Franklin Covey 2000 Annual Report 30 Management’s Discussion and Analysis 2000 and reduced the remaining accrual by $4.5 million. The adjustment was primarily due to favorable economic conditions that allowed former employees to find new jobs more quickly than expected and resulted in reduced severance costs. Also during fiscal 2000, the Company exited the leased office space located in Provo, Utah and obtained a subleasee for the property. After an assess- ment of the sublease terms, the Company adjusted its restructuring accrual by $0.4 million during the third quarter of fiscal 2000 to reflect lower than expected building transition costs. As of August 31, 2000, accrued severance costs consisted of expected remaining sever- ance and benefit payments for affected employees. Remaining accrued leased office space exit costs consisted of items such as the difference between the base rental charge and sublease revenues over time and tenant improvements. As of August 31, 2000, the restructuring plan was substantially complete and the Company expects that the remaining restructuring accrual will be sufficient to complete its restructuring plan. The Company’s quarterly results of operations reflect seasonal trends that are primarily the result of customers who renew their Franklin Planners on a calendar year basis. Training and Education sales are moderately seasonal because of the timing of corporate training, which is not typically scheduled during holiday and vacation periods, and the timing of Premier Agenda’s sales, which occur primarily in the Company’s fourth quarter. In the Company’s experience, catalog sales, retail store sales, and net income tend to be lower during the third quarter of each fiscal year. The seasonal nature of the Company’s operations has historically resulted in higher sales and significantly higher operating margins during the first, second, and fourth quarters, with declines in sales and income occurring during the third quarter of each fiscal year. The Company believes that the seasonal pattern of sales and earnings during its fiscal year will continue as in the past, exclusive of restructuring and other similar charges. During fiscal 2000, the Company incurred and expensed $11.2 million for other costs related to its restructuring plan which were not specific to severance or leased office space exit costs. These costs were primarily comprised of charges resulting from a stock option tender offer and other purchases of outstanding stock options, and to relocate sales associates to new regional sales offices. These costs have been classified as a separate component of operating expenses. In an effort to reduce the potentially dilutive effect of stock options on the Company’s capital structure, the Company was actively engaged in purchasing stock options from current and former employees. As part of this strategy, the Company filed a tender offer statement with the SEC that closed during the Company’s third quarter of fiscal 2000. Under terms of the offer, the Company paid cash for the outstanding option shares, which were priced using a market value methodology. As a result of the tender offer and previous purchases of option shares, the Company reacquired 3,294,476 option shares for $8.7 million in cash. The remaining $2.5 million was primarily used to relocate the Company’s sales force to eight new regional offices that were opened during fiscal 2000. During the fourth quarter of fiscal 1999, the Company initiated a restructuring plan that resulted in a $16.3 million charge to operations. Included in the restructur- ing charge were costs necessary to reduce the Company’s workforce by approximately 600 employees and to exit the majority of leased office space in Provo, Utah.  The Company reassessed the severance portion of the restructuring accrual during the fourth quarter of fiscal Historically, the Company’s primary sources of capital have been net cash provided by operating activities, long- term borrowing, and line-of-credit financing. Working capital requirements have also been financed through short-term borrowing and line-of-credit financing. In addition to these sources, the Company issued preferred stock to a private investor in the fourth quarter of fiscal 1999, and to existing shareholders through a subscrip- tion offering during fiscal 2000. The subscription offering closed on November 30, 1999 with 42,338 shares of preferred stock purchased under terms of the offering. The preferred stock issued to shareholders was substantially identical to preferred shares previously issued to the private investor. Net proceeds from the subscription offering were $4.1 million. Quarterly fluctuations may also be affected by other factors including the addition of new institutional customers, the introduction of new products, the timing of large institutional orders, and the opening of new retail stores. As part of its restructuring plan, and upon review of certain goodwill, intangibles, and other long-term assets, the Company recognized a loss on impaired assets totaling $16.6 million during the fourth quarter of  fiscal 1999. LIQUIDITY AND CAPITAL RESOURCES