0000886206-22-000020 | 10-Q | XBRL Viewer

Document And Entity Information - shares	9 Months Ended
Document And Entity Information - shares	May 31, 2022	Jun. 30, 2022
Document And Entity Information [Abstract]
Document Type	10-Q
Document Fiscal Period Focus	Q3
Current Fiscal Year End Date	--08-31
Document Fiscal Year Focus	2022
Document Quarterly Report	true
Document Period End Date	May 31, 2022
Document Transition Report	false
Entity File Number	001-11107
Entity Registrant Name	FRANKLIN COVEY CO.
Entity Incorporation, State or Country Code	UT
Entity Tax Identification Number	87-0401551
Entity Address, Address Line One	2200 West Parkway Boulevard
Entity Address, City or Town	Salt Lake City
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84119-2099
City Area Code	801
Local Phone Number	817-1776
Title of 12(b) Security	Common Stock, $.05 Par Value
Trading Symbol	FC
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		13,858,140
Amendment Flag	false
Entity Central Index Key	0000886206

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	May 31, 2022	Aug. 31, 2021
Current assets:
Cash and cash equivalents	$ 52,068	$ 47,417
Accounts receivable, less allowance for doubtful accounts of $4,345 and $4,643	50,430	70,680
Inventories	3,356	2,496
Prepaid expenses and other current assets	16,233	16,115
Total current assets	122,087	136,708
Property and equipment, net	9,591	11,525
Intangible assets, net	45,993	50,097
Goodwill	31,220	31,220
Deferred income tax assets	6,269	4,951
Other long-term assets	13,236	15,153
Total assets	228,396	249,654
Current liabilities:
Current portion of notes payable	5,835	5,835
Current portion of financing obligation	3,119	2,887
Accounts payable	8,067	6,948
Deferred subscription revenue	66,646	74,772
Other deferred revenue	16,646	11,117
Accrued liabilities	28,570	34,980
Total current liabilities	128,883	136,539
Notes payable, less current portion	8,490	12,975
Financing obligation, less current portion	8,794	11,161
Other liabilities	6,908	8,741
Deferred income tax liabilities	375	375
Total liabilities	153,450	169,791
Shareholders’ equity:
Common stock, $0.05 par value; 40,000 shares authorized, 27,056 shares issued	1,353	1,353
Additional paid-in capital	217,862	214,888
Retained earnings	76,443	63,591
Accumulated other comprehensive income (loss)	(203)	709
Treasury stock at cost, 13,218 shares and 12,889 shares	(220,509)	(200,678)
Total shareholders’ equity	74,946	79,863
Total liabilities and shareholders' equity	$ 228,396	$ 249,654

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	May 31, 2022	Aug. 31, 2021
Condensed Consolidated Balance Sheets [Abstract]
Allowance for doubtful accounts	$ 4,345	$ 4,643
Common stock, par value	$ 0.05	$ 0.05
Common stock, shares authorized	40,000	40,000
Common stock, shares issued	27,056	27,056
Treasury stock, shares	13,218	12,889

Condensed Consolidated Income Statements And Statements Of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2022	May 31, 2021	May 31, 2022	May 31, 2021
Condensed Consolidated Income Statements And Statements Of Comprehensive Income
Net sales	$ 66,176	$ 58,736	$ 184,035	$ 155,223
Cost of sales	15,044	12,829	41,190	35,589
Gross profit	51,132	45,907	142,845	119,634
Selling, general, and administrative	42,637	40,132	120,042	107,439
Depreciation	1,217	1,423	3,686	4,904
Amortization	1,329	1,238	4,106	3,503
Income from operations	5,949	3,114	15,011	3,788
Interest income	21	16	48	56
Interest expense	(405)	(525)	(1,274)	(1,633)
Income before income taxes	5,565	2,605	13,785	2,211
Income tax benefit (provision)	1,597	10,149	(933)	9,605
Net income	$ 7,162	$ 12,754	$ 12,852	$ 11,816
Net income per share:
Basic	$ 0.51	$ 0.90	$ 0.90	$ 0.84
Diluted	$ 0.51	$ 0.90	$ 0.90	$ 0.84
Weighted average number of common shares:
Basic	14,173	14,145	14,244	14,068
Diluted	14,175	14,156	14,273	14,133
COMPREHENSIVE INCOME
Net income	$ 7,162	$ 12,754	$ 12,852	$ 11,816
Foreign currency translation adjustments, net of income taxes of $0, $0, $0, and $0	(736)	(151)	(912)	123
Comprehensive income	$ 6,426	$ 12,603	$ 11,940	$ 11,939

Condensed Consolidated Income Statements And Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2022	May 31, 2021	May 31, 2022	May 31, 2021
Condensed Consolidated Income Statements And Statements Of Comprehensive Income
Foreign currency translation adjustments, income taxes	$ 0	$ 0	$ 0	$ 0

Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	May 31, 2022	May 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 12,852	$ 11,816
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	7,792	8,407
Amortization of capitalized curriculum costs	2,374	2,583
Stock-based compensation	5,987	5,127
Deferred income taxes	(1,409)	(10,521)
Change in fair value of contingent consideration liabilities	60	164
Amortization of right-of-use operating lease assets	695	758
Changes in assets and liabilities, net of effect of acquired business:
Decrease in accounts receivable, net	19,794	12,391
Decrease (increase) in inventories	(888)	322
Decrease in prepaid expenses and other assets	321	1,393
Increase (decrease) in accounts payable and accrued liabilities	(4,294)	4,629
Decrease in deferred revenue	(2,760)	(4,172)
Increase (decrease) in income taxes payable/receivable	355	(653)
Decrease in other long-term liabilities	(1,343)	(1,392)
Net cash provided by operating activities	39,536	30,852
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	(2,080)	(1,185)
Curriculum development costs	(1,379)	(1,827)
Acquisition of businesses, net of cash acquired		(10,554)
Net cash used for investing activities	(3,459)	(13,566)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes payable	(4,585)	(3,750)
Principal payments on financing obligation	(2,135)	(1,922)
Purchases of common stock for treasury	(23,850)	(2,971)
Payment of contingent consideration liabilities	(1,099)	(899)
Proceeds from sales of common stock held in treasury	1,006	783
Net cash used for financing activities	(30,663)	(8,759)
Effect of foreign currency exchange rates on cash and cash equivalents	(763)	93
Net increase in cash and cash equivalents	4,651	8,620
Cash and cash equivalents at the beginning of the period	47,417	27,137
Cash and cash equivalents at the end of the period	52,068	35,757
Supplemental disclosure of cash flow information:
Cash paid for income taxes	1,744	1,454
Cash paid for interest	1,295	1,634
Non-cash investing and financing activities:
Purchases of property and equipment financed by accounts payable	165	105
Acquisition of right-of-use operating lease assets for operating lease liabilities	$ 344	885
Use of notes payable to acquire business		$ 3,766

Condensed Consolidated Statements Of Changes In Shareholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Treasury Stock [Member]	Total
Beginning balance, shares at Aug. 31, 2020	27,056,000
Beginning balance at Aug. 31, 2020	$ 1,353	$ 211,920	$ 49,968	$ 641
Beginning balance, shares, Treasury at Aug. 31, 2020					(13,175,000)
Beginning balance, Treasury at Aug. 31, 2020					$ (204,429)
Issuance of common stock from treasury, shares					236,000
Issuance of common stock from treasury		(3,411)			$ 3,668
Purchase of common shares for treasury, shares					(89,000)
Purchase of common shares for treasury					$ (1,530)
Stock-based compensation		1,158
Cumulative translation adjustments				307
Net income			(892)
Ending balance, shares at Nov. 30, 2020	27,056,000
Ending balance at Nov. 30, 2020	$ 1,353	209,667	49,076	948
Ending balance, shares, Treasury at Nov. 30, 2020					(13,028,000)
Ending balance, Treasury at Nov. 30, 2020					$ (202,291)
Beginning balance, shares at Aug. 31, 2020	27,056,000
Beginning balance at Aug. 31, 2020	$ 1,353	211,920	49,968	641
Beginning balance, shares, Treasury at Aug. 31, 2020					(13,175,000)
Beginning balance, Treasury at Aug. 31, 2020					$ (204,429)
Cumulative translation adjustments						$ 123
Net income						11,816
Ending balance, shares at May. 31, 2021	27,056,000
Ending balance at May. 31, 2021	$ 1,353	211,283	61,784	764
Ending balance, shares, Treasury at May. 31, 2021					(12,901,000)
Ending balance, Treasury at May. 31, 2021					$ (200,852)
Beginning balance, shares at Nov. 30, 2020	27,056,000
Beginning balance at Nov. 30, 2020	$ 1,353	209,667	49,076	948
Beginning balance, shares, Treasury at Nov. 30, 2020					(13,028,000)
Beginning balance, Treasury at Nov. 30, 2020					$ (202,291)
Issuance of common stock from treasury, shares					143,000
Issuance of common stock from treasury		(2,014)			$ 2,222
Purchase of common shares for treasury, shares					(58,000)
Purchase of common shares for treasury					$ (1,441)
Stock-based compensation		1,599
Restricted stock award, shares					28,000
Restricted stock award		(436)			$ 436
Cumulative translation adjustments				(33)
Net income			(46)
Ending balance, shares at Feb. 28, 2021	27,056,000
Ending balance at Feb. 28, 2021	$ 1,353	208,816	49,030	915
Ending balance, shares, Treasury at Feb. 28, 2021					(12,915,000)
Ending balance, Treasury at Feb. 28, 2021					$ (201,074)
Issuance of common stock from treasury, shares					14,000
Issuance of common stock from treasury		97			$ 222
Stock-based compensation		2,370
Cumulative translation adjustments				(151)		(151)
Net income			12,754			12,754
Ending balance, shares at May. 31, 2021	27,056,000
Ending balance at May. 31, 2021	$ 1,353	211,283	61,784	764
Ending balance, shares, Treasury at May. 31, 2021					(12,901,000)
Ending balance, Treasury at May. 31, 2021					$ (200,852)
Beginning balance, shares at Aug. 31, 2021	27,056,000
Beginning balance at Aug. 31, 2021	$ 1,353	214,888	63,591	709		79,863
Beginning balance, shares, Treasury at Aug. 31, 2021					(12,889,000)
Beginning balance, Treasury at Aug. 31, 2021					$ (200,678)
Issuance of common stock from treasury, shares					217,000
Issuance of common stock from treasury		(3,033)			$ 3,378
Purchase of common shares for treasury, shares					(85,000)
Purchase of common shares for treasury					$ (3,488)
Stock-based compensation		1,649
Cumulative translation adjustments				(144)
Net income			3,812
Ending balance, shares at Nov. 30, 2021	27,056,000
Ending balance at Nov. 30, 2021	$ 1,353	213,504	67,403	565
Ending balance, shares, Treasury at Nov. 30, 2021					(12,757,000)
Ending balance, Treasury at Nov. 30, 2021					$ (200,788)
Beginning balance, shares at Aug. 31, 2021	27,056,000
Beginning balance at Aug. 31, 2021	$ 1,353	214,888	63,591	709		$ 79,863
Beginning balance, shares, Treasury at Aug. 31, 2021					(12,889,000)
Beginning balance, Treasury at Aug. 31, 2021					$ (200,678)
Issuance of common stock from treasury, shares						257,406
Purchase of common shares for treasury						$ (20,315)
Cumulative translation adjustments						(912)
Net income						12,852
Ending balance, shares at May. 31, 2022	27,056,000
Ending balance at May. 31, 2022	$ 1,353	217,862	76,443	(203)		$ 74,946
Ending balance, shares, Treasury at May. 31, 2022					(13,218,000)
Ending balance, Treasury at May. 31, 2022					$ (220,509)
Beginning balance, shares at Nov. 30, 2021	27,056,000
Beginning balance at Nov. 30, 2021	$ 1,353	213,504	67,403	565
Beginning balance, shares, Treasury at Nov. 30, 2021					(12,757,000)
Beginning balance, Treasury at Nov. 30, 2021					$ (200,788)
Issuance of common stock from treasury, shares					15,000
Issuance of common stock from treasury		$ 84			$ 239
Purchase of common shares for treasury, shares					(1,000)
Purchase of common shares for treasury					$ (47)
Stock-based compensation		$ 1,969
Restricted stock award, shares					13,000
Restricted stock award		(209)			$ 209
Cumulative translation adjustments				(32)
Net income			1,878
Ending balance, shares at Feb. 28, 2022	27,056,000
Ending balance at Feb. 28, 2022	$ 1,353	215,348	69,281	533
Ending balance, shares, Treasury at Feb. 28, 2022					(12,730,000)
Ending balance, Treasury at Feb. 28, 2022					$ (200,387)
Issuance of common stock from treasury, shares					11,000
Issuance of common stock from treasury		145			$ 193
Purchase of common shares for treasury, shares					(499,000)	(499,411)
Purchase of common shares for treasury					$ (20,315)	$ (20,300)
Stock-based compensation		2,369
Cumulative translation adjustments				(736)		(736)
Net income			7,162			7,162
Ending balance, shares at May. 31, 2022	27,056,000
Ending balance at May. 31, 2022	$ 1,353	$ 217,862	$ 76,443	$ (203)		$ 74,946
Ending balance, shares, Treasury at May. 31, 2022					(13,218,000)
Ending balance, Treasury at May. 31, 2022					$ (220,509)

Basis Of Presentation

9 Months Ended

May 31, 2022

Basis Of Presentation [Abstract]

Basis Of Presentation

NOTE 1 – BASIS OF PRESENTATION

General

Franklin Covey Co. (hereafter referred to as us, we, our, or the Company) is a global company focused on organizational performance improvement. Our mission is to “enable greatness in people and organizations everywhere,” and our global structure is designed to help individuals and organizations achieve sustained superior performance through changes in human behavior. We are fundamentally a content and solutions company, and we believe that our offerings and services create the connection between capabilities and results. We have a wide range of content delivery options, including: the All Access Pass (AAP) subscription, the Leader in Me membership, and other intellectual property licenses; digital online learning; on-site training; training led through certified facilitators; blended learning; and organization-wide transformational processes, including consulting and coaching. We believe our investments in digital delivery modalities over the past few years have enabled us to deliver our content to clients in a high-quality learning environment whether those clients are working remotely or in a centralized location. We believe that our clients are able to utilize our content to create cultures whose hallmarks are high-performing, collaborative individuals, led by effective, trust-building leaders who execute with excellence and deliver measurably improved results for all of their key stakeholders.

