Liberty Tax, Inc. I n v e s t o r P r e s e n t a t i o n

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1 Liberty Tax, Inc. I n v e s t o r P r e s e n t a t i o n

2 Safe Harbor Statement This presentation may contain forward-looking statements within the meaning of the securities laws. Forwardlooking statements can be identified by the fact that they do not relate strictly to historical or current facts. They often include words or variations of words such as expects, anticipates, intends, plans, believes, seeks, estimates, projects, forecasts, targets, would, will, should, could, or may or other similar expressions. Forward-looking statements provide management s current expectations or predictions of future conditions, events or results. All statements that address operating performance, events or developments that we expect or anticipate will occur in the future are forward-looking statements. They may include estimates of revenues, income, earnings per share, capital expenditures, dividends, liquidity, capital structure or other financial items, descriptions of management s plans or objectives for future operations, products or services, or descriptions of assumptions underlying any of the above. All forward-looking statements speak only as of the date they are made and reflect the Company s good faith beliefs, assumptions and expectations, but they are not guarantees of future performance or events. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions, factors, or expectations, new information, data or methods, future events or other changes, except as required by law. By their nature, forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those suggested by the forward-looking statements. Factors that might cause such differences include, but are not limited to, a variety of economic, competitive and regulatory factors, many of which are beyond the Company s control and that are described in our Annual Report on Form 10-K for the fiscal year ended April 30, 2015 in the section entitled Risk Factors, as well as additional factors we have described and may describe from time to time in other filings with the Securities and Exchange Commission. You should understand that it is not possible to predict or identify all such factors and, consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties. 2

3 Agenda The Industry The Company Future Opportunities

4 The Industry is Large and Steadily Growing Three certainties in life: Death, Taxes and Change! U.S. Individual Tax Returns (in millions) Source: SOI Tax Stats Historical Table 1 ( ), Publication 6149 (2015 update), figures are for calendar years filed 4

5 Online Providers Have Not Reduced Paid Preparer Market Share Growth in DIY resulting from previous pen and paper filers, not taking from paid preparer segment. Paid Preparer DIY 42% 41% 40% 38% 37% 37% 37% 40% 39% 40% 39% 40% 40% 40% 41% 58% 59% 60% 62% 63% 63% 63% 60% 61% 60% 61% 60% 60% 60% 59% Source: Liberty Tax, Inc. estimates and IRS data, figures are for calendar years filed 5

6 This is NOT a DIY Generation In 2013, Sales in Landscaping grew 12% and Profitability improved by more than 50% Revenue in Pet Grooming & Boarding has grown 20% since 2010 From 2010 to 2013, revenue in Nail Salons has grown 34% Molly Maid cleaning service has a 97% customer retention rate, with nearly $20 billion in annual sales and a projected growth rate of 20% Source: Forbes article (4/23/2014), Statista, Franchises 6

7 Agenda The Industry The Company Future Opportunities

8 Company Overview 2 nd largest preparer of paid tax returns in the United States and Canada Gaining market share every year for 17 years Close to 4,500 locations in U.S. and Canada More than 95% franchised 8

9 Liberty s Competitive Advantage Liberty is positioned to outperform both branded competitors and Mom and Pops Vs. Branded Competitors Our Franchise structure creates ownership mentality No CEO turnover Long Term Focus Local Guerrilla Marketing efforts Vs. Mom & Pops More attractive Financial product choices In-house certification program for tax preparers Support infrastructure for complicated returns 9

10 Financial Products are Important to our Customers ~50% of U.S. Customers Receive a Refund Transfer Product Key Advantages: Refund Transfer Lowest price among branded competitors NetSpend Card Fastest access to refund - opportunity to improve attachment rates Refund Advance Most flexible offering for consumers 10

11 Growth Across All Metrics Total Locations CAGR = 7.7% Seasonal Permanent Total Returns (offices only) (in thousands) CAGR = 3.7% ,946 2,075 2,116 2,201 2,247 3,620 3,995 4,074 3,926 4,023 4, Systemwide Revenue (offices only) (in millions) $338.6 $359.1 CAGR = 6.5% $ $421.2 $434.9 * Numbers reflect both U.S. and Canada operations

12 Financial Performance ($ in millions except per share data) Revenue EBITDA Adjusted Net Income and EPS 1 $118 $131 $148 $160 $162 $32 $35 $40 $45 $43 $1.00 $1.22 $1.39 $1.45 $ Net income and EPS adjusted for non-recurring items. 12

13 Agenda The Industry The Company Future Opportunities

14 Growth Initiatives - SiempreTax+ New brand focused on fast growing, underserved Hispanic market Launched in FY2015 with 57 locations in 16 states, grew to 144 locations this year Service to Hispanic community is reinforced with over 800 Hispanic certified Liberty offices Source: U.S. Census Bureau, 1970, 1980, 1990, and 2000 Decennial Censuses; July 1, 2011 Population Estimates; 2008 National Population Projections Includes citizens, legal immigrants, non-citizen long-term visitors and illegal immigrants. 14

15 SiempreTax+ Office Locations Over 25% Hispanic 10-25% Hispanic 5-10% Hispanic Less than 5% Hispanic Source: 15

16 Affordable Care Act Increased Complication will provide long-term opportunities for paid preparers, but impact has been slow to materialize Minimal impact so far, in fact confusion and fear may be keeping people from filing 2016 changes should drive more upside for paid preparers Confusion over new 1095 notices Higher penalties - bigger refund surprises Increased IRS enforcement 16

17 Mom & Pop Consolidation Opportunity FY 2015 Paid Preparer Segment Liberty s Focus 16% H&R Block 2% Jackson Hewitt 2% Liberty 65% Mom & Pops 15% CPAs Source: Liberty Tax, Inc. estimates and IRS data 17

18 Liberty Tax, Inc. I n v e s t o r P r e s e n t a t i o n

19 Industry Attractive to Entrepreneurs ACA and Immigration Reform make this the best time in decades to be in the tax industry Predictability and history of tax industry adds a sense of security Low capital requirements Short duration of tax season results in low annual overhead Labor force is plentiful and inexpensive Annual filing requirements result in annuity like demand Recession resistant Low investment in time 2/3 of our franchisees keep their day job while building their business 19

20 There is Seasonality within the 4 Month Tax Season Q3 Q4 Fastest Refund Younger Lower income Simple returns Minimize Payment Older Higher Income Complex Return FY