H&R Block (HRB) 4Q 2015 Earnings Call Transcript

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H&R Block (HRB) CEO William Cobb seeing a lot of changes in his industry including increased regulation

“We have seen broad sweeping changes affecting the tax industry from what is really a transitional year for both the industry and H&R Block. Some of the changes we’ve seen include: aggressive and numerous fraud prevention measures implemented at both the Federal and state levels; a decline in early season tax filings indicating a real delay to the season, possibly due to the overall impact of fraud, the Affordable Care Act and other industry factors.”

It’s taking longer for consumers to receive their tax refunds

“in 2015, the IRS had processed and refunded $66 billion in tax refunds by February 6th. This year, that number had dropped 11% to $59 billion. And the average time for taxpayers to receive their refund has increased from 10 days last year to 13 days this year.  Finally, our data shows that larger Federal refunds are taking longer to process than smaller refunds, which may be another indication of stronger fraud prevention measures.”

Launched a new business segment focusing on helping small businesses with tax advice

“And we launched a new brand, Block Advisors, focused on delivering tax planning and small business services to those clients that have year-round tax and business needs. Our new brand is up and running with over 280 offices throughout the country, staffed with expert tax advisors ready to assist clients with complex tax situations. As we said at our Investor Conference, this is a long-term play for us but we’re pleased with the progress made this year.”

H&R Block (HRB) CEO William Cobb was asked a question by an analyst about what would happen if Donald Trump were to become President

“Yeah, I know. And I’ve been asked this in interviews. I don’t know. I think that any president will have to work with 535 members of Congress. As I’ve said repeatedly, we are in favor of ways to simplify the tax code.  We stand ready to work with whoever. So, we’ll figure out where that goes.”

They’ve been able to raise the prices of their services substantially

“So one of the nice things about our industry is we have real pricing power.  Historically, as you know, we’ve basically been raising prices double the rate of inflation.”