UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported):
January
7, 2010
FRANKLIN
COVEY CO.
(Exact
name of registrant as specified in its charter)
Commission
File No. 1-11107
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Utah
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87-0401551
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(State
or other jurisdiction of incorporation)
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(IRS
Employer Identification Number)
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2200
West Parkway Boulevard
Salt
Lake City, Utah 84119-2099
(Address
of principal executive offices)(Zip Code)
Registrant’s
telephone number, including area code: (801) 817-1776
Former
name or former address, if changed since last report: Not Applicable
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
] Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
[
] Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
[
] Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[
] Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item
2.02 Results of Operations and Financial Condition
On
January 7, 2010, Franklin Covey Co. (the Company) announced its financial
results for the fiscal quarter ended November 28, 2009. A copy of the
earnings release is being furnished as exhibit 99.1 to this current report on
Form 8-K.
Certain
information in this Report (including the exhibit) is furnished pursuant to Item
2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise
subject to the liabilities of that section, nor shall it be deemed incorporated
by reference in any filing made by the Company under the Securities Act of 1933,
as amended, or the Exchange Act, except as expressly set forth by specific
reference in such a filing.
Item
8.01 Other Events
On
December 23, 2009, the Company announced that it would host a discussion for
shareholders and the financial community to review its financial results for the
fiscal quarter ended November 28, 2009. The discussion is scheduled
to be held on Thursday, January 7, 2010 at 5:00 p.m. Eastern time (3:00 p.m.
Mountain time).
Interested
persons can participate by dialing 1-800-638-4930 (International participants
may dial 1-617-614-3944), access code: 86003198. Alternatively, the
webcast is accessible at the following Web site:
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=102601&eventID=2638106.
A replay
of the discussion will be available from January 7 through January 14, 2010 by
dialing 1-888-286-8010 (International participants may dial 1-617-801-6888),
access code: 92258428. The webcast will also remain accessible
through January 14, 2010 on the Investor Relations area of the Company’s Web
site at: http://phx.corporate-ir.net/phoenix.zhtml?c=102601&p=irol-IRHome.
Item
9.01 Financial Statements and Exhibits
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(d)
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Exhibits
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99.1
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Earnings
release dated January 7, 2010
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SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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FRANKLIN
COVEY CO.
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Date:
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January 7, 2010
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By:
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/s/ Stephen D.
Young
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Stephen D.
Young
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||||
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Chief Financial
Officer
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Exhibit 99.1
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Press
Release
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2200
West Parkway Boulevard
Salt
Lake City, Utah 84119-2331
www.franklincovey.com
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FRANKLIN
COVEY ANNOUNCES FIRST QUARTER FISCAL 2010 RESULTS
Salt Lake City, Utah – January
7, 2010 – Franklin Covey Co. (NYSE: FC), a global provider of training and
consulting services, today announced financial results for its fiscal first
quarter ended November 28, 2009. For the first quarter of fiscal
2009, the Company recognized income from operations totaling $1.9 million
compared to a loss of $0.7 million in the first quarter of fiscal
2009. Net income for the quarter totaled $0.2 million, or $0.01 per
diluted share, compared to a net loss of $0.6 million, or ($0.04) per diluted
share, in the first quarter of fiscal 2009. Reported net sales for
the first quarter of fiscal 2010 totaled $33.9 million compared to $35.1 million
in the first quarter of fiscal 2009. The majority of this decline was
due to planned decreases in the number of public program events held during the
quarter, which reduced sales by $1.1 million compared to fiscal
2009. Excluding the impact of planned decreases in public programs,
training and consulting sales increased 3% compared to the prior
year.
Bob
Whitman, Chairman and Chief Executive Officer of Franklin Covey commented, “Due
to solid bookings in the fourth quarter, we started our new fiscal year with a
pipeline of contracted training revenue that was significantly larger than we
had at the beginning of last year’s first quarter. With this, and
continued solid booking momentum, we saw revenue trends strengthen during our
first quarter. The improvement in our sales trend was very broad
based, and extended across all of our major channels. The
strengthening of our revenue trends, combined with the favorable results of our
cost reduction actions implemented over the past year, resulted in a substantial
increase in operating profit for the quarter.”
Mr.
Whitman continued, “We have a large and loyal base of more than 6,000 clients
worldwide. We expect to grow our business with these existing clients as well as
expand our customer base through 1) the strength of our brands; 2) the size,
reach, and growth of our sales and delivery network, including our direct sales
forces, our international licensee partners, and our practices; 3) the increased
reach enabled by our new technology delivery platforms, and 4) the strength,
experience, and quality of our people. The combination of our
significantly lower cost structure, stabilizing revenues, solid current
bookings, and a strong pipeline of revenue opportunities, establishes the
foundation for what we expect will be a significant increase in profitability in
fiscal 2010.”
