Franklin Covey Company · NYSE:FC
Franklin Covey — Q4 2024 Earnings Presentation
31 slides from Franklin Covey's earnings presentation, Nov 6, 2024
Slide 1: Greatness Starts Here
Greatness Starts Here We transform organizations by building exceptional leaders, teams, and cultures that get results. © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL
Slide 2: Investor Update Fiscal Year 2024
Investor Update Fiscal Year 2024 © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL
Slide 3: Forward-Looking Statements/Non-GAAP
Forward-Looking Statements/Non-GAAP 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 includi
Slide 4: Revenue and Adjusted EBITDA Growth
Revenue and Adjusted EBITDA Growth (in millions, unaudited) Revenue Adj. EBITDA --FY17 was the first full year under AAP subscription model. Note: Adjusted EBITDA is a non-GAAP, please see Appendix for additional information. © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL 4
Slide 5: FY25 Growth Investments
FY25 Growth Investments (in millions, unaudited) Client Expansion: New Logos: Sales and Scalability: Sales Leadership Impact: Content Sales and Support Roles Marketing Roles & and Operations and Technology Closing Resources © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL 5
Slide 6: Franklin Covey Target Growth Trajectory
Franklin Covey Target Growth Trajectory (in millions, unaudited) Adjusted EBITDA Revenue Note: Adjusted EBITDA is a non-GAAP, please see Appendix for additional information. © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL 6
Slide 7: Franklin Covey
Franklin Covey (FY24 and Q4FY24 unaudited) $84.1M $287.2M $22.9M Q4FY24 Revenue FY24 Revenue Q4FY24 Adjusted EBITDA $78.0M Q4FY23 $280.5M FY23 $16.5M Q4FY23 $55.3M $60.3M $48.9M FY24 Adjusted EBITDA Cash Flows from Operating Free Cash Flows Activities $48.1M FY23 $35.7M FY23 $22.2M FY23 Note: Adjust
Slide 8: Enterprise Division - North America
Enterprise Division - North America (FY24 and Q4FY24 unaudited) $156.5M $89.1M $138.9M Revenue Subscription Revenue Subscription & Subscription Services Revenue $45.1M Q4FY24 $22.6M Q4FY24 $36.7M Q4FY24 $49.3M $68.4M 59% Billed Deferred Revenue Unbilled Deferred Revenue AAP Multi-Year Contract Value
Slide 9: Enterprise Division - International
Enterprise Division - International (FY24 and Q4FY24 unaudited) $33.1M $11.2M Revenue – International Direct Revenue - International Licensee Partners $8.7M Q4FY24 $2.6M Q4FY24 © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL 9
Slide 10: Education Division
Education Division (FY24 and Q4FY24 unaudited) $73.5M $81.4M $67.0M $48.5M Revenue Invoiced Amounts Subscription & Subscription Deferred Revenue Service Revenue (Billed) $24.1M Q4FY24 $44.4M Q4FY24 $22.6M Q4FY24 $40.7M FY23 © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL 10
Slide 11: Free Cash Flow
Free Cash Flow (in thousands) YEAR ENDED AUGUST 31, 2024 2023 In thousands CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 23,402 $ 17,781 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 8,153 8,613 Amortization of capitalized curricu
Slide 12: Appendix
Appendix © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL 12
Slide 13: Other Information
Other Information OTHER INCOME STATEMENT INFORMATION: • Depreciation: $3.9M in FY2024, expected to total approximately $3.5M in FY2025. • Amortization: $4.2M in FY2024, expected to total approximately $4.2 in FY2025. • Net Interest Expense: $0.0M in FY2024 and Net Interest Income expected to total a
Slide 14: Franklin Covey Financial Headlines
Franklin Covey Financial Headlines (in millions and unaudited) Fiscal 2024 Fiscal 2023 Chg % Q4 FY 24 Q4 FY 23 Chg % Revenue $ 287.2 $ 280.5 $ 6.7 2.4% $ 84.1 $ 78.0 $ 6.2 7.9% Cost of Sales 66.2 67.0 (0.9) -1 .3% 1 8.4 1 8.6 (0.3) -1 .4% Gross Profit 221 .1 21 3.5 7.6 3.6% 65.7 59.3 6.4 1 0.8% Gros
Slide 15: Franklin Covey Highlights
Franklin Covey Highlights (in millions and unaudited) Note: Adjusted EBITDA and Operating SG&A are non-GAAP financial measures; please see Appendix for additional information. Amounts may not total due to rounding. © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL 15
Slide 16: Trends in the Business
Trends in the Business (in millions and unaudited) © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL 16
Slide 17: Revenue Information
