Consolidated Sales Increase 8% to a Record
$71.4 Million Compared with $66.2 Million in Fiscal 2022
Education Division Revenues Grow 18% over
Fiscal 2022
Sum of Billed and Unbilled Deferred
Subscription Revenue Increases 21% to $140.9 Million Compared with
May 31, 2022
Pre-Tax Income Increases 18% to $6.6
Million, Adjusted EBITDA Increases 9% to $11.9 Million Compared
with $10.9 Million in Fiscal 2022
Company Purchases 664,000 Shares of its
Common Stock for $25.0 Million During the Quarter
Company Affirms Earnings Guidance for Fiscal
2023
Franklin Covey Co. (NYSE: FC), a leader in organizational
performance improvement that creates, and on a subscription basis,
distributes world-class content, training, processes, and tools
that organizations and individuals use to achieve systemic changes
in human behavior to transform their results, today announced
financial results for its third quarter of fiscal 2023, which ended
on May 31, 2023.
Introduction
The Company’s third quarter fiscal 2023 financial performance
was very strong, highlighted by the following key metrics:
- The Company’s consolidated sales for the quarter ended May 31,
2023, increased 8% (9% in constant currency) to a third-quarter
record $71.4 million, compared with $66.2 million in the third
quarter of fiscal 2022. This growth was on top of the strong 13%
growth achieved in last year’s third quarter, a quarter which
benefited from comparison against a pandemic-impacted third quarter
in fiscal 2021. For the rolling four quarters ended May 31, 2023,
the Company’s consolidated sales increased 11%, or $28.4 million,
to $281.4 million compared with $253.0 million in the corresponding
period ended May 31, 2022. This increase represents the second
highest amount of dollar growth in any comparable period over the
past six years and was exceeded only by growth in fiscal 2022,
which benefited from comparison against a pandemic period. The
latest two-year growth of $77.2 million represents the largest
two-year dollar growth since the conversion to a subscription
model. Since the Company’s conversion to its subscription business
model in fiscal 2017, subscription and subscription services sales
have grown by $152.4 million to $222.2 million in the four quarters
ended May 31, 2023. The Company’s sales performance for the third
quarter of fiscal 2023 included the following:
- All Access Pass subscription and subscription services sales
grew 6% to $41.3 million in the third quarter on top of the 32%
growth achieved in the third quarter of fiscal 2022, a quarter
which benefited from comparison with the previous year’s
pandemic-impacted result, and grew 15% to $156.6 million for the
rolling four quarters ended May 31, 2023.
- Education Division revenues grew 18% on the strength of
increased consulting, coaching, and training days delivered during
the quarter and increased Leader in Me subscription revenues.
- The sum of billed subscription and unbilled deferred
subscription revenue at May 31, 2023 grew 21% to $140.9 million,
compared with May 31, 2022. Total Company deferred revenue as of
May 31, 2023, was $90.5 million, representing growth of $5.0
million, or 6%, over May 31, 2022. As of May 31, 2023, 52% of the
Company’s All Access Pass contracts are for at least two years,
compared with 42% at May 31, 2022, and the percentage of contracted
amounts represented by multi-year contracts increased to 57% from
52% in the prior year.
- On the strength of increased sales and continued strong gross
margins, gross profit for the third quarter increased to $54.2
million compared with $51.1 million in the prior year. Rolling four
quarter gross profit increased to $213.3 million, compared with
$196.1 million for the four quarters ended May 31, 2022.
- Operating income for the third quarter of fiscal 2023 increased
10% to $6.6 million compared with $5.9 million in the prior year.
Rolling four quarter income from operations increased 27% to $24.5
million compared with $19.3 million for the four quarters ended May
31, 2022.
- Adjusted EBITDA for the quarter increased 9% to a third-quarter
record $11.9 million compared with $10.9 million in fiscal 2022,
and increased to $12.3 million in constant currency. Rolling
four-quarter Adjusted EBITDA increased 14% to $44.9 million
compared with $39.4 million in the corresponding period ended May
31, 2022.
- During the third quarter of fiscal 2023, the Company purchased
approximately 664,000 shares of its common stock on the open market
for $25.0 million. Even after these purchases, the Company’s cash
and liquidity position remained strong at May 31, 2023, with over
$100 million of liquidity, comprised of $39.3 million of cash and
with all of its new $62.5 million revolving line of credit
undrawn.
