Jackson Hewitt Tax Service Inc
Jackson Hewitt Tax Service — Investor Presentation (November 2006)
27 slides from Jackson Hewitt Tax Service's investor presentation, Nov 6, 2006
Slide 1: Investor Presentation November 2006 Update
Investor Presentation November 2006 Update Michael Lister Chairman and Chief Executive Officer Mark Heimbouch Chief Financial Officer 10/31/06
Slide 2: Important Disclosure
Important Disclosure Certain statements in this presentation including, but not limited to, those relating to office growth, territory sales, share repurchase programs, financial estimates and future growth opportunities are “forward-looking” statements within the meaning of Federal securities laws.
Slide 3: Company Background
Company Background Leading nationwide franchisor of full-service, individual federal and state income tax preparation 2006 Highlights 2006 Growth Over 6,000 offices (89% franchised) +10% 3.7 million customers +10% Total revenues of $273.7 million* +23% Net income of $60.8 million* +32% Diluted earni
Slide 4: Company Performance
Company Performance Since 2004 Initial Public Offering
Slide 5: Consistently Strong Financial Performance
Consistently Strong Financial Performance Total Revenues $300 $250 $200 $150 $100 $50 $0 +19% CAGR 2005 2006 Net Income $70 $60 $50 $40 $30 $20 $10 $0 +35% CAGR 2005 2006 Diluted Earnings Per Share $1.80 $1.60 $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 +38% CAGR 2004 2005 2006 All figures in mi
Slide 6: Commitment To Shareholder Value
Commitment To Shareholder Value June 2004 IPO at $17.00 per share ($638 million equity value) Dividend increased in each of first two years since IPO (cumulative increase of 71%) Share repurchase programs: Jackson Hewitt has returned to shareholders over $160 million since its IPO in 2004, deliverin
Slide 7: Competitive Landscape
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Slide 8: A Leading Player in a Large Market
A Leading Player in Large Market U.S. Tax Return Market 1997 - Total U.S. Market 121 Million Tax Returns 2006 - Total U.S. Market 135 Million Tax Returns (Est.) Self Prepared 50% 60mm Paid Prepared 50% 61mm Self Prepared 39% 53mm Paid Prepared 61% 82mm 2006 - Total Paid Preparer Segment 82 Million R
Slide 9: Profitable and High-Growth Business Model
Profitable and High-Growth Business Model Tax Return Growth Jackson Hewitt Tax Returns (000s) 4,000 3,500 3,000 2,500 2,000 1,500 1,000 JTX: 15% CAGR IRS: 1% CAGR 1999 2000 2001 2002 2003 2004 2005 2006 4.0% 2.0% 0.0% -2.0% IRS Tax Return Growth JTX Tax Returns (‘000s) 1,365 1,772 2,212 2,525 2,826
Slide 10: 2006 Tax Season Review
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Slide 11: 2006 Tax Season: Drivers of Growth
2006 Tax Season Drivers of Growth Targeted location expansion in under-penetrated territories Refocused marketing strategy with new advertising campaign Enhanced products and services Tax Return Volume Growth of 10% and Same Store Volume Growth of 6% in 2006
Slide 12: Growth Opportunities for 2007 and Beyond
Growth Opportunities for 2007 and Beyond
Slide 13: Multiple Opportunities for Growth
Multiple Opportunities for Growth Drivers of Growth Increase the number of offices in existing territories Increase the number of tax returns per office as offices mature Increase the number of offices through the sale of new territories
Slide 14: Further Penetration of Existing Territories
Multiple Opportunities for Growth Further Penetration of Existing Territories % of Territories in Each Category 46% 41% 38% 2004 2005 2006 Average 2 offices per territory 29% 25% 21% Offices per Territory Company penetrates deeper into existing territories while expanding into new territories * % of
Slide 15: Office Maturation
Multiple Opportunities for Growth Office Maturation 2006 Average Tax Returns Per Office Office Age 1 2 3 4 5+ Average Number Of Tax Returns By Type Of Location Storefront Location Retail-Partner Location Average number of tax returns increases as office matures; More than 50% of offices are less tha
Slide 16: Expanding Our Franchise Network
Multiple Opportunities for Additional Growth Expanding Our Franchise Network 1/3 of territories remain available, including populous states such as: New York, California, Michigan, Massachusetts, and Pennsylvania 200+ territories sold in each of past several years About 75% of territories historical
Slide 17: Fiscal 2007 Year-To-Date Review
Fiscal 2007 Year-To-Date Review
Slide 18: Year-To-Date Review
Year-To-Date Review Prepare for tax season and continue return to shareholders Sold 75 territories in Q1-2007 On target for approximately 200 territory sales in 2007 (affirmed as of Q1 earnings call) and in line with prior experience Announced and completed $75 million share repurchase program Annou
Slide 19: Financial Drivers That Have Driven Success
Financial Drivers That Have Driven Success
Slide 20: Profitable & High-Growth Business Model
Profitable & High-Growth Business Model Simple Business Model A x B x C = D Franchisees & Company-Owned Offices Franchise Tax Returns (3.3 million) x Avg. Revenue Per Tax Return ($178) x Royalty and Mkt. & Adv. Rate (19.2%) = Royalty and Mkt. & Adv. Revenue ($111 million) Company-owned Tax Returns (
Slide 21: Business Drivers
Business Drivers Several Levers To Drive Revenue Growth Same store tax return growth 5% 2% 6% (volume only) Revenue per tax return growth 6% 7% 13% New locations 4% 5% 3% Conversions & acquisitions 3% 1% 1% Total revenue growth 18% 15% 23% GAAP Reconciliation Other financial product revenue variabil
Slide 22: 3-5 Year Financial Targets
3-5 Year Financial Targets* Total Revenues Growth 14% - 19% / year Income from Operations Margin Growth 50 - 100 bps / year EPS Growth 20% - 25% / year These long-term targets have been in place since the IPO and are reaffirmed as of June 28, 2006 * Financial targets based on FY 2006 financial resul
Slide 23: Conclusion
Conclusion Profitable Financial Model Large and Growing Market Commitment to Shareholder Value
Slide 24: For more information, please contact
For more information, please contact: David J. Kraut Vice President, Treasury & Investor Relations (973) 630-0821 [email protected]
Slide 25: Appendix
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Slide 26: Revenue, Net Income and Diluted EPS
Revenue, Net Income and Diluted EPS (FY 2004, 2005 and 2006 - As adjusted reconciliations) (Amounts in millions) Total revenues, as reported $205.6 $232.5 $275.4 Adjustment: 2005 SBB&T agreement (a) (13.2) (10.1) (1.7) Total revenues, as adjusted $192.4 $222.4 $273.7 Net income, as reported $43.0 $5
Slide 27: INV JAGKSON HEWITT:
INV JAGKSON HEWITT: mmm =TAX SERVICE
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