\nFranklin Covey Co. (NYSE: FC), a leader in organizational performance improvement 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 third quarter of fiscal 2023, which ended on May 31, 2023.<\/p>\n
Introduction<\/span><\/b><\/p>\n \nThe Company\u2019s third quarter fiscal 2023 financial performance was very strong, highlighted by the following key metrics:<\/p>\n \nPaul Walker, President and Chief Executive Officer, commented, \u201cWe continue to be pleased with the demonstrated strength and durability of our subscription business model, which was reflected in our strong third quarter results. These results were particularly strong when viewed in the context that we were able to improve significantly over a period of record growth in last year\u2019s third quarter, a period which benefited from comparison with pandemic-impacted results in the third quarter of fiscal 2021. On a two-year basis, the more than $77 million of revenue growth achieved represents the greatest two-year period of growth since our conversion to a subscription business model.\u201d<\/p>\n \nWalker continued, \u201cOur third quarter results featured continuing revenue growth, a strong gross margin, lower selling and administrative expenses as a percent of total sales, and growth in Adjusted EBITDA over the prior year. Our consolidated sales increased 8% to a third-quarter record of $71.4 million, our gross margin remained strong at 75.9%, and our Adjusted EBITDA increased 9% to $11.9 million. Even after purchasing $25 million of our common stock during the quarter, our liquidity remained strong with over $100 million available from existing cash and our new revolving credit facility. We achieved these strong results despite currency exchange rates that have impacted our operations.\u201d<\/p>\n \nWalker concluded, \u201cThe strength of our third quarter results reflects the power of our continued focus on three fundamental priorities: First, we strive to be our clients\u2019 partner of choice for addressing the challenges that really matter to them. We believe that being the partner of choice for our clients translates into high retention, strong revenue growth, and an increasing lifetime customer value. Second, we endeavor to help our clients through a profitable business model that also produces high levels of cash flow. A strong and profitable business model means that a significant portion of our revenue growth flows through to increases in Adjusted EBITDA and incremental cash flows, which in turn produces significant value to our shareholders. And third, we seek to reinvest these profits and cash flow into activities that will drive better solutions for our clients and high rates of return for our key stakeholders. Continued investment in our solutions provides improved services and products to help our clients solve ever more challenging issues, which then drives increased sales and increases the size of our strategic moat. In addition, utilizing excess liquidity to return capital to shareholders in the form of stock purchases creates additional substantial shareholder value. Consistently advancing these key priorities quarter after quarter is helping us be the kind of Company that can strengthen and expand our strategic moat by continually helping our clients win; by providing our associates with an opportunity to do meaningful work for our clients and fostering personal growth; generating high rates of growth in Adjusted EBITDA and cash flows; and returning substantial capital to our shareholders. Our continued focus on these priorities was key to our strong third quarter performance, and we believe will be fundamental to continued growth in future periods.\u201d<\/p>\n Third Quarter Financial Overview<\/span><\/b><\/p>\n \nThe following is a summary of financial results for the third quarter of fiscal 2023:<\/p>\n Fiscal 2023 Year-to-Date Financial Results<\/span><\/b><\/p>\n \nConsolidated revenue for the three quarters ended May 31, 2023, increased 10%, or $18.5 million, to $202.6 million compared with $184.0 million in the same period of fiscal 2022. In constant currency, the Company\u2019s consolidated sales for the first three quarters of 2023 increased 12% over the prior year. Increased sales in the first three quarters of fiscal 2023 were primarily due to continued strong sales of subscription and subscription-related services, including the All Access Pass in the Enterprise Division and the Leader in Me<\/i> membership in the Education Division. Enterprise Division sales for the three quarters ended May 31, 2023, increased 8%, or $11.0 million, to $153.2 million compared with $142.2 million in the first three quarters of the prior year. In constant currency, Enterprise Division sales increased 10% compared with the first three quarters of fiscal 2022. AAP subscription and subscription services sales increased 12% to $116.3 million compared with $104.2 million in the prior year. For the three quarters ended May 31, 2023, sales increased in each of the Company\u2019s foreign direct offices, except Japan, which decreased 2% compared with the prior year, primarily due to lingering post-COVID issues. Thanks to a strong third quarter, fiscal 2023 sales in China have increased 11% compared with the prior year and reflect improving conditions in that country. Total Direct Office sales improved 5% over the first three quarters of fiscal 2022. International licensee revenues continue to improve and increased 10% compared with the prior year primarily on the strength of increased royalty revenues. Education Division sales grew 23%, or $8.4 million, to $45.6 million compared with $37.2 million in the first three quarters of fiscal 2022. Education Division sales grew primarily due to increased consulting, coaching, and training days delivered during the year, increased recognition of previously deferred revenue related to Leader in Me<\/i> subscriptions, and increased Symposium conference revenues. Gross profit for the first three quarters of fiscal 2023 increased 8%, or $11.3 million, to $154.2 million compared with $142.8 million in fiscal 2022. Gross margin for the three quarters ended May 31, 2023, remained strong at 76.1% of sales compared with 77.6% in the first three quarters of fiscal 2022.