Brief Overview on Company’s Performance: Franklin Covey Co. (NYSE: FC)

Franklin Covey Co. stock identified change of 75.97% away from 52-week low price and recently located move of -46.98% off 52-week high price. FC stock has been recorded 11.09% away from 50 day moving average and -25.24% away from 200 day moving average. Moving closer, we can see that shares have been trading 3.32% off 20-day moving average.

Franklin Covey Co. (FC) recently reported financial results for its third quarter of fiscal 2020, which ended on May 31, 2020.

Fiscal 2020 Year-to-Date Financial Results

After a strong start in the first half of fiscal 2020, which saw consolidated sales increase 8% over the first two quarters of fiscal 2019, the Company’s year-to-date results through May 31, 2020 were negatively affected by the impact of the COVID-19 pandemic on third quarter results. Consolidated sales for the three quarters ended May 31, 2020 were $149.5M contrast with $160.2M in the first three quarters of fiscal 2019. Enterprise Division sales reduced 9% to $114.0M, contrast with $124.9M for the first three quarters of the previous year, and were adversely influenced by reduced onsite, facilitator, and international licensee royalty revenues as offices and workplaces were closed and international economies were essentially shut down during the third quarter. Education Division revenues reduced 3% to $30.2M contrast with $31.1M in the first three quarters of fiscal 2019, which was primarily Because of reduced training material sales and coaching days as many schools were closed and educators transitioned to a virtual learning environment. Consolidated gross profit for the first three quarters of fiscal 2020 was $107.5M contrast with $111.8M in the corresponding period of fiscal 2019. Gross margin for the first three quarters of fiscal 2020 improved 214 basis points to 71.9% of sales contrast with 69.8% in the first three quarters of the previous year, reflecting the favorable impact of increased subscription revenues in the mix of total sales.

Operating expenses for the first three quarters of fiscal 2020 reduced $9.7M contrast with the first three quarters of fiscal 2019, primarily Because of reduced SG&A expenses and reduced stock-based compensation expense. Reduced SG&A expense was primarily Because of reduced variable compensation costs including commissions, bonuses, and incentives from reduced sales; reduced travel and marketing expense; and cost savings in various areas of the Company’s operations. Stock-based compensation expense reduced $4.5MBecause of the reevaluation of stock-based compensation awards in the third quarter of fiscal 2020 as before described. The Company’s loss from operations through May 31, 2020 improved to $(0.7M) contrast with $(6.1)M through May 31, 2019. Adjusted EBITDA for the three quarters ended May 31, 2020 was $5.4M contrast with $7.2M for the first three quarters of fiscal 2019, reflecting the impact of the COVID-19 pandemic on the Company’s third quarter results of operations. In constant currency, the Company’s Adjusted EBITDA was $5.8M for the first three quarters of fiscal 2020. Including the impact of a importantly increased tax provision resulting primarily from the addition of valuation allowances on deferred tax assets, the Company stated a net loss of $(10.4)M, or $(0.75) per share, for the first three quarters of fiscal 2020, contrast with a $(6.9)M loss, or $(.49) per share, in the first three quarters of fiscal 2019.

Fiscal 2020 Outlook

Despite the Company’s strong results for the first half of fiscal 2020, the Company before withdrew its guidance and assumptions for fiscal 2020Because of the adverse impacts of the COVID-19 pandemic and the ongoing uncertainties related to business, governmental, and educational institution disruptions. The Company remains confident, however, that once national and local economies start to return to normalcy, the same factors that have driven Franklin Covey’s growth trajectory across recent years, will help the Company start to resume accelerated growth.

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