On this page of StockholderLetter.com we present the 12/19/2023 shareholder letter from FRANKLIN COVEY CO — ticker symbol FC. Reading current and past FC letters to shareholders can bring important insights into the investment thesis.

 •  12/19/2023 Letter Continued (Full PDF)
 •  12/20/2024 FC Stockholder Letter
 •  12/19/2025 FC Stockholder Letter
 •  More "Business Services & Equipment" Category Stockholder Letters
 •  FC Benford's Law Stock Score = 68

FC 12/19/2023 Shareholder/Stockholder Letter Transcript:

Annual Report 2023
The FranklinCovey
All Access Pass Solution

The most powerful and effective way to generate
behavior change at scale.

Mission Statement
We enable greatness in people and
organizations everywhere.
Vision
Our vision is to profoundly impact the way
billions of people throughout the world live,
work, and achieve their own great purposes.
To Be the Workplace of Choice
for Achievers With Heart, We Value:
The Whole Person
Lasting Client Impact
We embrace the uniqueness and diversity
of each individual and cultivate a culture
of belonging.
We care deeply about our clients and helping
them achieve their own great purposes.
The Principles We Teach
The Pursuit of Growth
We believe in universal principles of
effectiveness and strive to model what
we teach.
We are committed to meaningful growth   
as individuals and as an organization.

TABLE OF CONTENTS
Letter to Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2
Financial Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
Proxy Statement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
Form 10-K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
73
Management   s Discussion and Analysis . . . . . . . . . . . . . . . . .
100
Report of Independent Registered Public Accounting Firm . .
118
Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . .
121
Notes to Consolidated Financial Statements . . . . . . . . . . . . .
125
Corporate Information . . . . . . . . . . . . . . . . . . . . .
Inside Back Cover

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Letter to Shareholders
Franklin Covey 2023 Annual Report
Dear Fellow Shareholders,
We are pleased to share our results for Fiscal 2023, results which were strong, and which reflect the importance and
durability of the must-win opportunities and challenges we are helping our clients address. Some key highlights
include the following:
First, our revenue growth metrics were strong:

Total revenue grew to $280.5 million, a level $55 million, or 25% higher than our pre-pandemic revenue high
of $225.4 million in fiscal 2019.

Subscription and subscription services sales reached $222.8 million, growth of almost $100 million, or 80%,
compared to our pre-pandemic high of $124.1 million in fiscal 2019.

The durability and predictability of our revenue also continued to increase, and our visibility into future
revenue growth continued to expand, with: (1) our balance of Deferred Subscription Revenue (Billed and
Unbilled) increasing 22% for the year to $186.4 million; (2) the percent of All Access Pass contracts which
are multiyear increasing to 54% at year end, up from 45% at the end of fiscal 2022; (3) the average Lifetime
Value of our All Access Pass customers continued to increase; and (4) an all-time high of 791 new schools in
the U.S. and Canada became Leader in Me schools bringing the number of schools to more than 3,500 in the
U.S. and Canada and more than 6,000 worldwide.
Second, our profitability-related metrics were also very strong:

Our Gross Profit grew 6% to $213.5 million, and our Gross Margin remained strong at 76.1%.

Operating SG&A as a percent of sales improved another 179 bps in fiscal 2023, ending at 59.0%, compared
with 60.8% in fiscal 2022.

Our flow-through percentage was high, with 37% of our growth in revenue flowing through to increases in
Adjusted EBITDA. As a result, Adjusted EBITDA increased 14%, or $5.9 million, to $48.1 million.

Net Cash provided by Operating Activities was a strong $35.7 million.

We returned a significant amount of capital to shareholders, investing $35.6 million to repurchase
885,512 shares: and,

Our liquidity position remained strong. Even after investing the $35.6 million for share repurchases, we
ended the year with more than $100 million of available liquidity.
We are extremely pleased by our accelerating revenue and Adjusted EBITDA
growth and the business    momentum. These results reflect the tremendous power
of our continued focus on three fundamental priorities that have continued to drive
our efforts and results over the years.
Priority 1: To be the partner of choice for our clients in addressing the
challenges that really matter to them. We have organized the entire company
around helping clients successfully address their mission critical opportunities and
challenges, challenges that require the collective action of their people. Our first
priority is to be so effective at accomplishing this that our clients become clients for
life, as many of them already are. Over the past two years we have made significant
investments in content and technology and are pleased that fiscal 2024 will be one
of our biggest content and solution launch years ever. The solutions in the All
Access Pass and Leader in Me subscriptions are best-in-class and designed to
specifically drive breakthrough results for our clients.

Franklin Covey 2023 Annual Report
Letter to Shareholders
Priority 2: To accomplish the first priority (being the partner of choice) while also having a strong and profitable
business model. Our business model is driven by our rapidly growing subscription and subscription services business
and results in a significant percentage of our growth in revenue flowing through to increases in Adjusted EBITDA and
Cash Flow.
Total Company Revenue from
Subscription & Subscription Services
(in millions and unaudited)
Priority 3: To reinvest our profits and cashflow at high rates of return, to create additional value. Successfully
achieving this priority is reflected in our ability to invest capital in the business to drive growth and to do so at high
rates of return, and also return substantial amounts of excess cash to shareholders in the form of share repurchases. In
addition to our investments in content, technology, new solution development, and share repurchases, since the
launch of our subscription business in fiscal 2016, we have significantly grown three important client-facing, revenue
generating roles: Client Partners, Implementation Strategists and Leader in Me Coaches. Today our client-facing team
of nearly 450 professionals is among the largest in our industry and as we continue to grow these roles, will continue
to enable significant future revenue growth and client impact.
We anticipate our subscription business to continue to achieve significant top and bottom line growth in fiscal 2024
and well into the future, as substantially all our business becomes subscription and subscription services over the next
few years. As this occurs, we expect to: (a) achieve accelerated growth in revenue, Adjusted EBITDA, and cash flow;
(b) substantially increase our number of clients     clients who go on to become       clients for life;       and (c) ensure that
FranklinCovey makes accelerated progress toward its goal of being       the workplace of choice for achievers with heart.      
We are grateful to our associates and partners all over the world for their tremendous efforts on behalf of our clients.
And we thank you, our shareholders, for the trust you have extended to us. We are committed to ensuring that your
trust is well-placed.
We wish you all a great 2024, a year in which you and your families are safe, well, and happy, and one in which we
expect FranklinCovey   s progress to accelerate even further.
With gratitude,
Paul Walker
President & CEO
Franklin Covey Co.
Stephen D. Young
Chief Financial Officer
Franklin Covey Co.
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 12/19/2023 Letter Continued (Full PDF)