Franklin Covey CEO Discusses F4Q2010 Results - Earnings Call Transcript
Franklin Covey Company (
)
F4Q2010 (Qtr End 08/31/10) Earnings Conference Call
November 9, 2010 5:00 PM ET
Executives
Derek Hatch – Corporate Controller
Bob Whitman – Chairman and CEO
Shawn Moon – EVP, Global Sales and Delivery, Government Services and Education
Sean Covey – EVP, Global Solutions and Partnerships, Education Practice
Steve Young – CFO
Analysts
Benj Gallander – Contra the Heard
James DeYoung [ph] – Credit Suisse
Patrick Retzer
John Lewis – Osmium Partners
Presentation
Operator
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Franklin Covey Co. F4Q09 (Qtr End 08/31/09) Earnings Call Transcript
Good day, ladies and gentlemen, and welcome to the Franklin Covey Investor conference call. My name is Chris and I’ll be your operator for today. All participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator instructions) As a reminder, this conference is being recorded for replay purposes. I would now like to turn the conference over to your host for today, Mr. Derek Hatch, Corporate Controller. Please proceed.
Derek Hatch
Good afternoon on behalf of Franklin Covey I would like to welcome you to our four quarter fiscal 2010 conference call. Before we begin the call and the information just want to represent it today. We’d just like to remind everybody about forward-looking statements and that 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 stabilize and grow revenues, the ability of the company to hire productive sales professionals, general economic conditions, competition in the company’s targeted marketplace, market acceptance of new products or services and marketing strategies, changes in the company’s market share, changes in the size of the overall market for the company’s products, changes in the training and spending policies of the company’s clients and other factors identified and discussed in the company’s most recent annual report on Form 10-K which is coming very soon and other periodic reports filed with the Securities and Exchange Commission.
Many of these conditions are beyond our control or influence, any one of which may cause future results to differ materially from the company’s current expectations. And there can be no assurance that the company’s actual future performance will meet management’s expectations. These forward-looking statements are based on management’s current expectations and we undertake no obligation to update or revise these forward-looking statements to reflect events or circumstances after the date of today’s presentation.
With that said, I would like to turn the time over this afternoon to our Chief Executive Officer and Chairman of the Board Mr. Bob Whitman?
Bob Whitman
Good afternoon everyone. I am delighted to have the chance to talk to you all of you today and appreciate you joining us. So I’d like to organize my comments there around the following four headlines or themes. First, that we were very pleased with the company’s strong performance and results in the fourth quarter. We’ll go into details on those. Second, we also feel very good about the company’s strong performance and tremendous progress for 2010 as a whole. Third, we’re excited by the strong booking trends momentum we are continuing to see in the business and fourth, based on these trends, we expect to achieve significant continued improvement in both revenues and profitability during fiscal 2011.
So with those headlines maybe I’ll just provide some detail behind each of those. First with respect to the fourth quarter, you’ve all seen the press release. As you see, revenue for the fourth quarter totaled $44.7 million, which is an increase of $11.3 million or 34% from the $33.4 million we achieved in the fourth quarter of fiscal 2009. And our strong bookings during the third quarter obviously translated into revenue growth during the fourth quarter which means we exceeded both last year’s revenues and our expectations.
You may recall that at the end of the third quarter webcast, we talked about having around $15 million more revenue to be delivered in coming periods on the books at that time than we had had at that point in the prior year. And as you can see a lot of that, $10 million of that came through in the quarter and as we’ll talk about in a moment, we still have $12 million more in the books at this point than we had at this time last year. So we see a continued strong pipeline.
As shown in slide four, we were really pleased to achieve growth in all of our major channels. The first line item which is US, Canada direct offices that break into two components. First, revenues in our government services group grew by $6.7 million in the fourth quarter reflecting in part of previously announced government services contract which was awarded to us in the beginning of the quarter that we talked about it in the last call. It is important that this contract was and is however we also achieved significant growth during the quarter in each of our other key channels. In fact every direct office both domestic and international grew during the fourth quarter as did every field support practice, our international licensee partners and two of the three national account practices.
Revenue in our other geographic domestic direct offices grew, other than government grew $2.2 million or 17% in the quarter reflecting the actual delivery of bookings that I had previously put on the books in the third and fourth quarters, as I noted every domestic office grew revenues and profitability during the quarter. Revenues in our international direct offices also grew 6% for the quarter which is the first time we’ve seen growth overall in these offices this year.
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