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Document And Entity Information - shares	9 Months Ended
May 31, 2018	Jun. 30, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	May 31, 2018
Amendment Flag	false
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2018
Entity Registrant Name	FRANKLIN COVEY CO
Entity Central Index Key	0000886206
Current Fiscal Year End Date	--08-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		13,907,731

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	May 31, 2018	Aug. 31, 2017
Current assets:
Cash and cash equivalents	$ 11,774	$ 8,924
Accounts receivable, less allowance for doubtful accounts of $2,975 and $2,310	51,035	66,343
Receivable from related party	955	1,020
Inventories	3,747	3,353
Income taxes receivable	816	259
Prepaid expenses and other current assets	11,265	11,936
Total current assets	79,592	91,835
Property and equipment, net	21,750	19,730
Intangible assets, net	53,185	57,294
Goodwill	24,220	24,220
Long-term receivable from related party	251	727
Deferred income tax assets	7,207	1,647
Other long-term assets	13,429	15,278
Total assets	199,634	210,731
Current liabilities:
Current portion of financing obligation	2,034	1,868
Current portion of term notes payable	6,250	6,250
Accounts payable	8,652	9,119
Deferred revenue	39,190	40,772
Accrued liabilities	17,130	22,617
Total current liabilities	73,256	80,626
Line of credit	15,866	4,377
Financing obligation, less current portion	19,530	21,075
Term notes payable, less current portion	8,125	12,813
Other liabilities	4,519	5,742
Deferred income tax liabilities	39	1,033
Total liabilities	121,335	125,666
Shareholders' equity:
Common stock, $.05 par value; 40,000 shares authorized, 27,056 shares issued	1,353	1,353
Additional paid-in capital	210,521	212,484
Retained earnings	61,790	69,456
Accumulated other comprehensive income	832	667
Treasury stock at cost, 13,169 shares and 13,414 shares	(196,197)	(198,895)
Total shareholders' equity	78,299	85,065
Total liabilities and shareholders' equity	$ 199,634	$ 210,731

Condensed Consolidated Statements Of Operations And Statements Of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2018	May 31, 2017
Condensed Consolidated Statements Of Operations And Statements Of Comprehensive Loss [Abstract]
Net sales	$ 50,461	$ 43,751	$ 144,939	$ 125,734
Cost of sales	15,545	16,410	44,411	45,054
Gross profit	34,916	27,341	100,528	80,680
Selling, general, and administrative	34,910	30,713	103,830	89,177
Restructuring costs		1,335		1,335
Contract termination costs				1,500
Depreciation	1,267	949	3,547	2,743
Amortization	1,326	835	4,117	2,278
Loss from operations	(2,587)	(6,491)	(10,966)	(16,353)
Interest income	35	52	94	181
Interest expense	(738)	(618)	(1,979)	(1,861)
Discount accretion on related party receivable	202	34	258	129
Loss before income taxes	(3,088)	(7,023)	(12,593)	(17,904)
Income tax benefit	554	2,482	4,927	6,073
Net loss	$ (2,534)	$ (4,541)	$ (7,666)	$ (11,831)
Net loss per share:
Basic and diluted	$ (0.18)	$ (0.33)	$ (0.55)	$ (0.86)
Weighted average number of common shares:
Basic and diluted	13,896	13,834	13,829	13,817
COMPREHENSIVE LOSS
Net loss	$ (2,534)	$ (4,541)	$ (7,666)	$ (11,831)
Foreign currency translation adjustments, net of income tax benefit (provision) of $50, $(79), $(44), and $254	(187)	148	165	(471)
Comprehensive loss	$ (2,721)	$ (4,393)	$ (7,501)	$ (12,302)

Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	9 Months Ended
	May 31, 2018	May 31, 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (7,666)	$ (11,831)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	7,725	5,046
Amortization of capitalized curriculum costs	3,923	2,683
Stock-based compensation expense	2,182	3,987
Deferred income taxes	(6,605)	(6,327)
Increase (reduction) in contingent consideration liabilities	789	(1,936)
Changes in assets and liabilities:
Decrease in accounts receivable, net	15,489	17,605
Decrease (increase) in inventories	(401)	1,491
Decrease in receivable from related party	540	1,420
Decrease (increase) in prepaid expenses and other assets	1,005	(1,720)
Decrease in accounts payable and accrued liabilities	(4,541)	(4,355)
Increase (decrease) in deferred revenue	(2,219)	7,197
Increase in income taxes payable/receivable	(564)	(1,321)
Decrease in other long-term liabilities	(1,065)	(279)
Net cash provided by operating activities	8,592	11,660
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	(4,981)	(5,126)
Curriculum development costs	(2,445)	(4,150)
Acquisition of business	(1,108)	(3,500)
Net cash used for investing activities	(8,534)	(12,776)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line of credit borrowings	71,107	7,811
Payments on line of credit borrowings	(59,619)	(7,239)
Proceeds from term notes payable financing		5,000
Principal payments on term notes payable	(4,687)	(3,750)
Principal payments on financing obligation	(1,378)	(1,226)
Purchases of common stock for treasury	(2,005)	(2,084)
Payment of contingent consideration liability	(1,188)
Proceeds from sales of common stock held in treasury	559	469
Net cash provided by (used for) financing activities	2,789	(1,019)
Effect of foreign currency exchange rates on cash and cash equivalents	3	(365)
Net increase (decrease) in cash and cash equivalents	2,850	(2,500)
Cash and cash equivalents at the beginning of the period	8,924	10,456
Cash and cash equivalents at end of the period	11,774	7,956
Supplemental disclosure of cash flow information:
Cash paid for income taxes	2,118	1,834
Cash paid for interest	1,947	1,847
Non-cash investing and financing activities:
Purchases of property and equipment financed by accounts payable	$ 1,344	417
Acquisition of intellectual property financed by accrued liabilities		$ 750

