[X] |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
[ ] |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Utah
(State of incorporation)
|
87-0401551
(I.R.S. employer identification number)
|
|
2200 West Parkway Boulevard
Salt Lake City, Utah
(Address of principal executive offices)
|
84119-2099
(Zip Code)
|
|
Registrant’s telephone number,
Including area code
|
(801) 817-1776
|
Title of Each Class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $.05 Par Value
|
FC
|
New York Stock Exchange
|
Large accelerated filer
|
☐ |
|
Accelerated filer
|
☒ |
|
||||
Non-accelerated filer
|
☐ |
|
Smaller reporting company
|
☒ |
|
||||
Emerging growth company
|
☐ |
May 31,
|
August 31,
|
|||||||
2019
|
2018
|
|||||||
(unaudited)
|
||||||||
ASSETS
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
10,858
|
$
|
10,153
|
||||
Accounts receivable, less allowance for doubtful accounts of $4,170 and $3,555
|
52,113
|
71,914
|
||||||
Inventories
|
3,072
|
3,160
|
||||||
Income taxes receivable
|
-
|
179
|
||||||
Prepaid expenses and other current assets
|
13,016
|
14,757
|
||||||
Total current assets
|
79,059
|
100,163
|
||||||
Property and equipment, net
|
19,171
|
21,401
|
||||||
Intangible assets, net
|
48,873
|
51,934
|
||||||
Goodwill
|
24,220
|
24,220
|
||||||
Deferred income tax assets
|
6,455
|
3,222
|
||||||
Other long-term assets
|
10,086
|
12,935
|
||||||
$
|
187,864
|
$
|
213,875
|
|||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
||||||||
Current liabilities:
|
||||||||
Current portion of term notes payable
|
$
|
6,563
|
$
|
10,313
|
||||
Current portion of financing obligation
|
2,273
|
2,092
|
||||||
Accounts payable
|
7,428
|
9,790
|
||||||
Income taxes payable
|
415
|
-
|
||||||
Deferred revenue
|
45,168
|
51,888
|
||||||
Accrued liabilities
|
20,505
|
20,761
|
||||||
Total current liabilities
|
82,352
|
94,844
|
||||||
Line of credit
|
4,123
|
11,337
|
||||||
Term notes payable, less current portion
|
1,562
|
2,500
|
||||||
Financing obligation, less current portion
|
17,258
|
18,983
|
||||||
Other liabilities
|
8,193
|
5,501
|
||||||
Deferred income tax liabilities
|
210
|
210
|
||||||
Total liabilities
|
113,698
|
133,375
|
||||||
Shareholders’ equity:
|
||||||||
Common stock, $.05 par value; 40,000 shares authorized, 27,056 shares issued
|
1,353
|
1,353
|
||||||
Additional paid-in capital
|
214,092
|
211,280
|
||||||
Retained earnings
|
53,528
|
63,569
|
||||||
Accumulated other comprehensive income
|
326
|
341
|
||||||
Treasury stock at cost, 13,097 shares and 13,159 shares
|
(195,133
|
)
|
(196,043
|
)
|
||||
Total shareholders’ equity
|
74,166
|
80,500
|
||||||
$
|
187,864
|
$
|
213,875
|
Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
May 31,
|
May 31,
|
May 31,
|
May 31,
|
|||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
(unaudited)
|
(unaudited)
|
|||||||||||||||
Net sales
|
$
|
56,006
|
$
|
50,461
|
$
|
160,191
|
$
|
144,939
|
||||||||
Cost of sales
|
16,342
|
15,545
|
48,379
|
44,411
|
||||||||||||
Gross profit
|
39,664
|
34,916
|
111,812
|
100,528
|
||||||||||||
Selling, general, and administrative
|
38,713
|
34,910
|
109,282
|
103,830
|
||||||||||||
Depreciation
|
1,556
|
1,267
|
4,806
|
3,547
|
||||||||||||
Amortization
|
1,259
|
1,326
|
3,797
|
4,117
|
||||||||||||
Loss from operations
|
(1,864
|
)
|
(2,587
|
)
|
(6,073
|
)
|
(10,966
|
)
|
||||||||
Interest income
|
8
|
35
|
30
|
94
|
||||||||||||
Interest expense
|
(562
|
)
|
(738
|
)
|
(1,817
|
)
|
(1,979
|
)
|
||||||||
Discount accretion on related party receivable
|
-
|
202
|
258
|
258
|
||||||||||||
Loss before income taxes
|
(2,418
|
)
|
(3,088
|
)
|
(7,602
|
)
|
(12,593
|
)
|
||||||||
Income tax benefit
|
394
|
554
|
704
|
4,927
|
||||||||||||
Net loss
|
$
|
(2,024
|
)
|
$
|
(2,534
|
)
|
$
|
(6,898
|
)
|
$
|
(7,666
|
)
|
||||
Net loss per share:
|
||||||||||||||||
Basic and diluted
|
$
|
(0.14
|
)
|
$
|
(0.18
|
)
|
$
|
(0.49
|
)
|
$
|
(0.55
|
)
|
||||
Weighted average number of common shares:
|
||||||||||||||||
Basic and diluted
|
13,963
|
13,896
|
13,939
|
13,829
|
||||||||||||
COMPREHENSIVE LOSS
|
||||||||||||||||
Net loss
|
$
|
(2,024
|
)
|
$
|
(2,534
|
)
|
$
|
(6,898
|
)
|
$
|
(7,666
|
)
|
||||
Foreign currency translation adjustments,
|
||||||||||||||||
net of income tax benefit (provision)
|
||||||||||||||||
of $8, $50, $8, and $(44)
|
(144
|
)
|
(187
