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Segment Information
 12 Months Ended
Aug. 31, 2023
Segment Information [Abstract]  
Segment Information 17. 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 that serve clients in Japan, China, the United Kingdom, Ireland, Australia, New Zealand, 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, leasing operations, shipping and handling revenues, and certain corporate administrative expenses.

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 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, 2023

Customers

Gross Profit

EBITDA

Enterprise Division:

Direct offices

$

194,021

$

156,915

$

44,198

International licensees

11,645

10,507

5,874

205,666

167,422

50,072

Education Division

69,736

44,418

7,426

Corporate and eliminations

5,119

1,650

(9,432)

Consolidated

$

280,521

$

213,490

$

48,066

Fiscal Year Ended

August 31, 2022

Enterprise Division:

Direct offices

$

183,845

$

148,051

$

37,497

International licensees

10,551

9,382

4,964

194,396

157,433

42,461

Education Division

61,852

41,206

8,408

Corporate and eliminations

6,593

3,273

(8,672)

Consolidated

$

262,841

$

201,912

$

42,197

Fiscal Year Ended

August 31, 2021

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


‎

A reconciliation of Adjusted EBITDA to consolidated net income is provided below (in thousands):

YEAR ENDED

AUGUST 31,

2023

2022

2021

Segment Adjusted EBITDA

$

57,498 

$

50,869 

$

36,352 

Corporate expenses

(9,432)

(8,672)

(8,394)

Consolidated Adjusted EBITDA

48,066 

42,197 

27,958 

Stock-based compensation

(12,520)

(8,286)

(8,617)

Increase in contingent

consideration liabilities

(7)

(68)

(193)

Restructuring costs

(565)

-

-

Gain from insurance settlement

-

-

150 

Government COVID assistance

-

-

299 

Business acquisition costs

-

-

(300)

Depreciation

(4,271)

(4,903)

(6,190)

Amortization

(4,342)

(5,266)

(5,006)

Income from operations

26,361 

23,674 

8,101 

Interest income

1,091

65 

73 

Interest expense

(1,583)

(1,675)

(2,099)

Income before income taxes

25,869

22,064 

6,075 

Benefit (provision) for income taxes

(8,088)

(3,634)

7,548 

Net income

$

17,781

$

18,430 

$

13,623 

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,

2023

2022

2021

Americas

$

233,479

$

218,863

$

182,954

Asia Pacific

28,640

26,835

28,621

Europe/Middle East/Africa

18,402

17,143

12,593

$

280,521

$

262,841

$

224,168

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 licensing arrangement obtained in fiscal 2020. 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, 2023

Products

Subscriptions

Royalties

Other

Consolidated

Enterprise Division:

Direct offices

$

93,700

$

97,992

$

2,329

$

-

$

194,021

International licensees

428

1,327

9,890

-

11,645

94,128

99,319

12,219

-

205,666

Education Division

26,803

39,662

3,271

-

69,736

Corporate and eliminations

-

-

1,250

3,869

5,119

Consolidated

$

120,931

$

138,981

$

16,740

$

3,869

$

280,521

Fiscal Year Ended

August 31, 2022

Enterprise Division:

Direct offices

$

93,324

$

88,055

$

2,466

$

-

$

183,845

International licensees

429

1,281

8,841

-

10,551

93,753

89,336

11,307

-

194,396

Education Division

25,134

34,037

2,681

-

61,852

Corporate and eliminations

-

-

1,194

5,399

6,593

Consolidated

$

118,887

$

123,373

$

15,182

$

5,399

$

262,841

Fiscal Year Ended

August 31, 2021

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

Inter-segment sales were immaterial for the periods presented and were eliminated in consolidation.

Other Geographic Information

At August 31, 2023, we had wholly owned direct offices that serve clients in Australia, New Zealand, China, Japan, the United Kingdom, Ireland, 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,

2023

2022

United States/Canada

$

25,538

$

24,179 

China

1,504

1,375 

Japan

1,024

983 

United Kingdom

782

425 

Germany, Switzerland, and Austria

223 

102 

Australia

100 

155 

$

29,171

$

27,219