x
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) FO THE SECURITIES EXCHANGE
ACT OF
1934 FOR THE FISCAL YEAR ENDED AUGUST 31, 2005
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|
OR
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||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSISTION PERIOD FROM ___ TO ___ |
Utah
|
1-11107
|
87-0401551
|
||
(State
or other jurisdiction of incorporation)
|
(Commission
File No.)
|
(IRS
Employer Commission File No.)
|
Title
of Each Class
|
Name
of Each Exchange on Which Registered
|
|
Common
Stock, $.05 Par Value
|
New
York Stock Exchange
|
|
||
|
||
|
||
|
||
|
||
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||
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||
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||
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Item
1.
|
l | People are inherently capable, aspire to greatness, and have the power to choose. |
l | Principles are timeless and universal and are the foundation to lasting effectiveness |
l | Leadership is a choice, built inside out on a foundation of character. Great leaders unleash the collective talent and passion of people toward the right goal. |
l | Habits of effectiveness come only from the committed use of integrated processes and tools. |
l | Sustained superior performance requires a balance of performance and performance capability (P/PC BalanceÒ) - a focus on achieving results and building capability. |
2005
|
2004
|
2003
|
||||||||
Consumer
and Small Business Unit
|
||||||||||
Retail
Stores
|
$
|
74,331
|
$
|
87,922
|
$
|
112,054
|
||||
Consumer
Direct
|
55,575
|
55,059
|
56,177
|
|||||||
Wholesale
|
19,691
|
21,081
|
16,915
|
|||||||
Other
|
3,757
|
2,007
|
7,020
|
|||||||
Total
CSBU
|
153,354
|
166,069
|
192,166
|
|||||||
Organizational
Solutions Business Unit
|
||||||||||
Domestic
|
76,114
|
61,047
|
74,306
|
|||||||
International
|
54,074
|
48,318
|
40,688
|
|||||||
Total
OSBU
|
130,188
|
109,365
|
114,994
|
|||||||
Total
|
$
|
283,542
|
$
|
275,434
|
$
|
307,160
|
1.
|
FranklinCovey
consultants provide on-site consulting or training classes for
organizations and schools. In these situations, our consultant
can tailor
the curriculum to our client’s specific business and
objectives.
|
|
2.
|
We
conduct public seminars in more than 151 cities throughout the
United
States, where organizations can send their employees in smaller
numbers.
These public seminars are also marketed directly to individuals
through
our catalog, e-commerce web-site, retail stores, and by direct
mail.
|
|
3.
|
Our
programs are also designed to be facilitated by licensed professional
trainers and managers in client organizations, reducing dependence
on our
professional presenters, and creating continuing revenue through
royalties
and as participant materials are purchased for trainees by these
facilitators.
|
|
4.
|
We
also offer The
7 Habits of Highly Effective People®
training course in online and CD-ROM formats. This self-paced
e-learning
alternative provides the flexibility that many organizations
need to meet
the needs of various groups, managers or supervisors who may
be unable to
attend extended classroom training and executives who need a
series of
working sessions over several
weeks.
|
l
|
In
June 2005, we completed the sale and leaseback of our corporate
headquarters facility, located in Salt Lake City, Utah. The sale
price was
$33.8 million in cash and after deducting customary closing costs,
including commissions and payment of the remaining mortgage on
one of the
buildings, we received net proceeds totaling $32.4 million. In
connection
with the transaction, we entered into a 20-year master lease
agreement
with the purchaser, an unrelated private investment group. The
master
lease agreement also contains six five-year options to renew
the master
lease agreement, thus allowing us to maintain our operations
at the
current location for up to 50 years.
|
l
|
In
November 2004, we simultaneously exercised our option to purchase
the
corporate facilities leased in Provo, Utah and sold these facilities
to
the tenant currently occupying that property. For further information
regarding this transaction, refer to Note 15 to our consolidated
financial
statements.
|
l
|
During
fiscal 2005, we closed 30 domestic retail store locations and
may close
additional retail locations during fiscal
2006.
|
Item
3.
