SALT LAKE CITY, April 9 /PRNewswire-FirstCall/ -- Franklin Covey
(NYSE: FC) today announced financial results for its fiscal year 2002 second
quarter ended February 23, 2002. The Company reported net income of
$35.1 million ($1.66 earnings per share, after accounting for preferred
dividends) compared to a net loss of $0.8 million ($0.14 loss per share, after
accounting for preferred dividends) for the same quarter in the prior year.
The quarter's earnings included a $60.8 million net gain from the sale of
Premier Agendas to School Specialties (Nasdaq: SCHS) completed in December
2001. Excluding the net gain on the sale of Premier, the Company had a net
loss from continuing operations of $24.4 million for the second quarter of
2002 compared to net income of $2.7 million for the same quarter of 2001. The
net loss from continuing operations for the second fiscal quarter of 2002
included non-cash reserves for management loans ($8.5 million), asset
impairment charges for the expected restructuring or possible termination of
its joint venture with AMS (Franklin Covey Coaching, LLC) and other impaired
assets ($19.0 million), and non-recurring SG&A expenses ($3.7 million) for
severance, consulting and project costs incurred in the second quarter of
fiscal year 2002.
Sales for the second quarter of fiscal year 2002 were $103.3 million
compared to $131.5 million in the second quarter of fiscal year 2001. Sales
for the quarter ended February 23, 2002 included $67.0 million from the
Consumer Business Unit compared to $89.3 million for the same quarter last
year. Comparable store sales declined 27% during the quarter compared to the
same quarter last year, an improvement from the 36% decline reported in the
first quarter of fiscal 2002. Total handheld electronic device sales, the
majority of which are made through the Company's retail stores, decreased more
than $14.5 million, or 60%, compared to the same quarter of the prior year.
Sales from the Company's annual catalog mailing and subsequent holiday catalog
mailings declined by 36% compared to the same quarter last year. The
Organizations Business Unit sales were $36.3 million during the quarter
compared to $42.2 million during the second quarter of fiscal 2001, a 14%
decline which narrowed from the 31% decline experienced in the first quarter
of fiscal 2002. Training sales declined primarily as a result of canceled and
postponed programs as well as reduced attendance at leadership and time
management seminars.
Sales for the first six months of fiscal 2002 were $187.7 million compared
to $257.1 million for the same period of fiscal 2001. The Company had a net
loss of $51.9 million ($2.83 loss per share, after accounting for preferred
dividends) compared to $0.5 million of net income ($0.17 loss per share, after
accounting for preferred dividends) for the first six months of fiscal 2001.
The first six months of fiscal 2002 included the effect of adopting FASB 142,
which resulted in a non-cash write-off of $61.4 million, net of tax, of
goodwill and indefinite lived intangible assets. FASB 142 was adopted as of
September 1, 2001 and the adjustments made retroactive to the beginning of the
fiscal year 2002, as required under the guidelines of FASB 142. Income for
the first six months of fiscal 2002, before the cumulative effect of a change
in accounting principle, was $9.5 million, which included the gain from the
sale of Premier Agendas. The Company had a loss of $46.0 million from
continuing operations for the first six months of fiscal 2002 compared to
$7.1 million in income for the same period in the prior year. The fiscal 2002
operating loss includes charges of $18.5 million for the non-cash reserve for
management loans and $20.8 million of non-cash expense for impairment of
assets.
About Franklin Covey Co.
Franklin Covey is a global learning and performance services firm
assisting professionals and organizations in measurably increasing their
effectiveness in leadership, productivity, communication and sales. Clients
include 80 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 Franklin Covey services and
products through consulting services, licensed client facilitators, one-on-one
coaching, public workshops, catalogs, more than 180 retail stores and
http://www.franklincovey.com . More than 2,500 Franklin Covey associates provide
professional services and products in 44 offices in 38 countries.
FRANKLIN COVEY CO.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
( in thousands, except per share amounts )
Quarter Ended Six Months Ended
February 23, February 24, February 23, February 24,
2002 2001 2002 2001
(unaudited) (unaudited)
Sales $103,326 $131,499 $187,665 $257,115
Cost of sales 46,561 58,259 83,414 108,403
Gross margin 56,765 73,240 104,251 148,712
Selling, general
and administrative 58,679 57,760 115,182 113,762
Provision for losses
on management stock
loans 8,485 -- 18,456 --
Impairment of
investment in
unconsolidated
subsidiary 14,462 -- 16,323 --
Other losses on
impaired assets 4,518 -- 4,518 --
Income (loss) from
operations (29,379) 15,480 (50,228) 34,950
Equity in earnings of
subsidiary 1,028 550 1,891 1,435
EBITDA (28,351) 16,030 (48,337) 36,385
Depreciation 9,060 5,955 17,337 12,021
Amortization 1,111 3,172 2,507 6,421
EBIT (38,522) 6,903 (68,181) 17,943
Interest income 1,027 175 1,878 340
Interest expense (588) (1,358) (2,754) (3,137)
Other income 637 -- 637 --
Gain (loss) on
interest rate swap
settlement 232 -- (4,894) --
Income (loss) before
provision for income
taxes (37,214) 5,720 (73,314) 15,146
Provision (benefit)
for income taxes (12,833) 3,037 (27,273) 8,042
Net income (loss)
from continuing
operations (24,381) 2,683 (46,041) 7,104
Loss from discontinued
operations, net of tax (1,290) (3,487) (5,282) (6,578)
Gain on sale of
discontinued operations,
net of tax 60,774 -- 60,774 --
Income (loss) before
change in accounting
principle 35,103 (804) 9,451 526
Cumulative change in
accounting principle,
net of tax -- -- (61,386) --
Net income (loss) 35,103 (804) (51,935) 526
Preferred dividends (2,183) (2,028) (4,313) (4,056)
Net income (loss)
attributable to
common shareholders $32,920 $(2,832) $(56,248) $(3,530)
Income (loss) per
share from continuing
operations, less
preferred dividends $(1.34) $0.03 $(2.53) $0.15
Income (loss) per
share available to
common shareholders $1.66 $(0.14) $(2.83) $(0.17)
Weighted average number
of common and common
equivalent shares --
Basic 19,882 20,450 19,897 20,546
Diluted 19,882 20,538 19,897 20,625
Sales Detail:
Retail Stores $45,794 $57,532 $74,433 $97,163
Catalog / e-Commerce 20,370 28,346 39,814 59,932
Other 854 3,389 2,224 7,094
Total Consumer
Business Unit 67,018 89,267 116,471 164,189
Organizations Sales
Group 24,754 28,022 46,762 63,254
International 11,554 14,210 24,432 29,672
Total Organizations
Business Unit 36,308 42,232 71,194 92,926
Total $103,326 $131,499 $187,665 $257,115
SOURCE Franklin Covey Co.
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Related links:
http://www.franklincovey.com
Company News On-Call:
http://www.prnewswire.com/comp/107086.html
CONTACT:
Richard R. Putnam, Investor Relations, of
Franklin Covey Co., +1-801-817-1776
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