Segment Information

9 Months Ended

May. 30, 2015

Segment Information [Abstract]

Segment Information

NOTE 9 – 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 earn out liabilities from previous business acquisitions and impairment of assets.

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 30, 2015 that would affect the comparability of the enterprise information presented below.  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 30, 2015		Customers		Gross Profit		EBITDA		Depreciation		Amortization
U.S./Canada	$	37,764	$	22,580	$	1,878	$	527	$	910
International		9,319		7,014		3,901		82		2
Total		47,083		29,594		5,779		609		912
Corporate and eliminations		1,223		728		(915)		371		-
Consolidated	$	48,306	$	30,322	$	4,864	$	980	$	912
Quarter Ended
May 31, 2014
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
Three Quarters Ended
May 30, 2015
U.S./Canada	$	107,921	$	65,716	$	3,673	$	1,614	$	2,814
International		31,317		24,138		14,215		240		4
Total		139,238		89,854		17,888		1,854		2,818
Corporate and eliminations		3,259		1,688		(3,298)		1,130		-
Consolidated	$	142,497	$	91,542	$	14,590	$	2,984	$	2,818
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

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

	Quarter Ended				Three Quarters Ended
		May 30,		May 31,		May 30,		May 31,
		2015		2014		2015		2014
Enterprise Adjusted EBITDA	$	5,779	$	5,965	$	17,888	$	20,943
Corporate expenses		(915)		(832)		(3,298)		(3,169)
Consolidated Adjusted EBITDA		4,864		5,133		14,590		17,774
Share-based compensation expense		(592)		(616)		(1,602)		(2,860)
Reduction of contingent earn
out liability		51		350		79		936
Other		65		-		-		-
Impairment of assets		(1,082)		-		(1,082)		-
Depreciation		(980)		(866)		(2,984)		(2,466)
Amortization		(912)		(983)		(2,818)		(2,961)
Income from operations		1,414		3,018		6,183		10,423
Interest income		104		74		322		325
Interest expense		(532)		(557)		(1,605)		(1,676)
Discount on related party receivable		(233)		(141)		(364)		(424)
Income before income taxes	$	753	$	2,394	$	4,536	$	8,648

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 during the three quarters ended May 30, 2015 totaled approximately $79,000 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 calculations as shown above.