|
)
|
(15
|
)
|
165
|
|||||||||
Comprehensive loss
|
$
|
(2,168
|
)
|
$
|
(2,721
|
)
|
$
|
(6,913
|
)
|
$
|
(7,501
|
)
|
Three Quarters Ended
|
||||||||
May 31,
|
May 31,
|
|||||||
2019
|
2018
|
|||||||
(unaudited)
|
||||||||
CASH FLOWS FROM OPERATING ACTIVITIES
|
||||||||
Net loss
|
$
|
(6,898
|
)
|
$
|
(7,666
|
)
|
||
Adjustments to reconcile net loss to net cash provided
|
||||||||
by operating activities:
|
||||||||
Depreciation and amortization
|
8,619
|
7,725
|
||||||
Amortization of capitalized curriculum costs
|
3,951
|
3,923
|
||||||
Stock-based compensation expense
|
3,040
|
2,182
|
||||||
Deferred income taxes
|
(2,207
|
)
|
(6,605
|
)
|
||||
Change in fair value of contingent consideration liabilities
|
1,145
|
789
|
||||||
Changes in assets and liabilities, net of effect of acquired business:
|
||||||||
Decrease in accounts receivable, net
|
19,461
|
15,489
|
||||||
Decrease (increase) in inventories
|
158
|
(401
|
)
|
|||||
Decrease in prepaid expenses and other assets
|
2,585
|
1,545
|
||||||
Decrease in accounts payable and accrued liabilities
|
(2,792
|
)
|
(4,541
|
)
|
||||
Decrease in deferred revenue
|
(8,384
|
)
|
(2,219
|
)
|
||||
Increase (decrease) in income taxes payable/receivable
|
358
|
(564
|
)
|
|||||
Decrease in other long-term liabilities
|
(412
|
)
|
(1,065
|
)
|
||||
Net cash provided by operating activities
|
18,624
|
8,592
|
||||||
CASH FLOWS FROM INVESTING ACTIVITIES
|
||||||||
Purchases of property and equipment
|
(2,996
|
)
|
(4,981
|
)
|
||||
Curriculum development costs
|
(1,821
|
)
|
(2,445
|
)
|
||||
Acquisition of business, net of cash acquired
|
(32
|
)
|
(1,108
|
)
|
||||
Net cash used for investing activities
|
(4,849
|
)
|
(8,534
|
)
|
||||
CASH FLOWS FROM FINANCING ACTIVITIES
|
||||||||
Proceeds from line of credit borrowings
|
66,451
|
71,107
|
||||||
Payments on line of credit borrowings
|
(73,665
|
)
|
(59,619
|
)
|
||||
Principal payments on term notes payable
|
(4,688
|
)
|
(4,687
|
)
|
||||
Principal payments on financing obligation
|
(1,544
|
)
|
(1,378
|
)
|
||||
Purchases of common stock for treasury
|
(12
|
)
|
(2,005
|
)
|
||||
Payment of contingent consideration liabilities
|
(483
|
)
|
(1,188
|
)
|
||||
Proceeds from sales of common stock held in treasury
|
694
|
559
|
||||||
Net cash provided by (used for) financing activities
|
(13,247
|
)
|
2,789
|
|||||
Effect of foreign currency exchange rates on cash and cash equivalents
|
177
|
3
|
||||||
Net increase in cash and cash equivalents
|
705
|
2,850
|
||||||
Cash and cash equivalents at the beginning of the period
|
10,153
|
8,924
|
||||||
Cash and cash equivalents at the end of the period
|
$
|
10,858
|
$
|
11,774
|
||||
Supplemental disclosure of cash flow information:
|
||||||||
Cash paid for income taxes
|
$
|
1,247
|
$
|
2,118
|
||||
Cash paid for interest
|
1,855
|
1,947
|
||||||
Non-cash investing and financing activities:
|
||||||||
Purchases of property and equipment financed by accounts payable
|
$
|
597
|
$
|
1,344
|
||||
Consideration for business acquisition from liabilities of acquiree
|
798
|
-
|
Accumulated | ||||||||||||||||||||||||||||
Common
|
Common
|
Additional
|
Other
|
Treasury
|
Treasury
|
|||||||||||||||||||||||
Stock
|
Stock
|
Paid-In
|
Retained
|
Comprehensive
|
Stock
|
Stock
|
||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Income
|
Shares
|
Amount
|
||||||||||||||||||||||
Balance at August 31, 2018
|
27,056
|
$
|
1,353
|
$
|
211,280
|
$
|
63,569
|
$
|
341
|
(13,159
|
)
|
$
|
(196,043
|
)
|
||||||||||||||
Issuance of common stock from
|
||||||||||||||||||||||||||||
treasury
|
64
|
11
|
166
|
|||||||||||||||||||||||||
Purchase of treasury shares
|
(7
|
)
|
||||||||||||||||||||||||||
Stock-based compensation
|
946
|
|||||||||||||||||||||||||||
Cumulative translation
|
||||||||||||||||||||||||||||
adjustments
|
(309
|
)
|
||||||||||||||||||||||||||
Cumulative effect of
|
||||||||||||||||||||||||||||
accounting change
|
(3,143
|
)
|
||||||||||||||||||||||||||
Net loss
|
(1,357
|
)
|
||||||||||||||||||||||||||
Balance at November 30, 2018
|
27,056
|
1,353
|
212,290
|
59,069
|
32
|
(13,148
|
)
|
(195,884
|
)
|
|||||||||||||||||||
Issuance of common stock from
|
||||||||||||||||||||||||||||
treasury
|
53
|
11
|
162
|
|||||||||||||||||||||||||
Purchase of treasury shares
|
(5
|
)
|
||||||||||||||||||||||||||
Stock-based compensation