Basis Of Presentation

9 Months Ended

May 31, 2018

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. Our expertise extends to seven crucial areas: Leadership, Execution, Productivity, Trust, Educational Improvement, Sales Performance, and Customer Loyalty. 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.

In the training and consulting marketplace, we believe there are three important characteristics that distinguish us from our competitors.

World Class Content – Our content is principle-centered and based on natural laws of human behavior and effectiveness. When our content is applied consistently in an organization, we believe the culture of that organization will change to enable the organization to achieve their own great purposes. Our content is designed to build new skillsets, establish new mindsets, and provide enabling toolsets to our clients.

Breadth and Scalability of Delivery Options – We have a wide range of content delivery options, including: subscription offerings, which includes the All Access Pass (available in multiple languages), The Leader in Me membership, and other subscription offerings; intellectual property licenses; on-site training; training led through certified facilitators; on-line learning; blended learning; and organization-wide transformational processes, including consulting and coaching.

Global Capability – We have sales professionals in the United States and Canada who serve clients in the private sector and in governmental organizations; wholly owned subsidiaries in Australia, China, Japan, and the United Kingdom; and we contract with licensee partners who deliver our content and provide related services in over 150 other countries and territories around the world.

We are committed to, and measure ourselves by, our clients’ achievement of transformational results.

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, and The 4 Disciplines of Execution, and proprietary content in the areas of Execution, Sales Performance, Productivity, Educational Improvement, and Customer Loyalty. Our offerings are described in further detail at www.franklincovey.com.

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 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, 2017.

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management 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.

Our fiscal year ends on August 31 of each year. During fiscal 2017, our Board of Directors approved a change to our fiscal quarter ending dates from a modified 52/53-week calendar, in which quarterly periods ended on different dates from year-to-year, to the last day of the calendar month in each quarter. The change was made to improve comparability between fiscal periods. Beginning with the second quarter of fiscal 2017, our fiscal quarters end on the last day of November, February, and May. We do not believe that the change in quarter ending dates had a material impact on the comparability of financial results for the quarter or three quarters ended May 31, 2018 with the prior year.

Our sales primarily consist of training and consulting services. In fiscal 2017, we exited the publishing business in Japan, which significantly reduced our sales of tangible products in the first three quarters of fiscal 2018. Due to the immateriality of product and leasing sales (less than four percent of consolidated revenues during the first three quarters of 2018 combined) compared with our training and consulting sales, we have condensed our reported sales and cost of sales into one line for presentation purposes.

We reclassified the accretion of the discount on FC Organizational Products’ (Note 8) long-term receivables in the accompanying condensed consolidated statements of operations. The accretion of the discount was previously included with interest income and totaled $0.1 million for the three quarters ended May 31, 2017.

The results of operations for the quarter ended May 31, 2018 are not necessarily indicative of results expected for the entire fiscal year ending August 31, 2018, or for any future periods.

Accounting Pronouncements Issued and Adopted

In March 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-09, Compensation - Stock Compensation (Topic 718) - Improvements to Employee Share-Based Payment Accounting. The guidance in ASU 2016-09 simplifies several aspects of the accounting for stock-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification of items on the statement of cash flows. The guidance in ASU 2016-09 is effective for public companies’ annual periods, including interim periods within those fiscal years, beginning after December 15, 2016. On September 1, 2017, we adopted the provisions of ASU 2016-09. The adoption of this accounting standard did not have a material impact on our consolidated financial statements during the three quarters ended May 31, 2018.

Accounting Pronouncements Issued Not Yet Adopted

On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). This new standard was issued in conjunction with the International Accounting Standards Board (IASB) and is designed to create a single, principles-based process by which all businesses calculate revenue. The core principle of this standard is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The standard also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. The new standard replaces numerous individual, industry-specific revenue rules found in generally accepted accounting principles in the United States. We will adopt this standard on September 1, 2018, and apply the new guidance during interim periods within fiscal 2019. We plan to adopt ASU No. 2014-09 using the “modified retrospective” approach. Based upon our current analysis of ASU No. 2014-09, we do not believe the new standard will significantly change the recognition of revenue associated with the delivery of onsite presentations, facilitator material sales, international licensee royalty revenues, or the majority of our smaller revenue streams, such as shipping and handling revenues. These revenue streams currently comprise approximately three-fourths of our expected fiscal 2018 revenue.