Fiscal First Quarter 2010
Results
Training
and consulting sales decreased $0.2 million, or 0.7%, from the first quarter of
fiscal 2009 to $30.3 million. Excluding the impact of planned
decreases in public programs, which totaled $1.1 million, the Company’s training
and consulting sales improved by 3% compared to the prior year. The
decline in public program sales did not materially impact profitability due to
the essentially breakeven nature of these programs. International
sales declined by $2.1 million, or 15.7%, from the first quarter of fiscal 2009
to $11.3 million, primarily due to a $1.7 million decline in sales through the
Company’s international direct offices, of which $1.6 million was attributable
to decreased sales in Japan, and a $0.4 million decline in licensee royalty
revenues.
Gross
margin improved to 63.5% of sales in the first quarter of fiscal 2010 compared
to 61.8% of sales in the first quarter of fiscal 2009 primarily due to an
improved mix of training and consulting programs sold during the
quarter. This improvement was partially offset by decreased licensee
royalty revenues.
Selling,
general and administrative (SG&A) expenses declined $2.9 million from the
first quarter of fiscal 2009 primarily due to the initiatives the Company has
implemented to reduce its cost structure. As a percentage of sales,
SG&A expenses declined to 52.2% of sales in the first quarter of fiscal 2010
from 58.7% of sales in the first quarter of fiscal 2009.
As of
November 28, 2009, the Company had $1.1 million in cash and cash equivalents
compared to $1.7 million as of August 31, 2009. The Company had $11.2
million outstanding on its line of credit as of November 28, 2009, down from
$12.9 million as of August 31, 2009.
Earnings Conference
Call
On
Thursday, January 7, 2010 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 first quarter ended November 28, 2009. Interested persons may
participate by dialing 1-800-638-4930 (International participants may dial
1-617-614-3944), access code: 86003198. Alternatively, a webcast will
be accessible at the following Web site:
http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=102601&eventID=2638106. Due
to the length of this address this URL may need to be copied/pasted into your
Internet browser’s address field. Remove the extra space if one
exists. A replay will be available through 11:59 p.m. Eastern time on
January 14, 2010 by dialing 1-888-286-8010 (International participants may dial
1-617-801-6888), access code: 92258428. The webcast will remain
accessible through January 14, 2010 on the Investor Relations area of the
Company’s web site at: http://phx.corporate-ir.net/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. Forward-looking
statements are based upon management's current expectations and are subject to
various risks and uncertainties including, but not limited to: expected sales;
reductions in capital requirements and cost structure; expected levels of
profitability; general economic conditions; market acceptance of new products or
services and marketing strategies; the ability to achieve sustainable growth in
future periods; the expected impact of the Company’s restructuring plan; 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 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.
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
the Company’s history, FranklinCovey 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 Co. has 40 direct and licensee offices
providing professional services in 147 countries.
On July
6, 2008, Franklin Covey Co. sold its Consumer Solutions Business Unit (CSBU) to
a new private equity-funded entity known as FranklinCovey Products, LLC., (www.franklinplanner.com)
the exclusive, worldwide licensee of the FranklinCovey™ brand. FranklinCovey
Products sells the popular Franklin Planner, binders and other related
productivity and organizational tools and accessories to consumers and small
businesses through retail, wholesale, Internet and call center
channels. Franklin Covey Co. has retained a 19.5 percent voting
interest in FranklinCovey Products, LLC. Franklin Covey Co. also uses the
FranklinCovey brand in all of its global training and consulting
services. For more information, please visit www.franklincovey.com.
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Investor
Contact:
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Media
Contact:
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FranklinCovey
Steve
Young
801-817-1776
investor.relations@franklincovey.com
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or
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ICR,
Inc.
Kate
Messmer
203-682-8338
kate.messmer@icrinc.com
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FranklinCovey
Debra
Lund
801-817-6440
Debra.Lund@franklincovey.com
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FRANKLIN COVEY CO.
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CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
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( in thousands, except per share amounts )
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Quarter
Ended
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November
28,
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November
29,
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2009
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2008
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(unaudited)
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(unaudited) | ||
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Net
sales
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$ 33,901
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$ 35,081
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Cost
of sales
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12,387
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13,384
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Gross
profit
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21,514
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21,697
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Selling,
general, and administrative
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17,694
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20,610
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Depreciation
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974
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903
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Amortization
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962
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902
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Income
(loss) from operations
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1,884
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(718)
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Interest
expense, net
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(715)
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(775)
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Income
(loss) before income taxes
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1,169
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(1,493)
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Income
tax provision (benefit)
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921
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(924)
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Net
income (loss)
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$ 248
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$ (569)
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Net
income (loss) per share available to common shareholders:
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Basic
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$ 0.01
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$ (0.04)
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Diluted
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$ 0.01
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$ (0.04)
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Weighted
average common shares:
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Basic
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16,958
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13,378
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Diluted
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17,050
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13,378
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Sales
Detail by Category:
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Training
and consulting services
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$ 30,257
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$ 30,481
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Products
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2,846
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3,681
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Leasing
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798
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919
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Total
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$ 33,901
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$ 35,081
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Sales
Detail by Region:
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Domestic
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$ 21,775
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$ 20,726
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International
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11,328
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13,436
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33,103
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34,162
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Corporate
(leasing)
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798
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919
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Total
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$ 33,901
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$ 35,081
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