|
1,043
|
|||||||||||||||||||||||||||
Restricted stock award
|
(426
|
)
|
28
|
426
|
||||||||||||||||||||||||
Cumulative translation
|
||||||||||||||||||||||||||||
adjustments
|
438
|
|||||||||||||||||||||||||||
Net loss
|
(3,517
|
)
|
||||||||||||||||||||||||||
Balance at February 28, 2019
|
27,056
|
1,353
|
212,960
|
55,552
|
470
|
(13,109
|
)
|
(195,301
|
)
|
|||||||||||||||||||
Issuance of common stock from
|
||||||||||||||||||||||||||||
treasury
|
81
|
12
|
168
|
|||||||||||||||||||||||||
Stock-based compensation
|
1,051
|
|||||||||||||||||||||||||||
Cumulative translation
|
||||||||||||||||||||||||||||
adjustments
|
(144
|
)
|
||||||||||||||||||||||||||
Net loss
|
(2,024
|
)
|
||||||||||||||||||||||||||
Balance at May 31, 2019
|
27,056
|
$
|
1,353
|
$
|
214,092
|
$
|
53,528
|
$
|
326
|
(13,097
|
)
|
$
|
(195,133
|
)
|
Accumulated
|
||||||||||||||||||||||||||||
Common
|
Common
|
Additional
|
Other
|
Treasury
|
Treasury
|
|||||||||||||||||||||||
Stock
|
Stock
|
Paid-In
|
Retained
|
Comprehensive
|
Stock
|
Stock
|
||||||||||||||||||||||
Shares
|
Amount
|
Capital
|
Earnings
|
Income
|
Shares
|
Amount
|
||||||||||||||||||||||
Balance at August 31, 2017
|
27,056
|
$
|
1,353
|
$
|
212,484
|
$
|
69,456
|
$
|
667
|
(13,414
|
)
|
$
|
(198,895
|
)
|
||||||||||||||
Issuance of common stock from
|
||||||||||||||||||||||||||||
treasury
|
(3,600
|
)
|
256
|
3,758
|
||||||||||||||||||||||||
Purchases of common shares
|
||||||||||||||||||||||||||||
for treasury
|
(103
|
)
|
(1,968
|
)
|
||||||||||||||||||||||||
Stock-based compensation
|
956
|
|||||||||||||||||||||||||||
Cumulative translation
|
||||||||||||||||||||||||||||
adjustments
|
(77
|
)
|
||||||||||||||||||||||||||
Net loss
|
(2,392
|
)
|
||||||||||||||||||||||||||
Balance at November 30, 2017
|
27,056
|
1,353
|
209,840
|
67,064
|
590
|
(13,261
|
)
|
(197,105
|
)
|
|||||||||||||||||||
Issuance of common stock from
|
||||||||||||||||||||||||||||
treasury
|
(264
|
)
|
61
|
456
|
||||||||||||||||||||||||
Purchases of common shares
|
||||||||||||||||||||||||||||
for treasury
|
(2
|
)
|
(38
|
)
|
||||||||||||||||||||||||
Stock-based compensation
|
779
|
|||||||||||||||||||||||||||
Restricted stock award
|
(348
|
)
|
23
|
348
|
||||||||||||||||||||||||
Cumulative translation
|
||||||||||||||||||||||||||||
adjustments
|
429
|
|||||||||||||||||||||||||||
Net loss
|
(2,740
|
)
|
||||||||||||||||||||||||||
Balance at February 28, 2018
|
27,056
|
|
1,353
|
|
210,007
|
|
64,324
|
|
1,019
|
(13,179
|
)
|
|
(196,339
|
)
|
||||||||||||||
Issuance of common stock from
|
||||||||||||||||||||||||||||
treasury
|
68
|
10
|
142
|
|||||||||||||||||||||||||
Stock-based compensation
|
446
|
|||||||||||||||||||||||||||
Cumulative translation
|
||||||||||||||||||||||||||||
adjustments
|
(187
|
)
|
||||||||||||||||||||||||||
Net loss
|
(2,534
|
)
|
||||||||||||||||||||||||||
Balance at May 31, 2018
|
27,056
|
$
|
1,353
|
$
|
210,521
|
$
|
61,790
|
$
|
832
|
(13,169
|
)
|
$
|
(196,197
|
)
|
1.
|
World Class Content – Our content is principle-centered and based on natural laws of human behavior and effectiveness. When our content is applied consistently in an
organization, we believe the culture of that organization will change to enable the organization to achieve their own great purposes. Our content is designed to build new skillsets, establish new mindsets, and provide enabling toolsets to
our clients.
|
2.
|
Breadth and Scalability of Delivery Options – We have a wide range of content delivery options, including: subscription offerings, which includes the All Access Pass
(available in multiple languages), The Leader in Me membership, and other subscription offerings; intellectual property licenses; on-site training; training led through certified facilitators;
on-line learning; blended learning; and organization-wide transformational processes, including consulting and coaching services.
|
3.
|
Global Capability – We have sales professionals in the United States and Canada who serve clients in the private sector and in governmental organizations;
wholly-owned subsidiaries in Australia, China, Japan, the United Kingdom and new subsidiaries in Germany, Switzerland, and Austria; and we contract with licensee partners who deliver our content and provide related services in over 150
other countries and territories around the world.
