0000886206-23-000015 | 10-Q | XBRL Viewer

Fair Value Of Financial Instruments (Schedule Of Contingent Consideration Liability) (Details) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended
	Feb. 28, 2023	Nov. 30, 2022	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Business Acquisition, Contingent Consideration [Line Items]
Change in fair value			$ 20	$ 7	$ 48
Jhana [Member]
Business Acquisition, Contingent Consideration [Line Items]
Balance at beginning		$ 729		729
Change in fair value	$ 7
Payments	(307)	$ (429)
Balance at ending	$ 307			$ 307

Stock-Based Compensation (Tables)

6 Months Ended

Feb. 28, 2023

Stock-Based Compensation [Abstract]

Total Cost Of Stock-Based Compensation



		Quarter Ended			Two Quarters Ended
		February 28,		February 28,		February 28,		February 28,
		2023		2022		2023		2022
Long-term incentive awards	$	2,866	$	1,375	$	5,204	$	2,498
Strive acquisition compensation		200		366		366		645
Unvested stock awards		175		168		340		343
Employee stock purchase plan		74		60		140		117
Fully-vested share awards		-		-		-		15
	$	3,315	$	1,969	$	6,050	$	3,618

Unvested Stock Awards



			Weighted-Average
			Grant Date
	Number of		Fair Value
	Shares		Per Share
Unvested stock awards at
August 31, 2022	13,260	$	49.78
Granted	15,882		45.34
Forfeited	-		-
Vested	(13,260)		49.78
Unvested stock awards at
February 28, 2023	15,882	$	45.34

Inventories (Components Of Inventories) (Details) - USD ($) $ in Thousands	Feb. 28, 2023	Aug. 31, 2022
Inventories [Abstract]
Finished goods	$ 3,464	$ 3,519
Raw materials	4	8
Inventories	$ 3,468	$ 3,527

Fair Value Of Financial Instruments (Tables)

6 Months Ended

Feb. 28, 2023

Fair Value Of Financial Instruments [Abstract]

Schedule Of Contingent Consideration Liability



Balance at August 31, 2022	$	729
Change in fair value		7
Payments		(429)
Balance at November 30, 2022		307
Change in fair value		-
Payments		(307)
Balance at February 28, 2023	$	-

Subsequent Event (Ratio Of Funded Debt To Adjusted EBITDA) (Details) - Subsequent Event [Member] - The 2023 Credit Agreement [Member]	Mar. 27, 2023
Funded Debt Ratio [Member]
Subsequent Event [Line Items]
Funded Debt Ratio	1.00
Debt Instrument, Basis Spread on Variable Rate	1.50%
Debt Instrument, Description of Variable Rate Basis	SOFR plus 1.50%
Between 1.00 And 2.00 [Member]
Subsequent Event [Line Items]
Debt Instrument, Basis Spread on Variable Rate	1.75%
Debt Instrument, Description of Variable Rate Basis	SOFR plus 1.75%
Between 1.00 And 2.00 [Member] \| Minimum [Member]
Subsequent Event [Line Items]
Funded Debt Ratio	1.00
Between 1.00 And 2.00 [Member] \| Maximum [Member]
Subsequent Event [Line Items]
Funded Debt Ratio	2.00
Between 2.01 And 2.50 [Member]
Subsequent Event [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.25%
Debt Instrument, Description of Variable Rate Basis	SOFR plus 2.25%
Between 2.01 And 2.50 [Member] \| Minimum [Member]
Subsequent Event [Line Items]
Funded Debt Ratio	2.01
Between 2.01 And 2.50 [Member] \| Maximum [Member]
Subsequent Event [Line Items]
Funded Debt Ratio	2.50
Greater Than 2.51 [Member]
Subsequent Event [Line Items]
Debt Instrument, Basis Spread on Variable Rate	2.75%
Debt Instrument, Description of Variable Rate Basis	SOFR plus 2.75%
Greater Than 2.51 [Member] \| Minimum [Member]
Subsequent Event [Line Items]
Funded Debt Ratio	2.51

Inventories

6 Months Ended

Feb. 28, 2023

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):



		February 28,		August 31,
		2023		2022
Finished goods	$	3,464	$	3,519
Raw materials		4		8
	$	3,468	$	3,527

Stock-Based Compensation (Unvested Share Award) (Details) - Unvested Stock Awards [Member]	6 Months Ended
	Feb. 28, 2023 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested stock awards, Number of Shares \| shares	13,260
Granted, Number of Shares \| shares	15,882
Vested, Number of Shares \| shares	(13,260)
Unvested stock awards, Number of Shares \| shares	15,882
Restricted stock awards, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	$ 49.78
Granted, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	45.34
Vested, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	49.78
Restricted stock awards, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	$ 45.34

Condensed Consolidated Income Statements And Statements Of Comprehensive Income (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Condensed Consolidated Income Statements And Statements Of Comprehensive Income [Abstract]
Foreign currency translation adjustments, net of income tax benefits	$ 0	$ 0	$ 0	$ 0

Purchases Of Common Stock (Tables)

6 Months Ended

Feb. 28, 2023

Purchases Of Common Stock [Abstract]

Purchases Of Common Stock


	Common Shares		Cost
Open market purchases		79	$	3,830
Shares withheld for taxes on stock-
based compensation awards		18		835
		97	$	4,665

