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Segment Information
 6 Months Ended
Feb. 28, 2025
Segment Information [Abstract]  
Segment Information NOTE 7 – SEGMENT INFORMATION

Segments

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 North America, International Direct Office, and International Licensee segments, and the Education Division, which is comprised of our Education practice. Beginning with the first quarter of fiscal 2025, our chief operating decision maker (CODM) began to manage our business, allocate resources, and evaluate performance based on changes that were made in the Company’s management and reporting structure in connection with the restructuring activities discussed in Note 5 Restructuring Costs. As a result, we realigned our reportable segments to those shown below.

Our operations consist of five reportable segments as described below:

North America – Our North America 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 and operations that serve the United States and Canada.

International Direct Offices – Our international direct offices provide the same offerings and content in countries outside of North America, which includes Australia, Austria, China, France, Germany, Ireland, Japan, New Zealand, Switzerland, and the United Kingdom.

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 sales are primarily comprised of royalty revenues received from the 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 the cost of certain administrative functions.

We have determined that the Company’s CODM continues to be 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 or loss excluding interest, income taxes, depreciation expense, intangible asset amortization expense, stock-based compensation, and certain other charges such as restructuring and headquarters moving costs. 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 unaudited condensed consolidated financial statements (in thousands). The prior period segment information has been recast to conform with the new reporting segment presentation described above.


‎

Revenue From

Quarter Ended

External

Adjusted

February 28, 2025

Customers

Gross Profit

EBITDA

Enterprise Division:

North America

$

34,520

$

28,974

$

4,843

International direct offices

6,201

4,560

(973)

International licensees

2,830

2,499

1,456

43,551

36,033

5,326

Education practice

15,065

9,331

(313)

Corporate and eliminations

996

382

(2,953)

Consolidated

$

59,612

$

45,746

$

2,060

Quarter Ended

February 29, 2024

Enterprise Division:

North America

$

35,554

$

29,911

$

9,158

International direct offices

7,263

5,502

(107)

International licensees

2,781

2,397

1,358

45,598

37,810

10,409

Education practice

14,689

8,675

(474)

Corporate and eliminations

1,049

366

(2,487)

Consolidated

$

61,336

$

46,851

$

7,448

Two Quarters Ended

February 28, 2025

Enterprise Division:

North America

$

74,657

$

61,795

$

13,587

International direct offices

14,440

10,673

(1,197)

International licensees

6,033

5,363

3,100

95,130

77,831

15,490

Education practice

31,529

19,741

(47)

Corporate and eliminations

2,039

885

(5,709)

Consolidated

$

128,698

$

98,457

$

9,734

Two Quarters Ended

February 29, 2024

Enterprise Division:

North America

$

75,847

$

62,675

$

19,599

International direct offices

15,993

12,115

1,051

International licensees

6,204

5,478

3,274

98,044

80,268

23,924

Education practice

29,580

18,150

(364)

Corporate and eliminations

2,112

711

(5,142)

Consolidated

$

129,736

$

99,129

$

18,418


‎

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

Quarter Ended

Two Quarters Ended

February 28,

February 29,

February 28,

February 29,

2025

2024

2025

2024

Segment Adjusted EBITDA

$

5,013 

$

9,935 

$

15,443 

$

23,560 

Corporate expenses

(2,953)

(2,487)

(5,709)

(5,142)

Consolidated Adjusted EBITDA

2,060 

7,448 

9,734 

18,418 

Stock-based compensation

(1,346)

(1,368)

(3,513)

(4,265)

Restructuring costs

-

(1,726)

(1,984)

(2,307)

Headquarters moving costs

(55)

-

(55)

-

Impaired asset

-

(928)

-

(928)

Depreciation

(1,016)

(913)

(1,967)

(2,005)

Amortization

(1,098)

(1,071)

(2,196)

(2,142)

Income (loss) from operations

(1,455)

1,442 

19 

6,771 

Interest income

263 

301 

553 

589 

Interest expense

(156)

(328)

(333)

(669)

Income (loss) before income taxes

(1,348)

1,415 

239 

6,691 

Income tax provision

272 

(541)

(134)

(966)

Net income (loss)

$

(1,076)

$

874 

$

105 

$

5,725 

Disaggregated Revenue

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,

2025

2024

2025

2024

Americas

$

50,728

$

51,399 

$

108,458

$

107,756 

Asia Pacific

5,037

5,757 

11,600

12,978 

Europe/Middle East/Africa

3,847

4,180 

8,640

9,002 

$

59,612

$

61,336 

$

128,698

$

129,736 


‎

The following table presents our revenue disaggregated by type of service (in thousands).

Quarter Ended

Services and

Leases and

February 28, 2025

Products

Subscriptions

Royalties

Other

Consolidated

Enterprise Division:

North America

$

11,953

$

22,282

$

285

$

-

$

34,520

International direct offices

3,705

2,460

36

-

6,201

International licensees

68

336

2,426

-

2,830

15,726

25,078

2,747

-

43,551

Education practice

3,605

10,090

1,370

-

15,065

Corporate and eliminations

-

-

38

958

996

Consolidated

$

19,331

$

35,168

$

4,155

$

958

$

59,612

Quarter Ended

February 29, 2024

Enterprise Division:

North America

$

11,954

$

23,336

$

264

$

-

$

35,554

International direct offices

4,634

2,596

33

-

7,263

International licensees

86

324

2,371

-

2,781

16,674

26,256

2,668

-

45,598

Education practice

3,932

9,508

1,249

-

14,689

Corporate and eliminations

-

-

313

736

1,049

Consolidated

$

20,606

$

35,764

$

4,230

$

736

$

61,336

Two Quarters Ended

February 28, 2025

Enterprise Division:

North America

$

28,219

$

45,819

$

619

$

-

$

74,657

International direct offices

9,331

5,031

78

-

14,440

International licensees

130

615

5,288

-

6,033

37,680

51,465

5,985

-

95,130

Education practice

8,352

20,560

2,617

-

31,529

Corporate and eliminations

-

-

351

1,688

2,039

Consolidated

$

46,032

$

72,025

$

8,953

$

1,688

$

128,698

Two Quarters Ended

February 29, 2024

Enterprise Division:

North America

$

27,751

$

47,478

$

618

$

-

$

75,847

International direct offices

10,963

4,953

77

-

15,993

International licensees

316

657

5,231

-

6,204

39,030

53,088

5,926

-

98,044

Education practice

7,666

19,265

2,649

-

29,580

Corporate and eliminations

-

-

626

1,486

2,112

Consolidated

$

46,696

$

72,353

$

9,201

$

1,486

$

129,736