Management's discussion and analysis contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based upon management's current expectations and are subject to various uncertainties and changes in circumstances. Important factors that could cause actual results to differ materially from those described in forward-looking statements are set forth below under the heading "Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995."

We suggest that the following discussion and analysis be read in conjunction with the Consolidated Financial Statements and Management's Discussion and Analysis of Financial Condition and Results of Operations included in our Annual Report on Form 10-K for the year ended August 31, 2019.




RESULTS OF OPERATIONS

Overview

Franklin Covey Co. is a global company focused on individual and organizational performance improvement. We believe that our content and services create the connection between capabilities and results. Our business is currently structured around two divisions, the Enterprise Division and the Education Division. The Enterprise Division consists of our Direct Office and International Licensee segments and is focused on selling our offerings to corporations, governments, not-for-profits, and other related organizations. Franklin Covey offerings delivered through the Enterprise Division are designed to help organizations and individuals achieve their own great results. Our Education Division is centered around the principles found in The Leader in Me and is dedicated to helping educational institutions build cultures that will produce great results, including increased student performance, improved school culture, and increased parental and teacher involvement.

During 2016, we introduced the All Access Pass (AAP), which we believe is a ground-breaking subscription service that allows our clients unlimited access to our content through an electronic portal. We believe the All Access Pass is a revolutionary and innovative way to deliver our content to clients of various sizes, including large, multinational organizations in a flexible and cost-effective manner. Clients may utilize complete offerings such as The 7 Habits of Highly Effective People and The 5 Choices to Extraordinary Productivity, or use individual concepts from any of our well-known offerings to create a custom solution to fit their organizational or individual training needs. We have also translated All Access Pass materials into numerous additional languages, which allows the AAP to be used effectively by multinational entities and provides for greater international sales opportunities. The AAP is primarily sold through our Enterprise Division.

In our Education Division, we have launched our Leader in Me membership, which provides coaching, access to the Leader in Me online service, and authorizes use of Franklin Covey's proprietary intellectual property. The Leader in Me online service provides access to student leadership guides, leadership lessons, illustrated leadership stories, and a variety of other resources to enable an educational institution to effectively implement and utilize the Leader in Me program. We believe that the tools and resources available through the Leader in Me membership will provide measurable results that are designed to develop student leadership, improve school culture, and increase academic proficiency.



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Our financial performance for the first quarter of fiscal 2020, which ended on November 30, 2019, set a solid foundation for continued growth and improved results over the prior year. For the quarter ended November 30, 2019, our consolidated sales increased nine percent to $58.6 million compared with $53.8 million in the first quarter of fiscal 2019. Sales growth in the first quarter of fiscal 2020 was broad based through both our Enterprise and Education Divisions. Increased sales during the quarter led to increased gross profit and improved operating results when compared with the prior year.

For the quarter ended November 30, 2019, our reported subscription and subscription-related revenue grew 21 percent compared with the first quarter of fiscal 2019. At November 30, 2019, we had $48.7 million of deferred subscription revenue on our balance sheet, an 18 percent, or $7.2 million, increase compared with deferred subscription revenue on our balance sheet at November 30, 2018. At November 30, 2019, we had $34.0 million of unbilled deferred revenue compared with $24.4 million of unbilled deferred revenue at November 30, 2018. Unbilled deferred revenue represents business that is contracted but unbilled, and excluded from our balance sheet.

Our financial results for the quarter ended November 30, 2019 were influenced by a number of factors, which are described in further detail throughout this discussion and analysis. The following is a summary of key financial results for the first quarter of fiscal 2020:

• Sales - Our consolidated net sales for the quarter ended November 30, 2019


  increased nine percent, or $4.8 million, to $58.6 million, compared with the
  first quarter of fiscal 2019.  Sales increased nine percent in the Enterprise
  Division, increased seven percent in the Education Division, and grew in nearly
  all of our delivery channels within the Divisions.  Our first quarter fiscal
  2020 sales reflected increased subscription and subscription-related sales at
  both our domestic and international locations, increased facilitator sales,
  increased Education segment revenues, and increased sales from the acquisition
  of our Germany, Switzerland, and Austria licensee, which recognized $0.7
  million of sales during the quarter ended November 30, 2019.

