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May 31, 2022
FranklinCovey Q3 2022 Earnings Report
Franklin Covey reported strong financial results, marked by a 13% increase in third-quarter sales, driven by growth in subscription services and the Education Division.
Key Takeaways
Franklin Covey reported a strong third quarter with a 13% increase in sales to $66.2 million. The growth was fueled by a 32% increase in All Access Pass subscription and subscription services sales, and a 21% increase in Education Division revenues. Operating income increased by 91% to $5.9 million, and adjusted EBITDA increased by 27% to $10.9 million. The company's liquidity remained strong with $52.1 million in cash and $15 million available on its revolving line of credit.
Consolidated sales increased 13% to $66.2 million compared to fiscal year 2021.
All Access Pass subscription and subscription services sales grew 32% to $39.1 million.
Education Division revenues grew 21% due to increased consulting, coaching, and training days.
Operating income increased 91% to $5.9 million and Adjusted EBITDA increased 27% to $10.9 million.
Revenue by Segment
Forward Guidance
Franklin Covey increased its guidance for fiscal year 2022 and now expects Adjusted EBITDA to total between $40 million and $41.5 million.
Positive Outlook
- Strength of the All Access Pass subscription.
- Strength of the Leader in Me membership subscriptions.
- The subscriptions have driven Franklin Covey’s growth trajectory across recent years.
- Subscriptions have remained strong during the pandemic and ongoing recovery.
- The subscriptions will drive continued growth in the fourth quarter of fiscal 2022 and subsequent years.
Challenges Ahead
- Ongoing business disruptions in China and Japan resulting from the COVID-19 pandemic and economic conditions in those countries.
- The timing of Education coaching days, which were concentrated in the fourth quarter of fiscal 2021 as pandemic restrictions loosened, but were recognized more evenly during fiscal 2022.
- Investments in new personnel.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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