\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 second quarter of fiscal 2021, which ended on February 28, 2021.\n<\/p>\n
Introduction<\/span><\/b><\/p>\n \nThe Company was very pleased with its second quarter and fiscal 2021 year-to-date results. The Company\u2019s strong, and stronger-than-expected performance reflects the continuation and acceleration of four key trends that have been repeated throughout the pandemic. These trends include:\n<\/p>\n \nBob Whitman, Chairman and Chief Executive Officer, commented, \u201cWe are really pleased that our second quarter and year-to-date results were strong, and even stronger than expected. This performance was driven by the continued success of our All Access Pass subscription model where we achieved double-digit sales growth in the second quarter, year-to-date, and latest twelve month periods, and by the strength of our subscription business overall. In the coming quarters and years we expect three factors to continue to drive significant growth in subscription and related sales and profitability. First: driven by growth in All Access Pass, we expect substantially all the Company\u2019s sales to be subscription and subscription-related within 3-4 years; second: we expect the already significant lifetime customer value of our All Access Passholders to continue to increase; and third: we expect the volume of new All Access Pass logos to grow significantly as we continue to aggressively grow our sales force and licensee network. As the almost complete conversion to subscription and related revenue occurs, we expect virtually the entire Company to be able to generate the same kinds of growth in revenue, gross margins, revenue retention, and customer impact we have seen in our subscription business over the past five years.\u201d\n<\/p>\n \nWhitman added, \u201cCash flow during the first half of fiscal 2021 was strong, and we ended the quarter with approximately $55 million in liquidity, a level higher than the $39 million of we had when the pandemic started, and up from $42 million at the end of fiscal 2020 in August. The Company had $40.3 million of cash, with no borrowings on its $15.0 million revolving line of credit, at February 28, 2021.\u201d\n<\/p>\n Financial Overview<\/span><\/b><\/p>\n \nThe following is a summary of key financial results for the quarter ended February 28, 2021:\n<\/p>\n Fiscal 2021 Year-to-Date Financial Results<\/span><\/b><\/p>\n \nConsolidated revenue for the first half of fiscal 2021 was $96.5 million compared with $112.4 million for the two quarters ended February 29, 2020. The Company\u2019s fiscal 2021 sales declined primarily as a result of the impact of the continuing COVID-19 pandemic. Despite the challenging economic environment, the Company\u2019s All Access Pass subscription revenues remained strong during the first half of fiscal 2021 and increased 14% compared with the first half of fiscal 2019. Enterprise Division sales were $77.5 million, compared with $86.5 million in the first two quarters of the prior year, and were primarily impacted by reduced international direct office sales, decreased materials sales, and decreased international licensee sales. While many countries continue to be in various stages of lockdown, the Company has seen international sales performance increase during last year\u2019s fourth quarter, and during both the first and second quarters of fiscal 2021, and the Company remains optimistic about the recovery of its international operations during the second half of fiscal 2021. Education Division revenues were $16.0 million compared with $22.0 million in the first half of fiscal 2020. Ongoing disruptions to school operating environments reduced the delivery of coaching, consulting, and training days and related material sales to educational institutions as educators have dealt with changing and uncertain schedules. However, the majority of the coaching, consulting, and training days not able to be delivered during first half of fiscal 2021 are contractual, and will be recognized in the second half of the fiscal year. Consolidated gross profit for the first two quarters of fiscal 2021 was $73.7 million compared with $80.7 million in the first two quarters of fiscal 2020. Gross margin for the first half of fiscal 2021 improved 459 basis points to 76.4% of sales compared with 71.8% in the first half of fiscal 2020, reflecting increased subscription services revenues in the overall mix of sales.\n<\/p>\n \nOperating expenses during the first two quarters of fiscal 2021 decreased $8.2 million compared with the first half of fiscal 2020 primarily due to decreased SG&A expenses. Decreased SG&A expense was primarily due to decreased travel, entertainment, and marketing; decreased associate costs; and cost savings from the successful implementation of expense reduction initiatives in various areas of the Company\u2019s operations. The Company\u2019s income from operations through February 28, 2021 improved significantly to $0.7 million compared with a loss of $(0.5) million in the first two quarters of fiscal 2020. Adjusted EBITDA for the two quarters ended February 28, 2021 remained strong at $8.8 million, compared with $9.0 million in the first two quarters of fiscal 2020. Including the impact of significantly increased tax expense resulting primarily from an increase in the valuation allowance against its deferred tax assets and various other non-deductible expenses, the Company reported a net loss of $(0.9) million, or $(0.07) per share, for the first two quarters of fiscal 2021, compared with $0.6 million of net income, or $0.04 per diluted share, in the first half of fiscal 2020.