Greatness Starts Here We transform organizations by building exceptional leaders, teams, and cultures that get results. © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL INVESTOR UPDATE Third Quarter Fiscal 2025 Forward-Looking Statements/Non-GAAP This presentation contains forward-looking statements within the meaning of 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 u ...

Core Viewpoint - Franklin Covey reported quarterly earnings of $0.18 per share, exceeding the Zacks Consensus Estimate of a loss of $0.08 per share, but down from $0.43 per share a year ago [1][2] Financial Performance - The earnings surprise for the quarter was +325.00%, with the company previously expected to post a loss of $0.11 per share but actually reporting a loss of $0.08, resulting in a surprise of +27.27% [2] - Revenues for the quarter ended May 2025 were $67.12 million, missing the Zacks Consensus Estimate by 0.34%, and down from $73.37 million year-over-year [3] - Over the last four quarters, the company has surpassed consensus EPS estimates three times but has topped consensus revenue estimates only once [2][3] Stock Performance - Franklin Covey shares have declined approximately 35.8% since the beginning of the year, contrasting with the S&P 500's gain of 5.4% [4] - The current Zacks Rank for the stock is 3 (Hold), indicating expected performance in line with the market in the near future [7] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.55 on revenues of $79.88 million, and for the current fiscal year, it is $0.48 on revenues of $275.93 million [8] - The outlook for the consulting services industry, where Franklin Covey operates, is currently in the bottom 31% of over 250 Zacks industries, which may impact stock performance [9]

Financial Data and Key Metrics Changes - Revenue for the third quarter was $67.1 million, down 9% year-over-year and 4% year-to-date, but up 13% sequentially [29] - Adjusted EBITDA was $7.3 million, exceeding expectations and higher than the top end of the guidance range of $4 million to $6.5 million [6][33] - Operating expenses increased to $53.5 million, primarily due to restructuring charges and increased selling, general, and administrative expenses [30] Business Line Data and Key Metrics Changes - The Enterprise Division generated 70% of total revenue, with revenue of $47.3 million, down from $51.9 million in the prior year [34] - The Education Division's revenue was $18.6 million, down 8% compared to the prior year, but subscription revenue grew 13% [39] - Adjusted EBITDA for the Education Division decreased to $2.1 million from $3.1 million last year due to lower revenue [39] Market Data and Key Metrics Changes - North America segment revenue was $37.1 million, a decrease of $3.5 million from the prior year, with subscription and subscription services revenue down 4% year-to-date [35] - International direct operations revenue was $7.5 million, a decrease of $1 million, primarily due to challenging business conditions in Asia and the UK [36] - The balance of billed deferred subscription revenue in North America was $45 million, down from $47.2 million in the prior year [36] Company Strategy and Development Direction - The company is focused on cost reductions while maintaining investments in growth initiatives, particularly in the Enterprise North America business [6][32] - A new Chief Marketing Officer has been appointed to accelerate marketing efforts and penetrate the total addressable market [22] - The company expects to grow its education business year-over-year despite uncertainties, with strong demand for its "Leader in Me" program [25][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to navigate economic uncertainties and continue winning large deals [8][46] - The revised revenue guidance for the fiscal year is now between $265 million and $275 million, reflecting ongoing uncertainties and timing risks [9][42] - Management anticipates a meaningful increase in adjusted EBITDA and free cash flow in fiscal year 2026 due to cost reduction actions [43] Other Important Information - The company has completed cost reduction initiatives that are expected to yield annualized savings of $8 million in fiscal year 2026 [32] - The percentage of clients in multi-year contracts increased from 55% to 58%, indicating a strong client retention strategy [21] Q&A Session Summary Question: Can you share milestones regarding the enterprise division's performance? - Management highlighted the increase in new logos and expansion within existing clients, emphasizing the separation of sales teams for better focus [51][53] Question: What are the expectations for new school additions in the education division? - Management expects to meet or exceed the previous year's new school additions, citing the effectiveness of the "Leader in Me" solution [62][63] Question: Can you break down the guidance reduction by segment? - The reduction primarily stems from timing issues in service delivery and ongoing uncertainties affecting enterprise clients [65][68] Question: How does the company foresee the current environment impacting fiscal year 2026? - Management is planning for continued scrutiny of budgets and tariffs, but remains committed to navigating through these challenges [74][75] Question: What is the current adoption rate of AI service delivery? - Approximately 43% of clients are using the AI sales coach, with expectations for increased adoption as the technology evolves [85]