However, due to the complex nature of the All Access Pass (AAP) and The Leader in Me membership, and the interrelationship of the goods and services promised in the contract, we have not yet completed our assessment of the nature of the performance obligations and whether they constitute obligations that are satisfied over time or at a point in time. We will recognize revenue when (or as) the performance obligations are satisfied, which is when (or as) the client obtains control of those assets. The Company currently records AAP and The Leader in Me membership revenues on a straight-line basis over the life of the underlying contract. We do not expect the adoption of ASU 2014-09 to have any impact on our operating cash flows.

In April 2016, the FASB issued ASU 2016-10, Revenue from Contracts with Customers (Topic 606) - Identifying Performance Obligations and Licensing. The guidance in ASU 2016-10 clarifies aspects of Topic 606 related to identifying performance obligations and the licensing implementation guidance, while retaining the related core principles for those areas. The effective date and transition requirements for ASU 2016-10 are the same as the effective date and transition requirements for Topic 606 (ASU 2014-09) discussed above. Please refer to the discussion in the preceding paragraph regarding the adoption of the new revenue recognition standards.

On February 25, 2016, the FASB issued ASU No. 2016-02, Leases. The new lease accounting standard is the result of a collaborative effort with the IASB (similar to the new revenue standard described above), although some differences remain between the two standards. This new standard will affect all entities that lease assets and will require lessees to recognize a lease liability and a right-of-use asset for all leases (except for short-term leases that have a duration of less than one year) as of the date on which the lessor makes the underlying asset available to the lessee. For lessors, accounting for leases is substantially the same as in prior periods. For public companies, the new lease standard is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early adoption is permitted for all entities. For leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, lessees and lessors must apply a modified retrospective transition approach. While we expect the adoption of this new standard will increase reported assets and liabilities, as of May 31, 2018, we have not yet determined the full impact that the adoption of ASU 2016-02 will have on our financial statements.

Fair Value Of Financial Instruments

9 Months Ended

May 31, 2018

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

NOTE 3 – FAIR VALUE OF FINANCIAL INSTRUMENTS

At May 31, 2018, the carrying value of our financial instruments approximated their fair values. The fair values of our contingent consideration liabilities from 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 valuation models described in our annual report on Form 10-K for the fiscal year ended August 31, 2017 were utilized during the current period (with updated estimates) to arrive at the estimated fair value of the contingent consideration liabilities on the reporting date. The fair value of the contingent consideration liabilities from the fiscal 2017 acquisitions of Robert Gregory Partners (RGP) and Jhana Education (Jhana) changed as follows during the three quarters ended May 31, 2018 (in thousands):



	Balance at		Change in				Balance at
	August 31, 2017		Fair Value		Payments		May 31, 2018
RGP Acquisition	$	913	$	583	$	-	$	1,496
Jhana Acquisition		6,052		206		(2,296)		3,962
	$	6,965	$	789	$	(2,296)	$	5,458

Approximately $1.0 million of the RGP and $0.8 million of the Jhana contingent consideration liabilities were recorded as components of accrued liabilities on our condensed consolidated balance sheet at May 31, 2018. The remainder of our contingent consideration liabilities are classified as other long-term liabilities. Due to the timing of the first $1.1 million of the Jhana contingent consideration payment (within 90 days of the acquisition date), the amount was classified as a component of investing activities on our condensed consolidated statement of cash flows for the three quarters ended May 31, 2018.

Adjustments to the fair value of our contingent consideration liabilities are included in selling, general, and administrative expense in the accompanying condensed consolidated statements of operations.

- 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

Stock-Based Compensation

9 Months Ended

May 31, 2018

Stock-Based Compensation [Abstract]

Stock-Based Compensation

NOTE 4 – STOCK-BASED COMPENSATION

The cost of our stock-based compensation plans is included in selling, general, and administrative expenses in the accompanying condensed consolidated statements of operations. The total cost of our stock-based compensation plans was as follows for the periods presented (in thousands):



		Quarter Ended			Three Quarters Ended
		May 31,		May 31,		May 31,		May 31,
		2018		2017		2018		2017
Performance awards	$	227	$	1,041	$	1,601	$	3,509
Unvested share awards		175		131		467		369
Employee stock purchase plan		44		38		114		94
Fully-vested share awards		-		-		-		15
	$	446	$	1,210	$	2,182	$	3,987

During the quarter and three quarters ended May 31, 2018, we issued 9,528 shares and 301,576 shares of our common stock to employees for stock-based compensation awards. Our stock-based compensation plans allow shares to be withheld to cover statutory income taxes if so elected by the award recipient. During the three quarters ended May 31, 2018, we withheld 104,699 shares of our common stock for statutory taxes on stock-based compensation awards that vested during fiscal 2018. No shares were withheld during the quarter ended May 31, 2018. The following is a description of the developments in our stock-based compensation plans during the quarter and three quarters ended May 31, 2018.

