Jackson Hewitt Tax Service Inc. on Thursday promoted recent hire Philip H. Sanford to president and CEO, replacing Harry W. Buckley, who came out of retirement two years ago to lead the nation's second-largest tax preparer.
The move comes at the beginning of a tax season that appears promising for Jackson Hewitt, which was dealt a strong card by the demise of larger rival H&R Block Inc.'s refund anticipation loan program.
Sanford, 56, joined the company in August as executive vice president of strategy and performance measurement.
He was previously president and chief operating officer of Value Place LLC, an extended stay hotel chain, and prior to that was chairman and CEO of quick service restaurant franchisor The Krystal Co. He is also a former senior vice president of beverage bottler Coca-Cola Enterprises.
In addition, Sanford is the principal of Port Royal Holdings LLC, a private equity firm.
Buckley, 65, a one-time CEO of H&R Block, took the helm of Jackson Hewitt in June 2009. The company said he will remain a special advisor to the president and a member of the company's board.
As tax season gets underway, Jackson Hewitt finds itself in the position of being able to offer a key product that its major competitor does not have: refund anticipation loans, or RALs.
Block last month lost its funding for the short-term, high-interest loans backed by tax refunds. RALs are particularly popular with early-season, low-income filers seeking quick access to their refunds.
Jackson Hewitt has said it has about 80 percent of the RAL funding it had historically, up from 50 percent last year.
During a conference call last month, Buckley said the inability to offer RALs in half its offices in 2010 led to a "significant loss in returns" prepared at those locations. "I would expect that if Block does not have RALs, that it would certainly benefit us. But obviously, quantitatively, I can't state how much," Buckley said.
He noted that funding for many independent tax preparers who offered RALs in the past also dried up, after the Internal Revenue Service did away with a code it used to indicate to preparers that a taxpayer would receive his entire refund. That code acted as a sort of credit check for refund loans, which are often sought by people with little access to traditional credit.
If independent shops are also unable to offer refund loans, "we certainly have something to gain," Buckley said.
Jackson Hewitt does not release specific figures on how many refund loans it makes. More than 8 million tax filers sought RALs last year, with about 3.4 million getting them from H&R Block.
The company also has a deal to set up shop in more than 2,000 Wal-Mart Stores for the 2011 tax season, in addition to company-owned and franchised offices. That will help increase Jackson Hewitt's visibility.
Jackson Hewitt's shares slipped 6 cents to $1.99 in midday trading. The stock has changed hands between 75 cents and $5.14 in the past year. Early this week, the company regained compliance with New York Stock Exchange rules that require share price remain above $1, removing the threat of delisting.