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Segment Information | 9 Months Ended
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May 31, 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
May 31, 2025 |  | Customers |  |  | Gross Profit |  |  | EBITDA
Enterprise Division: |  |  |  |  |  |  |  |
North America | $ | 37,054 |  | $ | 30,708 |  | $ | 6,201
International direct offices |  | 7,496 |  |  | 5,490 |  |  | 313
International licensees |  | 2,716 |  |  | 2,379 |  |  | 1,349
|  | 47,266 |  |  | 38,577 |  |  | 7,863
Education practice |  | 18,640 |  |  | 12,227 |  |  | 2,053
Corporate and eliminations |  | 1,215 |  |  | 518 |  |  | (2,609)
Consolidated | $ | 67,121 |  | $ | 51,322 |  | $ | 7,307
Quarter Ended |  |  |  |  |  |  |  |
May 31, 2024 |  |  |  |  |  |  |  |
Enterprise Division: |  |  |  |  |  |  |  |
North America | $ | 40,592 |  | $ | 33,425 |  | $ | 10,822
International direct offices |  | 8,540 |  |  | 6,629 |  |  | 1,268
International licensees |  | 2,747 |  |  | 2,463 |  |  | 1,352
|  | 51,879 |  |  | 42,517 |  |  | 13,442
Education practice |  | 20,235 |  |  | 13,270 |  |  | 3,142
Corporate and eliminations |  | 1,259 |  |  | 419 |  |  | (2,660)
Consolidated | $ | 73,373 |  | $ | 56,206 |  | $ | 13,924
Three Quarters Ended |  |  |  |  |  |  |  |
May 31, 2025 |  |  |  |  |  |  |  |
Enterprise Division: |  |  |  |  |  |  |  |
North America | $ | 111,711 |  | $ | 92,503 |  | $ | 19,788
International direct offices |  | 21,936 |  |  | 16,163 |  |  | (884)
International licensees |  | 8,749 |  |  | 7,742 |  |  | 4,449
|  | 142,396 |  |  | 116,408 |  |  | 23,353
Education practice |  | 50,169 |  |  | 31,968 |  |  | 2,006
Corporate and eliminations |  | 3,254 |  |  | 1,403 |  |  | (8,318)
Consolidated | $ | 195,819 |  | $ | 149,779 |  | $ | 17,041
Three Quarters Ended |  |  |  |  |  |  |  |
May 31, 2024 |  |  |  |  |  |  |  |
Enterprise Division: |  |  |  |  |  |  |  |
North America | $ | 116,439 |  | $ | 96,101 |  | $ | 30,421
International direct offices |  | 24,533 |  |  | 18,744 |  |  | 2,318
International licensees |  | 8,951 |  |  | 7,941 |  |  | 4,626
|  | 149,923 |  |  | 122,786 |  |  | 37,365
Education practice |  | 49,815 |  |  | 31,420 |  |  | 2,778
Corporate and eliminations |  | 3,371 |  |  | 1,130 |  |  | (7,803)
Consolidated | $ | 203,109 |  | $ | 155,336 |  | $ | 32,340
‎ A reconciliation of our consolidated Adjusted EBITDA to consolidated net income (loss) is provided below (in thousands).
| Quarter Ended |  | Three Quarters Ended
|  | May 31, |  |  | May 31, |  |  | May 31, |  |  | May 31,
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024
Segment Adjusted EBITDA | $ | 7,307 |  | $ | 13,924 |  | $ | 17,041 |  | $ | 32,340
Stock-based compensation |  | (2,217) |  |  | (2,828) |  |  | (5,730) |  |  | (7,092)
Restructuring costs |  | (4,739) |  |  | (701) |  |  | (6,723) |  |  | (3,008)
Headquarters moving costs |  | (444) |  |  | - |  |  | (498) |  |  | -
Impaired asset |  | - |  |  | - |  |  | - |  |  | (928)
Depreciation |  | (1,012) |  |  | (990) |  |  | (2,979) |  |  | (2,994)
Amortization |  | (1,098) |  |  | (1,062) |  |  | (3,294) |  |  | (3,204)
Income (loss) from operations |  | (2,203) |  |  | 8,343 |  |  | (2,183) |  |  | 15,114
Interest income |  | 211 |  |  | 268 |  |  | 765 |  |  | 857
Interest expense |  | (135) |  |  | (247) |  |  | (470) |  |  | (916)
Income (loss) before income taxes |  | (2,127) |  |  | 8,364 |  |  | (1,888) |  |  | 15,055
Income tax benefit (provision) |  | 718 |  |  | (2,643) |  |  | 584 |  |  | (3,609)
Net income (loss) | $ | (1,409) |  | $ | 5,721 |  | $ | (1,304) |  | $ | 11,446
Disaggregated Revenue The following table presents our revenue disaggregated by geographic region (in thousands).
