Franklin Covey (NYSE: FC) reported Q1 EPS of ($0.06), $0.08 better than the analyst estimate of ($0.14). Revenue for the quarter came in at $48.3 million versus the consensus estimate of $48.03 million.

• Net Income and Adjusted EBITDA Exceed Expectations
• Company’s Powerful Subscription Business Growth Engine, the All Access Pass and Leader in Me Membership, Show Continued Strong Growth, High Revenue Retention, and Durability with Clients
• Improved Gross Margin and Decreased Operating Expenses Allow Income from Operations to Remain Effectively Even with the Prior Year’s Strong Performance Despite Pandemic
• Cash Flows from Operating Activities Increases 59% to $10.9 Million in the First Quarter—Liquidity and Financial Position Remain Strong at November 30, 2020

Bob Whitman, Chairman and Chief Executive Officer, commented, “We are really pleased that in the first quarter of fiscal 2021, Franklin Covey’s operations continued to demonstrate their strength, agility, and ability to progress, even during the continuing pandemic. During the quarter, revenue was strong, driven particularly by the strength and growth of the All Access Pass and related services, which accounts for nearly 85% of revenues in North America. In addition, gross margins increased compared to even those achieved in last year’s very strong first quarter, and operating expenses decreased significantly compared with the prior year. We were also pleased that sales in our international operations, which were just beginning to offer the All Access Pass and, therefore, did not have a substantial base of subscription revenue to cushion them, improved significantly during the first quarter. As a result of the combination of these trends, we achieved Adjusted EBITDA of $3.7 million in the first quarter of fiscal 2021 versus an expectation of between $2.0 million and $2.5 million.”

Whitman continued, “Cash flow for the quarter was strong and we ended the quarter with approximately $50 million in liquidity, a level higher than the $39 million of liquidity we had when the pandemic started, and up from $42 million at the end of fiscal 2020 in August.”

Based on current expectations, including the duration and anticipated economic recovery from the COVID-19 pandemic, the Company affirms its previously announced guidance and continues to expect Adjusted EBITDA to total between $20 million to $22 million in fiscal 2021. The Company remains confident that the strength of the All Access Pass and Leader in Me membership, which have driven Franklin Covey’s growth trajectory across recent years, and which have remained strong during the pandemic, will drive accelerated growth in fiscal 2021 and in the future.

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