XML 27 R16.htm IDEA: XBRL DOCUMENT
v3.21.1

Segment Information | 6 Months Ended
--- | ---
Feb. 28, 2021
Segment Information [Abstract] |
Segment Information | NOTE 9 – SEGMENT INFORMATION Segment Information Our sales are primarily comprised of training and consulting services and 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 comprised of three reportable segments and one 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, Germany, Switzerland, and Austria; our government services sales channel; and our book and audio sales. 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. 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. Corporate and Other – Our corporate and other information includes leasing operations, shipping and handling revenues, royalty revenues from Franklin Planner Corp., and certain corporate administrative functions. 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 disclosed by other companies. Adjusted EBITDA is a non-GAAP financial measure. For reporting purposes, our consolidated Adjusted EBITDA may be calculated as net income (loss) excluding interest expense, income taxes, depreciation expense, amortization expense, stock-based compensation, and certain other charges such as adjustments for changes in the fair value of contingent liabilities arising from business acquisitions. We reference this non-GAAP financial measure in our 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, 2021 |  | Customers |  | Gross Profit |  | EBITDA
Enterprise Division: |  |  |  |  |  |
Direct offices | $ | 35,738 | $ | 29,084 | $ | 6,131
International licensees |  | 2,429 |  | 2,100 |  | 1,505
|  | 38,167 |  | 31,184 |  | 7,636
Education practice |  | 8,478 |  | 5,344 |  | (858)
Corporate and eliminations |  | 1,517 |  | 812 |  | (1,655)
Consolidated | $ | 48,162 | $ | 37,340 | $ | 5,123
Quarter Ended |  |  |  |  |  |
February 29, 2020 |  |  |  |  |  |
Enterprise Division: |  |  |  |  |  |
Direct offices | $ | 37,973 | $ | 28,702 | $ | 4,734
International licensees |  | 2,691 |  | 2,237 |  | 1,384
|  | 40,664 |  | 30,939 |  | 6,118
Education practice |  | 10,893 |  | 6,460 |  | (1,068)
Corporate and eliminations |  | 2,188 |  | 1,267 |  | (994)
Consolidated | $ | 53,745 | $ | 38,666 | $ | 4,056
Two Quarters Ended |  |  |  |  |  |
February 28, 2021 |  |  |  |  |  |
Enterprise Division: |  |  |  |  |  |
Direct offices | $ | 72,481 | $ | 58,523 | $ | 12,827
International licensees |  | 5,026 |  | 4,385 |  | 2,795
|  | 77,507 |  | 62,908 |  | 15,622
Education practice |  | 15,975 |  | 9,331 |  | (3,142)
Corporate and eliminations |  | 3,004 |  | 1,487 |  | (3,641)
Consolidated | $ | 96,486 | $ | 73,726 | $ | 8,839
Two Quarters Ended |  |  |  |  |  |
February 29, 2020 |  |  |  |  |  |
Enterprise Division: |  |  |  |  |  |
Direct offices | $ | 80,085 | $ | 60,113 | $ | 10,444
International licensees |  | 6,411 |  | 5,357 |  | 3,419
|  | 86,496 |  | 65,470 |  | 13,863
Education practice |  | 21,974 |  | 13,117 |  | (2,171)
Corporate and eliminations |  | 3,887 |  | 2,108 |  | (2,675)
Consolidated | $ | 112,357 | $ | 80,695 | $ | 9,017
‎ A reconciliation of our consolidated Adjusted EBITDA to consolidated net income (loss) is provided below (in thousands).
| Quarter Ended |  | Two Quarters Ended
|  | February 28, |  |  | February 29, |  |  | February 28, |  |  | February 29,
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020
Segment Adjusted EBITDA | $ | 6,778 |  | $ | 5,050 |  | $ | 12,480 |  | $ | 11,692
Corporate expenses |  | (1,655) |  |  | (994) |  |  | (3,641) |  |  | (2,675)
Consolidated Adjusted EBITDA |  | 5,123 |  |  | 4,056 |  |  | 8,839 |  |  | 9,017
Stock-based compensation |  | (1,599) |  |  | (1,793) |  |  | (2,757) |  |  | (3,644)
Increase (decrease) in the fair value of |  |  |  |  |  |  |  |  |  |  |
contingent consideration liabilities |  | 16 |  |  | 182 |  |  | (46) |  |  | 91
Government COVID-19 assistance |  | 27 |  |  | - |  |  | 234 |  |  | -
Knowledge Capital wind-down costs |  | - |  |  | - |  |  | - |  |  | (389)
Gain from insurance settlement |  | 150 |  |  | - |  |  | 150 |  |  | -
Depreciation |  | (1,740) |  |  | (1,653) |  |  | (3,481) |  |  | (3,273)
Amortization |  | (1,133) |  |  | (1,170) |  |  | (2,265) |  |  | (2,340)
Income (loss) from operations |  | 844 |  |  | (378) |  |  | 674 |  |  | (538)
Interest income |  | 16 |  |  | 13 |  |  | 40 |  |  | 18
Interest expense |  | (540) |  |  | (557) |  |  | (1,108) |  |  | (1,162)
Income (loss) before income taxes |  | 320 |  |  | (922) |  |  | (394) |  |  | (1,682)
Income tax benefit (provision) |  | (366) |  |  | 2,019 |  |  | (544) |  |  | 2,235
Net income (loss) | $ | (46) |  | $ | 1,097 |  | $ | (938) |  | $ | 553
Revenue by Category The following table presents our revenue disaggregated by geographic region (in thousands).