\n<\/p>\n Fiscal 2021 Outlook<\/span><\/b><\/p>\n \nBased on current expectations, including the duration and anticipated economic recovery from the COVID-19 pandemic, the Company affirms its previously announced guidance and continues to expect Adjusted EBITDA to total between $20 million to $22 million in fiscal 2021. The Company remains confident that the strength of the All Access Pass and Leader in Me<\/i> membership, which have driven Franklin Covey\u2019s growth trajectory across recent years, and which have remained strong during the pandemic, will drive accelerated growth during fiscal 2021 and in the future.\n<\/p>\n Earnings Conference Call<\/span><\/b><\/p>\n \nOn Thursday, April 1, 2021, at 5:00 p.m. Eastern (3:00 p.m. Mountain) Franklin Covey will host a conference call to review its financial results for the second quarter of fiscal 2021, which ended on February 28, 2021. Interested persons may participate by dialing 800-708-4540 (International participants may dial 847-619-6397), access code: 50128873. Alternatively, a webcast will be accessible at the following Web site: https:\/\/edge.media-server.com\/mmc\/p\/k99v65z2<\/a><\/span>. A replay of the webcast will remain accessible through April 22, 2021 on the Investor Relations area of the Company\u2019s Web site.\n<\/p>\n Forward-Looking Statements<\/span><\/b><\/p>\n \nThis press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 including those statements related to the Company\u2019s future results and profitability and other goals relating to the growth and operations of the Company. Forward-looking statements are based upon management\u2019s current expectations and are subject to various risks and uncertainties including, but not limited to: general economic conditions; the severity and duration of global business disruptions from the COVID-19 outbreak; the ability of the Company to operate effectively during and in the aftermath of the COVID-19 pandemic; expectations regarding the economic recovery from the pandemic; renewals of subscription contracts; the impact of deferred revenues on future financial results; market acceptance of new products or services, including new AAP portal upgrades; the ability to achieve sustainable growth in future periods; and other factors identified and discussed in the Company\u2019s most recent Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission. Many of these conditions are beyond the Company\u2019s control or influence, any one of which may cause future results to differ materially from the Company\u2019s current expectations, and there can be no assurance that the Company\u2019s actual future performance will meet management\u2019s expectations. These forward-looking statements are based on management\u2019s current expectations and the Company undertakes no obligation to update or revise these forward-looking statements to reflect events or circumstances subsequent to this press release.\n<\/p>\n Non-GAAP Financial Information<\/span><\/b><\/p>\n \nThis earnings release includes the concept of adjusted earnings before interest, income taxes, depreciation, and amortization (Adjusted EBITDA) which is a non-GAAP measure. The Company defines Adjusted EBITDA as net income or loss excluding the impact of interest expense, income taxes, intangible asset amortization, depreciation, stock-based compensation expense, and certain other items such as adjustments to the fair value of expected contingent consideration liabilities arising from business acquisitions. The Company references this non-GAAP financial measure in its decision making because it provides supplemental information that facilitates consistent internal comparisons to the historical operating performance of prior periods and the Company believes it provides investors with greater transparency to evaluate operational activities and financial results. Refer to the attached table for the reconciliation of a non-GAAP financial measure, \u201cAdjusted EBITDA,\u201d to consolidated net income (loss), a related GAAP financial measure.\n<\/p>\n \nThe Company is unable to provide a reconciliation of the above forward-looking estimate of non-GAAP Adjusted EBITDA to GAAP measures because certain information needed to make a reasonable forward-looking estimate is difficult to obtain and dependent on future events which may be uncertain, or out of the Company\u2019s control, including the amount of AAP contracts invoiced, the number of AAP contracts that are renewed, necessary costs to deliver the Company\u2019s offerings, such as unanticipated curriculum development costs, and other potential variables. Accordingly, a reconciliation is not available without unreasonable effort.\n<\/p>\n About Franklin Covey Co.<\/span><\/b><\/p>\n \nFranklin Covey Co. (NYSE: FC) is a global public company, specializing in organizational performance improvement. We help organizations achieve results that require lasting changes in human behavior. Our world-class solutions enable greatness in individuals, teams, and organizations and are accessible through the FranklinCovey All Access Pass\u00ae. These solutions are available across multiple delivery modalities, including online presentations, in 21 languages. Clients have included organizations in the Fortune 100<\/i>, Fortune 500<\/i>, thousands of small and mid-sized businesses, numerous government entities, and educational institutions. FranklinCovey has directly owned and licensee partner offices providing professional services in more than 160 countries and territories.