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Document And Entity Information - shares	6 Months Ended
Document And Entity Information - shares	Feb. 28, 2019	Mar. 31, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Feb. 28, 2019
Amendment Flag	false
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2019
Entity Registrant Name	FRANKLIN COVEY CO
Entity Trading Symbol	fc
Entity Central Index Key	0000886206
Current Fiscal Year End Date	--08-31
Entity Filer Category	Accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		13,963,616

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Feb. 28, 2019	Aug. 31, 2018
Current assets:
Cash and cash equivalents	$ 13,108	$ 10,153
Accounts receivable, less allowance for doubtful accounts of $4,185 and $3,555	50,591	71,914
Inventories	2,840	3,160
Income taxes receivable		179
Prepaid expenses and other current assets	12,879	14,757
Total current assets	79,418	100,163
Property and equipment, net	19,725	21,401
Intangible assets, net	50,146	51,934
Goodwill	24,220	24,220
Deferred income tax assets	5,652	3,222
Other long-term assets	11,015	12,935
Total assets	190,176	213,875
Current liabilities:
Current portion of term notes payable	7,813	10,313
Current portion of financing obligation	2,211	2,092
Accounts payable	7,933	9,790
Income taxes payable	107
Deferred revenue	45,209	51,888
Accrued liabilities	16,074	20,761
Total current liabilities	79,347	94,844
Line of credit	8,376	11,337
Term notes payable, less current portion	1,875	2,500
Financing obligation, less current portion	17,844	18,983
Other liabilities	7,490	5,501
Deferred income tax liabilities	210	210
Total liabilities	115,142	133,375
Shareholders' equity:
Common stock, $.05 par value; 40,000 shares authorized, 27,056 shares issued	1,353	1,353
Additional paid-in capital	212,960	211,280
Retained earnings	55,552	63,569
Accumulated other comprehensive income	470	341
Treasury stock at cost, 13,109 shares and 13,159 shares	(195,301)	(196,043)
Total shareholders' equity	75,034	80,500
Total liabilities and shareholders' equity	$ 190,176	$ 213,875

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands	Feb. 28, 2019	Aug. 31, 2018
Condensed Consolidated Balance Sheets [Abstract]
Allowance for doubtful accounts	$ 4,185	$ 3,555
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	13,109,000	13,159,000

Condensed Consolidated Statements Of Operations And Statements Of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2019	Feb. 28, 2018	Feb. 28, 2019	Feb. 28, 2018
Condensed Consolidated Statements Of Operations And Statements Of Comprehensive Loss [Abstract]
Net sales	$ 50,356	$ 46,547	$ 104,185	$ 94,479
Cost of sales	14,990	13,803	32,037	28,867
Gross profit	35,366	32,744	72,148	65,612
Selling, general, and administrative	35,925	35,097	70,568	68,921
Depreciation	1,697	1,379	3,251	2,280
Amortization	1,300	1,395	2,538	2,791
Loss from operations	(3,556)	(5,127)	(4,209)	(8,380)
Interest income	9	25	22	59
Interest expense	(623)	(692)	(1,255)	(1,240)
Discount accretion on related party receivable	243	29	258	56
Loss before income taxes	(3,927)	(5,765)	(5,184)	(9,505)
Income tax benefit	410	3,025	310	4,373
Net loss	$ (3,517)	$ (2,740)	$ (4,874)	$ (5,132)
Net loss per share:
Basic and diluted	$ (0.25)	$ (0.20)	$ (0.35)	$ (0.37)
Weighted average number of common shares:
Basic and diluted	13,937	13,867	13,927	13,796
COMPREHENSIVE LOSS
Net loss	$ (3,517)	$ (2,740)	$ (4,874)	$ (5,132)
Foreign currency translation adjustments, net of income tax benefit (provision) of $(11), $(136), $0, and $(94)	438	429	129	352
Comprehensive loss	$ (3,079)	$ (2,311)	$ (4,745)	$ (4,780)

Condensed Consolidated Statements Of Operations And Statements Of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2019	Feb. 28, 2018	Feb. 28, 2019	Feb. 28, 2018
Condensed Consolidated Statements Of Operations And Statements Of Comprehensive Loss [Abstract]
Foreign currency translation adjustments, tax	$ (11)	$ (136)	$ 0	$ (94)

Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Feb. 28, 2019	Feb. 28, 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (4,874)	$ (5,132)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	5,789	5,071
Amortization of capitalized curriculum costs	2,856	2,560
Stock-based compensation expense	1,989	1,736
Deferred income taxes	(1,402)	(5,358)
Change in fair value of contingent consideration liabilities	76	652
Changes in assets and liabilities:
Decrease in accounts receivable, net	21,197	17,911
Decrease (increase) in inventories	402	(157)
Decrease in prepaid expenses and other assets	2,425	1,144
Decrease in accounts payable and accrued liabilities	(6,298)	(2,310)
Decrease in deferred revenue	(8,842)	(5,388)
Increase (decrease) in income taxes payable/receivable	214	(288)
Decrease in other long-term liabilities	(182)	(1,074)
Net cash provided by operating activities	13,350	9,367
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	(2,195)	(4,288)
Curriculum development costs	(1,256)	(2,185)
Acquisition of business, net of cash acquired	(32)	(1,108)
Net cash used for investing activities	(3,483)	(7,581)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line of credit borrowings	46,032	47,047
Payments on line of credit borrowings	(48,993)	(41,505)
Principal payments on term notes payable	(3,125)	(3,125)
Principal payments on financing obligation	(1,020)	(910)
Purchases of common stock for treasury	(12)	(2,005)
Payment of contingent consideration liabilities	(301)	(44)
Proceeds from sales of common stock held in treasury	444	348
Net cash used for financing activities	(6,975)	(194)
Effect of foreign currency exchange rates on cash and cash equivalents	63	244
Net increase in cash and cash equivalents	2,955	1,836
Cash and cash equivalents at the beginning of the period	10,153	8,924
Cash and cash equivalents at end of the period	13,108	10,760
Supplemental disclosure of cash flow information:
Cash paid for income taxes	831	1,156
Cash paid for interest	1,276	1,274
Non-cash investing and financing activities:
Purchases of property and equipment financed by accounts payable	369	$ 233
Consideration for business acquisition from liabilities of acquiree	$ 798

Consolidated Statements Of Changes In Equity - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Treasury Stock [Member]	Total
Beginning balance, shares at Aug. 31, 2017	27,056				(13,414)
Beginning balance at Aug. 31, 2017	$ 1,353	$ 212,484	$ 69,456	$ 667	$ (198,895)
Issuance of common stock from treasury, shares					256
Issuance of common stock from treasury		(3,600)			$ 3,758
Purchase of treasury shares, shares					(103)
Purchase of treasury shares					$ (1,968)
Stock-based compensation		956
Cumulative translation adjustments				(77)
Net loss			(2,392)
Ending balance, shares at Nov. 30, 2017	27,056				(13,261)
Ending balance at Nov. 30, 2017	$ 1,353	209,840	67,064	590	$ (197,105)
Beginning balance, shares at Aug. 31, 2017	27,056				(13,414)
Beginning balance at Aug. 31, 2017	$ 1,353	212,484	69,456	667	$ (198,895)
Cumulative translation adjustments						$ 352
Net loss						(5,132)
Ending balance, shares at Feb. 28, 2018	27,056				(13,179)
Ending balance at Feb. 28, 2018	$ 1,353	210,007	64,324	1,019	$ (196,339)
Beginning balance, shares at Nov. 30, 2017	27,056				(13,261)
Beginning balance at Nov. 30, 2017	$ 1,353	209,840	67,064	590	$ (197,105)
Issuance of common stock from treasury, shares					61
Issuance of common stock from treasury		(264)			$ 456
Purchase of treasury shares, shares					(2)
Purchase of treasury shares					$ (38)
Stock-based compensation		779
Restricted stock award, shares					23
Restricted stock award		(348)			$ 348
Cumulative translation adjustments				429		429
Net loss			(2,740)			(2,740)
Ending balance, shares at Feb. 28, 2018	27,056				(13,179)
Ending balance at Feb. 28, 2018	$ 1,353	210,007	64,324	1,019	$ (196,339)
Beginning balance, shares at Aug. 31, 2018	27,056				(13,159)
Beginning balance at Aug. 31, 2018	$ 1,353	211,280	63,569	341	$ (196,043)	80,500
Issuance of common stock from treasury, shares					11
Issuance of common stock from treasury		64			$ 166
Purchase of treasury shares					$ (7)
Stock-based compensation		946
Cumulative translation adjustments				(309)
Net loss			(1,357)
Ending balance, shares at Nov. 30, 2018	27,056				(13,148)
Ending balance at Nov. 30, 2018	$ 1,353	212,290	59,069	32	$ (195,884)
Beginning balance, shares at Aug. 31, 2018	27,056				(13,159)
Beginning balance at Aug. 31, 2018	$ 1,353	211,280	63,569	341	$ (196,043)	80,500
Cumulative translation adjustments						129
Net loss						(4,874)
Ending balance, shares at Feb. 28, 2019	27,056				(13,109)
Ending balance at Feb. 28, 2019	$ 1,353	212,960	55,552	470	$ (195,301)	75,034
Cumulative effect of accounting change			(3,143)
Beginning balance, shares at Nov. 30, 2018	27,056				(13,148)
Beginning balance at Nov. 30, 2018	$ 1,353	212,290	59,069	32	$ (195,884)
Issuance of common stock from treasury, shares					11
Issuance of common stock from treasury		53			$ 162
Purchase of treasury shares					$ (5)
Stock-based compensation		1,043
Restricted stock award, shares					28
Restricted stock award		(426)			$ 426
Cumulative translation adjustments				438		438
Net loss			(3,517)			(3,517)
Ending balance, shares at Feb. 28, 2019	27,056				(13,109)
Ending balance at Feb. 28, 2019	$ 1,353	$ 212,960	$ 55,552	$ 470	$ (195,301)	$ 75,034