|
High
|
Low
|
||||||
Fiscal
Year Ended August 31, 2005:
|
|||||||
Fourth
Quarter
|
$
|
8.10
|
$
|
5.80
|
|||
Third
Quarter
|
7.13
|
2.22
|
|||||
Second
Quarter
|
2.80
|
1.65
|
|||||
First
Quarter
|
1.98
|
1.61
|
|||||
Fiscal
Year Ended August 31, 2004:
|
|||||||
Fourth
Quarter
|
$
|
2.75
|
$
|
1.70
|
|||
Third
Quarter
|
2.86
|
2.05
|
|||||
Second
Quarter
|
3.25
|
1.50
|
|||||
First
Quarter
|
1.86
|
1.15
|
Period
|
Total
Number of Shares Purchased
|
Average
Price Paid Per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans
or
Programs
|
Maximum
Number of Shares That May Yet Be Purchased Under the Plans
or
Programs
|
|||||||||
Common
Shares:
|
|||||||||||||
May
29, 2005 to July 2, 2005
|
10(1)
|
|
$
|
6.86
|
none
|
n/a
|
|||||||
July
3, 2005 to July 30, 2005
|
-
|
-
|
none
|
n/a
|
|||||||||
July
31, 2005 to August 31, 2005
|
1(3)
|
|
7.15
|
none
|
n/a
|
||||||||
Total
Common Shares
|
11
|
$
|
6.89
|
426(4)
|
|
||||||||
Total
Preferred Shares
|
1,200(2)
|
|
$
|
25.00
|
(1)
|
These
shares of common stock were purchased in open market transactions
for
exclusive distribution to participants in our employee stock
purchase
program.
|
(2)
|
Amount
represents the redemption of $30.0 million of preferred stock
held by
Knowledge Capital during the period July 3, 2005 to July 30,
2005 as
provided by our fiscal 2005 preferred stock recapitalization.
Subsequent
to August 31, 2005, we redeemed an additional $10.0 million,
or
approximately 400,000 shares of preferred stock.
|
(3)
|
These
shares of common stock were purchased in open market transactions
for
participants in the Company’s non-qualified deferred compensation plan by
the plan administrator.
|
(4)
|
In
previous fiscal years, our Board of Directors approved various
plans for
the purchase of up to 8,000,000 shares of our common stock.
As of November
25, 2000, the Company had purchased 7,705,000 shares of common
stock under
these board-authorized purchase plans. On December 1, 2000,
the Board of
Directors approved an additional plan to acquire up to $8.0
million of our
common stock. To date, we have purchased $7.1 million of our
common stock
under the terms of the December 2000 Board approved purchase
plan. The
maximum number of shares that may yet be purchased under the
plans was
calculated for the December 2000 plan by dividing the remaining
approved
dollars by $7.00, which was the closing price of the Company’s common
stock on August 31, 2005. These shares were added to the remaining
shares
from the Company’s other Board-approved plans to arrive at the maximum
amount that may be purchased as of August 31, 2005. No shares
of our
common stock were purchased during the fiscal quarter ended
August 31,
2005 under terms of any Board authorized purchase
plan.
|
Item
6.
|
August
31,
|
2005
|
2004
|
2003
|
2002
|
2001
|
||||||||||||||
In
thousands, except per share data
|
Restated
|
Restated
|
Restated
|
As
Previously
Reported
|
Restated
|
||||||||||||||
Income
Statement Data
|
|||||||||||||||||||
Net
sales
|
$
|
283,542
|
$
|
275,434
|
$
|
307,160
|
$
|
332,998
|
$
|
332,998
|
$
|
439,781
|
|||||||
Income
(loss) from operations
|
8,943
|
(9,064
|
)
|
(47,665
|
)
|
(122,573
|
)
|
(122,573
|
)
|
(14,793
|
)
|
||||||||
Net
income (loss) from continuing operations before income
taxes
|
9,101
|
(8,801
|
)
|
(47,790
|
)
|
(122,179
|
)
|
(122,179
|
)
|
(17,196
|
)
|
||||||||
Income
tax benefit (provision)
|
1,085
|
(1,349
|
)
|
2,537
|
32,122
|
25,713
|
4,000
|
||||||||||||
Net
income (loss) from continuing operations
|
10,186
|
(10,150
|
)
|
(45,253
|
)
|
(90,057
|
)
|
(96,466
|
)
|
(13,196
|
)
|
||||||||
Cumulative
effect of accounting change, net of income taxes
|
(75,928
|
)
|
(61,386
|
)
|
|||||||||||||||
Net
loss attributable to common shareholders
|
(5,837
|
)
|
(18,885
|
