Franklin Covey Announces Third Quarter Fiscal 2010 Results

Franklin Covey Announces Third Quarter Fiscal 2010 Results
SALT LAKE CITY, Jul 01, 2010 (BUSINESS WIRE) --

Franklin Covey Co. (NYSE: FC), a global provider of training and consulting services, today announced financial results for its fiscal third quarter ended May 29, 2010. Reported net sales totaled $30.5 million, an increase of 3.4% compared to $29.5 million in the third quarter of fiscal 2009. Adjusted EBITDA for the quarter was $1.7 million, a $0.7 million improvement compared to Adjusted EBITDA of $1.0 million in the third quarter of fiscal 2009. The loss before income taxes improved $1.0 million to $0.9 million in the third quarter of fiscal 2010 from $1.9 million in the third quarter of fiscal 2009. Including the impact of income taxes, the Company reported net income from continuing operations of $0.3 million, or $0.02 per diluted share for the third quarter of fiscal 2010 compared to a net loss from continuing operations of $5.5 million, or ($0.41) per diluted share, in the third quarter of fiscal 2009.


During the quarter ended May 29, 2010 the Company signed an agreement to sell the products sales component of its wholly owned subsidiary in Japan, which sale was completed on June 1, 2010. As a result of this agreement, the operating results of the Japan products sales component were reclassified and reported as discontinued operations for the quarter ended May 29, 2010 and for other periods reported. The Company expects to report a gain of approximately $1.0 million, after deducting customary costs necessary to complete the transaction, during the fourth quarter of fiscal 2010.

Bob Whitman, Chairman and Chief Executive Officer of Franklin Covey commented, "During the third quarter, we experienced solid high-single or double-digit revenue growth in nearly all of our major channels, including our domestic direct offices (up 8%), international licensees (up 16%), and national account practices (up 14%). Our international direct office sales declined, due to declines in our Japanese operations resulting from the impact of an intellectual property sale in fiscal 2009 that did not repeat in fiscal 2010 and continued weak economic conditions; however, we also completed the sale of our Japanese consumer products business on June 1, 2010, marking the last stage of exiting this non-core, lower-margin business."