We have some of the best-known offerings in the training industry, including a suite of individual-effectiveness and leadership-development training content based on the best-selling books, The 7 Habits of Highly Effective People, The Speed of Trust, The Leader in Me, The 4 Disciplines of Execution, and Multipliers, and proprietary content in the areas of Leadership, Execution, Productivity, Educational Improvement, and Sales Performance. Our offerings are described in further detail at www.franklincovey.com. The information posted on our website is not incorporated into this report.

The accompanying unaudited condensed consolidated financial statements reflect, in the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position and results of operations of the Company as of the dates and for the periods indicated. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations. The information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2021.

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

The results of operations for the quarter and three quarters ended May 31, 2022 are not necessarily indicative of results expected for the entire fiscal year ending August 31, 2022, or for any future periods.

Note on the Continuing COVID-19 Pandemic

The COVID-19 pandemic continues to produce difficult economic and operating conditions for certain areas of our business, including our international direct offices and licensee partners as countries and local municipalities have maintained a variety of measures designed to contain the spread of the virus. During the third quarter of fiscal 2022, our offices in China and Japan were especially affected as offices, schools, and other meeting spaces were closed and some personnel were prohibited from travel outside of their homes. While our content is able to be presented digitally and is translated into numerous languages, the technology base differs significantly among countries, which may impede the smooth delivery of content to remote work locations. Although there is continued economic uncertainty resonating from the ongoing pandemic and other macroeconomic conditions, we remain optimistic about the future as we continue to see signs of economic recovery in the United States and many of the other countries in which we operate as companies,

schools, and individuals are adapting. However, certain countries, states, and local governments may continue to implement additional lockdowns or other containment measures in future periods. These measures change rapidly to new and perceived threats and may have an adverse impact on our results of operations in future periods. We will continue to monitor developments related to the COVID-19 pandemic, including supply chain issues, and their actual and potential impacts on our financial position, results of operations, and liquidity.

Accounting Pronouncements Issued and Adopted

In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update No. 2019-12, Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. The guidance in ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, although early adoption is permitted. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The fiscal 2022 adoption of ASU 2019-12 did not have a material impact on our consolidated financial statements.

Inventories

9 Months Ended

May 31, 2022

Inventories [Abstract]

Inventories

NOTE 2 – INVENTORIES

Inventories are stated at the lower of cost or net realizable value, cost being determined using the first-in, first-out method, and were comprised of the following (in thousands):



		May 31,		August 31,
		2022		2021
Finished goods	$	3,329	$	2,468
Raw materials		27		28
	$	3,356	$	2,496

Fair Value Of Financial Instruments

9 Months Ended

May 31, 2022

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

NOTE 3 – FAIR VALUE OF FINANCIAL INSTRUMENTS

At May 31, 2022, the carrying value of our financial instruments approximated their fair values. The fair values of our contingent consideration liabilities from previous business acquisitions are considered “Level 3” measurements because we use various estimates in the valuation models to project the timing and amount of future contingent payments. The fair value of the contingent consideration liability from the acquisition of Jhana Education (Jhana) changed as follows during the quarter and three quarters ended May 31, 2022 (in thousands):



Balance at August 31, 2021	$	2,095
Change in fair value		28
Payments		(368)
Balance at November 30, 2021		1,755
Change in fair value		20
Payments		(303)
Balance at February 28, 2022		1,472
Change in fair value		12
Payments		(428)
Balance at May 31, 2022	$	1,056

At each quarterly reporting date, we estimate the fair value of our contingent liability from the acquisition of Jhana through the use of a Monte Carlo simulation. Based on the timing of expected payments, all of the Jhana contingent consideration liability shown above was recorded in accrued liabilities at May 31, 2022. Adjustments to the fair value of our contingent consideration liabilities are included in selling, general, and administrative expense in the accompanying condensed consolidated income statements and statements of comprehensive income.

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References + Details

Shareholders' Equity

9 Months Ended

May 31, 2022

Shareholders' Equity [Abstract]

Shareholders' Equity

NOTE 4 – SHAREHOLDERS’ EQUITY

During the first three quarters of fiscal 2022, we have purchased $23.9 million of our common stock for treasury, which includes 499,411 shares purchased for $20.3 million in open-market transactions during the third quarter. Our purchases of common stock during fiscal 2022 were comprised of open market purchases and shares withheld for income taxes from recipients of stock-based compensation awards (Note 6) as shown below (in thousands):



Open market purchases	$	20,315
Shares withheld for taxes on stock-
based compensation awards		3,535
	$	23,850

- Definition

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

+ References

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+ Details

Revenue Recognition

9 Months Ended

May 31, 2022

Revenue Recognition [Abstract]

Revenue Recognition

NOTE 5 – REVENUE RECOGNITION

Contract Balances

Our deferred revenue totaled $85.5 million at May 31, 2022 and $88.6 million at August 31, 2021, of which $2.2 million and $2.7 million were classified as components of other long-term liabilities at May 31, 2022, and August 31, 2021, respectively. The amount of deferred revenue that was generated from subscription offerings totaled $68.5 million at May 31, 2022 and $77.0 million at August 31, 2021. During the quarter and three quarters ended May 31, 2022, we recognized $30.6 million and $87.0 million of previously deferred subscription revenue.

Deferred subscription revenue primarily consists of billings or payments received in advance of revenue being recognized from subscription services. Deferred revenue is recognized in sales as the applicable revenue recognition criteria are met. We generally invoice customers in annual installments upon execution of a contract. With the Leader in Me offering, the contract includes both a subscription membership and onsite consulting which can be invoiced to the client in one lump sum. In this circumstance, the entire lump sum is included in deferred subscription revenue. The deferred subscription revenue related to the Leader in Me membership is recognized as revenue over the life of the contract whereas the consulting is recognized when the consulting takes place.

Remaining Performance Obligations

Whenever possible, we enter into multi-year non-cancellable contracts which are invoiced either upon execution of the contract or at the beginning of each annual contract period. Remaining transaction price represents contracted revenue that has not yet been recognized, including unearned revenue and unbilled amounts that will be recognized as revenue in future periods. Transaction price is influenced by factors such as inflation, the average length of the contract term, and the ability of the Company to continue to enter into multi-year non-cancellable contracts. At May 31, 2022, we had $116.5 million of remaining performance obligations, including the amount of deferred revenue related to our subscription offerings. The remaining performance obligation does not include other deferred revenue, as amounts included in other deferred revenue contain items such as deposits that are generally refundable at the client’s request prior to the satisfaction of the obligation.

Disaggregated Revenue Information

Refer to Note 9, Segment Information, to these condensed consolidated financial statements for our disaggregated revenue information.