Segment Information (Schedule Of Segment Operations) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Segment Reporting Information [Line Items]
Sales to External Customers	$ 61,756	$ 56,599	$ 131,125	$ 117,859
Gross Profit	47,210	44,114	99,952	91,713
Adjusted EBITDA	8,187	8,042	19,659	17,974
Operating Segments [Member]
Segment Reporting Information [Line Items]
Adjusted EBITDA	10,560	9,852	23,921	21,712
Operating Segments [Member] \| Enterprise Division [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	46,581	44,090	100,025	92,207
Gross Profit	38,513	36,252	81,410	75,155
Adjusted EBITDA	11,182	10,176	24,262	21,801
Operating Segments [Member] \| Education Practice [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	14,198	11,066	28,549	22,763
Gross Profit	8,392	7,098	17,568	14,959
Adjusted EBITDA	(622)	(324)	(341)	(89)
Operating Segments [Member] \| Direct Offices [Member] \| Enterprise Division [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	43,646	41,502	93,812	86,621
Gross Profit	35,854	33,948	75,775	70,150
Adjusted EBITDA	9,641	8,732	20,890	18,686
Operating Segments [Member] \| International Licensees [Member] \| Enterprise Division [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	2,935	2,588	6,213	5,586
Gross Profit	2,659	2,304	5,635	5,005
Adjusted EBITDA	1,541	1,444	3,372	3,115
Corporate And Eliminations [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	977	1,443	2,551	2,889
Gross Profit	305	764	974	1,599
Adjusted EBITDA	$ (2,373)	$ (1,810)	$ (4,262)	$ (3,738)

Subsequent Event

6 Months Ended

Feb. 28, 2023

Subsequent Event [Abstract]

Subsequent Events

NOTE 9 – SUBSEQUENT EVENT

On March 27, 2023, we entered into a new credit agreement (the 2023 Credit Agreement) with KeyBank National Association (KeyBank) leading a group of financial institutions (collectively, the Lenders), which replaced our previous credit agreement with JPMorgan Chase Bank, N.A. (the 2019 Credit Agreement). KeyBank will act as the sole administrative and collateral agent under the 2023 Credit Agreement. The 2023 Credit Agreement provides up to $70.0 million in total credit, of which $7.5 million will be used to replace the outstanding term loan balance from the 2019 Credit Agreement. The remaining $62.5 million will be available as a revolving line of credit or for future term loans.

Principal payments on the term loans will consist of quarterly payments totaling $1.25 million that are due and payable on the last business day of each March, June, September, and December until the term loan obligation is repaid. These payment terms on the term loan are essentially the same as under the 2019 Credit Agreement.

The 2023 Credit Agreement matures on March 27, 2028 and interest on all borrowings under the 2023 Credit Agreement is due and payable on the last day of each month. The interest rate for borrowings on the 2023 Credit Agreement is based on the Secured Overnight Financing Rate (SOFR) and is a tiered structure that varies according to the ratio of Funded Debt to Adjusted EBITDA (Leverage Ratio, as defined in the 2023 Credit Agreement) as shown below:



Funded Debt Ratio		Interest Rate
Less than 1.00		SOFR plus 1.50%
Between 1.00 and 2.00		SOFR plus 1.75%
Between 2.01 and 2.50		SOFR plus 2.25%
Greater than 2.51		SOFR plus 2.75%

The 2023 Credit Agreement also contains representations, warranties, and certain covenants. While any amounts are outstanding under the 2023 Credit Agreement, we are subject to a number of affirmative and negative covenants, including covenants regarding dispositions of property, investments, forming or acquiring subsidiaries, and business combinations or acquisitions, among other customary covenants, subject to certain exceptions. As defined in the 2023 Credit Agreement, we are (i) required to maintain a Leverage Ratio of less than 3.00 to 1.00 and a Fixed Charge Coverage Ratio greater than 1.15 to 1.00; and (ii) restricted from making certain distributions to stockholders, including repurchases of common stock. However, we are permitted to make distributions, including through purchases of outstanding common stock, provided that we are in compliance with the Leverage Ratio and Fixed Charge Coverage Ratio financial covenants before and after such distribution. In the event of noncompliance with these financial covenants and other defined events of default, the Lender is entitled to certain remedies, including acceleration of the repayment of amounts outstanding under the 2023 Credit Agreement.

The 2023 Credit Agreement is secured by substantially all of our assets and certain of our subsidiaries, and provides for standard events of default, such as for non-payment and failure to perform or observe covenants, and contains standard indemnifications benefitting the Lenders. In connection with the 2023 Credit Agreement, the Company and certain of its subsidiaries, as applicable, also entered into a Security Agreement, Intellectual Property Security Agreement, and Guaranty of Payment.

The foregoing description of the 2023 Credit Agreement does not purport to be complete and is qualified by reference to the text of the 2023 Credit Agreement and the Security Agreement, which are included as Exhibits 10.1 and 10.2 to this Form 10-Q.

noteE

Fair Value Of Financial Instruments

6 Months Ended

Feb. 28, 2023

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

NOTE 3 – FAIR VALUE OF FINANCIAL INSTRUMENTS

At February 28, 2023, 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 two quarters ended February 28, 2023 (in thousands):



Balance at August 31, 2022	$	729
Change in fair value		7
Payments		(429)
Balance at November 30, 2022		307
Change in fair value		-
Payments		(307)
Balance at February 28, 2023	$	-

At each quarterly reporting date, we estimated the fair value of our contingent liability from the acquisition of Jhana through the use of a Monte Carlo simulation. Adjustments to the fair value of our contingent consideration liabilities were included in selling, general, and administrative expense in the accompanying condensed consolidated income statements and statements of comprehensive income. During the quarter ended February 28, 2023, we made the final Jhana contingent liability payment and have no further liabilities related to this acquisition.