Financial Data and Key Metrics Changes - Revenue for Q3 2025 was $67.1 million, down 9% year-over-year and 4% year-to-date, but up 13% sequentially [27] - Adjusted EBITDA was $7.3 million, exceeding expectations and down from $13.9 million in the prior year [30][31] - Gross margin remained strong at approximately 76.5% of revenue, flat year-over-year [27] - Operating expenses increased to $53.5 million, primarily due to restructuring charges and increased selling, general, and administrative expenses [28] Business Line Data and Key Metrics Changes - The Enterprise Division generated 70% of total revenue, with Q3 revenue at $47.3 million, down from $51.9 million in the prior year [32] - The Education Division's revenue was $18.6 million, down 8% year-over-year but grew 1% year-to-date [36] - Subscription revenue in the Education Division increased by 13% to $11.8 million [36] Market Data and Key Metrics Changes - The North America segment revenue was $37.1 million, a decrease of $3.5 million from the prior year, affected by government actions [33] - International direct operations revenue was $7.5 million, down $1 million due to challenging business conditions [34] - The number of multi-year contracts in North America increased from 55% to 58% [34] Company Strategy and Development Direction - The company is focused on cost reductions while maintaining investments in growth initiatives [5][6] - A new Chief Marketing Officer has been appointed to accelerate marketing efforts and penetrate the total addressable market [21] - The company expects to grow its education business year-over-year despite uncertainties [22] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the uncertain external environment affecting investment decisions and cost scrutiny [5] - Revised revenue guidance for the fiscal year is now between $265 million and $275 million, with adjusted EBITDA guidance widened to $28 million to $33 million [7][40] - Confidence remains in the fundamental strengths of the business and the potential for future growth [7] Other Important Information - The company has completed cost reduction initiatives that are expected to yield significant savings in the coming fiscal year [6][29] - Deferred subscription revenue increased by 7% year-over-year, indicating a strong foundation for future growth [31] Q&A Session Summary Question: Can you share milestones regarding the enterprise division's performance? - Management noted improvements in new logo sales and expansion within existing clients, with a focus on off-cycle expansion opportunities [50][52] Question: What are the expectations for new school additions in the education division? - Management expects to meet or exceed the previous year's new school additions, citing strong demand for their solutions [60][61] Question: Can you break down the guidance reduction by segment? - The reduction primarily stems from timing issues in service delivery and ongoing uncertainty affecting enterprise clients [63][66] Question: How do you foresee the current environment impacting fiscal 2026? - Management is planning for continued scrutiny of budgets and uncertainty in the enterprise level due to tariffs and other factors [70][71] Question: What is the current status of deferred revenue growth relative to total revenue growth? - Management explained that deferred revenue growth is driven by invoiced amounts from prior years, and they expect future growth to translate into reported revenue [73][78] Question: What is the adoption rate of AI service delivery among clients? - Approximately 43% of clients are using the AI sales coach, with expectations for continued growth in this area [81]

Financial Performance - For the three months ended March 31, 2025, net income increased by 16.4% to $9,973,265 compared to $8,569,784 for the same period in 2024 [2] - Basic weighted average earnings per share for the same period was $0.271, up from $0.248 per share reported for the three months ended March 31, 2024 [3] - The Corporation reported income in excess of distributions by approximately $1.4 million, or $0.04 per share [3] Investment Portfolio - The investment portfolio decreased by 3.4% to $631.9 million as of March 31, 2025, from $653.8 million as of December 31, 2024 [4][7] - New investment funding for the quarter was $70.2 million, compared to $47.7 million in the same period of 2024, while repayments were $92.2 million, up from $32.6 million in 2024 [4] - The average gross investment size was approximately $2.3 million, with 17 investments individually exceeding $7.5 million [4] Credit Losses and Fair Value Adjustments - The allowance for expected credit losses and fair value adjustment as of March 31, 2025, was $31.6 million, an increase from $29.6 million as of December 31, 2024 [5] - This allowance includes $25.1 million representing the estimated shortfall between investment balances and recoverable amounts, and $4.7 million for fair value adjustments [5] Dividend Information - The Corporation declared dividends on its common shares totaling $8,595,950 or $0.234 per share for the three months ended March 31, 2025, compared to $8,070,602 or $0.234 per share for the same period in 2024 [10] - A monthly cash dividend of $0.078 per common share has been declared, payable on specified dates [8] Shareholder Plans - The Corporation has a Dividend Reinvestment Plan (DRIP) allowing shareholders to reinvest dividends in additional shares at a discounted price [9] - Participants in the Share Purchase Plan can purchase additional shares with no commission costs, subject to certain limits [9]

Core Insights - Franklin Covey's stock has experienced significant volatility, rising from approximately $18 in 2020 to over $50 in late 2022, before declining to around $38 in early 2025, and further dropping to about $20 after Q2 2025 earnings were released [1] Stock Performance - The stock price trajectory shows a peak of over $50 in late 2022, indicating a substantial increase from its 2020 price of ~$18 [1] - Following the peak, the stock has faced a decline, reaching ~$38 in early 2025 and subsequently falling to ~$20 after the latest earnings report [1]