- Definition

The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Stock-Based Compensation

9 Months Ended

May 31, 2022

Stock-Based Compensation [Abstract]

Stock-Based Compensation

‎

NOTE 6 – STOCK-BASED COMPENSATION

Our stock-based compensation was comprised of the following for the periods presented (in thousands):



		Quarter Ended			Three Quarters Ended
		May 31,		May 31,		May 31,		May 31,
		2022		2021		2022		2021
Long-term incentive awards	$	1,877	$	2,094	$	4,375	$	4,408
Strive acquisition compensation		267		50		912		50
Restricted stock awards		165		175		508		525
Employee stock purchase plan		60		51		177		144
Fully-vested share awards		-		-		15		-
	$	2,369	$	2,370	$	5,987	$	5,127

During the three quarters ended May 31, 2022, we issued 257,406 shares of our common stock under various stock-based compensation arrangements, including our employee stock purchase plan (ESPP). Our stock-based compensation plans also allow shares to be withheld to cover statutory income taxes if so elected by the award recipient. During the three quarters ended May 31, 2022, we withheld 86,125 shares of our common stock for taxes on stock-based compensation arrangements, which had a total fair value of $3.5 million (Note 4).

Adoption of the Franklin Covey Co. 2022 Omnibus Incentive Plan

On January 14, 2022, our shareholders approved the Franklin Covey Co. 2022 Omnibus Incentive Plan (the 2022 Plan), which authorized an additional 1,000,000 shares of common stock for issuance as stock-based payments. A more detailed description of the 2022 Plan is set forth in our Definitive Proxy Statement filed with the SEC on December 15, 2021.

Fiscal 2022 Long-Term Incentive Plan Award

On February 4, 2022, the Compensation Committee granted a new LTIP award to our executive officers and members of senior management. The fiscal 2022 LTIP award has two tranches, one with a time-based vesting condition and one with a performance-based vesting condition as described below:

Time-Based Award Shares – Twenty-five percent of the 2022 LTIP award shares vest to participants on August 31, 2024. The number of shares that may be earned by participants at the end of the service period totals 24,649 shares. The number of shares awarded in this tranche does not fluctuate based on the achievement of financial measures.

Performance-Based Award Shares – The remaining shares of the fiscal 2022 LTIP award are earned based on the highest rolling four-quarter level of qualified adjusted earnings before interest, income taxes, depreciation, amortization, and certain other charges (Adjusted EBITDA) achieved in the three-year period ending August 31, 2024. The number of shares that will vest to participants for this tranche is variable and may be 50 percent of the award (minimum award threshold) or up to 200 percent of the participant’s award (maximum threshold) depending on the level of qualified Adjusted EBITDA achieved. The number of shares that may be earned for achieving 100 percent of the performance-based objective totals 73,929 shares. The maximum number of shares that may be awarded in connection with the performance-based tranche of the 2022 LTIP totals 147,840 shares.

Fiscal 2022 Restricted Stock Award

Our annual restricted stock award granted to non-employee members of the Board of Directors is administered under the terms of our omnibus incentive plans, and is designed to provide our non-employee directors, who are not eligible to participate in our employee stock purchase plan, an opportunity to obtain an interest in the Company through the acquisition of shares of our common stock. The annual award is granted in January (following the annual shareholders’ meeting) of each year. For the fiscal 2022 award, each eligible director received a whole-share grant equal to $110,000 with a one year vesting period. Our restricted stock award activity during the three quarters ended May 31, 2022 consisted of the following:

			Weighted-Average
			Grant Date
	Number of		Fair Value
	Shares		Per Share
Restricted stock awards at
August 31, 2021	28,049	$	24.96
Granted	13,260		49.78
Forfeited	-		-
Vested	(28,049)		24.96
Restricted stock awards at
May 31, 2022	13,260	$	49.78

Employee Stock Purchase Plan

We have an employee stock purchase plan that offers qualified employees the opportunity to purchase shares of our common stock at a price equal to 85 percent of the average fair market value of our common stock on the last trading day of each fiscal quarter. During the quarter and three quarters ended May 31, 2022, we issued 8,616 shares and 26,662 shares of our common stock to participants in the ESPP.

Income Taxes

9 Months Ended

May 31, 2022

Income Taxes [Abstract]

Income Taxes

NOTE 7 – INCOME TAXES

For the three quarters ended May 31, 2022, we recorded income tax expense of $0.9 million on pre-tax income of $13.8 million, which resulted in an effective tax rate of approximately seven percent for the first three quarters of fiscal 2022. We computed our income tax provision by applying an estimated annual effective income tax rate to the consolidated pre-tax income for the period, adjusting for discrete items arising during the period, which included a $3.0 million tax benefit from the utilization of foreign tax credits against which we had previously established a valuation allowance, as well as a $0.5 million tax benefit from the federal tax deduction for Foreign-Derived Intangibles Income (FDII). These benefits were partially offset by non-deductible executive compensation.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Net Income Per Share

9 Months Ended

May 31, 2022

Net Income Per Share [Abstract]

Net Income Per Share

NOTE 8 – NET INCOME PER SHARE

The following schedule shows the calculation of net income per share for the periods presented (in thousands, except per-share amounts).



	Quarter Ended				Three Quarters Ended
		May 31,		May 31,		May 31,		May 31,
		2022		2021		2022		2021
Numerator for basic and
diluted loss per share:
Net income	$	7,162	$	12,754	$	12,852	$	11,816

Denominator for basic and
diluted loss per share:
Basic weighted average shares
outstanding		14,173		14,145		14,244		14,068
Effect of dilutive securities:
Other stock-based awards		2		11		29		65
Diluted weighted average
shares outstanding		14,175		14,156		14,273		14,133

EPS Calculations:
Net income per share:
Basic	$	0.51	$	0.90	$	0.90	$	0.84
Diluted		0.51		0.90		0.90		0.84

Segment Information

9 Months Ended

May 31, 2022

Segment Information [Abstract]

Segment Information

NOTE 9 – SEGMENT INFORMATION

Segment Information

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 Direct Office and International Licensee segments and the Education Division, which is comprised of our Education practice. Based on the applicable guidance, our operations are comprised of three reportable segments and one corporate services group. The following is a brief description of our reportable segments:

Direct Offices – Our Direct Office 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 that serve the United States and Canada; our international sales offices located in Japan, China, the United Kingdom, Australia, Germany, Switzerland, and Austria; our government services sales channel; and our book and audio sales.

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 results are primarily comprised of royalty revenues received from these 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 corporate administrative functions.

We have determined that 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 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 excluding interest expense, income taxes, depreciation expense, intangible asset amortization expense, stock-based compensation, and certain other charges such as adjustments for changes in the fair value of contingent liabilities arising from business acquisitions. 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 condensed consolidated financial statements (in thousands).