• Cost of Sales/Gross Profit - Our cost of sales totaled $16.6 million for the


  quarter ended November 30, 2019, compared with $17.0 million in the first
  quarter of fiscal 2019.  Gross profit for the first quarter of fiscal 2020
  increased 14 percent to $42.0 million compared with $36.8 million in the first
  quarter of fiscal 2019, and increased primarily due to increased sales.  Our
  consolidated gross margin increased to 71.7 percent of sales compared with 68.3
  percent in the prior year, reflecting increased higher margin subscription
  revenues over the prior year.

• Operating Expenses - Our operating expenses for the quarter ended November 30,


  2019 increased $4.8 million compared with the prior year, which was primarily
  due to increased selling, general, and administrative (SG&A) expenses.
  Increased SG&A expenses were primarily related to increased investments in new
  sales and sales related personnel; increased commissions and bonuses on higher
  sales; a $0.9 million increase in non-cash stock-based compensation; the
  addition of personnel in Germany, Switzerland, and Austria, who were employed
  by a licensee during the first quarter of fiscal 2019; increased thought
  leadership and marketing expense; and costs we were required to pay that were
  associated with the wind-down of Knowledge Capital.

• Operating Loss and Net Loss - Our loss from operations for the quarter ended

November 30, 2019 improved to $(0.2) million compared with a loss of $(0.7)
  million in the first quarter of fiscal 2019.  Net loss for the first quarter of
  fiscal 2020 was $(0.5) million, or $(.04) per share, compared with a net loss
  of $(1.4) million, or $(.10) per share, in the prior year.


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Further details regarding these factors and their impact on our operating results and liquidity are provided throughout the following management's discussion and analysis.

Quarter Ended November 30, 2019 Compared with the Quarter Ended November 30, 2018



Enterprise Division

Direct Offices Segment
The Direct Office segment includes our sales personnel that serve clients in the
United States and Canada; our directly owned international offices in Japan,
China, the United Kingdom, Australia, and our offices in Germany, Switzerland,
and Austria (GSA) which were acquired in the second quarter of fiscal 2019; and
other groups such as our government services office.  The following comparative
information is for our Direct Offices segment for the periods indicated (in
thousands):

                   Quarter Ended                   Quarter Ended
                   November 30,        % of        November 30,        % of
                       2019            Sales           2018            Sales      Change
Sales             $        42,111       100.0     $        38,471       100.0     $ 3,640
Cost of sales              10,700        25.4              11,401        29.6        (701 )
Gross profit               31,411        74.6              27,070        70.4       4,341
SG&A expenses              25,701        61.0              23,430        60.9       2,271
Adjusted EBITDA   $         5,710        13.6     $         3,640         9.5     $ 2,070

Sales. For the quarter ending November 30, 2019, our U.S./Canada sales grew $2.4 million and international direct office revenue grew $1.4 million compared with the prior year. Increased direct office sales were primarily attributable to the growth of the All Access Pass and recognition of previously deferred subscription revenues, as well as new contracts and increased facilitator sales recognized during the quarter. Sales increased at each of our international direct offices except for the United Kingdom office, which decreased $0.1 million against the first quarter of fiscal 2019. We expect the United Kingdom office to resume a growth trajectory later in fiscal 2020. The new GSA direct office also contributed $0.7 million of sales during the quarter. Foreign exchange rates had an immaterial impact on Direct Office sales and operating results during the first quarter of fiscal 2020.

Gross Profit. Gross profit increased due to increased sales in the quarter as previously described. Direct Office gross margin increased primarily due to the mix of services and products sold during the quarter, including increased subscription and facilitator sales, which have higher gross margins than most of our other offerings.

SG&A Expense. Direct Office operating expenses increased primarily due to new sales and sales related personnel, increased commissions on higher sales, and GSA expenses that totaled $0.5 million during the first quarter of fiscal 2020.



