UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of
The
Securities Exchange Act of 1934
Date of
Report (Date of Earliest Event Reported):
January
13, 2009
FRANKLIN
COVEY CO.
(Exact
name of registrant as specified in its charter)
Commission
File No. 1-11107
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Utah
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87-0401551
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(State
or other jurisdiction of incorporation)
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(IRS
Employer Identification
Number)
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2200
West Parkway Boulevard
Salt
Lake City, Utah 84119-2099
(Address
of principal executive offices)(Zip Code)
Registrant’s
telephone number, including area code: (801) 817-1776
Former
name or former address, if changed since last report: Not Applicable
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[
] Written communications pursuant to Rule 425
under the Securities Act (17 CFR 230.425)
[
] Soliciting material pursuant to Rule 14a-12
under the Exchange Act (17 CFR 240.14a-12)
[
] Pre-commencement communications pursuant to
Rule 14d-2(b) under the Exchange Act (17 CFR240.14d-2(b))
[
] Pre-commencement communications pursuant to
Rule 13e-4(c) under the Exchange Act (17 CFR240.13e-4(c))
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Item
4.02
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Non-Reliance
on Previously Issued Financial Statements or a Related Audit Report or
Completed Interim Review
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In the
Annual Report of Franklin Covey Co. on Form 10-K for the fiscal year ended
August 31, 2008 (the Form 10-K), management provided a report that concluded
that our internal control over financial reporting (as defined by Rule 13a-15(f)
under the Securities Exchange Act of 1934, as amended) was effective as of
August 31, 2008. We subsequently have determined that our controls:
i) to ensure the approval and appropriate accounting treatment of non-standard
shipping terms on product sales and ii) to evaluate obsolescence at the
individual product level in the calculation of inventory reserves were
insufficient to prevent misstatements at our Japan
subsidiary. Accordingly, we concluded that we had material weaknesses
in our internal control over financial reporting at our Japan subsidiary as of
August 31, 2008. As of January 13, 2009 we have designed and
implemented controls to require the approval of non-standard shipping terms on
product sales and to require detailed review and approval of the inventory
reserve calculation in Japan.
Following
the discovery of errors associated with these material weaknesses, we assessed
the materiality of the errors using the guidance found in Staff Accounting
Bulletin (SAB) No. 108 and determined that these errors were immaterial to
previously reported financial statements included in the Form
10-K. Therefore, these immaterial errors in prior periods will be
corrected through subsequent reports on Form 10-Q and in our Annual Report for
the fiscal year ended August 31, 2009.
On
January 13, 2009, the Audit Committee of the Board of Directors, after
consultation with management and KPMG LLP, our independent registered public
accounting firm, concurred with management’s conclusion that we had material
weaknesses in our internal control over financial reporting and determined that
neither management’s report nor KPMG LLP’s report regarding the effectiveness of
our internal control over financial reporting contained in the Form 10-K should
be relied upon. As a result of this determination, we intend to file
an amendment to the Form 10-K to reflect a change in management’s assessment of
our disclosure controls and procedures as of August 31, 2008 and to restate
Management’s Report on Internal Control Over Financial Reporting. In
addition, the amended Form 10-K will include a restated Report of Independent
Registered Public Accounting Firm Regarding Internal Control Over Financial
Reporting. Due to the immateriality of the errors discovered at our
subsidiary in Japan, the amended Form 10-K will not change the opinion of our
Independent Registered Public Accounting Firm on the Consolidated Financial
Statements and Related Financial Statement Schedule dated November 14, 2008,
included in the Form 10-K.
The Audit
Committee of our Board of Directors has discussed these matters with KPMG
LLP.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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FRANKLIN
COVEY CO.
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Date:
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January 13, 2009
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By:
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/s/ Stephen D. Young
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Stephen
D. Young
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Chief
Financial
Officer
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