SALT LAKE CITY — Nov. 2, 2022 — Franklin Covey Co. (NYSE: FC), a global performance improvement company that creates, and on a subscription basis, distributes world-class content, training, processes, and tools that organizations and individuals use to achieve systemic changes in human behavior to transform their results, today announced financial results for its fourth quarter and fiscal 2022 year, which ended on August 31, 2022.


The Company’s strong full year and fourth quarter performance were highlighted by the following key metrics:

    • The Company’s consolidated sales for the year ended August 31, 2022 increased 17%, or $38.7 million, to $262.8 million compared with $224.2 million in fiscal 2021, and consolidated sales for the fourth quarter increased 14%, or $9.9 million, to $78.8 million compared with $68.9 million in fiscal 2021. The Company’s sales for both the full year and fourth quarter increased primarily due to strong subscription and subscription services sales, including the following:
      All Access Pass subscription and subscription services sales grew 28% to $144.5 million for the year compared with $112.5 million in fiscal 2021, and grew 26% to $40.3 million in the fourth quarter compared with $32.0 million in the fourth quarter of fiscal 2021.
    • Education Division revenues grew 26% for the fiscal year and grew 17% in the fourth quarter on the strength of a record 739 new Leader in Me schools, as well as increased consulting, coaching, and training days delivered for both the year and the fourth quarter, a significant increase in the amount of previously deferred subscription revenue related to Leader in Me subscriptions recognized, and increased training and classroom material sales.
    • Total Company deferred revenue at August 31, 2022 topped $100 million for the first time and totaled $102.4 million. The sum of billed subscription and unbilled deferred subscription revenue at August 31, 2022 grew 20% to $153.4 million, compared with August 31, 2021. Approximately 46% of the Company’s All Access Pass subscriptions are now multi-year contracts, representing 61% of total All Access Pass subscription contract value.

The Company was very pleased with its overall sales growth for the year and during the quarter despite some international headwinds, including $2.6 million of unfavorable impact from foreign exchange rates for the year and $1.4 million in the fourth quarter, and a 27% decrease in China office sales during the year and a 28% decrease in the fourth quarter, primarily due to ongoing pandemic mitigation measures. On a constant currency basis, the Company’s consolidated sales for fiscal 2022 grew 18% over the prior year to $265.5 million, and grew 16% in the fourth quarter to $80.3 million.

    • On the strength of increased sales and continued strong gross margins, gross profit for fiscal 2022 increased 17%, or $29.0 million, to $201.9 million, and fourth quarter gross profit increased 11% to $59.1 million compared with $53.3 million in 2021.
    • Operating income increased 192%, or $15.6 million, to $23.7 million for fiscal 2022, and increased 101%, or $4.4 million, to $8.7 million in the fourth quarter compared with $4.3 million in fourth quarter of fiscal 2021.
    • Adjusted EBITDA for fiscal 2022 increased 51%, or $14.2 million, to $42.2 million compared with $28.0 million in fiscal 2021, and Adjusted EBITDA for the fourth quarter of fiscal 2022 increased 26% to $13.3 million compared with $10.6 million in the prior year.
    • Cash flows provided by operating activities for the fiscal year ended August 31, 2022 increased 13% to $52.3 million compared with $46.2 million in fiscal 2021.
    • With $60.5 million of cash and $15 million available on its revolving line of credit, the Company’s liquidity totaled more than $75 million at August 31, 2022.

Paul Walker, President and Chief Executive Officer, commented, “We are very pleased with our outstanding fiscal 2022 results and our stronger-than-expected fourth quarter performance, which were driven by sustained revenue growth, continued strong gross margins, and operational efficiency. Our strong fourth quarter results, combined with the very positive results for the first three quarters of fiscal 2022 resulted in our outstanding full-year results, which included a 17% increase in sales, a 76.8% gross margin, a 192% increase in operating income to $23.7 million, and a 51% increase in Adjusted EBITDA to $42.2 million. Our cash flows from operating activities increased 13% to $52.3 million and we ended the year with more than $75 million in liquidity, including $60.5 million in cash and with our full $15 million revolving credit facility available.”

Walker continued, “Our strong results in fiscal 2022 have been driven by five key factors. First, the global markets we have chosen to serve are large and growing. These market conditions provide us with significant opportunities for growth and to increase our share of these markets. Second, our focus is on the most important and durable segments within these markets. The opportunities and challenges we help our clients address are very longstanding and provide us with the opportunity to partner with them in both favorable and more challenging and volatile times. Third, our subscription model is a powerful engine that drives growth, recurring revenue, improved predictability of future revenues, and a high flow through of revenue to profitability and cash flow. Fourth, we have compelling opportunities for growth. The combination of the large and growing markets we serve, the importance of the challenges we help our clients address, and the strength of our subscription business model create a number of exciting global growth opportunities. And fifth, our strong cash flow has, and can be invested to create additional value for shareholders. We believe these factors have built considerable momentum in our business during fiscal 2022 and have created a foundation for increased revenues, Adjusted EBITDA, and cash flows in fiscal 2023 and in future years.”