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International Licensees Segment In countries or foreign locations where we do not have a directly owned office, our training and consulting services are delivered through independent licensees. The following comparative information is for our international licensee operations for the periods indicated (in thousands):



                   Quarter Ended                   Quarter Ended
                   November 30,        % of        November 30,        % of
                       2019            Sales           2018            Sales      Change
Sales             $         3,721       100.0     $         3,677       100.0     $    44
Cost of sales                 601        16.2                 815        22.2        (214 )
Gross profit                3,120        83.8               2,862        77.8         258
SG&A expenses               1,085        29.2               1,233        33.5        (148 )
Adjusted EBITDA   $         2,035        54.7     $         1,629        44.3     $   406

Sales. International licensee revenues are primarily comprised of royalty revenues. During the quarter ended November 30, 2019, increased royalty revenues were partially offset by decreased revenues from new licenses sold and from decreased sales of materials (primarily kits) to the licensees during the quarter. Royalty revenue increased by $0.3 million compared with the first quarter of fiscal 2019 as sales increased at certain licensees during the quarter. Foreign exchange rates had an immaterial impact on international licensee sales and operating results during the first quarter of fiscal 2020.

Gross Profit. Gross profit improved due to increased royalty revenues during the quarter, which also significantly improved international licensee gross margin when compared with the prior year.

SG&A Expense. International licensee SG&A expenses decreased primarily due to cost reduction initiatives implemented in the third and fourth quarters of fiscal 2019. We anticipate further improvements to the international licensee operating results throughout the remainder of fiscal 2020.

Education Division

Our Education Division is comprised of our domestic and international Education practice operations (focused on sales to educational institutions) and includes our widely acclaimed Leader In Me program designed for students primarily in K-6 elementary schools. The following comparative information is for our Education Division in the periods indicated (in thousands):



                   Quarter Ended                   Quarter Ended
                   November 30,        % of        November 30,        % of
                       2019            Sales           2018            Sales      Change
Sales             $        11,082       100.0     $        10,347       100.0     $   735
Cost of sales               4,425        39.9               3,954        38.2         471
Gross profit                6,657        60.1               6,393        61.8         264
SG&A expenses               7,759        70.0               6,658        64.3       1,101
Adjusted EBITDA   $        (1,102 )      (9.9 )   $          (265 )      (2.6 )   $  (837 )

Sales. For the quarter ended November 30, 2019, our Education Division sales increased primarily due to increased subscription revenues and the addition of new schools. Consistent with prior years, we continue to see increased demand for the Leader in Me program throughout the world. As of November 30, 2019, the Leader in Me program is used in over 4,100 schools and in over 50 countries.

Gross Profit. Education Division gross profit increased primarily due to increased sales as previously described. Education segment gross margin was slightly lower than the prior year primarily due to increased costs associated with our symposium events and increased travel costs related to Leader in Me onsite training days, which are offered in connection with the Leader in Me subscription offering.



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SG&A Expenses. Education SG&A expense increased primarily due to investments in additional sales and sales-related personnel, and increased commissions and related costs on higher sales.

Other Expenses

Depreciation - Depreciation expense increased due to the acquisition of capital assets in fiscal 2019 and the first quarter of fiscal 2020. Based on capital asset acquisition activity in prior periods, and expected capital additions during fiscal 2020, we expect depreciation expense will total approximately $6.7 million in fiscal 2020.

Income Taxes

Our effective income tax benefit rate for the quarter ended November 30, 2019 was 28.4 percent compared with a negative effective benefit rate of (8.0) percent in the first quarter of fiscal 2019. For the quarter ended November 30, 2019, we applied an estimated annual effective income tax rate to the consolidated pre-tax loss for the period, adjusted for discrete items arising during the period. The annual effective tax rate was increased by Global Intangible Low-Taxed Income (GILTI) tax expense, non-deductible expenses, and effective foreign tax rates which are significantly higher than the U.S. statutory rate. The negative effective benefit rate in the first quarter of fiscal 2019 resulted primarily from the amplified impact of GILTI and disallowed meals and entertainment deductions over the relatively small amount of pre-tax loss for the quarter.

Although we paid $0.9 million in cash for income taxes during the quarter ended November 30, 2019, we anticipate that our total cash paid for income taxes over the coming three to five years will be less than our total income tax provision as we utilize net operating loss carryforwards, foreign tax credit carryforwards, and other deferred income tax assets.

