GlobeNewswire Inc | Jun 15, 2021 04:15PM EDT

June 15, 2021

-- The Company achieved robust growth across total filing volumes, total market share, Assisted filings and market share, and Do-It-Yourself (DIY) revenue in the 2021 tax season. When including total tax season performance through the May 17, 2021 filing deadline, the Company substantially exceeded its original fiscal 2021 revenue and earnings outlook. -- The Company announced a 4% increase in its quarterly dividend to $0.27 per share. This is the fifth increase in six years, resulting in a 35% total increase in that time frame. -- The Company repurchased 2.11 million shares in its fiscal fourth quarter, resulting in total share repurchases of 11.6 million shares and $188 million, or $16.29 per share, for fiscal 2021. -- The Company announced its fiscal year-end will change to June 30, effective immediately.

KANSAS CITY, Mo., June 15, 2021 (GLOBE NEWSWIRE) -- H&R Block, Inc. (NYSE: HRB) (the Company) today released its financial results for the fiscal year ended April30, 2021. The extension of the U.S. federal tax filing deadline from April 15 to May 17 resulted in the tax season concluding beyond fiscal 2021. Including performance through May 18, 2021, in fiscal 2021, would result in the Company substantially exceeding its original revenue and earnings outlook for 2021.

I am proud of the outstanding growth across our business," said Jeff Jones, H&R Block's president and chief executive officer. "Our team provided help and inspired financial confidence for millions of consumers and small business owners this year. We made tremendous progress in our first year of Block Horizons, blending technology and digital tools with human expertise in tax, improving our offerings in small business, driving significant growth in Wave, and making progress on our new mobile banking platform.

Fiscal 2021 Results From Continuing Operations

"Growth in total filings, strong performance from Wave, and proactive fiscal management resulted in a strong 2021 that exceeded our expectations," said Tony Bowen, H&R Block's chief financial officer. "We are confident in our future, as evidenced by increasing our quarterly dividend by 4% and repurchasing 6% of our shares outstanding this fiscal year."

(in millions, except EPS) Fiscal Year 2021 Fiscal Year 2020Revenue $ 3,414 $ 2,640 Pretax Income (Loss) $ 669 $ (3 ) Net Income $ 590 $ 6 Weighted-Avg. Shares - Diluted 188.8 198.1 EPS^2 $ 3.11 $ 0.03 Adjusted EPS^2,3 $ 3.39 $ 0.84 Adjusted EBITDA^3 $ 932 $ 368

Key Financial Metrics

-- Total revenue of $3.4billion increased by $774million, or 29.3%, due to an increase in U.S. tax return volumes due to the extension of the 2020 tax season into our fiscal 2021, stronger mix in DIY, Emerald Card revenues related to federal stimulus payments, and strong growth from Wave. -- Total operating expenses of $2.6billion increased by $82million, or 3.2%, due to an increase in variable labor, partially offset by impairment charges related to the pandemic in fiscal 2020, and lower bank partner fees and travel-related costs. -- Pretax income of $669million compared favorably to a pretax loss of $3million in the prior year. -- Earnings per share from continuing operations increased $3.08 to $3.11; adjusted earnings per share from continuing operations increased from $0.84 to $3.39.

Dividends and Share Repurchases

The company announced today that its Board of Directors increased the quarterly dividend by 4%, representing the fifth increase in the dividend in six years and a 35% total increase over that time frame. The quarterly cash dividend is now $0.27 per share, payable on July 1, 2021 to shareholders of record as of June 25, 2021. The Company has paid consecutive quarterly dividends since it became publicly traded in 1962. Future actions regarding dividends will be dependent upon the Board's approval following consideration of operating results, market conditions, and capital needs, among other factors.

In fiscal 2021, the company repurchased 11.6 million shares for $188 million, at an average price of $16.29. Share repurchases made in the fourth quarter of fiscal 2021 totaled $38 million. Approximately $564million remains under the company's current share repurchase authorization, which expires in June of 2022.

Line of Credit The Company amended its line of credit to a new five-year term, resulting in favorable rates, reduced capacity to better align with business needs, and lower costs. Additional details regarding this line of credit can be found in a related Form 8-K filing today.

Change in Fiscal Year

The Company announced a change to its fiscal year-end from April 30 to June 30, effective immediately. The change allows for better alignment of complete tax seasons in comparable fiscal periods and other related benefits. The Company plans to file a transition report on form 10-QT for the transition period of May 1, 2021, through June 30, 2021, later this summer. The Companys fiscal 2022 will begin on July 1, 2021, and end on June 30, 2022.

