Financial Data and Key Metrics Changes - The total revenue for Q1 2024 was $68.4 million, which is higher than expected, and revenue for the latest 12 months grew by $8.6 million or 3% to $279.6 million [41] - Adjusted EBITDA for Q1 2024 was $11 million, with a rolling two-year growth in adjusted EBITDA of $13.4 million or 39% [5][34] - The balance of billed and unbilled deferred revenue increased by $18 million or 12% to $169.7 million compared to the same period last year [42][65] Business Line Data and Key Metrics Changes - Subscription and subscription services sales in North America were flat in Q1 but grew by 4% for the latest 12 months, reaching $54.8 million [11][61] - The Education Division's revenue grew 3% for the quarter and 9% for the latest 12 months, with subscription revenue now representing approximately 90% of total Education revenue [63][64] - The Enterprise Division in North America reported sales of $38.4 million in Q1, nearly equal to the prior year, with a 2% growth for the latest 12 months [76] Market Data and Key Metrics Changes - International operations accounted for approximately 17% of total Enterprise Division revenue, with a 7% decrease in revenue for the quarter, primarily due to declining legacy sales [31] - The percentage of All Access Pass clients entering into multiyear contracts increased to 54% from 48% year-over-year, indicating a stronger commitment from clients [48][62] Company Strategy and Development Direction - The company focuses on helping organizations achieve results that require collective action, leveraging best-in-class content and world-class coaching [12][14] - The strategic position is strengthened by a high revenue retention rate, with All Access Pass subscription revenue retention exceeding 90% in North America [17][53] - The company expects to achieve significant revenue growth in the back half of fiscal 2024, driven by improved subscription services attach rates and new product launches [9][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the current operating environment, noting that clients are moving forward with their budgets and plans [70][86] - The company anticipates strong demand for its solutions as organizations focus on leadership capabilities and cultural adaptability [70][86] - Future guidance for adjusted EBITDA is set between $54.5 million and $58 million for fiscal 2024, reflecting expected growth in subscription revenue and deferred revenue [66][59] Other Important Information - The company has invested significantly in share repurchases, totaling $51 million over the past 12 months, while maintaining a strong liquidity position of $96.5 million [78] - The Education Division's revenue model has transformed to closely mirror that of the Enterprise Division, with substantial growth in subscription revenue since the launch of the Leader in Me program [32][64] Q&A Session Summary Question: How do clients react after aggressive belt-tightening in 2023? - Management noted that clients are moving forward with their budgets and plans, feeling relatively good about the selling environment [69][86] Question: Status of ESSER funding for the Education business? - Approximately two-thirds of ESSER funding has been spent, with a third remaining for continued spending this year [71][90] Question: Insights on the total contract signed figure being down 23.6% year-over-year? - The decline is attributed to a large contract signed in the previous year, which will flow into revenue over the next five years [123][124] Question: How is the sales environment characterized? - The sales environment is described as good, with strong demand for solutions addressing execution challenges [125][126] Question: Update on international sales, particularly in China and Japan? - Both markets are improving, with Japan nearing pre-pandemic highs and China showing recovery as well [131][132]

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 uncertainties including, but not limited to: The ability of the Company to grow revenues; The acceptance of, and renewal rates for our subscription offerings, including the All Access Pass and Leader in Me memberships; The ability of the Company to hire productive sale ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 __________________ Form 10-K __________________ Franklin Covey Co. (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organization) Utah 001-11107 87-0401551 (Commission File No.) (IRS Employer Identification No.) 2200 West Parkway Boulevard Salt Lake City, Utah 84119-2331 (Address of principal executive offices, including zip code) Registrant's telephone number, including area code: ...

