Franklin Covey(FC) 2023Q3 Earnings Summary
Bullish Points:
1. Net sales for the quarter ended May 31, 2023, increased from the same period in 2022.
2. Gross profit for the quarter ended May 31, 2023, increased from the same period in 2022.
3. Deferred revenue and unbilled multi-year contracts increased by 21% compared to May 31, 2022.
4. Education Division revenues grew by 18% in Q3 fiscal 2023.
5. International sales improved, with international direct office sales increasing by 23% and international licensee revenues increasing by 9% compared to the prior year.
6. Q3 2023 AAP subscription and subscription-related revenues increased by 6% compared to Q3 2022.
7. China sales improved in Q3 2023, leading to overall growth in foreign direct offices.
8. Japan office sales increased by 2% over the prior year.
9. Education Division sales increased by 18% compared to the prior year.
10. Education membership subscription and subscription services revenue increased by 21% compared to Q3 2022.
11. First three quarters of fiscal 2023 Direct Office segment revenue increased by 8% compared to fiscal 2022.
12. AAP subscription and subscription-related revenues increased by 12% compared to the first three quarters of fiscal 2022.
13. International licensee revenues increased primarily due to increased royalty revenues from certain licensees.
14. Royalty revenues increased 11%, and share of AAP revenues increased by 6% to $1.1 million.
15. Education Division sales increased 23%, primarily due to increased consulting, coaching, and training days delivered.
Bearish Points:
1. Net income for the quarter ended May 31, 2023, decreased from the same period in 2022.
2. Diluted net income per share for the quarter ended May 31, 2023, decreased from the same period in 2022.
3. Stock-based compensation for the quarter ended May 31, 2023, was $3.307 million, and for the three quarters ended May 31, 2023, was $9.357 million.
4. Company is subject to various risks and uncertainties, including sales trends, macroeconomic activity, COVID-19 pandemic disruptions, cost containment, capital expenditures, and collection of accounts receivable.
5. Cash held in non-interest bearing and interest-bearing accounts exceeds FDIC insurance limits, posing a potential risk to liquidity.
In summary, Franklin Covey (FC) has shown growth in net sales, gross profit, and various revenue streams in Q3 fiscal 2023 compared to the previous year. However, the company experienced a decrease in net income and diluted net income per share for the quarter ended May 31, 2023. The company is also subject to various risks and uncertainties that could impact its financial performance. For more information, you can read the original text of Franklin Covey's financial report: https://www.sec.gov/Archives/edgar/data/886206/000088620623000026/fc-20230531x10q.htm
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