SALT LAKE CITY, Oct. 17 /PRNewswire/ -- Franklin Covey (NYSE: FC) today
announced financial results for its fiscal fourth quarter and fiscal year
ended August 31, 2000.
Fiscal Fourth Quarter 2000 Results
EBITDA for the quarter increased to $29.9 million compared to $3.6 million
for the same quarter of fiscal 1999. Earnings for the quarter were
$2.4 million ($0.12 earnings per share) compared to a loss of $23.5 million
($1.15 loss per share) for the same period last year. The fourth quarter of
fiscal year 2000 included a $4.5 million reversal of severance restructuring
charges accrued in fiscal 1999 and a $0.5 million additional charges related
to relocation expenses. The fiscal 1999 fourth quarter losses included
$16.3 million in restructuring charges as a result of associate terminations
and facility closures and $16.6 million in charges associated with write-offs
of impaired assets. After excluding restructuring charges and write-offs of
impaired assets, the earnings and EBITDA increase was a function of sales
growth and lower full-time equivalent head-counts partially offset by higher
expenditures in Franklin Covey's growth initiative businesses.
The Company reported $185.3 million in sales for the quarter ended
August 31, 2000, a 10% increase, compared to $168.2 million for the same
quarter a year ago. Fiscal 1999 sales included $5.6 million in non-comparable
Publishers Press sales, the Company's external printing operation, which was
sold earlier this year. Comparable store sales for the fourth quarter
increased 8% compared to the same quarter of fiscal 1999, primarily as a
result of the increased sales of Franklin Covey editions of hand-held
electronic organizers and associated products. The Company also reported
having 135 retail stores at the end of the quarter, an increase of 10 stores
from the fourth quarter of fiscal 1999. Sales from the Company's education
related activities increased 20% compared to the same quarter of fiscal 1999.
Fiscal Year 2000 Results
EBITDA for fiscal year 2000 was $55.4 million compared to $60.5 million
for fiscal 1999. The Company recorded a $12.4 million net loss
($0.61 loss per share) for the fiscal year compared to a net loss of
$10.6 million ($0.51 loss per share) for fiscal year 1999. Fiscal year 2000
earnings and EBITDA were reduced by $11.0 million of pre-tax charges from its
stock option repurchase program during the third quarter and relocation
expenses and approximately $16 million in costs associated with investments in
its growth initiatives. Off-setting these pre-tax charges was a reversal of
$4.9 million of previously accrued restructuring charges from fiscal year
1999. Fiscal 1999 EBITDA and earnings included $32.9 million in restructuring
charges and impaired assets write-offs. Sales for fiscal 2000 were
$585.2 million, a 5% increase over the $554.9 million in sales reported for
fiscal 1999. The sales increase included a 13% comparable store sales growth
compared to fiscal year 1999. The sales increase and fewer full-time
equivalent head-count partially off-set increased expenditures made in
Franklin Covey's growth initiative businesses, such as on-line learning and
planning, in the reported EBITDA and earnings.
Additional Information
The Company also reiterated its goal to increase EBITDA by $20 million in
fiscal 2001 through a combination of sales growth and the annualized effect of
cost reductions already undertaken. Franklin Covey has essentially completed
its previously announced employment force reduction. Approximately
600 full-time equivalents positions have been eliminated through productivity
effectiveness from the Company's core operations since the restructuring
started in fiscal 1999.
Franklin Covey entered in a new partnership with American Marketing
Systems, Inc., a major customer of its Personal Coaching division. The new
venture, Franklin Covey Coaching, LLC, will continue to provide personal
coaching services for the companies' customers. It is anticipated that the
new partnership will broaden the curriculum and services it offers to grow the
personal coaching business over the long term, while maintaining the Company's
EBITDA and earnings from its coaching activities over the short term.
The Company also announced that it would introduce a new collection of
integrated Personal Productivity systems and training courses later this
month. These productivity solutions are expected to significantly expand the
Company's capabilities to provide on-demand modularized learning and planning
productivity systems integrated across various platforms and mediums. In
connection with these productivity solutions, the Company has opened
12 Training Centers within its existing regional stores.
The Company also announced the imminent closing of its previously
announced management loan program. 170 of the Company's top managers have
purchased 3.8 million shares for approximately $33 million on the open market
since the inception of its program in March of this year. The management loan
program is intended to give management a strongly vested interest in the
Company's performance.
About Franklin Covey
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.
Safe-Harbor Statement
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 and Exchange Commission.
There can be no assurance that the Company's actual future performance will
meet management'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 Twelve Months Ended
August 31, August 31,
2000 1999 2000 1999
(unaudited) (unaudited)
Sales $185,339 $168,205 $585,199 $554,923
Cost of sales 80,211 80,494 254,208 243,132
Gross margin 105,128 87,711 330,991 311,791
Selling, general
and administrative 79,309 67,835 269,506 235,003
Provision for
restructuring (4,544) 16,282 (4,946) 16,282
Stock option
purchase and
relocation expense 505 -- 11,024 --
EBITDA 29,858 3,594 55,407 60,506
Depreciation 8,024 6,080 24,190 20,802
Amortization 5,682 5,024 20,977 18,737
Loss on impaired
assets -- 16,559 -- 16,559
Income (loss)
from operations 16,152 (24,069) 10,240 4,408
Interest income 735 267 1,665 1,278
Interest expense (1,587) (2,622) (6,178) (9,912)
Other expense (569) -- (174) --
Income (loss)
before provision
for income taxes 14,731 (26,424) 5,553 (4,226)
Provision for
income taxes 10,313 (4,777) 9,962 4,546
Net income (loss) 4,418 (21,647) (4,409) (8,772)
Preferred Dividends (2,028) (1,875) (8,005) (1,875)
Income (loss)
available to
shareholders $2,390 $(23,522) $(12,414) $(10,647)
Earnings per share
Basic $0.12 $(1.15) $(0.61) $(0.51)
Diluted $0.12 $(1.15) $(0.61) $(0.51)
Weighted average
o/s shares
Basic 20,617 20,378 20,437 20,881
Diluted 20,676 20,378 20,437 20,881
Sales Detail:
Consumer Products $67,598 $58,312 $302,944 $269,285
Training and
Education 104,510 92,566 214,646 205,669
International 11,383 10,610 49,955 50,513
Other 1,848 6,717 17,654 29,456
Total Sales $185,339 $168,205 $585,199 $554,923
SOURCE Franklin Covey
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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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