UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K/A
(Amendment No. 1)
| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE FISCAL YEAR ENDED AUGUST 31, 2019
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE TRANSITION PERIOD FROM TO
Franklin Covey Co.
(Exact name of registrant as specified in its charter)
| Utah | 1-11107 | 87-0401551 | ||
| (State or other jurisdiction of incorporation or organization) |
(Commission File No.) |
(IRS Employer Identification No.) |
2200 West Parkway Boulevard
Salt Lake City, Utah 84119-2331
(Address of principal executive offices, including zip code)
Registrant’s telephone number, including area code: (801) 817-1776
Securities registered pursuant to Section 12(b) of the Act:
|
Title of Each Class |
Name of Each Exchange on Which Registered | |
| Common Stock, $.05 Par Value | New York Stock Exchange |
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act:
| Large Accelerated Filer | ☐ | Accelerated Filer | ☒ | |||
| Non-accelerated Filer | ☐ | Smaller Reporting Company | ☒ | |||
| 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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of February 28, 2019, the aggregate market value of the Registrant’s Common Stock held by non-affiliates of the Registrant was approximately $175.4 million, which was based upon the closing price of $26.02 per share as reported by the New York Stock Exchange.
As of October 31, 2019, the Registrant had 13,982,356 shares of Common Stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Parts of the Registrant’s Definitive Proxy Statement for the Annual Meeting of Shareholders, which is scheduled to be held on January 24, 2020, are incorporated by reference in Part III of this Form 10-K.
EXPLANATORY NOTE
This Amendment No. 1 to Form 10-K (this “Amendment”) amends the Annual Report on Form 10-K for the fiscal year ended August 31, 2019 filed on November 14, 2019 (the “Original 10-K”), of Franklin Covey Co., a Utah corporation (the “Company” or “we”). We are filing this Amendment to include, as Exhibit 4.6, a description of the Company’s securities registered under Section 12 of the Securities Exchange Act of 1934, as amended. This Amendment does not reflect events occurring after the filing of the Original 10-K or otherwise modify or update the disclosures set forth in the Original 10-K, including the financial statements and notes thereto included in the Original 10-K.
PART IV
| ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES |
(a) List of documents filed as part of this report:
| 1. | Financial Statements. The consolidated financial statements of the Company and Report of Independent Registered Public Accounting Firm thereon included in the Annual Report to Shareholders on Form 10-K for the year ended August 31, 2019, are as follows: |
Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets at August 31, 2019 and 2018
Consolidated Statements of Operations and Statements of Comprehensive Loss for the fiscal years ended August 31, 2019, 2018, and 2017
Consolidated Statements of Cash Flows for the fiscal years ended August 31, 2019, 2018, and 2017
Consolidated Statements of Shareholders’ Equity for the fiscal years ended August 31, 2019, 2018, and 2017
Notes to Consolidated Financial Statements
| 2. | Financial Statement Schedules. |
Other financial statement schedules are omitted because they are not required or applicable, or the required information is shown in the financial statements or notes thereto, or contained in this report.
| 3. | Exhibit List. |
| 10.32* | Franklin Covey Co. 2019 Omnibus Incentive Plan | (29) | ||||
| 10.32 | Credit Agreement by and among JPMorgan Chase Bank, N.A., Franklin Covey Co., and the subsidiary guarantors party thereto, dated August 7, 2019 | (30) | ||||
| 10.33 | Pledge and Security Agreement by and between JPMorgan Chase Bank, N.A., Franklin Covey Co., and the subsidiary guarantors party thereto, dated August 7, 2019 | (30) | ||||
| 21 | Subsidiaries of the Registrant | (31) | ||||
| 23 | Consent of Independent Registered Public Accounting Firm | (31) | ||||
| 31.1 | Rule 13a-14(a) Certification of the Chief Executive Officer | «« | ||||
| 31.2 | Rule 13a-14(a) Certification of the Chief Financial Officer | «« | ||||
| 32 | Section 1350 Certifications | «« | ||||
| 101.INS | XBRL Instance Document | (31) | ||||
| 101.SCH | XBRL Taxonomy Extension Schema | (31) | ||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase | (31) | ||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase | (31) | ||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase | (31) | ||||
| 101.PRE | XBRL Extension Presentation Linkbase | (31) | ||||
| (1) | Incorporated by reference to Registration Statement on Form S-1 filed with the Commission on April 17, 1992, Registration No. 33-47283. |
