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Segment Information | 12 Months Ended
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Aug. 31, 2020
Segment Information [Abstract] |
Segment Information | ﻿ ﻿ 16.SEGMENT INF ORMATION ﻿ Reportable Segments ﻿ Our sales are primarily comprised of training and consulting services and our internal reporting structure is comprised of three reportable operating segments and a corporate services group. Our internal reporting structure and reportable segments are organized primarily around the client channels which produce the Company’s revenues. The following is a brief description of our reportable segments: ﻿
| · |  | Direct Offices – 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, Germany, Switzerland, and Austria; our governmental sales channel; our coaching operations; and our books and audio sales channel.
﻿
| · |  | International Licensees – This segment is primarily comprised of our international licensees’ royalty revenues.
﻿
| · |  | Education Practice – This group includes our domestic and international Education practice operations, which are focused on sales to educational institutions.
﻿
| · |  | Corporate and Other – Our corporate and other information includes royalty revenue from Franklin Planner Corporation (Note 17), leasing operations, shipping and handling revenues, and certain corporate administrative expenses.
﻿ We have determined that the Company’s chief operating decision maker continues to be 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, changes in the fair value of contingent consideration liabilities from business acquisitions, restructuring charges, depreciation expense, amortization expense, and certain other unusual or infrequent items. ﻿ 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 (in thousands).
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﻿ |  |  |  |  |  |
﻿ |  | Sales to |  |  |  |
﻿Fiscal Year Ended |  | External |  |  |  | Adjusted
﻿August 31, 2020 |  | Customers |  | Gross Profit |  | EBITDA
﻿Enterprise Division: |  |  |  |  |  |
﻿Direct offices | $ | 139,780 | $ | 108,144 | $ | 17,694
﻿International licensees |  | 8,451 |  | 6,679 |  | 2,406
﻿ |  | 148,231 |  | 114,823 |  | 20,100
﻿Education Division |  | 43,405 |  | 27,099 |  | (90)
﻿Corporate and eliminations |  | 6,820 |  | 3,448 |  | (5,726)
﻿Consolidated | $ | 198,456 | $ | 145,370 | $ | 14,284
﻿ |  |  |  |  |  |
﻿Fiscal Year Ended |  |  |  |  |  |
﻿August 31, 2019 |  |  |  |  |  |
﻿Enterprise Division: |  |  |  |  |  |
﻿Direct offices | $ | 157,754 | $ | 116,755 | $ | 19,455
﻿International licensees |  | 12,896 |  | 10,231 |  | 6,072
﻿ |  | 170,650 |  | 126,986 |  | 25,527
﻿Education Division |  | 48,880 |  | 30,373 |  | 3,553
﻿Corporate and eliminations |  | 5,826 |  | 1,955 |  | (8,474)
﻿Consolidated | $ | 225,356 | $ | 159,314 | $ | 20,606
﻿ |  |  |  |  |  |
﻿Fiscal Year Ended |  |  |  |  |  |
﻿August 31, 2018 |  |  |  |  |  |
﻿Enterprise Division: |  |  |  |  |  |
﻿Direct offices | $ | 145,890 | $ | 108,140 | $ | 13,254
﻿International licensees |  | 13,226 |  | 10,031 |  | 5,081
﻿ |  | 159,116 |  | 118,171 |  | 18,335
﻿Education Division |  | 45,272 |  | 28,654 |  | 2,710
﻿Corporate and eliminations |  | 5,370 |  | 1,464 |  | (9,167)
﻿Consolidated | $ | 209,758 | $ | 148,289 | $ | 11,878
﻿ A reconciliation of Adjusted EBITDA to consolidated net loss is provided below (in thousands): ﻿
﻿ |  |  |  |  |  |
﻿ |  |  |  |  |  |
﻿YEAR ENDED |  |  |  |  |  |
﻿AUGUST 31, |  | 2020 |  | 2019 |  | 2018
﻿Segment Adjusted EBITDA | $ | 20,010 | $ | 29,080 | $ | 21,045
﻿Corporate expenses |  | (5,726) |  | (8,474) |  | (9,167)
﻿Consolidated Adjusted EBITDA |  | 14,284 |  | 20,606 |  | 11,878
﻿Stock-based compensation |  | 573 |  | (4,789) |  | (2,846)
﻿Reduction (increase) in |  |  |  |  |  |
﻿contingent consideration liabilities |  | 49 |  | (1,334) |  | (1,014)
﻿Restructuring costs |  | (1,636) |  | - |  | -
﻿Gain from insurance settlement |  | 933 |  | - |  | -
﻿Government COVID assistance |  | 514 |  | - |  | -
﻿Knowledge Capital wind-down costs |  | (389) |  | - |  | -
﻿ERP system implementation costs |  | - |  | - |  | (855)
﻿Licensee transition costs |  | - |  | (488) |  | -
﻿Depreciation |  | (6,664) |  | (6,364) |  | (5,161)
﻿Amortization |  | (4,606) |  | (4,976) |  | (5,368)
﻿Income (loss) from operations |  | 3,058 |  | 2,655 |  | (3,366)
﻿Interest income |  | 56 |  | 37 |  | 104
