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):
November
10, 2005
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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|
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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
4.02 Non-Reliance on Previously Issued Financial
Statements or a Related Audit Report or Completed Interim
Review
(a)
On November 10, 2005, the Audit Committee of Franklin Covey Co. (the Company)
determined that due to inaccurate deferred income tax calculations, the
Company’s consolidated financial statements as of August 31, 2004 and 2003 and
for each of the years in the three year period ended August 31, 2004 as
contained in the Company’s fiscal 2004 Form 10-K, and subsequent interim
periods, should no longer be relied upon. We currently believe that the error
only impacts the reported net loss for the year ended August 31, 2002 and
has no
impact on subsequent periods other than the reported balance
sheets.
Based
upon our current understanding, we believe that the underlying error was
the
result of incorrectly calculating deferred tax liabilities on previously
acquired intangible assets and improper deferred tax treatment of
indefinite-lived intangible assets recognized at the adoption of Statement
of
Financial Accounting Standards (SFAS) No. 142, Goodwill
and Other Intangibles,
and
their effects upon the Company’s calculation of the valuation allowance on
deferred tax assets reported in fiscal 2002 and in subsequent periods. Based
upon the Company’s preliminary analysis, these inaccurate deferred tax
calculations would have increased our income tax benefit, and decreased our
loss
from continuing operations, by approximately $6.4 million, and increased
the
charge resulting from the cumulative effect of accounting change related
to the
adoption of SFAS No. 142 by approximately $14.5 million. The Company believes
that the net effect of these errors would increase the reported $109.3 million
net loss attributable to common shareholders in fiscal 2002 by approximately
$8.1 million. The Company believes that these errors have no effect upon
the
operating results for periods subsequent to fiscal 2002. For periods subsequent
to fiscal 2002, the errors only impact the balance sheets through the impact
of
increased deferred tax liabilities and decreased retained earnings at each
balance sheet date.
The
Company currently plans to report the impact of the errors by restating the
affected financial statements included in its Annual Report on Form 10-K for
the
fiscal period ended August 31, 2005, which is due to be filed with the
Securities and Exchange Commission on, or before, November 29,
2005.
The
Audit
Committee of the Company’s Board of Directors and senior management has
discussed this matter with the Company’s independent registered public
accounting firm, KPMG LLP. The restatement amounts are subject to completion
of
KPMG’s review.
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 thereunto
duly authorized.
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FRANKLIN
COVEY CO.
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Date:
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November
14, 2005
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By:
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/s/
STEPHEN D. YOUNG
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Stephen
D. Young
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Chief
Financial Officer
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