Basis Of Presentation

6 Months Ended

Feb. 28, 2019

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, the United Kingdom and new subsidiaries in Germany, Switzerland, and Austria; 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 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 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, 2018.

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 and our fiscal quarters end on the last day of November, February, and May of each year.

The results of operations for the quarter and two quarters ended February 28, 2019 are not necessarily indicative of results expected for the entire fiscal year ending August 31, 2019, or for any future periods.

Accounting Pronouncements Issued and Adopted

In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (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 new standard replaces numerous individual, industry-specific revenue rules found in generally accepted accounting principles in the United States. We adopted ASU No. 2014-09 on September 1, 2018 using the “modified retrospective” approach. Under this transition method, we applied the new standard to contracts that were not completed as of the adoption date and recognized a cumulative effect adjustment which reduced our retained earnings by $4.1 million ($3.1 million, net of tax) on September 1, 2018, which primarily consisted of initial licensing fees on international locations. The comparative prior period information has not been restated and continues to be presented according to accounting standards for revenue recognition in effect during the periods presented.

The primary impact of ASU No. 2014-09 on our revenue recognition policies is a change in the way we account for our initial license fee associated with licensing an international location. The Company previously recorded the non-refundable initial license fee from licensing an international location as revenue at the time the license period begins if all other revenue requirements had been met. However, under Topic 606, the Company will recognize revenue on the upfront fees over the duration of the contract.

Under Topic 606, we will account for the All Access Pass (AAP) as a single performance obligation and recognize the associated transaction price on a straight-line basis over the term of the underlying contract. This determination was reached after considering that our web-based functionality and content, in combination with our intellectual property, each represent inputs that transform into a combined output that represents the intended outcome of the AAP, which is to provide a continuously accessible, customized, and dynamic learning and development solution only accessible through the AAP platform.

We do not expect the accounting for fulfillment costs or costs incurred to obtain a contract to be materially affected in any period due to the adoption of ASU 2014-09. While we do not believe the adoption of ASU 2014-09 will materially impact our annual financial statements, the change in the timing of revenue recognition of certain contracts could result in significant quarter-to-quarter fluctuations in revenue. See Note 2 for further details regarding our revenue recognition accounting policies under Topic 606.

The cumulative after-tax effects of the changes made to our consolidated balance sheet from the adoption of Topic 606 were as follows (in thousands):




		August 31,		ASC 606		September 1,
		2018		Adjustments		2018
Assets:
Other current assets	$	10,893	$	109	$	11,002
Deferred income tax assets		3,222		1,005		4,227

Liabilities and Shareholders' Equity:
Deferred revenue		51,888		2,008		53,896
Other liabilities		5,501		2,249		7,750
Retained earnings		63,569		(3,143)		60,426

The following line items in our condensed consolidated statement of operations were impacted by the adoption of the new standard for the quarter ended February 28, 2019 (in thousands, except per-share data):



		February 28,		February 28,
		2019		2019		Impact of
		As Reported		Without ASC 606		ASC 606
Revenue	$	50,356	$	49,895	$	461
Cost of sales		14,990		14,990		-
Selling, general, and administrative		35,925		35,914		11
Income tax benefit		410		517		(107)
Net loss		(3,517)		(3,860)		343

