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FranklinCovey
🇺🇸 NYSE:FC
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May 31, 2021

FranklinCovey Q3 2021 Earnings Report

Franklin Covey's third quarter of fiscal year 2021 resulted in record sales, increased subscription revenue, and exceeded expectations for operating income and adjusted EBITDA.

Key Takeaways

Franklin Covey reported strong third-quarter results for fiscal year 2021, with record sales of $58.7 million, a 43% increase in All Access Pass subscription and subscription services sales, and a significant increase in adjusted EBITDA to $8.6 million.

Consolidated sales for the quarter reached a record $58.7 million, surpassing both fiscal year 2020 and pre-pandemic levels of fiscal year 2019.

Gross profit increased to $45.9 million, driven by increased sales and a 587 basis points improvement in gross margin percentage.

Adjusted EBITDA rose to $8.6 million, a significant improvement compared to a loss of $(3.6) million in fiscal year 2020.

Cash flows from operating activities for the first three quarters of fiscal year 2021 increased by 65% to $30.9 million.

Total Revenue
$58.7M
Previous year: $37.1M
+58.3%
EPS
$0.21
Previous year: -$0.12
-275.0%
Gross Profit
$45.9M
Previous year: $26.8M
+71.1%
Cash and Equivalents
$35.8M
Previous year: $37M
-3.3%
Free Cash Flow
$8.63M
Total Assets
$213M

FranklinCovey

FranklinCovey

FranklinCovey Revenue by Segment

Forward Guidance

Franklin Covey increased its fiscal year 2021 Adjusted EBITDA guidance to a range of $24.5 million to $26.5 million, anticipating continued strength in All Access Pass and Leader in Me membership, while also planning investments for long-term growth.

Positive Outlook

  • Continued strength in All Access Pass and Leader in Me membership is expected during the fourth quarter of fiscal year 2021.
  • Investments are planned for long-term growth, including costs associated with the acquisition of Strive Talent.
  • A significant number of new client partners are being hired to position the Company for growth in future periods.
  • Other growth investments are planned to support future expansion.
  • The middle of the Adjusted EBITDA range reflects over 75% growth compared with the $14.3 million achieved in fiscal year 2020.

Challenges Ahead

  • Investments in Strive Talent acquisition will impact the fourth quarter.
  • Hiring a significant number of new client partners will increase costs in the fourth quarter.
  • Other growth investments will also contribute to higher expenses in the fourth quarter.
  • The Company is unable to provide a reconciliation of forward-looking estimate of non-GAAP Adjusted EBITDA to GAAP measures.
  • The reconciliation is not available without unreasonable effort.

Revenue & Expenses

Visualization of income flow from segment revenue to net income

Company Overview

Full financial data and analysis

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