Good day and thank you for standing by. Welcome to the Third Quarter 2023 Franklin Covey Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Derek Hatch, Corporate Controller. Please go ahead.

Thank you, Victor. Good afternoon, everyone. On behalf of Franklin Covey, I want to welcome you to our third quarter fiscal 2023 earnings call. Before we begin this afternoon, I would like to remind everyone that this presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based upon management's current expectations and are subject to various risks and uncertainties, including but not limited to, the ability of the company to grow revenues, the acceptance of renewal rates of our subscription offerings, including the All Access Pass and Leader in Me memberships, the ability of the company to hire productive sales and other client facing professionals, general economic conditions, competition in the company's targeted marketplace, market acceptance of new offerings or services and marketing strategies, changes in the company's market share, changes in the size of the overall market for the company's products, changes in the training and spending policies of the company's clients and other factors identified and discussed in the company's most recent Annual Report on Form 10-K and other periodic reports filed with the Securities and Exchange Commission. Many of these conditions are beyond our control or influence, any one of which may cause future results to differ materially from the company's current expectations and there can be no assurance the company's actual future performance will meet management's expectations. These forward-looking statements are based upon management's current expectations and we undertake no obligation to update or revise these forward-looking statements to reflect events or circumstances after the date of today’s presentation, except as required by law. With that out of the way, I'd like to turn the time over to Mr. Paul Walker, our Chief Executive Officer. Paul?

Thank you, Derek. Hello, everyone. Thanks for joining us today. We are glad to have the chance to talk to you today. Joining me on the call are Steve Young, our CFO; Jennifer Colosimo, President of our Enterprise Division; Sean Covey, President of our Education Division and other members of our executive team. We're also happy to have Bob Whitman, our Executive Chairman and Chairman of the Board with us also. I'd like to start-off by expressing how pleased we are with the continued strength, durability, and growth of the business and of our business model. This strength and durability are evident in our third quarter year to date and latest 12 months results, and we're pleased to reaffirm our fiscal 2023 guidance, that we expect to achieve adjusted EBITDA between 47 million and 49 million in constant currency. I'd like to begin today by briefly sharing a few headlines from the quarter. First, our revenue growth continued to be strong. As you can see shown in Slide 4, since the conversion of our subscription business model in fiscal 2017, our subscription and subscription services sales have grown by more than $150 million to $222.2 million. We're pleased that driven by the continued strength of our subscription business, both our overall revenue growth and our subscription and subscription services revenue growth continued to be strong in the third quarter and for the year to date and latest 12 month periods. For overall company revenue, as you can see on Slide 5, in the third quarter, total company revenue grew 8% or 9% in constant currency, or $5.3 million on top of the strong 13% growth achieved in last year's third quarter. A quarter which benefited from comping against the pandemic impacted third quarter in the prior year. For the year…

Thank you, Paul. Good afternoon, everyone. It's a pleasure to be with you today. I'd like to briefly provide more detail on the factors underlying this strong performance focusing on the results in three key areas of our company. Specifically our enterprise business in North America. The enterprise business internationally in both our direct offices and international licensee partner operations and our education business, which is primarily in North America. As shown in Slide 21, results in our enterprise business in North America continued to be strong in the third quarter year-to-date and latest 12 months. Reported sales in North America, which account for 73% of total enterprise division sales grew 3% in the third quarter on top of 20% growth in last year's record third quarter. 9% year to date and 11% in the latest 12 months. We are pleased with the 23% growth we've achieved an enterprise business in North America over the past two-years. The first year of which, as Paul noted is benefited from comping to the prior year COVID impacted result. As noted, we expect the beginning in Q2 of FY 2024, our year-over-year comparisons will return to be an apples-to-apples basis. Subscription and subscription services sales in North America grew 3% for the quarter on top of 29% growth in last year's third quarter. Subscription and subscription services sales increased 9% year to date and 12% for the latest 12 months. We're pleased with the growth rates we've achieved in the enterprise business in North America, particularly in light of the fact this growth is comping over pandemic impacted quarters. Our balance of deferred sales billed and unbilled in North America grew 19%, compared to last year's third quarter balance, establishing a strong base for next year's growth. And the percent of North America's…

