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Segment Information | 6 Months Ended
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Feb. 28, 2019
Segment Information [Abstract] |
Segment Information | ﻿ ﻿ NOTE 9 – SEGMENT INFORMATION ﻿ Segment Information ﻿ Our sales are primarily comprised of training and consulting services. Our internal reporting and operating structure is currently organized around two divisions. The Enterprise Division, which consists of our Direct Office and International Licensee segments and the Education Division, which is comprised of our Education practice. Based on the applicable guidance, our operations are now comprised of three reportable segments and a corporate services group. The following is a brief description of our reportable segments: ﻿
| · |  | Direct Offices – Our Direct Office segment has a depth of expertise in helping organizations solve problems that require changes in human behavior, including leadership, productivity, execution, trust, and sales performance. We have a variety of principle-based offerings that help build winning and profitable cultures. This segment includes our sales personnel that serve the United States and Canada; our international sales offices located in Japan, China, the United Kingdom, Australia, and our new offices in Germany, Switzerland, and Austria; our government services sales channel; and our public programs operations.
﻿
| · |  | Education Practice – Centered around the principles found in The Leader in Me, the Education practice is dedicated to helping educational institutions build a culture that will produce great results. We believe these results are manifested by increases in student performance, improved school culture, decreased disciplinary issues, and increased teacher engagement and parental involvement. This segment includes our domestic and international Education practice operations, which are focused on sales to educational institutions such as elementary schools, high schools, and colleges and universities.
﻿
| · |  | International Licensees – Our independently owned international licensees provide our offerings and services in countries where we do not have a directly-owned office. These licensee partners allow us to expand the reach of our services to large multinational organizations as well as smaller organizations in their countries. This segment’s results are primarily comprised of royalty revenues received from these licensees.
﻿
| · |  | Corporate and Other – Our corporate and other information includes leasing operations, shipping and handling revenues, and certain corporate administrative expenses.
﻿ We determined that the Company’s chief operating decision maker is the Chief Executive Officer (CEO), and the primary measurement tool used in business unit performance analysis is Adjusted EBITDA, which may not be calculated as similarly titled amounts disclosed by other companies. Adjusted EBITDA is a non-GAAP financial measure. For reporting purposes, our consolidated Adjusted EBITDA may be calculated as our income or loss from operations excluding stock-based compensation, depreciation expense, amortization expense, and certain other charges such as adjustments for changes in the fair value of contingent liabilities from business acquisitions. The Company references this non-GAAP financial measure in its decision making because it provides supplemental information that facilitates consistent internal comparisons to the historical operating performance of prior periods and we believe it provides investors with greater transparency to evaluate operational activities and financial results. ﻿ Our operations are not capital intensive and we do not own any manufacturing facilities or equipment. Accordingly, we do not allocate assets to the reportable segments 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. ﻿ We account for the following segment information on the same basis as the accompanying condensed consolidated financial statements (in thousands). ﻿