)
|
(53,988
|
)
|
(117,399
|
)
|
(109,266
|
)
|
(19,236
|
)
|
|||||||
Basic
and diluted loss per share
|
(.34
|
)
|
(.96
|
)
|
(2.69
|
)
|
(5.90
|
)
|
(5.49
|
)
|
(.95
|
)
|
|||||||
Balance
Sheet Data
|
|||||||||||||||||||
Total
current assets
|
$
|
105,182
|
$
|
92,229
|
$
|
110,057
|
$
|
124,345
|
$
|
120,739
|
$
|
226,911
|
|||||||
Other
long-term assets
|
9,426
|
7,305
|
10,472
|
11,474
|
11,474
|
14,369
|
|||||||||||||
Total
assets
|
233,233
|
227,625
|
262,146
|
308,344
|
304,738
|
551,022
|
|||||||||||||
Deferred
income tax liabilities
|
9,715
|
10,047
|
10,538
|
11,739
|
-
|
41,326
|
|||||||||||||
Long-term
obligations of continuing operations
|
46,171
|
13,067
|
15,743
|
15,231
|
3,492
|
146,138
|
|||||||||||||
Total
liabilities
|
100,407
|
69,146
|
84,479
|
81,922
|
70,183
|
241,140
|
|||||||||||||
Shareholders’
equity
|
132,826
|
158,479
|
177,667
|
226,422
|
234,555
|
309,882
|
l
|
Sales
Performance
- Our
total sales increased by $8.1
million, which represented the first increase in year-over-year
sales
performance in several years. The increase in total sales
was due to
improved training and consulting services sales, which
increased
$18.1
million compared to fiscal 2004. Increased training and
consulting sales
was attributable to improvements in both domestic and international
delivery channels. During fiscal 2005 we also completed
significant
enhancements to our successful and well-known The
7 Habits of Highly Effective People training
course and related products. We believe that our refreshed
course
materials and related products, in combination with our
new training
offerings, will contribute to continuing improvements in
our training and
consulting sales performance.
Product
sales decreased by $10.0
million, which was primarily due to the impact of closed
retail stores and
declining technology and specialty product sales compared
to the prior
year.
|
l
|
Gross
Margin Improvement
-
Our gross margin improved compared to the prior year primarily
due to
increased training and consulting sales as a percent of
total sales,
favorable product and training program mix changes, reduced
product costs,
and lower overall costs in delivering our training and
consulting service
sales.
|
l
|
Decreased
Operating Costs
-
Our operating costs decreased by $5.1
million, primarily due to reduced depreciation and reduced
selling,
general, and administrative expenses. Consistent with prior
years, we
continue to seek for and implement strategies that will
enable us to
reduce our operating costs in order to improve our
profitability.
|
l
|
Improved
Cash Flows from Operations
- Our
cash flows from operations improved to $22.3
million compared to $12.1
million in fiscal 2004 and $5.8
million in fiscal 2003. We were able to improve our cash
flows from
operations primarily through improved operating results
and continued
reductions of on-hand inventories. As a result of these
and other factors,
we were able to increase our cash and cash equivalents
balance to
$51.7
million at August 31, 2005.
|
l
|
Completion
of the Preferred Stock Recapitalization
-
During fiscal 2005, we completed a preferred stock recapitalization
that
allows the Company to redeem shares of preferred stock.
Although we
recorded a $7.8
million non-cash loss resulting from the revaluation of
our preferred
stock and valuation of the newly issued common stock warrants,
we were
able to use a portion of the proceeds from the sale of
our corporate
headquarters to redeem $30.0
million, or 1.2
million shares, of preferred stock in fiscal 2005. This
redemption will
save $3.0
million annually in preferred dividends. Subsequent to
August 31, 2005, we
redeemed an additional $10.0
million of preferred stock, which will save additional
dividend costs in
future periods.