Thank you, Steve. Appreciate that. We're now ready to begin the transition of the Q&A portion of the call. And as we do, I'd like to begin by addressing three questions. Some of you have previously indicated you have an interest in. First, some have asked how potential uncertainty in the current economic environment is impacting or how it may impact the durability of our subscription business? I thought I'd provide you just a little bit of color about what we're seeing right now across our Enterprise All Access Pass business, and I'll make just maybe four quick points here. First, as you know, we've chosen to organize the entire company around the most important must win challenges and opportunities our clients face. Therefore, one aspect of durability is solution durability. Our solutions to these must win challenges and opportunities are viewed as best-in-class at driving collective action and behavior change. And these challenges and opportunities continue regardless of the external environment. Second, as we reported, we continue to be pleased with our growth in a number of new logos, growth which shows clients continued to desire and need to invest to address their top challenges and opportunities. Year-over-year revenue from new logos has grown in each of the first three quarters this fiscal year. Third, an increasing and sizable portion of our clients recognize that they benefit from a long-term partnership with Franklin Covey. After considerable focus and effort over the past few years, we've grown the percentage of clients in the U.S. and Canada who are on one of these multi-year contracts from zero to, as we've said, 52% at the end of the third quarter. And of course, the associated revenue is 57% of our subscription revenue. And this growing base of multi-year clients creates tremendous durability…

Sure. [Operator Instructions] Our first question comes from the line of Jeff Martin from ROTH. Your line is open.

Great. Thanks. Good afternoon, everyone.

Hi, Jeff.

Hi. Paul, could you expand a little bit more on the revenue retention impact that you saw in Q2? What maybe was more client specific than market related? And then what leads to conviction for significant improvement in Q4?

Yes, great. Great question. So, as we reported at the end of second quarter, there were a handful of clients who – we used the metaphor, if you recall, deeper snow. But there were a handful of clients who were themselves not unaffected by some of the uncertainty in the environment. And while our – the percentage of clients we retain in any given quarter remain roughly the same. This handful of clients, some of whom were a few larger clients, who either didn't renew or downgrade the size of their past drug on our – provided a drag on our revenue retention. We talked a bit about that quarter. That to the degree which that occurred in the second quarter, while there was some of that in the third quarter far less. We had it with a much better revenue retention quarter in third quarter. And just what we're seeing in our pipelines, the conversations we are having with our customers. As you know, we have a quarterly business review with every one of our subscribing clients where we sit down with them and we actually begin the renewal discussions far in advance of that final quarterly QBR. And so, in those discussions, the pipelines we're seeing what I think was a bit of a bottoming out there in Q2 and a return to normal much more normalized retention rates in Q4 and as we move into next year.

Great. That's helpful. And then wanted to, kind of bridge the gap between, let's take North American Enterprise Division, for example, the gap between the subscription and subscription services revenue growing at 3% in the quarter, 9% year to date relative to high teens to low 20s percent growth in deferred revenue. Are clients just pushing out some of the projects, are they taking a pause? Is there anything underlying that dynamic?

It's a good question. Part of the comparison there on a percentage basis is, we've noted a few times here in today's remarks that the 3% this year is comping over a very, very significant growth percentage last year. And so what we're – frankly what we're seeing is, if we normalize for that and just looked over a couple of years, we're quite pleased with where the level and the size of that subscription-related services business at this point. If we had to go back a couple of years and pick where we thought that would be and what would be an exciting number, we're about in same spot. It just came in with a really big first year of growth because of the comping over the pandemic. And then this year is a lower growth percentage. To your specific question, we're not, I mean, we're not seeing a lot in clients pushing things out. We're actually quite pleased with the number of clients who even in the environment are signing year contracts. There's a meaningful jump this year year-over-year in the percentage of revenue that's now multi-year and in the percent of clients, didn't know if we'd ever get above 50% back in the day, thought we might get to about a third of our contracts being multi-year, now we are more than half. I think it speaks to clients recognizing that the types of challenges that they need and want to address, aren't solved in a quarter or even a year. They view this as a long-term partnership with us, and I think we're seeing that show up and being reflected in the numbers.

