Jackson Hewitt Tax Service Inc
Jackson Hewitt Tax Service — Investor Presentation (October 2004)
33 slides from Jackson Hewitt Tax Service's investor presentation, Oct 13, 2004
Slide 1: Jackson Hewitt Tax Service, October 2004
SVJACKSON HEWITT «TAX SERVICE NYSE: JTX October 2004 Michael Lister Mark Heimbouch Chairman & Chief Financial Officer Chief Executive Officer
Slide 2: Important Disclosure
Important Disclosure Certain statements in this presentation may constitute forwarc-ooking statements within the meaning of the Federal securties laws. These statements can be identified by the fact that they do nat relete strictly to historic or current facis. They use such words as “anticipate, es
Slide 3: Transaction Summary
Transaction Summary / m@ IPO completed June 2004 @ 37.5 million shares sold at $17 m@ Cendant received — 100% of IPO proceeds, and — $175 million cash proceeds from concurrent debt offering m NYSE Listing (‘JTX”) @ Initial quarterly dividend of $0.07 per share paid on October 15, 2004 NY NSH rs
Slide 4: Mike Lister
Mike Lister Chairman, Chief Executive Officer NY JACKSON HEWITT:
Slide 5: Company Overview
Company Overview 2nd largest tax preparer in the United States Revenues earned from royalties, preparation of tax returns and facilitating the sale of financial products High margin franchising model Large market opportunity — only 4% share of paid preparer market Demonstrated success — doubling of
Slide 6: Two Complementary Operations
Two Complementary Operations 2004 Return Count Company-owned Franchise Network Offices (TSA) “w 04 million returns m= 27 million returns # 04 million returns @ 605 offices @ 4,330 offices 98% of franchisees have 5-10 years remaining on franchise agreements Model is financially rewarding to both fran
Slide 7: Investment Highlights
Investment Highlights @ Leading player with growing share in growing market @ Multiple opportunities for additional growth @ Profitable and high-growth business model NY MSH
Slide 8: High Organic Growth Business
gh Organic Gre rn Growl wth Busi 3.500 g sm 18% CAGR g 200 z z = 2,000 g 2 § 1500 3 5 4000 00 190 «2000-20102 S200 ms Returns (0008) 4305 4rra_ ana 80528283498 IRS Return Growth 19% 10% 19% OR OZ CTHE JACKSON HEWITT: wmou9 WIMaY SUL
Slide 9: Investment Highlights
Investment Highlights ™@ High organic growth business @ Multiple opportunities for additional growth @ Profitable and high-growth business model NY NSH Ts
Slide 10: Leading Player in Growing Market
ket 1997 - Total U.S. Market 121 Million Returns er in Growing Market 2003 - Total U.S. Market 131 Million Returns Self Prepared Prepared 50% 5 6omm 2003 - Total Paid Preparer Segment | \Y SMEKSON HEWITT 77 Million Returns Jackson Hewitt 4%
Slide 11: Leading Player in Growing Market: Customer Profile
Leading Player in Growing Market Focus on Lower to Middle Income Segment Customer Profile 2003 Jackson Hewitt Returns By AGI m Less than $30k Adjusted Gross Income (AGI) m Highly likely to receive a tax refund — typically $2,500 Typically no bank account $30-49k Typically no personal computer Desire
Slide 12: Leading Player in Growing Market: Timing of Returns
Leading Player in Growing Market Timing of Returns Filed During 2004 eason: Feb 28th 20,000 S g @ 16,000 = 8 3 s $ = x @ 12,000 g E cy 3 3 a 4 8 3B 8,000 e 2 Total U.S. a 5 Retums = 2 2 3 4,000 8 9van 28-Jan 16Feb 6-Mar 25-Mar 13-Apr Week Ending JACKSON HEWITT
Slide 13: Gaining Share in Growing Market
| ining Sha e of Paid Prey 5% 4 4% 4 3.1% 3% 4 2% 4 1% 4 0% re in Growing Market Segment +28% growth 3.4% 3.7% 4.0% 2001 2002 2003 2004E (2) 20045 macket share caloulations assume fofal paid preparer return Count of 77 calion tax returns. JACKSON HEWITT:
Slide 14: Investment Highlights
Investment Highlights @ High organic growth business @ Leading player with growing share in growing market @ Profitable and high-growth business model NY JACKSON HEWITT:
Slide 15: Multiple Growth Drivers
Multiple Growth Drivers m@ Drivers of Return Growth 1. Increase the number of tax returns per office 2. Increase the number of offices in existing territories 3. Add offices through the sale of new territories @ Additional Revenue Growth — Offer innovative financial products NY NSH
Slide 16: Multiple Opportunities for Additional Growth: Office Maturity
Multiple Opportunities for Additional Growth Office Matu and Increasing Returns Average Number of Returns Per Office (FY Ended April 30, 2004) 833 636 536 434 : a 2 3 4 5+ Office Age (Years) % of Offices 22% 18% 10% 10% 4% 57% of stores < 5 years old | S" JACKSON HEWITT:
