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Segment Information
 12 Months Ended
Aug. 31, 2016
Segment Information [Abstract]  
Segment Information





16.SEGMENT INFORMATION



Reportable Segments



Our revenues are primarily obtained from the sale of training and consulting services and related products.  Effective September 1, 2015, we reorganized our internal reporting structure to include four new divisions and a corporate services group.  A brief description of these new divisions follows:



·

Direct Offices – This division includes our geographic sales offices that serve the United States and Canada; our international sales offices located in Japan, the United Kingdom, and Australia; and our public programs group.



·

Strategic Markets – This division includes our government services office, the Sales Performance practice, the Customer Loyalty practice, and a new “Global 50” group, which is specifically focused on sales to large, multi-national organizations.



·

Education practice – This division includes our domestic and international Education practice operations, which are centered on sales to educational institutions.



·

International Licensees – This division is primarily comprised of our international licensees’ royalty revenues.



We determined that the new divisions are reportable segments under the applicable accounting guidance.  Additionally, we determined that the Company’s chief operating decision maker is the CEO, 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 reporting purposes, our consolidated Adjusted EBITDA can be calculated as our income or loss from operations excluding stock-based compensation, restructuring charges, depreciation expense, amortization expense, and certain other charges such as impaired asset charges and adjustments for changes in the fair value of contingent earn out liabilities from previous business acquisitions.



Our operations are not capital intensive and we do not own any manufacturing facilities or equipment.  Accordingly, we do not allocate assets to the divisions for analysis purposes.  Interest expense and interest income are primarily generated at the corporate level and are not allocated.  Income taxes are likewise calculated and paid on a corporate level (except for entities that operate in foreign jurisdictions) and are not allocated for analysis purposes.



All prior period segment information has been revised to conform to our current organizational structure, assigned responsibilities, and primary internal reports.  We account for our segment information on the same basis as the accompanying consolidated financial statements.



 

 

 

 

 

 



 

 

 

 

 

 



 

Sales to

 

 

 

 

Fiscal Year Ended

 

External

 

 

 

Adjusted

August 31, 2016

 

Customers

 

Gross Profit

 

EBITDA



 

 

 

 

 

 

Direct offices

$

 103,613 

$

 74,642 

$

 17,701 

Strategic markets

 

 29,778 

 

 18,749 

 

 3,536 

Education practice

 

 40,361 

 

 24,030 

 

 4,372 

International licensees

 

 17,629 

 

 13,667 

 

 9,174 

Total

 

 191,381 

 

 131,088 

 

 34,783 

Corporate and eliminations

 

 8,674 

 

 4,066 

 

 (7,889)

Consolidated

$

 200,055 

$

 135,154 

$

 26,894 



 

 

 

 

 

 

Fiscal Year Ended

 

 

 

 

 

 

August 31, 2015

 

 

 

 

 

 



 

 

 

 

 

 

Direct offices

$

 113,087 

$

 81,057 

$

 18,801 

Strategic markets

 

 37,039 

 

 21,680 

 

 8,418 

Education practice

 

 33,128 

 

 18,797 

 

 2,531 

International licensees

 

 17,100 

 

 12,896 

 

 7,198 

Total

 

 200,354 

 

 134,430 

 

 36,948 

Corporate and eliminations

 

 9,587 

 

 3,659 

 

 (5,090)

Consolidated

$

 209,941 

$

 138,089 

$

 31,858 



 

 

 

 

 

 

Fiscal Year Ended

 

 

 

 

 

 

August 31, 2014

 

 

 

 

 

 



 

 

 

 

 

 

Direct offices

$

 115,085 

$

 82,162 

$

 21,667 

Strategic markets

 

 31,841 

 

 18,156 

 

 4,625 

Education practice

 

 30,883 

 

 18,591 

 

 4,315 

International licensees

 

 17,065 

 

 13,505 

 

 8,406 

Total

 

 194,874 

 

 132,414 

 

 39,013 

Corporate and eliminations

 

 10,291 

 

 5,852 

 

 (4,593)