Great. And the last one for me is update on the impact platform, what's the uptake rate? What kind of responses are you getting? Do you see that being a longer-term driver of revenue growth acceleration?

Yes. Jennifer Colosimo, President, Enterprise Division is on. Jen, do you want to take that one?

Of course. Thanks for the question, Jeff. We are seeing a tremendous impact from the impact platform. The vast majority of our English speaking clients are on that platform. We now have our primary languages launched in an early fall and winter we'll have our secondary languages, getting us roughly to 24 languages that will be launched in. What we're finding from clients is, as we talk about collective behavior change at scale, the platform makes it so much easier to deploy and scale and get real behavior change. So, where – I think our better technology story is also driving new logos, some of the multi-year’s great use cases continuing to see the impact of that as it rolls out around the world.

Thank you, Jen.

Thanks, Jeff.

Thank you. One moment for our next question. Our next question will come from the line of Nehal Chokshi from Northland Capital. Your line is open.

Yes. Thank you and congrats on the great quarter. So, I think you guys would agree that invoice value and that year-over-year growth is an excellent in-quarter metric. And that definitely improved on a year-over-year basis. Looking forward, what kind of invoice growth would you need in order to maintain confidence in that initial fiscal year 2024 EBITDA perspective?

Yes. And so, it’s a great question. First, we mentioned to achieve our – the reason we're quite confident in maintaining our outlook targets of fiscal 2024 of 57 million of adjusted EBITDA and then fiscal 2025, 67 million is that the total company revenue growth level, reported revenue growth level, we need that high single digits, low double digits, call it, 10% is what we would need to achieve those targets. We feel very good about that. In fact, as I mentioned a minute ago, the $28-or-so million, $28.7 million of growth we've achieved in the last 12 months, if we did that same thing again in the next 12 months, that would be roughly 10% growth. Your question, at a company level, your question around invoiced subscription sales need to be a little bit ahead of that, right, as those invoice sales eventually convert into reported sales. And so, growing a little bit ahead of that is what we would need to see, and we're feeling good and confident enough in that to put out those and reaffirm those EBITDA targets for the next two years.

Okay. And so, just to be clear, for the first three quarters, your invoice value on an overall basis, I think, is up mid-single digits now for the first three quarters. So, sounds like you do need to be in the high single digits to low double digits in order for you guys to achieve your fiscal 2024 and fiscal 2025 objectives. And you've talked about expectations of a strong fiscal fourth quarter. So, that sounds like you are expecting your invoice levels on a year-over-year basis to accelerate as well in fiscal [indiscernible]. Is that correct?

Yes. We are expecting them to accelerate in the fourth quarter and then through the first – meaningfully through the first part of next year, absolutely.

Got it. And what has given you that confidence that will indeed accelerate? Because it doesn't look like you're coming into a materially easy comp into the fourth quarter here?

Yes, it was not a meaningfully – materially meaningfully easier comp in the fourth quarter, that flips, as we said, at the beginning of Q2 next year, so towards the end of the fall here. But what's giving us confidence in the growth is, one, we are – we do see the revenue retention rates coming back nicely after the dip in Q2 and a little bit in Q3 here. So that's a big driver. That's the biggest number we have to influence, right, is that revenue retention number, and we're seeing that strengthen. Second, as we've reported, we've been – we've sold more new logos this year in the first three quarters of the year than we did a year ago, and we expect that's going to continue. And those – and both – the sales of new logos is higher and the average revenue per new logo continues to tick up as well. So that increases the base that we have to renew and the base of subscriptions to which we have to attach services. I think the third is, we've hired a lot of client partners. While this year, we'll end the year about where we – on the client partner front about where we ended last year at 300, that – you got to remember that we added over the prior three years or so significant number of client partners who are ramping and becoming more [indiscernible] and more effective. At the same time, we're seeing client partners who are already ramped their ability to go far beyond what we thought was possible is increasing. And so, I think the combination of those factors is giving us confidence that there's – while there's been a bit of a slowing in the year-over-year subscription growth, again, partially related to the amount of growth we had last year and comping over that, that will – the subscription business will grow enough to throw off the amount of revenue growth we needed at the total company level for us to be able to hit the EBITDA targets we put out there.