Revenue Performance - Consolidated revenue for the quarter ended February 28, 2025, was $59.6 million, a decrease from $61.3 million in the same quarter of fiscal 2024, with a constant currency revenue of $60.1 million[66]. - Enterprise Division revenues for the second quarter of fiscal 2025 totaled $43.6 million, down from $45.6 million in the prior year, primarily due to a $1.1 million decrease in International Direct Office revenues and a $1.0 million decrease in North America segment revenues[67]. - Education Division revenues increased by 3% to $15.1 million compared to $14.7 million in the prior year, driven by increased training and coaching revenue, membership subscription revenues, and classroom materials sales[68]. - Consolidated subscription and subscription services revenues for the second quarter of fiscal 2025 were $49.5 million, down from $50.3 million in the same quarter of fiscal 2024[68]. - Consolidated deferred subscription revenue increased by 10% to $94.4 million compared to $86.1 million at February 29, 2024[68]. - International Direct Office revenues decreased by $1.1 million, impacted by economic disruptions and geopolitical tensions, with significant declines in China (35%), Japan (19%), and the UK (17%) compared to the same period in fiscal 2024[74]. - North America segment revenue for the first two quarters of fiscal 2025 totaled $74.657 million, a decrease of $1.190 million compared to fiscal 2024[86]. - International Direct Office revenues decreased by 9.7%, or $1.553 million, for the first two quarters of fiscal 2025, impacted by economic disruptions in Asia and Europe[89]. - International Licensees revenue decreased by 3%, or $0.2 million, primarily due to decreased services revenue and a decrease in share of AAP revenue[92]. - Education Division revenue for the first two quarters of fiscal 2025 increased by 7%, or $1.949 million, reaching $31.529 million[95]. Profitability and Expenses - Gross profit for the second quarter of fiscal 2025 was $45.7 million, down from $46.9 million in the prior year, with a gross margin of 76.7% compared to 76.4% in the same quarter of the prior year[68]. - Operating expenses increased by $1.8 million, primarily due to a $4.3 million increase in selling, general, and administrative (SG&A) expenses[68]. - The net loss for the quarter ended February 28, 2025, was $(1.1) million, or $(0.08) per share, compared to net income of $0.9 million, or $0.06 per diluted share, in the same quarter of fiscal 2024[68]. - Adjusted EBITDA for the quarter was $2.1 million, down from $7.4 million in the second quarter of fiscal 2024, with a constant currency Adjusted EBITDA of $2.6 million[68]. - Education Division gross profit increased to $9.331 million, with a gross margin of 61.9%, up from 59.1% in the prior year[81]. - SG&A expenses for the Education Division increased to $19.788 million, up from $18.514 million in the prior year[95]. - North America SG&A expenses increased by $5.132 million, primarily due to new sales personnel and increased advertising costs[88]. - International Licensee gross margin increased to 88.9% in the first half of fiscal 2025, driven by increased royalties in the revenue mix[93]. Cash Flow and Financing - Cash provided by operating activities decreased to $12.8 million in the first half of fiscal 2025 from $30.2 million in the same period of fiscal 2024, primarily due to lower operating income and cash payments for income taxes[108]. - Total cash used for investing activities in the first half of fiscal 2025 was $5.0 million, with $2.4 million allocated to the development of offerings and $2.3 million for property and equipment purchases[109]. - The company expects capital spending for curriculum development to total approximately $8.3 million in fiscal 2025, with additional investments planned for future offerings[110]. - A new credit agreement provides up to $70.0 million in total credit, with $62.5 million available as a revolving line of credit, maturing on March 27, 2028[105]. - Net cash used for financing activities totaled $15.9 million, primarily for purchasing common stock and principal payments on financing obligations[113]. - The company had over $100 million in available liquidity as of February 28, 2025, consisting of $40.4 million in cash and a $62.5 million undrawn revolving credit facility[104]. - The effective interest rate on the 2023 Credit Agreement was 6.0% as of February 28, 2025, while the financing obligation had a fixed interest rate of 7.7%[129]. - The company anticipates that total cash paid for income taxes will approximate its total income tax provision on an annual basis going forward[103]. Tax and Regulatory Matters - The effective tax rate for the first two quarters of fiscal 2025 was 56.1%, significantly higher than the 14.4% rate in the same period of the previous year, due to near-break-even pre-tax income[102]. Market and Strategic Updates - The company reacquired license rights to sell content in France for $0.3 million in cash and $0.2 million of forgiven receivables, indicating plans for market expansion in France[112]. - No material changes reported from the previous information in the Annual Report[130]. - No utilization of foreign currency or interest rate derivative instruments during the quarter[130]. - No significant updates on user data or performance metrics provided in the call[130]. - No new product or technology developments mentioned in the conference[130]. - No market expansion or acquisition strategies discussed[130]. - No future outlook or performance guidance provided[130]. - No new strategies or initiatives highlighted during the call[130]. - No financial performance figures or percentages disclosed[130]. - No commentary on competitive positioning or market trends included[130]. - No updates on regulatory or compliance matters shared[130].

