Although RSM McGladrey reported a 4-percent drop in revenue for the third quarter ended January 31, the firm's purchase of Caturano last year boosted tax services revenue by 5.4 percent. Meanwhile, cost-cutting helped McGladrey post an operating profit of $8.59 million, a rebound from a loss of $11.2 million in last year's corresponding period.
Those numbers were reported by the unit's parent, H&R Block this week. Revenue for the most recently ended quarter was $171.3 million, down from $178.5 million a year ago. The Caturano deal was largely responsible for the increase in revenue to $84.1 million from $79.7 million a year earlier.
Among the segments in which revenue dropped was business consulting, which reported just over $60 million in income for the third quarter, a decline of 14.9 percent from $70.5 million. Also showing a decline was accounting services with $9.1 million in revenue, off 22 percent from the prior year's $11.7 million.
In its SEC filings, Block noted that for the nine months it had a drop of $10.3 million in its Other Revenue category, down 23.7 percent from the first three quarters of fiscal 2010. The decrease stemmed primarily from a reduction in management fees received under Block's new administrative services agreement with McGladrey & Pullen. That agreement stemmed from McGladrey's move to sever the relationship, which led to the new agreement..
Bob Scott has provided information to the tax and accounting community since 1991, first as technology editor of Accounting Today, and from 1997 through 2009 as editor of its sister publication, Accounting Technology. He is known throughout the industry for his depth of knowledge and for his high journalistic standards. Scott has made frequent appearances as a speaker, moderator and panelist and events serving tax and accounting professionals. He has a strong background in computer journalism as an editor with two former trade publications, Computer+Software News and MIS Week and spent several years with weekly and daily newspapers in Morris County New Jersey prior to that. A graduate of Indiana University with a degree in journalism, Bob is a native of Madison, Ind