|
YEAR
ENDED
AUGUST
31,
|
2005
|
|
2004
|
|
2003
|
|||||
Product
sales
|
59.0
|
%
|
64.3
|
%
|
65.8
|
%
|
||||
Training
and consulting services sales
|
41.0
|
35.7
|
34.2
|
|||||||
Total
sales
|
100.0
|
100.0
|
100.0
|
|||||||
Product
cost of sales
|
27.2
|
31.1
|
33.3
|
|||||||
Training
and consulting services cost of sales
|
13.3
|
12.3
|
11.2
|
|||||||
Total
cost of sales
|
40.5
|
43.4
|
44.5
|
|||||||
Gross
margin
|
59.5
|
56.6
|
55.5
|
|||||||
Selling,
general and administrative
|
52.3
|
54.1
|
60.0
|
|||||||
Impairment
of and (gain) on disposal of investment in unconsolidated
subsidiary
|
(0.2
|
)
|
0.2 | |||||||
Provision
for losses on management stock loans
|
1.3
|
|||||||||
Recovery
of investment in unconsolidated subsidiary
|
(0.5
|
)
|
||||||||
Depreciation
|
2.7
|
4.3
|
8.6
|
|||||||
Amortization
|
1.5
|
1.5
|
1.4
|
|||||||
Total
operating expenses
|
56.3
|
59.9
|
71.0
|
|||||||
Income
(loss) from operations
|
3.2
|
(3.3
|
)
|
(15.5
|
)
|
|||||
Interest
income
|
0.3
|
0.1
|
0.2
|
|||||||
Interest
expense
|
(0.3
|
)
|
(0.1
|
)
|
||||||
Other
expense, net
|
(0.1
|
)
|
||||||||
Income
(loss) before income taxes
|
3.2
|
%
|
(3.2
|
)%
|
(15.5
|
)%
|
YEAR
ENDED
AUGUST
31,
|
2005
|
2004
|
2003
|
|||||||
Consumer
and Small Business Unit:
|
||||||||||
Retail
stores
|
$
|
74,331
|
$
|
87,922
|
$
|
112,054
|
||||
Consumer
direct
|
55,575
|
55,059
|
56,177
|
|||||||
Wholesale
|
19,691
|
21,081
|
16,915
|
|||||||
Other
CSBU
|
3,757
|
2,007
|
7,020
|
|||||||
153,354
|
166,069
|
192,166
|
||||||||
Organizational
Solutions Business Unit:
|
||||||||||
Domestic
|
76,114
|
61,047
|
74,306
|
|||||||
International
|
54,074
|
48,318
|
40,688
|
|||||||
130,188
|
109,365
|
114,994
|
||||||||
Total
net sales
|
$
|
283,542
|
$
|
275,434
|
$
|
307,160
|
l
|
Retail
Sales
-
The decline in retail sales was due to the impact of fewer stores,
which represented $10.7
million of the total $13.6
million decline, and reduced technology and specialty product
sales which
totaled $5.5 million. During fiscal 2004, we closed 18
retail store
locations and we closed 30 additional stores during fiscal
2005. At August
31, 2005, we were operating 105 retail stores compared
to 135 stores at
August 31, 2004. Overall product sales trends were reflected
in a
four
percent decline in year-over-year comparable store (stores
which were open
during the comparable periods) sales. Declining technology
and specialty
product sales were partially offset by increased “core” product (e.g.
planners, binders, and totes) sales during fiscal 2005.
|
l
|
Consumer
Direct
-
Sales through our consumer direct channels (catalog and
eCommerce) were
generally consistent with the prior year and the slight
increase was
primarily due to increased core product sales compared
to the prior
year.
|
l
|
Wholesale
Sales
- Sales
through our wholesale channel, which includes sales to
office superstores
and other retail chains, decreased primarily due to a shift
from contract
stationer revenue channels to royalty based retail channels. As a
result of this change our sales decreased, but our gross
margin contribution through this channel remained consistent with
the
prior year.
|
l
|
Other
CSBU Sales
-
Other CSBU sales primarily consist of domestic printing
and publishing
sales and building sublease revenues. The increase in other
CSBU sales was
primarily attributable to increased sublease income. We
have subleased a
substantial portion of our corporate headquarters in Salt
Lake City, Utah
and have recognized $1.1
million of sublease revenue during fiscal 2005, compared
to $0.2 million
in fiscal 2004, which has been classified as other CSBU
sales.
|
l
|
$14.3
million of the retail sales decrease is the result of the
closure of
retail stores. The Company closed 18 stores in fiscal 2004
in addition to
22 domestic and 10 international stores that were closed
in fiscal 2003.
These store closures were primarily comprised of unprofitable
stores and
stores located in markets where we had multiple retail
operations.
|
l
|
$8.4
million of the retail store decrease was the result of
declining
comparable store technology sales, which include handheld
electronic
devices, or PDAs, and related products. Comparable stores
are retail
locations which have been open for the full year in the
periods reported.