Paul Walker, President and Chief Executive Officer, commented,
“We continue to be pleased with the demonstrated strength and
durability of our subscription business model, which was reflected
in our strong third quarter results. These results were
particularly strong when viewed in the context that we were able to
improve significantly over a period of record growth in last year’s
third quarter, a period which benefited from comparison with
pandemic-impacted results in the third quarter of fiscal 2021. On a
two-year basis, the more than $77 million of revenue growth
achieved represents the greatest two-year period of growth since
our conversion to a subscription business model.”
Walker continued, “Our third quarter results featured continuing
revenue growth, a strong gross margin, lower selling and
administrative expenses as a percent of total sales, and growth in
Adjusted EBITDA over the prior year. Our consolidated sales
increased 8% to a third-quarter record of $71.4 million, our gross
margin remained strong at 75.9%, and our Adjusted EBITDA increased
9% to $11.9 million. Even after purchasing $25 million of our
common stock during the quarter, our liquidity remained strong with
over $100 million available from existing cash and our new
revolving credit facility. We achieved these strong results despite
currency exchange rates that have impacted our operations.”
Walker concluded, “The strength of our third quarter results
reflects the power of our continued focus on three fundamental
priorities: First, we strive to be our clients’ partner of choice
for addressing the challenges that really matter to them. We
believe that being the partner of choice for our clients translates
into high retention, strong revenue growth, and an increasing
lifetime customer value. Second, we endeavor to help our clients
through a profitable business model that also produces high levels
of cash flow. A strong and profitable business model means that a
significant portion of our revenue growth flows through to
increases in Adjusted EBITDA and incremental cash flows, which in
turn produces significant value to our shareholders. And third, we
seek to reinvest these profits and cash flow into activities that
will drive better solutions for our clients and high rates of
return for our key stakeholders. Continued investment in our
solutions provides improved services and products to help our
clients solve ever more challenging issues, which then drives
increased sales and increases the size of our strategic moat. In
addition, utilizing excess liquidity to return capital to
shareholders in the form of stock purchases creates additional
substantial shareholder value. Consistently advancing these key
priorities quarter after quarter is helping us be the kind of
Company that can strengthen and expand our strategic moat by
continually helping our clients win; by providing our associates
with an opportunity to do meaningful work for our clients and
fostering personal growth; generating high rates of growth in
Adjusted EBITDA and cash flows; and returning substantial capital
to our shareholders. Our continued focus on these priorities was
key to our strong third quarter performance, and we believe will be
fundamental to continued growth in future periods.”
Third Quarter Financial
Overview
The following is a summary of financial results for the third
quarter of fiscal 2023:
- Net Sales: Consolidated sales for
the quarter ended May 31, 2023, increased 8%, or $5.3 million, to a
third-quarter record of $71.4 million, compared with $66.2 million
in the third quarter of fiscal 2022. This growth was on top of the
record sales and strong 13% growth achieved in third quarter of
fiscal 2022, a quarter which benefited from comparison against a
pandemic-impacted third quarter of fiscal 2021. Excluding the
unfavorable impact of foreign exchange rates during the quarter,
consolidated sales increased 9% compared with the prior year. The
Company continues to be pleased with the performance of the All
Access Pass and Leader in Me subscription-based services, which
drove continued growth during the third quarter of fiscal 2023. For
the third quarter of fiscal 2023, Enterprise Division sales grew
6%, or $3.2 million, to $53.2 million compared with $50.0 million
in fiscal 2022. This 6% growth was on top of the 11% growth in last
year’s third quarter, a quarter which benefited from comparison
against a pandemic-impacted third quarter in fiscal 2021. For the
third quarter of fiscal 2023, AAP subscription and subscription
services sales increased 6% to $41.3 million and have increased 15%
over the latest 12 months. This 15% growth was on top of the 32%
growth in the previous 12 month period, a period which benefited
from comparison against a covid-impacted year. International Direct
Office sales increased 23% for the quarter, which was primarily due
to improved sales in China, as that country recovers from ongoing
pandemic issues. International licensee revenues continue to
improve and increased 9% compared with the prior year, despite the
adverse impact of foreign exchange rates, and the ongoing impact of
various geopolitical difficulties around the world. Excluding the
impact of unfavorable foreign exchange rates, Enterprise Division
sales increased 8% compared with the prior year. Education Division
sales grew 18%, or $2.6 million, to $17.1 million compared with
$14.4 million in the third quarter of fiscal 2022. Education
Division sales grew primarily due to increased consulting,
coaching, and training days delivered during the quarter and
increased Leader in Me subscription revenue compared with the prior
year.