Performance Awards

On November 14, 2017, the Organization and Compensation Committee (the Compensation Committee) of the Board of Directors granted a new performance-based long-term incentive plan (LTIP) award to our executive officers and members of senior management. The fiscal 2018 LTIP award has three tranches, which consist of the following: 1) shares that vest after three years of service; 2) the achievement of certain levels of fiscal 2020 qualified adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA); and 3) fiscal 2020 subscription sales. Twenty-five percent of a participant’s award vests after three years of service, and the number of shares awarded in this tranche will not fluctuate based on financial measures. The number of shares granted in this tranche totals 42,883 shares. The remaining two tranches of the award are divided between the achievement of certain levels of Adjusted EBITDA and subscription sales recognized in fiscal 2020. The number of shares that will vest to participants for these two tranches is variable and may be 50 percent of the award (minimum award threshold) up to 200 percent of the participant’s award (maximum threshold). The maximum number of shares that may be awarded in connection with these tranches totals 257,300 shares.

The fiscal 2018 LTIP has a three-year life and expires on August 31, 2020.

Compensation expense recognized during the quarter and three quarters ended May 31, 2018, for performance awards includes expense related to awards granted in previous periods for which the performance conditions are probable of being achieved.

Unvested Share Awards

Our annual unvested share award granted to non-employee members of the Board of Directors is administered under the terms of the 2015 Omnibus Incentive Plan, 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 unvested award is granted in January (following the annual shareholders’ meeting) of each year. For the fiscal 2018 award, each eligible director received a whole-share grant equal to $100,000 with a one-year vesting period. Our unvested share activity during the three quarters ended May 31, 2018 consisted of the following:



			Weighted-Average
			Grant Date
	Number of		Fair Value
	Shares		Per Share
Unvested stock awards at
August 31, 2017	29,834	$	17.60
Granted	23,338		30.00
Forfeited	-		-
Vested	(29,834)		17.60
Unvested stock awards at
May 31, 2018	23,338	$	30.00

At May 31, 2018, there was approximately $0.4 million of unrecognized compensation expense remaining on the fiscal 2018 Board of Director unvested share award.

Employee Stock Purchase Plan

We have an employee stock purchase plan (ESPP) 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, 2018, we issued 9,528 shares and 30,619 shares of our common stock to participants in the ESPP.

At the annual meeting of shareholders held on January 26, 2018, our shareholders approved the Franklin Covey Co. 2017 Employee Stock Purchase Plan (the Plan). The Plan replaced the Franklin Covey Co. 2004 Employee Stock Purchase Plan, which previously expired. The Plan authorized an additional 1,000,000 shares, subject to certain adjustments, of our common stock for issuance to ESPP participants. For further information regarding the Plan, including the full text of the Plan, please refer to our definitive Proxy Statement as filed with the SEC on December 22, 2017.

Loss Per Share

9 Months Ended

May 31, 2018

Loss Per Share [Abstract]

Loss Per Share

NOTE 6 – LOSS PER SHARE

The following schedule shows the calculation of loss 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,
		2018		2017		2018		2017
Numerator for basic and
diluted loss per share:
Net loss	$	(2,534)	$	(4,541)	$	(7,666)	$	(11,831)

Denominator for basic and
diluted loss per share:
Basic weighted average shares
outstanding		13,896		13,834		13,829		13,817
Effect of dilutive securities:
Stock options and other
stock-based awards		-		-		-		-
Diluted weighted average
shares outstanding		13,896		13,834		13,829		13,817

EPS Calculations:
Net loss per share:
Basic and diluted	$	(0.18)	$	(0.33)	$	(0.55)	$	(0.86)

Since we incurred a net loss for the quarter and three quarters ended May 31, 2018, no potentially dilutive securities are included in the calculation of diluted loss per share because such effect would be anti-dilutive. The number of dilutive stock options and other stock-based awards for the quarter ended May 31, 2018 would have been approximately 202,000 shares.

Segment Information

9 Months Ended

May 31, 2018

Segment Information [Abstract]

Segment Information

NOTE 7 – SEGMENT INFORMATION

Our sales are primarily comprised of training and consulting services. Consistent with changes during the first quarter of fiscal 2018 in our organization designed to promote the sale of subscription-based offerings, our internal reporting structure was revised and is now comprised of three operating segments and a corporate services group. The former Strategic Markets operating segment was absorbed by the Direct Office operating segment since their target customers and sales methodologies were essentially identical. The remaining operating segments were determined to be reportable segments under the applicable accounting guidance. The following is a brief description of our reportable segments:

Direct Offices – This segment includes our sales personnel that serve the United States and Canada; our international sales offices located in Japan, China, the United Kingdom, and Australia; our governmental sales channel; and our public program operations.

Education Practice – This group includes our domestic and international Education practice operations, which are focused on sales to educational institutions.

International Licensees – This segment is primarily comprised of our international licensees’ royalty revenues.

Corporate and Other – Our corporate and other information includes leasing operations, shipping and handling revenues, and certain corporate administrative expenses.

We determined that the Company’s chief operating decision maker continues to be the Chief Executive Officer (CEO), 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. For reporting purposes, our consolidated Adjusted EBITDA may be calculated as our income or loss from operations excluding stock-based compensation, depreciation expense, amortization expense, and certain other charges such as restructuring charges and adjustments for changes in the fair value of contingent liabilities from business acquisitions. Prior period segment financial information was reclassified to conform to our current reporting and operating structure.