Consolidated

$

 205,165 

$

 138,266 

$

 34,420 



A reconciliation of Adjusted EBITDA to consolidated net income is provided below (in thousands):





 

 

 

 

 

 



 

 

 

 

 

 

YEAR ENDED

 

 

 

 

 

 

AUGUST 31,

 

 2016 

 

 2015 

 

 2014 

Enterprise Adjusted EBITDA

$

 34,783 

$

 36,948 

$

 39,013 

Corporate expenses

 

 (7,889)

 

 (5,090)

 

 (4,593)

Consolidated Adjusted EBITDA

 

 26,894 

 

 31,858 

 

 34,420 

Stock-based compensation

 

 (3,121)

 

 (2,536)

 

 (3,534)

Reduction (increase) in

 

 

 

 

 

 

contingent consideration liability

 

 (1,538)

 

 (35)

 

 1,579 

Other expenses

 

 (670)

 

 -

 

 -

Impaired assets

 

 -

 

 (1,302)

 

 (363)

Restructuring costs

 

 (776)

 

 (587)

 

 -

Depreciation

 

 (3,677)

 

 (4,142)

 

 (3,383)

Amortization

 

 (3,263)

 

 (3,727)

 

 (3,954)

Income from operations

 

 13,849 

 

 19,529 

 

 24,765 

Interest income

 

 325 

 

 383 

 

 427 

Interest expense

 

 (2,263)

 

 (2,137)

 

 (2,237)

Discount on related party receivable

 

 -

 

 (363)

 

 (1,196)

Income before income taxes

 

 11,911 

 

 17,412 

 

 21,759 

Provision for income taxes

 

 (4,895)

 

 (6,296)

 

 (3,692)

Net income

$

 7,016 

$

 11,116 

$

 18,067 



Geographic Information



Our revenues are derived primarily from the United States.  However, we also operate wholly owned offices or contract with licensees to provide our services in various countries throughout the world.  Our consolidated revenues were derived from the following countries (in thousands):



 

 

 

 

 

 



 

 

 

 

 

 

YEAR ENDED

 

 

 

 

 

 

AUGUST 31,

 

 2016 

 

 2015 

 

 2014 

United States

$

 155,153 

$

 162,594 

$

 153,999 

Japan

 

 14,997 

 

 14,446 

 

 16,652 

United Kingdom

 

 7,716 

 

 8,997 

 

 6,899 

China/Singapore

 

 5,027 

 

 3,821 

 

 3,322 

Canada

 

 4,357 

 

 6,460 

 

 8,780 

Australia

 

 3,404 

 

 3,774 

 

 4,623 

Thailand

 

 1,226 

 

 1,055 

 

 860 

Mexico/Central America

 

 917 

 

 974 

 

 923 

Denmark/Scandinavia

 

 863 

 

 729 

 

 831 

India

 

 677 

 

 708 

 

 684 

Central/Eastern Europe

 

 644 

 

 492 

 

 697 

Middle East

 

 584 

 

 670 

 

 594 

Indonesia

 

 579 

 

 651 

 

 761 

Malaysia

 

 384 

 

 511 

 

 405 

Brazil

 

 319 

 

 321 

 

 595 

South Korea

 

 318 

 

 179 

 

 725 

Others

 

 2,890 

 

 3,559 

 

 3,815 



$

 200,055 

$

 209,941 

$

 205,165 



During the periods presented in this report, there were no customers that accounted for more than ten percent of our consolidated revenues.



At August 31, 2016 and 2015, we had wholly owned direct offices in Australia, Japan, and the United Kingdom.  Our long-lived assets, excluding intangible assets, goodwill, and the long-term portion of the FCOP receivable were held in the following locations for the periods indicated (in thousands):





 

 

 

 



 

 

 

 

AUGUST 31,

 

 2016 

 

 2015 

United States/Canada

$

 27,288 

$

 28,770 

Japan

 

 2,045 

 

 1,227 

United Kingdom

 

 114 

 

 101 

Australia

 

 349 

 

 208 



$

 29,796 

$

 30,306 



Inter-segment sales were immaterial and were eliminated in consolidation.