Discontinued Operations

For information on Sand Canyon, please refer to disclosures in the companys reports on Forms 10-K, 10-Q, and other filings with the SEC.

Conference Call

Discussion of fiscal 2021 results, outlook, and a general business update will occur during the companys previously announced fiscal 2021 conference call for analysts and investors that will be held at 4:30 p.m. Eastern Time on Tuesday, June15, 2021. To access the call, please dial the number below approximately 10 minutes prior to the scheduled starting time:

U.S./Canada (855) 859-2056 or International (404) 537-3406

Conference ID: 2575807

The call, along with a presentation for viewing, will also be webcast in a listen-only format for the media and public. The link to the webcast can be accessed directly at https://investors.hrblock.com. The presentation will be posted on the Quarterly Results page at https://investors.hrblock.com following the conclusion of the call.

A replay of the call will be available beginning at 7:30 p.m. Eastern time on June15, 2021 and continuing for seven days by dialing (855) 859-2056 (U.S./Canada) or (404) 537-3406 (International). The conference ID is 5554906. The webcast will be available for replay beginning on June 17, 2021 and continuing for 90 days at https://investors.hrblock.com.

About H&R BlockH&R Block, Inc. (NYSE: HRB) provides help and inspires confidence in its clients and communities everywhere through global tax preparation, financial servicesand small business solutions. The company blends digital innovation with the human expertise of its associates and franchisees as it helps people get the best outcome at tax time, and better manage and access their money year-round. Through Block Advisors and Wave, the company helps small business owners thrive with innovative products like Wave Money, a small business banking and bookkeeping solution, and the only business bank account to manage bookkeeping automatically. For more information visit hrblock.com/newsand follow @HRBlockNews.

About Non-GAAP Financial Information

This press release and the accompanying tables include non-GAAP financial information. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with generally accepted accounting principles, please see the section of the accompanying tables titled "Non-GAAP Financial Information."

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the securities laws. Forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variation of words such as "expects," "anticipates," "intends," "plans," "believes," "commits," "seeks," "estimates," "projects," "forecasts," "targets," "would," "will," "should," "goal," "could," "may," or other similar expressions. Forward-looking statements provide management's current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include estimates of revenues, client trajectory, income, effective tax rate, earnings per share, cost savings, capital expenditures, dividends, share repurchases, liquidity, capital structure, market share, industry volumes, or other financial items, descriptions of managements plans or objectives for future operations, products or services, or descriptions of assumptions underlying any of the above. They also include the expected impact of the coronavirus (COVID-19) pandemic, including, without limitation, the impact on economic and financial markets, the Companys capital resources and financial condition, the expected use of proceeds under the Companys revolving credit facility, future expenditures, potential regulatory actions, such as extensions of tax filing deadlines or other related relief, changes in consumer behaviors and modifications to the Companys operations related thereto. All forward-looking statements speak only as of the date they are made and reflect the company's good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, the company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new information, data or methods, future events or other changes, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to a variety of economic, competitive and regulatory factors, many of which are beyond the company's control, that are described in our Annual Report on Form 10-K for the most recently completed fiscal year in the section entitled "Risk Factors" and additional factors we may describe from time to time in other filings with the Securities and Exchange Commission. You may get such filings for free at our website at http://investors.hrblock.com. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.__________________

1 All amounts in this release are unaudited. Unless otherwise noted, all comparisons refer to the current period compared to the corresponding prior year period.2 All per share amounts are based on weighted average fully diluted shares over the corresponding period.3 Adjusted earnings per share from continuing operations and adjusted EBITDA from continuing operations are non-GAAP financial measures. See "About Non-GAAP Financial Information" below for more information regarding financial measures not prepared in accordance with generally accepted accounting principles (GAAP).

For Further Information

Investor Colby Brown, (816) 854-4559, colby.brown@hrblock.comRelations: Michaella Gallina, (816) 854-3022, michaella.gallina@hrblock.comMedia Relations: Angela Davied, (816) 854-5798, angela.davied@hrblock.com