- Deferred Subscription Revenue and
Unbilled Deferred Revenue: At May 31, 2023, the Company had
$140.9 million of billed and unbilled deferred subscription
revenue, a 21%, or $24.4 million increase over the balance at May
31, 2022. This total includes $72.7 million of deferred
subscription revenue on the balance sheet, a 6%, or $4.2 million
increase compared with deferred subscription revenue on May 31,
2022. Unbilled deferred subscription revenue represents business
(typically multi-year contracts) that is contracted but unbilled
and excluded from the Company’s balance sheet.
- Gross profit: Gross profit for the
third quarter of fiscal 2023 increased 6% to $54.2 million,
compared with $51.1 million in the third quarter of fiscal 2022.
The Company’s gross margin for the quarter ended May 31, 2023,
remained strong at 75.9% compared with 77.3% in fiscal 2022, and
was impacted by changes in the overall mix of services and products
sold during the quarter, including an increase in the number of
onsite programs presented, and by an increase in lower-margin
Education Division revenues in relation to total consolidated
sales.
- Operating Expenses: The Company’s
operating expenses for the quarter ended May 31, 2023, increased
$2.5 million compared with the third quarter of fiscal 2022, which
was due to a $3.0 million increase in selling, general, and
administrative (SG&A) expenses. Despite the increase in overall
SG&A expenses, SG&A as a percentage of revenue declined to
63.9% in the third quarter of fiscal 2023 compared with 64.4% in
the prior year. The Company’s SG&A expenses increased primarily
due to additional associate costs resulting from investments in new
client-facing personnel and increased salaries; increased
commissions on higher sales; increased stock-based compensation
expense; and increased travel expense. Over the previous 12 months,
the Company has invested in new associates for a variety of
primarily client-facing roles, including sales and sales-related
personnel, Leader in Me coaches, and implementation specialists.
The Company believes these investments will provide a strong return
in future periods. The increase in stock-based compensation expense
is primarily due to increased use of equity-based compensation
awards to attract and retain key personnel.
- Operating and Pre-Tax Income: The
Company’s income from operations for the quarter ended May 31,
2023, increased 10% to $6.6 million, compared with $5.9 million in
the third quarter of fiscal 2022. As a result of increased interest
income and decreased interest expense, the Company’s pre-tax income
for the third quarter of fiscal 2023 increased 18%, or $1.0
million, to $6.6 million, compared with $5.6 million in the prior
year.
- Income Taxes: In the third quarter
of fiscal 2022, the Company recognized an income tax benefit of
$1.6 million on pre-tax income of $5.6 million, for an effective
income tax benefit rate of approximately 29 percent. The income tax
benefit in fiscal 2022 resulted primarily from the utilization of
$3.0 million of foreign tax credits which were not expected to be
used and which previously had a valuation allowance against them,
as well as a $0.5 million tax benefit from the federal tax
deduction for Foreign-Derived Intangibles Income. The income tax
benefit of these items did not repeat in fiscal 2023 and the
Company’s income tax provision resulted in a more normalized 31%
effective tax rate for the quarter.
- Net Income: As a result of the
factors noted above, the Company’s net income for the third quarter
of fiscal 2023 was $4.6 million, or $0.32 per diluted share,
compared with $7.2 million, or $0.51 per diluted share, in the
third quarter of fiscal 2022.
- Adjusted EBITDA: Adjusted EBITDA
for the quarter ended May 31, 2023, improved 9% to $11.9 million
compared with $10.9 million in fiscal 2022, which was a very strong
quarter where growth partially benefited from comparison with the
prior year’s pandemic-impacted period. The growth in fiscal 2023
reflected increased sales, continued strong gross margins, and
lower SG&A as a percent of revenue. In constant currency,
Adjusted EBITDA increased 13% compared with the third quarter of
fiscal 2022.
- Liquidity and Financial Position:
The Company’s liquidity and financial position remained strong with
more than $100 million of liquidity on May 31, 2023, which was
comprised of $39.3 million of cash with no borrowings on the
Company’s new $62.5 million line of credit.
- Purchases of Common Stock: During
the quarter ended May 31, 2023, the Company purchased approximately
664,000 shares of its stock on the open market for $25.0
million.
