Franklin Covey Reports 2015 Fourth Quarter and Fiscal Year Financial Results
Wednesday, November 04, 2015 4:38:00 PM ET Franklin Covey Co. (FC ), a global performance improvement company
that creates and distributes world-class content, training, processes,
and tools that organizations and individuals use to transform their
results, today announced financial results for its fiscal fourth quarter
and full fiscal year ended August 31, 2015.
Fiscal 2015 Fourth Quarter Financial Highlights
--
Sales: Consolidated sales for the fourth
quarter were $67.4 million, in spite of absorbing $1.9 million of
adverse foreign exchange activity in the quarter. Fourth quarter
fiscal 2015 sales, even after the adverse impact of foreign exchange,
were the second-best ever for the Company’s current business.
Increased sales from the Company’s U.S/Canada direct offices
(including the government services office) and the United Kingdom
office were offset by decreased National Account practice sales,
decreased sales in Japan and Australia, and decreased licensee sales.
Sales performance during the quarter was less than previously
anticipated due to the effects of foreign exchange rates as the U.S.
dollar continued to strengthen, and, in the Education practice, to
significantly increased amounts of deferred revenue related to
increased sales of subscription services, and to not closing certain
large contracts in the Education practice that were expected to be
completed in the quarter.
--
Gross profit: Fourth quarter gross profit
was $46.5 million, compared with $46.9 million in the fourth quarter
of fiscal 2014. Consolidated gross margin increased slightly to 69.0%
of sales compared with 68.9% in the fourth quarter of fiscal 2014.
--
Operating Expenses: The Company’s
operating expenses increased by $0.6 million compared with the fourth
quarter of the prior year, which was primarily due to $0.6 million of
restructuring costs related to the realignment of the U.S./Canada
direct office sales regions and the closure of the Company’s
northeastern regional office, and a $0.2 million increase in
depreciation expense.
--
Adjusted EBITDA: Fourth quarter Adjusted
EBITDA increased 4% to $17.3 million, which is the best ever quarterly
result for the Company’s current business. The Company’s fourth
quarter Adjusted EBITDA was adversely affected by $1.1 million of
foreign exchange related costs. Adjusted EBITDA margin increased to
25.6% compared with 24.4% in the fourth quarter of fiscal 2014.
--
Income Taxes: The Company’s effective
income tax rate for the fourth quarter of fiscal 2015 was
approximately 40% compared with 5% in the fourth quarter of fiscal
2014. The increase in the Company’s effective tax rate was primarily
due to the recognition of tax benefits in fiscal 2014 from amending
previously filed U.S. federal income tax returns to realize foreign
tax credits that were previously treated as expired under the tax
positions taken in the original returns. The foreign tax credits were
fully utilized during fiscal 2015, and the Company’s effective income
tax rate was expected to approximate statutory rates in the fourth
quarter of fiscal 2015 and in future periods.
--
Net Income: Net income for the quarter
was $7.7 million compared with $12.5 million in the fourth quarter of
fiscal 2014, reflecting the increased effective tax rate, adverse
foreign exchange impact and other factors noted above.
--
Diluted EPS: Diluted EPS for the fourth
quarter of fiscal 2015 was $.46 per share compared with $.73 per share
in the fourth quarter of fiscal 2014.
--
Balance Sheet and Cash Flows: The
Company’s cash totaled $16.2 million at August 31, 2015, with no
borrowings on its $30.0 million line of credit facility, compared with
$10.5 million of cash at the end of fiscal 2014. Cash flows from
operating activities for fiscal 2015 increased to $26.2 million
compared with $18.1 million in fiscal 2014.
--
Common Shares Repurchased: During the
quarter ended August 31, 2015, the Company purchased approximately
359,000 shares of its common stock for $6.5 million under the terms of
the January 2015 share repurchase plan that was expanded to $40.0
million. Since January 2015, the Company has purchased approximately
760,000 shares of its common stock for $14.1 million.
