SALT LAKE CITY, Sept. 28 /PRNewswire/ -- Franklin Covey Co. (NYSE: FC)
today reported sales and earnings for its fourth quarter and fiscal year ended
August 31, 1998. Sales for the year increased 26% to a record $546.6 million
compared to $433.3 million for fiscal 1997. Earnings for the year were a
record $40.1 million, including a $2.1 million or $0.08 per share after-tax
charge taken in the first quarter from a change in accounting principle. This
represents a 3% increase over the previous year's earnings of $38.9 million,
which included a fourth quarter pre-tax charge of $5.5 million or $0.14 per
share associated with integration costs related to the Covey Leadership Center
merger in fiscal 1997. Earnings per share for the fiscal 1998 year were $1.62
compared to $1.76 per share for fiscal 1997.
Sales for the fourth quarter ended August 31, 1998, rose to $156.6
million, an 8% increase compared to $145.1 million for the fourth quarter of
fiscal 1997. Earnings for the quarter were $15.6 million or $0.67 per share
compared to $9.7 million or $0.37 per share in the comparable quarter of
fiscal 1997.
Product sales reached a record fourth quarter level of $108.3 million, up
13% from the same quarter of fiscal 1997, even though retail same-store sales
declined 2% during the quarter. The Company noted a strong increase in sales
from Premier School Agendas (PSA) during the quarter. PSA sells agendas to
school children, teachers and administrators. Training sales were $41.4
million, a 4% decrease from $43.1 million for the same quarter in fiscal 1997.
Printing services sales were $6.9 million for the quarter ended August 31,
1998, compared to $6.3 million for the same quarter of fiscal 1997.
Commenting on the fiscal 1998 results, John L. Theler, Chief Financial
Officer of the Company said, "In spite of the challenges associated with the
merger, we still have been able to grow our business. On a proforma basis,
comparing fiscal 1998 to fiscal 1997 results as if Covey Leadership Center and
Premier School Agendas had been included for the full fiscal 1997 year, sales
and earnings per share both increased 6%. Further, if we look at fiscal 1998
EPS before the accounting change and compare it to the fiscal 1997 proforma
EPS, we have an 11% improvement. As we look forward to fiscal 1999, we
reiterate our expectation of earning in the $1.80 to $1.90 per share range."
The Company also announced that it had repurchased 1,465,000 shares during
the quarter at an average price of $19.48 per share. The Company has also
repurchased an additional 700,000 shares since the end of the quarter. Under
the current repurchase program the Company has 400,000 remaining shares
authorized for repurchase.
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 1997 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 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 and planners,
and its training products and related materials are printed in 28 languages
throughout the world. Franklin Covey trains in excess of 750,000 participants
annually in training seminars teaching 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 Twelve Months Ended
August 31, August 31,
1998 1997 1998 1997 1997
reported proforma
(unaudited) (unaudited) (unaudited)
Sales $156,587 $145,097 $546,612 $433,272 $517,756
Cost of
sales 61,014 55,649 213,888 175,602 206,844
Gross margin 95,573 89,448 332,724 257,670 310,912
Selling,
general and
administrative 58,020 56,992 221,303 164,057 209,611
Merger
integration
expenses 5,450 5,450
Depreciation 4,603 3,552 17,294 11,296 13,465
Amortization 4,163 4,697 15,734 9,505 14,908
Income from
operations 28,787 18,757 78,393 67,362 72,928
Interest income 531 347 1,954 1,344 1,344
Interest
expense (2,660) (1,602) (8,316) (2,344) (6,173)
Income before
provision for
income taxes 26,658 17,502 72,031 66,362 68,099
Provision for
income taxes 11,063 7,833 29,893 27,498 28,261
Net income
before
cumulative
effect of
accounting
change 15,595 9,669 42,138 38,864 39,838
Cumulative
effect of
accounting
change, net
of tax (2,080)
Net income $15,595 $9,669 $40,058 $38,864 $39,838
Net income
per share $0.67 $0.37 $1.62 $1.76 $1.53
Weighted
average
number of
common and
common
equivalent
shares 23,234 26,199 24,726 22,117 26,099
Sales Detail:
Product $108,260 $95,655 $343,832 $301,687 $317,490
Training 41,443 43,145 174,927 107,417 176,099
Printing
services 6,884 6,297 27,853 24,168 24,167
Total Sales $156,587 $145,097 $546,612 $433,272 $517,756
SOURCE Franklin Covey Co.
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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, 801-975-1776, all of Franklin Covey Co.
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