Fiscal 2023 Year-to-Date Financial
Results
Consolidated revenue for the three quarters ended May 31, 2023,
increased 10%, or $18.5 million, to $202.6 million compared with
$184.0 million in the same period of fiscal 2022. In constant
currency, the Company’s consolidated sales for the first three
quarters of 2023 increased 12% over the prior year. Increased sales
in the first three quarters of fiscal 2023 were primarily due to
continued strong sales of subscription and subscription-related
services, including the All Access Pass in the Enterprise Division
and the Leader in Me membership in the Education Division.
Enterprise Division sales for the three quarters ended May 31,
2023, increased 8%, or $11.0 million, to $153.2 million compared
with $142.2 million in the first three quarters of the prior year.
In constant currency, Enterprise Division sales increased 10%
compared with the first three quarters of fiscal 2022. AAP
subscription and subscription services sales increased 12% to
$116.3 million compared with $104.2 million in the prior year. For
the three quarters ended May 31, 2023, sales increased in each of
the Company’s foreign direct offices, except Japan, which decreased
2% compared with the prior year, primarily due to lingering
post-COVID issues. Thanks to a strong third quarter, fiscal 2023
sales in China have increased 11% compared with the prior year and
reflect improving conditions in that country. Total Direct Office
sales improved 5% over the first three quarters of fiscal 2022.
International licensee revenues continue to improve and increased
10% compared with the prior year primarily on the strength of
increased royalty revenues. Education Division sales grew 23%, or
$8.4 million, to $45.6 million compared with $37.2 million in the
first three quarters of fiscal 2022. Education Division sales grew
primarily due to increased consulting, coaching, and training days
delivered during the year, increased recognition of previously
deferred revenue related to Leader in Me subscriptions, and
increased Symposium conference revenues. Gross profit for the first
three quarters of fiscal 2023 increased 8%, or $11.3 million, to
$154.2 million compared with $142.8 million in fiscal 2022. Gross
margin for the three quarters ended May 31, 2023, remained strong
at 76.1% of sales compared with 77.6% in the first three quarters
of fiscal 2022.
Operating expenses for the three quarters ended May 31, 2023,
increased $10.6 million compared with the corresponding three
quarters of fiscal 2022, due to an $11.9 million increase in
SG&A expenses. SG&A expenses increased primarily due to
additional associate costs resulting from investments in new
client-facing personnel and increased salaries; increased
commissions on higher sales; and increased stock-based compensation
expense. Despite the increase in overall SG&A expenses, as a
percentage of sales, SG&A remained consistent with the prior
year at 65.2%. The Company’s income from operations through May 31,
2023, improved to $15.8 million compared with $15.0 million in
fiscal 2022. The Company’s pre-tax income for the three quarters
ended May 31, 2023, increased to $15.4 million compared with $13.8
million in fiscal 2022. However, due to the significant income tax
benefit recorded in the third quarter of fiscal 2022, which did not
repeat in fiscal 2023, net income for the three quarters ended May
31, 2023, was $11.0 million, or $0.76 per diluted share, compared
with $12.9 million, or $0.90 per diluted share, for the first three
quarters of fiscal 2022. Adjusted EBITDA for the three quarters
ended May 31, 2023, increased 9%, or $2.7 million, to $31.6
million, compared with $28.9 million in the same period of fiscal
2022. In constant currency, Adjusted EBITDA in the first three
quarters of fiscal 2023 increased 14% compared with fiscal
2022.
Fiscal 2023 Guidance and
Outlook
Driven by the continued strategic strength and durability of its
All Access Pass and Leader in Me membership subscriptions, which
have resulted in accelerated growth over the past years, and
performance through the first three quarters of fiscal 2023, the
Company affirms its previously provided guidance that Adjusted
EBITDA for fiscal 2023 will increase to between $47 million and $49
million in constant currency, compared with the $42.2 million in
Adjusted EBITDA achieved in fiscal 2022. The Company expects to
achieve this growth despite additional growth investments and
continuing macroeconomic headwinds that have adversely impacted its
fiscal 2023 operating results. The Company remains confident in the
strength of the All Access Pass and Leader in Me membership
subscriptions, which have driven Franklin Covey’s growth across
recent years and which are expected to drive continued growth in
the future.
Earnings Conference Call
On Wednesday, June 28, 2023, at 5:00 p.m. Eastern (3:00 p.m.
