Segment Information

3 Months Ended

Nov. 30, 2013

Segment Information [Abstract]

Segment Information

NOTE 5 – 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 ended November 30, 2013 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
November 30, 2013		Customers		Gross Profit		EBITDA		Depreciation		Amortization
U.S./Canada	$	32,294	$	21,303	$	2,438	$	374	$	987
International		10,367		8,438		4,890		79		2
Total		42,661		29,741		7,328		453		989
Corporate and eliminations		757		290		(1,307)		331		-
Consolidated	$	43,418	$	30,031	$	6,021	$	784	$	989
Quarter Ended
December 1, 2012
U.S./Canada	$	30,343	$	18,830	$	2,326	$	267	$	619
International		12,663		10,162		5,917		81		3
Total		43,006		28,992		8,243		348		622
Corporate and eliminations		1,055		567		(1,154)		354		-
Consolidated	$	44,061	$	29,559	$	7,089	$	702	$	622

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

	Quarter Ended
		November 30,		December 1,
		2013		2012
Enterprise Adjusted EBITDA	$	7,328	$	8,243
Corporate expenses		(1,307)		(1,154)
Consolidated Adjusted EBITDA		6,021		7,089
Share-based compensation expense		(1,262)		(473)
Reduction of contingent earnout liability		520		-
Depreciation		(784)		(702)
Amortization		(989)		(622)
Consolidated income from operations		3,506		5,292
Interest income		143		137
Interest expense		(560)		(589)
Discount on related party receivable		(142)		(147)
Income before taxes	$	2,947	$	4,693

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 at November 30, 2013 totaled $0.5 million and is reflected in selling, general, and administrative expenses on our income statement.  However, the impact of this adjustment is not included in our consolidated Adjusted EBITDA