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Segment Information
 12 Months Ended
Aug. 31, 2017
Segment Information [Abstract]  
Segment Information





17.SEGMENT INFORMATION



Reportable Segments



Our revenues are primarily obtained from the sale of training and consulting services and related products.  During fiscal 2017, we managed our business based on the following four operating segments:



·

Direct Offices – This division includes our geographic sales offices that serve the United States and Canada; our international sales offices located in Japan, China, 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 the “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 have 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, contract termination costs, restructuring charges, depreciation expense, amortization expense, and certain other items such as impaired asset charges and adjustments for changes in the fair value of contingent consideration liabilities from 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, 2017

 

Customers

 

Gross Profit

 

EBITDA



 

 

 

 

 

 

Direct offices

$

 96,662 

$

 65,950 

$

 6,134 

Strategic markets

 

 22,974 

 

 13,601 

 

 (2,005)

Education practice

 

 44,122 

 

 27,916 

 

 6,043 

International licensees

 

 13,571 

 

 10,483 

 

 6,005 

Total

 

 177,329 

 

 117,950 

 

 16,177 

Corporate and eliminations

 

 7,927 

 

 4,717 

 

 (8,478)

Consolidated

$

 185,256 

$

 122,667 

$

 7,699 



 

 

 

 

 

 

Fiscal Year Ended

 

 

 

 

 

 

August 31, 2016

 

 

 

 

 

 



 

 

 

 

 

 

Direct offices

$

 103,605 

$

 74,632 

$

 17,791 

Strategic markets

 

 29,819 

 

 18,791 

 

 3,559 

Education practice

 

 40,844 

 

 24,513 

 

 4,787 

International licensees

 

 17,113 

 

 13,152 

 

 8,646 

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

 

 33,681 

 

 19,350 

 

 3,084 

International licensees

 

 16,547 

 

 12,343 

 

 6,645 

Total

 

 200,354 

 

 134,430 

 

 36,948 

Corporate and eliminations

 

 9,587 

 

 3,659 

 

 (5,090)

Consolidated

$

 209,941 

$

 138,089 

$

 31,858 



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





 

 

 

 

 

 



 

 

 

 

 

 

YEAR ENDED

 

 

 

 

 

 

AUGUST 31,

 

 2017 

 

 2016 

 

 2015 

Enterprise Adjusted EBITDA

$

 16,177 

$

 34,783 

$

 36,948 

Corporate expenses

 

 (8,478)

 

 (7,889)

 

 (5,090)

Consolidated Adjusted EBITDA

 

 7,699 

 

 26,894 

 

 31,858 

Stock-based compensation

 

 (3,658)

 

 (3,121)

 

 (2,536)

Reduction (increase) in

 

 

 

 

 

 

contingent consideration liability

 

 1,936 

 

 (1,538)

 

 (35)

Costs to exit Japan publishing business

 

 (2,107)

 

 -

 

 -

Contract termination costs

 

 (1,500)

 

 -

 

 -

Restructuring costs

 

 (1,482)

 

 (776)

 

 (587)

ERP system implementation costs

 

 (1,404)

 

 (448)

 

 -

China office start-up costs

 

 (505)

 

 (222)

 

 -

Business acquisition costs

 

 (442)

 

 -

 

 -

Impaired assets

 

 -

 

 -

 

 (1,302)

Depreciation

 

 (3,879)

 

 (3,677)

 

 (4,142)

Amortization

 

 (3,538)

 

 (3,263)

 

 (3,727)

Income (loss) from operations

 

 (8,880)

 

 13,849 

 

 19,529 

Interest income

 

 379 

 

 325 

 

 383 

Interest expense

 

 (2,408)

 

 (2,263)

 

 (2,137)

Discount on related party receivable

 

 -

 

 -

 

 (363)

Income (loss) before income taxes

 

 (10,909)

 

 11,911 

 

 17,412 

Benefit (provision) for income taxes

 

 3,737 

 

 (4,895)

 

 (6,296)

Net income (loss)

$

 (7,172)

$

 7,016 

$

 11,116 



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/regions (in thousands):



 

 

 

 

 

 



 

 

 

 

 

 

YEAR ENDED

 

 

 

 

 

 

AUGUST 31,

 

 2017 

 

 2016 

 

 2015 

United States

$

 137,219 

$

 155,153 

$

 162,594 

Japan

 

 14,482 

 

 14,997 

 

 14,446 

China

 

 11,552 

 

 3,884 

 

 2,424 

United Kingdom

 

 4,754 

 

 7,716 

 

 8,997 

Canada

 

 4,372 

 

 4,357 

 

 6,460 

Australia

 

 2,704 

 

 3,404 

 

 3,774 

Western Europe

 

 1,679 

 

 1,503 

 

 1,364 

Thailand

 

 1,147 

 

 1,226 

 

 1,055 

Denmark/Scandinavia

 

 775 

 

 863 

 

 729 

Mexico/Central America

 

 751 

 

 917 

 

 974 

Middle East

 

 723 

 

 584 

 

 670 

Singapore

 

 722 

 

 1,143 

 

 1,397 

India

 

 701 

 

 677 

 

 708 

Central/Eastern Europe

 

 638 

 

 644 

 

 492 

Indonesia

 

 614 

 

 579 

 

 651 

Brazil

 

 410 

 

 319 

 

 321 

Malaysia

 

 364 

 

 384 

 

 511 

The Philippines

 

 324 

 

 332 

 

 327 

Others

 

 1,325 

 

 1,373 

 

 2,047 



$

 185,256 

$

 200,055 

$

 209,941 



At August 31, 2017, we had wholly owned direct offices in Australia, China, Japan, and the United Kingdom.  Our China direct offices opened on September 1, 2016.  Our long-lived assets, excluding intangible assets, goodwill, and the long-term portion of the related party receivable were held in the following locations for the periods indicated (in thousands):





 

 

 

 



 

 

 

 

AUGUST 31,

 

 2017 

 

 2016 

United States/Canada

$

 33,146 

$

 27,288 

Japan

 

 2,350 

 

 2,045 

Australia

 

 466 

 

 349 

China

 

 301 

 

 -

United Kingdom

 

 240 

 

 114 

Singapore

 

 152 

 

 -



$

 36,655 

$

 29,796 



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