Core Viewpoint - Firm Capital Mortgage Investment Corporation plans to redeem all outstanding $25 million of its 5.40% convertible unsecured subordinated debentures early on May 12, 2025, prior to their maturity date of June 30, 2025 [1][2]. Group 1: Redemption Details - The redemption price will be $1,000 for each $1,000 principal amount of debentures, including all accrued and unpaid interest up to the redemption date [2]. - The corporation will utilize cash on hand to pay the redemption price for the debentures [2]. - Formal notice of redemption will be delivered to debenture holders through the Debenture Trustee, Computershare Trust Company of Canada [3]. Group 2: Company Overview - Firm Capital Mortgage Investment Corporation operates as a non-bank lender providing residential and commercial short-term bridge and conventional real estate financing [4]. - The corporation's investment objective focuses on preserving shareholders' equity while providing a stable stream of monthly dividends from investments [4]. - The corporation is classified as a mortgage investment corporation (MIC) under the Income Tax Act (Canada), allowing it to avoid taxation on income if distributed to shareholders as dividends within 90 days after year-end [4].

TORONTO, April 07, 2025 (GLOBE NEWSWIRE) -- Firm Capital Mortgage Investment Corporation (“MIC”) (TSX: FC), announces its monthly cash dividend of $0.078 per share payable to shareholders of record as follows: Record DateDividend PayableApril 30, 2025May 15, 2025May 30, 2025June 16, 2025June 30, 2025July 15, 2025   DIVIDEND AND SHARE PURCHASE PLAN The Corporation has in place a Dividend Reinvestment Plan (DRIP) and Share Purchase Plan that is available to its shareholders. The DRIP allows participants to ha ...

Financial Data and Key Metrics Changes - The company reported second quarter revenue of $59.6 million, slightly below the $61.3 million achieved in the same quarter last year, primarily due to government-related cancellations [44][60][65] - Adjusted EBITDA for the quarter was $2.1 million, landing at the top end of expectations despite disruptions [44][45] - The company expects revenue for the fiscal year to be between $275 million and $285 million, which is $7 million or 2.5% lower than last year [21][53] Business Line Data and Key Metrics Changes - The North America enterprise business is experiencing significant traction from a go-to-market transformation, with new logo sales exceeding plans by more than 50% in the second quarter [30][31] - Education revenue grew 3% in the second quarter and is up 7% year-to-date, with invoiced amounts in education up 13% [40][49] Market Data and Key Metrics Changes - The company is experiencing direct and indirect impacts from government actions and economic uncertainty, particularly in its government business, which constitutes roughly 6% of total revenue [12][13] - International revenues are expected to decline by as much as $4 million due to trade tensions and government actions [14][18] Company Strategy and Development Direction - The company is committed to its go-to-market transformation, which is expected to drive significant revenue growth, moving from single-digit to double-digit growth in the coming years [19][20] - The focus remains on enhancing client relationships and expanding service offerings, with a strong emphasis on multi-year contracts [26][46] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the turbulent external economic environment but remains confident in the business model and the importance of the services offered [8][9] - The company anticipates a one-year step back in performance due to government-related impacts but expects to return to previous adjusted EBITDA levels in the following year [23][88] Other Important Information - The company has over $100 million in liquidity and has invested approximately $105 million in share repurchases since 2022 [51][52] - The company is focused on maintaining its growth investments despite the current challenges [128] Q&A Session Summary Question: Impact of government actions on revenue - Management confirmed that the $17 million in government-related revenue is primarily from federal agencies, with expectations of not recovering this revenue in the current year [60][69] Question: Education revenue and funding sources - Management clarified that the Department of Education is not a direct client, and funding is expected to continue flowing from state governments despite potential federal cuts [74][76] Question: Guidance and future expectations - Management indicated that the guidance reflects a one-year step back, with expectations to update long-term revenue and EBITDA projections in November [85][88] Question: New logo sales and project starts - Management reported strong new logo sales and confirmed that project starts have not been delayed despite external uncertainties [108][110] Question: Adjusted EBITDA expectations for Q4 - Management discussed that Q4 EBITDA could be influenced by service delivery and education days, with potential for exceeding guidance if disruptions do not materialize [116][118]