Franklin Covey to Report First-Quarter Fiscal 2017 Results
Conference Call to be held on
Affirms
Previously Issued Financial Guidance
Provides
Additional Detail on its Financial Guidance for Fiscal 2017
During the Company’s November conference call in which it reviewed
fourth quarter and full-year results for fiscal 2016, the Company also
issued its financial guidance for fiscal 2017. That guidance was that
the sum of reported Adjusted EBITDA, plus the Change in Deferred Revenue
(less certain costs) for fiscal 2017, is expected to range between
Additional Guidance Detail
The Company’s additional guidance detail is as follows:
First, the Company expects to affirm its previously provided guidance
that the sum of reported Adjusted EBITDA, plus the Change in Deferred
Revenue (less certain costs) for fiscal 2017 is expected to be between
-
First quarter:
($2.5) million , compared to$3.4 million on the same basis in fiscal 2016, reflecting increases in investments in the first quarter related to: (1) translating and localizing all of the core All Access Pass content into 15 major languages (in addition to English), and building a new All Access Pass portal in preparation for the global launch of All Access Pass at the end of the second quarter; (2) the hiring of 24 new client partners and 10 new Education Practice coaches whose costs will hit in the first and second quarters of fiscal 2017, and which are expected to be more than covered by the revenue they generate in the third and fourth quarters; (3) lower revenue in the Sales Performance Practice, partially reflecting the change in the timing of some major training and content contracts; and the somewhat longer All Access Pass sales cycle, compared to the facilitator sales cycle, in the U.S. Direct Offices. -
Second quarter:
$1.0 million to $2.0 million , compared to$3.4 million on the same basis in fiscal 2016, reflecting: (1) continued investments to prepare for the global launch of All Access Pass; (2) lower revenue in the Sales Performance Practice; and (3) continued investment in new client partners and new Education Practice coaches, offset by the conversion of the significantly increased pipelines in most operations resulting from first quarter investments, and the expected high renewal rate for that portion of the more than$3.0 million of All Access Pass amounts invoiced in last year’s second quarter that are renewable in the second quarter and new All Access Pass sales. -
Third quarter:
$8.0 million to $9.0 million , compared to$3.5 million on the same basis in fiscal 2016, reflecting the continued conversion of the Company’s significant pipelines, and the expected high renewal rate for that portion of the more than$6.0 million of All Access Pass amounts invoiced in last year’s third quarter that are renewable in the third quarter of fiscal 2017, and new All Access Pass sales. -
Fourth quarter:
$27.5 million to $29.5 million , compared to$24.1 million on the same basis in fiscal 2016, reflecting: (1) the recognition of substantially all of the Education Practice’s EBITDA for fiscal 2017; (2) the expected high renewal rate for that portion of the more than$12.0 million in All Access Pass amounts invoiced in last year’s fourth quarter that are renewable in the fourth quarter of fiscal 2017 and new All Access Pass sales; and (3) seasonally higher sales in the U.S.,Japan , theU.K. , andAustralia .
Second, Net Cash Generated (Adjusted EBITDA, plus change in Deferred
Revenue, less certain costs, plus curriculum amortization (approximately
Third, the Company expects that Adjusted EBITDA as actually reported in
fiscal 2017, before adding the amount of Adjusted EBITDA contribution
embedded in the increase in Deferred Revenue, is expected to range
between
A majority of the Company’s reported Adjusted EBITDA is expected
to be generated in its fiscal fourth quarter, reflecting the investments
and factors discussed above. Without considering changes in the amounts
of high-margin Deferred Revenue, there is a projected reported Adjusted
EBITDA loss in the first and second quarters of
Interested persons can participate in Franklin Covey’s
A replay will be available starting
About
Non-GAAP Financial Information
The Company defines Adjusted EBITDA as net income or loss excluding the impact of interest expense, income tax expense, amortization, depreciation, share-based compensation expense, impaired asset charges, restructuring costs, adjustments to contingent earn out liabilities, and certain other items. The Company references this non-GAAP financial measure in its decision making because it provides supplemental information that facilitates consistent internal comparisons to the historical operating performance of prior periods and the Company believes it provides investors with greater transparency to evaluate operational activities and financial results. The Company does not provide forward-looking GAAP measures or a reconciliation of the forward-looking Adjusted EBITDA to GAAP measures because of the inability to project certain of the costs included in the calculation of Adjusted EBITDA.
Forward-Looking Statements
This News Bulletin contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
including, among others, those statements related to the Company’s
future results and profitability; expected Adjusted EBITDA in fiscal
2017; amounts of deferred revenue in fiscal 2017; expected sales of All
Access Pass services; and goals relating to the growth of the Company.
Forward-looking statements are based upon management’s current
expectations and are subject to various risks and uncertainties
including, but not limited to: general economic conditions; renewal of
AAP contracts; the expected number of booked days to be delivered;
market acceptance of new products or services and marketing strategies;
the ability to achieve sustainable growth in future periods; and other
factors identified and discussed in the Company’s most recent Annual
Report on Form 10-K and other periodic reports filed with the
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Source:
Franklin Covey Co.
Stephen D. Young, 801-817-1776
Chief
Financial Officer