|
August 31,
|
ASC 606
|
September 1,
|
||||||||||
2018
|
Adjustments
|
2018
|
||||||||||
Assets:
|
||||||||||||
Other current assets
|
$
|
10,893
|
$
|
109
|
$
|
11,002
|
||||||
Deferred income tax assets
|
3,222
|
1,005
|
4,227
|
|||||||||
Liabilities and Shareholders' Equity:
|
||||||||||||
Deferred revenue
|
51,888
|
2,008
|
53,896
|
|||||||||
Other liabilities
|
5,501
|
2,249
|
7,750
|
|||||||||
Retained earnings
|
63,569
|
(3,143
|
)
|
60,426
|
May 31,
|
May 31,
|
|||||||||||
2019
|
2019
|
Impact of
|
||||||||||
As Reported
|
Without ASC 606
|
ASC 606
|
||||||||||
Revenue
|
$
|
56,006
|
$
|
56,160
|
$
|
(154
|
)
|
|||||
Cost of sales
|
16,342
|
16,342
|
-
|
|||||||||
Selling, general, and administrative
|
38,713
|
38,686
|
27
|
|||||||||
Income tax benefit
|
394
|
349
|
45
|
|||||||||
Net loss
|
(2,024
|
)
|
(1,888
|
)
|
(136
|
)
|
||||||
Net loss per share:
|
||||||||||||
Basic and diluted
|
$
|
(0.14
|
)
|
$
|
(0.14
|
)
|
Three Quarters
|
Three Quarters
|
|||||||||||
Ended May 31,
|
Ended May 31,
|
|||||||||||
2019
|
2019
|
Impact of
|
||||||||||
As Reported
|
Without ASC 606
|
ASC 606
|
||||||||||
Revenue
|
$
|
160,191
|
$
|
158,813
|
$
|
1,378
|
||||||
Cost of sales
|
48,379
|
48,379
|
-
|
|||||||||
Selling, general, and administrative
|
109,282
|
109,173
|
109
|
|||||||||
Income tax benefit
|
704
|
387
|
317
|
|||||||||
Net loss
|
(6,898
|
)
|
(8,484
|
)
|
1,586
|
|||||||
Net loss per share:
|
||||||||||||
Basic and diluted
|
$
|
(0.49
|
)
|
$
|
(0.61
|
)
|
May 31,
|
May 31,
|
|||||||||||
2019
|
2019
|
Impact of
|
||||||||||
As Reported
|
Without ASC 606
|
ASC 606
|
||||||||||
Assets:
|
||||||||||||
Prepaid expenses and other current assets
|
$
|
13,016
|
$
|
12,907
|
$
|
109
|
||||||
Deferred income tax assets
|
6,455
|
6,772
|
(317
|
)
|
||||||||
Total assets
|
187,864
|
188,072
|
(208
|
)
|
||||||||
Liabilities and Shareholders' Equity:
|
||||||||||||
Deferred revenue
|
45,168
|
43,715
|
1,453
|
|||||||||
Other liabilities
|
8,193
|
8,268
|
(75
|
)
|
||||||||
Retained earnings
|
53,528
|
55,114
|
(1,586
|
)
|
||||||||
Total liabilities and shareholders' equity
|
187,864
|
188,072
|
(208
|
)
|
•
|
Identification of the contract with a customer
|
•
|
Identification of the performance obligations in the contract
|
•
|
Determination of the transaction price
|
•
|
Allocation of the transaction price to the performance obligations in the contract
|
•
|
Recognition of revenue when the Company satisfies the performance obligations
|
Cash paid at closing
|
$
|
159
|
||
Accounts receivable from GSA licensee
|
798
|
|||
Total purchase price
|
$
|
957
|
Cash acquired
|
$
|
127
|
||
Accounts receivable
|
564
|
|||
Inventories
|
80
|
|||
Prepaid and other current assets
|
45
|
|||
Intangible assets
|
741
|
|||
Property and equipment
|
27
|
|||
Other long-term assets
|
11
|
|||
Assets acquired
|
1,595
|
|||
Accounts payable
|
(208
|
)
|
||
Accrued liabilities
|
(383
|
)
|
||
Income taxes payable
|
(47
|
)
|
||
Liabilities assumed
|
(638
|
)
|
||
$
|
957
|
Weighted Average
|
|||||
Description
|
Amount
|
Life
|
|||
Reacquisition of license rights
|
$
|
360
|
3 years
|
||
Localized content
|
202
|
3 years
|
|||
Customer relationships
|
179
|
3 years
|
|||
$
|
741
|
May 31,
|
August 31,
|
|||||||
2019
|
2018
|
|||||||
Finished goods
|
$
|
3,041
|
$
|
3,130
|
||||
Raw materials
|
31
|
30
|
||||||
$
|
3,072
|
$
|
3,160
|
Balance at
|
Change in
|
Balance at
|
||||||||||||||
August 31, 2018
|
Fair Value
|
Payments
|
May 31, 2019
|
|||||||||||||
RGP Acquisition
|
$
|
606
|
$
|
1,096
|
$
|
-
|
$
|
1,702
|
||||||||
Jhana Acquisition
|
3,942
|
49
|
(483
|
)
|
3,508
|
|||||||||||
$
|
4,548
|
$
|
1,145
|
$
|
(483
|
)
|
$
|
5,210
|
Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
May 31,
|
May 31,
|
May 31,
|
May 31,
|
|||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Long-term incentive awards
|
$
|
826
|
$
|
227
|
$
|
2,384
|
$
|
1,601
|
||||||||
Restricted stock awards
|
175
|
175
|
525
|
467
|
||||||||||||
Employee stock purchase plan
|
50
|
44
|
131
|
114
|
||||||||||||
$
|
1,051
|
$
|
446
|
$
|
3,040
|
$
|
2,182
|
Weighted-Average
|
||||||||
Grant Date
|
||||||||
Number of
|
Fair Value
|
|||||||
Shares
|
Per Share
|
|||||||
Restricted stock awards at
|
||||||||
August 31, 2018
|
23,338
|
$
|
30.00
|
|||||
Granted
|
28,525
|
24.54
|
||||||
Forfeited
|
-
|
-
|
||||||
Vested
|
(23,338
|
)
|
30.00
|
|||||
Restricted stock awards at
|
||||||||
May 31, 2019
|
28,525
|
$
|
24.54
|
•
|
Time-Based Award Shares – Twenty-five percent of the 2019 LTIP award shares vest to participants after three years of service. The total number of shares that may be
earned by participants after three years of service is 36,470 shares. The number of shares awarded in this tranche is not variable and will not fluctuate based on financial measures.
|
•
|
Performance-Based Award Shares – The remaining two tranches of the 2019 LTIP award are based on fiscal 2021 qualified adjusted earnings before interest, taxes,
depreciation, and amortization (Adjusted EBITDA) and fiscal 2021 subscription service sales, respectively. The number of shares that will vest to participants for these two tranches is variable and may be 50 percent of the award (minimum
award threshold) up to 200 percent of the participant’s award (maximum threshold). The number of shares that may be earned for achieving 100 percent of the performance-based objectives (target award threshold) totals 109,409 shares. The
maximum number of shares that may be awarded in connection with the performance-based tranches of the 2019 LTIP totals 218,818 shares.