LIQUIDITY AND CAPITAL RESOURCES

Introduction

Our cash and cash equivalents at November 30, 2019, totaled $32.8 million, with $14.9 million available on our revolving line of credit facility. Of our $32.8 million in cash at November 30, 2019, $8.8 million was held at our foreign subsidiaries. We routinely repatriate cash from our foreign subsidiaries and consider cash generated from foreign activities a key component of our overall liquidity position. Our primary sources of liquidity are cash flows from the sale of services in the normal course of business, available proceeds from our revolving line of credit facility, and term loans. Our primary uses of liquidity include payments for operating activities, capital expenditures (including curriculum development), debt payments, contingent liability payments from the acquisition of businesses, working capital expansion, and purchases of our common stock.

Pursuant to the credit agreement we obtained in August 2019 (the 2019 Credit Agreement), we have the ability to borrow up to $25.0 million in term loans. At August 31, 2019, we had borrowed $20.0 million of the available term loan amount. During November 2019, we borrowed the remaining $5.0 million term loan available on the 2019 Credit Agreement. The additional $5.0 million term loan has the same terms and conditions as the previous term loan and does not change our quarterly principal payments. The additional term loan extended the maturity of our term loan obligation by one year.



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We may use the proceeds from our 2019 Credit Agreement for general corporate purposes as well as for other transactions, unless specifically prohibited by the terms of the agreement. Our 2019 Credit Agreement contains customary representations and guarantees, as well as provisions for repayment and liens. The 2019 Credit Agreement also includes the following financial covenants: (i) a Funded Indebtedness to Adjusted EBITDAR Ratio of less than 3.00 to 1.00; (ii) a Fixed Charge Coverage ratio not less than 1.15 to 1.00; (iii) an annual limit on capital expenditures (excluding capitalized curriculum development costs) of $8.0 million; and (iv) consolidated accounts receivable of not less than 150% of the aggregate amount of the outstanding borrowings on the revolving line of credit, the undrawn amount of outstanding letters of credit, and the amount of unreimbursed letter of credit disbursements. We believe that we were in compliance with the financial covenants and other terms applicable to the 2019 Credit Agreement at November 30, 2019.

In addition to our term-loan obligation and available borrowings on our revolving line of credit, we have a long-term rental agreement on our corporate campus that is accounted for as a financing obligation.

The following discussion is a description of the primary factors affecting our cash flows and their effects upon our liquidity and capital resources during the quarter ended November 30, 2019.

Cash Flows From Operating Activities

Our primary source of cash from operating activities was the sale of services to our customers in the normal course of business. Our primary uses of cash for operating activities were payments for selling, general, and administrative expenses, payments for direct costs necessary to conduct training programs, payments to suppliers for materials used in training manuals sold, and to fund working capital needs. Our cash provided by operating activities during the quarter ended November 30, 2019 was $6.8 million compared with $8.1 million in the first quarter of fiscal 2019. The decrease was primarily due to cash used to support changes in our working capital balances. However, we continue to expect that our cash flows from operating activities for the full fiscal year ended August 31, 2020 will exceed cash flows provided by operating activities in fiscal 2019. Our collection of accounts receivable remained strong during the first quarter of fiscal 2020 and provided a significant amount of cash to support operations, pay our obligations, and make critical investments. Although we are required to defer AAP and other subscription revenues over the lives of the underlying contracts, we invoice the entire contract amount and collect the associated receivable at the inception of the agreement.

Cash Flows From Investing Activities and Capital Expenditures

Our cash used for investing activities during the first quarter of fiscal 2020 totaled $4.5 million. The primary uses of cash for investing activities included the purchase of a note receivable from a bank used as consideration for an amended license agreement with FCOP (Note 11), purchases of property and equipment in the normal course of business, and additional investments in the development of our offerings.

In November 2019, we purchased $2.6 million of notes payable from a bank that were the obligation of FCOP. We exchanged the receivable from FCOP to modify the term and royalty provisions of a long-term licensing agreement that is expected to increase our cash flows over the duration of the license agreement. The licensing arrangement was assumed by Franklin Planner Corp., a new unrelated entity that purchased substantially all of the assets of FCOP in November 2019.

Our purchases of property and equipment, which totaled $1.4 million in the first quarter of fiscal 2020, consisted primarily of hardware, software, and leasehold improvements on leased office space. We currently anticipate that our purchases of property and equipment will total approximately $6.0 million in fiscal 2020.



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We spent $0.5 million during the first quarter of fiscal 2020 on the development of various offerings. We believe continued investment in our offerings is critical to our future success and anticipate that our capital spending for curriculum development will total $5.0 million during fiscal 2020.