Technology sales decreased as competition increased from
office product
superstores and discounters. Sales of core products remained
relatively
flat, decreasing less than one percent compared to fiscal
2003.
|
l
|
Technology
sales, including handheld electronic devices and PDAs,
through this
channel decreased $1.5
million.
|
l
|
The
total number of orders placed through the consumer direct
channel
decreased five
percent from the prior year.
|
YEAR
ENDED AUGUST 31, 2005
|
|||||||||||||
November
27
|
February
26
|
May
28
|
August
31
|
||||||||||
In
thousands, except per share amounts
|
|||||||||||||
Net
sales
|
$
|
69,104
|
$
|
82,523
|
$
|
65,788
|
$
|
66,128
|
|||||
Gross
margin
|
41,435
|
50,217
|
38,268
|
38,775
|
|||||||||
Selling,
general, and administrative expense
|
35,930
|
38,939
|
36,095
|
37,341
|
|||||||||
Depreciation
|
2,178
|
2,320
|
1,848
|
1,428
|
|||||||||
Amortization
|
1,043
|
1,043
|
1,043
|
1,044
|
|||||||||
Income
(loss) from operations
|
2,284
|
7,915
|
(218
|
)
|
(1,038
|
)
|
|||||||
Income
(loss) before income taxes
|
2,364
|
8,051
|
63
|
(1,377
|
)
|
||||||||
Net
income (loss)
|
1,526
|
7,086
|
3,069
|
(1,495
|
)
|
||||||||
Preferred
stock dividends
|
(2,184
|
)
|
(2,184
|
)
|
(2,184
|
)
|
(1,718
|
)
|
|||||
Loss
on recapitalization of preferred stock
|
-
|
-
|
(7,753
|
)
|
-
|
||||||||
Income
(loss) attributable to common shareholders
|
(658
|
)
|
4,902
|
(6,868
|
)
|
(3,213
|
)
|
||||||
Basic
and diluted income (loss) per share attributable to common
shareholders
|
$
|
(.03
|
)
|
$
|
.19
|
$
|
(.34
|
)
|
$
|
(.16
|
)
|
||
YEAR
ENDED AUGUST 31, 2004
|
|||||||||||||
|
|
|
November
29
|
February
28
|
May
29
|
August
31
|
|||||||
In
thousands, except per share amounts
|
|||||||||||||
Net
sales
|
$
|
75,031
|
$
|
78,715
|
$
|
61,248
|
$
|
60,440
|
|||||
Gross
margin
|
42,755
|
44,784
|
32,767
|
35,495
|
|||||||||
Selling,
general, and administrative expense
|
40,245
|
39,569
|
35,234
|
33,870
|
|||||||||
Depreciation
|
3,591
|
3,222
|
2,509
|
2,452
|
|||||||||
Amortization
|
1,043
|
1,043
|
1,043
|
1,044
|
|||||||||
Income
(loss) from operations
|
(2,124
|
)
|
950
|
(6,019
|
)
|
(1,871
|
)
|
||||||
Income
(loss) before income taxes
|
(2,150
|
)
|
1,035
|
(5,961
|
)
|
(1,725
|
)
|
||||||
Net
income (loss)
|
(3,180
|
)
|
232
|
(5,149
|
)
|
(2,053
|
)
|
||||||
Preferred
stock dividends
|
(2,184
|
)
|
(2,184
|
)
|
(2,184
|
)
|
(2,183
|
)
|
|||||
Loss
attributable to common shareholders
|
(5,364
|
)
|
(1,952
|
)
|
(7,333
|
)
|
(4,236
|
)
|
|||||
Basic
and diluted loss per share attributable to common
shareholders
|
$
|
(.27
|
)
|
$
|
(.10
|
)
|
$
|
(.37
|
)
|
$
|
(.21
|
)
|
|
QUARTER
ENDED
|
Fiscal
2005
|
Fiscal
2004
|
|||||
November
|
$
|
276
|
$
|
229
|
|||
February
|
152
|
159
|
|||||
May
|
148
|
106
|
|||||
August
|
145
|
167
|
|||||
Total
reclassified
|
$
|
721
|
$
|
661
|
Fiscal
|
Fiscal
|
Fiscal
|
Fiscal
|
Fiscal
|
||||||||||||||||||
Contractual
Obligations
|
2006
|
2007
|
2008
|
2009
|
2010
|
Thereafter
|
Total
|
|||||||||||||||
Minimum
required payments to EDS for outsourcing services
|
$
|
23,918
|
$
|
22,591
|
$
|
22,829
|
$
|
23,076
|
$
|
23,330
|
$
|
141,467
|
$
|
257,211
|
||||||||
Required
payments on corporate campus financing obligation
|
3,045
|
3,045
|
3,045
|
3,045
|
3,055
|
53,072