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, 2018		Customers		Gross Profit		EBITDA

Direct offices	$	36,331	$	26,444	$	2,624
Education practice		9,235		5,501		(723)
International licensees		3,543		2,735		1,672
Total		49,109		34,680		3,573
Corporate and eliminations		1,352		236		(2,985)
Consolidated	$	50,461	$	34,916	$	588

Quarter Ended
May 31, 2017

Direct offices	$	30,075	$	18,626	$	679
Education practice		8,596		5,193		341
International licensees		3,822		2,964		1,714
Total		42,493		26,783		2,734
Corporate and eliminations		1,258		558		(2,752)
Consolidated	$	43,751	$	27,341	$	(18)

Three Quarters Ended
May 31, 2018

Direct offices	$	103,802	$	75,886	$	7,467
Education practice		27,418		16,094		(2,273)
International licensees		9,909		7,601		4,252
Total		141,129		99,581		9,446
Corporate and eliminations		3,810		947		(8,922)
Consolidated	$	144,939	$	100,528	$	524

Three Quarters Ended
May 31, 2017

Direct offices	$	86,595	$	56,425	$	413
Education practice		25,187		14,625		19
International licensees		10,191		7,877		4,607
Total		121,973		78,927		5,039
Corporate and eliminations		3,761		1,753		(8,243)
Consolidated	$	125,734	$	80,680	$	(3,204)

As a result of the change in our segments, all of the goodwill previously included in the Strategic Markets segment was reassigned to the Direct Office segment. As of May 31, 2018, our goodwill balances were $16.8 million in the Direct Offices segment, $2.3 million in the Education Practice segment, and $5.1 million in the International Licensee segment. In conjunction with the change in reportable segments, we evaluated goodwill in the Direct Offices and Strategic Markets reportable segments for impairment, both before and after the segment change, and determined that goodwill was not impaired.

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



	Quarter Ended				Three Quarters Ended
		May 31,		May 31,		May 31,		May 31,
		2018		2017		2018		2017
Segment Adjusted EBITDA	$	3,573	$	2,734	$	9,446	$	5,039
Corporate expenses		(2,985)		(2,752)		(8,922)		(8,243)
Consolidated Adjusted EBITDA		588		(18)		524		(3,204)
Stock-based compensation expense		(446)		(1,210)		(2,182)		(3,987)
Reduction (increase) in contingent
consideration liabilities		(136)		-		(789)		1,936
Costs to exit Japan publishing business		-		(1,792)		-		(1,792)
Restructuring costs		-		(1,335)		-		(1,335)
Contract termination costs		-		-		-		(1,500)
China office start-up costs		-		-		-		(505)
ERP system implementation costs		-		(327)		(855)		(920)
Other expenses		-		(25)		-		(25)
Depreciation		(1,267)		(949)		(3,547)		(2,743)
Amortization		(1,326)		(835)		(4,117)		(2,278)
Loss from operations		(2,587)		(6,491)		(10,966)		(16,353)
Interest income		35		52		94		181
Interest expense		(738)		(618)		(1,979)		(1,861)
Discount accretion on related
party receivable		202		34		258		129
Loss before income taxes		(3,088)		(7,023)		(12,593)		(17,904)
Income tax benefit		554		2,482		4,927		6,073
Net loss	$	(2,534)	$	(4,541)	$	(7,666)	$	(11,831)

Basis Of Presentation (Policy)

9 Months Ended

May 31, 2018

Basis Of Presentation [Abstract]

General

In the training and consulting marketplace, we believe there are three important characteristics that distinguish us from our competitors.

We are committed to, and measure ourselves by, our clients’ achievement of transformational results.

The results of operations for the quarter ended May 31, 2018 are not necessarily indicative of results expected for the entire fiscal year ending August 31, 2018, or for any future periods.

Accounting Pronouncements Issued And Adopted

Accounting Pronouncements Issued and Adopted

Accounting Pronouncements Issued Not Yet Adopted

Stock-Based Compensation (Tables)

9 Months Ended

May 31, 2018

Stock-Based Compensation [Abstract]

Total Cost Of Stock-Based Compensation



		Quarter Ended			Three Quarters Ended
		May 31,		May 31,		May 31,		May 31,
		2018		2017		2018		2017
Performance awards	$	227	$	1,041	$	1,601	$	3,509
Unvested share awards		175		131		467		369
Employee stock purchase plan		44		38		114		94
Fully-vested share awards		-		-		-		15
	$	446	$	1,210	$	2,182	$	3,987

Unvested Share Awards



			Weighted-Average
			Grant Date
	Number of		Fair Value
	Shares		Per Share
Unvested stock awards at
August 31, 2017	29,834	$	17.60
Granted	23,338		30.00
Forfeited	-		-
Vested	(29,834)		17.60
Unvested stock awards at
May 31, 2018	23,338	$	30.00

Loss Per Share (Tables)

