SALT LAKE CITY, June 29 /PRNewswire/ -- Franklin Covey
(NYSE: FC) today announced financial results for its fiscal year 2000 third
quarter ended May 27, 2000. The Company reported an $18.8 million loss ($1.02
per share loss, after accounting for preferred stock dividends) compared to a
$4.6 million reported loss ($0.22 per share loss) for the same quarter in the
prior year. The $14.2 million year to year difference in quarterly earnings
includes the following pre-tax variances:
Restructuring charges - $8.4 million
-- $8.4 million charge associated with the option tender offer and other
restructuring activities.
Investments in growth initiatives - $3.5 million
-- $1.2 million related to an aggressive investment in on-line training,
electronic application tools and e-commerce capabilities and the
development of FranklinPlanner.com, the Company's on-line planning
site.
-- $1.3 million investments during the period in support of an
anticipated $16 million full-year increase in sales for its Premier
School Agendas in the fourth quarter. These sales are expected to be
recognized in the fiscal fourth quarter.
-- $1.0 million in additional expense related to the Professional
Resources Organization, (the Jack Phillips Group) a leading
measurement and assessment firm acquired by the Company in September
1999.
Sales for the third quarter of fiscal year 2000 were $110.8 million, a 1%
increase compared to the third quarter of fiscal year 1999. Electronic
training and implementation tools sales growth fueled much of the 23% growth
in same store sales and the growth in catalog/e-commerce sales during the
quarter. Product sales also increased through the Contract sales channel.
These sales increases were partially offset by a decline in training sales
partially resulting from the disruption associated with relocating the
Company's organizational sales force into eight regional offices to increase
the Company's ability to serve and increase business with major corporate
accounts. Sales were also negatively impacted by the sale of the commercial
division of Publishers Press.
The Company reported its core headcount was lower by 398 compared to the
same period in the prior year, primarily as a result of its previously
announced restructuring program. The remaining reductions under the plan are
expected to be completed by the end of its fiscal year.
Sales for the first nine months of fiscal 2000 were $399.9 million
compared to $386.7 million for the same period of fiscal 1999. The Company's
reportable earnings were a loss of $8.8 million ($0.73 loss per
share after preferred stock dividends) compared to reportable earnings of
$12.9 million ($0.60 diluted earnings per share) for the same period of the
prior year.
Franklin Covey is a leading global professional services firm offering
learning and performance solutions to assist 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 midsize 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, over 100 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 in 33 languages.
This announcement contains forward-looking statements that necessarily are
based on certain assumptions and are subject to certain risks and
uncertainties, including 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 1999 10-K and
subsequent 10-Q reports filed with the Securities Exchange Commission. There
can be no assurance that the Company's actual future performance will meet 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 )
Three Months Ended Nine Months Ended
May 27, May 29, May 27, May 29,
2000 1999 2000 1999
(unaudited) (unaudited)
Sales $110,759 $109,267 $399,861 $386,718
Cost of sales 53,049 50,745 173,998 162,638
Gross margin 57,710 58,522 225,863 224,080
Selling, general and
administrative 65,399 54,647 189,795 167,168
Other restructuring
costs 8,361 10,519
Depreciation 5,655 5,295 16,166 14,719
Amortization 5,387 4,708 15,295 13,716
Income (loss) from
operations (27,092) (6,128) (5,912) 28,477
Interest expense and
other - net (609) (1,794) (3,265) (6,279)
Income (loss) before
provision for income
taxes (27,701) (7,922) (9,177) 22,198
Provision for income
taxes (8,867) (3,327) (350) 9,323
Net income (loss) $(18,834) $(4,595) $(8,827) $12,875
Preferred dividend 2,028 5,978
Income available to
common shareholders $(20,862) $(4,595) $(14,805) $12,875
Earnings (loss) per
share:
Basic $(1.02) $(0.22) $(0.73) $0.61
Diluted $(1.02) $(0.22) $(0.73) $0.60
Weighted average common
shares:
Basic 20,413 20,522 20,377 21,252
Diluted 20,413 20,522 20,377 21,461
Sales Detail:
Consumer Product $63,030 $51,661 $235,346 $210,973
Training and Education 36,405 38,941 110,136 113,102
International 9,925 11,214 38,572 39,925
Other 1,399 7,451 15,807 22,718
Total Sales $110,759 $109,267 $399,861 $386,718
SOURCE Franklin Covey
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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, 801-975-1776
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