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Segment Information | 6 Months Ended
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Feb. 28, 2022
Segment Information [Abstract] |
Segment Information | NOTE 7 – 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 Chief Executive Officer, 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, intangible asset 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 AdjustedFebruary 28, 2022 Customers Gross Profit EBITDA Enterprise Division: Direct offices$ 41,502 $ 33,948 $ 8,732International licensees 2,588 2,304 1,444 44,090 36,252 10,176Education practice 11,066 7,098 (324)Corporate and eliminations 1,443 764 (1,810)Consolidated$ 56,599 $ 44,114 $ 8,042 Quarter Ended February 28, 2021 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 Two Quarters Ended February 28, 2022 Enterprise Division: Direct offices$ 86,621 $ 70,150 $ 18,686International licensees 5,586 5,005 3,115 92,207 75,155 21,801Education practice 22,763 14,959 (89)Corporate and eliminations 2,889 1,599 (3,738)Consolidated$ 117,859 $ 91,713 $ 17,974 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 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 28, February 28, February 28, 2022 2021 2022 2021Segment Adjusted EBITDA$ 9,852 $ 6,778 $ 21,712 $ 12,480 Corporate expenses (1,810) (1,655) (3,738) (3,641)Consolidated Adjusted EBITDA 8,042 5,123 17,974 8,839 Stock-based compensation (1,969) (1,599) (3,618) (2,757)Increase in the fair value of contingent consideration liabilities (20) 16 (48) (46)Government COVID-19 assistance - 27 - 234 Gain from insurance settlement - 150 - 150 Depreciation (1,190) (1,740) (2,470) (3,481)Amortization (1,346) (1,133) (2,776) (2,265)Income (loss) from operations 3,517 844 9,062 674 Interest income 12 16 27 40 Interest expense (423) (540) (869) (1,108)Income (loss) before income taxes 3,106 320 8,220 (394)Income tax provision (1,228) (366) (2,530) (544)Net income (loss)$ 1,878 $ (46) $ 5,690 $ (938) 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, 2022 2021 2022 2021 Americas$ 46,447 $ 38,828 $ 95,202 $ 77,155 Asia Pacific 6,489 6,622 14,287 13,428 Europe/Middle East/Africa 3,663 2,712 8,370 5,903 $ 56,599 $ 48,162 $ 117,859 $ 96,486 ‎ The following table presents our revenue disaggregated by type of service (in thousands). Quarter Ended Services and Leases and February 28, 2022 Products Subscriptions Royalties Other Consolidated Enterprise Division: Direct offices$ 20,212 $ 20,553 $ 737 $ - $ 41,502International licensees 99 313 2,176 - 2,588 20,311 20,866 2,913 - 44,090Education practice 2,844 7,128 1,094 - 11,066Corporate and eliminations - - 220 1,223 1,443Consolidated$ 23,155 $ 27,994 $ 4,227 $ 1,223 $ 56,599 Quarter Ended February 28, 2021 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 Two Quarters Ended February 28, 2022 Enterprise Division: Direct offices$ 44,063 $ 41,065 $ 1,493 $ - $ 86,621International licensees 212 605 4,769 - 5,586 44,275 41,670 6,262 - 92,207Education practice 6,070 14,972 1,721 - 22,763Corporate and eliminations - - 564 2,325 2,889Consolidated$ 50,345 $ 56,642 $ 8,547 $ 2,325 $ 117,859 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

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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://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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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=123359005&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
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