Slide 17: Further Penetrate Existing Territories
Multiple Opportuniti tional Growt Substantial 0 Further Penetrate Existing Territories Target: 3 stores per existing territory = 3,165 additional offices LLLD # of Offices per Territories 0% 20% 40% 60% 20% 100% 4% of Territories JACKSON HEWITT
Slide 18: Leverage Strategic Retailer Relationships
Multiple Opportunities for Additional Growth Leverage Strategic Retailer Relationships NY JACKSON HEWITT
Slide 19: Expanding Our Franchise Network
Multiple Opportunities for Additional Growth Expanding Our Franchise Network @ Nearly 40% of total territories remain available for sale — Average of 200 new territories sold over the past 3 years — Under - penetrated states include New York, California, Ohio, Michigan, Massachusetts and Pennsylvani
Slide 20: Financial Product Innovation
inancial Product Innovation Historical Financial Products Recent Introductions @ Refund Anticipation Loans m@ Accelerated Check Refund @ Assisted Direct Deposit > Speed of delivery > No out of pocket expenses m@ Money Now Loan™ @ Holiday Express Loan Program™ m@ Gold Guarantee™ m@ CashCard m@ Balanc
Slide 21: Investment Highlights
Investment Highlights @ High organic growth business @ Leading player with growing share in growing market @ Multiple opportunities for additional growth NY NSH ii
Slide 22: Mark Heimbouch
Mark Heimbouch Chief Financial Officer NY ICS i ae
Slide 23: Profitable & High-Growth Consolidated Revenue
Profitable & Consolic d Revenue (mitfions) 22% CAGR $191.2 27% CAGR $104.3 $32.0 2001 2002-2003 2004 2001 2002 2003 2004 er atanng:f hempate ck temas agreement Sana Sarars Bank & Tus ereatianen curd ‘route lama au ave aaroanerhad oven placefe tr ospcatopuods, perc cos seus af eeute doh egie wo he 20
Slide 24: Revenue and Income From Operations
Revenue and Income From Operations (As adjusted reconciliation) (tions) 2001 2002 2003 2004 Het revenue (as reported) $75.5 $1570 $171.5 $2056 Adjustments: Franchise operations segment - New SBB&T agreement @ 63 (17.9) 9.0) 144) Franchise operations segment - intercompany elimination —_(b) wa) 4.0)
Slide 25: Profitable & High-Growth Business Model
Profitable & High-Growth Business Model Simple Business Model Financial Product Fees A Other Financial Product Revenue Financial Pee Per Procuct NY JACKSON HEWITT:
Slide 26: Other Financial Product Revenue
Other Financial Product Revenue Reduced Volat from New SBB&T Agreement $29.5 $30.3 in millions) 2000 2001 2002 2003 2004 NY NSH i a
Slide 27: Revenue by Segment ($ in millions)
($in millions) $210 22% CAGR $1012 $175 Company- Owned $140 $104.3 “ | oso | $70 Franchise $35 $0 2001 2002 2003 2004 suse amcunes not aus rr asct ac oanng: Brom poe Rena 2B-een ect Sn Bats Bank & Tus ef Merzalzoen cue [rout lama a aro ayroan ached oven placeee repent pufods, pet fo he sou eTecete a
Slide 28: Components of Revenue Growth
Components of Revenue Growth 2003 2004 Same store return growth 5% 5% Revenue per return growth 5% 6% New locations 2% 4% Conversions/acquisitions 5% 3% Organic revenue growth 17% 18% Other financial product revenue (8)% 2% variability impact” Annual historical revenue growth 9% 20% + nzaecet vray o
Slide 29: Debt / EBITDA
2004 Debt / EBITDA ($ in millions) Amount Rate Multiple Revolver ©) $0.0 L+150 - Senior Notes $175.0 L+150 2.4% ™ Strong cash flow ™ Quarterly cash dividend of $0.07 per share = Potential uses of excess cash flow: acquisitions, debt reduction, dividends, and share repurchases NY Ig oo fone eyesore d
Slide 30: First Quarter Review
First Quarter Review @ For the quarter ended July 31, business was on track with our plans for separating from Cendant — Loss of $0.30 per share as compared to loss of $0.33 per share in the first quarter of prior year. Included in results: — Other financial product revenue of $2.9 million - $0.05 p
Slide 31: Michael Lister
Michael Lister Chairman & Chief Executive Officer NY ICS i
Slide 32: Investment Highlights
@ High organic growth business @ Leading player with growing share in growing market @ Multiple opportunities for additional growth @ Profitable and high-growth business model NY RSH
Slide 33: Searchable text section of graphics
Searchable text section of graphics shown above [ LOG O] NYSE: JTX October 2004 Michael Lister Mark Heimbouch Chairman & Chief Financial Officer Chief Executive Officer Imp ortant Disclosure [GRAPHIC] Certain statements in this presentation may constitute forward-looking statements within the meanin
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