JTH Holding Beats on Q3 Earnings, Lags Revs - Analyst Blog

Liberty Tax Service's parent company, JTH Holding Inc., TAX reported third-quarter fiscal 2014 (ending Jan 31) net income of 28 cents per share, up from 12 cents earned in the year-ago period. The result also exceeded the Zacks Consensus Estimate of 8 cents per share.

Increased market share and focus on JTH Holding's high performers mainly led to the improvement.

Behind the Headlines

JTH Holding's total revenue amounted to $40.7 million during the reported quarter, missing the Zacks Consensus Estimate of $42 million. However, the results improved 8.3% year over year. The increase in revenues was attributable to higher royalties and advertising fees, financial products and tax preparation fees. These were driven by increased returns and average net fees.

On the other hand, JTH Holding's total operating expenses increased 4.1% year over year to $35.5 million. Higher general and administrative expenses, depreciation, amortization and impairment expenses, and area developer costs led to the increase in operating expenses.

While one-time restatement costs and higher bad-debt expense from office closures, led to higher general and administrative expenses, growth in royalties increased the area developer expenses. On the other hand, acquired customer lists and area developer rights and JTH Holding's NextGen software assuming service in fiscal 2014, led to extra amortization expenses that drove depreciation, amortization and impairment charges.

Financial Update

Total assets of JTH Holding stood at approximately $256 million as of Jan 31, 2014. It increased from $103.1 million at fiscal 2013-end.

However, total cash and cash equivalents plunged 80.3% to $3.7 million from $19 million recorded as of Apr 30, 2013.

Total long-term debt amounted to $22 million at the end of third-quarter fiscal 2014, reflecting an improvement from $24.3 million at fiscal 2013-end.

JTH Holding's cash used in operations totaled $50.9 million in the first nine months of fiscal 2014, down from $51.8 million used in the comparable period last year.  

Performances by Others

SouFun Holdings Ltd. SFUN reported fourth-quarter 2013 operating earnings of $1.41 per share, 34.5% above the Zacks Consensus Estimate.

Rentrak Corporation RENT delivered fourth-quarter 2013 operating loss of 3 cents per share narrower than the Zacks Consensus Estimate of a loss of 13 cents and the year-ago loss of 15 cents.

Cardtronics Inc. CATM reported fourth-quarter operating net earnings of 44 cents a share that beat the Zacks Consensus Estimate by a penny. However, the result beat the prior-year quarter figure by 19%.