XML 26 R14.htm IDEA: XBRL DOCUMENT v3.25.2
Segment Information
 9 Months Ended
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