H&R Block(HRB)2020-06-17 02:03Financial Data and Key Metrics Changes - The company reported revenues of 106 million was recorded at Wave due to the pandemic's impact on small businesses [36][39] - The company ended the fiscal year with 2 billion drawn on its line of credit [41][42] Business Line Data and Key Metrics Changes - The DIY e-files were estimated to be down approximately 4%, while Assisted e-files were down 15% through June 5 [22][21] - The company maintained relatively flat shares in the DIY segment, while experiencing share gains in Assisted through the end of April, which moderated in the extended filing season [23][21] Market Data and Key Metrics Changes - Industry return volume was reported down 6% due to the filing extension and stimulus package, with the IRS indicating a significant number of returns completed by those who typically do not file [21][22] - The company observed a shift from Assisted to DIY of just shy of 300 basis points, indicating changing consumer behavior during the pandemic [83][81] Company Strategy and Development Direction - The company is focused on digitally enabling every aspect of its business to meet client needs, which has become increasingly important during the pandemic [15][10] - The company is evaluating and reprioritizing its strategic imperatives while examining its expense structure to identify areas for savings [31][41] - The introduction of Wave Money, a business bank account designed to simplify bookkeeping for small business owners, reflects the company's commitment to innovation [29][28] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the unprecedented challenges posed by the pandemic and emphasized the importance of agility and innovation in responding to these challenges [10][11] - The sentiment in Washington suggests that there will not be another extension of the tax deadline, which could impact client behavior [108][107] - Management expressed confidence in the long-term viability and future growth of Wave despite short-term impacts [28][102] Other Important Information - The company has declared a dividend of $0.26 per share, maintaining its commitment to dividend payments since going public in 1962 [45][90] - The company has entered into a non-binding letter of intent with MetaBank to provide financial products, which is expected to result in improved economics [52][122] Q&A Session Summary Question: What attributes to the moderation of Assisted share gains in the extended tax season? - Management attributed the moderation to the unusual operating model and the scrutiny of following local orders, which disrupted client expectations [56][57] Question: Are there longer-term opportunities beyond the initial COVID period? - Management indicated that the pandemic has highlighted the strength of their digital capabilities, which may lead to a reevaluation of their physical footprint in the future [59][60] Question: What are the expectations regarding IRS filing and stimulus returns? - Management believes that most of the stimulus return wave is behind them and does not expect a second round of stimulus payments [66][67] Question: What are the expectations for industry growth in the Assisted and DIY channels? - Management expects overall industry growth to remain around 1%, with a slight shift from Assisted to DIY anticipated to moderate as the season progresses [78][85] Question: How does the company view the competitive landscape in the Assisted category? - Management noted that independent competitors may have more flexibility in their operations, which could impact their ability to serve clients compared to the company's adherence to local orders [120][119]