Full Year Fiscal 2015 Financial Highlights
--
Sales: Consolidated sales for the fiscal
year ended August 31, 2015 was the highest ever for the Company’s
current business, reaching $209.9 million. The Company’s sales grew 2%
in spite of absorbing $5.2 million of negative impact from foreign
exchange rates and a tough comparison against the successful fiscal
2014 launch of the re-created The 7 Habits of Highly Effective
People Signature Edition, which is the Company’s best-selling
program worldwide. Excluding the impact of foreign exchange rates,
nearly all of the Company’s major practices and delivery channels grew
compared with the prior year.
--
Gross profit: Fiscal 2015 gross profit
was $138.1 million compared with $138.3 million in fiscal 2014.
Consolidated gross margin was 65.8% of sales compared with 67.4% in
fiscal 2014.
--
Operating Expenses: Operating expenses in
fiscal 2015 increased by $5.1 million compared with fiscal 2014. The
increase was primarily due to a $3.0 million increase in selling,
general and administrative expenses; $0.9 million of increased
impaired asset charges; $0.8 million of increased depreciation
expense; and $0.6 million of restructuring costs. These increases were
partially offset by decreased amortization expense.
--
Adjusted EBITDA: Fiscal 2015 Adjusted
EBITDA was $31.9 million compared with $34.4 million in fiscal 2014.
The Company’s fiscal 2015 Adjusted EBITDA was adversely impacted by
$3.2 million of foreign exchange related costs as the U.S. dollar
strengthened significantly during the year. Adjusted EBITDA margin was
15.2% of sales compared with 16.8% in fiscal 2014.
--
Income Taxes: The Company’s effective
income tax rate for fiscal 2015 was approximately 36% compared with
17% in fiscal 2014. The increase in the Company’s effective tax rate
was primarily due to the recognition of foreign tax credit benefits in
fiscal 2014.
--
Net Income: Net income for fiscal 2015
was $11.1 million compared with $18.1 million in fiscal 2014,
reflecting the increased effective tax rate, the adverse impact of
foreign exchange rates, and increased operating costs as discussed
above.
--
Diluted EPS: Diluted EPS for fiscal 2015
was $0.66 per share compared with $1.07 per share in the prior year.
Bob Whitman, Chairman and Chief Executive Officer of Franklin Covey,
commented, "Our Adjusted EBITDA for the fourth quarter was our highest
ever for our current business, even after absorbing a significant
foreign exchange impact, and our full-year revenue and Adjusted EBITDA
were the highest ever, excluding the negative impact of foreign
exchange. However, in our Education practice, the combination of
significantly increased amounts of deferred revenue related to increased
sales of subscriptions services, and to not being able to close certain
large Education practice contracts that were projected to be completed
in the quarter, caused our results to be lower than we had expected, and
below our guidance. Our disappointment in missing our fiscal 2015
guidance is sincere. However, our confidence in the underlying and
ongoing strength and direction of the business continues to be strong.
Each of our major channels and practices has grown significantly over
the years, and these growth engines are seasoned and strong. The units
whose growth slowed in fiscal 2015--Education and our U.S. direct
offices--are poised for strong growth in fiscal 2016. The key drivers of
our business over the years, including high customer retention, and the
productivity and growth of our sales forces, are proven and strong. We
believe our strong cash flow, cash position and balance sheet strength
provide us with additional opportunities to create value. We feel more
confident and excited about the business than ever, and about the
expected growth and performance of each of our operating divisions in
fiscal 2016. We expect fiscal 2016 to be our best year ever for both
revenue and Adjusted EBITDA."
Fourth Quarter 2015 Financial Results
The Company’s consolidated sales in the fourth quarter of fiscal 2015
were $67.4 million, after absorbing $1.9 million of adverse impact from
foreign exchange rates, compared with $68.1 million in the prior year.