|
68,307
|
|||||||||||||||
Minimum
operating lease payments
|
8,509
|
6,204
|
5,346
|
4,225
|
3,148
|
7,718
|
35,150
|
|||||||||||||||
Preferred
stock dividend payments(2)
|
4,930
|
4,734
|
4,734
|
4,734
|
4,734
|
-
|
23,866
|
|||||||||||||||
Debt
payments(1)
|
866
|
160
|
155
|
148
|
143
|
554
|
2,026
|
|||||||||||||||
Contractual
computer hardware and software purchases(3)
|
1,334
|
680
|
797
|
1,072
|
1,334
|
6,059
|
11,276
|
|||||||||||||||
Monitoring
fees paid to a preferred stock investor(2)
|
219
|
210
|
210
|
210
|
210
|
-
|
1,059
|
|||||||||||||||
Total
expected contractual obligation payments
|
$
|
42,821
|
$
|
37,624
|
$
|
37,116
|
$
|
36,510
|
$
|
35,954
|
$
|
208,870
|
$
|
398,895
|
(1)
|
The
Company’s variable rate debt payments include interest payments
at 5.5%,
which was the applicable interest rate at September 30,
2005.
|
(2)
|
Amount
reflects the $10.0 million preferred stock redemption that
occurred
subsequent to August 31, 2005 and will decline if we determine
to make
future redemptions of our preferred stock.
|
(3)
|
We
are contractually obligated by our EDS outsourcing agreement
to purchase
the necessary computer hardware and software to keep such
equipment up to
current specifications. Amounts shown are estimated capital
purchases of
computer hardware and software under terms of the EDS outsourcing
agreement and its amendments.
|
l
|
Products
-
We sell planners, binders, planner accessories, handheld
electronic
devices, and other related products that are primarily
sold through our
CSBU channels.
|
l
|
Training
and Services
-
We provide training and consulting services to both organizations
and
individuals in strategic execution, leadership, productivity,
goal
alignment, sales force performance, and communication effectiveness
skills. These training programs and services are primarily
sold through
our OSBU channels.
|
YEAR
ENDED AUGUST
31,
|
2005
|
|
2004
|
|
2003
|
|||||
Losses
on foreign exchange contracts
|
$
|
(437
|
)
|
$
|
(641
|
)
|
$
|
(501
|
)
|
|
Gains
on foreign exchange contracts
|
127
|
227
|
38
|
|||||||
Net
losses on foreign exchange contracts
|
$
|
(310
|
)
|
$
|
(414
|
)
|
$
|
(463
|
)
|
Contract
Description
|
Notional
Amount in Foreign Currency
|
Notional
Amount in U.S. Dollars
|
|||||
Japanese
Yen
|
273,000
|
$
|
2,458
|
||||
Australian
Dollars
|
1,333
|
1,018
|
|||||
Mexican
Pesos
|
9,400
|
846
|
YEAR
ENDED AUGUST
31,
|
2005
|
|
2004
|
|
|||
Losses
on net investment hedge contracts
|
$
|
(384
|
)
|
$
|
(337
|
)
|
|
Gains
on net investment hedge contracts
|
66
|
130
|
|||||
Net
losses on investment hedge contracts
|
$
|
(318
|
)
|
$
|
(207
|
)
|
l
|
Declining
traffic in our retail stores and consumer direct
channel
|
l
|
Increased
risk of excess and obsolete inventories
|
l
|
Operating
expenses that, as a percentage of sales, have exceeded our
desired
business model
|
l
|
Costs
associated with exiting unprofitable retail
stores
|
l
|
The
overall demand for training, consulting, and our related
products
|
l
|
Conditions
and trends in the training and consulting industry
|
l
|
General
economic and business conditions
|
l
|
General
political developments, such as the war on terrorism, and
their impacts
upon our business both domestically and internationally
|
l
|
Natural
disasters
|