| Quarter Ended |  | Two Quarters Ended
|  | February 28, |  |  | February 29, |  |  | February 28, |  |  | February 29,
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020
Americas | $ | 38,828 |  | $ | 42,721 |  | $ | 77,155 |  | $ | 86,756
Asia Pacific |  | 6,622 |  |  | 7,089 |  |  | 13,428 |  |  | 17,228
Europe/Middle East/Africa |  | 2,712 |  |  | 3,935 |  |  | 5,903 |  |  | 8,373
| $ | 48,162 |  | $ | 53,745 |  | $ | 96,486 |  | $ | 112,357
‎ The following table presents our revenue disaggregated by type of service (in thousands).
Quarter Ended |  | Services and |  |  |  |  |  | Leases and |  |
February 28, 2021 |  | Products |  | Subscriptions |  | Royalties |  | Other |  | Consolidated
Enterprise Division: |  |  |  |  |  |  |  |  |  |
Direct offices | $ | 17,912 | $ | 17,132 | $ | 694 | $ | - | $ | 35,738
International licensees |  | 522 |  | - |  | 1,907 |  | - |  | 2,429
|  | 18,434 |  | 17,132 |  | 2,601 |  | - |  | 38,167
Education practice |  | 1,797 |  | 5,731 |  | 950 |  | - |  | 8,478
Corporate and eliminations |  | - |  | - |  | 373 |  | 1,144 |  | 1,517
Consolidated | $ | 20,231 | $ | 22,863 | $ | 3,924 | $ | 1,144 | $ | 48,162
Quarter Ended |  |  |  |  |  |  |  |  |  |
February 29, 2020 |  |  |  |  |  |  |  |  |  |
Enterprise Division: |  |  |  |  |  |  |  |  |  |
Direct offices | $ | 21,644 | $ | 15,172 | $ | 1,157 | $ | - | $ | 37,973
International licensees |  | 410 |  | - |  | 2,281 |  | - |  | 2,691
|  | 22,054 |  | 15,172 |  | 3,438 |  | - |  | 40,664
Education practice |  | 2,950 |  | 6,192 |  | 1,751 |  | - |  | 10,893
Corporate and eliminations |  | - |  | - |  | 935 |  | 1,253 |  | 2,188
Consolidated | $ | 25,004 | $ | 21,364 | $ | 6,124 | $ | 1,253 | $ | 53,745
Two Quarters Ended |  |  |  |  |  |  |  |  |  |
February 28, 2021 |  |  |  |  |  |  |  |  |  |
Enterprise Division: |  |  |  |  |  |  |  |  |  |
Direct offices | $ | 37,323 | $ | 33,747 | $ | 1,411 | $ | - | $ | 72,481
International licensees |  | 854 |  | - |  | 4,172 |  | - |  | 5,026
|  | 38,177 |  | 33,747 |  | 5,583 |  | - |  | 77,507
Education practice |  | 3,721 |  | 10,805 |  | 1,449 |  | - |  | 15,975
Corporate and eliminations |  | - |  | - |  | 708 |  | 2,296 |  | 3,004
Consolidated | $ | 41,898 | $ | 44,552 | $ | 7,740 | $ | 2,296 | $ | 96,486
Two Quarters Ended |  |  |  |  |  |  |  |  |  |
February 29, 2020 |  |  |  |  |  |  |  |  |  |
Enterprise Division: |  |  |  |  |  |  |  |  |  |
Direct offices | $ | 48,895 | $ | 29,461 | $ | 1,729 | $ | - | $ | 80,085
International licensees |  | 1,000 |  | - |  | 5,411 |  | - |  | 6,411
|  | 49,895 |  | 29,461 |  | 7,140 |  | - |  | 86,496
Education practice |  | 6,535 |  | 13,010 |  | 2,429 |  | - |  | 21,974
Corporate and eliminations |  | - |  | - |  | 1,314 |  | 2,573 |  | 3,887
Consolidated | $ | 56,430 | $ | 42,471 | $ | 10,883 | $ | 2,573 | $ | 112,357

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