|
Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
May 31,
|
May 31,
|
May 31,
|
May 31,
|
|||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Numerator for basic and
|
||||||||||||||||
diluted loss per share:
|
||||||||||||||||
Net loss
|
$
|
(2,024
|
)
|
$
|
(2,534
|
)
|
$
|
(6,898
|
)
|
$
|
(7,666
|
)
|
||||
Denominator for basic and
|
||||||||||||||||
diluted loss per share:
|
||||||||||||||||
Basic weighted average shares
|
||||||||||||||||
outstanding
|
13,963
|
13,896
|
13,939
|
13,829
|
||||||||||||
Effect of dilutive securities:
|
||||||||||||||||
Stock options and other
|
||||||||||||||||
stock-based awards
|
-
|
-
|
-
|
-
|
||||||||||||
Diluted weighted average
|
||||||||||||||||
shares outstanding
|
13,963
|
13,896
|
13,939
|
13,829
|
||||||||||||
EPS Calculations:
|
||||||||||||||||
Net loss per share:
|
||||||||||||||||
Basic and diluted
|
$
|
(0.14
|
)
|
$
|
(0.18
|
)
|
$
|
(0.49
|
)
|
$
|
(0.55
|
)
|
•
|
Direct Offices – Our Direct Office segment has a depth of expertise in helping organizations solve problems that require changes in human
behavior, including leadership, productivity, execution, trust, and sales performance. We have a variety of principle-based offerings that help build winning and profitable cultures. This segment includes our sales personnel that serve
the United States and Canada; our international sales offices located in Japan, China, the United Kingdom, Australia, and our new operations in Germany, Switzerland, and Austria; our government services sales channel; and our public
programs operations.
|
•
|
International Licensees – Our independently owned international licensees provide our offerings and services in countries where we do not have a
directly-owned office. These licensee partners allow us to expand the reach of our services to large multinational organizations as well as smaller organizations in their countries. This segment’s results are primarily comprised of
royalty revenues received from these licensees.
|
•
|
Education Practice – Centered around the principles found in The Leader in Me, the Education practice is
dedicated to helping educational institutions build a culture that will produce great results. We believe these results are manifested by increases in student performance, improved school culture, decreased disciplinary issues, and
increased teacher engagement and parental involvement. This segment includes our domestic and international Education practice operations, which are focused on sales to educational institutions such as elementary schools, high schools, and
colleges and universities.
|
•
|
Corporate and Other – Our corporate and other information includes leasing operations, shipping and handling revenues, and certain corporate
administrative expenses.
|
Sales to
|
||||||||||||
Quarter Ended
|
External
|
Adjusted
|
||||||||||
May 31, 2019
|
Customers
|
Gross Profit
|
EBITDA
|
|||||||||
Enterprise Division:
|
||||||||||||
Direct offices
|
$
|
40,387
|
$
|
29,836
|
$
|
4,520
|
||||||
International licensees
|
3,014
|
2,432
|
1,281
|
|||||||||
43,401
|
32,268
|
5,801
|
||||||||||
Education practice
|
11,088
|
6,846
|
(181
|
)
|
||||||||
Corporate and eliminations
|
1,517
|
550
|
(2,549
|
)
|
||||||||
Consolidated
|
$
|
56,006
|
$
|
39,664
|
$
|
3,071
|
||||||
Quarter Ended
|
||||||||||||
May 31, 2018
|
||||||||||||
Enterprise Division:
|
||||||||||||
Direct offices
|
$
|
36,331
|
$
|
26,444
|
$
|
2,190
|
||||||
International licensees
|
3,543
|
2,735
|
1,651
|
|||||||||
39,874
|
29,179
|
3,841
|
||||||||||
Education practice
|
9,235
|
5,501
|
(901
|
)
|
||||||||
Corporate and eliminations
|
1,352
|
236
|
(2,352
|
)
|
||||||||
Consolidated
|
$
|
50,461
|
$
|
34,916
|
$
|
588
|
||||||
Three Quarters Ended
|
||||||||||||
May 31, 2019
|
||||||||||||
Enterprise Division:
|
||||||||||||
Direct offices
|
$
|
115,271
|
$
|
84,200
|
$
|
10,703
|
||||||
International licensees
|
9,598
|
7,515
|
4,127
|
|||||||||
124,869
|
91,715
|
14,830
|
||||||||||
Education practice
|
31,132
|
18,668
|
(1,355
|
)
|
||||||||
Corporate and eliminations
|
4,190
|
1,429
|
(6,272
|
)
|
||||||||
Consolidated
|
$
|
160,191
|
$
|
111,812
|
$
|
7,203
|
||||||
Three Quarters Ended
|
||||||||||||
May 31, 2018
|
||||||||||||
Enterprise Division:
|
||||||||||||
Direct offices
|
$
|
103,802
|
$
|
75,886
|
$
|
5,913
|
||||||
International licensees
|
9,909
|
7,601
|
4,222
|
|||||||||
113,711
|
83,487
|
10,135
|
||||||||||
Education practice
|
27,418
|
16,094
|
(2,894
|
)
|
||||||||
Corporate and eliminations
|
3,810
|
947
|
(6,717
|
)
|
||||||||
Consolidated
|
$
|
144,939
|
$
|
100,528
|
$
|
524
|
Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
May 31,
|
May 31,
|
May 31,
|
May 31,
|
|||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Segment Adjusted EBITDA
|
$
|
5,620
|
$
|
2,940
|
$
|
13,475
|
$
|
7,241
|
||||||||
Corporate expenses
|
(2,549
|
)
|
(2,352
|
)
|
(6,272
|
)
