1283552--6/29/2007--JACKSON_HEWITT_TAX_SERVICE

related topics

{debt, indebtedness, cash}

{regulation, change, law}

{financial, litigation, operation}

{system, service, information}

{competitive, industry, competition}

{customer, product, revenue}

{condition, economic, financial}

{capital, credit, financial}

{regulation, government, change}

{personnel, key, retain}

{property, intellectual, protect}

{control, financial, internal}

{stock, price, operating}

{provision, law, control}

{loss, insurance, financial}

{cost, operation, labor}

{gas, price, oil}

We may not achieve the same levels of growth in revenues and profits in the future as we have in the past. We may be unable to attract and retain key personnel. Government initiatives that simplify tax return preparation could reduce the need for our services as a third party tax return preparer. Initiatives that improve the timing and efficiency of processing tax returns could reduce the demand for financial products available to our customers and demand for our services. Changes in the tax law that result in a decreased number of tax returns filed could harm our business. The current trend in filing patterns could harm our business. Our success is tied to the operations of our franchisees, yet our ability to exercise control over their operations is limited. We may be held responsible by third parties, regulators or courts for the actions of, or failures to act by, our franchisees, which exposes us to possible fines, other liabilities and negative publicity. Federal and state legislators and regulators have increasingly taken an active role in regulating financial products such as RALs, and the continuation of this trend could impede our ability to facilitate these financial products and reduce demand for our services and harm our business. The failure by us, our franchisees or the financial institutions that provide financial products to our customers through us and our franchisees to comply with legal and regulatory requirements, including with respect to tax return preparation or financial products, could result in substantial sanctions against us or require changes to our business practices which could harm our profitability and reputation. The ongoing DOJ Lawsuits and IRS examinations could harm our business, reputation, revenues and profitability. Our tax return preparation compliance program may not be successful in detecting all problems in our network. Changes in the law that result in increased regulation of tax return preparers could make it more difficult to find qualified tax preparers and could harm our business. Our facilitation of RALs and other financial products exposes us to the risk of significant losses as a result of litigation defense and resolution costs. Our insurance coverage may not cover all risks associated with our business. Failure to comply with laws and regulations that protect our customers personal and financial information could result in significant fines and harm our brand and reputation. Our operating results depend on the effectiveness of our marketing and advertising programs and franchisee support of these programs. Our operating results depend on the continued success and growth of our franchise system. Our business is, to some extent, dependent upon our customers ability to obtain financial products through our offices. Disruptions in our relationships with large retailers and shopping malls could negatively affect our growth and profitability. The highly seasonal nature of our business presents a number of financial risks and operational challenges which if we fail to meet could materially affect our business. We face significant competition in our business that may negatively impact our revenues, profitability and market position. Our business relies on technology systems and electronic communications, which, if disrupted, could significantly affect our business. Our failure to protect our intellectual property rights may harm our competitive position, and litigation to protect our intellectual property rights or defend against third party allegations of infringement may be costly. We are a holding company that depends on cash flow from our subsidiaries to meet our obligations. Our credit facility contains restrictive covenants and other requirements that may limit our business flexibility by imposing operating and financial restrictions on our operations. Our floating rate debt financing exposes us to interest rate risk. Because the tax season is relatively short and straddles two quarters, our quarterly results may not be indicative of our performance, which may increase the volatility of the trading price of our common stock. Although we intend to pay dividends in the future, our financial condition, debt covenants or Delaware law may prohibit us from doing so. We are subject to certain provisions that may have the effect of hindering, delaying or preventing third party takeovers, which may prevent our shareholders from receiving premium prices for their shares in an unsolicited takeover and make it more difficult for third parties to replace our current management. If we fail to maintain an effective system of internal controls, we may not be able to detect fraud or report our financial results accurately, which could harm our business and the trading price of our common stock.

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1283552--6/29/2007--JACKSON_HEWITT_TAX_SERVICE_INC