Financial Data and Key Metrics Changes - Total revenue grew to $280.5 million, which is $55 million or 25% higher than the pre-pandemic revenue high of $225.4 million in fiscal 2019 [32] - Adjusted EBITDA increased significantly to $48.1 million, representing a $27.5 million or 133% growth compared to the pre-pandemic high of $20.6 million in fiscal 2019 [47][131] - Subscription and subscription services sales reached $222.8 million, an increase of almost $100 million or 80% compared to the pre-pandemic high of $124.1 million in fiscal 2019 [33] Business Line Data and Key Metrics Changes - The Education business accounted for about 25% of total company revenue, growing 13% for the year but decreasing 2% from the record level achieved in Q4 FY 2022 [1] - The Enterprise Division's revenue for the full year was $205.7 million, representing growth of $69.8 million or 51% since the conversion to a subscription model in 2017 [54] - Education's revenue increased by $7.9 million or 13% to $69.7 million, representing growth of $25.6 million or 58% since 2017 [87] Market Data and Key Metrics Changes - North America accounted for 73% of total Enterprise Division sales, which grew 6% in FY 2023 on top of 19% pandemic-comp accelerated sales growth in FY 2022 [70] - International operations, accounting for approximately 17% of total Enterprise Division revenue, increased by $1.9 million or 6% in the year, primarily driven by improved results in China [72] - Year-over-year retention of Leader in Me schools remained extremely high at nearly 85% for FY 2023 [73] Company Strategy and Development Direction - The company aims to be the partner of choice for clients by addressing significant challenges while maintaining a strong and profitable business model [35] - Investments are being made in new content and technology to penetrate and expand solutions within more organizations and schools globally [7] - The company plans to focus on organic growth opportunities within current client organizations and explore inorganic growth through potential acquisitions [158][151] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in future revenue growth due to several factors, including a strong sales force and high retention rates [5][80] - The company expects adjusted EBITDA to increase by 17% in FY 2024, with guidance set between $54.5 million and $58 million [107] - Management noted that while economic conditions could impact expectations, they remain optimistic about financial future [76] Other Important Information - The balance of billed and unbilled deferred revenue grew by 22% or $33 million to $186.4 million, indicating strong future revenue visibility [6][38] - The company returned $35.6 million to shareholders through share repurchases during the year, with a total of $59.4 million over the last two years [81][92] Q&A Session Summary Question: What was the attach rate in Q4? - The attach rate in Q4 was 60%, which is one of the stronger attach quarters [141] Question: What trends are being noticed in sales conversion relative to previous economic conditions? - New client partners added are currently ramping, and their contributions to growth are expected to be more pronounced in the middle and back half of the year [144] Question: How is the company thinking about capital allocation and potential inorganic growth? - The company sees significant opportunities for organic growth within current clients and is exploring interesting inorganic opportunities as it continues to grow [151][158]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=2&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) Presents Franklin Covey Co.'s unaudited condensed consolidated financial statements for periods ended May 31, 2023 [Condensed Consolidated Balance Sheets](index=2&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) Balance sheet as of May 31, 2023, shows decreased total assets to **$217.7 million** and liabilities to **$143.2 million** Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | May 31, 2023 | August 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $39,329 | $60,517 | | Accounts receivable, net | $55,476 | $72,561 | | Total current assets | $116,730 | $155,883 | | Total assets | $217,724 | $259,155 | | **Liabilities & Equity** | | | | Deferred subscription revenue (current) | $70,419 | $85,543 | | Total current liabilities | $128,406 | $153,796 | | Total liabilities | $143,217 | $176,341 | | Total shareholders' equity | $74,507 | $82,814 | [Condensed Consolidated Income Statements](index=3&type=section&id=CONDENSED%20CONSOLIDATED%20INCOME%20STATEMENTS) Q3 2023 net sales increased to **$71.4 million**, but net income decreased to **$4.6 million** due to tax provision changes Income Statement Summary (in thousands, except per-share amounts) | Metric | Q3 2023 | Q3 2022 | YTD 2023 | YTD 2022 | | :--- | :--- | :--- | :--- | :--- | | Net sales | $71,441 | $66,176 | $202,565 | $184,035 | | Gross profit | $54,233 | $51,132 | $154,185 | $142,845 | | Income from operations | $6,572 | $5,949 | $15,793 | $15,011 | | Net income | $4,563 | $7,162 | $10,969 | $12,852 | | Diluted EPS | $0.32 | $0.51 | $0.76 | $0.90 | [Condensed Consolidated Statements of Cash Flows](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) Nine-month operating cash flow decreased to **$25.9 million**, with increased investing and financing outflows Cash Flow Summary for Nine Months Ended May 31 (in thousands) | Cash Flow Activity | 2023 | 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $25,947 | $39,536 | | Net cash used for investing activities | ($10,386) | ($3,459) | | Net cash used for financing activities | ($36,590) | ($30,663) | | Net (decrease) increase in cash | ($21,188) | $4,651 | - Purchases of common stock for treasury significantly increased to **$29.7 million** in the first three quarters of fiscal 2023, compared to **$23.9 million** in the same period of 2022[11](index=11&type=chunk) - Curriculum development costs, a key investing activity, rose sharply to **$6.8 million** from **$1.4 million** in the prior-year period[11](index=11&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=NOTES%20TO%20CONDENSED%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) Detailed disclosures on accounting policies, revenue recognition, new credit agreement, and segment information - On March 27, 2023, the company entered into a new five-year, **$70.0 million** credit agreement with KeyBank, replacing its previous agreement, including a **$7.5 million** term loan and a **$62.5 million** revolving line of credit[26](index=26&type=chunk) - Total deferred revenue was **$90.5 million** at May 31, 2023, with **$72.7 million** from subscription offerings, and **$140.9 million** of remaining performance obligations[33](index=33&type=chunk)[35](index=35&type=chunk) - On February 14, 2023, the Board approved a new **$50.0 million** stock repurchase plan, under which the company purchased **743,000 shares** for **$28.8 million** in the first three quarters of fiscal 2023[31](index=31&type=chunk) Revenue by Service Type - Three Quarters Ended May 31 (in thousands) | Service Type | 2023 | 2022 | | :--- | :--- | :--- | | Services and Products | $85,453 | $80,859 | | Subscriptions | $101,264 | $87,260 | | Royalties | $13,092 | $12,195 | | Leases and Other | $2,756 | $3,721 | | **Consolidated** | **$202,565** | **$184,035** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=17&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses financial condition and results, highlighting record Q3 2023 sales of **$71.4 million** - Q3 2023 consolidated sales grew **8%** to a record **$71.4 million**, driven by the strength of the subscription business model[60](index=60&type=chunk) - Key performance trends include: **1)** Growth of All Access Pass (AAP) and related services, with rolling four-quarter sales up **15%** to **$156.6 million**; **2)** Education Division revenue growth of **18%** in Q3; and **3)** International sales improvement, with direct office sales up **23%** in Q3[63](index=63&type=chunk) - The company's liquidity remains strong with over **$100 million** available, consisting of **$39.3 million** in cash and a **$62.5 million** undrawn credit line at quarter-end[64](index=64&type=chunk) - During Q3 2023, the company repurchased **$25.0 million** of its common stock on the open market[64](index=64&type=chunk) [Results of Operations](index=17&type=section&id=RESULTS%20OF%20OPERATIONS) Details operating results for Q3 and first three quarters of fiscal 2023 by segment, showing growth Q3 2023 vs Q3 2022 Segment Sales (in thousands) | Segment | Q3 2023 Sales | Q3 2022 Sales | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Direct Offices | $50,382 | $47,416 | $2,966 | +6.3% | | International Licensees | $2,835 | $2,610 | $225 | +8.6% | | Education Division | $17,082 | $14,439 | $2,643 | +18.3% | YTD 2023 vs YTD 2022 Segment Sales (in thousands) | Segment | YTD 2023 Sales | YTD 2022 Sales | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Direct Offices | $144,194 | $134,037 | $10,157 | +7.6% | | International Licensees | $9,048 | $8,196 | $852 | +10.4% | | Education Division | $45,631 | $37,202 | $8,429 | +22.7% | - International Direct Office sales increased **23%** in Q3, primarily due to a sharp recovery in China, which had been impacted by pandemic-related issues in the first half of the fiscal year[62](index=62&type=chunk)[66](index=66&type=chunk) - The sum of deferred subscription revenue and unbilled