---

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):

June 27, 2019

FRANKLIN COVEY CO.

(Exact name of registrant as specified in its charter)

Commission File No. 1-11107

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company □

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

---

Item 2.02     Results of Operations and Financial Condition

On June 27, 2019, Franklin Covey Co. (the Company) announced its financial results for the third quarter of fiscal 2019, which ended on May 31, 2019.  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 June 13, 2019, the Company announced that it would host a discussion for shareholders and the financial community to review its financial results for the third quarter of fiscal 2019, which ended on May 31, 2019.  The discussion is scheduled to be held on Thursday, June 27, 2019, at 5:00 p.m. Eastern (3:00 p.m. Mountain).

Interested persons can participate by dialing 888-771-4371 (International participants may dial 847-585-4405), access code: 48751632.  Alternatively, a webcast will be accessible at the following Web site: https://www.edge.media-server.com/m6/p/uof8kmnt.

A replay will be available from June 27 (7:30 p.m. ET) through July 4, 2019 by dialing 888-843-7419 (International participants may dial 630-652-3042), access code: 48751632#.  The webcast will remain accessible through July 4, 2019 on the Investor Relations area of the Company's website at: https://investor.franklincovey.com/phoenix.zhtml?c=102601&p=irol-IRHome.

Item 9.01     Financial Statements and Exhibits

(d)

Exhibits

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.

---

---

FRANKLIN COVEY REPORTS STRONG FISCAL 2019 THIRD QUARTER FINANCIAL RESULTS

Sales of $56.0 Million, Increased 11% Year-Over-Year, or 12% in Constant Currency, Fueled by Strong Growth in Both the Enterprise and Education Divisions

Subscription and Related Sales Increased 27% Year-Over-Year

Results of Operations Improved by $0.7 Million Year-Over-Year

Adjusted EBITDA of $3.1 Million, Increased by $2.5 Million Year-Over-Year, Increased $2.8 Million in Constant Currency

Operating Cash Flows Increased 117% to $18.6 Million For Fiscal 2019 Year-To-Date Compared with $8.6 Million in Fiscal 2018 Year-To-Date

Salt Lake City, Utah – Franklin Covey Co. (NYSE: FC), a global performance improvement company that creates and distributes world-class content, training, processes, tools, and services that organizations and individuals use to transform their results, today announced strong financial results for its third quarter of fiscal 2019, which ended on May 31, 2019.

Franklin Covey delivered the following results for its third quarter of fiscal 2019:

Enterprise Division sales increased 9% to $43.4 million compared with $39.9 million in last year’s third quarter.  Excluding the impact of foreign exchange, Enterprise Division sales grew 10% compared with the prior year.  Enterprise Division sales increased through broad-based growth in both domestic and international sales offices from subscription services and from increased onsite presentations.  The previous acquisition of the licensee that served Germany, Switzerland, and Austria (GSA) added $0.6 million of new international direct offices revenue during the quarter and is expected to provide significant future growth opportunities.  Education Division revenues increased 20% to $11.1 million compared with $9.2 million in the third quarter of fiscal 2018, primarily due to increased subscription service revenues and increased symposium events.

Consolidated revenue for the first three quarters of fiscal 2019 increased 11%, or $15.3 million, to $160.2 million compared with $144.9 million in the first three quarters of fiscal 2018.  Excluding the impact of foreign exchange, the Company’s sales grew 12% over the first three quarters of the prior year.  Enterprise Division sales increased 10% to $124.9 million compared with $113.7 million for the first three quarters of fiscal 2018.  Excluding the impact of foreign exchange, Enterprise Division sales increased 11% over the first three quarters of fiscal 2018.  Enterprise Division sales were favorably impacted by increased direct office revenues, both domestically and internationally, increased government services sales, and increased coaching revenues.  Education Division revenues increased 14%, or $3.7 million, to $31.1 million compared with $27.4 million in the first three quarters of the prior year.  Consolidated gross profit for the first three quarters of fiscal 2019 was $111.8 million compared with $100.5 million in the same period of the prior year.  Fiscal 2019 gross margin through May 31, 2019 remained strong at 69.8% compared with 69.4% in the first three quarters of fiscal 2018.