- 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

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, 2021	27,056,000
Beginning balance at Aug. 31, 2021	$ 1,353	$ 214,888	$ 63,591	$ 709
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
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					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
Unvested share award, shares					13,000
Unvested share award		(209)			$ 209
Cumulative translation adjustments				(32)		$ (176)
Net income			1,878			5,690
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)
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)
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)
Beginning balance, shares at Aug. 31, 2022	27,056,000
Beginning balance at Aug. 31, 2022	$ 1,353	220,246	82,021	(542)		$ 82,814
Beginning balance, shares, Treasury at Aug. 31, 2022					(13,203,000)	(13,203,000)
Beginning balance, Treasury at Aug. 31, 2022					$ (220,264)
Issuance of common stock from treasury, shares					56,000
Issuance of common stock from treasury		(568)			$ 935
Purchase of common shares for treasury, shares					(18,000)
Purchase of common shares for treasury					$ (835)
Stock-based compensation		2,735
Cumulative translation adjustments				(130)
Net income			4,667
Ending balance, shares at Nov. 30, 2022	27,056,000
Ending balance at Nov. 30, 2022	$ 1,353	222,413	86,688	(672)
Ending balance, shares, Treasury at Nov. 30, 2022					(13,165,000)
Ending balance, Treasury at Nov. 30, 2022					$ (220,164)
Beginning balance, shares at Aug. 31, 2022	27,056,000
Beginning balance at Aug. 31, 2022	$ 1,353	220,246	82,021	(542)		$ 82,814
Beginning balance, shares, Treasury at Aug. 31, 2022					(13,203,000)	(13,203,000)
Beginning balance, Treasury at Aug. 31, 2022					$ (220,264)
Issuance of common stock from treasury, shares						83,392
Purchase of common shares for treasury, shares						(97,000)
Purchase of common shares for treasury						$ (4,665)
Cumulative translation adjustments						16
Net income						6,406
Ending balance, shares at Feb. 28, 2023	27,056,000
Ending balance at Feb. 28, 2023	$ 1,353	225,643	88,427	(526)		$ 91,361
Ending balance, shares, Treasury at Feb. 28, 2023					(13,216,000)	(13,216,000)
Ending balance, Treasury at Feb. 28, 2023					$ (223,536)
Beginning balance, shares at Nov. 30, 2022	27,056,000
Beginning balance at Nov. 30, 2022	$ 1,353	222,413	86,688	(672)
Beginning balance, shares, Treasury at Nov. 30, 2022					(13,165,000)
Beginning balance, Treasury at Nov. 30, 2022					$ (220,164)
Issuance of common stock from treasury, shares					12,000
Issuance of common stock from treasury		181			$ 192
Purchase of common shares for treasury, shares					(79,000)
Purchase of common shares for treasury					$ (3,830)
Stock-based compensation		3,315
Unvested share award, shares					16,000
Unvested share award		(266)			$ 266
Cumulative translation adjustments				146		$ 146
Net income			1,739			1,739
Ending balance, shares at Feb. 28, 2023	27,056,000
Ending balance at Feb. 28, 2023	$ 1,353	$ 225,643	$ 88,427	$ (526)		$ 91,361
Ending balance, shares, Treasury at Feb. 28, 2023					(13,216,000)	(13,216,000)
Ending balance, Treasury at Feb. 28, 2023					$ (223,536)

Segment Information (Reconciliation Of Adjusted EBITDA) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	$ 8,187	$ 8,042	$ 19,659	$ 17,974
Stock-based compensation	(3,315)	(1,969)	(6,050)	(3,618)
Increase in the fair value of contingent consideration liabilities		(20)	(7)	(48)
Depreciation	(951)	(1,190)	(2,196)	(2,470)
Amortization	(1,093)	(1,346)	(2,185)	(2,776)
Income from operations	2,828	3,517	9,221	9,062
Interest income	362	12	442	27
Interest expense	(409)	(423)	(819)	(869)
Income before income taxes	2,781	3,106	8,844	8,220
Income tax provision	(1,042)	(1,228)	(2,438)	(2,530)
Net income	1,739	1,878	6,406	5,690
Operating Segments [Member]
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	10,560	9,852	23,921	21,712
Corporate And Eliminations [Member]
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	$ (2,373)	$ (1,810)	$ (4,262)	$ (3,738)

Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Feb. 28, 2023	Feb. 28, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 6,406	$ 5,690
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	4,381	5,246
Amortization of capitalized curriculum costs	1,648	1,620
Stock-based compensation	6,050	3,618
Deferred income taxes	1,130	1,277
Change in fair value of contingent consideration liabilities	7	48
Amortization of right-of-use operating lease assets	411	475
Changes in assets and liabilities:
Decrease in accounts receivable, net	19,050	22,925
Decrease in inventories	71	25
Decrease in prepaid expenses and other assets	1,333	353
Decrease in accounts payable and accrued liabilities	(16,823)	(11,165)
Decrease in deferred revenue	(11,674)	(5,518)
Increase in income taxes payable	(455)	(238)
Decrease in other long-term liabilities	(327)	(1,118)
Net cash provided by operating activities	11,208	23,238
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	(2,644)	(1,264)
Curriculum development costs	(5,277)	(774)
Net cash used for investing activities	(7,921)	(2,038)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes payable	(2,500)	(2,500)
Principal payments on financing obligation	(1,562)	(1,409)
Purchases of common stock for treasury	(4,665)	(3,535)
Payment of contingent consideration liabilities	(736)	(671)
Proceeds from sales of common stock held in treasury	739	668
Net cash used for financing activities	(8,724)	(7,447)
Effect of foreign currency exchange rates on cash and cash equivalents	41	(108)
Net increase (decrease) in cash and cash equivalents	(5,396)	13,645
Cash and cash equivalents at the beginning of the period	60,517	47,417
Cash and cash equivalents at the end of the period	55,121	61,062
Supplemental disclosure of cash flow information:
Cash paid for income taxes	1,604	1,302
Cash paid for interest	738	782
Non-cash investing and financing activities:
Purchases of property and equipment financed by accounts payable	141	160
Acquisition of right-of-use operating lease assets for operating lease liabilities	$ 448	$ 338

