[June 26, 2014] |
|
Franklin Covey Announces Fiscal 2014 Third Quarter Financial Results
SALT LAKE CITY --(Business Wire)--
Franklin Covey Co. (NYSE: FC), the 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 third
quarter ended May 31, 2014.
Financial Highlights
-
Revenue: Consolidated revenue for the
third quarter of fiscal 2014 was the strongest ever for a third
quarter for the Company's current business. Third quarter fiscal 2014
revenue increased 5% to $47.1 million, compared with $44.9 million in
the prior year. Revenue grew in nearly all of the Company's major
channels, including its four U.S./Canada geographic direct offices,
National Account Practices, international direct offices, and
international licensee partner operations. This growth was partially
offset by a decline in Government Services' revenue.
Despite
this broad-based growth, the Company's overall revenue growth was
somewhat less than expected for the quarter due to approximately $2.4
million of revenue that had been expected to be recognized in the
third quarter which shifted, and either has already been realized, or
is expected to be realized during the fourth quarter of fiscal 2014.
As noted below, this shift of revenue into the fourth quarter accounts
for more than 100% of the variance in gross profit, Adjusted EBITDA,
operating income, and net income compared to that which the Company
expected for the quarter. Approximately $1.0 million of this
previously anticipated revenue has already been recognized in June
2014. The revenue which shifted into the fourth quarter falls into two
categories: First, a last-minute delay in the signing of two specific
contracts totaling approximately $0.6 million (with an estimated
Adjusted EBITDA contribution of approximately $0.5 million) the
largest of which was signed in June; and second, an encouraging, but
earlier-than-expected, increase in the mix of new client prospects
(compared to the Company's existing client facilitators, a large
portion of whom recertified and repurchased in the second quarter)
attending the Company's launch events for the re-created The 7
Habits of Highly Effective People Signature Program (7 Habits
Signature Program) during the third quarter compared to the second
quarter. While the strong response by new-prospect companies was very
encouraging, new clients typically have a slightly longer average
conversion period than do the Company's existing client facilitators.
The Company believes that this increased mix of prospective new
clients resulted in the shift of approximately $1.8 million of 7
Habits Signature Program revenue into the fourth quarter, from the
third quarter, resulting in an increase in the size of the Company's
prospective business pipeline at the end of the third quarter.
For
the first three quarters of fiscal 2014, the Company's consolidated
revenues increased $7.7 million, or 6%, to $137.1 million, compared
with $129.4 million in the first three quarters of fiscal 2013. For
the trailing four quarters ended May 31, 2014, consolidated revenues
grew 10% to $198.6 million, compared with $180.4 million for the
trailing four quarters ended June 1, 2013.
Gross
Profit: Third quarter gross profit increased to $29.9 million
on increased sales. The Company's gross margin was 63.4% of sales
compared with 65.6% in last year's third quarter. In comparison with
last year's third quarter, the Company's gross margin was impacted by
an increase in the amount of amortization from capitalized development
costs associated with the re-launch of the Company's 7 Habits
Signature Program, and by year-over-year growth in lower-margin
"off-season" coaching contracts. The above-noted shift of certain
high-margin revenue into the fourth quarter also reduced the Company's
gross margin for the quarter ended May 31, 2014 compared to what it
was expected to be. For the three quarters ended May 31, 2014, gross
profit increased to $91.3 million, compared with $86.3 million for the
corresponding period last year. The Company's gross margin for the
first three quarters of fiscal 2014 was 66.6% compared with 66.7% for
the first three quarters of fiscal 2013. For the trailing four
quarters, the Company's gross profit increased to $134.0 million,
compared with $121.3 million, and gross margin increased to 67.5% for
the trailing four quarters ended May 31, 2014 compared with 67.2% for
the trailing four quarters ended June 1, 2013.
-
Adjusted EBITDA: Adjusted EBITDA for the
third quarter was $5.1 million, compared with $6.3 million in last
year's third quarter, reflecting the impact of the revenue shift
described above. For the three quarters ended May 31, 2014, Adjusted
EBITDA was $17.8 million, compared with $18.9 million for the same
period of last year. For the trailing four quarters ended May 31,
2014, Adjusted EBITDA increased to $30.3 million compared with $28.5
million for the same four-quarter period last year.
