SALT LAKE CITY, Feb. 23 /PRNewswire-FirstCall/ -- FranklinCovey (NYSE: FC)
announced today that it has entered into an agreement to sell and lease-back
the buildings and real estate at its corporate headquarters in Salt Lake City,
Utah for $34.3 million. In connection with the sale, FranklinCovey will enter
into a 20-year master lease agreement with the purchaser, a private investment
group. FranklinCovey has six five-year options to renew the master lease
agreement and could therefore maintain its principal headquarters and
operations at the current location for the next 50 years. The Company
presently expects that, if the sale is completed, its net proceeds after
transaction costs will be approximately $32 million.
If the closing occurs, the net proceeds will be available for general
corporate purposes. If the Company's proposed recapitalization plan is
approved by the shareholders at the annual meeting scheduled for March 4,
2005, all or a portion of the proceeds may, subject to the discretion of the
Board of Directors, be used to exercise the Company's contractual rights to
retire a portion of its outstanding preferred stock provided for in that plan.
However, the purchaser's obligation to close is subject to a 60-day due
diligence review, obtaining acceptable financing, confirmation of title and
survey information and other customary closing conditions. FranklinCovey's
closing obligations are subject to Board approval and other conditions.
Safe Harbor Statement
There can be no assurance that the closing conditions will be satisfied or
that the closing will occur or, if it does occur, as to the timing of
financial proceeds. Use of the funds from the sale-leaseback transaction will
be subject to the discretion of the Board of Directors. While all or a
substantial portion may be used in connection with the proposed
recapitalization plan, there is no assurance that this will occur. Adoption
of the recapitalization plan is subject to the necessary approval of the
shareholders at the meeting scheduled for March 4, 2005. If the
recapitalization plan is approved, a decision by the board of directors as to
the use of the funds will depend on many factors including the anticipated
ability of the Company's operations to generate positive cash flow, the
anticipated need for future capital expenditures, and the existence of
perceived opportunities for future growth of the business of the Company
through expansion or acquisition. Changes in any of these factors could
materially influence the decision of the Board of Directors with respect to
the use of the funds.
About FranklinCovey
FranklinCovey is a leading learning and performance services firm
assisting professionals and organizations in measurably increasing their
effectiveness in leadership, productivity, communication and sales. Clients
include 91 of the Fortune 100, more than three-quarters of the Fortune 500,
thousands of small and mid-sized businesses, as well as numerous government
entities. Organizations and professionals access FranklinCovey services and
products through consulting services, licensed client facilitators, one-on-one
coaching, public workshops, catalogs, more than 130 retail stores, and
http://www.franklincovey.com. Nearly 1,500 FranklinCovey associates provide
professional services and products in the United States and for
38 international offices serving more than 100 countries.
SOURCE FranklinCovey
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Related links:
http://www.franklincovey.com
CONTACT:
Richard R. Putnam, Treasurer and Investor
Relations of FranklinCovey, +1-801-817-1776
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