Mountain) Franklin Covey will host a conference call to review its
financial results for the third quarter of fiscal 2023. Interested
persons may access a live audio webcast at
https://edge.media-server.com/mmc/p/3tpokmnp or may participate via
telephone by registering at
https://register.vevent.com/register/BIb6c8f39aba5d4a4d8b2ec7bdb3e9b9ff.
Once registered, participants will have the option of: 1) dialing
into the call from their phone (via a personalized PIN); or 2)
clicking the “Call Me” option to receive an automated call directly
to their phone. For either option, registration will be required to
access the call. A replay of the conference call webcast will be
archived on the Company’s website for at least 30 days.
Forward-Looking
Statements
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 and other goals relating to the growth and
operations 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 deferred revenues on future financial results; impacts from
global economic and supply chain disruptions; lingering impacts
from the COVID-19 pandemic on international operations; market
acceptance of new products or services, including new AAP portal
upgrades; inflation; 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.
Non-GAAP Financial
Information
This earnings release includes the concepts of Adjusted EBITDA
and “constant currency,” which are non-GAAP measures. The Company
defines Adjusted EBITDA as net income excluding the impact of
interest, income taxes, intangible asset 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.
Constant currency is a non-GAAP financial measure that removes the
impact of fluctuations in foreign currency exchange rates and is
calculated by translating the current period’s financial results at
the same average exchange rates in effect during the prior year and
then comparing this amount to the prior year. The Company
references these non-GAAP financial measures in its decision making
because they provide supplemental information that facilitates
consistent internal comparisons to the historical operating
performance of prior periods and the Company believes they provide
investors with greater transparency to evaluate operational
activities and financial results. Refer to the attached table for
the reconciliation of the non-GAAP financial measure, Adjusted
EBITDA, to consolidated net income, a related GAAP financial
measure.
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 obtain 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 the
Company’s offerings, such as unanticipated curriculum development
costs, and other potential variables. Accordingly, a reconciliation
is not available without unreasonable effort.
About Franklin Covey Co.
Franklin Covey Co. (NYSE: FC) is a global leadership company
with directly owned and licensee partner offices providing
professional services in over 160 countries and territories. The
Company transforms organizations by partnering with its clients to
build leaders, teams, and cultures that achieve breakthrough
results through collective action, which leads to a more engaging
work experience for their people. Available through the Franklin
Covey All Access Pass, the Company’s best-in-class content and
solutions, experts, technology, and metrics seamlessly integrate to
ensure lasting behavioral change at scale. Solutions are available
in multiple delivery modalities in more than 20 languages.
This approach to leadership and organizational change has been
tested and refined by working with tens of thousands of teams and
organizations over the past 30 years. Clients have included
organizations in the Fortune 100, Fortune 500, and thousands of
small- and mid-sized businesses, numerous governmental entities,
and educational institutions. To learn more, visit
www.franklincovey.com, and enjoy exclusive content from Franklin
Covey’s social media channels at: LinkedIn, Facebook, Twitter,
Instagram, and YouTube.
FRANKLIN COVEY CO.
Condensed Consolidated Income
Statements (in thousands, except per-share amounts, and
unaudited) Quarter Ended Three Quarters Ended
May 31,
May 31,
May 31,
May 31,
2023
2022
2023
2022
Net sales
$
71,441
$
66,176
$
202,565
$
184,035
Cost of sales
17,208
15,044
48,380
41,190
Gross profit
54,233
51,132
154,185
142,845
Selling, general, and administrative
45,641
42,637
131,991
120,042
Depreciation
934
1,217
3,131
3,686
Amortization
1,086
1,329
3,270
4,106
Income from operations
6,572
5,949
15,793
15,011
Interest income (expense), net
8
(384
)
(369
)
(1,226
)
Income before income taxes
6,580
5,565
15,424
13,785
Income tax benefit (provision)
(2,017
)
1,597
(4,455
)
(933
)
Net income
$
4,563
$
7,162
$
10,969
$
12,852
Net income per common share: Basic
$
0.33
$
0.51
$
0.79
$
0.90
Diluted
0.32
0.51
0.76
0.90
Weighted average common shares: Basic
13,621
14,173
13,799
14,244
Diluted
14,273
14,175
14,437
14,273
Other data: Adjusted EBITDA(1)
$
11,899
$
10,876
$
31,558
$
28,850
(1)
The term Adjusted EBITDA (earnings before interest, income taxes,
depreciation, amortization, stock-based compensation, and certain
other items) is a non-GAAP financial measure that the Company
believes is useful to investors in evaluating its results. For a
reconciliation of this non-GAAP measure to a GAAP measure, refer to
the Reconciliation of Net Income to Adjusted EBITDA as shown below.