Increased sales from the Company’s U.S./Canada direct offices and sales
office in the United Kingdom were offset by decreased National Account
practice sales, decreased sales from the Japan and Australia
international offices, and decreased licensee revenues. Sales from the
Company’s U.S./Canada direct offices and government services office
increased $2.0 million, or 7%, compared with the prior year primarily
due to new contracted revenue. The Company’s office in the United
Kingdom maintained the favorable momentum from previous periods and
increased sales by $0.3 million, or 15% (25% excluding foreign
exchange), compared with the prior year.
National Account practice sales totaled $20.3 million compared with
$21.8 million in the fourth quarter of fiscal 2014. Education practice
sales accounted for most of the decline and decreased by $1.1 million
compared to the fourth quarter of fiscal 2014. Education practice
revenues were less than expected, as some anticipated contracts were not
completed, and sales of coaching services increased significantly over
the prior year. Coaching services are subscription-based and are
recognized over a specified service period, which is usually 12 months.
The Company deferred an additional $2.8 million of revenue into fiscal
2016 related to coaching services. However, sales for the Education
practice increased for the full fiscal year as more schools adopted The
Leader In Me program. At August 31, 2015, over 2,500
elementary-level schools worldwide were using The Leader in Me
curriculum. Sales Performance practice sales decreased by $0.3 million
and Customer Loyalty practice sales decreased by $0.1 million, as
contracted revenue was less than expected for the quarter. Sales from
the Company’s office in Japan decreased $1.0 million, or 18%, compared
with the fourth quarter of fiscal 2014. However, when denominated in
Japanese Yen, sales only declined by 1% compared with the prior year.
Foreign exchange rates also had a significant impact on sales in
Australia, which decreased by $0.3 million, or 21%. When denominated in
Australian dollars, sales declined less than 1% compared with the prior
year. Licensee royalties declined by $0.3 million compared with the
fourth quarter of fiscal 2014, but were essentially flat excluding the
effects of foreign exchange.
Gross profit for the quarter totaled $46.5 million compared with $46.9
million in the fourth quarter of fiscal 2014. The Company’s gross margin
for the quarter remained strong at 69.0% of sales and was consistent
with 68.9% in the fourth quarter of fiscal 2014.
Selling, general and administrative (SG&A) expenses were flat compared
with the fourth quarter of fiscal 2014. Increased expenses related to
the addition of new sales and sales-support personnel, increases to the
allowance for doubtful accounts and foreign exchange transaction losses
were offset by decreased executive short-term incentive plan bonus
expense, decreased marketing and promotion expense, and decreased travel
expense.
During the fourth quarter of fiscal 2015, the Company decided to realign
its regional sales offices that serve the United States and Canada. As a
result of this realignment plan, the Company closed its northeastern
regional sales office located in Pennsylvania and created three
geographic sales regions. In connection with this restructuring, the
Company incurred costs related to involuntary severance and office
closure costs totaling $0.6 million. Also during the fourth quarter of
fiscal 2015, the Company received unfavorable information regarding the
financial health of an entity in which it had previously invested $0.2
million. Based on this information, the Company determined that it was
appropriate to impair its investment in this unconsolidated subsidiary.
Due primarily to benefits from the utilization of foreign tax credits,
the Company’s effective income tax rate for the fourth quarter of fiscal
2014 was substantially less than statutory income tax rates. The Company
finalized its utilization of tax credits in fiscal 2015 and, as
expected, its effective tax rate for the quarter approximated statutory
rates. The change in effective rates increased the Company’s fourth
quarter tax provision by $4.6 million. Due to the factors noted above,
net income for the quarter ended August 31, 2015 was $7.7 million, or
$.46 per diluted share, compared with $12.5 million, or $.73 per diluted
share, in the fourth quarter of fiscal 2014.