Cash Flows From Financing Activities

During the quarter ended November 30, 2019, our cash provided by financing activities totaled $2.7 million. As previously mentioned, in November 2019, we elected to obtain the remaining $5.0 million of term loan borrowing capacity associated with the 2019 Credit Agreement. The proceeds from this term loan were partially offset by $1.8 million of cash used for principal payments on our term loans and the financing obligation on our corporate campus, and $0.8 million of cash used to pay contingent liabilities from previous business acquisitions.

On November 15, 2019, our Board of Directors approved a new plan to repurchase up to $40.0 million of the Company's outstanding common stock. The previously existing common stock repurchase plan was canceled and the new common share repurchase plan does not have an expiration date. We did not purchase any shares of our common stock under this new repurchase plan during the quarter ended November 30, 2019. Our uses of financing cash during the remainder of fiscal 2020 are expected to include purchases of common stock under the terms of our new Board approved purchase plan, required payments on our term loans and financing obligation, and contingent consideration payments from previous business acquisitions. However, the timing and amount of common stock purchases is dependent on a number of factors, including available resources, and we are not obligated to make purchases of our common stock during any future period.

Subsequent to November 30, 2019, we purchased 284,608 shares of our common stock from Knowledge Capital for approximately $10 million (Note 12) prior to the distribution of Knowledge Capital assets to its investors. This purchase of shares from Knowledge Capital was completed under a separate Board of Director authorization and will not be included in the November 15, 2019 authorized purchase plan.

Sources of Liquidity

We expect to meet our projected capital expenditures, repay amounts borrowed on our 2019 Credit Agreement, service our existing financing obligation, and meet other working capital requirements during fiscal 2020 from current cash balances, future cash flows from operating activities, and available borrowings from our Credit Agreement. Going forward, we will continue to incur costs necessary for the day-to-day operation and potential growth of the business and may use our revolving line of credit and other financing alternatives, if necessary, for these expenditures. Our 2019 Credit Agreement expires in August 2024 and we expect to renew and amend the 2019 Credit Agreement on a regular basis to maintain the long-term borrowing capacity of this credit facility. At November 30, 2019, we had $14.9 million of available borrowing capacity on our 2019 Credit Agreement, which consisted of available credit on our revolving credit facility (amount reduced by $0.1 million of open standby letters of credit). Additional potential sources of liquidity available to us include factoring receivables, issuance of additional equity, or issuance of debt from public or private sources. If necessary, we will evaluate all of these options and select one or more of them depending on overall capital needs and the associated cost of capital.

We believe that our existing cash and cash equivalents, cash generated by operating activities, and availability of external funds as described above, will be sufficient for us to maintain our operations on both a short- and long-term basis. However, our ability to maintain adequate capital for our operations in the future is dependent upon a number of factors, including sales trends, macroeconomic activity, our ability to contain costs, levels of capital expenditures, collection of accounts receivable, and other factors. Some of the factors that influence our operations are not within our control, such as general economic conditions and the introduction of new offerings or technology by our competitors. We will continue to monitor our liquidity position and may pursue additional financing alternatives, as described above, to maintain sufficient resources for future growth and capital requirements. However, there can be no assurance such financing alternatives will be available to us on acceptable terms, or at all.



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Contractual Obligations

We have not structured any special purpose entities, or participated in any commodity trading activities, which would expose us to potential undisclosed liabilities or create adverse consequences to our liquidity. Required contractual payments primarily consist of rental payments resulting from the sale of our corporate campus (financing obligation); repayment of term loan obligations; expected contingent consideration payments from business acquisitions; short-term purchase obligations for inventory items and other products and services used in the ordinary course of business; minimum operating lease payments; and minimum payments for outsourced warehousing and distribution service charges. For further information on our contractual obligations, please refer to the table included in our annual report on Form 10-K for the fiscal year ended August 31, 2019.

ACCOUNTING PRONOUNCEMENTS ISSUED NOT YET ADOPTED

Refer to the discussion of new accounting pronouncements as found in Note 1 to the financial statements as presented within this report.

