News Column

Liberty Tax says its loss widened in latest quarter

August 28, 2014

By Dave Mayfield, The Virginian-Pilot

Aug. 28--Virginia Beach-based Liberty Tax Inc. said today that its fiscal first-quarter loss widened from the same period last year, largely due to an increase in staffing as it prepares for expected growth in the next tax season.

The company, which has more than 4,400 offices, reported a net loss of about $8.6 million, or 67 cents a share, in the latest period, which ended July 31. That was up from a loss of about $5.9 million, or 46 cents a share, in the year-earlier period. Revenues fell to roughly $7.8 million in the latest quarter from about $8.1 million a year earlier.

Liberty typically loses money in the quarter and makes almost all of its profit during the fiscal fourth quarter, in which peak tax season falls.

The company said it expects its revenues to grow faster than expenses for the full fiscal year, but lowered its projection of a 5 percent increase in preparation fees for the next season that it said would be related to tax complexities in the Affordable Care Act. Liberty said it now expects ACA-related changes to be simpler than previously thought, so its fee increases associated with the ACA likely will range between 2 and 3 percent in the coming season. The expected increase would be in addition to its standard annual fee increase, the company said.


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Source: Virginian-Pilot (Norfolk, VA)

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