Full Fiscal Year 2015 Financial Results
Consolidated sales for the fiscal year ended August 31, 2015 increased
2% to $209.9 million compared with $205.2 million in fiscal 2014. The
Company’s sales grew in spite of absorbing $5.2 million of negative
impact from foreign exchange rates as the U.S. dollar strengthened
against other currencies during fiscal 2015. Excluding the impact of
foreign exchange, sales increased over the prior year through most of
the Company’s major delivery channels. For fiscal 2015, the Company’s
government services office grew $3.5 million, or 30%; the United Kingdom
direct office grew $2.1 million, or 30% (39% growth excluding foreign
exchange), as this office had the best year ever for its current
business; and the Company’s office in Japan grew 1% excluding the impact
of foreign exchange in fiscal 2015. Sales increased in two of three
national account practices, which included a $2.3 million, or 8%,
increase from the Education practice, and a $0.3 million, or 2%,
increase from the Sales Performance practice. Licensee sales for fiscal
2015 were flat after absorbing $1.0 million of adverse impact from
foreign exchange rates (6% licensee growth excluding foreign exchange).
Consolidated gross profit for the fiscal year ended August 31, 2015 was
$138.1 million compared with $138.3 million in fiscal 2014. Gross profit
in fiscal 2015 was adversely impacted by the effects of foreign exchange
on translated sales and cost of sales; $1.3 million of increased
capitalized curriculum amortization costs, primarily resulting from
fiscal 2014 expenditures to re-create the 7 Habits Signature Program;
the mix of offerings sold; and additional coaches hired during the year
to support growth in the Education practice. Gross margin for fiscal
2015 reflected these factors and was 65.8% of sales in fiscal 2015
compared with 67.4% in the prior year.
The Company’s SG&A expenses during fiscal 2015 increased $3.0 million
compared with fiscal 2014. The increase in SG&A expenses over the prior
year was primarily due to 1) a $3.7 million increase related to the
addition of new sales and sales support personnel in our direct offices
and Education practice, and increased commissions on higher sales; 2)
fiscal 2014 reductions to the estimated contingent earn out payment from
the acquisition of Ninety-Five 5 LLC totaling $1.6 million, which did
not repeat in fiscal 2015; and 3) $1.0 million of increased foreign
exchange transaction losses as the U.S. dollar strengthened during the
year. The impact of these increases was partially offset by reduced
executive short-term incentive bonus expense, decreased share-based
compensation expense and by cost cutting efforts in various other areas
of the Company’s operations.
During fiscal 2015 the Company’s operating income was adversely impacted
by $1.3 million of impaired asset charges related to long-term
receivables from a related party, discontinued offerings and an
investment in a cost basis unconsolidated subsidiary in the fourth
quarter. The Company also recorded $0.6 million of restructuring costs
to realign its geographic sales territories as previously discussed.
Depreciation expense increased by $0.8 million compared with fiscal
2014, primarily due to the addition of fixed assets during fiscal 2015
and in previous years.
Income before income taxes was $17.4 million compared with $21.8 million
in the prior year. The Company’s effective tax rate increased primarily
due to the recognition of benefits from claiming foreign tax credits
instead of foreign tax deductions on previously filed tax returns. The
net tax benefit of claiming these foreign tax credits totaled $4.2
million in fiscal 2014. The income tax benefit recognized from these
foreign tax credits totaled only $0.6 million in fiscal 2015 and the
Company has fully utilized its ability to claim foreign tax credits on
previously filed returns. Accordingly, the Company’s effective income
tax rate for fiscal 2015 was expected to become closer to statutory
rates and increased to 36% compared with 17% in fiscal 2014. The
combination of reduced pre-tax income and a substantially higher
effective income tax rate in fiscal 2015 resulted in net income of $11.1
million, or $.66 per diluted share, compared with $18.1 million, or
$1.07 per diluted share, in fiscal 2014.
Fiscal 2016 Outlook
The Company expects Adjusted EBITDA for fiscal 2016 to increase to
between $34 million and $36 million, excluding the effects of foreign
exchange, up from $31.9 million in fiscal 2015.
Earnings Conference Call
As previously announced, on Wednesday, November 4, 2015, at 5:00 p.m.