|
(6,717
|
)
|
||||||||
Consolidated Adjusted EBITDA
|
3,071
|
588
|
7,203
|
524
|
||||||||||||
Stock-based compensation expense
|
(1,051
|
)
|
(446
|
)
|
(3,040
|
)
|
(2,182
|
)
|
||||||||
Increase in contingent consideration liabilities
|
(1,069
|
)
|
(136
|
)
|
(1,145
|
)
|
(789
|
)
|
||||||||
Licensee transition costs
|
-
|
-
|
(488
|
)
|
-
|
|||||||||||
ERP system implementation costs
|
-
|
-
|
-
|
(855
|
)
|
|||||||||||
Depreciation
|
(1,556
|
)
|
(1,267
|
)
|
(4,806
|
)
|
(3,547
|
)
|
||||||||
Amortization
|
(1,259
|
)
|
(1,326
|
)
|
(3,797
|
)
|
(4,117
|
)
|
||||||||
Loss from operations
|
(1,864
|
)
|
(2,587
|
)
|
(6,073
|
)
|
(10,966
|
)
|
||||||||
Interest income
|
8
|
35
|
30
|
94
|
||||||||||||
Interest expense
|
(562
|
)
|
(738
|
)
|
(1,817
|
)
|
(1,979
|
)
|
||||||||
Discount accretion on related
|
||||||||||||||||
party receivable
|
-
|
202
|
258
|
258
|
||||||||||||
Loss before income taxes
|
(2,418
|
)
|
(3,088
|
)
|
(7,602
|
)
|
(12,593
|
)
|
||||||||
Income tax benefit
|
394
|
554
|
704
|
4,927
|
||||||||||||
Net loss
|
$
|
(2,024
|
)
|
$
|
(2,534
|
)
|
$
|
(6,898
|
)
|
$
|
(7,666
|
)
|
Quarter Ended
|
Three Quarters Ended
|
|||||||||||||||
May 31,
|
May 31,
|
May 31,
|
May 31,
|
|||||||||||||
2019
|
2018
|
2019
|
2018
|
|||||||||||||
Americas
|
$
|
44,919
|
$
|
38,531
|
$
|
125,676
|
$
|
109,283
|
||||||||
Asia Pacific
|
7,914
|
8,337
|
24,592
|
25,827
|
||||||||||||
Europe/Middle East/Africa
|
3,173
|
3,593
|
9,923
|
9,829
|
||||||||||||
$
|
56,006
|
$
|
50,461
|
$
|
160,191
|
$
|
144,939
|
Quarter Ended
|
Services and
|
Leases and
|
||||||||||||||||||
May 31, 2019
|
Products
|
Subscriptions
|
Royalties
|
Other
|
Consolidated
|
|||||||||||||||
Enterprise Division:
|
||||||||||||||||||||
Direct offices
|
$
|
26,295
|
$
|
13,363
|
$
|
729
|
$
|
-
|
$
|
40,387
|
||||||||||
International licensees
|
403
|
-
|
2,611
|
-
|
3,014
|
|||||||||||||||
26,698
|
13,363
|
3,340
|
-
|
43,401
|
||||||||||||||||
Education practice
|
5,065
|
5,564
|
459
|
-
|
11,088
|
|||||||||||||||
Corporate and eliminations
|
-
|
-
|
-
|
1,517
|
1,517
|
|||||||||||||||
Consolidated
|
$
|
31,763
|
$
|
18,927
|
$
|
3,799
|
$
|
1,517
|
$
|
56,006
|
||||||||||
Quarter Ended
|
||||||||||||||||||||
May 31, 2018
|
||||||||||||||||||||
Enterprise Division:
|
||||||||||||||||||||
Direct offices
|
$
|
24,842
|
$
|
11,137
|
$
|
352
|
$
|
-
|
$
|
36,331
|
||||||||||
International licensees
|
811
|
-
|
2,732
|
-
|
3,543
|
|||||||||||||||
25,653
|
11,137
|
3,084
|
-
|
39,874
|
||||||||||||||||
Education practice
|
4,425
|
3,732
|
1,078
|
-
|
9,235
|
|||||||||||||||
Corporate and eliminations
|
-
|
-
|
-
|
1,352
|
1,352
|
|||||||||||||||
Consolidated
|
$
|
30,078
|
$
|
14,869
|
$
|
4,162
|
$
|
1,352
|
$
|
50,461
|
||||||||||
Three Quarters Ended
|
||||||||||||||||||||
May 31, 2019
|
||||||||||||||||||||
Enterprise Division:
|
||||||||||||||||||||
Direct offices
|
$
|
74,405
|
$
|
38,453
|
$
|
2,413
|
$
|
-
|
$
|
115,271
|
||||||||||
International licensees
|
1,793
|
-
|
7,805
|
-
|
9,598
|
|||||||||||||||
76,198
|
38,453
|
10,218
|
-
|
124,869
|
||||||||||||||||
Education practice
|
11,565
|
16,644
|
2,923
|
-
|
31,132
|
|||||||||||||||
Corporate and eliminations
|
-
|
-
|
-
|
4,190
|
4,190
|
|||||||||||||||
Consolidated
|
$
|
87,763
|
$
|
55,097
|
$
|
13,141
|
$
|
4,190
|
$
|
160,191
|
||||||||||
Three Quarters Ended
|
||||||||||||||||||||
May 31, 2018
|
||||||||||||||||||||
Enterprise Division:
|
||||||||||||||||||||
Direct offices
|
$
|
71,823
|
$
|
30,236
|
$
|
1,743
|
$
|
-
|
$
|
103,802
|
||||||||||
International licensees
|
1,870
|
-
|
8,039
|
-
|
9,909
|
|||||||||||||||
73,693
|
30,236
|
9,782
|
-
|
113,711
|
||||||||||||||||
Education practice
|
12,606
|
11,214
|
3,598
|
-
|
27,418
|
|||||||||||||||
Corporate and eliminations
|
-
|
-
|
-
|
3,810
|
3,810
|
|||||||||||||||
Consolidated
|
$
|
86,299
|
$
|
41,450
|
$
|
13,380
|
$
|
3,810
|
$
|
144,939
|
May 31,
|
August 31,
|
|||||||
2019
|
2018
|
|||||||
Other current assets
|
$
|
860
|
$
|
1,123
|
||||
Other long-term assets
|
-
|
411
|
||||||
$
|
860
|
$
|
1,534
|
•
|
Sales – Our consolidated net sales for the quarter ended May 31, 2019 increased 11 percent, or $5.5
million, to $56.0 million, compared with the third quarter of fiscal 2018. Net sales for the quarter were impacted by $0.6 million of unfavorable foreign exchange rates, which primarily affected our Enterprise Division sales. Excluding
the impact of foreign exchange, our sales grew 12 percent compared with the third quarter of the prior year. Our third quarter sales were impacted by significantly increased subscription and subscription-related sales at both our domestic
and international locations, increased onsite presentations, increased Education segment revenues, and the acquisition of our GSA licensee. These increases were partially offset by decreased legacy facilitator and international licensee
revenues during the quarter.