		Sales to
Quarter Ended		External				Adjusted
May 31, 2022		Customers		Gross Profit		EBITDA

Enterprise Division:
Direct offices	$	47,416	$	38,144	$	9,978
International licensees		2,610		2,340		1,303
		50,026		40,484		11,281
Education practice		14,439		9,790		1,887
Corporate and eliminations		1,711		858		(2,292)
Consolidated	$	66,176	$	51,132	$	10,876

Quarter Ended
May 31, 2021

Enterprise Division:
Direct offices	$	42,704	$	34,678	$	8,894
International licensees		2,395		2,069		821
		45,099		36,747		9,715
Education practice		11,899		8,179		1,132
Corporate and eliminations		1,738		981		(2,284)
Consolidated	$	58,736	$	45,907	$	8,563

Three Quarters Ended
May 31, 2022

Enterprise Division:
Direct offices	$	134,037	$	108,294	$	28,664
International licensees		8,196		7,344		4,418
		142,233		115,638		33,082
Education practice		37,202		24,749		1,798
Corporate and eliminations		4,600		2,458		(6,030)
Consolidated	$	184,035	$	142,845	$	28,850

Three Quarters Ended
May 31, 2021

Enterprise Division:
Direct offices	$	115,185	$	93,201	$	21,729
International licensees		7,421		6,454		3,608
		122,606		99,655		25,337
Education practice		27,874		17,510		(2,010)
Corporate and eliminations		4,743		2,469		(5,925)
Consolidated	$	155,223	$	119,634	$	17,402

‎

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



	Quarter Ended				Three Quarters Ended
		May 31,		May 31,		May 31,		May 31,
		2022		2021		2022		2021
Segment Adjusted EBITDA	$	13,168	$	10,847	$	34,880	$	23,327
Corporate expenses		(2,292)		(2,284)		(6,030)		(5,925)
Consolidated Adjusted EBITDA		10,876		8,563		28,850		17,402
Stock-based compensation		(2,369)		(2,370)		(5,987)		(5,127)
Increase in the fair value of
contingent consideration liabilities		(12)		(118)		(60)		(164)
Business acquisition costs		-		(300)		-		(300)
Government COVID-19 assistance		-		-		-		234
Gain from insurance settlement		-		-		-		150
Depreciation		(1,217)		(1,423)		(3,686)		(4,904)
Amortization		(1,329)		(1,238)		(4,106)		(3,503)
Income from operations		5,949		3,114		15,011		3,788
Interest income		21		16		48		56
Interest expense		(405)		(525)		(1,274)		(1,633)
Income before income taxes		5,565		2,605		13,785		2,211
Income tax benefit (provision)		1,597		10,149		(933)		9,605
Net income	$	7,162	$	12,754	$	12,852	$	11,816

Revenue by Category

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,
		2022		2021		2022		2021

Americas	$	56,081	$	47,524	$	151,283	$	124,679
Asia Pacific		5,609		7,922		19,896		21,351
Europe/Middle East/Africa		4,486		3,290		12,856		9,193
	$	66,176	$	58,736	$	184,035	$	155,223

‎

The following table presents our revenue disaggregated by type of service (in thousands).



Quarter Ended		Services and						Leases and
May 31, 2022		Products		Subscriptions		Royalties		Other		Consolidated

Enterprise Division:
Direct offices	$	24,647	$	22,101	$	668	$	-	$	47,416
International licensees		87		331		2,192		-		2,610
		24,734		22,432		2,860		-		50,026
Education practice		5,780		8,185		474		-		14,439
Corporate and eliminations		-		-		315		1,396		1,711
Consolidated	$	30,514	$	30,617	$	3,649	$	1,396	$	66,176

Quarter Ended
May 31, 2021

Enterprise Division:
Direct offices	$	23,266	$	18,752	$	686	$	-	$	42,704
International licensees		412		-		1,983		-		2,395
		23,678		18,752		2,669		-		45,099
Education practice		4,298		7,171		430		-		11,899
Corporate and eliminations		-		-		345		1,393		1,738
Consolidated	$	27,976	$	25,923	$	3,444	$	1,393	$	58,736

Three Quarters Ended
May 31, 2022

Enterprise Division:
Direct offices	$	68,710	$	63,167	$	2,160	$	-	$	134,037
International licensees		299		936		6,961		-		8,196
		69,009		64,103		9,121		-		142,233
Education practice		11,850		23,157		2,195		-		37,202
Corporate and eliminations		-		-		879		3,721		4,600
Consolidated	$	80,859	$	87,260	$	12,195	$	3,721	$	184,035

Three Quarters Ended
May 31, 2021

Enterprise Division:
Direct offices	$	60,589	$	52,499	$	2,097	$	-	$	115,185
International licensees		1,267		-		6,154		-		7,421
		61,856		52,499		8,251		-		122,606
Education practice		8,018		17,977		1,879		-		27,874
Corporate and eliminations		-		-		1,053		3,690		4,743
Consolidated	$	69,874	$	70,476	$	11,183	$	3,690	$	155,223

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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+ Details

Basis Of Presentation (Policy)	9 Months Ended
Basis Of Presentation (Policy)	May 31, 2022
Basis Of Presentation [Abstract]
General	General Franklin Covey Co. (hereafter referred to as us, we, our, or the Company) is a global company focused on organizational performance improvement. Our mission is to “enable greatness in people and organizations everywhere,” and our global structure is designed to help individuals and organizations achieve sustained superior performance through changes in human behavior. We are fundamentally a content and solutions company, and we believe that our offerings and services create the connection between capabilities and results. We have a wide range of content delivery options, including: the All Access Pass (AAP) subscription, the Leader in Me membership, and other intellectual property licenses; digital online learning; on-site training; training led through certified facilitators; blended learning; and organization-wide transformational processes, including consulting and coaching. We believe our investments in digital delivery modalities over the past few years have enabled us to deliver our content to clients in a high-quality learning environment whether those clients are working remotely or in a centralized location. We believe that our clients are able to utilize our content to create cultures whose hallmarks are high-performing, collaborative individuals, led by effective, trust-building leaders who execute with excellence and deliver measurably improved results for all of their key stakeholders. We have some of the best-known offerings in the training industry, including a suite of individual-effectiveness and leadership-development training content based on the best-selling books, The 7 Habits of Highly Effective People, The Speed of Trust, The Leader in Me, The 4 Disciplines of Execution, and Multipliers, and proprietary content in the areas of Leadership, Execution, Productivity, Educational Improvement, and Sales Performance. Our offerings are described in further detail at www.franklincovey.com. The information posted on our website is not incorporated into this report. The accompanying unaudited condensed consolidated financial statements reflect, in the opinion of management, all adjustments (consisting of normal recurring accruals) necessary to present fairly the financial position and results of operations of the Company as of the dates and for the periods indicated. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to Securities and Exchange Commission (SEC) rules and regulations. The information included in this quarterly report on Form 10-Q should be read in conjunction with the consolidated financial statements and related notes included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2021. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the quarter and three quarters ended May 31, 2022 are not necessarily indicative of results expected for the entire fiscal year ending August 31, 2022, or for any future periods.
Note On The Continuing COVID-19 Pandemic	Note on the Continuing COVID-19 Pandemic The COVID-19 pandemic continues to produce difficult economic and operating conditions for certain areas of our business, including our international direct offices and licensee partners as countries and local municipalities have maintained a variety of measures designed to contain the spread of the virus. During the third quarter of fiscal 2022, our offices in China and Japan were especially affected as offices, schools, and other meeting spaces were closed and some personnel were prohibited from travel outside of their homes. While our content is able to be presented digitally and is translated into numerous languages, the technology base differs significantly among countries, which may impede the smooth delivery of content to remote work locations. Although there is continued economic uncertainty resonating from the ongoing pandemic and other macroeconomic conditions, we remain optimistic about the future as we continue to see signs of economic recovery in the United States and many of the other countries in which we operate as companies, schools, and individuals are adapting. However, certain countries, states, and local governments may continue to implement additional lockdowns or other containment measures in future periods. These measures change rapidly to new and perceived threats and may have an adverse impact on our results of operations in future periods. We will continue to monitor developments related to the COVID-19 pandemic, including supply chain issues, and their actual and potential impacts on our financial position, results of operations, and liquidity.
Accounting Pronouncements Issued And Adopted	Accounting Pronouncements Issued and Adopted In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update No. 2019-12, Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. The guidance in ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, although early adoption is permitted. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The fiscal 2022 adoption of ASU 2019-12 did not have a material impact on our consolidated financial statements.

