UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported):
April
9, 2009
FRANKLIN
COVEY CO.
(Exact
name of registrant as specified in its charter)
Commission
File No. 1-11107
|
Utah
|
87-0401551
|
|
|
(State
or other jurisdiction of incorporation)
|
(IRS
Employer Identification Number)
|
|
2200
West Parkway Boulevard
Salt
Lake City, Utah 84119-2099
(Address
of principal executive offices)(Zip Code)
Registrant’s
telephone number, including area code: (801) 817-1776
Former
name or former address, if changed since last report: Not Applicable
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
] Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
[
] Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
[
] Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))
[
] Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-4(c))
Item
2.02 Results of Operations
and Financial Condition
On April
9, 2009, Franklin Covey Co. (the Company) announced its financial results for
the fiscal quarter and two quarters ended February 28, 2009. A copy
of the earnings release is being furnished as exhibit 99.1 to this current
report on Form 8-K.
Certain
information in this Report (including the exhibit) is furnished pursuant to Item
2.02 and shall not be deemed to be “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise
subject to the liabilities of that section, nor shall it be deemed incorporated
by reference in any filing made by the Company under the Securities Act of 1933,
as amended, or the Exchange Act, except as expressly set forth by specific
reference in such a filing.
Item
9.01 Financial Statements
and Exhibits
|
(d)
|
Exhibits
|
|
|
99.1
Earnings release dated April 9,
2009
|
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
|
FRANKLIN
COVEY CO.
|
||||
|
Date:
|
April 9, 2009
|
By:
|
/s/ Stephen D.
Young
|
|
|
Stephen D.
Young
|
||||
|
Chief Financial
Officer
|
||||
Exhibit
99.1
|
2200
West Parkway Boulevard
Salt
Lake City, Utah 84119-2331
www.franklincovey.com
|
Press
Release
|
FRANKLINCOVEY
ANNOUNCES FISCAL 2009 SECOND QUARTER RESULTS
Salt Lake City, Utah – April
9, 2009 – Franklin Covey Co. (NYSE: FC), a global provider of training and
consulting services, today announced financial results for its fiscal second
quarter ended February 28, 2009. Reported net sales for the quarter
totaled $29.9 million, compared to $75.1 million in the second quarter of fiscal
2008. The vast majority of this decline was attributable to the sale
of the Company’s Consumer Solutions Business Unit (CSBU) operations and the
resulting reduction in product sales. The net loss totaled $0.6
million, or $(0.05) per share, compared to net income of $3.0 million, or $0.15
per diluted share, in the second quarter of fiscal 2008.
The
Company’s financial results are difficult to compare to the corresponding
quarter of the prior year due to the sale of its CSBU. Effective July
6, 2008, the CSBU was sold to a new private equity-funded entity known as
Franklin Covey Products, LLC. The CSBU was primarily responsible for sales of
the Company’s consumer products, including the popular Franklin Planner®,
binders, and related accessories, to consumers and small businesses through
retail, wholesale, Internet, and call center channels. Due to the
Company’s 19.5 percent voting interest and continuing involvement with Franklin
Covey Products, LLC, the Company is not presenting the financial results of the
CSBU in a discontinued operations format.
“We
anticipated that our results would build momentum as the year
progressed. Our second quarter results were largely in line with our
expectations, although our domestic facilitator business and international
licensee revenues came in slightly lower than planned. While we are
not immune to the impact of weak economic conditions, we have strong bookings
for the third and fourth quarters, and combined with the significant cost
reduction initiatives we have implemented, we continue to expect a significant
improvement in our profitability in the second half of the year,” said Bob
Whitman, Chairman and Chief Executive Officer of Franklin Covey. “While we
expect the economic climate to remain challenging, we are working harder than
ever to demonstrate that our services are especially relevant as companies seek
to maximize productivity, customer loyalty, and sales force effectiveness during
these difficult times.”
