Franklin Covey Announces Fiscal 2009 First Quarter Results

Business Wire, Jan 13, 2009

SALT LAKE CITY -- Franklin Covey Co. (NYSE: FC), a global provider of leadership and productivity-based training and consulting services, today announced financial results for its fiscal first quarter ended November 29, 2008. Reported net sales for the quarter totaled $35.1 million, compared to $73.6 million in the first quarter of fiscal 2008. The vast majority of this decline was attributable to the sale of CSBU operations and the resulting reduction in product sales. The net loss totaled $0.6 million, or $(0.04) per share, compared to net income of $2.0 million, or $0.10 per diluted share, in the first quarter of fiscal 2008.

The Company's financial results are difficult to compare to the corresponding quarter of the prior year due to the sale of its Consumer Solutions Business Unit (CSBU). Effective July 6, 2008, the CSBU was sold to a new private equity-funded entity known as Franklin Covey Products, LLC. The CSBU was primarily responsible for sales of the Company's consumer products, including the popular Franklin Covey Planner(TM), binders, and related accessories, to consumers and small businesses through retail, wholesale, Internet, and call center channels. Due to the Company's 19.5 percent voting interest and continuing involvement with Franklin Covey Products, LLC, the Company is not presenting the financial results of the CSBU in a discontinued operations format.

"We are pleased to now have a single-minded focus on our core training and consulting business. We anticipated our 2009 performance would start slowly and build momentum over the course of the year. We are encouraged to see bookings strengthen considerably in November and December and validate our earlier assumptions. Our training and consulting offerings are targeted towards enhancing employee productivity and leadership, developing customer loyalty, and improving sales force effectiveness, which makes our services especially relevant to our clients as they attempt to navigate through this difficult economic environment," said Bob Whitman, Chairman and Chief Executive Officer of Franklin Covey. "We remain committed to taking costs out of our business, and concurrent with the sale of CSBU, implemented a restructuring plan to reduce the number of domestic sales offices and decentralize certain sales support functions. Combined with our expected sales momentum, we believe that these actions to streamline our expense structure will position us well for a strong second-half and overall performance in 2009."

Sales from the Company's Organizational Solutions Business Unit, which primarily consist of training and consulting sales, decreased $3.4 million compared to the prior year. Domestic sales declined by $3.2 million, primarily due to planned decreases in the number of public programs offered, a decline in facilitator sales, fewer on-site events resulting from a decrease in days booked at September 1, 2008 compared to the prior year, and lower sales force performance training revenues. International sales declined by $0.1 million largely due to lower sales in certain countries in which the Company operates directly owned offices, partially offset by increased licensee royalty revenues.

Earnings Conference Call

On Thursday, January 13, 2009 at 5:00 p.m. Eastern time (3:00 p.m. Mountain time) Franklin Covey will host a conference call to review its financial results for the fiscal quarter ended November 29, 2008. Interested persons may participate by dialing 1-866-700-7477 (International participants may dial 1-617-213-8840), access code: 95846365. Alternatively, a webcast will be accessible at the following Web site: http://phx.corporate-ir.net/phoenix.zhtml?p=irol-eventDetails&c=102601&eventID=2058937. A replay will be available through 11:59 p.m. Eastern time on January 22, 2009 by dialing 1-888-286-8010 (International participants may dial 1-617-801-6888), access code: 61056511. The webcast will remain accessible through January 22, 2009 on the Investor Relations area of the Company's web site at: http://phx.corporate-ir.net/phoenix.zhtml?c=102601&p=irol-IRHome.

Forward-Looking Statements

This press release 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: expected sales; reductions in capital requirements and cost structure; general economic conditions; market acceptance of new products or services and marketing strategies; the ability to achieve sustainable growth in future periods; the expected impact of the Company's restructuring plan; and other factors identified and discussed in the Company's most recent Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission. Many of these conditions are beyond the Company's 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 the Company's actual future performance will meet management's expectations. These forward-looking statements are based on management's current expectations and the Company undertakes no obligation to update or revise these forward-looking statements to reflect events or circumstances subsequent to this press release.