﻿Interest expense |  | (2,318) |  | (2,358) |  | (2,676)
﻿Accretion of discount on related |  |  |  |  |  |
﻿ party receivable |  | - |  | 258 |  | 418
﻿Income (loss) before income taxes |  | 796 |  | 592 |  | (5,520)
﻿Provision for income taxes |  | (10,231) |  | (1,615) |  | (367)
﻿Net loss | $ | (9,435) | $ | (1,023) | $ | (5,887)
﻿ Disaggregated Revenue ﻿ Our revenues are derived primarily from the United States. However, we also operate directly-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, |  | 2020 |  | 2019 |  | 2018
﻿Americas | $ | 160,989 | $ | 173,784 | $ | 159,595
﻿Asia Pacific |  | 11,845 |  | 14,457 |  | 12,715
﻿Europe/Middle East/Africa |  | 25,622 |  | 37,115 |  | 37,448
﻿ | $ | 198,456 | $ | 225,356 | $ | 209,758
﻿ The following table presents our revenue disaggregated by our significant revenue generating activities. Sales of services and products include training and consulting services and related products such as training manuals. Subscription sales include revenues from our subscription services such as the All Access Pass and Leader in Me membership. We receive royalty revenue from our international licensees and from other sources such as book publishing arrangements. Corporate royalties are amounts received from Franklin Planner Co. pursuant to a new licensing arrangement obtained in fiscal 2020 (Note 17). Leases and other revenue is primarily comprised of lease revenues from sub-leases for space at our corporate headquarters campus and from shipping and handling revenues (in thousands). ﻿
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﻿ |  |  |  |  |  |  |  |  |  |
﻿Fiscal Year Ended |  | Services and |  |  |  |  |  | Leases and |  |
﻿August 31, 2020 |  | Products |  | Subscriptions |  | Royalties |  | Other |  | Consolidated
﻿Enterprise Division: |  |  |  |  |  |  |  |  |  |
﻿Direct offices | $ | 75,580 | $ | 60,954 | $ | 3,246 | $ | - | $ | 139,780
﻿International licensees |  | 1,411 |  | - |  | 7,040 |  | - |  | 8,451
﻿ |  | 76,991 |  | 60,954 |  | 10,286 |  | - |  | 148,231
﻿Education Division |  | 15,107 |  | 25,587 |  | 2,711 |  | - |  | 43,405
﻿Corporate and eliminations |  | - |  | - |  | 1,985 |  | 4,835 |  | 6,820
﻿Consolidated | $ | 92,098 | $ | 86,541 | $ | 14,982 | $ | 4,835 | $ | 198,456
﻿ |  |  |  |  |  |  |  |  |  |
﻿Fiscal Year Ended |  |  |  |  |  |  |  |  |  |
﻿August 31, 2019 |  |  |  |  |  |  |  |  |  |
﻿Enterprise Division: |  |  |  |  |  |  |  |  |  |
﻿Direct offices | $ | 102,557 | $ | 52,536 | $ | 2,661 | $ | - | $ | 157,754
﻿International licensees |  | 2,439 |  | - |  | 10,457 |  | - |  | 12,896
﻿ |  | 104,996 |  | 52,536 |  | 13,118 |  | - |  | 170,650
﻿Education Division |  | 23,779 |  | 22,151 |  | 2,950 |  | - |  | 48,880
﻿Corporate and eliminations |  | - |  | - |  | - |  | 5,826 |  | 5,826
﻿Consolidated | $ | 128,775 | $ | 74,687 | $ | 16,068 | $ | 5,826 | $ | 225,356
﻿ |  |  |  |  |  |  |  |  |  |
﻿Fiscal Year Ended |  |  |  |  |  |  |  |  |  |
﻿August 31, 2018 |  |  |  |  |  |  |  |  |  |
﻿Enterprise Division: |  |  |  |  |  |  |  |  |  |
﻿Direct offices | $ | 100,730 | $ | 42,465 | $ | 2,695 | $ | - | $ | 145,890
﻿International licensees |  | 2,484 |  | - |  | 10,742 |  | - |  | 13,226
﻿ |  | 103,214 |  | 42,465 |  | 13,437 |  | - |  | 159,116
﻿Education Division |  | 26,061 |  | 15,587 |  | 3,624 |  | - |  | 45,272
﻿Corporate and eliminations |  | - |  | - |  | - |  | 5,370 |  | 5,370
﻿Consolidated | $ | 129,275 | $ | 58,052 | $ | 17,061 | $ | 5,370 | $ | 209,758
﻿ Inter-segment sales were immaterial for the periods presented and were eliminated in consolidation. ﻿ Other Geographic Information ﻿ At August 31, 2020, we had wholly owned direct offices in Australia, China, Japan, the United Kingdom, Germany, Switzerland, and Austria. Our long-lived assets, excluding intangible assets and goodwill, were held in the following locations for the periods indicated (in thousands):
﻿ |  |  |  |
﻿ |  |  |  |
﻿AUGUST 31, |  | 2020 |  | 2019
﻿United States/Canada | $ | 28,327 | $ | 31,129
﻿Japan |  | 1,537 |  | 1,456
﻿China |  | 1,307 |  | 441
﻿United Kingdom |  | 720 |  | 207
﻿Germany, Switzerland, and Austria |  | 240 |  | 10
﻿Singapore |  | 158 |  | 370
﻿Australia |  | 139 |  | 164
﻿ | $ | 32,428 | $ | 33,777
﻿

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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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