| Quarter Ended |  | Three Quarters Ended
|  | May 31, |  |  | May 31, |  |  | May 31, |  |  | May 31,
|  | 2025 |  |  | 2024 |  |  | 2025 |  |  | 2024
Americas | $ | 57,011 |  | $ | 62,084 |  | $ | 165,469 |  | $ | 169,840
Asia Pacific |  | 5,609 |  |  | 6,460 |  |  | 17,209 |  |  | 19,438
Europe/Middle East/Africa |  | 4,501 |  |  | 4,829 |  |  | 13,141 |  |  | 13,831
| $ | 67,121 |  | $ | 73,373 |  | $ | 195,819 |  | $ | 203,109
‎ The following table presents our revenue disaggregated by type of service (in thousands).
Quarter Ended |  | Services and |  |  |  |  |  |  |  |  | Leases and |  |  |
May 31, 2025 |  | Products |  |  | Subscriptions |  |  | Royalties |  |  | Other |  |  | Consolidated
Enterprise Division: |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America | $ | 14,139 |  | $ | 22,534 |  | $ | 381 |  | $ | - |  | $ | 37,054
International direct offices |  | 5,266 |  |  | 2,182 |  |  | 48 |  |  | - |  |  | 7,496
International licensees |  | 80 |  |  | 293 |  |  | 2,343 |  |  | - |  |  | 2,716
|  | 19,485 |  |  | 25,009 |  |  | 2,772 |  |  | - |  |  | 47,266
Education practice |  | 6,214 |  |  | 11,774 |  |  | 652 |  |  | - |  |  | 18,640
Corporate and eliminations |  | - |  |  | - |  |  | 298 |  |  | 917 |  |  | 1,215
Consolidated | $ | 25,699 |  | $ | 36,783 |  | $ | 3,722 |  | $ | 917 |  | $ | 67,121
Quarter Ended |  |  |  |  |  |  |  |  |  |  |  |  |  |
May 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Enterprise Division: |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America | $ | 16,727 |  | $ | 23,490 |  | $ | 375 |  | $ | - |  | $ | 40,592
International direct offices |  | 5,955 |  |  | 2,538 |  |  | 47 |  |  | - |  |  | 8,540
International licensees |  | 57 |  |  | 303 |  |  | 2,387 |  |  | - |  |  | 2,747
|  | 22,739 |  |  | 26,331 |  |  | 2,809 |  |  | - |  |  | 51,879
Education practice |  | 9,117 |  |  | 10,397 |  |  | 721 |  |  | - |  |  | 20,235
Corporate and eliminations |  | - |  |  | - |  |  | 313 |  |  | 946 |  |  | 1,259
Consolidated | $ | 31,856 |  | $ | 36,728 |  | $ | 3,843 |  | $ | 946 |  | $ | 73,373
Three Quarters Ended |  |  |  |  |  |  |  |  |  |  |  |  |  |
May 31, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Enterprise Division: |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America | $ | 42,358 |  | $ | 68,353 |  | $ | 1,000 |  | $ | - |  | $ | 111,711
International direct offices |  | 14,597 |  |  | 7,213 |  |  | 126 |  |  | - |  |  | 21,936
International licensees |  | 210 |  |  | 908 |  |  | 7,631 |  |  | - |  |  | 8,749
|  | 57,165 |  |  | 76,474 |  |  | 8,757 |  |  | - |  |  | 142,396
Education practice |  | 14,566 |  |  | 32,334 |  |  | 3,269 |  |  | - |  |  | 50,169
Corporate and eliminations |  | - |  |  | - |  |  | 649 |  |  | 2,605 |  |  | 3,254
Consolidated | $ | 71,731 |  | $ | 108,808 |  | $ | 12,675 |  | $ | 2,605 |  | $ | 195,819
Three Quarters Ended |  |  |  |  |  |  |  |  |  |  |  |  |  |
May 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |
Enterprise Division: |  |  |  |  |  |  |  |  |  |  |  |  |  |
North America | $ | 44,478 |  | $ | 70,968 |  | $ | 993 |  | $ | - |  | $ | 116,439
International direct offices |  | 16,918 |  |  | 7,491 |  |  | 124 |  |  | - |  |  | 24,533
International licensees |  | 373 |  |  | 960 |  |  | 7,618 |  |  | - |  |  | 8,951
|  | 61,769 |  |  | 79,419 |  |  | 8,735 |  |  | - |  |  | 149,923
Education practice |  | 16,783 |  |  | 29,662 |  |  | 3,370 |  |  | - |  |  | 49,815
Corporate and eliminations |  | - |  |  | - |  |  | 939 |  |  | 2,432 |  |  | 3,371
Consolidated | $ | 78,552 |  | $ | 109,081 |  | $ | 13,044 |  | $ | 2,432 |  | $ | 203,109

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