|
•
|
Impact of ASC 606 Adoption (Revenue Recognition) – On September 1, 2018, we adopted the new revenue recognition standard commonly referred to as
ASC 606 (Note 1). This new standard had a $0.2 million unfavorable impact on our consolidated sales during the third quarter, which was primarily recognized in our Education practice. The impact of adopting ASC 606 increased our loss from
operations and pre-tax loss by $0.2 million for the quarter ended May 31, 2019.
|
•
|
Cost of Sales/Gross Profit – Our cost of goods sold was $16.3 million for the quarter ending May 31, 2019, compared with $15.5 million in the
corresponding quarter of the prior year. Gross profit for the third quarter of fiscal 2019 increased 14 percent to $39.7 million compared with $34.9 million in the third quarter of fiscal 2018 and increased primarily due to increased
sales. Our consolidated gross margin remained strong at 70.8 percent of sales compared with 69.2 percent in the prior year.
|
•
|
Operating Expenses – Our operating expenses for the quarter ended May 31, 2019 increased $4.0 million compared with the prior year, which was
primarily due to a $3.8 million increase in selling, general, and administrative (SG&A) expenses and a $0.3 million increase in depreciation expense. Increased SG&A expenses were primarily related to increased associate costs
resulting from increased commissions and bonuses on higher sales, new sales and sales related personnel, a $0.9 million increase in the fair value of contingent consideration liabilities, increased non-cash stock-based compensation, and the
addition of GSA personnel, who were formerly employed by a licensee. Increased SG&A and depreciation expense were partially offset by decreased amortization expense.
|
•
|
Operating Loss and Net Loss – Our loss from operations for the quarter ended May 31, 2019 improved to $(1.9) million compared with a loss of $(2.6)
million in the third quarter of fiscal 2018. Our operating results for the third quarter of fiscal 2019 were negatively impacted by $0.3 million of unfavorable foreign exchange rates when compared with the prior year. Net loss for the
third quarter of fiscal 2019 was $(2.0) million, or $(.14) per share, compared with a net loss of $(2.5) million, or $(.18) per share, in the prior year. Our net loss during the third quarter of fiscal 2019 was also impacted by a lower
effective tax benefit rate that was the result of changes enacted by the 2017 Tax Act.
|
Quarter Ended
|
Quarter Ended
|
|||||||||||||||||||
May 31,
|
% of
|
May 31,
|
% of
|
|||||||||||||||||
2019
|
Sales
|
2018
|
Sales
|
Change
|
||||||||||||||||
Sales
|
$
|
40,387
|
100.0
|
$
|
36,331
|
100.0
|
$
|
4,056
|
||||||||||||
Cost of sales
|
10,551
|
26.1
|
9,887
|
27.2
|
664
|
|||||||||||||||
Gross profit
|
29,836
|
73.9
|
26,444
|
72.8
|
3,392
|
|||||||||||||||
SG&A expenses
|
25,316
|
62.7
|
24,254
|
66.8
|
1,062
|
|||||||||||||||
Adjusted EBITDA
|
$
|
4,520
|
11.2
|
$
|
2,190
|
6.0
|
$
|
2,330
|
Quarter Ended
|
Quarter Ended
|
|||||||||||||||||||
May 31,
|
% of
|
May 31,
|
% of
|
|||||||||||||||||
2019
|
Sales
|
2018
|
Sales
|
Change
|
||||||||||||||||
Sales
|
$
|
3,014
|
100.0
|
$
|
3,543
|
100.0
|
$
|
(529
|
)
|
|||||||||||
Cost of sales
|
582
|
19.3
|
808
|
22.8
|
(226
|
)
|
||||||||||||||
Gross profit
|
2,432
|
80.7
|
2,735
|
77.2
|
(303
|
)
|
||||||||||||||
SG&A expenses
|
1,151
|
38.2
|
1,084
|
30.6
|
67
|
|||||||||||||||
Adjusted EBITDA
|
$
|
1,281
|
42.5
|
$
|
1,651
|
46.6
|
$
|
(370
|
)
|
Quarter Ended
|
Quarter Ended
|
|||||||||||||||||||
May 31,
|
% of
|
May 31,
|
% of
|
|||||||||||||||||
2019
|
Sales
|
2018
|
Sales
|
Change
|
||||||||||||||||
Sales
|
$
|
11,088
|
100.0
|
$
|
9,235
|
100.0
|
$
|
1,853
|
||||||||||||
Cost of sales
|
4,242
|
38.3
|
3,734
|
40.4
|
508
|
|||||||||||||||
Gross profit
|
6,846
|
61.7
|
5,501
|
59.6
|
1,345
|
|||||||||||||||
SG&A expenses
|
7,027
|
63.4
|
6,402
|
69.3
|
625
|
|||||||||||||||
Adjusted EBITDA
|
$
|
(181
|
)
|
(1.6
|
)
|
$
|
(901
|
)
|
(9.8
|
)
|
$
|
720
|
Three Quarters
|
Three Quarters
|
|||||||||||||||||||
Ended
|
Ended
|
|||||||||||||||||||
May 31,
|
% of
|
May 31,
|
% of
|
|||||||||||||||||
2019
|
Sales
|
2018
|
Sales
|
Change
|
||||||||||||||||
Sales
|
$
|
115,271
|
100.0
|
$
|
103,802
|
100.0
|
$
|
11,469
|
||||||||||||
Cost of sales
|
31,071
|
27.0
|
27,916
|
26.9
|
3,155
|
|||||||||||||||
Gross profit
|
84,200
|
73.0
|
75,886
|
73.1
|
8,314
|
|||||||||||||||
SG&A expenses
|
73,497
|
63.8
|
69,973
|
67.4
|
3,524
|
|||||||||||||||
Adjusted EBITDA
|
$
|
10,703
|
9.3
|
$
|
5,913
|
5.7
|
$
|
4,790
|
Three Quarters
|
Three Quarters
|
|||||||||||||||||||
Ended
|
Ended
|
|||||||||||||||||||
May 31,
|
% of
|
May 31,
|
% of
|
|||||||||||||||||
2019
|
Sales
|
2018
|
Sales
|
Change