Okay. Great. And then, Paul, you mentioned much that I'm not sure I quite understand, but I think you said that for the customers that are entering into a multi-year contract, at renewal, you're seeing 50% higher value renewal. Can you just repeat where it is that you said there?

Yes. So, it's interesting doing an analysis – so the question is, how much better our multi-year contracts and single-year contracts? And of course, we're happy to have all contracts, single or multi-year. But we're really happy to have multi-year. And one of the things we've watched is, what happens to a client at the end of their initial multi-year term, whether it's two years, three years, four years? What do they do? Do they feel like they're done and they don't renew at all, do they renew and renew for just the same value as they had in place, do they renew and expand? And the analysis is showing that those clients who, at the conclusion of that multi-year contract, whether it's two years, three years, four years or more, when they do renew, the value of that next contract is 50% larger than the value of the contract that they were coming out of was.

Just to be clear, is that a total contract value or annual contract value that's higher [indiscernible]?

Annual.

Wow. So secondly, that's – if it's on average, a three-year contract, and you're seeing a 50% uplift three years later, that's effectively like [Multiple Speakers] revenue retention rate.

Nehal, it's not 50% greater than their contract they are in. 50% greater than their single-year contract peers. So, the analysis is single-year contract clients versus multi-year contract clients, how much more valuable are they and what happens to them relative – the point is not on that specific client. It's the value of multi-year versus single year why we're pushing so hard to get multi-year because they are – not only is that revenue guaranteed during the term of the multi-year contract, they are 50% more likely upon renewal to expand. They're not expanding by 50%. One day, we hope that will happen. We love to – we're doing everything we can to make sure that our customer engagement models and customer success teams are treating them, those clients in a way that, that could be possible. For some, they do, but that's not what's happening. It's not 50% growth in the contract value. It's compared to their peers, single-year peers.

Okay. Okay.

Thank you for clarifying that. Great clarification.

Yes. And then just to be clear, that 50% improvement relative to a single-year contract peers, there's generally two components, right, renewal rate and then upsell, which one is the bigger factor here?

Renewal rate is the slightly larger factor because multi-year clients are more – they've been with us longer, and they are more likely than to sign up for the next journey with us. But – so it's slightly more because of renewal rate, but we do see greater expansion of those clients as well, again, because we've had a longer time with those clients to establish the relationship to look for and sell to expanded populations tee up additional journeys that we can go on with that client. But the larger driver is the likelihood that they are renewing versus a first year client, for example, that may not renew.

Got it. Okay. Great. Thank you.

Thanks Nehal. Good questions. Good to talk to you.

One moment for our next question. Our next question will come from the line of Dave Storms from Stonegate Capital. Your line is open.

Good afternoon.

Hi, Dave.

How’s it going? Just wanted to kind of start, I saw the education EBITDA margin, adjusted margin had a nice jump sequentially. Is there a story there that, maybe it's a sign of good things to come or is that just more seasonal factors or macro driven?

Okay. The sequential Q2 to Q3?

Yes.

Dave, good question. What the driver of that – first of all, education business is really doing great and really thrills what Sean and team are doing there. The specific answer to that question is that in Q2 – we do these, what we call, client symposiums, and there are events where we bring together current and prospective clients as a way to expose them to a Leader in Me process. And we charge for attendance of those, so it comes in as revenue. And in the second quarter, we did more of them than we did in the third quarter. And so – but we don't – we're not making money on those. We're just charging a little bit to help defray some of the costs. We've got revenue coming in with no profit attached to it and we had more of that in the second quarter than we did in the third quarter, and that caused a sequential bump there in gross margin.

Understood. Very helpful. Thank you. And then the other thing, I know you mentioned in your comments that adjusted EBITDA for the quarter came in – the total company level came in higher than expected, was there anything that really been right there you could see going forward or is that just some of the revenue retention stuff that you were talking about earlier?

Steve, I think you want to...

One of the significant things in this quarter is that we're just in a process like everybody else, really reviewing a lot of our expenses and controlling our hiring and just everything that we can control without negatively impacting revenue. So, we had – so our expenses came in quite a bit lower than we anticipated in Q3. And our revenue held up good. Our gross margin held up good, and we had less expenses. So, everything kind of added together, but the expenses were a big part of that.

Very helpful. Thank you for taking my questions and congrats on the quarter.

Thanks, Dave.

One moment for our next question. Our next question comes from the line of Alex Paris from Barrington Research. Your line is open.

HI, guys. Thanks for taking my questions. I want to also congratulate you on the strong performance in the third quarter and comment that what a difference three months mix, right? Yes, big difference this conference call than last conference call. And the deep snow that we were waiting through seems to have melted a bit here in the spring. So, just kind of trying to ask incremental questions here. You said that – in your prepared comments that the number of All Access Pass clients who renewed or expanded in Q3 was up or consistent with Q2, and you didn't lose or not renew large clients like you did in Q2. Can you maybe just dive into that a little bit more sequentially? What's the macro impact on the North American enterprise business?

Yes. Great question. So, yes, as mentioned, Q2, we had – we had in Q2 with a few – a handful of clients who were some of our – a couple of our larger clients that because of circumstances on their side, weren't able to renew and that disproportionately weighed on that. We had – we saw much less of that. No big clients like that in Q3, certainly. And so that improved – while client – the percentage of clients retained quarter-to-quarter was roughly the same. But the revenue retained from those clients who renewed was – that percentage was better in the third quarter because, again, we didn't have a couple of those outlier clients like we did in Q2. And then we're seeing that trend continue into Q4. And the trend being the strengthening trend there getting revenue retention back up to levels that were more consistent with what we were seeing in Q1 and throughout last year. And we – the further outlook is that we expect that to continue into the first quarter and beyond.

Got you. And then you still have hope or expectations that you'll have the opportunity to win back some of those larger clients that didn't – weren't able to renew in Q2?

100%. In fact, the ones we're talking about in Q2, the conversations were we are on their side, we are so disappointed. There are some things going on, and we're not going to talk about who those clients are. But if you knew them, you would understand why they were in the position they were in, and they have every expectation, so do we that they'll come back. In fact, we continue to meet with them and have quarterly business reviews. We're still kind of treating them as if they're clients. They don't have access to our products and services, but from a relationship standpoint, we hope and expect that we will win them back. And that's really the mentality, Alex, we take with all of our clients. We talk about clients for life. That's both, kind of a mantra, but it's also a way of behaving. And so, every quarter we have some nice win backs of clients that, for some reason, weren't able to renew. In fact, we talked in the second quarter about a client, a large client that wasn't able to renew with an IT consulting services for a very large global company that wasn't able to renew in the fourth quarter. They were unsure about what this year would look like for them. They didn't renew, but they did renew in the second quarter this year and significantly expanded the size of their subscription with us. And so, we hope and expect and are doing everything we can to make that the case for any client that we lose and particularly a couple of those big ones in Q2.

Good to hear. Good to hear. Thanks. And then still on the enterprise business, in your prepared comments, Paul, you mentioned that China performed better. China and Japan were obviously a drag in the first half of the fiscal year. Together, they represented 52% of international sales. You did mention Japan specifically, but maybe just a little overview on what's going on in China and Japan quarter-over-quarter?