CONSOLIDATED STATEMENTS OF (unaudited, in000sOPERATIONS -exceptpershareamounts) Three months ended April 30, Year ended April 30, 2021 2020 2021 2020 REVENUES: Service $ 2,110,618 $ 1,635,561 $ 3,067,223 $ 2,327,323 revenuesRoyalty,product and 217,562 173,791 346,764 312,397 other revenues 2,328,180 1,809,352 3,413,987 2,639,720 OPERATING EXPENSES:Costs of 901,728 767,157 1,842,092 1,712,276 revenuesImpairment of ? 106,000 ? 106,000 goodwillSelling,general and 340,900 268,603 802,268 744,361 administrativeTotaloperating 1,242,628 1,141,760 2,644,360 2,562,637 expenses Other income 1,220 1,896 5,979 15,637 (expense), netInterestexpense on (21,551 ) (27,412 ) (106,870 ) (96,094 ) borrowingsIncome (loss)fromcontinuingoperations 1,065,221 642,076 668,736 (3,374 ) before incometaxes(benefit)Income taxes 114,254 178,616 78,524 (9,530 ) (benefit)Net incomefrom 950,967 463,460 590,212 6,156 continuingoperationsNet loss fromdiscontinued (1,715 ) (3,057 ) (6,421 ) (13,682 ) operationsNET INCOME $ 949,252 $ 460,403 $ 583,791 $ (7,526 ) (LOSS) BASIC EARNINGS(LOSS) PER SHARE:Continuing $ 5.22 $ 2.40 $ 3.15 $ 0.03 operationsDiscontinued (0.01 ) (0.01 ) (0.04 ) (0.07 ) operationsConsolidated $ 5.21 $ 2.39 $ 3.11 $ (0.04 ) WEIGHTEDAVERAGE BASIC 181,512 192,475 186,832 196,701 SHARES DILUTEDEARNINGS (LOSS) PERSHARE:Continuing $ 5.14 $ 2.39 $ 3.11 $ 0.03 operationsDiscontinued (0.01 ) (0.02 ) (0.03 ) (0.07 ) operationsConsolidated $ 5.13 $ 2.37 $ 3.08 $ (0.04 ) WEIGHTEDAVERAGE 184,354 193,726 188,777 198,108 DILUTED SHARES

CONSOLIDATED BALANCE SHEETS (unaudited, in 000s - except per share data)As of April 30, 2021 2020 ASSETS Cash and cash equivalents $ 934,251 $ 2,661,914 Cash and cash equivalents - restricted 128,669 211,106 Receivables, net 197,876 133,197 Income taxes receivable 333,366 28,477 Prepaid expenses and other current assets 105,562 52,042 Total current assets 1,699,724 3,086,736 Property and equipment, net 148,490 184,367Operating lease right of use asset 437,246 494,788Intangible assets, net 360,148 414,976 Goodwill 757,659 712,138 Deferred tax assets and income taxes 182,848 151,195 receivableOther noncurrent assets 67,531 67,847 Total assets $ 3,653,646 $ 5,112,047 LIABILITIES AND STOCKHOLDERS? EQUITY LIABILITIES: Accounts payable and accrued expenses $ 198,084 $ 203,103 Accrued salaries, wages and payroll taxes 270,982 116,375 Accrued income taxes and reserves for 287,404 209,816 uncertain tax positionsCurrent portion of long-term debt ? 649,384 Operating lease liabilities 206,393 195,537 Deferred revenue and other current 200,216 201,401 liabilitiesTotal current liabilities 1,163,079 1,575,616 Long-term debt and line of credit 1,490,039 2,845,873 borrowingsDeferred tax liabilities and reserves for 279,351 182,441 uncertain tax positionsOperating lease liabilities 242,626 312,566 Deferred revenue and other noncurrent 126,150 124,510 liabilitiesTotal liabilities 3,301,245 5,041,006 COMMITMENTS AND CONTINGENCIES STOCKHOLDERS? EQUITY: Common stock, no par, stated value $.01 per 2,167 2,282 shareAdditional paid-in capital 783,292 775,387 Accumulated other comprehensive income 4,786 (51,576 ) (loss)Retained earnings 248,506 42,965 Less treasury shares, at cost (686,350 ) (698,017 ) Total stockholders' equity 352,401 71,041 Total liabilities and stockholders' equity $ 3,653,646 $ 5,112,047