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿ |  | Sales to |  |  |  |
﻿Quarter Ended |  | External |  |  |  | Adjusted
﻿February 28, 2019 |  | Customers |  | Gross Profit |  | EBITDA
﻿ |  |  |  |  |  |
﻿Enterprise Division: |  |  |  |  |  |
﻿Direct offices | $ | 36,414 | $ | 27,294 | $ | 2,543
﻿International licensees |  | 2,906 |  | 2,221 |  | 1,218
﻿ |  | 39,320 |  | 29,515 |  | 3,761
﻿Education practice |  | 9,698 |  | 5,429 |  | (909)
﻿Corporate and eliminations |  | 1,338 |  | 422 |  | (1,888)
﻿Consolidated | $ | 50,356 | $ | 35,366 | $ | 964
﻿ |  |  |  |  |  |
﻿Quarter Ended |  |  |  |  |  |
﻿February 28, 2018 |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿Enterprise Division: |  |  |  |  |  |
﻿Direct offices | $ | 33,275 | $ | 24,881 | $ | 1,331
﻿International licensees |  | 3,046 |  | 2,364 |  | 1,162
﻿ |  | 36,321 |  | 27,245 |  | 2,493
﻿Education practice |  | 9,007 |  | 5,163 |  | (1,151)
﻿Corporate and eliminations |  | 1,219 |  | 336 |  | (2,010)
﻿Consolidated | $ | 46,547 | $ | 32,744 | $ | (668)
﻿ |  |  |  |  |  |
﻿Two Quarters Ended |  |  |  |  |  |
﻿February 28, 2019 |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿Enterprise Division: |  |  |  |  |  |
﻿Direct offices | $ | 74,885 | $ | 54,364 | $ | 6,183
﻿International licensees |  | 6,583 |  | 5,084 |  | 2,846
﻿ |  | 81,468 |  | 59,448 |  | 9,029
﻿Education practice |  | 20,044 |  | 11,822 |  | (1,174)
﻿Corporate and eliminations |  | 2,673 |  | 878 |  | (3,722)
﻿Consolidated | $ | 104,185 | $ | 72,148 | $ | 4,133
﻿ |  |  |  |  |  |
﻿Two Quarters Ended |  |  |  |  |  |
﻿February 28, 2018 |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿Enterprise Division: |  |  |  |  |  |
﻿Direct offices | $ | 67,471 | $ | 49,442 | $ | 3,723
﻿International licensees |  | 6,366 |  | 4,866 |  | 2,572
﻿ |  | 73,837 |  | 54,308 |  | 6,295
﻿Education practice |  | 18,183 |  | 10,593 |  | (1,993)
﻿Corporate and eliminations |  | 2,459 |  | 711 |  | (4,368)
﻿Consolidated | $ | 94,479 | $ | 65,612 | $ | (66)
﻿ A reconciliation of our consolidated Adjusted EBITDA to consolidated net loss is provided below (in thousands). ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |
﻿ | Quarter Ended |  | Two Quarters Ended
﻿ |  | February 28, |  |  | February 28, |  |  | February 28, |  |  | February 28,
﻿ |  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018
﻿Segment Adjusted EBITDA | $ | 2,852 |  | $ | 1,342 |  | $ | 7,855 |  | $ | 4,302
﻿Corporate expenses |  | (1,888) |  |  | (2,010) |  |  | (3,722) |  |  | (4,368)
﻿Consolidated Adjusted EBITDA |  | 964 |  |  | (668) |  |  | 4,133 |  |  | (66)
﻿Stock-based compensation expense |  | (1,043) |  |  | (779) |  |  | (1,989) |  |  | (1,736)
﻿Increase in contingent consideration liabilities |  | (52) |  |  | (477) |  |  | (76) |  |  | (652)
﻿Licensee transition costs |  | (428) |  |  | - |  |  | (488) |  |  | -
﻿ERP system implementation costs |  | - |  |  | (429) |  |  | - |  |  | (855)
﻿Depreciation |  | (1,697) |  |  | (1,379) |  |  | (3,251) |  |  | (2,280)
﻿Amortization |  | (1,300) |  |  | (1,395) |  |  | (2,538) |  |  | (2,791)
﻿Loss from operations |  | (3,556) |  |  | (5,127) |  |  | (4,209) |  |  | (8,380)
﻿Interest income |  | 9 |  |  | 25 |  |  | 22 |  |  | 59
﻿Interest expense |  | (623) |  |  | (692) |  |  | (1,255) |  |  | (1,240)
﻿Discount accretion on related |  |  |  |  |  |  |  |  |  |  |
﻿ party receivable |  | 243 |  |  | 29 |  |  | 258 |  |  | 56