Stock-Based Compensation (Narrative) (Details)	3 Months Ended	6 Months Ended
Stock-Based Compensation (Narrative) (Details)	Feb. 28, 2023 shares	Feb. 28, 2023 USD ($) item shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issued from treasury stock		83,392
Shares withheld for tax		18,000
Fiscal 2023, Long-Term Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of shares which will vest		33.30%
Number of tranches \| item		2
Shares issued under terms of the award		42,600
Unvested Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Whole-share grant per eligible director \| $		$ 120,000
Vesting period of awards		1 year
Time-Based Award [Member] \| Fiscal 2023, Long-Term Equity Incentive Plan [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		26,000
Number of tranches \| item		1
Performance-Based Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued under terms of the award		77,300
Performance-Based Award [Member] \| Fiscal 2023, Long-Term Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of tranches \| item		1
Percent of performance-based objectives	100.00%	100.00%
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	8,498	17,591
Tranche One and Two [Member] \| Performance-Based Award [Member] \| Fiscal 2023, Long-Term Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares may be awarded		154,600
Tranche One and Two [Member] \| Performance-Based Award [Member] \| Minimum [Member] \| Fiscal 2023, Long-Term Equity Incentive Plan [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 2023, Long-Term Equity Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of performance award to be granted		200.00%

Revenue Recognition (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Feb. 28, 2023	Feb. 28, 2023	Aug. 31, 2022
Deferred revenue	$ 90.9	$ 90.9	$ 102.4
Other long-term liabilities	2.2	2.2	2.7
Remaining performance obligations	145.8	145.8
Subscription Offerings [Member]
Deferred revenue	76.1	76.1	$ 88.1
Subscription [Member]
Deferred revenue recognized	$ 33.0	$ 66.0

Revenue Recognition

6 Months Ended

Feb. 28, 2023

Revenue Recognition [Abstract]

Revenue Recognition

NOTE 5 – REVENUE RECOGNITION

Contract Balances

Our deferred revenue totaled $90.9 million at February 28, 2023 and $102.4 million at August 31, 2022, of which $2.2 million and $2.7 million were classified as components of other long-term liabilities at February 28, 2023, and August 31, 2022, respectively. The amount of deferred revenue that was generated from subscription offerings totaled $76.1 million at February 28, 2023 and $88.1 million at August 31, 2022. During the quarter and two quarters ended February 28, 2023, we recognized $33.0 million and $66.0 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 service 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 February 28, 2023, we had $145.8 million of remaining performance obligations, including our deferred subscription revenue. 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 8, 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
-Topic 606
-URI https://asc.fasb.org/topic&trid=49130388

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 10
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130551-203045

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 13
-Subparagraph (b)(2)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130556-203045

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (b)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 9
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130550-203045

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (e)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (d)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 15
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130558-203045

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 606
-SubTopic 10
-Section 50
-Paragraph 12
-Subparagraph (c)
-URI https://asc.fasb.org/extlink&oid=126920106&loc=SL49130554-203045

+ Details

Net Income Per Share

6 Months Ended

Feb. 28, 2023

Net Income Per Share [Abstract]

Net Income Per Share

NOTE 7 – 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				Two Quarters Ended
		February 28,		February 28,		February 28,		February 28,
		2023		2022		2023		2022
Numerator for basic and
diluted income per share:
Net income	$	1,739	$	1,878	$	6,406	$	5,690

Denominator for basic and
diluted income per share:
Basic weighted average shares
outstanding		13,900		14,312		13,888		14,279
Effect of dilutive securities:
Stock-based compensation awards		633		21		632		44
Diluted weighted average
shares outstanding		14,533		14,333		14,520		14,323

EPS Calculations:
Net income per share:
Basic	$	0.13	$	0.13	$	0.46	$	0.40
Diluted		0.12		0.13		0.44		0.40

Purchases Of Common Stock

6 Months Ended

Feb. 28, 2023

Purchases Of Common Stock [Abstract]

Purchases Of Common Stock

NOTE 4 – PURCHASES OF COMMON STOCK

Our purchases of common stock during the first two quarters of fiscal 2023 were comprised of open-market purchases and shares withheld on stock-based compensation awards (Note 6). Our stock-based compensation plans allow shares to be withheld to cover statutory income taxes if so elected by the award recipient. These shares are valued at the market price on the date the shares are withheld. Shares purchased during the first two quarters of fiscal 2023 consisted of the following (in thousands):


	Common Shares		Cost
Open market purchases		79	$	3,830
Shares withheld for taxes on stock-
based compensation awards		18		835
		97	$	4,665

On February 14, 2023, our Board of Directors approved a new plan to repurchase up to $50.0 million of our outstanding common stock. The previously existing common stock repurchase plan was canceled and the new common share repurchase plan does not have an expiration date. The actual timing, number, and value of common shares repurchased under our board-approved plan will be determined at our discretion and will depend on a number of factors, including, among others, general market and business conditions, the trading price of common shares, and applicable legal requirements. We have no obligation to repurchase any common shares under the authorization, and the repurchase plan may be suspended, discontinued, or modified at any time for any reason.

Document And Entity Information - shares	6 Months Ended
Document And Entity Information - shares	Feb. 28, 2023	Mar. 31, 2023
Document And Entity Information [Abstract]
Document Type	10-Q
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--08-31
Document Fiscal Year Focus	2023
Document Quarterly Report	true
Document Period End Date	Feb. 28, 2023
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		13,852,825
Amendment Flag	false
Entity Central Index Key	0000886206

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Feb. 28, 2023	Aug. 31, 2022
Condensed Consolidated Balance Sheets [Abstract]
Allowance for doubtful accounts	$ 4,116	$ 4,492
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	13,216	13,203

Stock-Based Compensation (Total Cost Of Stock-Based Compensation) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	$ 3,315	$ 1,969	$ 6,050	$ 3,618
Long-Term Incentive Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	2,866	1,375	5,204	2,498
Strive Acquisition Compensation [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	200	366	366	645
Unvested Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	175	168	340	343
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	$ 74	$ 60	$ 140	117
Fully-Vested Share Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost				$ 15

Subsequent Event (Tables)

6 Months Ended

Feb. 28, 2023

Subsequent Event [Abstract]

Ratio Of Funded Debt To Adjusted EBITDA



Funded Debt Ratio		Interest Rate
Less than 1.00		SOFR plus 1.50%
Between 1.00 and 2.00		SOFR plus 1.75%
Between 2.01 and 2.50		SOFR plus 2.25%
Greater than 2.51		SOFR plus 2.75%

