SALT LAKE CITY, June 29 /PRNewswire/ -- Franklin Covey (NYSE: FC) today
reported its fiscal third quarter sales and earnings. Sales for the quarter
ended May 31, 1998 increased 35% to $107.5 million compared to $79.8 million
for the same quarter of Fiscal 1997 due primarily to the impact of the
Franklin Quest and Covey Leadership Center merger finalized in June 1997.
Earnings for the quarter decreased to $0.5 million compared to the previous
year's third quarter of $3.1 million mainly attributable to higher operating
expenses and slower growth in product sales. Earnings per share were $0.02
per share for the third quarter of fiscal 1998 compared to $0.15 per share for
the third quarter of Fiscal 1997.
Product sales were $54.0 million, up 6% from the same quarter of Fiscal
1997. Same retail store sales decreased 7% during the quarter compared to
last year. Training sales increased to $46.6 million, up 103% over the same
quarter in Fiscal 1997, due primarily to the Covey merger. Service sales were
$6.9 million, growing 16% over the comparable period last year.
Sales for the first nine months of Fiscal 1998 increased by 35% to $390.0
million. Earnings decreased to $24.5 million, down $4.7 million from the same
nine month period of last year due primarily to higher operating expenses and
Fiscal 1998 first quarter change in accounting principle. Earnings per share
for the first nine months of Fiscal 1997 were $0.97 compared to $1.41 for the
same period of the prior year, including $.08 per share cumulative change in
accounting principle charged in the first quarter of the Fiscal 1998 relating
to "business process reengineering and information technology transformation"
costs.
Franklin Covey also announced the repurchase of 961,300 shares of its
common stock during the quarter at an average price of $23.56 per share.
Since quarter-end, an additional 783,600 shares have been bought by the
Company at an average price of $19.45 per share. The Company has Board
authorization to purchase up to an additional 1,789,300 shares.
During the quarter, the Company enhanced its capital structure by
privately placing a 1O year fixed rate $85 million senior note at 6.6% to
reduce the variable rate line of credit financing of the Company. This
reduced the Company's cost of capital and interest expense as well as adding
to its debt capacity.
Franklin Covey is the leading global provider of leadership development
and productivity services and product solutions based on proven principles.
More than 15 million individuals use Franklin Covey's agendas, organizers and
planners and training products and related materials that are printed in 28
languages throughout the world. Franklin Covey trains in excess of 750,000
participants annually in training seminars reaching principles to help them
achieve "What Matters Most."
FRANKLIN COVEY CO.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(in thousands, except per share amounts)
Three Months Ended Nine Months Ended
May 31 May 31,
1998 1997 1998 1997
(unaudited) (unaudited)
Sales $107,542 $79,840 $390,025 $288,175
Cost of sales 42,728 33,612 152,874 119,953
Gross margin 64,814 46,228 237,151 168,222
Selling, general and
administrative 53,825 36,325 163,283 107,065
Depreciation 4,403 2,724 12,691 7,744
Amortization 4,183 1,803 11,571 4,807
Income from operations 2,403 5,376 49,606 48,606
Interest income 531 278 1,423 997
Interest expense (2,131) (420) (5,656) (742)
Income before provision
for income taxes 803 5,234 45,373 48,861
Provision for income taxes 333 2,107 18,830 19,666
Cumulative change in
accounting principle -
net of tax (2,080)
Net income $470 $3,127 $24,463 $29,195
Net income per share $0.02 $0.15 $0.97 $1.41
Weighted average number
of common and common
equivalent shares 24,732 20,537 25,227 20,742
Sales Detail:
Product $53,982 $50,908 $235,572 $206,031
Training 46,646 22,964 133,484 64,273
Printing Services 6,914 5,968 20,969 17,871
Total Sales $107,542 $79,840 $390,025 $288,175
SOURCE Franklin Covey
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Related links:
http://www.franklincovey.com
Company News On-Call: http://www.prnewswire.com or
fax, 800-758-5804, ext. 107086
CONTACT:
Jon H. Rowberry, CEO and President, or John
L. Theler, Chief Financial Officer, or Richard R. Putnam,
Investor Relations, all for Franklin Covey, 801-975-1776
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