Franklin Covey Co. (FC) saw its loss widen to $4.54 million, or $0.33 a share for the quarter ended May 31, 2017. In the previous year period, the company reported a loss of $1.05 million, or $0.07 a share. Revenue during the quarter went down marginally by 2.21 percent to $43.75 million from $44.74 million in the previous year period. Gross margin for the quarter contracted 359 basis points over the previous year period to 62.49 percent. Operating margin for the quarter stood at negative 14.84 percent as compared to a negative 2.81 percent for the previous year period.
Operating loss for the quarter was $6.49 million, compared with an operating loss of $1.26 million in the previous year period.
However, the adjusted EBITDA for the quarter stood at negative $0.02 million compared with $1.79 million in the prior year period. At the same time, adjusted EBITDA margin stood at negative 0.04 percent for the quarter compared to 4.01 percent in the last year period.
Bob Whitman, chairman and chief executive officer, commented, "During the third quarter, we were encouraged by the strong year-over-year growth in All Access Pass contracts invoiced, and by the high renewal rate of All Access Pass contracts. We believe that the transition to the All Access Pass business model will provide growth in future periods through higher initial sale sizes, consistently strong renewals, and from sales of add-on services and training materials. The All Access Pass approach is strengthening every aspect of our business as we change the way we engage with clients, both pre- and post-sale, expand our reach within the customer, and create additional value for them. Because of the long-term advantages of All Access Pass to our clients and to us, we are pleased to have sales shift from our traditional channels to the All Access Pass. The transition to the All Access Pass is building strong momentum in our operations, and we believe that we are now at positive inflection points where: our growing deferred revenue balances will flow-through to increases in sales and profits; sales of services and materials added on to All Access Passes alone will substantially offset declines in our traditional onsite and facilitator channels; and where the percentage profit flow-through on increases in revenue will improve. We believe we are positioned for accelerated growth in the fourth quarter and future years."
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