Eastern time (3:00 p.m. Mountain time) Franklin Covey will host a
conference call to review its financial results for the quarter and full
fiscal year ended August 31, 2015. Interested persons may participate by
dialing 877-261-8992 (International participants may dial 847-619-6548),
access code: 41011542. Alternatively, a webcast will be accessible at
the following website: http://www.media-server.com/m/p/7d8wi4iv/lan/en .
A replay will be available from November 4 (7:30 p.m. ET) through
November 11, 2015 by dialing 888-843-7419 (International participants
may dial 630-652-3042), access code: 41011542#. The webcast will remain
accessible through November 11, 2015 on the Investor Relations area of
the Company’s website at: http://investor.franklincovey.com/phoenix.zhtml?c=102601&p=irol-IRHome .
Forward-Looking Statements
This 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’s future results and
profitability, including the expectation that fiscal 2016 will be the
best year ever for both revenue and Adjusted EBITDA; expected Adjusted
EBITDA in fiscal 2016; anticipated future sales; expected cash payment
for income taxes; expected effective income tax rates; the expected
growth and performance of each of the Company’s operating divisions; and
goals relating to the growth of the Company. Forward-looking statements
are based upon management’s current expectations and are subject to
various risks and uncertainties including, but not limited to: general
economic conditions; the expected number of booked days to be delivered;
market acceptance of new products or services and marketing strategies;
the ability to achieve sustainable growth in future periods; and other
factors identified and discussed in the Company’s 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’s control or influence, any one of which may cause future
results to differ materially from the Company’s current expectations,
and there can be no assurance that the Company’s actual future
performance will meet management’s expectations. These forward-looking
statements are based on management’s 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.
Non-GAAP Financial Information
Refer to the attached table for the reconciliation of a non-GAAP
financial measure, "Adjusted EBITDA," to consolidated net income, the
most comparable GAAP financial measure. The Company defines Adjusted
EBITDA as net income or loss excluding the impact of interest expense,
income tax expense, amortization, depreciation, share-based compensation
expense, impaired asset charges, restructuring costs, adjustments to
contingent earn out liabilities, and certain other items. 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.
The Company does not provide forward-looking GAAP measures or a
reconciliation of the forward-looking Adjusted EBITDA to GAAP measures
because of the inability to project certain of the costs included in the
calculation of Adjusted EBITDA.
About Franklin Covey Co.
Franklin Covey Co. (FC ) (www.franklincovey.com),
is a global provider of training and consulting services in the areas of
leadership, productivity, strategy execution, customer loyalty, trust,
sales performance, government, education and individual effectiveness.
Over its history, Franklin Covey has worked with 90 percent of the
Fortune 100, more than 75 percent of the Fortune 500, and thousands of
small and mid-sized businesses, as well as numerous government entities
and educational institutions. Franklin Covey has more than 40 direct and
licensee offices providing professional services in over 150 countries.
FRANKLIN COVEY CO.