Inventories (Tables)

9 Months Ended

May 31, 2022

Inventories [Abstract]

Components Of Inventories



		May 31,		August 31,
		2022		2021
Finished goods	$	3,329	$	2,468
Raw materials		27		28
	$	3,356	$	2,496

Fair Value Of Financial Instruments (Tables)

9 Months Ended

May 31, 2022

Fair Value Of Financial Instruments [Abstract]

Schedule Of Contingent Consideration Liability



Balance at August 31, 2021	$	2,095
Change in fair value		28
Payments		(368)
Balance at November 30, 2021		1,755
Change in fair value		20
Payments		(303)
Balance at February 28, 2022		1,472
Change in fair value		12
Payments		(428)
Balance at May 31, 2022	$	1,056

Shareholders' Equity (Tables)

9 Months Ended

May 31, 2022

Shareholders' Equity [Abstract]

Schedule Of Purchases Of Common Stock



Open market purchases	$	20,315
Shares withheld for taxes on stock-
based compensation awards		3,535
	$	23,850

Stock-Based Compensation (Tables)

9 Months Ended

May 31, 2022

Stock-Based Compensation [Abstract]

Total Cost Of Stock-Based Compensation



		Quarter Ended			Three Quarters Ended
		May 31,		May 31,		May 31,		May 31,
		2022		2021		2022		2021
Long-term incentive awards	$	1,877	$	2,094	$	4,375	$	4,408
Strive acquisition compensation		267		50		912		50
Restricted stock awards		165		175		508		525
Employee stock purchase plan		60		51		177		144
Fully-vested share awards		-		-		15		-
	$	2,369	$	2,370	$	5,987	$	5,127

Restricted Stock Award Activity

			Weighted-Average
			Grant Date
	Number of		Fair Value
	Shares		Per Share
Restricted stock awards at
August 31, 2021	28,049	$	24.96
Granted	13,260		49.78
Forfeited	-		-
Vested	(28,049)		24.96
Restricted stock awards at
May 31, 2022	13,260	$	49.78

Net Income Per Share (Tables)

9 Months Ended

May 31, 2022

Net Income Per Share [Abstract]

Computation Of Net Income Per Share



	Quarter Ended				Three Quarters Ended
		May 31,		May 31,		May 31,		May 31,
		2022		2021		2022		2021
Numerator for basic and
diluted loss per share:
Net income	$	7,162	$	12,754	$	12,852	$	11,816

Denominator for basic and
diluted loss per share:
Basic weighted average shares
outstanding		14,173		14,145		14,244		14,068
Effect of dilutive securities:
Other stock-based awards		2		11		29		65
Diluted weighted average
shares outstanding		14,175		14,156		14,273		14,133

EPS Calculations:
Net income per share:
Basic	$	0.51	$	0.90	$	0.90	$	0.84
Diluted		0.51		0.90		0.90		0.84

Segment Information (Tables)

9 Months Ended

May 31, 2022

Segment Information [Abstract]

Schedule Of Segment Operations



		Sales to
Quarter Ended		External				Adjusted
May 31, 2022		Customers		Gross Profit		EBITDA

Enterprise Division:
Direct offices	$	47,416	$	38,144	$	9,978
International licensees		2,610		2,340		1,303
		50,026		40,484		11,281
Education practice		14,439		9,790		1,887
Corporate and eliminations		1,711		858		(2,292)
Consolidated	$	66,176	$	51,132	$	10,876

Quarter Ended
May 31, 2021

Enterprise Division:
Direct offices	$	42,704	$	34,678	$	8,894
International licensees		2,395		2,069		821
		45,099		36,747		9,715
Education practice		11,899		8,179		1,132
Corporate and eliminations		1,738		981		(2,284)
Consolidated	$	58,736	$	45,907	$	8,563

Three Quarters Ended
May 31, 2022

Enterprise Division:
Direct offices	$	134,037	$	108,294	$	28,664
International licensees		8,196		7,344		4,418
		142,233		115,638		33,082
Education practice		37,202		24,749		1,798
Corporate and eliminations		4,600		2,458		(6,030)
Consolidated	$	184,035	$	142,845	$	28,850

Three Quarters Ended
May 31, 2021

Enterprise Division:
Direct offices	$	115,185	$	93,201	$	21,729
International licensees		7,421		6,454		3,608
		122,606		99,655		25,337
Education practice		27,874		17,510		(2,010)
Corporate and eliminations		4,743		2,469		(5,925)
Consolidated	$	155,223	$	119,634	$	17,402

Reconciliation Of Adjusted EBITDA



	Quarter Ended				Three Quarters Ended
		May 31,		May 31,		May 31,		May 31,
		2022		2021		2022		2021
Segment Adjusted EBITDA	$	13,168	$	10,847	$	34,880	$	23,327
Corporate expenses		(2,292)		(2,284)		(6,030)		(5,925)
Consolidated Adjusted EBITDA		10,876		8,563		28,850		17,402
Stock-based compensation		(2,369)		(2,370)		(5,987)		(5,127)
Increase in the fair value of
contingent consideration liabilities		(12)		(118)		(60)		(164)
Business acquisition costs		-		(300)		-		(300)
Government COVID-19 assistance		-		-		-		234
Gain from insurance settlement		-		-		-		150
Depreciation		(1,217)		(1,423)		(3,686)		(4,904)
Amortization		(1,329)		(1,238)		(4,106)		(3,503)
Income from operations		5,949		3,114		15,011		3,788
Interest income		21		16		48		56
Interest expense		(405)		(525)		(1,274)		(1,633)
Income before income taxes		5,565		2,605		13,785		2,211
Income tax benefit (provision)		1,597		10,149		(933)		9,605
Net income	$	7,162	$	12,754	$	12,852	$	11,816

Schedule Of Revenue Disaggregated By Category

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,
		2022		2021		2022		2021

Americas	$	56,081	$	47,524	$	151,283	$	124,679
Asia Pacific		5,609		7,922		19,896		21,351
Europe/Middle East/Africa		4,486		3,290		12,856		9,193
	$	66,176	$	58,736	$	184,035	$	155,223

‎

The following table presents our revenue disaggregated by type of service (in thousands).