﻿Loss before income taxes |  | (3,927) |  |  | (5,765) |  |  | (5,184) |  |  | (9,505)
﻿Income tax benefit |  | 410 |  |  | 3,025 |  |  | 310 |  |  | 4,373
﻿Net loss | $ | (3,517) |  | $ | (2,740) |  | $ | (4,874) |  | $ | (5,132)
﻿ Revenue by Category ﻿ The following table presents our revenue disaggregated by geographic region (in thousands). ﻿
﻿ |  |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |  |
﻿ | Quarter Ended |  | Two Quarters Ended
﻿ |  | February 28, |  |  | February 28, |  |  | February 28, |  |  | February 28,
﻿ |  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018
﻿ |  |  |  |  |  |  |  |  |  |  |
﻿Americas | $ | 39,839 |  | $ | 34,786 |  | $ | 80,757 |  | $ | 70,751
﻿Asia Pacific |  | 7,398 |  |  | 8,711 |  |  | 16,678 |  |  | 17,491
﻿Europe/Middle East/Africa |  | 3,119 |  |  | 3,050 |  |  | 6,750 |  |  | 6,237
﻿ | $ | 50,356 |  | $ | 46,547 |  | $ | 104,185 |  | $ | 94,479
﻿ The following table presents our revenue disaggregated by type of service (in thousands). ﻿
﻿ |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |
﻿Quarter Ended |  | Services and |  |  |  |  |  | Leases and |  |
﻿February 28, 2019 |  | Products |  | Subscriptions |  | Royalties |  | Other |  | Consolidated
﻿ |  |  |  |  |  |  |  |  |  |
﻿Enterprise Division: |  |  |  |  |  |  |  |  |  |
﻿Direct offices | $ | 23,102 | $ | 12,416 | $ | 896 | $ | - | $ | 36,414
﻿International licensees |  | 517 |  | - |  | 2,389 |  | - |  | 2,906
﻿ |  | 23,619 |  | 12,416 |  | 3,285 |  | - |  | 39,320
﻿Education practice |  | 2,583 |  | 5,368 |  | 1,747 |  | - |  | 9,698
﻿Corporate and eliminations |  | - |  | - |  | - |  | 1,338 |  | 1,338
﻿Consolidated | $ | 26,202 | $ | 17,784 | $ | 5,032 | $ | 1,338 | $ | 50,356
﻿ |  |  |  |  |  |  |  |  |  |
﻿Quarter Ended |  |  |  |  |  |  |  |  |  |
﻿February 28, 2018 |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |
﻿Enterprise Division: |  |  |  |  |  |  |  |  |  |
﻿Direct offices | $ | 22,108 | $ | 9,982 | $ | 1,185 | $ | - | $ | 33,275
﻿International licensees |  | 568 |  | - |  | 2,478 |  | - |  | 3,046
﻿ |  | 22,676 |  | 9,982 |  | 3,663 |  | - |  | 36,321
﻿Education practice |  | 3,396 |  | 3,749 |  | 1,862 |  | - |  | 9,007
﻿Corporate and eliminations |  | - |  | - |  | - |  | 1,219 |  | 1,219
﻿Consolidated | $ | 26,072 | $ | 13,731 | $ | 5,525 | $ | 1,219 | $ | 46,547
﻿ |  |  |  |  |  |  |  |  |  |
﻿Two Quarters Ended |  |  |  |  |  |  |  |  |  |
﻿February 28, 2019 |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |
﻿Enterprise Division: |  |  |  |  |  |  |  |  |  |
﻿Direct offices | $ | 48,111 | $ | 25,091 | $ | 1,683 | $ | - | $ | 74,885
﻿International licensees |  | 1,389 |  | - |  | 5,194 |  | - |  | 6,583
﻿ |  | 49,500 |  | 25,091 |  | 6,877 |  | - |  | 81,468
﻿Education practice |  | 6,501 |  | 11,080 |  | 2,463 |  | - |  | 20,044
﻿Corporate and eliminations |  | - |  | - |  | - |  | 2,673 |  | 2,673
﻿Consolidated | $ | 56,001 | $ | 36,171 | $ | 9,340 | $ | 2,673 | $ | 104,185
﻿ |  |  |  |  |  |  |  |  |  |
﻿Two Quarters Ended |  |  |  |  |  |  |  |  |  |
﻿February 28, 2018 |  |  |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  |  |  |  |  |
﻿Enterprise Division: |  |  |  |  |  |  |  |  |  |
﻿Direct offices | $ | 46,981 | $ | 19,099 | $ | 1,391 | $ | - | $ | 67,471
﻿International licensees |  | 1,059 |  | - |  | 5,307 |  | - |  | 6,366
﻿ |  | 48,040 |  | 19,099 |  | 6,698 |  | - |  | 73,837
﻿Education practice |  | 8,181 |  | 7,482 |  | 2,520 |  | - |  | 18,183
﻿Corporate and eliminations |  | - |  | - |  | - |  | 2,459 |  | 2,459
﻿Consolidated | $ | 56,221 | $ | 26,581 | $ | 9,218 | $ | 2,459 | $ | 94,479
﻿

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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