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Condensed Consolidated Income Statements
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(in thousands, except per-share amounts, and unaudited)
Quarter Ended Fiscal Year Ended
----------------------------------------------------------------------------------------------------------------------------------------------------------------- -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
August 31, August 31, August 31, August 31,
2015 2014 2015 2014
------------------------------------------------- ------------------------------------------------- -------------------------------------------------- ------------------------------------------------------------------------------------
Net sales, including $1.9 million and $5.2 million of adverse
foreign exchange impact (refer to note 2 below)
$ 67,444 $ 68,109 $ 209,941 $ 205,165
Cost of sales 20,897 21,169 71,852 66,899
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- -------------------- --------------------
Gross profit 46,547 46,940 138,089 138,266
Selling, general, and administrative 30,327 30,323 108,802 105,801
Impairment of assets 220 363 1,302 363
Restructuring costs 587 - 587 -
Depreciation 1,158 917 4,142 3,383
Amortization 909 993 3,727 3,954
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- -------------------- --------------------
Income from operations(2) 13,346 14,344 19,529 24,765
Interest expense, net (470 ) (460 ) (1,754 ) (1,810 )
Discount on related party receivable - (772 ) (363 ) (1,196 )
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- -------------------- --------------------
Income before income taxes 12,876 13,112 17,412 21,759
Income tax provision (refer to note 3 below) (5,207 ) (656 ) (6,296 ) (3,692 )
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- -------------------- --------------------
Net income $ 7,669 $ 12,456 $ 11,116 $ 18,067
==================== ====== ==================== ==================== ====== ==================== ==================== ======= ==================== ==================== ==================== ====================
Net income per common share:
Basic $ 0.47 $ 0.74 $ 0.66 $ 1.08
Diluted 0.46 0.73 0.66 1.07
Weighted average common shares:
Basic 16,449 16,843 16,742 16,720
Diluted 16,614 17,069 16,923 16,947
Other data:
Adjusted EBITDA(1), including $1.1 million and $3.2
million of adverse foreign exchange impact, (refer to note 2 below)
$ 17,268 $ 16,647 $ 31,858 $ 34,420
==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ==================== ====================
(1) The term Adjusted EBITDA (earnings before interest, income taxes,
depreciation, amortization, share-based compensation, impaired
asset charges, restructuring costs, 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 the most comparable GAAP equivalent, refer to
the Reconciliation of Net Income to Adjusted EBITDA as shown below.
(2) Sales for the quarter and fiscal year ended August 31, 2015
include $1.9 million and $5.2 million, respectively, of adverse
impact from foreign exchange rates as the U.S. dollar strengthened
during fiscal 2015. The Company’s Adjusted EBITDA for the quarter
and fiscal year ended August 31, 2015 include $1.1 million and
$3.2 million of negative impact from foreign exchange rates. These
amounts approximate the impact from foreign exchange on the
Company’s income from operations for the periods indicated.
(3) The Company’s income tax rate during fiscal 2014 was significantly
impacted by the income tax benefits of claiming foreign tax
credits. The Company anticipates its effective income tax rate
will be approximately 40 percent in future periods, which
approximates statutory income tax rates.
FRANKLIN COVEY CO.
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Reconciliation of Net Income to Adjusted EBITDA
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(in thousands and unaudited)
Quarter Ended Fiscal Year Ended
----------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------
August 31, August 31, August 31, August 31,
2015 2014 2015 2014
------------------------------------------------- ------------------------------------------------- -------------------------------------------------- --------------------------------------------------
Reconciliation of net income to Adjusted EBITDA:
Net income $ 7,669 $ 12,456 $ 11,116 $ 18,067
Adjustments:
Interest expense, net 470 460 1,754 1,810
Discount on related party receivable - 772 363 1,196
Income tax provision 5,207 656 6,296 3,692
Amortization 909 993 3,727 3,954
Depreciation 1,158 917 4,142 3,383
Impaired assets 220 363 1,302 363
Restructuring costs 587 - 587 -
Share-based compensation 934 674 2,536 3,534
Increase to (reduction of) contingent earnout liability 114 (644 ) 35 (1,579 )
Other expense - - - -
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
Adjusted EBITDA $ 17,268 $ 16,647 $ 31,858 $ 34,420
==================== ====== ==================== ==================== ====== ==================== ==================== ======= ==================== ==================== ======= ====================
Adjusted EBITDA margin 25.6 % 24.4 % 15.2 % 16.8 %
FRANKLIN COVEY CO.