\n<\/p>\n \n2021\n<\/p>\n<\/td>\n \n2020\n<\/p>\n<\/td>\n \n2021\n<\/p>\n<\/td>\n \n2020\n<\/p>\n<\/td>\n<\/tr>\n \n$ 48,162\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 53,745\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 96,486\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 112,357\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n10,822\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n15,079\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n22,760\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n31,662\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n37,340\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n38,666\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n73,726\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n80,695\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n33,623\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n36,221\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n67,306\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n75,620\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n1,740\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n1,653\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n3,481\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n3,273\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n1,133\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n1,170\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n2,265\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n2,340\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n 844<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n (378<\/b><\/p>\n<\/td>\n )<\/b><\/p>\n<\/td>\n 674<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n (538<\/b><\/p>\n<\/td>\n )<\/b><\/p>\n<\/td>\n<\/tr>\n \n(524\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n(544\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n(1,068\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n(1,144\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n<\/tr>\n 320<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n (922<\/b><\/p>\n<\/td>\n )<\/b><\/p>\n<\/td>\n (394<\/b><\/p>\n<\/td>\n )<\/b><\/p>\n<\/td>\n (1,682<\/b><\/p>\n<\/td>\n )<\/b><\/p>\n<\/td>\n<\/tr>\n \n(366\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n2,019\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(544\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n2,235\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n $ (46<\/b><\/p>\n<\/td>\n )<\/b><\/p>\n<\/td>\n $ 1,097<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n $ (938<\/b><\/p>\n<\/td>\n )<\/b><\/p>\n<\/td>\n $ 553<\/b><\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n$ (0.00\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n$ 0.08\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ (0.07\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n$ 0.04\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n14,082\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n13,841\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n14,029\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n13,911\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n14,082\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n13,990\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n14,029\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n14,118\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n$ 5,123\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 4,056\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 8,839\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 9,017\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n(1)\n<\/p>\n<\/td>\n \n2021\n<\/p>\n<\/td>\n \n2020\n<\/p>\n<\/td>\n \n2021\n<\/p>\n<\/td>\n \n2020\n<\/p>\n<\/td>\n<\/tr>\n \n$ (46\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n$ 1,097\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ (938\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n$ 553\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n524\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n544\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n1,068\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n1,144\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n366\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(2,019\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n544\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(2,235\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n<\/tr>\n \n1,133\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n1,170\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n2,265\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n2,340\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n1,740\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n1,653\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n3,481\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n3,273\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n1,599\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n1,793\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n2,757\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n3,644\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n(16\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n(182\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n46\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(91\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n<\/tr>\n \n(27\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(234\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n(150\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n(150\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n–\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n–\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n389\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n$ 5,123\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 4,056\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 8,839\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 9,017\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n10.6\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n \n7.5\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n \n9.2\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n \n8.0\n<\/p>\n<\/td>\n \n%\n<\/p>\n<\/td>\n<\/tr>\n \n2021\n<\/p>\n<\/td>\n \n2020\n<\/p>\n<\/td>\n \n2021\n<\/p>\n<\/td>\n \n2020\n<\/p>\n<\/td>\n<\/tr>\n \n$ 35,738\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 37,973\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 72,481\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 80,085\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n2,429\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n2,691\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n5,026\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n6,411\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n38,167\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n40,664\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n77,507\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n86,496\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n8,478\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n10,893\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n15,975\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n21,974\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n1,517\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n2,188\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n3,004\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n3,887\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n$ 48,162\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 53,745\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 96,486\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 112,357\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n$ 29,084\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 28,702\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 58,523\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 60,113\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n2,100\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n2,237\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n4,385\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n5,357\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n31,184\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n30,939\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n62,908\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n65,470\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n5,344\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n6,460\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n9,331\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n13,117\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n812\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n1,267\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n1,487\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n2,108\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n$ 37,340\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 38,666\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 73,726\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 80,695\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n$ 6,131\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 4,734\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 12,827\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 10,444\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n1,505\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n1,384\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n2,795\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n3,419\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n7,636\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n6,118\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n15,622\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n13,863\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n \n(858\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n(1,068\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n(3,142\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n(2,171\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n<\/tr>\n \n(1,655\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n(994\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n(3,641\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n \n(2,675\n<\/p>\n<\/td>\n \n)\n<\/p>\n<\/td>\n<\/tr>\n \n$ 5,123\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 4,056\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 8,839\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n \n$ 9,017\n<\/p>\n<\/td>\n \n\u00a0\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \nFebruary 28,\n<\/p>\n<\/td>\n \nAugust 31,\n<\/p>\n<\/td>\n<\/tr>\n \n2021\n<\/p>\n<\/td>\n \n2020\n<\/p>\n<\/td>\n<\/tr>\n \n$ 40,343\n<\/p>\n<\/td>\n \n$ 27,137\n<\/p>\n<\/td>\n<\/tr>\n \n41,482\n<\/p>\n<\/td>\n \n56,407\n<\/p>\n<\/td>\n<\/tr>\n \n2,641\n<\/p>\n<\/td>\n \n2,974\n<\/p>\n<\/td>\n<\/tr>\n \n15,799\n<\/p>\n<\/td>\n \n15,146\n<\/p>\n<\/td>\n<\/tr>\n \n100,265\n<\/p>\n<\/td>\n \n101,664\n<\/p>\n<\/td>\n<\/tr>\n \n13,159\n<\/p>\n<\/td>\n \n15,723\n<\/p>\n<\/td>\n<\/tr>\n \n44,864\n<\/p>\n<\/td>\n \n47,125\n<\/p>\n<\/td>\n<\/tr>\n \n24,220\n<\/p>\n<\/td>\n \n24,220\n<\/p>\n<\/td>\n<\/tr>\n \n843\n<\/p>\n<\/td>\n \n1,094\n<\/p>\n<\/td>\n<\/tr>\n \n15,378\n<\/p>\n<\/td>\n \n15,611\n<\/p>\n<\/td>\n<\/tr>\n \n$ 198,729\n<\/p>\n<\/td>\n \n$ 205,437\n<\/p>\n<\/td>\n<\/tr>\n \n$ 5,000\n<\/p>\n<\/td>\n \n$ 5,000\n<\/p>\n<\/td>\n<\/tr>\n \n2,741\n<\/p>\n<\/td>\n \n2,600\n<\/p>\n<\/td>\n<\/tr>\n \n5,060\n<\/p>\n<\/td>\n \n5,622\n<\/p>\n<\/td>\n<\/tr>\n \n57,344\n<\/p>\n<\/td>\n \n59,289\n<\/p>\n<\/td>\n<\/tr>\n \n8,126\n<\/p>\n<\/td>\n \n7,389\n<\/p>\n<\/td>\n<\/tr>\n \n22,837\n<\/p>\n<\/td>\n \n22,628\n<\/p>\n<\/td>\n<\/tr>\n \n101,108\n<\/p>\n<\/td>\n \n102,528\n<\/p>\n<\/td>\n<\/tr>\n \n12,500\n<\/p>\n<\/td>\n \n15,000\n<\/p>\n<\/td>\n<\/tr>\n \n12,638\n<\/p>\n<\/td>\n \n14,048\n<\/p>\n<\/td>\n<\/tr>\n \n8,631\n<\/p>\n<\/td>\n \n9,110\n<\/p>\n<\/td>\n<\/tr>\n \n4,812\n<\/p>\n<\/td>\n \n5,298\n<\/p>\n<\/td>\n<\/tr>\n \n139,689\n<\/p>\n<\/td>\n \n145,984\n<\/p>\n<\/td>\n<\/tr>\n \n1,353\n<\/p>\n<\/td>\n \n1,353\n<\/p>\n<\/td>\n<\/tr>\n \n208,816\n<\/p>\n<\/td>\n \n211,920\n<\/p>\n<\/td>\n<\/tr>\n \n49,030\n<\/p>\n<\/td>\n \n49,968\n<\/p>\n<\/td>\n<\/tr>\n \n915\n<\/p>\n<\/td>\n \n641\n<\/p>\n<\/td>\n<\/tr>\n \n(201,074)\n<\/p>\n<\/td>\n \n(204,429)\n<\/p>\n<\/td>\n<\/tr>\n \n59,040\n<\/p>\n<\/td>\n \n59,453\n<\/p>\n<\/td>\n<\/tr>\n \n$ 198,729\n<\/p>\n<\/td>\n \n$ 205,437\n<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n\u00a0\n<\/p>\n View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20210401005812\/en\/<\/a><\/span><\/p>\n \nInvestor Contact: \nMedia Contact: KEYWORDS:<\/b> Utah United States North America<\/p>\n INDUSTRY KEYWORDS:<\/b> Primary\/Secondary Professional Services Education Other Professional Services Human Resources Other Education<\/p>\n\n
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\n FRANKLIN COVEY CO.<\/span><\/b><\/td>\n<\/tr>\n \n Condensed Consolidated Statements of Operations<\/span><\/b><\/td>\n<\/tr>\n \n (in thousands, except per-share amounts, and unaudited)<\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n Quarter Ended<\/td>\n \n Two Quarters Ended<\/td>\n<\/tr>\n \n \n \n February 28,<\/td>\n \n February 29,<\/td>\n \n February 28,<\/td>\n \n February 29,<\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Net sales<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Cost of sales<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Gross profit<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Selling, general, and administrative<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Depreciation<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Amortization<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Income (loss) from operations<\/b><\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Interest expense, net<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Income (loss) before income taxes<\/b><\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Income tax benefit (provision)<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Net income (loss)<\/b><\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Net income (loss) per common share:<\/td>\n \n \n \n \n \n \n <\/tr>\n \n Basic and diluted<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Weighted average common shares:<\/td>\n \n \n \n \n \n \n <\/tr>\n \n Basic<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n Diluted<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Other data:<\/td>\n \n \n \n \n \n \n <\/tr>\n \n Adjusted EBITDA(1)<\/sup><\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n
\n \n \u00a0<\/td>\n The term Adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, stock-based<\/td>\n<\/tr>\n \n \n \u00a0<\/td>\n compensation, and certain other items) is a non-GAAP financial measure that the Company believes is useful<\/td>\n<\/tr>\n \n \n \u00a0<\/td>\n to investors in evaluating its results. For a reconciliation of this non-GAAP measure to a comparable GAAP<\/td>\n<\/tr>\n \n \n \u00a0<\/td>\n equivalent, refer to the Reconciliation of Net Income (Loss) to Adjusted EBITDA as shown below.<\/td>\n<\/tr>\n<\/table>\n \n