| (2) | Incorporated by reference to Amendment No. 1 to Registration Statement on Form S-1 filed with the Commission on May 26, 1992, Registration No. 33-47283. |
| (3) | Incorporated by reference to Schedule 13D (CUSIP No. 534691090 as filed with the Commission on June 14, 1999). Registration No. 005-43123. |
| (4) | Incorporated by reference to Report on Form 8-K filed with the Commission on March 10, 2005.** |
| (5) | Incorporated by reference to Report on Form 8-K filed with the Commission on June 27, 2005.** |
| (6) | Incorporated by reference to Report on Form 8-K filed with the Commission on October 24, 2005.** |
| (7) | Incorporated by reference to the Definitive Proxy Statement on Form DEF 14A filed with the Commission on December 12, 2005.** |
| (8) | Incorporated by reference to Report on Form 8-K/A filed with the Commission on May 29, 2008.** |
| (9) | Incorporated by reference to Report on Form 10-Q filed July 10, 2008, for the Quarter ended May 31, 2008.** |
| (10) | Incorporated by reference to Report on Form 8-K filed with the Commission on July 11, 2008.** |
| (11) | Incorporated by reference to Report on Form 10-Q filed with the Commission on April 9, 2009.** |
| (12) | Incorporated by reference to the Definitive Proxy Statement on Form DEF 14A (Appendix A) filed with the Commission on December 15, 2010.** |
| (13) | Incorporated by reference to Report on Form 8-K filed with the Commission on March 17, 2011.** |
| (14) | Incorporated by reference to Report on Form 8-K filed with the Commission on July 28, 2011.** |
| (15) | Incorporated by reference to Report on Form 8-K filed with the Commission on February 1, 2012.** |
| (16) | Incorporated by reference to Report on Form 8-K filed with the Commission on March 15, 2012.** |
| (17) | Incorporated by reference to Report on Form 8-K filed with the Commission on June 19, 2012.** |
| (18) | Incorporated by reference to Report on Form 8-K filed with the Commission on March 14, 2012.** |
| (19) | Incorporated by reference to Report on Form 8-K filed with the Commission on March 14, 2013.** |
| (20) | Incorporated by reference to Report on Form 8-K filed with the Commission on March 27, 2013.** |
| (21) | Incorporated by reference to the Definitive Proxy Statement on Form DEF 14A (Appendix A) filed with the Commission on December 22, 2014.** |
| (22) | Incorporated by reference to Report on Form 8-K filed with the Commission on April 2, 2015.** |
| (23) | Incorporated by reference to Report on Form 8-K filed with the Commission on May 24, 2016.** |
| (24) | Incorporated by reference to Report on Form 8-K filed with the Commission on March 3, 2017.** |
| (25) | Incorporated by reference to Report on Form 8-K filed with the Commission on June 1, 2017.** |
| (26) | Incorporated by reference to Report on Form 8-K filed with the Commission on August 29, 2017.** |
| (27) | Incorporated by reference to the Definitive Proxy Statement on Form DEF 14A (Appendix A) filed with the Commission on December 22, 2017.** |
| (28) | Incorporated by reference to Report on Form 8-K filed with the Commission on August 20, 2018.** |
| (29) | Incorporated by reference to the Definitive Proxy Statement on Form DEF 14A (Appendix A) filed with the Commission on December 20, 2018.** |
| (30) | Incorporated by reference to Report on Form 8-K filed with the Commission on August 8, 2019.** |
| (31) | Incorporated by reference to Report on Form 10-K filed with the Commission on November 14, 2019.** |
| «« | Filed herewith and attached to this report. |
| * | Indicates a management contract or compensatory plan or agreement. |
| ** | Registration No. 001-11107. |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on December 2, 2019.
FRANKLIN COVEY CO.
| By: | /s/ Stephen D. Young | |
| Stephen D. Young Chief Financial Officer and Chief Accounting Officer |
Exhibit 4.6
DESCRIPTION OF THE REGISTRANT’S SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES
EXCHANGE ACT OF 1934
Franklin Covey Co.. (“Franklin Covey,” “we,” “our,” or “us”) has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: our common stock.
DESCRIPTION OF CAPITAL STOCK
The following summary of the terms of our capital stock is based upon our Restated Articles of Incorporation, as amended (the “Articles of Incorporation”) and our Amended and Restated Bylaws (the “Bylaws”). The summary is not complete, and is qualified by reference to our Articles of Incorporation and our Bylaws, which are filed as exhibits to this Annual Report on Form 10-K and are incorporated by reference herein. We encourage you to read our Articles of Incorporation, our Bylaws and the applicable provisions of the Utah Revised Business Corporation Act for additional information.