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Additional Sales and Financial Information
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(in thousands and unaudited)
Quarter Ended Fiscal Year Ended
----------------------------------------------------------------------------------------------------------------------- -------------------------------------------------------------------------------------------------------------------------
August 31, August 31, August 31, August 31,
2015 2014 2015 2014
------------------------------------------------- ------------------------------------------------- -------------------------------------------------- --------------------------------------------------
Sales Detail by Region/Type:
U.S./Canada direct $ 30,973 $ 29,139 $ 101,959 $ 98,791
International direct 8,277 9,608 27,217 28,588
Licensees 4,256 4,614 17,100 17,065
National account practices 20,301 21,830 51,354 48,982
Self-funded marketing 1,701 1,693 5,547 5,938
Other 1,936 1,225 6,764 5,801
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
Total $ 67,444 $ 68,109 $ 209,941 $ 205,165
==================== ====== ==================== ==================== ====== ==================== ==================== ======= ==================== ==================== ======= ====================
Sales Detail by Category:
Training and consulting services $ 64,303 $ 64,320 $ 198,695 $ 193,720
Products 2,039 2,751 6,885 7,518
Leasing 1,102 1,038 4,361 3,927
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
67,444 68,109 209,941 205,165
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
Cost of Goods Sold by Category:
Training and consulting services 19,303 19,214 66,370 61,474
Products 995 1,437 3,306 3,502
Leasing 599 518 2,176 1,923
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
20,897 21,169 71,852 66,899
-------------------- ------ -------------------- -------------------- ------ -------------------- -------------------- ------- -------------------- -------------------- ------- --------------------
Gross Profit $ 46,547 $ 46,940 $ 138,089 $ 138,266
==================== ====== ==================== ==================== ====== ==================== ==================== ======= ==================== ==================== ======= ====================
FRANKLIN COVEY CO.
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Condensed Consolidated Balance Sheets
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
(in thousands and unaudited)
August 31, August 31,
2015 2014
--------------------------------------------------- ---------------------------------------------------
Assets
-----------------------------------------------------------------------
Current assets:
Cash $ 16,234 $ 10,483
Accounts receivable, less allowance for 65,182 61,490
doubtful accounts of
$1,333 and $918
Receivable from related party 2,425 1,851
Inventories 3,949 6,367
Income taxes receivable - 2,432
Deferred income taxes 2,479 4,340
Prepaid expenses and other current assets 5,156 6,053
-------------------- -------- -------------------- -------------------- -------- --------------------
Total current assets 95,425 93,016
Property and equipment, net 15,499 17,271
Intangible assets, net 53,449 57,177
Goodwill 19,903 19,641
Long-term receivable from related party 1,562 3,296
Other assets 14,807 14,785
-------------------- -------- -------------------- -------------------- -------- --------------------
$ 200,645 $ 205,186
==================== ======== ==================== ==================== ======== ====================
Liabilities and Shareholders’ Equity
-----------------------------------------------------------------------
Current liabilities:
Current portion of financing obligation $ 1,473 $ 1,298
Accounts payable 8,306 12,001
Income taxes payable 221 -
Accrued liabilities 29,634 29,586
-------------------- -------- -------------------- -------------------- -------- --------------------
Total current liabilities 39,634 42,885
Financing obligation, less current portion 24,605 26,078
Other liabilities 3,802 3,934
Deferred income tax liabilities 7,098 5,575
-------------------- -------- -------------------- -------------------- -------- --------------------
Total liabilities 75,139 78,472
-------------------- -------- -------------------- -------------------- -------- --------------------
Shareholders’ equity:
Common stock 1,353 1,353
Additional paid-in capital 208,635 207,148
Retained earnings 69,612 58,496
Accumulated other comprehensive income 192 1,451
Treasury stock at cost, 10,909 and 10,266 shares (154,286 ) (141,734 )
-------------------- -------- -------------------- -------------------- -------- --------------------
Total shareholders’ equity 125,506 126,714
-------------------- -------- -------------------- -------------------- -------- --------------------
$ 200,645 $ 205,186
==================== ======== ==================== ==================== ======== ====================
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SOURCE: Franklin Covey Co.
Franklin Covey Co.
Investor Contact:
Steve Young, 801-817-1776
investor.relations@franklincovey.com
or
Media Contact:
Debra Lund, 801-817-6440
Debra.Lund@franklincovey.com