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited, in 000s)Year ended April 30, 2021 2020CASH FLOWS FROM OPERATING ACTIVITIES: Net income (loss) $ 583,791 $ (7,526 ) Adjustments to reconcile net income (loss)to net cash provided by operating activities:Depreciation and amortization 156,852 169,536 Provision for bad debt 73,451 76,621 Deferred taxes (22,583 ) (8,300 ) Stock-based compensation 28,271 28,045 Impairment of goodwill ? 106,000 Changes in assets and liabilities, net of acquisitions:Receivables (150,933 ) (66,896 ) Prepaid expenses and other current and (49,498 ) 39,377 noncurrent assetsAccounts payable, accrued expenses, 150,635 (124,019 ) salaries, wages and payroll taxesDeferred revenue, other current and (1,160 ) (9,096 ) noncurrent liabilitiesIncome tax receivables, accrued income (138,152 ) (87,423 ) taxes and income tax reservesOther, net (4,746 ) (7,358 ) Net cash provided by operating activities 625,928 108,961 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures (52,792 ) (81,685 ) Payments made for business acquisitions, (15,576 ) (450,242 ) net of cash acquiredFranchise loans funded (26,917 ) (35,264 ) Payments from franchisees 41,215 39,919 Other, net 8,547 57,041 Net cash used in investing activities (45,523 ) (470,231 ) CASH FLOWS FROM FINANCING ACTIVITIES: Repayments of line of credit borrowings (3,275,000 ) (1,335,000 ) Proceeds from line of credit borrowings 1,275,000 3,335,000 Repayments of long-term debt (650,000 ) ? Proceeds from issuance of long-term debt 647,965 ? Dividends paid (195,068 ) (204,870 ) Repurchase of common stock, including (191,294 ) (256,214 ) shares surrenderedProceeds from exercise of stock options 2,140 2,075 Other, net (22,566 ) (9,143 ) Net cash provided by (used in) financing (2,408,823 ) 1,531,848 activities Effects of exchange rate changes on cash 18,318 (5,285 ) Net increase (decrease) in cash and cash (1,810,100 ) 1,165,293 equivalents, including restricted balancesCash, cash equivalents and restricted cash, 2,873,020 1,707,727 beginning of the yearCash, cash equivalents and restricted cash, $ 1,062,920 $ 2,873,020 end of the year SUPPLEMENTARY CASH FLOW DATA: Income taxes paid, net of refunds received $ 236,459 $ 89,204 Interest paid on borrowings 103,855 87,426 Accrued additions to property and equipment 1,643 1,185

FINANCIAL (unaudited, in 000s - except per share amounts)RESULTS Three months ended April 30, Year ended April 30, 2021 2020 2021 2020REVENUES: U.S. assistedtax $ 1,493,968 $ 1,175,129 $ 2,035,107 $ 1,533,303 preparationU.S. 158,826 133,767 226,253 193,411 royaltiesU.S. DIY tax 218,724 166,861 313,055 208,901 preparationInternational 117,521 82,754 249,868 180,065 Refund 151,577 101,893 163,329 154,687 TransfersEmerald Card 87,916 53,609 136,717 92,737 Peace ofMind 26,011 29,734 98,882 105,185 ExtendedService PlanTax Identity 21,495 14,489 40,624 31,797 ShieldInterest andfee income on 24,676 27,087 53,430 60,867 EmeraldAdvance^SMWave 17,080 10,971 58,277 36,711 Other 10,386 13,058 38,445 42,056 Total 2,328,180 1,809,352 3,413,987 2,639,720 revenues Compensation and benefits:Field wages 490,711 398,582 797,262 678,813 Other wages 90,654 40,159 272,664 218,548 Benefits andother 102,566 74,956 208,147 175,535 compensation 683,931 513,697 1,278,073 1,072,896 Occupancy 116,508 117,932 414,389 410,402 Marketing and 167,007 153,904 261,960 255,094 advertisingDepreciationand 39,689 44,127 156,852 169,536 amortizationBad debt 50,004 39,876 78,763 77,470 Impairment of ? 106,000 ? 106,000 goodwillOther 185,489 166,224 454,323 471,239 Totaloperating 1,242,628 1,141,760 2,644,360 2,562,637 expenses Other income(expense), 1,220 1,896 5,979 15,637 netInterestexpense on (21,551 ) (27,412 ) (106,870 ) (96,094 ) borrowingsIncome (loss)fromcontinuingoperations 1,065,221 642,076 668,736 (3,374 ) before incometaxes(benefit)Income taxes 114,254 178,616 78,524 (9,530 ) (benefit)Net incomefrom 950,967 463,460 590,212 6,156 continuingoperationsNet loss fromdiscontinued (1,715 ) (3,057 ) (6,421 ) (13,682 ) operationsNET INCOME $ 949,252 $ 460,403 $ 583,791 $ (7,526 ) (LOSS) BASICEARNINGS (LOSS) PERSHARE:Continuing $ 5.22 $ 2.40 $ 3.15 $ 0.03 operationsDiscontinued (0.01 ) (0.01 ) (0.04 ) (0.07 ) operationsConsolidated $ 5.21 $ 2.39 $ 3.11 $ (0.04 ) WEIGHTEDAVERAGE BASIC 181,512 192,475 186,832 196,701 SHARES DILUTEDEARNINGS (LOSS) PERSHARE:Continuing $ 5.14 $ 2.39 $ 3.11 $ 0.03 operationsDiscontinued (0.01 ) (0.02 ) (0.03 ) (0.07 ) operationsConsolidated $ 5.13 $ 2.37 $ 3.08 $ (0.04 ) WEIGHTEDAVERAGE 184,354 193,726 188,777 198,108 DILUTEDSHARES Adjusted EPS^ $ 5.16 $ 3.01 $ 3.39 $ 0.84 (1)EBITDA^(1) 1,126,461 713,615 932,458 262,256 Adjusted 1,126,461 819,615 932,458 368,256 EBITDA ^(1)AdjustedEBITDA margin 48.4 % 45.3 % 27.3 % 14.0 % ^(1)

