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Franklin Covey Co. (NYSE: FC), an intellectual property company that creates and distributes world-class content, training, processes and tools that organizations as well as individuals use to transform their results, today announced financial results for its fiscal first quarter ended November 26, 2011.
Net sales for the quarter ended November 26, 2011 increased to $39.5 million, with a $4.0 million, or 12%, increase in sales from other areas of the business offsetting a planned $3.9 million decrease in Government Services revenues. Adjusted EBITDA for the quarter increased 12% to $6.4 million, compared with $5.7 million in fiscal 2011. With the significant flow-through of revenue to Adjusted EBITDA, the Company’s Adjusted EBITDA margin (Adjusted EBITDA as a percent of sales) increased to 16.1% in the first quarter of fiscal 2012 compared with 14.4% in the prior year.
Bob Whitman, Chairman and Chief Executive Officer of Franklin Covey, commented, “The transformational impact which Franklin Covey’s world-leading intellectual property and content has on our client organizations; our global footprint, which allows us to serve clients with excellence almost anywhere in the world; and the depth of influence which our thought leadership vehicles create, continues to drive our business. We are very pleased that we have been able to translate the demand for our offerings into continued significant growth in Adjusted EBITDA and EPS growth the first quarter of fiscal 2012 and over the past several years. We expect continued growth in both profitability and cash flows from operations in fiscal 2012 and beyond.”
First Quarter Financial Results
The Company’s consolidated sales increased to $39.5 million in the first quarter of fiscal 2012 compared with $39.4 million in the first quarter of fiscal 2011. Sales increased in the Company’s direct offices, direct international offices, international licensee channel, National Account practices and from book royalty revenues related to new publications. These increases were partially offset by planned sales declines from contracts with a governmental agency. Excluding the impact of this on our Government Services revenues, the Company’s other U.S./Canada direct offices increased 9% compared with fiscal 2011. Sales in the Company’s international direct offices increased primarily due to increased sales in Japan, and the majority of the Company’s international licensee partners recognized stronger sales during the quarter, resulting in a 23% increase in royalty revenues. The Company’s National Account practices reported a 24% increase in revenues, led by a $0.5 million improvement in the Sales Performance practice and a $0.4 million increase in revenues from the Education practice. Self-funded marketing revenues, which include public programs, book and audio sales and royalties, and delivered speeches, increased by $0.8 million on the strength of royalties related to new books.