Authorized Shares of Capital Stock
Our authorized capital stock consists of 40,000,000 shares of common stock, $0.05 par value, and 14,000,000 shares of preferred stock, no par value. As of October 31, 2019, there were 13,982,356 shares of common stock issued and outstanding and no shares of preferred stock issued and outstanding. The outstanding shares of our common stock are duly authorized, validly issued, fully paid, and nonassessable.
Listing
Our common stock trades on the New York Stock Exchange under the symbol “FC.”
Voting Rights
Each holder of shares of our common stock is entitled to one (1) vote for each share held of record by such holder on the applicable record date on all matters submitted to a vote of shareholders. Pursuant to our Articles of Incorporation, shareholders do not have the right to vote cumulatively.
Dividend Rights
Subject to any preferential dividend rights granted to the holders of any shares of our preferred stock that may at the time be outstanding, holders of our common stock are entitled to receive dividends as may be declared from time to time by our board of directors out of funds legally available therefor.
Rights upon Liquidation
Subject to any preferential rights of outstanding shares of preferred stock, holders of our common stock are entitled to share pro rata, upon any liquidation or dissolution of Franklin Covey, in all remaining assets legally available for distribution to shareholders.
Other Rights and Preferences
Our common stock has no sinking fund, redemption provisions, or preemptive, conversion, or exchange rights. Subject to certain requirements, special meetings of shareholders may be called by shareholders holding shares representing not less than 10% of the outstanding votes entitled to vote at the meeting. Subject to certain requirements, holders of our common stock may also act by written consent of the holders of outstanding shares having not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting at which all shares entitled to vote were present and voted.
Transfer Agent and Registrar
Zions Bancorporation, National Association, is the transfer agent and registrar for our common stock.
Certain Anti-Takeover Effects
Certain provisions of our Articles of Incorporation and Bylaws may be deemed to have an anti-takeover effect.
Advance Notice Requirements for Shareholder Proposals and Director Nominations. Our Bylaws provide advance notice procedures for shareholders seeking to bring business before our annual meeting of shareholders or to nominate candidates for election as directors at our annual meeting of shareholders and specify certain requirements regarding the form and content of a shareholder’s notice. These provisions might preclude our shareholders from bringing matters before our annual meeting of shareholders or from making nominations for directors at our annual meeting of shareholders if the proper procedures are not followed.
Additional Authorized Shares of Capital Stock. The additional shares of authorized common stock and preferred stock available for issuance under our Articles of Incorporation, could be issued at such times, under such circumstances and with such terms and conditions as to impede a change in control.
Issuance of Undesignated Preferred Stock. Our board of directors has the authority, without further action by the stockholders, to issue shares of undesignated preferred stock with rights and preferences, including voting rights, designated from time to time by our board of directors. The existence of authorized but unissued shares of preferred stock would enable our board of directors to render more difficult or to discourage an attempt to obtain control of us by means of a merger, tender offer, proxy contest or other means.
Exhibit 31.1
SECTION 302 CERTIFICATION
I, Robert A. Whitman, certify that:
| 1. | I have reviewed this yearly report on Form 10-K/A of Franklin Covey Co.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: December 2, 2019 |
/s/ Robert A. Whitman | |||||
| Robert A. Whitman Chief Executive Officer |
Exhibit 31.2
SECTION 302 CERTIFICATION
I, Stephen D. Young, certify that:
| 1. | I have reviewed this yearly report on Form 10-K/A of Franklin Covey Co.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: December 2, 2019 |
/s/ Stephen D. Young | |||||
| Stephen D. Young Chief Financial Officer |
Exhibit 32
CERTIFICATION
In connection with the yearly report of Franklin Covey Co. (the “Company”) on Form 10-K/A for the period ended August 31, 2019, as filed with the Securities and Exchange Commission (the “Report”), we, Robert A. Whitman, President and Chief Executive Officer of the Company, and Stephen D. Young, Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to the best of our knowledge:
| 1. | The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and |
| 2. | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated. |
This Certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.
| /s/ Robert A. Whitman |
/s/ Stephen D. Young | |||
| Robert A. Whitman Chief Executive Officer |
Stephen D. Young Chief Financial Officer | |||
| Date: December 2, 2019 | Date: December 2, 2019 |