-
Net Income: Third quarter net income was
$1.9 million compared with $2.1 million in the third quarter of fiscal
2013, reflecting the above-noted factors. For the three quarters ended
May 31, 2014, net income was $5.6 million, compared with $6.6 million
during the three quarters ended June 1, 2013. Trailing four quarters
net income increased to $13.3 million, compared with $10.0 million for
the same four quarter period last year.
-
Diluted EPS: Diluted EPS was $.11 per
share compared with $.13 per share for the third quarter of fiscal
2013. For the three quarters ended May 31, 2014, diluted EPS was $.33
per share compared with $.36 per share for the three quarters ended
June 1, 2013.
-
Booking Momentum: The Company's booking
momentum continued to be very strong in the third quarter, with its
corporate pipeline of Booked Days and Awarded Revenue increasing by 7%
to more than $36 million, the Company's largest-ever corporate
pipeline for the end of a third quarter. Corporate and Education
"booked day" momentum was strong, increasing 13% during the quarter,
and the Company's overall prospective business pipelines reached their
highest levels ever for the end of a third fiscal quarter. Booked days
and Prospective Business pipelines for the Company's four direct
offices in the U.S. and Canada, the offices which accounted for
essentially all of the "shifted" 7 Habits Signature Program
revenue, have had very strong historical performance (12% revenue
growth for the trailing four quarters). These offices' strong momentum
continued during the quarter. For the third quarter, these offices saw
their booked days grow 19%, and their Prospective Business Pipeline
grow 11%, to the highest level ever for the end of a third quarter. We
expect these offices' to achieve double digit growth during the fourth
quarter.
-
Progress on Key Strategic Initiatives:
During the third quarter, the Company continued to make strong
progress on each of its key strategic initiatives:
-
The size of the Company's direct sales
forces continued to expand: The Company's client partner
count now stands at 169, compared with 150 as of November 2013.
The Company expects to have more than 180 client partners by the
beginning of its semi-annual client partner sales training academy
scheduled to be held at the end of September 2014.
-
Client partner productivity continues to
meet or exceed expectations: The ramp-up of new client
partners continues to be somewhat ahead of schedule, and the
productivity of our fully-ramped legacy client partners continues
to meet or exceed expectations.
-
The Company's licensee partner network
continues to expand: The number of international licensee
partners (including Education Licensee partners) has increased to
52.
-
The Company's repeating revenue continues to
be high: More than 90% of the revenue generated by clients
in the trailing four quarter period ended one year ago, repeated
in the most recent four quarter period.
-
Launch of re-created 7 Habits Signature
Program has exceeded expectations to date: The initial
stages of the launch of the re-created 7 Habits Signature
Program have exceeded expectations, generating $11.2 million
in revenue during the second and third quarters of fiscal 2014,
compared with expected revenue of $7-$9 million.
-
Adjusted EBITDA Outlook: Given the
strength of the Company's pipelines, its strong booking momentum, the
expectation of a renewal of a large government agency contract in the
fourth quarter, and its expectation of significant sales growth in the
fourth quarter of fiscal 2014, the Company is confident that its
fiscal fourth quarter will be its strongest ever, and that the Company
is well-positioned for continued, and accelerated growth in fiscal
2015 and beyond. To allow for some uncertainty related to the timing
and award of the government contract, and provide additional
conservatism to its forecast, the Company is expanding its annual
guidance range for Adjusted EBITDA to between $34 million and $37
million.
Bob Whitman, Chairman and Chief Executive Officer, commented, "We are
very pleased with our continued progress on each of our major strategic
objectives. We are encouraged by the repeat of more than 90% of the
prior year's revenue, our strong booking pace, the size of our
prospective business pipelines, and the strength of the launch of our
re-created 7 Habits Signature Program. Throughout the past years,
we have made significant ongoing investments in our content, offerings,
and organizational capabilities. We expect that the accelerated benefits
and flow-through from these investments will be evident in our fiscal
fourth quarter results, and in fiscal 2015 and beyond. We expect fiscal
fourth quarter 2014 revenue, Adjusted EBITDA, operating income, and net
income to be highest ever for a fourth quarter, also resulting in our
highest-ever annual results in each of these areas for fiscal 2014 as a
whole."
