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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, we 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