9 Months Ended

May 31, 2018

Loss Per Share [Abstract]

Computation Of Loss Per Share



	Quarter Ended				Three Quarters Ended
		May 31,		May 31,		May 31,		May 31,
		2018		2017		2018		2017
Numerator for basic and
diluted loss per share:
Net loss	$	(2,534)	$	(4,541)	$	(7,666)	$	(11,831)

Denominator for basic and
diluted loss per share:
Basic weighted average shares
outstanding		13,896		13,834		13,829		13,817
Effect of dilutive securities:
Stock options and other
stock-based awards		-		-		-		-
Diluted weighted average
shares outstanding		13,896		13,834		13,829		13,817

EPS Calculations:
Net loss per share:
Basic and diluted	$	(0.18)	$	(0.33)	$	(0.55)	$	(0.86)

Segment Information (Tables)

9 Months Ended

May 31, 2018

Segment Information [Abstract]

Schedule Of Segment Operations



		Sales to
Quarter Ended		External				Adjusted
May 31, 2018		Customers		Gross Profit		EBITDA

Direct offices	$	36,331	$	26,444	$	2,624
Education practice		9,235		5,501		(723)
International licensees		3,543		2,735		1,672
Total		49,109		34,680		3,573
Corporate and eliminations		1,352		236		(2,985)
Consolidated	$	50,461	$	34,916	$	588

Quarter Ended
May 31, 2017

Direct offices	$	30,075	$	18,626	$	679
Education practice		8,596		5,193		341
International licensees		3,822		2,964		1,714
Total		42,493		26,783		2,734
Corporate and eliminations		1,258		558		(2,752)
Consolidated	$	43,751	$	27,341	$	(18)

Three Quarters Ended
May 31, 2018

Direct offices	$	103,802	$	75,886	$	7,467
Education practice		27,418		16,094		(2,273)
International licensees		9,909		7,601		4,252
Total		141,129		99,581		9,446
Corporate and eliminations		3,810		947		(8,922)
Consolidated	$	144,939	$	100,528	$	524

Three Quarters Ended
May 31, 2017

Direct offices	$	86,595	$	56,425	$	413
Education practice		25,187		14,625		19
International licensees		10,191		7,877		4,607
Total		121,973		78,927		5,039
Corporate and eliminations		3,761		1,753		(8,243)
Consolidated	$	125,734	$	80,680	$	(3,204)

Reconciliation Of Adjusted EBITDA



	Quarter Ended				Three Quarters Ended
		May 31,		May 31,		May 31,		May 31,
		2018		2017		2018		2017
Segment Adjusted EBITDA	$	3,573	$	2,734	$	9,446	$	5,039
Corporate expenses		(2,985)		(2,752)		(8,922)		(8,243)
Consolidated Adjusted EBITDA		588		(18)		524		(3,204)
Stock-based compensation expense		(446)		(1,210)		(2,182)		(3,987)
Reduction (increase) in contingent
consideration liabilities		(136)		-		(789)		1,936
Costs to exit Japan publishing business		-		(1,792)		-		(1,792)
Restructuring costs		-		(1,335)		-		(1,335)
Contract termination costs		-		-		-		(1,500)
China office start-up costs		-		-		-		(505)
ERP system implementation costs		-		(327)		(855)		(920)
Other expenses		-		(25)		-		(25)
Depreciation		(1,267)		(949)		(3,547)		(2,743)
Amortization		(1,326)		(835)		(4,117)		(2,278)
Loss from operations		(2,587)		(6,491)		(10,966)		(16,353)
Interest income		35		52		94		181
Interest expense		(738)		(618)		(1,979)		(1,861)
Discount accretion on related
party receivable		202		34		258		129
Loss before income taxes		(3,088)		(7,023)		(12,593)		(17,904)
Income tax benefit		554		2,482		4,927		6,073
Net loss	$	(2,534)	$	(4,541)	$	(7,666)	$	(11,831)

Stock-Based Compensation (Narrative) (Details)			3 Months Ended	9 Months Ended
Stock-Based Compensation (Narrative) (Details)	Jan. 26, 2018 shares	Nov. 14, 2017 item shares	May 31, 2018 USD ($) shares	May 31, 2018 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued under terms of the award			9,528	301,576
Number of shares reduced, withheld for minimum statutory taxes			0	104,699
Fiscal 2018 Long Term Incentive Plan Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of tranches \| item		3
Life of awards		3 years
Expiration date		Aug. 31, 2020
Unvested Share Awards [Member] \| Director [Member] \| Fiscal 2018 Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Whole-share grant per eligible director \| $				$ 100,000
Vesting period of awards				1 year
Unvested Share Awards [Member] \| Board of Directors [Member] \| Fiscal 2018 Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense \| $			$ 400,000	$ 400,000
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			9,528	30,619
2017 Employee Stock Purchase 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 [Member] \| Fiscal 2018 Long Term Incentive Plan Award [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
New shares granted		42,883
Percent of shares plan participants are entitled to		25.00%
Vesting period of awards		3 years
Tranche Two and Three [Member] \| Fiscal 2018 Long Term Incentive Plan Award [Member] \| Minimum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of performance award to be granted		50.00%
Tranche Two and Three [Member] \| Fiscal 2018 Long Term Incentive Plan Award [Member] \| Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of performance award to be granted		200.00%
New shares granted		257,300