Thank you. We were pleased. Japan and China behaved like we thought they would in the third quarter. So, you'll recall, we talked in the second quarter about the fact that they were – they had been a drag and continued through the first two quarters of this year to be a drag and we anticipated and still do that. They kind of net-net overall, are providing a bit of a drag on overall reported growth this year. And that we kind of gave guidance around that in Q2. That said, in Q3, China strengthened significantly. We've seen this now 3x with them. China has kind of had a 3x in and out of COVID experience. And each time they've come back out, the business has responded and grown rapidly. That happened again in the third quarter, and we expect that they'll have meaningful growth in the fourth quarter. They will not be to the level we thought they would have been for this full-year, fiscal 2023, but they are growing back meaningfully like we expected they would start to do at some point in the year, just is happening a little bit later in the year. And so both China and Japan are back on a nice growth trajectory on a year-over-year basis and expect that they'll contribute meaningfully in the fourth quarter and as we move into next year.

Great. And then just a quick question for Sean, I believe, on the Education Division in the summer. The summer is a very important period for renewals and that, sort of thing in that business? I know you're focused significantly on districts rather than just focusing on schools. Maybe a little update and color there, what you're seeing in the early renewal season.

Sure. Hi Alex, how are you?

Good. How are you?

So yes, we're excited about the summer. So generally, we feel really good about it. We have a lot of schools and districts coming on right now. I think what the strength of our growth so far this year and going into the fourth quarter, we feel like our solution is like perfectly designed for the challenges that schools are facing right now. So, a lot of mental wellness amongst teachers, as well as students, learning loss, test scores are the lowest they've been in a long time. And so, being able to help overcome those learning loss problems. Teacher turnover is a big issue. Whole student development instead of just academics, looking at the whole students. So all those things are – we're perfectly designed to deliver well on those. So, we feel really good about the summer coming into it. The district focus is working. I think we'll report on this at the end of the year, but I think we're going to double the amount of districts we brought on compared to last year, which is really good news. And with that comes clumps of schools instead of single schools. It usually takes a little longer to get a [district on] [ph], but boy, they're much bigger and you get big comps instead of onesies, twosies. And the retention so far has – in terms of the schools that are renewing is really good and strong, like it's been historically. So, there's a lot of momentum. The results we continue to get with our data and research is really strong. For example, we just did a big study on teacher retention and Leader in Me schools is significantly higher. And that's become a big issue. So of course, we're going to market that and get out with that message. But we've got – we've just got a lot of things in our favor right now, and we expect a solid fourth quarter. Was that [Multiple Speakers].

No, absolutely. That's what I was looking for. Thank you, Sean and good luck on the renewal season and good luck on the fourth quarter overall. Thanks for taking my question.

Thanks, Alex.

Thank you. One moment for our next question. Our next question will be a follow-up from Nehal Chokshi from Northland Capital. Your line is open.

Yes. Thank you for the follow-up questions. I wanted to know your thoughts on the potential impact of generative AI on how you can impact your customers, as well as how it can impact your own employees? A little bit out of the question, but I appreciate your thoughts there.

That's a great question. In fact, I was hoping somebody would ask. I considered making that kind of the fourth question I was going to answer proactively, but I thought, no, I won't do that, that would be too many. So, we're actually quite encouraged by the opportunity that generative AI is going to present for us and then you outlined it two ways. One, there's an opportunity for us as we embrace this internally and how we work just to become even more efficient. We think that could be a real accelerant for us. We already have a really strong business financial operating model, but that ought to even help more in the future as we can unleash the power of generative AI to help us work more efficiently. I think that will be a big opportunity. I think the bigger opportunity actually might be with our clients. We're working aggressively right now to; A, to watch this as quickly as we can, but to think about and figure out how to weave AI into our offerings. For example, we talk about being a content plus people plus technology company and that the integration of those three things are a differentiator and important as it relates to helping clients and people achieve behavior change and doing it at scale. The people component is really important. We don't expect that's going to go away, but the – part of the – I can imagine a day where that coaching, some of that coaching is, you have your AI, Franklin Covey coach in your pocket all the time. And with our acquisition of Jhana a few years ago, Jhana is that for a lot of people. It's kind of a just-in-time, right now, it's text-based. We push information to people just in time to be supportive of the learning journeys they're on, but also to play the role of performance support coaching kind of in the moment. What AI could do for that would be tremendous. And I think one of the questions around AI is going to be, can you trust the source? And Franklin Covey being the most, if not one of the most trusted leadership companies out there, you can definitely trust where that information is coming from. And so, as we kind of turn AI on, so to speak, across different solutions, as it plays a bigger role in our impact platform in helping people monitor, measure, track, behavior change, feeding analytics back to our customers. There's a big opportunity there. We're actually quite excited to buy it. And think it will be a great accelerant for us in a couple of important ways.