Sales
from the Company’s Organizational Solutions Business Unit, which primarily
consist of training and consulting sales, decreased $7.8 million compared to the
prior year. Domestic sales declined by $5.1 million, primarily due to
weak economic conditions, which impacted facilitator sales, the number of booked
site events, and sales force performance training
revenues. Additionally, domestic sales were affected by planned
decreases in the number of public programs offered during the
quarter. International sales declined by $2.8 million due to a large
intellectual property contract delivered in the second quarter of fiscal 2008
that did not repeat in fiscal 2009, lower sales in certain countries in which
the Company operates directly owned offices, and decreased licensee royalty
revenues.
Earnings Conference
Call
On
Thursday, April 9, 2009 at 5:00 p.m. Eastern time (3:00 p.m. Mountain time)
Franklin Covey will host a conference call to review its financial results for
the fiscal quarter ended February 28, 2009. Interested persons may
participate by dialing 1-888-396-2298 (International participants may dial
1-617-847-8708), access code: 60817610. Alternatively, a webcast will
be accessible at the following Web site: http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=102601&eventID=2150142. Due
to the length of this address this URL may need to be copied/pasted into your
Internet browser’s address field. Remove the extra space if one
exists. A replay will be available through 11:59 p.m. Eastern time on
April 16, 2009 by dialing 1-888-286-8010 (International participants may dial
1-617-801-6888), access code: 66849530. The webcast will remain
accessible through April 16, 2009 on the Investor Relations area of the
Company’s web site at: http://phx.corporate-ir.net/phoenix.zhtml?c=102601&p=irol-IRHome.
Forward-Looking
Statements
This
press release contains forward-looking statements related to, among other
things, our bookings and our profitability. These statements are made
pursuant to the Private Securities Litigation Reform Act of
1995. Forward-looking statements are based upon management's current
expectations and are subject to various risks and uncertainties including, but
not limited to: expected sales; reductions in capital requirements and cost
structure; general economic conditions; market acceptance of new
products or services and marketing strategies; the ability to achieve
sustainable growth in future periods; the expected impact of the Company’s
restructuring plan; 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
Securities and Exchange Commission. Many of these conditions are
beyond the Company’s control or influence, any one of which may cause future
results to differ materially from the Company’s current expectations, and there
can be no assurance the Company’s actual future performance will meet
management’s expectations. These forward-looking statements are based
on management’s current expectations and the Company undertakes no obligation to
update or revise these forward-looking statements to reflect events or
circumstances subsequent to this press release.
About
Franklin Covey Co.
Franklin
Covey Co. (NYSE:FC) (www.franklincovey.com),
is a global provider of training and consulting services in the areas of
leadership, productivity, strategy execution, customer loyalty, trust, sales
performance, government, education and individual effectiveness. Clients
include 90 percent of the Fortune 100, more than 75 percent of the Fortune 500,
thousands of small- and mid-sized businesses, as well as numerous government
entities and educational institutions. Franklin Covey Co. has 40 direct
and licensee offices providing professional services in 147
countries.
On July
6, 2008, Franklin Covey Co. sold its Consumer Solutions Business Unit (CSBU) to
a new private equity-funded entity known as FranklinCovey Products, LLC, (www.franklinplanner.com)
the exclusive, worldwide licensee of the FranklinCovey™ brand. FranklinCovey
Products sells the popular Franklin Planner, binders and other related
productivity and organizational tools and accessories to consumers and small
businesses through retail, wholesale, Internet and call center channels.
Franklin Covey Co. has retained a 19.5 percent voting interest in
FranklinCovey Products, LLC. Franklin Covey Co. also uses the FranklinCovey
brand in all of its global training and consulting services. For more
information, please visit www.franklincovey.com.
|
Investor
Contact:
FranklinCovey
Steve
Young
801-817-1776
investor.relations@franklincovey.com
|
or
|
ICR,
LLC
Kate
Messmer
203-682-8338
kate.messmer@icrinc.com
|
Media
Contact:
FranklinCovey
Debra
Lund
Debra.Lund@franklincovey.com
|
|
FRANKLIN COVEY CO.