Net loss per share:
Basic and diluted	$	(0.25)	$	(0.28)

The following line items in our condensed consolidated statements of operations were impacted by the adoption of Topic 606 for the two quarters ended February 28, 2019 (in thousands, except per-share data):



		Two Quarters		Two Quarters
		Ended February 28,		Ended February 28,
		2019		2019		Impact of
		As Reported		Without ASC 606		ASC 606
Revenue	$	104,185	$	102,653	$	1,532
Cost of sales		32,037		32,037		-
Selling, general, and administrative		70,568		70,486		82
Income tax benefit		310		652		(342)
Net loss		(4,874)		(5,982)		1,108

Net loss per share:
Basic and diluted	$	(0.35)	$	(0.43)

Selected condensed consolidated balance sheet line items as of February 28, 2019, which were impacted by the adoption of the new standard, are as follows (in thousands):


		February 28,		February 28,
		2019		2019		Impact of
		As Reported		Without ASC 606		ASC 606
Assets:
Prepaid expenses and other current assets	$	12,879	$	12,853	$	26
Deferred income tax assets		5,652		4,989		663
Total assets		190,176		189,487		689

Liabilities and Shareholders' Equity:
Deferred revenue		45,209		44,262		947
Other liabilities		7,490		5,712		1,778
Retained earnings		55,552		57,588		(2,036)
Total liabilities and shareholders' equity		190,176		189,487		689

The adoption of ASC Topic 606 did not have a material impact on our cash flows from operating, investing, or financing activities.

Accounting Pronouncements Issued Not Yet Adopted

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, and early adoption is permitted for all entities. We expect to adopt the provisions of ASU 2016-02 on September 1, 2019, and we may elect to apply the new standard on a prospective basis. At February 28, 2019, our leases primarily consist of the lease on our corporate campus, which is accounted for as a financing obligation on our consolidated balance sheets and operating leases for office and warehousing space. We expect the adoption of this new standard will increase our reported assets and liabilities since we will record the lease obligation and a corresponding right of use asset on our balance sheet for leases that are currently accounted for as operating leases. However, as of February 28, 2019, we have not yet elected the transition method or determined the full impact that the adoption of ASU 2016-02 will have on our consolidated financial statements.

Revenue Recognition

6 Months Ended

Feb. 28, 2019

Revenue Recognition [Abstract]

Revenue Recognition

NOTE 2 – REVENUE RECOGNITION

We account for revenue in accordance with ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606), which was adopted on September 1, 2018 using the modified retrospective method (Note 1). We earn revenue from contracts with customers primarily through the delivery of our All Access Pass and The Leader in Me subscription offerings, through the delivery of training days and training course materials, and through the licensing of rights to sell our content into geographic locations where the Company does not maintain a direct office. We also earn revenues from leasing arrangements that are not accounted for under Topic 606. Returns and refunds are generally immaterial, and we do not have any significant warranty obligations.

Under Topic 606, we recognize revenue upon the transfer of control of promised products and services to customers in an amount equal to the consideration the Company expects to receive in exchange for those products or services. Although rare, if the consideration promised in a contract includes variable amounts, we evaluate the estimate of variable consideration to determine whether the estimate needs to be constrained. We include the variable consideration in the transaction price only to the extent that it is probable a significant reversal of the amount of cumulative revenue recognized will not occur.

We determine the amount of revenue to be recognized through application of the following steps:

Identification of the contract with a customer

Identification of the performance obligations in the contract

Determination of the transaction price

Allocation of the transaction price to the performance obligations in the contract

Recognition of revenue when the Company satisfies the performance obligations

Taxes assessed by a government authority that are collected from a customer are excluded from net revenue.

Subscription and Support Revenues

Subscription revenues primarily relate to the Company’s All Access Pass and The Leader in Me subscription offerings. We have determined that it is most appropriate to account for the AAP subscription as single performance obligation and recognize the associated transaction price ratably over the term of the underlying contract beginning on the commencement date of each contract, which is the date the Company’s platforms and resources are made available to the customer. This determination was reached after considering that our web-based functionality and content, in combination with our intellectual property, each represent inputs that transform into a combined output that represents the intended outcome of the AAP, which is to provide a continuously accessible, customized, and dynamic learning and development solution only accessible through the AAP platform.

We typically invoice our customers annually upon execution of the contract or subsequent renewals. Amounts that have been invoiced are recorded in accounts receivable and in unearned revenue or revenue, depending on whether transfer of control has occurred.