Quarter Ended		Services and						Leases and
May 31, 2022		Products		Subscriptions		Royalties		Other		Consolidated

Enterprise Division:
Direct offices	$	24,647	$	22,101	$	668	$	-	$	47,416
International licensees		87		331		2,192		-		2,610
		24,734		22,432		2,860		-		50,026
Education practice		5,780		8,185		474		-		14,439
Corporate and eliminations		-		-		315		1,396		1,711
Consolidated	$	30,514	$	30,617	$	3,649	$	1,396	$	66,176

Quarter Ended
May 31, 2021

Enterprise Division:
Direct offices	$	23,266	$	18,752	$	686	$	-	$	42,704
International licensees		412		-		1,983		-		2,395
		23,678		18,752		2,669		-		45,099
Education practice		4,298		7,171		430		-		11,899
Corporate and eliminations		-		-		345		1,393		1,738
Consolidated	$	27,976	$	25,923	$	3,444	$	1,393	$	58,736

Three Quarters Ended
May 31, 2022

Enterprise Division:
Direct offices	$	68,710	$	63,167	$	2,160	$	-	$	134,037
International licensees		299		936		6,961		-		8,196
		69,009		64,103		9,121		-		142,233
Education practice		11,850		23,157		2,195		-		37,202
Corporate and eliminations		-		-		879		3,721		4,600
Consolidated	$	80,859	$	87,260	$	12,195	$	3,721	$	184,035

Three Quarters Ended
May 31, 2021

Enterprise Division:
Direct offices	$	60,589	$	52,499	$	2,097	$	-	$	115,185
International licensees		1,267		-		6,154		-		7,421
		61,856		52,499		8,251		-		122,606
Education practice		8,018		17,977		1,879		-		27,874
Corporate and eliminations		-		-		1,053		3,690		4,743
Consolidated	$	69,874	$	70,476	$	11,183	$	3,690	$	155,223

Inventories (Components Of Inventories) (Details) - USD ($) $ in Thousands	May 31, 2022	Aug. 31, 2021
Inventories [Abstract]
Finished goods	$ 3,329	$ 2,468
Raw materials	27	28
Inventories	$ 3,356	$ 2,496

Fair Value Of Financial Instruments (Schedule Of Contingent Consideration Liability) (Details) - USD ($) $ in Thousands	3 Months Ended				9 Months Ended
	May 31, 2022	Feb. 28, 2022	Nov. 30, 2021	May 31, 2021	May 31, 2022	May 31, 2021
Business Acquisition, Contingent Consideration [Line Items]
Change in fair value	$ 12			$ 118	$ 60	$ 164
Jhana [Member]
Business Acquisition, Contingent Consideration [Line Items]
Balance at beginning	1,472	$ 1,755	$ 2,095		2,095
Change in fair value	12	20	28
Payments	(428)	(303)	(368)
Balance at ending	$ 1,056	$ 1,472	$ 1,755		$ 1,056

Shareholders' Equity (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	May 31, 2022	May 31, 2022
Shareholders' Equity [Abstract]
Number of shares purchased	499,411
Purchase of treasury shares	$ 20,300	$ 20,315
Common stock for treasury		$ 23,850

Shareholders' Equity (Schedule Of Purchases Of Common Stock) (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	May 31, 2022	May 31, 2022
Shareholders' Equity [Abstract]
Open market purchases	$ 20,300	$ 20,315
Shares withheld for taxes on stock-based compensation awards		3,535
Common stock for treasury		$ 23,850

Revenue Recognition (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	May 31, 2022	May 31, 2022	Aug. 31, 2021
Deferred revenue	$ 85.5	$ 85.5	$ 88.6
Other long-term liabilities	2.2	2.2	2.7
Remaining performance obligations	116.5	116.5
Subscription Offerings [Member]
Deferred revenue	68.5	68.5	$ 77.0
Subscription [Member]
Deferred revenue recognized	$ 30.6	$ 87.0

Stock-Based Compensation (Narrative) (Details) - USD ($)		3 Months Ended					9 Months Ended
	Jan. 14, 2022	May 31, 2022	Feb. 28, 2022	Nov. 30, 2021	Feb. 28, 2021	Nov. 30, 2020	May 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issued from treasury stock							257,406
Shares withheld for tax							86,125
Shares withheld for tax, fair value							$ 3,535,000
Vesting period of awards							1 year
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Price of common stock as a percent of the average fair market value							85.00%
Shares issued to employee stock purchase plan participants		8,616					26,662
Common Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Cost of common stock issued from treasury
Restricted Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Whole-share grant per eligible director							$ 110,000
Time-Based Award [Member] \| Fiscal 2022 Long Term Incentive Plan Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of performance award to be granted							25.00%
Shares may be awarded							24,649
Performance-Based Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued under terms of the award							73,929
Performance-Based Award [Member] \| Fiscal 2022 Long Term Incentive Plan Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of performance-based objectives		100.00%					100.00%
Performance-Based Award [Member] \| Common Stock [Member] \| 2022 Omnibus Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Authorized additional shares of common stock for issuance	1,000,000
Tranche One and Two [Member] \| Performance-Based Award [Member] \| Fiscal 2022 Long Term Incentive Plan Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares may be awarded							147,840
Tranche One and Two [Member] \| Performance-Based Award [Member] \| Minimum [Member] \| Fiscal 2022 Long Term Incentive Plan Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of performance award to be granted							50.00%
Tranche One and Two [Member] \| Performance-Based Award [Member] \| Maximum [Member] \| Fiscal 2022 Long Term Incentive Plan Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of performance award to be granted							200.00%

Stock-Based Compensation (Total Cost Of Stock-Based Compensation) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2022	May 31, 2021	May 31, 2022	May 31, 2021
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	$ 2,369	$ 2,370	$ 5,987	$ 5,127
Long-Term Incentive Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	1,877	2,094	4,375	4,408
Strive Acquisition Compensation [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	267	50	912	50
Restricted Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	165	175	508	525
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	$ 60	$ 51	177	$ 144
Fully-Vested Share Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost			$ 15

Stock-Based Compensation (Restricted Stock Award Activity) (Details)	9 Months Ended
	May 31, 2022 $ / shares shares
Stock-Based Compensation [Abstract]
Restricted stock awards at August 31, 2021, Number of Shares \| shares	28,049
Granted, Number of Shares \| shares	13,260
Vested, Number of Shares \| shares	(28,049)
Restricted stock awards at May 31, 2022, Number of Shares \| shares	13,260
Restricted stock awards at August 31, 2021, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	$ 24.96
Granted, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	49.78
Vested, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	24.96
Restricted stock awards at May 31, 2022, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	$ 49.78

Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	May 31, 2022	May 31, 2021	May 31, 2022	May 31, 2021
Income Taxes [Abstract]
Income tax expense	$ (1,597)	$ (10,149)	$ 933	$ (9,605)
Income before income taxes	$ 5,565	$ 2,605	$ 13,785	$ 2,211
Effective tax rate			7.00%
Income tax benefit from foreign tax credits			$ 3,000
FDII tax benefit			$ 500

- Definition

Amount of income (loss) from continuing operations, including income (loss) from equity method investments, before deduction of income tax expense (benefit), and income (loss) attributable to noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 32
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8933-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 30
-Subparagraph (b)
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
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-Section 50
-Paragraph 32
-Subparagraph (f)
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
-Topic 942
-SubTopic 235
-Section S99
-Paragraph 1
-Subparagraph (SX 210.9-05(b)(2))
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-URI https://asc.fasb.org/extlink&oid=120399700&loc=SL114874048-224260

+ Details

- Definition

Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.