Additional Fiscal 2014 Third Quarter Financial
Results
Consolidated sales increased by 5% to $47.1 million compared with $44.9
million in the third quarter of fiscal 2013. As previously mentioned,
the Company experienced growth in nearly all of its major delivery
channels, which resulted in the best third quarter sales for the
Company's current business. Sales increased at the Company's U.S./Canada
regional sales offices, excluding the government services group, by $1.4
million, or 7 percent, compared with the prior year. The increase over
the prior year at the regional sales offices was primarily due to the
launch of the re-created 7 Habits Signature Program during the
quarter and increased Execution practice sales. The continued launch of
the re-created 7 Habits Signature Program in English-speaking
countries is being enthusiastically received by existing and potential
clients. The Company's pipeline of Booked Days and Awarded Revenue grew
significantly during the quarter. Revenue from the Company's Government
Services unit declined $1.7 million, primarily due to a large government
contract that was renewed during the third quarter of the prior year,
but did not renew during the third quarter of fiscal 2014. The renewal
process for this contract was postponed and is now expected to occur
during the Company's fiscal fourth quarter. During the quarter ended May
31, 2014 sales increased in all three of the Company's national account
practices, which included a $1.0 million increase from the Education
practice, a $0.5 million increase from the Customer Loyalty practice,
and a $0.1 million increase from the Sales Performance practice. During
the third quarter, sales increased at our international direct offices
located in the United Kingdom and Japan. The Company's United Kingdom
office had one its strongest quarters ever for the Company's current
business and increased its sales $0.4 million compared with the prior
year. After several quarters of adverse foreign exchange, which masked
growing sales in local currency, the Japanese Yen exchange rate
stabilized and sales grew by $0.3 million at our Japan office. Sales
decreased $0.2 million at the Company's office in Australia when
compared with the prior year primarily due to a delay in closing a large
contract that was initially expected to occur in the third quarter. This
contract was closed shortly after May 31, 2014. During the quarter ended
May 31, 2014, certain of our foreign licensees, led by our
Singapore/China licensee, had increased training sales compared with the
same period of the prior year, which resulted in an 11 percent increase
in licensee royalty revenues compared with the same quarter of fiscal
2013.
Selling, general, and administrative (SG&A) expenses for the quarter
ended May 31, 2014 increased $1.4 million compared with the third
quarter of the prior year. The increase in SG&A expenses over the prior
year was primarily due to a $1.8 million increase primarily related to
the addition of new sales-related personnel, increased commissions from
higher sales, marketing, and other advertising and promotional costs
primarily related to events from our worldwide tour to launch the
re-created The 7 Habits Signature Program. The Company continues
to invest in new sales personnel as expected; however, due to
significant investments in sales support personnel in fiscal 2013, the
Company is now able to hire fewer than one new sales support person for
each new client partner it hires. These new client partners are expected
to ramp up throughout fiscal 2014 and provide significant incremental
sales as they develop their client bases and selling capabilities. The
impact of these increased expenses was partially offset by a $0.4
million reduction in the fair value of estimated contingent earn out
payments from the fiscal 2013 acquisition of NinetyFive 5, LLC.
The Company's depreciation expense increased by $0.1 million primarily
due to the addition of new capital assets during the first quarter of
fiscal 2014. Amortization expense was essentially flat compared with the
prior year.
The Company's effective income tax rate for the quarter ended May 31,
2014 was approximately 20 percent, compared with approximately 40
percent for the third quarter of fiscal 2014. The decrease in the
effective rate was primarily due to the recognition of income tax
benefits resulting from the resolution of certain issues as the
applicable statute of limitations expired during the quarter.
The Company's income from operations was $3.0 million, compared with
$4.1 million in the third quarter of fiscal 2013, reflecting the factors
discussed above. With the favorable impact of a smaller income tax
provision, net income was $1.9 million, or $.11 per diluted share,
compared with $2.1 million, or $.13 per diluted share in fiscal 2013.
The Company's balance sheet and liquidity position remained healthy
through the third quarter. The Company made the final earn out payment
of $3.5 million from the acquisition of CoveyLink and paid $0.5 million
in cash for the acquisition of Red Tree, Inc. At May 31, 2014, the
Company had $5.3 million in cash, with $2.5 million outstanding on its
line of credit facility, compared with $12.3 million of cash at August
31, 2013, with no borrowings on its line of credit. During the three
quarters ended May 31, 2014 the Company used $14.9 million of cash for
investing activities, including $6.4 million for curriculum development;
$6.2 million for contingent earn out and other business acquisition
costs, and $2.3 million for purchases of property and equipment in the
normal course of business. Net working capital at May 31, 2014 remained
strong and totaled $37.4 million compared with $38.2 million on August
31, 2013.
