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Segment Information
 6 Months Ended
Feb. 28, 2015
Segment Information [Abstract]  
Segment Information

 

NOTE 6 – SEGMENT INFORMATION

 

Our sales are primarily comprised of training and consulting sales and related products.  Based on the consistent nature of our services and products and the types of customers for these services, we function as a single operating segment.  However, to improve comparability with previous periods, operating information for our U.S./Canada, international, and corporate services operations is presented below.  Our U.S./Canada operations are responsible for the sale and delivery of our training and consulting services in the United States and Canada.  Our international sales group includes the financial results of our directly owned foreign offices and royalty revenues from licensees.  Our corporate services information includes leasing income and certain corporate operating expenses.

 

The Company’s chief operating decision maker is the Chief Executive Officer, and the primary measurement tool used in business unit performance analysis is Adjusted EBITDA, which may not be calculated as similarly titled amounts calculated by other companies.  For segment reporting purposes, our consolidated Adjusted EBITDA can be calculated as our income from operations excluding share-based compensation, depreciation expense, amortization expense, and certain other charges such as adjustments for changes in the fair value of contingent earn out liabilities from previous business acquisitions.

 

In the normal course of business, we may make structural and cost allocation revisions to our enterprise information to reflect new reporting responsibilities within the organization.  There were no significant organizational or structural changes during the quarter ended February 28, 2015 that would affect the comparability of the enterprise information presented below.  We account for our enterprise information on the same basis as the accompanying condensed consolidated financial statements.

 

ENTERPRISE INFORMATION

(in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales to

 

 

 

 

 

 

 

 

Quarter Ended

 

External

 

 

 

Adjusted

 

 

 

 

February 28, 2015

 

Customers

 

Gross Profit

 

EBITDA

 

Depreciation

 

Amortization

 

 

 

 

 

 

 

 

 

 

 

U.S./Canada

$
34,618 

$
21,129 

$
142 

$
582 

$
952 

International

 
10,749 

 
8,401 

 
4,896 

 
76 

 
1 

Total

 
45,367 

 
29,530 

 
5,038 

 
658 

 
953 

Corporate and eliminations

 
949 

 
485 

 
(1,191)

 
382 

 

 -

Consolidated

$
46,316 

$
30,015 

$
3,847 

$
1,040 

$
953 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

 

 

 

 

 

 

 

 

 

March 1, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S./Canada

$
34,910 

$
22,335 

$
3,045 

$
407 

$
987 

International

 
10,520 

 
8,484 

 
4,604 

 
79 

 
2 

Total

 
45,430 

 
30,819 

 
7,649 

 
486 

 
989 

Corporate and eliminations

 
1,076 

 
592 

 
(1,029)

 
330 

 

 -

Consolidated

$
46,506 

$
31,411 

$
6,620 

$
816 

$
989 

 

 

 

 

 

 

 

 

 

 

 

Two Quarters Ended

 

 

 

 

 

 

 

 

 

 

February 28, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S./Canada

$
70,156 

$
43,135 

$
1,831 

$
1,087 

$
1,904 

International

 
21,998 

 
17,124 

 
10,278 

 
159 

 
2 

Total

 
92,154 

 
60,259 

 
12,109 

 
1,246 

 
1,906 

Corporate and eliminations

 
2,036 

 
960 

 
(2,383)

 
758 

 

 -

Consolidated

$
94,190 

$
61,219 

$
9,726 

$
2,004 

$
1,906 

 

 

 

 

 

 

 

 

 

 

 

Two Quarters Ended

 

 

 

 

 

 

 

 

 

 

March 1, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S./Canada

$
67,204 

$
43,638 

$
5,483 

$
781 

$
1,974 

International

 
20,887 

 
16,921 

 
9,494 

 
158 

 
4 

Total

 
88,091 

 
60,559 

 
14,977 

 
939 

 
1,978 

Corporate and eliminations

 
1,833 

 
882 

 
(2,337)

 
662 

 

 -

Consolidated

$
89,924 

$
61,441 

$
12,640 

$
1,601 

$
1,978 

 

A reconciliation of our consolidated Adjusted EBITDA to consolidated income before income taxes is provided below (in thousands).

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter Ended

 

Two Quarters Ended

 

 

February 28,

 

 

March 1,

 

 

February 28,

 

 

March 1,

 

 

2015

 

 

2014

 

 

2015

 

 

2014

Enterprise Adjusted EBITDA

$
5,038 

 

$
7,649 

 

$
12,109 

 

$
14,977 

Corporate expenses

 
(1,191)

 

 
(1,029)

 

 
(2,383)

 

 
(2,337)

Consolidated Adjusted EBITDA

 
3,847 

 

 
6,620 

 

 
9,726 

 

 
12,640 

Share-based compensation expense

 
(608)

 

 
(983)

 

 
(1,010)

 

 
(2,244)

Reduction of contingent earn

 

 

 

 

 

 

 

 

 

 

 

   out liability

 

 -

 

 
67 

 

 
28 

 

 
587 

Other

 
(65)

 

 

 -

 

 
(65)

 

 

 -

Depreciation

 
(1,040)

 

 
(816)

 

 
(2,004)

 

 
(1,601)

Amortization

 
(953)

 

 
(989)

 

 
(1,906)

 

 
(1,978)

Income from operations

 
1,181 

 

 
3,899 

 

 
4,769 

 

 
7,404 

Interest income

 
107 

 

 
109 

 

 
218 

 

 
252 

Interest expense

 
(535)

 

 
(559)

 

 
(1,074)

 

 
(1,119)

Discount on related party receivable

 

 -

 

 
(142)

 

 
(131)

 

 
(283)

Income before income taxes

$
753 

 

$
3,307 

 

$
3,782 

 

$
6,254 

 

We reassess the fair value of expected contingent consideration and the corresponding liability resulting from the fiscal 2013 acquisition of NinetyFive 5, LLC (Ninety Five 5) each period.  The reduction of the liability for the two quarters ended February 28, 2015 totaled approximately $28,000 and is reflected in selling, general, and administrative expenses on our consolidated income statements.  However, the impact of these adjustments is not included in our consolidated Adjusted EBITDA