<\/p>\n \nOperating expenses for the three quarters ended May 31, 2023, increased $10.6 million compared with the corresponding three quarters of fiscal 2022, due to an $11.9 million increase in SG&A expenses. SG&A expenses increased primarily due to additional associate costs resulting from investments in new client-facing personnel and increased salaries; increased commissions on higher sales; and increased stock-based compensation expense. Despite the increase in overall SG&A expenses, as a percentage of sales, SG&A remained consistent with the prior year at 65.2%. The Company\u2019s income from operations through May 31, 2023, improved to $15.8 million compared with $15.0 million in fiscal 2022. The Company\u2019s pre-tax income for the three quarters ended May 31, 2023, increased to $15.4 million compared with $13.8 million in fiscal 2022. However, due to the significant income tax benefit recorded in the third quarter of fiscal 2022, which did not repeat in fiscal 2023, net income for the three quarters ended May 31, 2023, was $11.0 million, or $0.76 per diluted share, compared with $12.9 million, or $0.90 per diluted share, for the first three quarters of fiscal 2022. Adjusted EBITDA for the three quarters ended May 31, 2023, increased 9%, or $2.7 million, to $31.6 million, compared with $28.9 million in the same period of fiscal 2022. In constant currency, Adjusted EBITDA in the first three quarters of fiscal 2023 increased 14% compared with fiscal 2022.<\/p>\n Fiscal 2023 Guidance and Outlook<\/span><\/b><\/p>\n \nDriven by the continued strategic strength and durability of its All Access Pass and Leader in Me<\/i> membership subscriptions, which have resulted in accelerated growth over the past years, and performance through the first three quarters of fiscal 2023, the Company affirms its previously provided guidance that Adjusted EBITDA for fiscal 2023 will increase to between $47 million and $49 million in constant currency, compared with the $42.2 million in Adjusted EBITDA achieved in fiscal 2022. The Company expects to achieve this growth despite additional growth investments and continuing macroeconomic headwinds that have adversely impacted its fiscal 2023 operating results. The Company remains confident in the strength of the All Access Pass and Leader in Me<\/i> membership subscriptions, which have driven Franklin Covey\u2019s growth across recent years and which are expected to drive continued growth in the future.<\/p>\n Earnings Conference Call<\/span><\/b><\/p>\n \nOn Wednesday, June 28, 2023, 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 third quarter of fiscal 2023. Interested persons may access a live audio webcast at https:\/\/edge.media-server.com\/mmc\/p\/3tpokmnp<\/a> or may participate via telephone by registering at https:\/\/register.vevent.com\/register\/BIb6c8f39aba5d4a4d8b2ec7bdb3e9b9ff<\/a>. Once registered, participants will have the option of: 1) dialing into the call from their phone (via a personalized PIN); or 2) clicking the \u201cCall Me\u201d option to receive an automated call directly to their phone. For either option, registration will be required to access the call. A replay of the conference call webcast will be archived on the Company\u2019s website for at least 30 days.<\/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; renewals of subscription contracts; the impact of deferred revenues on future financial results; impacts from global economic and supply chain disruptions; lingering impacts from the COVID-19 pandemic on international operations; market acceptance of new products or services, including new AAP portal upgrades; inflation; 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.<\/p>\n Non-GAAP Financial Information<\/span><\/b><\/p>\n \nThis earnings release includes the concepts of Adjusted EBITDA and \u201cconstant currency,\u201d which are non-GAAP measures. The Company defines Adjusted EBITDA as net income excluding the impact of interest, 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. Constant currency is a non-GAAP financial measure that removes the impact of fluctuations in foreign currency exchange rates and is calculated by translating the current period\u2019s financial results at the same average exchange rates in effect during the prior year and then comparing this amount to the prior year. The Company references these non-GAAP financial measures in its decision making because they provide supplemental information that facilitates consistent internal comparisons to the historical operating performance of prior periods and the Company believes they provide investors with greater transparency to evaluate operational activities and financial results. Refer to the attached table for the reconciliation of the non-GAAP financial measure, Adjusted EBITDA, to consolidated net income, a related GAAP financial measure.<\/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.<\/p>\n About Franklin Covey Co.<\/span><\/b><\/p>\n \nFranklin Covey Co. (NYSE: FC) is a global leadership company with directly owned and licensee partner offices providing professional services in over 160 countries and territories. The Company transforms organizations by partnering with its clients to build leaders, teams, and cultures that achieve breakthrough results through collective action, which leads to a more engaging work experience for their people. Available through the Franklin Covey All Access Pass, the Company\u2019s best-in-class content and solutions, experts, technology, and metrics seamlessly integrate to ensure lasting behavioral change at scale. Solutions are available in multiple delivery modalities in more than 20 languages.