Franklin Covey(US:FC)2021-11-10 05:04Financial Data and Key Metrics Changes - Adjusted EBITDA for fiscal 2021 increased to $28 million, up 96% from $14.3 million in fiscal 2020 and up 36% compared to fiscal 2019's $20.6 million [6][17] - Total revenue grew 40.7% or $20 million in the fourth quarter and grew 13% or $25.7 million for the full fiscal year 2021 [9][13] - Gross margin for the year increased 388 basis points to 77.1% from 73.3% in fiscal 2020 [13][15] - Cash flow from operating activities for the year increased 68% to $46.2 million, up from $27.6 million in fiscal 2020 [19] Business Line Data and Key Metrics Changes - Total subscription revenue grew 33% or $7.2 million in the fourth quarter and 15% or $13 million for the full fiscal year [9][28] - Subscription and subscription services sales grew 21% to $157.2 million in fiscal 2021, with fourth quarter growth of 52% to $52.1 million [28][29] - Leader in Me subscription and subscription services sales grew 14% or $5.4 million to $44.7 million compared with $39.2 million in fiscal 2020 [33] Market Data and Key Metrics Changes - Revenue in North America grew $16.3 million or 16% from $103.3 million in fiscal 2020 to $119.6 million in fiscal 2021 [23] - International revenue grew 54% in the fourth quarter compared to the fourth quarter of fiscal 2020, although still below fiscal 2019 levels [24] Company Strategy and Development Direction - The company expects subscription and subscription services to account for greater than 90% of sales within three years [11][38] - Significant investments are being made in hiring additional salespeople and expanding the client partner network to drive growth [43][44] - The company aims to achieve a SaaS-like valuation as it transitions to a subscription-based model [53] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the All Access Pass and related sales, expecting continued strong growth and high revenue retention rates [57][58] - The company anticipates achieving adjusted EBITDA of between $34 million and $36 million for FY2022, reflecting a 25% increase compared to FY2021 [55][60] Other Important Information - The company ended the fourth quarter with $62.4 million in total liquidity, comprised of $47.4 million in cash and no net debt [20] - The balance of deferred subscription revenue grew 27% to $77 million at year-end compared to $60.6 million at year-end fiscal 2020 [30] Q&A Session Summary Question: What drove the strong performance in the Education segment? - Management indicated that the strong performance was due to a focus on selling to districts rather than individual schools, resulting in high retention rates [68] Question: Is the goal of adding 30 client partners still achievable in the current labor environment? - Management confirmed the goal remains, with a focus on leveraging existing client partners who are still ramping up to offset any potential hiring challenges [70][72] Question: What does the delivery model look like post-COVID? - Management noted that the delivery remains predominantly live online, with expectations that this trend will continue due to its effectiveness in driving behavior change [78][80] Question: What is the status of the Strive integration? - Management reported that the integration of Strive is on track for a January launch, with a roadmap for additional functionality throughout the fiscal year [84] Question: How is lead generation evolving in the digital space? - Management highlighted that online events have become a significant source of lead generation, potentially surpassing previous in-person events [86]