Subsequent Event (Narrative) (Details) - The 2023 Credit Agreement [Member] - Subsequent Event [Member] $ in Thousands	Mar. 27, 2023 USD ($)
Subsequent Event [Line Items]
Maximum borrowing capacity	$ 70,000
Maturity date	Mar. 27, 2028
Leverage Ratio	3.00
Fixed Charge Coverage Ratio	1.15
Revolving Line Of Credit [Member]
Subsequent Event [Line Items]
Maximum borrowing capacity	$ 62,500
Term Loan [Member]
Subsequent Event [Line Items]
Maximum borrowing capacity	$ 7,500
Frequency of periodic payment	quarterly payments
Quarterly principal payment amount	$ 1,250

Purchases Of Common Stock (Details) - USD ($) shares in Thousands, $ in Thousands	6 Months Ended
	Feb. 28, 2023	Feb. 14, 2023
Equity [Line Items]
Stock repurchased during period, shares	79
Stock Repurchased During Period, Value	$ 3,830
Shares withheld for taxes on stock-based compensation awards, Shares	18
Shares withheld for taxes on stock-based compensation awards, Value	$ 835
Purchase of treasury shares, shares	97
Purchase of treasury shares, cost	$ 4,665
Maximum [Member]
Equity [Line Items]
Amount authorized under common stock repurchase plan		$ 50,000

Stock-Based Compensation

6 Months Ended

Feb. 28, 2023

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			Two Quarters Ended
		February 28,		February 28,		February 28,		February 28,
		2023		2022		2023		2022
Long-term incentive awards	$	2,866	$	1,375	$	5,204	$	2,498
Strive acquisition compensation		200		366		366		645
Unvested stock awards		175		168		340		343
Employee stock purchase plan		74		60		140		117
Fully-vested share awards		-		-		-		15
	$	3,315	$	1,969	$	6,050	$	3,618

During the two quarters ended February 28, 2023, we issued 83,392 shares of our common stock under various stock-based compensation arrangements, including our employee stock purchase plan (ESPP).

Fiscal 2023 Long-Term Incentive Plan Award

On October 14, 2022, the Compensation Committee granted a new Long-Term Incentive Plan (LTIP) award to our executive officers and members of senior management. The fiscal 2023 LTIP award was subsequently expanded with new grants for additional participants, which are expensed based on the market value of our common stock on the date of the grants. The fiscal 2023 LTIP 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 2023 LTIP award shares vest to participants on August 31, 2025. The number of shares that may be earned by participants at the end of the service period totals approximately 26,000 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 2023 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, 2025. 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 approximately 77,300 shares. The maximum number of shares that may be awarded in connection with the performance-based tranche of the 2023 LTIP totals approximately 154,600 shares.

New Long-Term Incentive Performance and Retention Plan

During the first quarter of fiscal 2023, we introduced a new long-term equity incentive plan for client partners, managing directors, and certain other associates that we believe are critical to our long-term success. These awards are generally based on the achievement of specified sales goals and are expected to be granted annually. One-third of the award shares will vest to participants on each August 31 following the award grant. We granted a total of approximately 42,600 unvested share units in fiscal 2023 to the participants in this long-term incentive plan. The compensation cost of these awards is included in the long-term incentive awards category in the preceding table.

Fiscal 2023 Board of Director Unvested Share Award

Our annual unvested 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 as part of their compensation. The annual award is granted in January (following the annual shareholders’ meeting) of each year. For the fiscal 2023 award, each eligible director received a whole-share grant equal to $120,000 with a one year vesting period. Our unvested stock award activity during the two quarters ended February 28, 2023 consisted of the following:



			Weighted-Average
			Grant Date
	Number of		Fair Value
	Shares		Per Share
Unvested stock awards at
August 31, 2022	13,260	$	49.78
Granted	15,882		45.34
Forfeited	-		-
Vested	(13,260)		49.78
Unvested stock awards at
February 28, 2023	15,882	$	45.34

‎

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 two quarters ended February 28, 2023, we issued 8,498 shares and 17,591 shares of our common stock to participants in the ESPP.

Segment Information

6 Months Ended

Feb. 28, 2023

Segment Information [Abstract]

Segment Information

NOTE 8 – 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 consist 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 sales 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, 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
February 28, 2023		Customers		Gross Profit		EBITDA

Enterprise Division:
Direct offices	$	43,646	$	35,854	$	9,641
International licensees		2,935		2,659		1,541
		46,581		38,513		11,182
Education practice		14,198		8,392		(622)
Corporate and eliminations		977		305		(2,373)
Consolidated	$	61,756	$	47,210	$	8,187

Quarter Ended
February 28, 2022

Enterprise Division:
Direct offices	$	41,502	$	33,948	$	8,732
International licensees		2,588		2,304		1,444
		44,090		36,252		10,176
Education practice		11,066		7,098		(324)
Corporate and eliminations		1,443		764		(1,810)
Consolidated	$	56,599	$	44,114	$	8,042

Two Quarters Ended
February 28, 2023

Enterprise Division:
Direct offices	$	93,812	$	75,775	$	20,890
International licensees		6,213		5,635		3,372
		100,025		81,410		24,262

Education practice		28,549		17,568		(341)
Corporate and eliminations		2,551		974		(4,262)
Consolidated	$	131,125	$	99,952	$	19,659

Two Quarters Ended
February 28, 2022

Enterprise Division:
Direct offices	$	86,621	$	70,150	$	18,686
International licensees		5,586		5,005		3,115
		92,207		75,155		21,801
Education practice		22,763		14,959		(89)
Corporate and eliminations		2,889		1,599		(3,738)
Consolidated	$	117,859	$	91,713	$	17,974