Selling, general, and administrative expenses for the first three quarters of fiscal 2019 increased $5.5 million compared with the same period of fiscal 2018 but decreased as a percent of revenue to 68.2% compared with 71.6% in the first three quarters of fiscal 2018.  The increase was primarily due to increased commissions on higher sales, new sales and sales related personnel, personnel at the Company’s new GSA direct office, and increased non-cash stock-based compensation expense.  Depreciation expense increased $1.3 million primarily related to significant information systems investments in fiscal 2018.  The Company’s loss from operations through May 31, 2019 improved to $(6.1) million compared with a loss of $(11.0) million in the first three quarters of fiscal 2018.  Adjusted EBITDA for the three quarters ended May 31, 2019 improved $6.7 million to $7.2 million compared with $0.5 million through the first three quarters of fiscal 2018.  Excluding the impact of foreign currency, Adjusted EBITDA for the first three quarters of fiscal 2019 increased $7.6 million compared with the prior year.  Net loss for the first three quarters of fiscal 2019 was $(6.9) million, or $(.49) per share, compared with a $(7.7) million loss, or $(.55) per share, in the same period of fiscal 2018.  The Company’s net loss during fiscal 2019 was impacted by the significant reduction in its effective tax benefit rate as previously described.

On Thursday, June 27, 2019, 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, 2019.  Interested persons may participate by dialing 888-771-4371 (International participants may dial 847-585-4405), access code: 48751632.  Alternatively, a webcast will be accessible at the following Web site: http://edge.media-server.com/m6/p/uof8kmnt.  A replay will be available from June 27 (7:30 p.m. ET) through July 4, 2019 by dialing 888-843-7419 (International participants may dial 630-652-3042), access code: 48751632#.  The webcast will remain accessible through July 4, 2019 on the Investor Relations area of the Company’s Web site at: http://investor.franklincovey.com/phoenix.zhtml?c=102601&p=irol-IRHome.

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 and growth in deferred revenues in fiscal 2019; expected growth and profitability of the subscription-based business model; expected growth and profitability of the Education Division; and other 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; renewals of subscription contracts; the impact of new sales personnel; the impact of deferred revenues on future financial results; market

acceptance of new products or services, including new AAP portal upgrades; the ability to achieve sustainable growth in future periods; and other factors identified and discussed in the Company’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.

Refer to the attached table for the reconciliation of a non-GAAP financial measure, “Adjusted EBITDA,” to consolidated net loss, the most comparable GAAP financial measure.  The Company defines Adjusted EBITDA as net income or loss excluding the impact of interest expense, income taxes, amortization, depreciation, stock-based compensation expense, and certain other items such as adjustments to the fair value of expected contingent consideration liabilities arising from business acquisitions.  The Company references this non-GAAP financial measure in its decision making because it provides supplemental information that facilitates consistent internal comparisons to the historical operating performance of prior periods and the Company believes it provides investors with greater transparency to evaluate operational activities and financial results.  The 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 estimate and dependent on future events which may be uncertain or out of the Company’s control, including the amount of AAP contracts invoiced, the number of AAP contracts that are renewed, necessary costs to deliver our offerings such as unanticipated curriculum development costs, and other potential variables.  Accordingly, a reconciliation is not available without unreasonable effort.

Franklin Covey Co. (NYSE:FC) (www.franklincovey.com) is a global, public company specializing in organizational performance improvement.  We help organizations and individuals achieve results that require a change in human behavior.  Our expertise is in seven areas: leadership, execution, productivity, trust, sales performance, customer loyalty and education.  Over its history, Franklin Covey clients have included 90% of the Fortune 100, more than 75% of the Fortune 500, thousands of small and mid-sized businesses, as well as numerous government entities and educational institutions. Franklin Covey has more than 100 direct and partner offices providing professional services in over 150 countries and territories.