XML 37 R23.htm IDEA: XBRL DOCUMENT
v3.21.2

Segment Information | 12 Months Ended
--- | ---
Aug. 31, 2021
Segment Information [Abstract] |
Segment Information | 16. SEGMENT INFORMATION 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 reported by other companies. For reporting purposes, w e define Adjusted EBITDA as net income or loss excluding the impact of interest, income taxes, intangible asset amortization, depreciation, stock-based compensation expense, and certain other items such as adjustments to the fair value of expected contingent consideration liabilities arising from business acquisitions, and 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. We account for our segment information on the same basis as the accompanying consolidated financial statements (in thousands).
|  | Sales to |  |  |  |
Fiscal Year Ended |  | External |  |  |  | Adjusted
August 31, 2021 |  | Customers |  | Gross Profit |  | EBITDA
Enterprise Division: |  |  |  |  |  |
Direct offices | $ | 159,608 | $ | 129,416 | $ | 27,948
International licensees |  | 9,036 |  | 7,727 |  | 3,586
|  | 168,644 |  | 137,143 |  | 31,534
Education Division |  | 48,902 |  | 32,771 |  | 4,818
Corporate and eliminations |  | 6,622 |  | 2,988 |  | (8,394)
Consolidated | $ | 224,168 | $ | 172,902 | $ | 27,958
Fiscal Year Ended |  |  |  |  |  |
August 31, 2020 |  |  |  |  |  |
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
‎ A reconciliation of Adjusted EBITDA to consolidated net income (loss) is provided below (in thousands):
YEAR ENDED |  |  |  |  |  |
AUGUST 31, |  | 2021 |  | 2020 |  | 2019
Segment Adjusted EBITDA | $ | 36,352 | $ | 20,010 | $ | 29,080
Corporate expenses |  | (8,394) |  | (5,726) |  | (8,474)
Consolidated Adjusted EBITDA |  | 27,958 |  | 14,284 |  | 20,606
Stock-based compensation |  | (8,617) |  | 573 |  | (4,789)
Reduction (increase) in |  |  |  |  |  |
contingent consideration liabilities |  | (193) |  | 49 |  | (1,334)
Restructuring costs |  | - |  | (1,636) |  | -
Gain from insurance settlement |  | 150 |  | 933 |  | -
Government COVID assistance |  | 299 |  | 514 |  | -
Business acquisition costs |  | (300) |  |  |  |
Knowledge Capital wind-down costs |  | - |  | (389) |  | -
Licensee transition costs |  | - |  | - |  | (488)
Depreciation |  | (6,190) |  | (6,664) |  | (6,364)
Amortization |  | (5,006) |  | (4,606) |  | (4,976)
Income from operations |  | 8,101 |  | 3,058 |  | 2,655
Interest income |  | 73 |  | 56 |  | 37
Interest expense |  | (2,099) |  | (2,318) |  | (2,358)
Accretion of discount on related |  |  |  |  |  |
party receivable |  | - |  | - |  | 258
Income before income taxes |  | 6,075 |  | 796 |  | 592
Benefit (provision) for income taxes |  | 7,548 |  | (10,231) |  | (1,615)
Net income (loss) | $ | 13,623 | $ | (9,435) | $ | (1,023)
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, |  | 2021 |  | 2020 |  | 2019
Americas | $ | 182,954 | $ | 160,989 | $ | 173,784
Asia Pacific |  | 28,621 |  | 25,622 |  | 37,115
Europe/Middle East/Africa |  | 12,593 |  | 11,845 |  | 14,457
| $ | 224,168 | $ | 198,456 | $ | 225,356
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).
Fiscal Year Ended |  | Services and |  |  |  |  |  | Leases and |  |
August 31, 2021 |  | Products |  | Subscriptions |  | Royalties |  | Other |  | Consolidated
Enterprise Division: |  |  |  |  |  |  |  |  |  |
Direct offices | $ | 84,111 | $ | 72,789 | $ | 2,708 | $ | - | $ | 159,608
International licensees |  | 1,085 |  | - |  | 7,951 |  | - |  | 9,036
|  | 85,196 |  | 72,789 |  | 10,659 |  | - |  | 168,644
Education Division |  | 19,747 |  | 26,742 |  | 2,413 |  | - |  | 48,902
Corporate and eliminations |  | - |  | - |  | 1,396 |  | 5,226 |  | 6,622
Consolidated | $ | 104,943 | $ | 99,531 | $ | 14,468 | $ | 5,226 | $ | 224,168
Fiscal Year Ended |  |  |  |  |  |  |  |  |  |
August 31, 2020 |  |  |  |  |  |  |  |  |  |
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
Inter-segment sales were immaterial for the periods presented and were eliminated in consolidation. Other Geographic Information At August 31, 2021, 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, |  | 2021 |  | 2020
United States/Canada | $ | 27,038 | $ | 28,327
China |  | 2,133 |  | 1,307
Japan |  | 1,238 |  | 1,537
United Kingdom |  | 702 |  | 720
Singapore |  | 238 |  | 158
Australia |  | 160 |  | 139
Germany, Switzerland, and Austria |  | 120 |  | 240
| $ | 31,629 | $ | 32,428

X
- References No definition available. + Details
Name: | us-gaap_SegmentReportingAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8924-108599 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8981-108599 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9031-108599 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (f) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8844-108599 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8933-108599 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 22 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8736-108599 Reference 11: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e9054-108599 Reference 12: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8657-108599 Reference 13: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 21 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=120311839&loc=d3e8721-108599 Reference 14: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
Name: | us-gaap_SegmentReportingDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration