{"id":410750,"date":"2021-01-07T16:10:20","date_gmt":"2021-01-07T21:10:20","guid":{"rendered":"http:\/\/www.marketnewsdesk.com\/?p=410750"},"modified":"2021-01-07T16:10:20","modified_gmt":"2021-01-07T21:10:20","slug":"franklin-covey-reports-first-quarter-fiscal-2021-results","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/franklin-covey-reports-first-quarter-fiscal-2021-results\/","title":{"rendered":"Franklin Covey Reports First Quarter Fiscal 2021 Results"},"content":{"rendered":"

<\/p>\n

Franklin Covey Reports First Quarter Fiscal 2021 Results<\/b><\/p>\n

Net Income and Adjusted EBITDA Exceed Expectations<\/b><\/p>\n

Company\u2019s Powerful Subscription Business Growth Engine, the All Access Pass and Leader in Me<\/i> Membership, Show Continued Strong Growth, High Revenue Retention, and Durability with Clients<\/b><\/p>\n

Improved Gross Margin and Decreased Operating Expenses Allow Income from Operations to Remain Effectively Even with the Prior Year\u2019s Strong Performance Despite Pandemic<\/b><\/p>\n

Cash Flows from Operating Activities Increases 59% to $10.9 Million in the First Quarter\u2014Liquidity and Financial Position Remain Strong at November 30, 2020<\/b><\/p>\n

SALT LAKE CITY–(BUSINESS WIRE<\/a>)–
\nFranklin Covey Co. (NYSE: FC), a global performance improvement company that creates, and on a subscription basis, distributes world-class content, training, processes, and tools that organizations and individuals use to achieve systemic changes in human behavior to transform their results, today announced financial results for its first quarter of fiscal 2021, which ended on November 30, 2020.\n<\/p>\n

Introduction<\/span><\/b><\/p>\n

\nWhile the Company\u2019s first quarter 2021 results were impacted by the ongoing COVID-19 pandemic, the Company was pleased that due to the continued strength of its subscription business and its quick pivot to delivering content live-online and through other digital modalities, its first quarter financial results were better-than-expected. The Company\u2019s revenues were favorably impacted by the continued strength of its subscription business, driven by the All Access Pass (AAP) in the Enterprise Division and the Leader in Me <\/i>membership in the Education Division. Throughout the pandemic, the Company\u2019s AAP sales have been strong and resilient. During the first quarter of fiscal 2021, All Access Pass sales grew 16% compared with the prior year, and annual AAP revenue retention also remained strong at greater than 90%. Following the initial impact of the pandemic, the Company\u2019s U.S.\/Canada and governmental clients quickly transitioned to the Company\u2019s live-online and digital delivery options, and the first quarter\u2019s invoiced sales of services were nearly even with the strong prior year results.\n<\/p>\n

\nThe Company expects that sales and revenue retention for AAP subscription sales, and the booking pace for AAP related add-on services will continue to be strong in both the current and future periods. Sales at the Company\u2019s operations in China, Japan, Germany, and its licensee partners improved substantially compared with both the third and fourth quarters of fiscal 2020. The Company\u2019s China and Japan direct offices and its licensee partners continue to transition to selling AAP. Because most of these operations had just started to sell the All Access Pass, they did not have a strong base of subscription revenue at the onset of the pandemic. As a result, these operations were primarily dependent upon the in-person delivery of content and training. Stay-at-home restrictions made it necessary to reschedule nearly all of their training engagements and sales declined disproportionately at these operations. However, international operations continue to improve and licensee revenues increased 95% over the fourth quarter of fiscal 2020. The Company is optimistic that international momentum will continue to rebuild in fiscal 2021.\n<\/p>\n

\nThrough continued subscription business strength, recovering add-on services revenue, improved margins, and successful efforts to lower SG&A expenses, the Company was able to exceed expectations for net income and adjusted earnings before interest, income taxes, depreciation, and amortization (Adjusted EBITDA). In addition, the Company\u2019s cash flows from operating activities increased 59% over the first quarter of fiscal 2020 and its liquidity and financial position remained strong at November 30, 2020.\n<\/p>\n

\nBob Whitman, Chairman and Chief Executive Officer, commented, \u201cWe are really pleased that in the first quarter of fiscal 2021, Franklin Covey\u2019s operations continued to demonstrate their strength, agility, and ability to progress, even during the continuing pandemic. During the quarter, revenue was strong, driven particularly by the strength and growth of the All Access Pass and related services, which accounts for nearly 85% of revenues in North America. In addition, gross margins increased compared to even those achieved in last year\u2019s very strong first quarter, and operating expenses decreased significantly compared with the prior year. We were also pleased that sales in our international operations, which were just beginning to offer the All Access Pass and, therefore, did not have a substantial base of subscription revenue to cushion them, improved significantly during the first quarter. As a result of the combination of these trends, we achieved Adjusted EBITDA of $3.7 million in the first quarter of fiscal 2021 versus an expectation of between $2.0 million and $2.5 million.\u201d\n<\/p>\n

\nWhitman continued, \u201cCash flow for the quarter was strong and we ended the quarter with approximately $50 million in liquidity, a level higher than the $39 million of liquidity we had when the pandemic started, and up from $42 million at the end of fiscal 2020 in August.\u201d\n<\/p>\n

Financial Overview<\/span><\/b><\/p>\n

\nThe following is a summary of key financial results for the quarter ended November 30, 2020:\n<\/p>\n