Stock-Based Compensation (Unvested Share Awards) (Details) - Unvested Share Awards [Member]	9 Months Ended
	May 31, 2018 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested stock awards at August 31, 2017, Number of Shares \| shares	29,834
Granted, Number of Shares \| shares	23,338
Forfeited, Number of Shares \| shares
Vested, Number of Shares \| shares	(29,834)
Unvested stock awards at May 31, 2018, Number of Shares \| shares	23,338
Unvested stock awards at August 31, 2017, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	$ 17.60
Granted, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	30.00
Forfeited, Weighted-Average Grant Date Fair Value Per Share \| $ / shares
Vested, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	17.60
Unvested stock awards at May 31, 2018, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	$ 30.00

Segment Information (Reconciliation Of Adjusted EBITDA) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	May 31, 2018	May 31, 2017	May 31, 2018	May 31, 2017
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	$ 588	$ (18)	$ 524	$ (3,204)
Stock-based compensation expense	(446)	(1,210)	(2,182)	(3,987)
Reduction (increase) in contingent consideration liabilities	(136)		(789)	1,936
Costs to exit Japan publishing business		(1,792)		(1,792)
Restructuring costs		(1,335)		(1,335)
Contract termination costs				(1,500)
China office start-up costs				(505)
ERP system implementation costs		(327)	(855)	(920)
Other expenses		(25)		(25)
Depreciation	(1,267)	(949)	(3,547)	(2,743)
Amortization	(1,326)	(835)	(4,117)	(2,278)
Loss from operations	(2,587)	(6,491)	(10,966)	(16,353)
Interest income	35	52	94	181
Interest expense	(738)	(618)	(1,979)	(1,861)
Discount accretion on related party receivable	202	34	258	129
Loss before income taxes	(3,088)	(7,023)	(12,593)	(17,904)
Income tax benefit	554	2,482	4,927	6,073
Net loss	(2,534)	(4,541)	(7,666)	(11,831)
Operating Segments [Member]
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	3,573	2,734	9,446	5,039
Corporate And Eliminations [Member]
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	$ (2,985)	$ (2,752)	$ (8,922)	$ (8,243)

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	May 31, 2018	Aug. 31, 2017
Condensed Consolidated Balance Sheets [Abstract]
Allowance for doubtful accounts	$ 2,975	$ 2,310
Common stock, par value	$ 0.05	$ 0.05
Common stock, shares authorized	40,000,000	40,000,000
Common stock, shares issued	27,056,000	27,056,000
Treasury stock, shares	13,169,000	13,414,000

Income Taxes	9 Months Ended
Income Taxes	May 31, 2018
Income Taxes [Abstract]
Income Taxes	NOTE 5 – INCOME TAXES The Tax Cut and Jobs Act (the 2017 Tax Act) was signed into law on December 22, 2017. The 2017 Tax Act significantly revises the U.S. corporate income tax code by, among other things, lowering the statutory corporate tax rate from 35 percent to 21 percent; eliminating certain deductions; imposing a mandatory one-time transition tax, or deemed repatriation tax, on accumulated earnings of foreign subsidiaries as of 2017 that were previously tax deferred; introducing new tax regimes; and changing how foreign earnings are subject to U.S. tax. Since we have an August 31 fiscal year end, the lower corporate income tax rate will be phased in, resulting in a U.S. statutory federal rate of 25.7 percent for fiscal 2018 and 21 percent rate for subsequent fiscal years. Other provisions of the 2017 Tax Act will not be effective for us until fiscal 2019, including limitations on the deductibility of interest and executive compensation as well as anti-deferral provisions on Global Intangible Low-Taxed Income. Due to the complexities of implementing the provisions of the 2017 Tax Act, the SEC staff issued Staff Accounting Bulletin 118, which provides guidance on accounting for tax effects of the 2017 Tax Act and permits a measurement period, not to exceed one year from the enactment date, for companies to complete the required analyses and accounting. During the second quarter of fiscal 2018, we recorded a one-time income tax benefit of $1.2 million as a provisional estimate of the effects of the 2017 Tax Act. The benefit resulted primarily from the re-measurement of net deferred tax liabilities at the lower enacted U.S. federal corporate tax rate. We did not establish a provisional valuation allowance against our foreign tax credit carryforward deferred tax asset, notwithstanding the reduced U.S. tax rate. The 2017 Tax Act allows us to increase our computed foreign-source income, essentially offsetting the impact of the reduced U.S. tax rate on our ability to use foreign tax credit carryforwards in the future. We did not record any provisional income tax expense related to the deemed repatriation of accumulated earnings from our foreign subsidiaries. We expect foreign tax credits to fully offset the deemed repatriation tax. As we complete our analysis of the 2017 Tax Act, finalize our fiscal 2017 federal and state income tax returns, collect and prepare necessary data, and interpret any additional guidance issued by the U.S. Treasury Department, the Internal Revenue Service, and other standard-setting bodies, we may make adjustments to the provisional tax amounts. Those adjustments may materially impact our provision or benefit for income taxes in the period in which the adjustments are made.