multi-year contracts increased **21%** year-over-year to **$140.9 million** as of May 31, 2023, indicating a solid base for future revenue[65](index=65&type=chunk) [Liquidity and Capital Resources](index=25&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) As of May 31, 2023, the company had **$39.3 million** cash and a **$62.5 million** undrawn credit facility - The company entered a new **$70.0 million** credit agreement on March 27, 2023, which matures in 2028 and provides a **$62.5 million** revolving line of credit[92](index=92&type=chunk) - Cash from operating activities decreased to **$25.9 million** for the nine months ended May 31, 2023, from **$39.5 million** in the prior year, mainly due to working capital changes[97](index=97&type=chunk) - Primary uses of financing cash in the first nine months of fiscal 2023 were **$29.7 million** for common stock purchases and **$7.0 million** for principal payments on debt and financing obligations[101](index=101&type=chunk) - The company expects to spend approximately **$9.7 million** on curriculum development and **$3.9 million** on property and equipment for the full fiscal year 2023[99](index=99&type=chunk)[100](index=100&type=chunk) [Critical Accounting Estimates](index=27&type=section&id=CRITICAL%20ACCOUNTING%20ESTIMATES) No significant changes to critical accounting policies and estimates as disclosed in the fiscal 2022 10-K - There have been no significant changes to the company's previously disclosed critical accounting policies or estimates[108](index=108&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) Primary market risk is interest rate fluctuations on variable-rate debt, with no derivative instruments used - A hypothetical **one percent** increase in the effective interest rate on the unpaid term loan balance as of May 31, 2023, would result in approximately **$35,000** of additional interest expense over the next 12 months[116](index=116&type=chunk) - The company did not utilize any foreign currency or interest rate derivative instruments during the reported periods[117](index=117&type=chunk) [Item 4. Controls and Procedures](index=29&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded disclosure controls were effective as of May 31, 2023, with no material changes - Based on an evaluation as of the end of the reporting period, the CEO and CFO concluded that the company's disclosure controls and procedures were effective[119](index=119&type=chunk) - No changes in internal controls over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[120](index=120&type=chunk) PART II. OTHER INFORMATION [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20RISK%20FACTORS) Highlights financial services industry risks, where cash balances exceeding FDIC limits could impact liquidity - The company is exposed to risks from the financial services industry, as its cash held in bank accounts exceeds FDIC insurance limits[122](index=122&type=chunk) - Instability in the banking system, such as the failure of Silicon Valley Bank, could adversely affect the company's liquidity and access to financing, even without direct exposure to the failed institutions[122](index=122&type=chunk)[123](index=123&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) Q3 2023 repurchases totaled **664,133 shares** for **$37.65** average, under a new **$50.0 million** plan Common Stock Purchases for Quarter Ended May 31, 2023 | Period | Total Shares Purchased | Average Price Paid Per Share | | :--- | :--- | :--- | | March 2023 | - | $ - | | April 2023 | 324,833 | $38.68 | | May 2023 | 339,300 | $36.67 | | **Total** | **664,133** | **$37.65** | - A new **$50.0 million** stock purchase plan was approved on February 14, 2023, replacing the prior plan, with **$21.6 million** remaining available for future repurchases as of May 31, 2023[124](index=124&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) Lists exhibits filed with Form 10-Q, including the new Credit Agreement and CEO/CFO certifications - Exhibit 10.1: Credit Agreement with KeyBank National Association, dated March 27, 2023[129](index=129&type=chunk) - Exhibits 31.1 and 31.2: Certifications of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(a)[129](index=129&type=chunk)

Franklin Covey Co. (NYSE:FC) Q3 2023 Earnings Conference Call June 28, 2023 5:00 PM ET Company Participants Derek Hatch - Corporate Controller Paul Walker - Chief Executive Officer Steve Young - Chief Financial Officer Jennifer Colosimo - President, Enterprise Division Sean Covey - President, Education Division Conference Call Participants Jeff Martin - ROTH Nehal Chokshi - Northland Capital Dave Storms - Stonegate Capital Alex Paris - Barrington Research Operator Good day and thank you for standing by. We ...

FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended February 28, 2023 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FRANKLIN COVEY CO. (Exact name of registrant as specified in its charter) Utah 87-0401551 (State or other jurisdiction of incorporation or organization) (I.R.S. employer identification ...

Financial Data and Key Metrics Changes - The company reported Q2 2023 revenue of $61.8 million, a 9% increase from the prior year, and 11% growth in constant currency [7][40] - Adjusted EBITDA for Q2 was $8.2 million, with a constant currency figure of $8.4 million, reflecting a strong performance despite challenges [9][46] - The company expects full-year adjusted EBITDA guidance in constant currency to be between $47 million and $49 million [10][80] Business Line Data and Key Metrics Changes - Total subscription and subscription services revenue grew 15% in Q2, 18% year-to-date, and 22% for the latest 12 months [18][41] - The All Access Pass subscription revenue grew 11% in Q2, following a 29% growth in the same quarter last year [18][41] - The Leader in Me subscription revenue increased by 30% in Q2, 27% year-to-date, and 23% for the latest 12 months [18][60] Market Data and Key Metrics Changes - Revenue in North America, which accounts for about 73% of total Enterprise Division revenue, grew 8% in Q2 [52] - International licensee partner revenue increased by 13% in Q2, indicating resilience despite global economic conditions [58] - Revenue in China and Japan declined by 17% in Q2, but improvements are expected in the latter half of the year [57] Company Strategy and Development Direction - The company’s strategy focuses on addressing mission-critical challenges for clients, which remain durable even in tough economic times [12][14] - The business model emphasizes resilience and growth in revenue, adjusted EBITDA, and cash flow, even during economic downturns [12][37] - The company plans to continue investing in client-facing roles and expanding its sales force to drive future growth [70][79] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging economic environment but expressed confidence in the strength of their pipelines and client relationships [9][10] - The company anticipates a recovery in sales in China and Japan in the second half of the year, contributing to future growth [74][82] - Management highlighted the importance of leadership capability and culture in driving financial performance for clients [64][68] Other Important Information - The company ended Q2 with $55.1 million in cash and an undrawn $15 million revolving credit facility, providing flexibility for growth and acquisitions [35][50] - The Board of Directors increased the stock repurchase authorization to $50 million, reflecting confidence in the company’s financial position [36] Q&A Session Summary Question: Clarification on EBITDA guidance - Management confirmed that guidance is typically provided on a constant currency basis and acknowledged a previous oversight in communication [89][90] Question: Deceleration in bookings - Management noted that while bookings were up only 2% year-over-year, the number of clients renewing and expanding their contracts was higher than the previous year [92][94] Question: Industry trends in client renewals - Management indicated that there is no significant trend by industry in client renewals, although some larger clients faced challenges [101][110] Question: Explanation of "deeper snow" - Management explained that "deeper snow" refers to increased challenges faced by clients, impacting their ability to renew contracts [96][97] Question: Unbilled deferred revenue growth - Management clarified that the growth in unbilled deferred revenue suggests that loyal, higher-value clients are opting for multi-year contracts [111][112]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 2022 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number: 001-11107 FRANKLIN COVEY CO. (Exact name of registrant as specified in its charter) | Utah | 87-0401551 | ...

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------|-------| | | | 53.4 | 141.7 | 177.4 | 199.7 | | | | | 93.0 | 119.7 | | 39.3 | 48.1 | | | | | | 26.0 | 33.1 | 39.6 | | | Q1 FY 21 Q1 FY 22 Q1 FY 23 LTM Q1FY21 LTM Q1FY22 LTM Q1FY23 124.4 97.7 80.0 LTM Q1FY23 LTM Q1FY21 LTM Q1FY22 © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL 41 Education Division Financial Summary LTM Q1 LTM ...