Fiscal 2014 Year-to-Date Financial Results
Consolidated sales for the three quarters ended May 31, 2014 increased
$7.7 million, or 6%, to $137.1 million, compared with $129.4 million in
the first three quarters of fiscal 2013. During the first three quarters
of fiscal 2014, sales increased through nearly all of the Company's
primary delivery channels compared with the prior year. Increased sales
led to a 6% increase in gross profit to $91.3 million compared with
$86.3 million in fiscal 2013. Consolidated gross margin remained
consistent with fiscal 2013 at 66.6% of sales compared with 66.7% in the
prior year. The Company's SG&A expenses increased $6.2 million primarily
due to increased associate costs from additional sales-related
personnel, increased commissions from higher sales, development and
marketing expenses for strategic initiatives, including the launch of
the 7 Habits Signature Program, the fiscal 2013
acquisition of NinetyFive 5, and an increase in non-cash share-based
compensation expense.
Adjusted EBITDA totaled $17.8 million, compared with $18.9 million in
the first three quarters of fiscal 2013 and Adjusted EBITDA margin was
13.0% compared with 14.6% in the prior year. Net income for the three
quarters ended May 31, 2014 was $5.6 million, or $0.33 per diluted
share, compared with $6.6 million, or $0.36 per diluted share.
Earnings Conference Call
On Tuesday, July 1, 2014, 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 fiscal quarter ended May 31, 2014. Interested persons
may participate by dialing 800-708-4540 (International participants may
dial 847-619-6397), access code: 37516997. Alternatively, a webcast will
be accessible at the following Web site: http://edge.media-server.com/m/p/ggeezc9u.
A replay will be available from July 1 (7:30 pm ET) through July 8, 2014
by dialing 888-843-7419 (International participants may dial
630-652-3042), access code: 37516997#. The webcast will remain
accessible through July 8, 2014 on the Investor Relations area of the
Company's Web site 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; expected Adjusted EBITDA in fiscal 2014; anticipated
future sales; 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; the expected number of client
partners to be hired; 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, adjustment 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. (NYSE: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 140 countries.
|
FRANKLIN COVEY CO.
|
Condensed Consolidated Income Statements
|
(in thousands, except per-share amounts, and unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Three Quarters Ended
|
|
|
|
May 31,
|
|
June 1,
|
|
May 31,
|
|
June 1,
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
47,131
|
|
|
$
|
44,859
|
|
|
$
|
137,055
|
|
|
$
|
129,350
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales
|
|
|
17,247
|
|
|
|
15,424
|
|
|
|
45,730
|
|
|
|
43,073
|
|
Gross profit
|
|
|
29,884
|
|
|
|
29,435
|
|
|
|
91,325
|
|
|
|
86,277
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative
|
|
|
25,017
|
|
|
|
23,661
|
|
|
|
75,475
|
|
|
|
69,295
|
|
Depreciation
|
|
|
866
|
|
|
|
752
|
|
|
|
2,466
|
|
|
|
2,175
|
|
Amortization
|
|
|
983
|
|
|
|
960
|
|
|
|
2,961
|
|
|
|
2,201
|
|
Income from operations
|
|
|
3,018
|
|
|
|
4,062
|
|
|
|
10,423
|
|
|
|
12,606
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense, net
|
|
|
(483
|
)
|
|
|
(420
|
)
|
|
|
(1,351
|
)
|
|
|
(1,320
|
)
|
Discount on related party receivable
|
|
|
(141
|
)
|
|
|
(135
|
)
|
|
|
(424
|
)
|
|
|
(418
|
)
|
Other income, net
|
|
|
-
|
|
|
|
20
|
|
|
|
-
|
|
|
|
20
|
|
Income before income taxes
|
|
|
2,394
|
|
|
|
3,527
|
|
|
|
8,648
|
|
|
|
10,888
|
|
|
|
|
|
|
|
|
|
|
|
Income tax provision
|
|
|
(472
|
)
|
|
|
(1,416
|
)
|
|
|
(3,036
|
)
|
|
|
(4,289
|
)
|
Net income
|
|
$
|
1,922
|
|
|
$
|
2,111
|
|
|
$
|
5,612
|
|
|
$
|
6,599
|
|
|
|
|
|
|
|
|
|
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Net income per common share:
|
|
|
|
|
|
|
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Basic
|
|
$
|
0.11
|
|
|
$
|
0.13
|
|
|
$
|
0.34
|
|
|
$
|
0.37
|
|
Diluted
|
|
|
0.11
|
|
|
|
0.13
|
|
|
|
0.33
|
|
|
|
0.36
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
16,754
|
|
|
|
16,330
|
|
|
|
16,678
|
|
|
|
17,680
|
|
Diluted
|
|
|
16,934
|
|
|
|
16,421
|
|
|
|
16,906
|
|
|
|
18,469
|
|
|
|
|
|
|
|
|
|
|
|
Other data:
|
|
|
|
|
|
|
|
|
Adjusted EBITDA(1)
|
|
$
|
5,133
|
|
|
$
|
6,262
|
|
|
$
|
17,774
|
|
|
$
|
18,915
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
The term Adjusted EBITDA (earnings before interest, income taxes,
depreciation, amortization, share-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 the most comparable
GAAP equivalent, refer to the Reconciliation of Net Income to
Adjusted EBITDA as shown below.