Investment In FC Organizational Products	9 Months Ended
Investment In FC Organizational Products	May 31, 2018
Investment In FC Organizational Products [Abstract]
Investment In FC Organizational Products	NOTE 8 – INVESTMENT IN FC ORGANIZATIONAL PRODUCTS We own a 19.5 percent interest in FC Organizational Products (FCOP), an entity that purchased substantially all of our consumer solution business unit assets in fiscal 2008 for the purpose of selling planners and related organizational products under a comprehensive licensing agreement. Due to significant operating losses incurred after the establishment of FCOP, we reconsidered whether FCOP was a variable interest entity as defined under FASC 810, and determined that FCOP was a variable interest entity. We further determined that we are not the primary beneficiary of FCOP because we do not have the ability to direct the activities that most significantly impact FCOP’s economic performance, which primarily consist of the day-to-day sale of planning products and related accessories, and we do not have an obligation to absorb losses or the right to receive benefits from FCOP that could potentially be significant. We account for our investment in FCOP using the equity method of accounting. However, we have not recorded our share of FCOP’s losses in the accompanying condensed consolidated statements of operations because we have impaired and written off investment balances in previous periods, as defined within the applicable accounting guidance, in excess of our share of FCOP’s losses through May 31, 2018. The operations of FCOP are primarily financed by the sale of planning products and accessories in the normal course of business. The majority of FCOP’s sales and cash flows are seasonal and occur between October and January. Accordingly, we generally receive payment on outstanding receivables during our second and third quarters of each fiscal year. At May 31, 2018 we had $1.2 million (net of $0.4 million discount) receivable from FCOP, compared with $1.7 million (net of $0.7 million discount) receivable at August 31, 2017. These receivables are classified as components of current and long-term assets on our condensed consolidated balance sheets based on expected payment dates. During the second quarter of fiscal 2018, we received $1.1 million of cash from FCOP for payment on these receivables.

Basis Of Presentation (Narrative) (Details) $ in Thousands	3 Months Ended		9 Months Ended
Basis Of Presentation (Narrative) (Details) $ in Thousands	May 31, 2018 USD ($) country	May 31, 2017 USD ($)	May 31, 2018 USD ($) country item	May 31, 2017 USD ($)
Business Acquisition [Line Items]
Number of areas of expertise			7
Number of important distinguishing characteristics from competitors			3
Discount accretion on related party receivable \| $	$ 202	$ 34	$ 258	$ 129
Minimum [Member]
Business Acquisition [Line Items]
Number of countries in which entity operates \| country	150		150

Inventories (Components Of Inventories) (Details) - USD ($) $ in Thousands	May 31, 2018	Aug. 31, 2017
Inventories [Abstract]
Finished goods	$ 3,714	$ 3,306
Raw materials	33	47
Inventories	$ 3,747	$ 3,353

Fair Value Of Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands	9 Months Ended
	May 31, 2018	Aug. 31, 2017
Contingent consideration	$ 5,458	$ 6,965
Robert Gregory Partners, LLC [Member]
Contingent consideration	1,496	913
Robert Gregory Partners, LLC [Member] \| Accrued Liabilities [Member]
Contingent consideration	1,000
Jhana Education [Member]
Contingent consideration	3,962	$ 6,052
Contingent consideration payment classified as investing activities	1,100
Jhana Education [Member] \| Accrued Liabilities [Member]
Contingent consideration	$ 800

Income Taxes (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
Income Taxes (Narrative) (Details) - USD ($) $ in Millions	Feb. 28, 2018	Aug. 31, 2018	Dec. 31, 2017
Income Taxes [Line Items]
Federal statutory income tax rate			35.00%
Provisional tax benefit	$ 1.2
Scenario, Forecast [Member]
Income Taxes [Line Items]
Federal statutory income tax rate		25.70%
Scenario, Plan [Member]
Income Taxes [Line Items]
Federal statutory income tax rate			21.00%

Loss Per Share (Narrative) (Details) - shares	3 Months Ended	9 Months Ended
Loss Per Share (Narrative) (Details) - shares	May 31, 2018	May 31, 2018
Loss Per Share [Abstract]
Potentially dilutive securities were included in the calculation of diluted loss per share	0	0
Dilutive securities that would have been included in the computation of diluted EPS	202,000

Segment Information (Narrative) (Details) $ in Thousands	9 Months Ended
Segment Information (Narrative) (Details) $ in Thousands	May 31, 2018 USD ($) item	Aug. 31, 2017 USD ($)
Segment Information [Line Items]
Number of operating segments \| item	3
Number of corporate services group \| item	1
Goodwill	$ 24,220	$ 24,220
Direct Offices [Member]
Segment Information [Line Items]
Goodwill	16,800
Education Practice [Member]
Segment Information [Line Items]
Goodwill	2,300
International Licensees [Member]
Segment Information [Line Items]
Goodwill	$ 5,100