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



	Quarter Ended				Two Quarters Ended
		February 28,		February 28,		February 28,		February 28,
		2023		2022		2023		2022
Segment Adjusted EBITDA	$	10,560	$	9,852	$	23,921	$	21,712
Corporate expenses		(2,373)		(1,810)		(4,262)		(3,738)
Consolidated Adjusted EBITDA		8,187		8,042		19,659		17,974
Stock-based compensation		(3,315)		(1,969)		(6,050)		(3,618)
Increase in the fair value of
contingent consideration liabilities		-		(20)		(7)		(48)
Depreciation		(951)		(1,190)		(2,196)		(2,470)
Amortization		(1,093)		(1,346)		(2,185)		(2,776)
Income from operations		2,828		3,517		9,221		9,062
Interest income		362		12		442		27
Interest expense		(409)		(423)		(819)		(869)
Income before income taxes		2,781		3,106		8,844		8,220
Income tax provision		(1,042)		(1,228)		(2,438)		(2,530)
Net income	$	1,739	$	1,878	$	6,406	$	5,690

Revenue by Category

The following table presents our revenue disaggregated by geographic region (in thousands).



	Quarter Ended				Two Quarters Ended
		February 28,		February 28,		February 28,		February 28,
		2023		2022		2023		2022

Americas	$	51,638	$	46,447	$	108,380	$	95,202
Asia Pacific		5,925		6,489		13,383		14,287
Europe/Middle East/Africa		4,193		3,663		9,362		8,370
	$	61,756	$	56,599	$	131,125	$	117,859

‎

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



Quarter Ended		Services and						Leases and
February 28, 2023		Products		Subscriptions		Royalties		Other		Consolidated

Enterprise Division:
Direct offices	$	19,086	$	23,711	$	849	$	-	$	43,646
International licensees		43		343		2,549		-		2,935
		19,129		24,054		3,398		-		46,581
Education practice		4,110		8,860		1,228		-		14,198
Corporate and eliminations		-		-		308		669		977
Consolidated	$	23,239	$	32,914	$	4,934	$	669	$	61,756

Quarter Ended
February 28, 2022

Enterprise Division:
Direct offices	$	20,212	$	20,553	$	737	$	-	$	41,502
International licensees		99		313		2,176		-		2,588
		20,311		20,866		2,913		-		44,090
Education practice		2,844		7,128		1,094		-		11,066
Corporate and eliminations		-		-		220		1,223		1,443
Consolidated	$	23,155	$	27,994	$	4,227	$	1,223	$	56,599

Two Quarters Ended
February 28, 2023

Enterprise Division:
Direct offices	$	45,303	$	47,201	$	1,308	$	-	$	93,812
International licensees		186		695		5,332		-		6,213
		45,489		47,896		6,640		-		100,025
Education practice		8,610		18,044		1,895		-		28,549
Corporate and eliminations		-		-		624		1,927		2,551
Consolidated	$	54,099	$	65,940	$	9,159	$	1,927	$	131,125

Two Quarters Ended
February 28, 2022

Enterprise Division:
Direct offices	$	44,063	$	41,065	$	1,493	$	-	$	86,621
International licensees		212		605		4,769		-		5,586
		44,275		41,670		6,262		-		92,207
Education practice		6,070		14,972		1,721		-		22,763
Corporate and eliminations		-		-		564		2,325		2,889
Consolidated	$	50,345	$	56,642	$	8,547	$	2,325	$	117,859

- 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
-SubTopic 10
-Section 50
-Paragraph 31
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8924-108599

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 34
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8981-108599

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 21
-Subparagraph (a)
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e8721-108599

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
-Paragraph 40
-URI https://asc.fasb.org/extlink&oid=126901519&loc=d3e9031-108599

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 280
-SubTopic 10
-Section 50
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+ Details

Segment Information (Schedule Of Revenue Disaggregated By Type Of Service) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 61,756	$ 56,599	$ 131,125	$ 117,859
Services And Products [Member]
Disaggregation of Revenue [Line Items]
Revenue	23,239	23,155	54,099	50,345
Subscriptions [Member]
Disaggregation of Revenue [Line Items]
Revenue	32,914	27,994	65,940	56,642
Royalties [Member]
Disaggregation of Revenue [Line Items]
Revenue	4,934	4,227	9,159	8,547
Leases And Other [Member]
Disaggregation of Revenue [Line Items]
Revenue	669	1,223	1,927	2,325
Operating Segments [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	46,581	44,090	100,025	92,207
Operating Segments [Member] \| Education Practice [Member]
Disaggregation of Revenue [Line Items]
Revenue	14,198	11,066	28,549	22,763
Operating Segments [Member] \| Direct Offices [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	43,646	41,502	93,812	86,621
Operating Segments [Member] \| International Licensees [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	2,935	2,588	6,213	5,586
Operating Segments [Member] \| Services And Products [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	19,129	20,311	45,489	44,275
Operating Segments [Member] \| Services And Products [Member] \| Education Practice [Member]
Disaggregation of Revenue [Line Items]
Revenue	4,110	2,844	8,610	6,070
Operating Segments [Member] \| Services And Products [Member] \| Direct Offices [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	19,086	20,212	45,303	44,063
Operating Segments [Member] \| Services And Products [Member] \| International Licensees [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	43	99	186	212
Operating Segments [Member] \| Subscriptions [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	24,054	20,866	47,896	41,670
Operating Segments [Member] \| Subscriptions [Member] \| Education Practice [Member]
Disaggregation of Revenue [Line Items]
Revenue	8,860	7,128	18,044	14,972
Operating Segments [Member] \| Subscriptions [Member] \| Direct Offices [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	23,711	20,553	47,201	41,065
Operating Segments [Member] \| Subscriptions [Member] \| International Licensees [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	343	313	695	605
Operating Segments [Member] \| Royalties [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	3,398	2,913	6,640	6,262
Operating Segments [Member] \| Royalties [Member] \| Education Practice [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,228	1,094	1,895	1,721
Operating Segments [Member] \| Royalties [Member] \| Direct Offices [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	849	737	1,308	1,493
Operating Segments [Member] \| Royalties [Member] \| International Licensees [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	2,549	2,176	5,332	4,769
Corporate And Eliminations [Member]
Disaggregation of Revenue [Line Items]
Revenue	977	1,443	2,551	2,889
Corporate And Eliminations [Member] \| Royalties [Member]
Disaggregation of Revenue [Line Items]
Revenue	308	220	624	564
Corporate And Eliminations [Member] \| Leases And Other [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 669	$ 1,223	$ 1,927	$ 2,325