\n FRANKLIN COVEY CO.<\/span><\/b><\/td>\n<\/tr>\n \n Reconciliation of Net Income (Loss) to Adjusted EBITDA<\/span><\/b><\/td>\n<\/tr>\n \n (in thousands and unaudited)<\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n \n \n Quarter Ended<\/td>\n \n Two Quarters Ended<\/td>\n<\/tr>\n \n \n \n \n \n February 28,<\/td>\n \n February 29,<\/td>\n \n February 28,<\/td>\n \n February 29,<\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n \n \n \n Reconciliation of net income (loss) to Adjusted EBITDA:<\/td>\n \n \n \n \n \n <\/tr>\n \n \n Net income (loss)<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Adjustments:<\/td>\n \n \n \n \n \n \n \n <\/tr>\n \n \n \n Interest expense, net<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Income tax provision (benefit)<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Amortization<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Depreciation<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Stock-based compensation<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Increase (decrease) in the fair value of contingent<\/td>\n \n \n \n \n \n \n \n <\/tr>\n \n \n \n consideration liabilities<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Government COVID assistance<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Gain from insurance settlement<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Knowledge Capital wind-down costs<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n Adjusted EBITDA<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n Adjusted EBITDA margin<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n FRANKLIN COVEY CO.<\/span><\/b><\/td>\n<\/tr>\n \n Additional Financial Information<\/span><\/b><\/td>\n<\/tr>\n \n (in thousands and unaudited)<\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n \n \n Quarter Ended<\/td>\n \n Two Quarters Ended<\/td>\n<\/tr>\n \n \n \n \n \n February 28,<\/td>\n \n February 29,<\/td>\n \n February 28,<\/td>\n \n February 29,<\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n \n \n \n Sales by Division\/Segment:<\/b><\/td>\n \n \n \n \n \n \n \n <\/tr>\n \n \n Enterprise Division:<\/td>\n \n \n \n \n \n \n \n <\/tr>\n \n \n \n Direct offices<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n International licensees<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Education Division<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Corporate and other<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n Consolidated<\/b><\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Gross Profit by Division\/Segment:<\/b><\/td>\n \n \n \n \n \n \n \n <\/tr>\n \n \n Enterprise Division:<\/td>\n \n \n \n \n \n \n \n <\/tr>\n \n \n \n Direct offices<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n International licensees<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Education Division<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Corporate and other<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n Consolidated<\/b><\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Adjusted EBITDA by Division\/Segment:<\/b><\/td>\n \n \n \n \n \n \n \n <\/tr>\n \n \n Enterprise Division:<\/td>\n \n \n \n \n \n \n \n <\/tr>\n \n \n \n Direct offices<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n International licensees<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Education Division<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Corporate and other<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n Consolidated<\/b><\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n
\n FRANKLIN COVEY CO.<\/span><\/b><\/td>\n<\/tr>\n \n Condensed Consolidated Balance Sheets<\/span><\/b><\/td>\n<\/tr>\n \n (in thousands and unaudited)<\/td>\n<\/tr>\n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n \n \n \n Assets<\/span><\/td>\n <\/tr>\n \n Current assets:<\/td>\n \n \n <\/tr>\n \n \n Cash and cash equivalents<\/td>\n \n \n \n \n \n Accounts receivable, less allowance for<\/td>\n \n \n <\/tr>\n \n \n doubtful accounts of $3,662 and $4,159<\/td>\n \n \n \n \n \n Inventories<\/td>\n \n \n \n \n \n Prepaid expenses and other current assets<\/td>\n \n \n \n \n \n Total current assets<\/td>\n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Property and equipment, net<\/td>\n \n \n \n \n Intangible assets, net<\/td>\n \n \n \n \n Goodwill<\/td>\n \n \n \n \n Deferred income tax assets<\/td>\n \n \n \n \n Other long-term assets<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Liabilities and Shareholders’ Equity<\/span><\/td>\n \n \n <\/tr>\n \n Current liabilities:<\/td>\n \n \n <\/tr>\n \n \n Current portion of term notes payable<\/td>\n \n \n \n \n \n Current portion of financing obligation<\/td>\n \n \n \n \n \n Accounts payable<\/td>\n \n \n \n \n \n Deferred subscription revenue<\/td>\n \n \n \n \n \n Other deferred revenue<\/td>\n \n \n \n \n \n Accrued liabilities<\/td>\n \n \n \n \n \n Total current liabilities<\/td>\n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Term notes payable, less current portion<\/td>\n \n \n \n \n Financing obligation, less current portion<\/td>\n \n \n \n \n Other liabilities<\/td>\n \n \n \n \n Deferred income tax liabilities<\/td>\n \n \n \n \n \n Total liabilities<\/td>\n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Shareholders’ equity:<\/td>\n \n \n <\/tr>\n \n \n Common stock<\/td>\n \n \n \n \n \n Additional paid-in capital<\/td>\n \n \n \n \n \n Retained earnings<\/td>\n \n \n \n \n \n Accumulated other comprehensive income<\/td>\n \n \n \n \n \n Treasury stock at cost, 12,915 and 13,175 shares<\/td>\n \n \n \n \n \n Total shareholders’ equity<\/td>\n \n \n \n \n \n \n \n \n \n <\/p>\n
\n
Franklin Covey
\n
Steve Young
\n
801-817-1776
\n
investor.relations@franklincovey.com<\/a><\/p>\n
\n
Franklin Covey
\n
Debra Lund
\n
801-817-6440
\n
Debra.Lund@franklincovey.com<\/a><\/p>\n
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