USE OF ESTIMATES AND CRITICAL ACCOUNTING POLICIES

Our consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America. The significant accounting policies used to prepare our consolidated financial statements, including our revenue recognition policy, are outlined primarily in Note 1 to the consolidated financial statements presented in Part II, Item 8 of our annual report on Form 10-K for the fiscal year ended August 31, 2019. Please refer to these disclosures for further information regarding our uses of estimates and critical accounting policies. There have been no significant changes to our previously disclosed estimates or critical accounting policies.

Estimates

Some of the accounting guidance we use requires us to make estimates and assumptions that affect the amounts reported in our consolidated financial statements. We regularly evaluate our estimates and assumptions and base those estimates and assumptions on historical experience, factors that are believed to be reasonable under the circumstances, and requirements under accounting principles generally accepted in the United States of America. Actual results may differ from these estimates under different assumptions or conditions, including changes in economic conditions and other circumstances that are not within our control, but which may have an impact on these estimates and our actual financial results.

SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

Certain statements made by the Company in this report are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934 as amended (the Exchange Act). Forward-looking statements include, without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or



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achievements, and may contain words such as "believe," "anticipate," "expect," "estimate," "project," or words or phrases of similar meaning. In our reports and filings we may make forward-looking statements regarding, among other things, our expectations about future sales levels and financial results, future training and consulting sales activity, expected sales and benefits from the All Access Pass, anticipated renewals of subscription offerings, the expected impact of new revenue recognition rules, the change in our business model associated with subscription offerings, the expected growth of our Education practice, potential growth opportunities associated with the acquisition of the GSA licensee, the impact of new accounting standards on our financial condition and results of operations, the amount and timing of capital expenditures, anticipated expenses, including SG&A expenses, depreciation, and amortization, future gross margins, the release of new services or products, the adequacy of existing capital resources, our ability to extend our line of credit facility, the amount of cash expected to be paid for income taxes, our ability to maintain adequate capital for our operations for at least the upcoming 12 months, the seasonality of future sales, future compliance with the terms and conditions of our line of credit, the ability to borrow on our line of credit, expected collection of accounts receivable, estimated capital expenditures, and cash flow estimates used to determine the fair value of long-lived assets. These, and other forward-looking statements, are subject to certain risks and uncertainties that may cause actual results to differ materially from the forward-looking statements. These risks and uncertainties are disclosed from time to time in reports filed by us with the SEC, including reports on Forms 8-K, 10-Q, and 10-K. Such risks and uncertainties include, but are not limited to, the matters discussed in Item 1A of our annual report on Form 10-K for the fiscal year ended August 31, 2019, entitled "Risk Factors." In addition, such risks and uncertainties may include unanticipated developments in any one or more of the following areas: cybersecurity risks; unanticipated costs or capital expenditures; delays or unanticipated outcomes relating to our strategic plans; dependence on existing products or services; the rate and consumer acceptance of new product introductions, including the All Access Pass; competition; the impact of foreign exchange rates; the number and nature of customers and their product orders, including changes in the timing or mix of product or training orders; pricing of our products and services and those of competitors; adverse publicity; and other factors which may adversely affect our business.

The risks included here are not exhaustive. Other sections of this report may include additional factors that could adversely affect our business and financial performance. Moreover, we operate in a very competitive and rapidly changing environment. New risk factors may emerge and it is not possible for our management to predict all such risk factors, nor can we assess the impact of all such risk factors on our business or the extent to which any single factor, or combination of factors, may cause actual results to differ materially from those contained in forward-looking statements. Given these risks and uncertainties, investors should not rely on forward-looking statements as a prediction of actual results.

The market price of our common stock has been and may remain volatile. In addition, the stock markets in general have experienced increased volatility. Factors such as quarter-to-quarter variations in revenues and earnings or losses and our failure to meet expectations could have a significant impact on the market price of our common stock. In addition, the price of our common stock can change for reasons unrelated to our performance. Due to our low market capitalization, the price of our common stock may also be affected by conditions such as a lack of analyst coverage and fewer potential investors.

Forward-looking statements are based on management's expectations as of the date made, and we do not undertake any responsibility to update any of these statements in the future except as required by law. Actual future performance and results will differ and may differ materially from that contained in or suggested by forward-looking statements as a result of the factors set forth in this Management's Discussion and Analysis of Financial Condition and Results of Operations and elsewhere in our filings with the SEC.



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