|
||||||||||||||||
Sales
|
$
|
9,598
|
100.0
|
$
|
9,909
|
100.0
|
$
|
(311
|
)
|
|||||||||||
Cost of sales
|
2,083
|
21.7
|
2,308
|
23.3
|
(225
|
)
|
||||||||||||||
Gross profit
|
7,515
|
78.3
|
7,601
|
76.7
|
(86
|
)
|
||||||||||||||
SG&A expenses
|
3,388
|
35.3
|
3,379
|
34.1
|
9
|
|||||||||||||||
Adjusted EBITDA
|
$
|
4,127
|
43.0
|
$
|
4,222
|
42.6
|
$
|
(95
|
)
|
Three Quarters
|
Three Quarters
|
|||||||||||||||||||
Ended
|
Ended
|
|||||||||||||||||||
May 31,
|
% of
|
May 31,
|
% of
|
|||||||||||||||||
2019
|
Sales
|
2018
|
Sales
|
Change
|
||||||||||||||||
Sales
|
$
|
31,132
|
100.0
|
$
|
27,418
|
100.0
|
$
|
3,714
|
||||||||||||
Cost of sales
|
12,464
|
40.0
|
11,324
|
41.3
|
1,140
|
|||||||||||||||
Gross profit
|
18,668
|
60.0
|
16,094
|
58.7
|
2,574
|
|||||||||||||||
SG&A expenses
|
20,023
|
64.3
|
18,988
|
69.3
|
1,035
|
|||||||||||||||
Adjusted EBITDA
|
$
|
(1,355
|
)
|
(4.4
|
)
|
$
|
(2,894
|
)
|
(10.6
|
)
|
$
|
1,539
|
Period
|
Total Number of Shares Purchased
|
Average Price Paid Per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
|
Maximum Dollar Value of Shares That May Yet Be Purchased Under the Plans or Programs(1)
(in thousands)
|
||||||||||||
March 1, 2019 to March 31, 2019
|
-
|
$
|
-
|
-
|
$
|
13,174
|
||||||||||
April 1, 2019 to April 30, 2019
|
-
|
-
|
-
|
13,174
|
||||||||||||
May 1, 2019 to May 31, 2019
|
-
|
-
|
-
|
13,174
|
||||||||||||
Total Common Shares
|
-
|
$
|
-
|
-
|
(1)
|
On January 23, 2015, our Board of Directors approved a new plan to repurchase up to $10.0 million of the Company’s outstanding common stock. All previously existing common stock repurchase plans were
canceled and the new common share repurchase plan does not have an expiration date. On March 27, 2015, our Board of Directors increased the aggregate value of shares of Company common stock that may be purchased under the January 2015 plan
to $40.0 million so long as we have either $10.0 million in cash and cash equivalents or have access to debt financing of at least $10.0 million. Under the terms of this expanded common stock repurchase plan, we have purchased 1,539,828
shares of our common stock for $26.8 million through May 31, 2019.
|
(A)
|
Exhibits:
|
31.1
|
Rule 13a-14(a) Certifications of the Chief Executive Officer.**
|
31.2
|
Rule 13a-14(a) Certifications of the Chief Financial Officer.**
|
32
|
Section 1350 Certifications.**
|
101.INS |
XBRL Instance Document.
|
101.SCH |
XBRL Taxonomy Extension Schema Document.
|
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document.
|
101.DEF |
XBRL Taxonomy Definition Linkbase Document.
|
101.LAB |
XBRL Taxonomy Extension Label Linkbase Document.
|
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document.
|
FRANKLIN COVEY CO.
|
||||
Date:
|
July 9, 2019
|
By:
|
/s/ Robert A. Whitman
|
|
Robert A. Whitman
|
||||
Chief Executive Officer
|
||||
(Duly Authorized Officer)
|
||||
Date:
|
July 9, 2019
|
By:
|
/s/ Stephen D. Young
|
|
Stephen D. Young
|
||||
Chief Financial Officer
|
||||
(Principal Financial and Accounting Officer)
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Franklin Covey Co.;
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
|
||
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
|
||
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
||
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
|
||
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
|
||
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
|
Date: July 9, 2019
|
/s/ Robert A. Whitman
|
|
|
Robert A. Whitman
Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Franklin Covey Co.;
|
||
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
|
||
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of
the registrant as of, and for, the periods presented in this report;
|
||
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
||
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
||
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability
of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
||
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
|
||
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
||
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the
registrant’s board of directors (or persons performing the equivalent functions):
|
||
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
|
||
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
|
Date: July 9, 2019
|
/s/ Stephen D. Young
|
|
|
Stephen D. Young
Chief Financial Officer
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.
|
|
|
|
|
|
|||
/s/ Robert A. Whitman
|
|
/s/ Stephen D. Youg
|
|
Robert A. Whitman
Chief Executive Officer |
|
|
Stephen D. Young
Chief Financial Officer |
Date: July 9, 2019
|
Date: July 9, 2019
|