Revenue Information (in millions and unaudited) FY 2022 FY 2023 FY 2024 Q1 Q2 Q3 Q4 FY2022 Q1 Q2 Q3 Q4 FY2023 Q1 Q2 Q3 Q4 FY2024 Revenue Reported Revenue 61.3 56.6 66.2 78.8 262.8 69.4 61.8 71.4 78.0 280.5 68.4 61.3 73.4 84.1 287.2 Change in Deferred Revenue (9.3) 2.6 (1.8) 19.5 11.0 (11.4) (0.6) (3
Slide 18: Franklin Covey Contracts Signed
Franklin Covey Contracts Signed (in millions and unaudited) Enterprise Division Education Division C orporate Total C ompany Fourth Quarter FY24 FY23 Change % FY24 FY23 Change % FY24 FY23 Change FY24 FY23 Change % Revenue 58.5 52.4 6.1 1 1 .6% 24.1 24.1 0.0 0.0% 1.5 1.4 0.1 84.1 78.0 6.2 7.9% Change
Slide 19: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income to Adjusted EBITDA (in millions and unaudited) Quarter Ended Fiscal Year Ended August 31, August 31, August 31, August 31, 2024 2023 2024 2023 Reconciliation of net income to Adjusted EBITDA: Net income $ 11,956 $ 6,812 $ 23,402 $ 17,781 Adjustments: Interest expense (in
Slide 20: Additional Financial Information
Additional Financial Information (in millions and unaudited) Quarter Ended Fiscal Year Ended August 31, August 31, August 31, August 31, 2024 2023 2024 2023 Revenue by Division/Segment: Enterprise Division: Direct offices $ 56,100 $ 49,827 $ 197,610 $ 194,021 International licensees 2,403 2,597 11,2
Slide 21: Condensed Consolidated Balance Sheets
Condensed Consolidated Balance Sheets (in millions and unaudited) August 31, August 31, August 31, August 31, 2024 2023 2024 2023 Assets Liabilities and Shareholders' Equity Current assets: Current liabilities: Cash and cash equivalents $ 48,663 $ 38,230 Current portion of notes payable $ 835 $ 5,83
Slide 22: Condensed Consolidated Income Statements
Condensed Consolidated Income Statements (in thousands, except per-share amounts, and unaudited) Quarter Ended Fiscal Year Ended August 31, August 31, August 31, August 31, 2024 2023 2024 2023 Revenue $ 84,124 $ 77,955 $ 287,233 $ 280,521 Cost of revenue 18,387 18,650 66,161 67,031 Gross profit 65,7
Slide 23: Free Cash Flow
Free Cash Flow (in thousands) YEAR ENDED AUGUST 31, 2024 2023 In thousands CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 23,402 $ 17,781 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 8,153 8,613 Amortization of capitalized curricu
Slide 24: Enterprise Division Financial Summary
Enterprise Division Financial Summary (in millions and unaudited) Fiscal 2024 Fiscal 2023 Chg % Q4 FY 24 Q4 FY 23 Chg % Revenue $ 208.8 $ 205.7 $ 3.2 1 .5% $ 58.5 $ 52.4 $ 6.1 1 1 .6% Cost of Sales 36.4 38.2 (1 .8) -4.7% 9.1 9.4 (0.2) -2.5% Gross Profit 1 72.4 1 67.4 5.0 3.0% 49.4 43.0 6.3 1 4.7% Gr
Slide 25: Enterprise Division Financial Summary
Enterprise Division Financial Summary (in millions and unaudited) © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL 25
Slide 26: Enterprise Division AAP & Related Revenue
Enterprise Division AAP & Related Revenue (in millions and unaudited) Fiscal 2024 Fiscal 2023 Fiscal 2022 Q4FY24 Q3FY24 Q2FY24 Q1FY24 Q4FY23 AAP Sales $106.3 $99.3 $89.0 $26.9 $26.3 $26.3 $26.8 $26.1 AAP Add on Sales* 58.5 58.7 55.5 16.3 16.2 11.2 14.8 15.6 Total AAP and Related 164.8 158.0 144.5 43
Slide 27: Education Division Financial Summary
Education Division Financial Summary (in millions and unaudited) Fiscal 2024 Fiscal 2023 Chg % Q4 FY 24 Q4 FY 23 Chg % Revenue $ 73.5 $ 69.7 $ 3.8 5.4% $ 24.1 $ 24.1 $ 0.0 0.0% Cost of Sales 26.4 25.3 1 .1 4.2% 8.1 8.2 (0.1 ) -0.7% Gross Profit 47.1 44.4 2.7 6.1 % 1 6.0 1 5.9 0.1 0.4% Gross Profit %
Slide 28: Education Division Financial Summary
Education Division Financial Summary (in millions and unaudited) * * © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL 28
Slide 29: Definitions
Definitions 1. “Deferred Subscription Revenue” primarily consists of billings or payments received in advance of revenue being recognized from subscription services. Deferred revenue is recognized as Revenue as the revenue recognition criteria are met. The Company generally invoices customers in ann
Slide 30: Definitions
Definitions 1. “Adjusted EBITDA” (earnings before interest, income taxes, depreciation, amortization, stock-based compensation, and certain other items) is a non-GAAP financial measure that the Company believes is useful to investors in evaluating its results. A reconciliation of “Adjusted EBITDA,”
Slide 31: franklincovey.com
franklincovey.com © FranklinCovey Co. All rights reserved. PROPRIETARY AND CONFIDENTIAL
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