<\/p>\n \nThis approach to leadership and organizational change has been tested and refined by working with tens of thousands of teams and organizations over the past 30 years. Clients have included organizations in the Fortune 100<\/i>, Fortune 500<\/i>, and thousands of small- and mid-sized businesses, numerous governmental entities, and educational institutions. To learn more, visit www.franklincovey.com<\/a>, and enjoy exclusive content from Franklin Covey\u2019s social media channels at: LinkedIn, Facebook, Twitter, Instagram, and YouTube.<\/p>\n \nMay 31,<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \nMay 31,<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \nMay 31,<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \nMay 31,<\/p>\n<\/td>\n<\/tr>\n \n\u00a0<\/p>\n<\/td>\n \n2023<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n2022<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n2023<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n2022<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n$<\/p>\n<\/td>\n \n71,441<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n66,176<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n202,565<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n$<\/p>\n<\/td>\n \n184,035<\/p>\n<\/td>\n 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\n19,278<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n116,730<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n155,883<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n9,699<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n9,798<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n41,582<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n44,833<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n31,220<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n31,220<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n2,270<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n4,686<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n16,223<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n12,735<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n217,724<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n259,155<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n5,835<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n5,835<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n3,450<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n3,199<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n7,102<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n10,864<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n70,419<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n85,543<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n17,660<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n14,150<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n23,940<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n34,205<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n128,406<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n153,796<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n2,764<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n7,268<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n5,344<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n7,962<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n6,504<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n7,116<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n199<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n199<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n143,217<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n176,341<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n1,353<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n1,353<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n229,134<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n220,246<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n92,990<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n82,021<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n(665<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n(542<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n(248,305<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n \n(220,264<\/p>\n<\/td>\n \n)<\/p>\n<\/td>\n<\/tr>\n \n74,507<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n82,814<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n \n217,724<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n \n259,155<\/p>\n<\/td>\n \n\u00a0<\/p>\n<\/td>\n<\/tr>\n<\/table>\n \n\u00a0<\/p>\n View source version on businesswire.com: <\/span>https:\/\/www.businesswire.com\/news\/home\/20230628023091\/en\/<\/a><\/span><\/p>\n \nInvestor Contact: \nMedia Contact: KEYWORDS:<\/b> United States North America Utah<\/p>\n INDUSTRY KEYWORDS:<\/b> Technology Consulting Professional Services Small Business Software Continuing Training Data Management Education<\/p>\n\n
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\n FRANKLIN COVEY CO.<\/span><\/b><\/td>\n<\/tr>\n \n Condensed Consolidated Income Statements<\/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 \u00a0<\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n \n Quarter Ended<\/td>\n \n Three Quarters Ended<\/td>\n<\/tr>\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 \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 Cost of sales<\/td>\n \n \n \n \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 \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 \n \n \n \n Depreciation<\/td>\n \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 \n Income from operations<\/b><\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest income (expense), net<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Income before income taxes<\/b><\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Income tax benefit (provision)<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Net income<\/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 Net income per common share:<\/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 \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 \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 \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 \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 \n \n