FRANKLIN COVEY CO.
Reconciliation of Net Income to Adjusted
EBITDA (in thousands and unaudited)
Quarter Ended
Three Quarters Ended
May 31,
May 31,
May 31,
May 31,
2023
2022
2023
2022
Reconciliation of net income to Adjusted EBITDA: Net income
$
4,563
$
7,162
$
10,969
$
12,852
Adjustments: Interest expense (income), net
(8
)
384
369
1,226
Income tax provision (benefit)
2,017
(1,597
)
4,455
933
Amortization
1,086
1,329
3,270
4,106
Depreciation
934
1,217
3,131
3,686
Stock-based compensation
3,307
2,369
9,357
5,987
Increase in the fair value of contingent consideration liabilities
-
12
7
60
Adjusted EBITDA
$
11,899
$
10,876
$
31,558
$
28,850
Adjusted EBITDA margin
16.7
%
16.4
%
15.6
%
15.7
%
FRANKLIN COVEY
CO. Additional Financial
Information (in thousands and unaudited)
Quarter Ended
Three Quarters Ended
May 31,
May 31,
May 31,
May 31,
2023
2022
2023
2022
Sales by Division/Segment: Enterprise Division: Direct
offices
$
50,382
$
47,416
$
144,194
$
134,037
International licensees
2,835
2,610
9,048
8,196
53,217
50,026
153,242
142,233
Education Division
17,082
14,439
45,631
37,202
Corporate and other
1,142
1,711
3,692
4,600
Consolidated
$
71,441
$
66,176
$
202,565
$
184,035
Gross Profit by Division/Segment: Enterprise
Division: Direct offices
$
40,425
$
38,144
$
116,199
$
108,294
International licensees
2,549
2,340
8,184
7,344
42,974
40,484
124,383
115,638
Education Division
10,929
9,790
28,497
24,749
Corporate and other
330
858
1,305
2,458
Consolidated
$
54,233
$
51,132
$
154,185
$
142,845
Adjusted EBITDA by Division/Segment: Enterprise
Division: Direct offices
$
11,322
$
9,978
$
32,212
$
28,664
International licensees
1,415
1,303
4,787
4,418
12,737
11,281
36,999
33,082
Education Division
1,649
1,887
1,309
1,798
Corporate and other
(2,487
)
(2,292
)
(6,750
)
(6,030
)
Consolidated
$
11,899
$
10,876
$
31,558
$
28,850
FRANKLIN COVEY CO.
Condensed Consolidated Balance
Sheets (in thousands and unaudited)
May 31,
August 31,
2023
2022
Assets Current assets: Cash and cash
equivalents $
39,329
$
60,517
Accounts receivable, less allowance for doubtful accounts of $3,867
and $4,492
55,476
72,561
Inventories
4,573
3,527
Prepaid expenses and other current assets
17,352
19,278
Total current assets
116,730
155,883
Property and equipment, net
9,699
9,798
Intangible assets, net
41,582
44,833
Goodwill
31,220
31,220
Deferred income tax assets
2,270
4,686
Other long-term assets
16,223
12,735
$
217,724
$
259,155
Liabilities and Shareholders'
Equity Current liabilities: Current portion of notes payable
$
5,835
$
5,835
Current portion of financing obligation
3,450
3,199
Accounts payable
7,102
10,864
Deferred subscription revenue
70,419
85,543
Other deferred revenue
17,660
14,150
Accrued liabilities
23,940
34,205
Total current liabilities
128,406
153,796
Notes payable, less current portion
2,764
7,268
Financing obligation, less current portion
5,344
7,962
Other liabilities
6,504
7,116
Deferred income tax liabilities
199
199
Total liabilities
143,217
176,341
Shareholders' equity: Common stock
1,353
1,353
Additional paid-in capital
229,134
220,246
Retained earnings
92,990
82,021
Accumulated other comprehensive loss
(665
)
(542
)
Treasury stock at cost, 13,866 and 13,203 shares
(248,305
)
(220,264
)
Total shareholders' equity
74,507
82,814
$
217,724
$
259,155
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230628023091/en/
Investor Contact: Franklin Covey Boyd Roberts 801-817-5127
investor.relations@franklincovey.com
Media Contact: Franklin Covey Debra Lund 801-817-6440
Debra.Lund@franklincovey.com
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