+ References + Details

Net Income Per Share (Computation Of Net Income Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2022	May 31, 2021	May 31, 2022	May 31, 2021
Numerator for basic and diluted loss per share:
Net income	$ 7,162	$ 12,754	$ 12,852	$ 11,816
Denominator for basic and diluted loss per share:
Basic weighted average shares outstanding	14,173	14,145	14,244	14,068
Effect of dilutive securities:
Other stock-based awards	2	11	29	65
Diluted weighted average shares outstanding	14,175	14,156	14,273	14,133
EPS Calculations:
Net income per share: Basic	$ 0.51	$ 0.90	$ 0.90	$ 0.84
Net income per share: Diluted	$ 0.51	$ 0.90	$ 0.90	$ 0.84

Segment Information (Narrative) (Details)	9 Months Ended
Segment Information (Narrative) (Details)	May 31, 2022 segment item
Segment Information [Abstract]
Number of divisions	2
Number of operating reportable segments \| segment	3
Number of corporate services group	1

Segment Information (Schedule Of Segment Operations) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2022	May 31, 2021	May 31, 2022	May 31, 2021
Segment Reporting Information [Line Items]
Sales to External Customers	$ 66,176	$ 58,736	$ 184,035	$ 155,223
Gross Profit	51,132	45,907	142,845	119,634
Adjusted EBITDA	10,876	8,563	28,850	17,402
Operating Segments [Member]
Segment Reporting Information [Line Items]
Adjusted EBITDA	13,168	10,847	34,880	23,327
Operating Segments [Member] \| Enterprise Division [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	50,026	45,099	142,233	122,606
Gross Profit	40,484	36,747	115,638	99,655
Adjusted EBITDA	11,281	9,715	33,082	25,337
Operating Segments [Member] \| Education practice [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	14,439	11,899	37,202	27,874
Gross Profit	9,790	8,179	24,749	17,510
Adjusted EBITDA	1,887	1,132	1,798	(2,010)
Operating Segments [Member] \| Direct Offices [Member] \| Enterprise Division [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	47,416	42,704	134,037	115,185
Gross Profit	38,144	34,678	108,294	93,201
Adjusted EBITDA	9,978	8,894	28,664	21,729
Operating Segments [Member] \| International Licensees [Member] \| Enterprise Division [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	2,610	2,395	8,196	7,421
Gross Profit	2,340	2,069	7,344	6,454
Adjusted EBITDA	1,303	821	4,418	3,608
Corporate And Eliminations [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	1,711	1,738	4,600	4,743
Gross Profit	858	981	2,458	2,469
Adjusted EBITDA	$ (2,292)	$ (2,284)	$ (6,030)	$ (5,925)

Segment Information (Reconciliation Of Adjusted EBITDA) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2022	May 31, 2021	May 31, 2022	May 31, 2021
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	$ 10,876	$ 8,563	$ 28,850	$ 17,402
Stock-based compensation	(2,369)	(2,370)	(5,987)	(5,127)
Increase in the fair value of contingent consideration liabilities	(12)	(118)	(60)	(164)
Business acquisition costs		(300)		(300)
Government COVID-19 assistance				234
Gain from insurance settlement				150
Depreciation	(1,217)	(1,423)	(3,686)	(4,904)
Amortization	(1,329)	(1,238)	(4,106)	(3,503)
Income from operations	5,949	3,114	15,011	3,788
Interest income	21	16	48	56
Interest expense	(405)	(525)	(1,274)	(1,633)
Income before income taxes	5,565	2,605	13,785	2,211
Income tax benefit (provision)	1,597	10,149	(933)	9,605
Net income	7,162	12,754	12,852	11,816
Operating Segments [Member]
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	13,168	10,847	34,880	23,327
Corporate And Eliminations [Member]
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	(2,292)	(2,284)	(6,030)	(5,925)
Corporate [Member]
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	$ (2,292)	$ (2,284)	$ (6,030)	$ (5,925)

Segment Information (Schedule Of Revenue Disaggregated By Geographic Region) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2022	May 31, 2021	May 31, 2022	May 31, 2021
Disaggregation of Revenue [Line Items]
Revenue	$ 66,176	$ 58,736	$ 184,035	$ 155,223
Americas [Member]
Disaggregation of Revenue [Line Items]
Revenue	56,081	47,524	151,283	124,679
Asia Pacific [Member]
Disaggregation of Revenue [Line Items]
Revenue	5,609	7,922	19,896	21,351
Europe/Middle East/Africa [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 4,486	$ 3,290	$ 12,856	$ 9,193

- Definition

Amount, excluding tax collected from customer, of revenue from satisfaction of performance obligation by transferring promised good or service to customer. Tax collected from customer is tax assessed by governmental authority that is both imposed on and concurrent with specific revenue-producing transaction, including, but not limited to, sales, use, value added and excise.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
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-URI https://asc.fasb.org/extlink&oid=6472922&loc=d3e499488-122856

+ Details

Segment Information (Schedule Of Revenue Disaggregated By Type Of Service) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2022	May 31, 2021	May 31, 2022	May 31, 2021
Disaggregation of Revenue [Line Items]
Revenue	$ 66,176	$ 58,736	$ 184,035	$ 155,223
Corporate [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,711	1,738	4,600	4,743
Services And Products [Member]
Disaggregation of Revenue [Line Items]
Revenue	30,514	27,976	80,859	69,874
Subscriptions [Member]
Disaggregation of Revenue [Line Items]
Revenue	30,617	25,923	87,260	70,476
Royalties [Member]
Disaggregation of Revenue [Line Items]
Revenue	3,649	3,444	12,195	11,183
Royalties [Member] \| Corporate [Member]
Disaggregation of Revenue [Line Items]
Revenue	315	345	879	1,053
Leases And Other [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,396	1,393	3,721	3,690
Leases And Other [Member] \| Corporate [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,396	1,393	3,721	3,690
Operating Segments [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	50,026	45,099	142,233	122,606
Operating Segments [Member] \| Education practice [Member]
Disaggregation of Revenue [Line Items]
Revenue	14,439	11,899	37,202	27,874
Operating Segments [Member] \| Direct Offices [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	47,416	42,704	134,037	115,185
Operating Segments [Member] \| International Licensees [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	2,610	2,395	8,196	7,421
Operating Segments [Member] \| Services And Products [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	24,734	23,678	69,009	61,856
Operating Segments [Member] \| Services And Products [Member] \| Education practice [Member]
Disaggregation of Revenue [Line Items]
Revenue	5,780	4,298	11,850	8,018
Operating Segments [Member] \| Services And Products [Member] \| Direct Offices [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	24,647	23,266	68,710	60,589
Operating Segments [Member] \| Services And Products [Member] \| International Licensees [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	87	412	299	1,267
Operating Segments [Member] \| Subscriptions [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	22,432	18,752	64,103	52,499
Operating Segments [Member] \| Subscriptions [Member] \| Education practice [Member]
Disaggregation of Revenue [Line Items]
Revenue	8,185	7,171	23,157	17,977
Operating Segments [Member] \| Subscriptions [Member] \| Direct Offices [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	22,101	18,752	63,167	52,499
Operating Segments [Member] \| Subscriptions [Member] \| International Licensees [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	331		936
Operating Segments [Member] \| Royalties [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	2,860	2,669	9,121	8,251
Operating Segments [Member] \| Royalties [Member] \| Education practice [Member]
Disaggregation of Revenue [Line Items]
Revenue	474	430	2,195	1,879
Operating Segments [Member] \| Royalties [Member] \| Direct Offices [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	668	686	2,160	2,097
Operating Segments [Member] \| Royalties [Member] \| International Licensees [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 2,192	$ 1,983	$ 6,961	$ 6,154