\n \n The term Adjusted EBITDA (earnings before interest, income taxes, depreciation, amortization, stock-based compensation, and certain other items) is a non-GAAP financial measure that the Company believes is useful to investors in evaluating its results. For a reconciliation of this non-GAAP measure to a GAAP measure, refer to the Reconciliation of Net Income to Adjusted EBITDA as shown below.<\/td>\n<\/tr>\n \n \n \u00a0<\/td>\n<\/tr>\n<\/table>\n \n
\n FRANKLIN COVEY CO.<\/span><\/b><\/td>\n<\/tr>\n \n Reconciliation of Net Income 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 \u00a0<\/td>\n<\/tr>\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 \n \n \n \n \n Reconciliation of net income to Adjusted EBITDA:<\/td>\n \n \n \n \n \n <\/tr>\n \n Net income<\/td>\n \n \n \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 Interest expense (income), net<\/td>\n \n \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 \n \n Amortization<\/td>\n \n \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 \n \n Stock-based compensation<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Increase in the fair value of contingent consideration liabilities<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \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 \n \n \u00a0<\/td>\n<\/tr>\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 \n \n \u00a0<\/td>\n<\/tr>\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 \u00a0<\/td>\n<\/tr>\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 \n \n \n \n \n Sales by Division\/Segment:<\/b><\/td>\n \n \n \n \n \n \n \n <\/tr>\n \n Enterprise Division:<\/td>\n \n \n \n \n \n \n \n <\/tr>\n \n Direct offices<\/td>\n \n \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 \n \n \n \n \n Education Division<\/td>\n \n \n \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 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 \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 Enterprise Division:<\/td>\n \n \n \n \n \n \n \n <\/tr>\n \n Direct offices<\/td>\n \n \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 \n \n \n \n \n Education Division<\/td>\n \n \n \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 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 \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 Enterprise Division:<\/td>\n \n \n \n \n \n \n \n <\/tr>\n \n Direct offices<\/td>\n \n \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 \n \n \n \n \n Education Division<\/td>\n \n \n \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 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 \n \n \u00a0<\/td>\n<\/tr>\n<\/table>\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 \n \n \u00a0<\/td>\n<\/tr>\n \n \n \n \n \n \n \n \n \n \n \n \n \n Assets<\/span><\/td>\n \n \n <\/tr>\n \n Current assets:<\/td>\n \n \n \n \n \n <\/tr>\n \n Cash and cash equivalents<\/td>\n \n $<\/td>\n \n \n \n $<\/td>\n \n \n \n Accounts receivable, less allowance for doubtful accounts of $3,867 and $4,492<\/td>\n \n \n \n \n \n \n \n \n \n Inventories<\/td>\n \n \n \n \n \n \n \n \n \n Prepaid expenses and other current assets<\/td>\n \n \n \n \n \n \n \n \n \n Total current assets<\/td>\n \n \n \n \n \n \n \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 \n \n \n \n \n Intangible assets, net<\/td>\n \n \n \n \n \n \n \n \n \n Goodwill<\/td>\n \n \n \n \n \n \n \n \n \n Deferred income tax assets<\/td>\n \n \n \n \n \n \n \n \n \n Other long-term assets<\/td>\n \n \n \n \n \n \n \n \n \n \n \n $<\/td>\n \n \n \n $<\/td>\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 \n \n \n <\/tr>\n \n Current liabilities:<\/td>\n \n \n \n \n \n <\/tr>\n \n Current portion of notes payable<\/td>\n \n $<\/td>\n \n \n \n $<\/td>\n \n \n \n Current portion of financing obligation<\/td>\n \n \n \n \n \n \n \n \n \n Accounts payable<\/td>\n \n \n \n \n \n \n \n \n \n Deferred subscription revenue<\/td>\n \n \n \n \n \n \n \n \n \n Other deferred revenue<\/td>\n \n \n \n \n \n \n \n \n \n Accrued liabilities<\/td>\n \n \n \n \n \n \n \n \n \n Total current liabilities<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Notes payable, less current portion<\/td>\n \n \n \n \n \n \n \n \n \n Financing obligation, less current portion<\/td>\n \n \n \n \n \n \n \n \n \n Other liabilities<\/td>\n \n \n \n \n \n \n \n \n \n Deferred income tax liabilities<\/td>\n \n \n \n \n \n \n \n \n \n Total liabilities<\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \u00a0<\/td>\n<\/tr>\n \n Shareholders’ equity:<\/td>\n \n \n \n \n \n <\/tr>\n \n Common stock<\/td>\n \n \n \n \n \n \n \n \n \n Additional paid-in capital<\/td>\n \n \n \n \n \n \n \n \n \n Retained earnings<\/td>\n \n \n \n \n \n \n \n \n \n Accumulated other comprehensive loss<\/td>\n \n \n \n \n \n \n \n \n \n Treasury stock at cost, 13,866 and 13,203 shares<\/td>\n \n \n \n \n \n \n \n \n \n Total shareholders’ equity<\/td>\n \n \n \n \n \n \n \n \n \n \n \n $<\/td>\n \n \n \n $<\/td>\n \n \n <\/p>\n
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Franklin Covey
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Boyd Roberts
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801-817-5127
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investor.relations@franklincovey.com<\/a><\/p>\n
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Franklin Covey
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Debra Lund
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801-817-6440
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Debra.Lund@franklincovey.com<\/a><\/p>\n
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