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Feb. 28, 2023	Aug. 31, 2022
Current assets:
Cash and cash equivalents	$ 55,121	$ 60,517
Accounts receivable, less allowance for doubtful accounts of $4,116 and $4,492	53,729	72,561
Inventories	3,468	3,527
Prepaid expenses and other current assets	18,532	19,278
Total current assets	130,850	155,883
Property and equipment, net	9,853	9,798
Intangible assets, net	42,651	44,833
Goodwill	31,220	31,220
Deferred income tax assets	3,555	4,686
Other long-term assets	15,956	12,735
Total assets	234,085	259,155
Current liabilities:
Current portion of notes payable	5,835	5,835
Current portion of financing obligation	3,365	3,199
Accounts payable	8,488	10,864
Deferred subscription revenue	74,089	85,543
Other deferred revenue	14,619	14,150
Accrued liabilities	18,654	34,205
Total current liabilities	125,050	153,796
Notes payable, less current portion	4,823	7,268
Financing obligation, less current portion	6,233	7,962
Other liabilities	6,419	7,116
Deferred income tax liabilities	199	199
Total liabilities	142,724	176,341
Shareholders’ equity:
Common stock, $0.05 par value; 40,000 shares authorized, 27,056 shares issued	1,353	1,353
Additional paid-in capital	225,643	220,246
Retained earnings	88,427	82,021
Accumulated other comprehensive loss	(526)	(542)
Treasury stock at cost, 13,216 shares and 13,203 shares	(223,536)	(220,264)
Total shareholders’ equity	91,361	82,814
Total liabilities and shareholders' equity	$ 234,085	$ 259,155

Segment Information (Narrative) (Details)	3 Months Ended
Segment Information (Narrative) (Details)	Feb. 28, 2023 segment item
Segment Information [Abstract]
Number of divisions	2
Number of operating reportable segments \| segment	3
Number of corporate services group	1

Net Income Per Share (Tables)

6 Months Ended

Feb. 28, 2023

Net Income Per Share [Abstract]

Computation Of Net Income Per Share



	Quarter Ended				Two Quarters Ended
		February 28,		February 28,		February 28,		February 28,
		2023		2022		2023		2022
Numerator for basic and
diluted income per share:
Net income	$	1,739	$	1,878	$	6,406	$	5,690

Denominator for basic and
diluted income per share:
Basic weighted average shares
outstanding		13,900		14,312		13,888		14,279
Effect of dilutive securities:
Stock-based compensation awards		633		21		632		44
Diluted weighted average
shares outstanding		14,533		14,333		14,520		14,323

EPS Calculations:
Net income per share:
Basic	$	0.13	$	0.13	$	0.46	$	0.40
Diluted		0.12		0.13		0.44		0.40

Segment Information (Tables)

6 Months Ended

Feb. 28, 2023

Segment Information [Abstract]

Schedule Of Segment Operations



		Sales to
Quarter Ended		External				Adjusted
February 28, 2023		Customers		Gross Profit		EBITDA

Enterprise Division:
Direct offices	$	43,646	$	35,854	$	9,641
International licensees		2,935		2,659		1,541
		46,581		38,513		11,182
Education practice		14,198		8,392		(622)
Corporate and eliminations		977		305		(2,373)
Consolidated	$	61,756	$	47,210	$	8,187

Quarter Ended
February 28, 2022

Enterprise Division:
Direct offices	$	41,502	$	33,948	$	8,732
International licensees		2,588		2,304		1,444
		44,090		36,252		10,176
Education practice		11,066		7,098		(324)
Corporate and eliminations		1,443		764		(1,810)
Consolidated	$	56,599	$	44,114	$	8,042

Two Quarters Ended
February 28, 2023

Enterprise Division:
Direct offices	$	93,812	$	75,775	$	20,890
International licensees		6,213		5,635		3,372
		100,025		81,410		24,262

Education practice		28,549		17,568		(341)
Corporate and eliminations		2,551		974		(4,262)
Consolidated	$	131,125	$	99,952	$	19,659

Two Quarters Ended
February 28, 2022

Enterprise Division:
Direct offices	$	86,621	$	70,150	$	18,686
International licensees		5,586		5,005		3,115
		92,207		75,155		21,801
Education practice		22,763		14,959		(89)
Corporate and eliminations		2,889		1,599		(3,738)
Consolidated	$	117,859	$	91,713	$	17,974

Reconciliation Of Adjusted EBITDA



	Quarter Ended				Two Quarters Ended
		February 28,		February 28,		February 28,		February 28,
		2023		2022		2023		2022
Segment Adjusted EBITDA	$	10,560	$	9,852	$	23,921	$	21,712
Corporate expenses		(2,373)		(1,810)		(4,262)		(3,738)
Consolidated Adjusted EBITDA		8,187		8,042		19,659		17,974
Stock-based compensation		(3,315)		(1,969)		(6,050)		(3,618)
Increase in the fair value of
contingent consideration liabilities		-		(20)		(7)		(48)
Depreciation		(951)		(1,190)		(2,196)		(2,470)
Amortization		(1,093)		(1,346)		(2,185)		(2,776)
Income from operations		2,828		3,517		9,221		9,062
Interest income		362		12		442		27
Interest expense		(409)		(423)		(819)		(869)
Income before income taxes		2,781		3,106		8,844		8,220
Income tax provision		(1,042)		(1,228)		(2,438)		(2,530)
Net income	$	1,739	$	1,878	$	6,406	$	5,690

Schedule Of Revenue Disaggregated By Category

The following table presents our revenue disaggregated by geographic region (in thousands).



