SALT LAKE CITY, April 10 /PRNewswire/ -- Franklin Covey (NYSE: FC) today
announced financial results for its fiscal year 2001 second quarter ended
February 24, 2001. The Company reported a net loss of $0.8 million
($0.14 loss per share, after accounting for preferred dividends) compared to
earnings of $2.8 million ($0.04 earnings per share, after accounting for
preferred dividends) for the same quarter in the prior year. Sales for the
second quarter of fiscal year 2001 were $133.4 million compared to
$149.4 million in the second quarter of fiscal year 2000. Sales and earnings
were primarily impacted by lower traffic and sales in the Company's retail
stores and catalog operations.
Sales for the second quarter of fiscal year 2000 included sales from
Publishers Press, which was sold at the end of fiscal year 2000 and sales from
Personal Coaching, whose net assets were contributed to Franklin Covey
Coaching, LLC, a partnership in which the Company owns 50% in joint venture
with AMS Direct. These two noncomparable sales channels accounted for
$10.4 million in sales during the same period last year. Last year's sales
during the second fiscal quarter included a 14% comparable store sales
increase, due in large part to a very successful launch of Palm handheld
products during the quarter. While the delayed launch this year had an impact
on comparable store sales during the second quarter of fiscal 2001, the
recently announced introduction of new handheld products is anticipated to
help this year's third and fourth quarters. During the quarter ended
February 24, 2001, the Company reported a comparable store sales decline of
10% mainly in connection with the strong sales during the prior year, an
economic slow-down which generated lower foot traffic in 2001, renovations in
a number of existing stores and the opening of 24 new retail stores. Many of
the new stores opened during the year have been in comparable store sales
markets, cannibalizing sales from the existing stores, yet growing comparable
market sales. The Company ended the quarter with 151 retail stores in the
United States. Retail store sales were $55.8 million for the second quarter
of fiscal 2001 compared to $55.1 million for the same quarter a year ago.
Catalog/e-commerce sales were $28.3 million for the quarter compared to
$29.9 million for the second quarter of fiscal 2000. Organizational Solution
Group (OSG) sales were $17.4 million during the second quarter of fiscal 2001
compared to $19.2 million for the same quarter last year. Educational sales
were $3.1 million during the quarter compared to $2.3 million for the second
quarter of fiscal 2000. International sales were $14.5 million compared to
$14.2 million for the same quarter last year. Other sales were $14.2 million
compared to $28.7 million for the same quarter of fiscal 2000, which included
sales from Personal Coaching and Publishers Press. In addition, Other sales
declined as a result of decreased volume through the Company's Wholesale
channel.
The Company's EBITDA for the quarter was $10.0 million compared to
$17.4 million for the same quarter of the prior year resulting primarily from
reduced revenue and the opening new stores during the quarter as well as
renovations of older stores which resulted in higher costs without the
incremental revenues to off-set these expenses. Partially off-setting the
decline in EBITDA was a reduction in associate costs compared to the same
quarter of the prior year. Economic factors also contributed to lower sales
and earnings. Commenting on the quarter's results, Robert Whitman, Chairman
and CEO said, "At the beginning of the year, we budgeted for approximately
$75 million in EBITDA this year compared to $55 million of EBITDA during
fiscal year 2000. To date, our e-commerce, International, Franklin Covey
Coaching, LLC and corporate support functions are all performing above that
budget. Other channels that are performing slightly below that budget but
ahead of last year are OSG, Public Programs, Education and our Solutions
groups. Although, through the first six months, we are $2 million behind our
budgeted level, we expect that the opportunities during the next two quarters
in Educational sales, new handheld product launches and additional strategic
alliances will form a strong enough base to allow the Company to reach $70 to
$75 million in EBITDA this year."
Sales for the first six months of fiscal 2001 were $262.5 million compared
to $298.2 million for the same period of fiscal 2000. Net income was
$0.5 million ($0.17 loss per share, after accounting for preferred dividends)
compared to $10.0 million ($0.30 earnings per share, after accounting for
preferred dividends) for the first six months of fiscal 2000.
Franklin Covey also announced that it had purchased to date $7.1 million
or 888,029 shares of its common stock on the open market, $5.0 million or
632,300 shares during the quarter ended February 24, 2001. The Company is not
currently pursuing the purchase of additional shares in connection with its
buyback program. The Company anticipates it will make a public announcement
prior to resuming any buyback program.
About Franklin Covey Co.
With a new set of tools and learning solutions aimed at increasing
productivity in the digital age, Franklin Covey Co. 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 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, public workshops, catalogs, more than
150 retail stores, http://www.franklincovey.com and http://www.franklinplanner.com. More
than 3,500 Franklin Covey associates provide professional services and
products in 44 offices in 38 countries.
This announcement contains forward-looking statements that necessarily are
based on certain assumptions and are subject to certain risks and
uncertainties, including economic factors, the effects of competition, lack of
market acceptance of new products or services, failure to gain market share in
target markets and other factors identified and discussed in the Company's
2000 Form 10-K and subsequent 10-Q reports filed with the Securities and
Exchange Commission. There can be no assurance that the Company's actual
future performance will achieve the Company's expectations. These
forward-looking statements are based on management's expectations as of the
date hereof, and are based on factors that may cause future results to differ
materially from the Company's current expectations.
FRANKLIN COVEY CO.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
( in thousands, except per share amounts )
Quarter Ended Six Months Ended
February 24, February 26, February 24, February 26,
2001 2000 2001 2000
(unaudited) (unaudited)
Sales $133,366 $149,365 $262,488 $298,244
Cost of sales 58,959 66,267 110,467 130,092
Gross margin 74,407 83,098 152,021 168,152
Selling, general
and administrative 64,994 64,013 128,319 124,396
Other restructuring
costs 1,668 2,158
Equity in earnings
of subsidiary 550 1,435
EBITDA 9,963 17,417 25,137 41,598
Depreciation 5,692 5,368 11,459 10,510
Amortization 4,859 5,160 9,796 9,909
EBIT (588) 6,889 3,882 21,179
Interest income 281 305 521 634
Interest expense (1,408) (1,764) (3,282) (3,290)
Income before
provision for
income taxes (1,715) 5,430 1,121 18,523
Provision for income
taxes (911) 2,611 595 8,516
Net income (loss) $(804) $2,819 $526 $10,007
Preferred dividends (2,028) (2,036) (4,056) (3,950)
Income (loss) available
to common shareholders $(2,832) $783 $(3,530) $6,057
Earnings per share
(basic and diluted) $(0.14) $0.04 $(0.17) $0.30
Weighted average number
of common and common
equivalent shares
(basic and diluted) 20,450 20,285 20,546 20,445
Sales Detail:
Retail Stores $55,833 $55,075 $94,410 $92,911
Catalog / e-commerce 28,346 29,878 59,932 66,980
Organizational
Sales Group 17,358 19,248 40,099 41,147
Educational 3,134 2,250 7,943 8,627
International 14,480 14,249 29,242 29,217
Other 14,215 28,665 30,862 59,362
Total $133,366 $149,365 $262,488 $298,244
SOURCE Franklin Covey Co.
 back to top
Related links:
http://www.franklincovey.com
Company News On-Call:
http://www.prnewswire.com/comp/107086.html or fax,
800-758-5804, ext. 107086
CONTACT:
Richard R. Putnam, Investor Relations of
Franklin Covey Co., 801-975-1776
|