|
||||||||||||||||
|
CONDENSED CONSOLIDATED INCOME
STATEMENTS
|
||||||||||||||||
|
(
in thousands, except per share amounts )
|
||||||||||||||||
|
Quarter
Ended
|
Two
Quarters Ended
|
|||||||||||||||
|
February
28,
|
March
1,
|
February
28,
|
March
1,
|
|||||||||||||
|
2009
|
2008
|
2009
|
2008
|
|||||||||||||
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
(unaudited)
|
|||||||||||||
|
Net
sales
|
$ | 29,903 | $ | 75,127 | $ | 64,984 | $ | 148,702 | ||||||||
|
Cost
of sales
|
11,220 | 28,325 | 24,604 | 55,908 | ||||||||||||
|
Gross
profit
|
18,683 | 46,802 | 40,380 | 92,794 | ||||||||||||
|
Selling,
general, and administrative
|
20,253 | 37,652 | 40,864 | 76,424 | ||||||||||||
|
Depreciation
|
906 | 1,532 | 1,809 | 2,911 | ||||||||||||
|
Amortization
|
903 | 901 | 1,804 | 1,800 | ||||||||||||
|
Income
(loss) from operations
|
(3,379 | ) | 6,717 | (4,097 | ) | 11,659 | ||||||||||
|
Equity
in earnings of equity investee
|
224 | - | 224 | - | ||||||||||||
|
Interest
expense, net
|
(744 | ) | (746 | ) | (1,519 | ) | (1,648 | ) | ||||||||
|
Income
before income taxes
|
(3,899 | ) | 5,971 | (5,392 | ) | 10,011 | ||||||||||
|
Income
taxes benefit (provision)
|
3,266 | (2,924 | ) | 4,190 | (4,972 | ) | ||||||||||
|
Net
income (loss)
|
$ | (633 | ) | $ | 3,047 | $ | (1,202 | ) | $ | 5,039 | ||||||
|
Net
income per share available to common shareholders
|
||||||||||||||||
|
Basic
|
$ | (0.05 | ) | $ | 0.16 | $ | (0.09 | ) | $ | 0.26 | ||||||
|
Diluted
|
$ | (0.05 | ) | $ | 0.15 | $ | (0.09 | ) | $ | 0.25 | ||||||
|
Weighted
average common shares
|
||||||||||||||||
|
Basic
|
13,385 | 19,510 | 13,381 | 19,495 | ||||||||||||
|
Diluted
|
13,385 | 19,805 | 13,381 | 19,782 | ||||||||||||
|
Sales
Detail by Category:
|
||||||||||||||||
|
Training
and consulting services
|
$ | 25,566 | $ | 33,828 | $ | 56,047 | $ | 68,027 | ||||||||
|
Products
|
3,431 | 40,702 | 7,112 | 79,505 | ||||||||||||
|
Leasing
|
906 | 597 | 1,825 | 1,170 | ||||||||||||
|
Total
|
$ | 29,903 | $ | 75,127 | $ | 64,984 | $ | 148,702 | ||||||||
|
Sales
Detail by Business Unit:
|
||||||||||||||||
|
Domestic
|
$ | 18,373 | $ | 23,429 | $ | 39,099 | $ | 47,394 | ||||||||
|
International
|
10,624 | 13,397 | 24,060 | 26,964 | ||||||||||||
|
Total
Organizational Solutions Business Unit
|
28,997 | 36,826 | 63,159 | 74,358 | ||||||||||||
|
Retail
Stores
|
- | 17,628 | - | 30,762 | ||||||||||||
|
Catalog
/ e-commerce
|
- | 13,574 | - | 28,386 | ||||||||||||
|
Wholesale
|
- | 2,921 | - | 7,181 | ||||||||||||
|
CSBU
International
|
- | 2,902 | - | 5,574 | ||||||||||||
|
Other
|
- | 679 | - | 1,271 | ||||||||||||
|
Total
Consumer Solutions Business Unit
|
- | 37,704 | - | 73,174 | ||||||||||||
|
Leasing
|
906 | 597 | 1,825 | 1,170 | ||||||||||||
|
Total
|
$ | 29,903 | $ | 75,127 | $ | 64,984 | $ | 148,702 | ||||||||