	Quarter Ended				Two Quarters Ended
		February 28,		February 28,		February 28,		February 28,
		2023		2022		2023		2022

Americas	$	51,638	$	46,447	$	108,380	$	95,202
Asia Pacific		5,925		6,489		13,383		14,287
Europe/Middle East/Africa		4,193		3,663		9,362		8,370
	$	61,756	$	56,599	$	131,125	$	117,859

‎

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



Quarter Ended		Services and						Leases and
February 28, 2023		Products		Subscriptions		Royalties		Other		Consolidated

Enterprise Division:
Direct offices	$	19,086	$	23,711	$	849	$	-	$	43,646
International licensees		43		343		2,549		-		2,935
		19,129		24,054		3,398		-		46,581
Education practice		4,110		8,860		1,228		-		14,198
Corporate and eliminations		-		-		308		669		977
Consolidated	$	23,239	$	32,914	$	4,934	$	669	$	61,756

Quarter Ended
February 28, 2022

Enterprise Division:
Direct offices	$	20,212	$	20,553	$	737	$	-	$	41,502
International licensees		99		313		2,176		-		2,588
		20,311		20,866		2,913		-		44,090
Education practice		2,844		7,128		1,094		-		11,066
Corporate and eliminations		-		-		220		1,223		1,443
Consolidated	$	23,155	$	27,994	$	4,227	$	1,223	$	56,599

Two Quarters Ended
February 28, 2023

Enterprise Division:
Direct offices	$	45,303	$	47,201	$	1,308	$	-	$	93,812
International licensees		186		695		5,332		-		6,213
		45,489		47,896		6,640		-		100,025
Education practice		8,610		18,044		1,895		-		28,549
Corporate and eliminations		-		-		624		1,927		2,551
Consolidated	$	54,099	$	65,940	$	9,159	$	1,927	$	131,125

Two Quarters Ended
February 28, 2022

Enterprise Division:
Direct offices	$	44,063	$	41,065	$	1,493	$	-	$	86,621
International licensees		212		605		4,769		-		5,586
		44,275		41,670		6,262		-		92,207
Education practice		6,070		14,972		1,721		-		22,763
Corporate and eliminations		-		-		564		2,325		2,889
Consolidated	$	50,345	$	56,642	$	8,547	$	2,325	$	117,859

Basis Of Presentation (Policy)

6 Months Ended

Feb. 28, 2023

Basis Of Presentation [Abstract]

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, 2022.

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 two quarters ended February 28, 2023 are not necessarily indicative of results expected for the entire fiscal year ending August 31, 2023, or for any future periods.

Segment Information (Schedule Of Revenue Disaggregated By Geographic Region) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Disaggregation of Revenue [Line Items]
Revenue	$ 61,756	$ 56,599	$ 131,125	$ 117,859
Americas [Member]
Disaggregation of Revenue [Line Items]
Revenue	51,638	46,447	108,380	95,202
Asia Pacific [Member]
Disaggregation of Revenue [Line Items]
Revenue	5,925	6,489	13,383	14,287
Europe/Middle East/Africa [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 4,193	$ 3,663	$ 9,362	$ 8,370

- 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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-Name Accounting Standards Codification
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+ Details

Inventories (Tables)

6 Months Ended

Feb. 28, 2023

Inventories [Abstract]

Components Of Inventories



		February 28,		August 31,
		2023		2022
Finished goods	$	3,464	$	3,519
Raw materials		4		8
	$	3,468	$	3,527

Net Income Per Share (Computation Of Net Income Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Numerator for basic and diluted loss per share:
Net income	$ 1,739	$ 1,878	$ 6,406	$ 5,690
Denominator for basic and diluted income per share:
Basic weighted average shares outstanding	13,900	14,312	13,888	14,279
Effect of dilutive securities:
Stock-based compensation awards	633	21	632	44
Diluted weighted average shares outstanding	14,533	14,333	14,520	14,323
EPS Calculations:
Net income per share: Basic	$ 0.13	$ 0.13	$ 0.46	$ 0.40
Net income per share: Diluted	$ 0.12	$ 0.13	$ 0.44	$ 0.40

Condensed Consolidated Income Statements And Statements Of Comprehensive Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2023	Feb. 28, 2022	Feb. 28, 2023	Feb. 28, 2022
Condensed Consolidated Income Statements And Statements Of Comprehensive Income [Abstract]
Net sales	$ 61,756	$ 56,599	$ 131,125	$ 117,859
Cost of sales	14,546	12,485	31,173	26,146
Gross profit	47,210	44,114	99,952	91,713
Selling, general, and administrative	42,338	38,061	86,350	77,405
Depreciation	951	1,190	2,196	2,470
Amortization	1,093	1,346	2,185	2,776
Income from operations	2,828	3,517	9,221	9,062
Interest income	362	12	442	27
Interest expense	(409)	(423)	(819)	(869)
Income before income taxes	2,781	3,106	8,844	8,220
Income tax provision	(1,042)	(1,228)	(2,438)	(2,530)
Net income	$ 1,739	$ 1,878	$ 6,406	$ 5,690
Net income per share:
Basic	$ 0.13	$ 0.13	$ 0.46	$ 0.40
Diluted	$ 0.12	$ 0.13	$ 0.44	$ 0.40
Weighted average number of common shares:
Basic	13,900	14,312	13,888	14,279
Diluted	14,533	14,333	14,520	14,323
COMPREHENSIVE INCOME
Net income	$ 1,739	$ 1,878	$ 6,406	$ 5,690
Foreign currency translation adjustments, net of income taxes of $0, $0, $0, and $0	146	(32)	16	(176)
Comprehensive income	$ 1,885	$ 1,846	$ 6,422	$ 5,514

Basis Of Presentation

6 Months Ended

Feb. 28, 2023

Basis Of Presentation [Abstract]

Basis Of Presentation

NOTE 1 – BASIS OF PRESENTATION

General