H & R Block Disposing of Offices

HRB is cutting costs and closing offices to reduce expenses and get ready for the upcoming tax season.

They sold 127 offices last quarter and have just announced plans to dispose of another 150 by year's end. HRB, for decades, the giant of the tax preparation industry, has been taking hits from many directions. Block reported a net loss from continuing operations in the current period, after charges, amounting $127+ million. Total revenues were down $1 million from the prior year.

Block's stock has suffered greatly in 2010 and has recently traded in the $11 to $13 range, down from prior years highs in the $40s and $50s. There has even been talk that at these low levels, Block might be a tempting target for an unfriendly takeover.

HRB appointed Alan Bennett president and chief executive officer in July, after the unexpected resignation of then president, Russ Smith. This change has been followed by Tom Bloch, son of the founder, announcing his decision to resign from the board. Bloch has stated his disagreement with board chairman, Richard Breeden, regarding the overall direction of the company.

HRB remains a bricks and mortar operation in an increasingly digital world. It remains to be seen if that model can survive without major adjustments.

Tax Wisdom - Tax subsidies cause Americans to overinvest in oversized homes.

- Robert J. Samuelson

As Certain As Death

By Jeffery L. Yablon