|
|
FRANKLIN COVEY CO.
|
Reconciliation of Net Income to Adjusted
EBITDA
|
(in thousands and unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Three Quarters Ended
|
|
|
|
|
May 31,
|
|
June 1,
|
|
May 31,
|
|
June 1,
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Reconciliation of net income to Adjusted EBITDA:
|
|
|
|
|
|
|
|
Net income
|
|
$
|
1,922
|
|
|
$
|
2,111
|
|
|
$
|
5,612
|
|
|
$
|
6,599
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Other income, net
|
|
|
-
|
|
|
|
(20
|
)
|
|
|
-
|
|
|
|
(20
|
)
|
Interest expense, net
|
|
|
483
|
|
|
|
420
|
|
|
|
1,351
|
|
|
|
1,320
|
|
Discount on related party receivable
|
|
|
141
|
|
|
|
135
|
|
|
|
424
|
|
|
|
418
|
|
Income tax provision
|
|
|
472
|
|
|
|
1,416
|
|
|
|
3,036
|
|
|
|
4,289
|
|
Amortization
|
|
|
983
|
|
|
|
960
|
|
|
|
2,961
|
|
|
|
2,201
|
|
Depreciation
|
|
|
866
|
|
|
|
752
|
|
|
|
2,466
|
|
|
|
2,175
|
|
Share-based compensation
|
|
|
616
|
|
|
|
488
|
|
|
|
2,860
|
|
|
|
1,933
|
|
Reduction of contingent earnout liability
|
|
|
(350
|
)
|
|
|
-
|
|
|
|
(936
|
)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
$
|
5,133
|
|
|
$
|
6,262
|
|
|
$
|
17,774
|
|
|
$
|
18,915
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA margin
|
|
|
10.9
|
%
|
|
|
14.0
|
%
|
|
|
13.0
|
%
|
|
|
14.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FRANKLIN COVEY CO.
|
Additional Sales and Financial Information
|
(in thousands and unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|
Three Quarters Ended
|
|
|
|
|
May 31,
|
|
June 1,
|
|
May 31,
|
|
June 1,
|
|
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
Sales Detail by Region/Type:
|
|
|
|
|
|
|
|
|
U.S./Canada direct
|
|
$
|
24,801
|
|
|
$
|
25,139
|
|
|
$
|
69,867
|
|
|
$
|
67,850
|
|
International direct
|
|
|
5,781
|
|
|
|
5,143
|
|
|
|
18,980
|
|
|
|
20,341
|
|
Licensees
|
|
|
4,178
|
|
|
|
3,749
|
|
|
|
12,451
|
|
|
|
11,667
|
|
National account practices
|
|
|
9,691
|
|
|
|
8,077
|
|
|
|
26,938
|
|
|
|
20,356
|
|
Self-funded marketing
|
|
|
1,451
|
|
|
|
1,317
|
|
|
|
4,246
|
|
|
|
4,205
|
|
Other
|
|
|
1,229
|
|
|
|
1,434
|
|
|
|
4,573
|
|
|
|
4,931
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
$
|
47,131
|
|
|
$
|
44,859
|
|
|
$
|
137,055
|
|
|
$
|
129,350
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales Detail by Category:
|
|
|
|
|
|
|
|
|
Training and consulting services
|
|
$
|
44,381
|
|
|
$
|
42,378
|
|
|
$
|
129,399
|
|
|
$
|
121,185
|
|
Products
|
|
|
1,694
|
|
|
|
1,428
|
|
|
|
4,767
|
|
|
|
4,995
|
|
Leasing
|
|
|
1,056
|
|
|
|
1,053
|
|
|
|
2,889
|
|
|
|
3,170
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
47,131
|
|
|
|
44,859
|
|
|
|
137,055
|
|
|
|
129,350
|
|
Cost of Goods Sold by Category:
|
|
|
|
|
|
|
|
|
Training and consulting services
|
|
|
15,811
|
|
|
|
14,281
|
|
|
|
42,260
|
|
|
|
39,809
|
|
Products
|
|
|
982
|
|
|
|
665
|
|
|
|
2,065
|
|
|
|
1,836
|
|
Leasing
|
|
|
454
|
|
|
|
478
|
|
|
|
1,405
|
|
|
|
1,428
|
|
|
|
|
|
|
17,247
|
|
|
|
15,424
|
|
|
|
45,730
|
|
|
|
43,073
|
|
Gross Profit
|
|
$
|
29,884
|
|
|
$
|
29,435
|
|
|
$
|
91,325
|
|
|
$
|
86,277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FRANKLIN COVEY CO.
