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AFTER HRS · 19:50 ET
Market ClerkRecap
Tue Oct 27 · after hours3 signals today140 insider buys this week · $73.9MCIRO short report next: Oct 31The week ahead

FC

FRANKLIN COVEY CO
NYSE · INDUSTRIALS · SERVICES-MANAGEMENT SERVICES
18.24
−0.35 −1.88%
USD · close Oct 27

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MKT CAP $206MP/E 107.3DIV YIELD —FCF YIELD 9.36%REV TTM $262.7M −6.1%NET INCOME $2.2M −79.5%NET DEBT $6.8M52W 11.54 – 25.55SEC XBRL · TTM TO Invalid Date

How FC rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025
Text kept
74%
of sentences unchanged
Added
14
new sentences
Dropped
11
sentences removed
Length
+82
words, now 2,575

New in FY2025

  • RISK FACTORS Our industry and business environment, domestic and international economic conditions, governmental actions, geopolitical circumstances, international relationships, cybersecurity threats, and other specific risks may affect our future business decisions and financial performance.
  • Moreover, we operate in a very competitive and rapidly changing industry and global environment.
  • Any one of these circumstances could have an adverse effect on our ability to obtain new business, keep existing clients, and successfully deliver our services.
  • A large portion of our success depends on our ability to generate renewals of our subscription-based offerings, which primarily consist of the AAP and the Leader in Me membership, and produce new sales of our offerings and products to both new and existing clients.
  • If we are unable to generate new sales, due to competition, economic uncertainty, or other factors, our revenues will be adversely affected.
  • In addition, the rapid growth and utilization of artificial intelligence (AI) may infringe on our trademarked and copyrighted materials.
  • The steps we take to protect our intellectual property may not be adequate to prevent or deter infringement or other misappropriation of our intellectual property, and we might not be able to detect unauthorized use of, or take appropriate and timely steps to enforce, our intellectual property rights.
  • In addition, we partner with charitable organizations to fund the Leader in Me programs in many schools across the country.
  • If governmental funding for school improvement expires or is reduced, or charitable organizations decide not to continue to support the Leader in Me programs in schools, our results of operations, cash flows, and financial position may be adversely impacted.
  • The loss of the services of key individuals could harm our business.
  • Findings from an audit may result in our being required to prospectively adjust previously agreed upon rates for our work, which may adversely affect our future margins.  If a governmental client discovers improper activities in the course of audits or investigations, then we may become subject to various civil and criminal penalties and administrative sanctions, which may include termination of contracts, forfeiture of profits, suspension of payments, fines and suspensions, or debarment from doing business with other agencies of that government.  Political and economic factors such as pending elections, the outcome of elections, revisions to governmental tax policies, sequestration, debt ceiling negotiations, and reduced tax revenues can affect the number and terms of new governmental contracts signed.
  • While we have an ongoing review process to remove potentially offensive terms or images from our materials, a rapidly changing cultural and social environment may create unfavorable interpretations of language or images faster than we can identify and remediate them.
  • We strive to employ global best practices in securing and monitoring code, applications, systems, processes, and data, and our data protection practices are regularly reviewed and validated by an external auditing firm.
  • However, no information security program is perfect, and these efforts may be insufficient to protect sensitive information against illegal activities.

Gone since FY2024

  • RISK FACTORS Our industry and business environment, domestic and international economic conditions, geopolitical circumstances, changing social standards, cybersecurity, and other specific risks may affect our future business decisions and financial performance.
  • Moreover, we operate in a very competitive and rapidly changing global environment.
  • Any one of these circumstances could have an adverse effect on our ability to obtain new business and successfully deliver our services.
  • A large portion of our success depends on our ability to generate renewals of our subscription-based offerings, which primarily consist of the AAP and Leader in Me membership, and produce new sales of our offerings and products to both new and existing clients.
  • If we are unable to generate new sales, due to competition or other factors, our revenues will be adversely affected.
  • While we have developed an ongoing review process to remove potentially offensive terms or images from our materials, a rapidly changing cultural and social environment may create unfavorable interpretations of language or images faster than we can identify and remediate them.
  • The steps we take in this regard may not be adequate to prevent or deter infringement or other misappropriation of our intellectual property, and we might not be able to detect unauthorized use of, or take appropriate and timely steps to enforce, our intellectual property rights, especially in foreign jurisdictions.
  • In addition, we partner with charitable organizations to fund Leader in Me programs in many schools across the country.
  • If governmental funding for school improvement expires or is reduced, or charitable organizations decide not to continue to support Leader in Me schools, our results of operations, cash flows, and financial position may be adversely impacted.
  • The loss of the services of any key individuals could harm our business.
  • Findings from an audit may result in our being required to prospectively adjust previously agreed upon rates for our work, which may adversely affect our future margins.  If a governmental client discovers improper activities in the course of audits or investigations, we may become subject to various civil and criminal penalties and administrative sanctions, which may include termination of contracts, forfeiture of profits, suspension of payments, fines and suspensions, or debarment from doing business with other agencies of that government.  Political and economic factors such as pending elections, the outcome of elections, revisions to governmental tax policies, sequestration, debt ceiling negotiations, and reduced tax revenues can affect the number and terms of new governmental contracts signed.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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