THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, July 1, 1994 TAG: 9407010380
SECTION: BUSINESS PAGE: D3 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
DATELINE: VIRGINIA BEACH LENGTH: Medium: 55 lines
Jackson Hewitt Inc., the rapidly expanding national tax service, said Thursday that net income for its fiscal year that ended April 30 jumped 36 percent.
The Beach-based Jackson Hewitt, the nation's second-largest tax preparer behind H&R Block, said it earned $923,049, or 16 cents a share, during the most recent fiscal year. That was up from net earnings of $677,603, or 18 cents a share, in the previous year.
Also on Thursday, Jackson Hewitt disclosed that it is in the process of buying its headquarters building on Bonney Road, for $1.22 million.
For the company's latest fiscal year, earnings on a per-share basis were less because of dividends accrued in the most recent year by a new class of preferred shareholders.
The company would have ended up in the red for the year if not for surging profits during the fiscal fourth quarter, which includes tax season. In the final quarter, Jackson Hewitt said its net profit more than doubled to $2.9 million from $1.44 million in the previous year's final quarter.
Jackson Hewitt typically racks up lossesuntil tax season comes along. The same thing happened in the first nine months of the prior fiscal year too.
The company said total revenues for the most recent fiscal year were $18.6 million, up 72 percent.
The revenue and profit increases were due largely to the tax service's office expansion. It ended the most recent tax season with 878 offices, up from 614 at the end of the previous tax-filing period.
Martha O'Gorman, a company spokeswoman, said Jackson Hewitt aims to have 1,200 offices open for the 1995 tax season and to rely more heavily on franchises. This season Jackson Hewitt had 136 company-owned offices. It plans to reduce that number to under 90 next season.
The company said in an analysis accompanying its earnings release that its self-owned stores ``did not meet targets for sales volume and profit'' in the last fiscal year.
O'Gorman said running its own offices and providing field support to its franchisees proved too demanding to Jackson Hewitt at this time. For the time being, she said, ``we really feel like the level of support to the franchisees is paramount.''
In the long term, however, Jackson Hewitt will return to owning more of its own locations, she noted.
More than other major tax services, Jackson Hewitt has capitalized on the surging popularity of electronic filing. That trend continued in the most recent fiscal year; 88 percent of the the 568,500 returns filed by the company or its franchisees with the Internal Revenue Service were by computer. by CNB