|
Condensed Consolidated Balance Sheets
|
(in thousands and unaudited)
|
|
|
|
|
|
|
|
|
|
May 31,
|
|
August 31,
|
|
|
|
2014
|
|
2013
|
Assets
|
|
|
|
|
Current assets:
|
|
|
|
|
Cash
|
|
$
|
5,337
|
|
|
$
|
12,291
|
|
Accounts receivable, less allowance for doubtful accounts of $707
and $982
|
|
|
45,145
|
|
|
|
52,684
|
|
Receivable from related party
|
|
|
581
|
|
|
|
3,305
|
|
Inventories
|
|
|
5,347
|
|
|
|
4,321
|
|
Income taxes receivable
|
|
|
3,183
|
|
|
|
-
|
|
Deferred income taxes
|
|
|
4,670
|
|
|
|
4,685
|
|
Prepaid expenses and other current assets
|
|
|
4,766
|
|
|
|
3,822
|
|
Total current assets
|
|
|
69,029
|
|
|
|
81,108
|
|
|
|
|
|
|
|
Property and equipment, net
|
|
|
17,039
|
|
|
|
17,180
|
|
Intangible assets, net
|
|
|
58,564
|
|
|
|
60,654
|
|
Goodwill
|
|
|
19,641
|
|
|
|
16,135
|
|
Long-term receivable from related party
|
|
|
5,055
|
|
|
|
4,453
|
|
Other assets
|
|
|
14,234
|
|
|
|
9,875
|
|
|
|
|
$
|
183,562
|
|
|
$
|
189,405
|
|
|
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
|
Current liabilities:
|
|
|
|
|
Current portion of financing obligation
|
|
$
|
1,257
|
|
|
$
|
1,139
|
|
Line of credit
|
|
|
2,527
|
|
|
|
-
|
|
Accounts payable
|
|
|
6,980
|
|
|
|
9,294
|
|
Income taxes payable
|
|
|
-
|
|
|
|
1,365
|
|
Accrued liabilities
|
|
|
20,817
|
|
|
|
31,140
|
|
Total current liabilities
|
|
|
31,581
|
|
|
|
42,938
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financing obligation, less current portion
|
|
|
26,420
|
|
|
|
27,376
|
|
Other liabilities
|
|
|
4,695
|
|
|
|
6,106
|
|
Deferred income tax liabilities
|
|
|
8,725
|
|
|
|
6,479
|
|
Total liabilities
|
|
|
71,421
|
|
|
|
82,899
|
|
|
|
|
|
|
|
Shareholders' equity:
|
|
|
|
|
Common stock
|
|
|
1,353
|
|
|
|
1,353
|
|
Additional paid-in capital
|
|
|
205,888
|
|
|
|
210,227
|
|
Retained earnings
|
|
|
46,041
|
|
|
|
40,429
|
|
Accumulated other comprehensive income
|
|
|
1,647
|
|
|
|
1,686
|
|
Treasury stock at cost, 10,370 and 10,759 shares
|
|
|
(142,788
|
)
|
|
|
(147,189
|
)
|
Total shareholders' equity
|
|
|
112,141
|
|
|
|
106,506
|
|
|
|
|
$
|
183,562
|
|
|
$
|
189,405
|
|
|
|
|
|
|
|
|
|
|
|
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|