Franklin Covey Co. (FC), a global performance improvement company, reported on Tuesday a decline of 40.66 percent in earnings for the first-quarter of fiscal 2013.
The company earned $1.72 million, or $0.10 a share in the first-quarter compared with $ 2.90 million or $0.15 a share, a year ago. Analysts on average had predicted profit of $0.14 a share.
Revenues during the first-quarter decreased 1.46 percent to $43.42 million from $44.1 million for last year period.
During the first-quarter, gross margin expanded by 208 basis points to 69.17% of sales compared with 67.09% in the last year period.
Total expenses as a percentage of revenues increased to 91.93% from 87.99% in the same period last year. That resulted in contraction of 394 basis points in operating margin to 8.07%.
The company disclosed operating income of $3.51 million compared with $5.29 million in the last year period.
On the other hand, adjusted EBITDA for the first-quarter stood at $6.02 million, down 15.07 percent compared to $7.09 million in prior year quarter. While adjusted EBITDA margin has contracted 222 bps over prior year period to 13.87 percent.
Commenting on the outlook on adjusted EBITDA, the company said, "Given strong booking momentum, and the expected shift of postponed contractual government services’ revenue into subsequent quarters, the Company affirmed its previously-announced annual guidance range for Adjusted EBITDA of $35 million to $37 million."
Bob Whitman, chairman and CEO, said, ''We were pleased to continue our strong momentum during the first quarter of fiscal 2014. We were awarded the renewal of a large government agency contract in September, and expected to deliver millions of dollars of revenue related to that contract in the first quarter. With the strength of our other operations during the quarter, our strong booking momentum, the size of our contractual pipelines, and the expected shift of government business into the other quarters of fiscal 2014, the outlook for the future direction of our business remains strong and we expect to have another outstanding year in fiscal 2014.''
The company's cash and cash equivalents stood $2.0 million at Nov. 30, 2013 with no borrowings on its line of credit facility, compared with $12.3 million at Aug. 31, 2013.
Net working capital of $36.1 million represents a $6 million increase compared with the quarter ended Dec. 1, 2012, but a slight decrease compared with $38.2 million on Aug. 31, 2013.
Shares of Franklin Covey rose 42 cents or 2.14 percent to close at $20.07 on Tuesday. The stock had underperformed the market over the past one month, with fall of 0.1 percent compared with the NASDAQ 100's 1.53 percent gain. However, it underperformed in the past one quarter, with gain of 5.08 percent as against 10.64 percent rise in the NASDAQ 100.