(1)All non-GAAP measures are results from continuing operations. See "Non-GAAP Financial Information" for a reconciliation of non-GAAP measures.

NON-GAAP FINANCIAL MEASURES (in 000s) Three months ended April Year ended April 30, 30,NON-GAAP FINANCIAL 2021 2020 2021 2020MEASURE - EBITDA Net income (loss) - $ 949,252 $ 460,403 $ 583,791 $ (7,526 ) as reportedDiscontinued 1,715 3,057 6,421 13,682 operations, netNet income fromcontinuing 950,967 463,460 590,212 6,156 operations - asreportedAdd back: Income taxes 114,254 178,616 78,524 (9,530 ) (benefit)Interest expense 21,551 27,412 106,870 96,094 Depreciation and 39,689 44,127 156,852 169,536 amortization 175,494 250,155 342,246 256,100 EBITDA fromcontinuing 1,126,461 713,615 932,458 262,256 operationsAdjustments: Impairment of ? 106,000 ? 106,000 goodwillAdjusted EBITDAfrom continuing $ 1,126,461 $ 819,615 $ 932,458 $ 368,256 operations EBITDA margin fromcontinuing 48.4 % 39.4 % 27.3 % 9.9 % operations ^(1)Adjusted EBITDAmargin from 48.4 % 45.3 % 27.3 % 14.0 % continuingoperations^ (2)

(1) EBITDA margin from continuing operations is computed as EBITDA from continuing operations divided by revenues from continuing operations.(2) Adjusted EBITDA margin from continuing operations is computed as adjusted EBITDA from continuing operations divided by revenues from continuing operations.

(in 000s, except per share amounts) Three months ended April 30, Year ended April 30,NON-GAAPFINANCIAL 2021 2020 2021 2020MEASURE -ADJUSTED EPS Net income fromcontinuing $ 950,967 $ 463,460 $ 590,212 $ 6,156 operations - asreported Adjustments: Amortization ofintangiblesrelated to 16,211 19,564 68,387 74,561 acquisitions(pretax)Impairment ofgoodwill ? 106,000 ? 106,000 (pretax)Tax effect of (11,741 ) (5,459 ) (15,884 ) (19,126 ) adjustments^(1)Adjusted netincome from $ 955,437 $ 583,565 $ 642,715 $ 167,591 continuingoperations Dilutedearnings pershare from $ 5.14 $ 2.39 $ 3.11 $ 0.03 continuingoperations - asreportedAdjustments, 0.02 0.62 0.28 0.81 net of taxAdjusteddilutedearnings per $ 5.16 $ 3.01 $ 3.39 $ 0.84 share fromcontinuingoperations

(1) The tax effect of adjustments is the difference between the tax provision calculation on a GAAP basis and on an adjusted non-GAAP basis.

NON-GAAP FINANCIAL INFORMATION

Non-GAAP financial measures should not be considered as a substitute for, or superior to, measures of financial performance prepared in accordance with GAAP. Because these measures are not measures of financial performance under GAAP and are susceptible to varying calculations, they may not be comparable to similarly titled measures for other companies.

We consider our non-GAAP financial measures to be performance measures and a useful metric for management and investors to evaluate and compare the ongoing operating performance of our business. We make adjustments for certain non-GAAP financial measures related to amortization of intangibles from acquisitions and goodwill impairments. We may consider whether other significant items that arise in the future should be excluded from our non-GAAP financial measures.

We measure the performance of our business using a variety of metrics, including earnings before interest, taxes, depreciation and amortization (EBITDA) from continuing operations, adjusted EBITDA from continuing operations, EBITDA margin from continuing operations, adjusted EBITDA margin from continuing operations, adjusted diluted earnings per share from continuing operations and free cash flow. We also use EBITDA from continuing operations and pretax income of continuing operations, each subject to permitted adjustments, as performance metrics in incentive compensation calculations for our employees.