Do you have any actual developed, you know generative AI development programs that have been kicked off at this point in time or is this more of a discussion of where might you want to make such investments?

Yes, great question. So, we don't have anything that we have released to our clients yet. But – and we are working on things like what I just described. But we have not released – we have not officially put any of that into our offering for our clients yet. Expect to do so in the future, near future.

Near future. Okay. Great. Thank you.

Thank you. And I'm not showing any further questions in the queue. I'd like to turn the call back over to Paul for closing remarks.

Okay. Wonderful. Thank you, Victor. Before we go, we had Bob on. And Bob was – we are going to turn to – just a minute to Bob to share a couple of thoughts. And he's dropped. And so what we're going to do, if it's okay, Bob has prepared his remarks, we're going to be happy to have them here. I'm going to ask Steve if he'd be willing to share what Bob wanted to say, so pretend for a minute that you're listening to Bob. [Indiscernible] by the end of this, Steve, and he can share a thought or two as well.

Maybe I'll try to talk in Bob's voice. So, I'm really – what he was going to say, and it's in his words. So, obviously, I, Bob, I'm delighted to be here with you all and share a couple of things. Okay. First, I would like to express to you our shareholders how much we appreciate and have appreciated your trust, support, and guidance. You are great advisers and supporters and our executive team wakes up every day determined to continue to earn your confidence, trust, and commitment. Second, I'd like to express to Paul, Steve, Jen, Sean and to the entire executive team, the Board, and I know you as shareholders, our appreciation and admiration for their great leadership and vision and for the remarkable way in which they lead and execute each day. The strength of our combined ongoing leadership has and is significantly expanding the strength of our strategic moat, building an incredible future and creating significant value for our shareholders. And third, on behalf of myself and our remarkable Board of Directors, I would like to express to Paul, how much we admire him as a person, as a leader and as our CEO. Paul has done and is doing just an incredible job, and he has my full confidence out of the Board of the executive team on Franklin Covey's employees and of our clients and customers, and I know of each of you. Given this, I am pleased to announce that Paul has been appointed to serve as a member of the company's Board of Directors starting immediately, and that he will formally stand for election to the Board at this year's Annual Shareholder Meeting. Given Paul and the team's tremendous performance and deep strength in leading the company, I wanted to also let you know that effective September 1, 2023, I will transition from the additional role I took over as Executive Chairman in order to help in any way that I could during the transition and return to the single role of Chairman of the Board, where I will happily and actively continue to help in any way that I can. So, I appreciate Bob and everything that he has done with – for the company and are pleased that he will still serve as the Chairman of the Board and have influence on the company. And we're very pleased that Paul has been appointed to the Board. And as Bob said, we all do totally support Paul.

Thanks, Stephen, and thanks, Bob. I would just say on the final comment for me, Bob. You could not have a better partner as you all know, than Bob, and you just could not have. And that has been the case, and I'm excited that's going to continue to be the case as he's the Chairman of the company. So, thank you all so much for your time today. I know we went a little bit over, but it was important, I think, to share, wish Bob could have been important to share that. And we appreciate you. Thanks for all of your interest and for your careful understanding of the company, and we look forward to talking to you again when we report year-end results. Have a good evening.

This concludes today's conference call. Thank you for participating. You may now disconnect. Everyone, have a great day.