Segment Information

9 Months Ended

May 31, 2014

Segment Information [Abstract]

Segment Information

NOTE 8– SEGMENT INFORMATION

Our sales are primarily comprised of training and consulting sales and related products.  Based on the consistent nature of our services and products and the types of customers for these services, we function as a single operating segment.  However, to improve comparability with previous periods, operating information for our U.S./Canada, international, and corporate services operations is presented below.  Our U.S./Canada operations are responsible for the sale and delivery of our training and consulting services in the United States and Canada.  Our international sales group includes the financial results of our directly owned foreign offices and royalty revenues from licensees.  Our corporate services information includes leasing income and certain corporate operating expenses.

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 calculated by other companies.  For segment reporting purposes, our consolidated Adjusted EBITDA can be calculated as our income from operations excluding share-based compensation, depreciation expense, amortization expense, and certain other charges such as adjustments for changes in the fair value of contingent earnout liabilities from previous business acquisitions.

In the normal course of business, we may make structural and cost allocation revisions to our enterprise information to reflect new reporting responsibilities within the organization.  There were no significant organizational or structural changes during the quarter or three quarters ended May 31, 2014 that would affect the comparability of the enterprise information presented.  We account for our enterprise information on the same basis as the accompanying condensed consolidated financial statements.

ENTERPRISE INFORMATION

(in thousands)

		Sales to
Quarter Ended		External				Adjusted
May 31, 2014		Customers		Gross Profit		EBITDA		Depreciation		Amortization
U.S./Canada	$	36,318	$	21,924	$	1,950	$	446	$	943
International		9,757		7,357		4,015		88		40
Total		46,075		29,281		5,965		534		983
Corporate and eliminations		1,056		603		(832)		332		-
Consolidated	$	47,131	$	29,884	$	5,133	$	866	$	983
Quarter Ended
June 1, 2013
U.S./Canada	$	35,198	$	21,958	$	3,651	$	320	$	957
International		8,608		6,901		3,801		79		3
Total		43,806		28,859		7,452		399		960
Corporate and eliminations		1,053		576		(1,190)		353		-
Consolidated	$	44,859	$	29,435	$	6,262	$	752	$	960
Three Quarters Ended
May 31, 2014
U.S./Canada	$	103,522	$	65,562	$	7,434	$	1,227	$	2,917
International		30,644		24,279		13,509		246		44
Total		134,166		89,841		20,943		1,473		2,961
Corporate and eliminations		2,889		1,484		(3,169)		993		-
Consolidated	$	137,055	$	91,325	$	17,774	$	2,466	$	2,961
Three Quarters Ended
June 1, 2013
U.S./Canada	$	94,803	$	59,367	$	8,135	$	886	$	2,193
International		31,377		25,166		14,155		244		8
Total		126,180		84,533		22,290		1,130		2,201
Corporate and eliminations		3,170		1,744		(3,375)		1,045		-
Consolidated	$	129,350	$	86,277	$	18,915	$	2,175	$	2,201

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

	Quarter Ended				Three Quarters Ended
		May 31,		June 1,		May 31,		June 1,
		2014		2013		2014		2013
Enterprise Adjusted EBITDA	$	5,965	$	7,452	$	20,943	$	22,290
Corporate expenses		(832)		(1,190)		(3,169)		(3,375)
Consolidated Adjusted EBITDA		5,133		6,262		17,774		18,915
Share-based compensation expense		(616)		(488)		(2,860)		(1,933)
Reduction of contingent earn out liability		350		-		936		-
Depreciation		(866)		(752)		(2,466)		(2,175)
Amortization		(983)		(960)		(2,961)		(2,201)
Income from operations		3,018		4,062		10,423		12,606
Interest income		74		158		325		446
Interest expense		(557)		(578)		(1,676)		(1,766)
Discount on related party receivable		(141)		(135)		(424)		(418)
Other income, net		-		20		-		20
Income before income taxes	$	2,394	$	3,527	$	8,648	$	10,888

We reassess the fair value of expected contingent consideration and the corresponding liability resulting from the fiscal 2013 acquisition of NinetyFive 5, LLC (Ninety Five 5) each period.  The reduction of the liability for the quarter and three quarters ended May 31, 2014 totaled $0.4 million and $0.9 million and is reflected in selling, general, and administrative expenses on our consolidated income statements.  However, the impact of these adjustments is not included in our consolidated Adjusted EBITDA