Training Days and Product Sales

We deliver Company-led training days from our offerings, such as The 7 Habits of Highly Effect People, at a customer’s location based upon a daily consultant rate and a set price for training materials. These revenues are recognized as the training days occur and the services are performed. Customers also have the option to purchase training materials and present our offerings through internal facilitators and not through the use of a Franklin Covey consultant. Revenue is recognized from these product sales when the materials are shipped. Shipping revenues associated with product sales are recorded in revenue with the corresponding shipping cost being recorded as a component of cost of sales.

Geographic Location License Rights

Our international strategy includes the use of licensees in countries where we do not have a wholly-owned direct office. Licensee companies are unrelated entities that have been granted a license to translate our content and offerings, adapt the content to the local culture, and sell our content in a specific country or region. Licensees are required to pay us royalties based upon a percentage of their sales to clients. We recognize royalty income each reporting period based upon the sales information reported to us from our licensees. When sales information is not received from a particular licensee at the end of a reporting period, the Company estimates the amount of royalties to be received for the period that is being reported based upon prior forecasts and historical performance. These estimated royalties are recorded as revenue and are adjusted, if necessary, in the subsequent period.

The primary impact of ASU No. 2014-09 on our financial statements is a change in the way we account for the initial license fee associated with licensing an international location. The Company previously recorded the non-refundable initial license fee from licensing an international location as revenue at the time the license period began if all other revenue requirements had been met. However, under Topic 606, we recognize revenue on the upfront fees over the term of the initial contract.

Contracts with Multiple Performance Obligations

We enter into contracts that often include multiple performance obligations. A performance obligation is a promise in a contract to transfer products or services that are distinct, or that are distinct within the context of the contract. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when the performance obligation is satisfied. Determining whether products and services meet the distinct criteria that should be accounted for separately or combined as one unit of accounting requires significant judgment.

When determining whether goods and services meet the distinct criteria we consider various factors for each agreement including the availability of the services and the nature of the offerings and services. We allocate the transaction price to each performance obligation on a relative standalone selling price (SSP) basis. Significant judgment is required to determine the SSP for each distinct performance obligation. The SSP is the price which the Company would sell a promised product or service separately to a customer. In determining the SSP, we consider the size and volume of transactions, the geographic location, price lists, historical sales, and contract prices. We may modify our pricing from time-to-time in the future, which could result in changes to the SSP.

Contract Balances

As described above, subscription revenue is generally recognized ratably over the term of the underlying contract beginning on the commencement date of each contract. The timing of when these contracts are invoiced, cash is collected, and revenue is recognized impacts our accounts receivable and deferred revenue accounts. We generally bill our clients in advance for subscription offerings or within the month that the training and products are delivered. As such, consideration due to the Company for work performed is included in accounts receivable and we do not have a significant amount of contract assets. Our receivables are generally collected within 30 to 120 days but typically no longer than 12 months. Deferred revenue primarily consists of billings or payments received in advance of revenue being recognized from our subscription offerings. Furthermore, our clients, to expend funds in a particular budget cycle, may prepay for services or products which are also a component of our consolidated deferred revenue. Our deferred revenue totaled $48.4 million at February 28, 2019 and $52.9 million at August 31, 2018, of which $3.2 million and $1.0 million were classified as components of other long-term liabilities at February 28, 2019 and August 31, 2018, respectively. The amount of deferred revenue that was generated from subscription offerings totaled $39.6 million at February 28, 2019 and $48.4 million at August 31, 2018. During the quarter and two quarters ended February 28, 2019, we recognized $14.0 million and $30.1 million of previously deferred subscription revenue.

Remaining Performance Obligations

When 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. Topic 606 introduced the concept of remaining transaction price which 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 seasonality, the average length of the contract term, and the ability of the Company to continue to enter multi-year non-cancellable contracts. At February 28, 2019 we had $64.5 million of remaining performance obligations, including the amount of deferred revenue related to our subscription offerings, of which approximately 75 percent will be recognized over the next 12 months.

Costs Capitalized to Obtain Contracts

We capitalize the incremental costs of obtaining non-cancellable subscription revenue, primarily from the All Access Pass and The Leader in Me subscription offerings. These incremental costs consist of sales commissions paid to our direct sales force and include the associated payroll taxes and fringe benefits. As the same commission rates are paid annually when the customer renews their contract, the capitalized commission costs are amortized ratably on an annual basis. At February 28, 2019 the Company has capitalized $6.2 million of direct sales force commissions, which are included as a component of other current assets on our condensed consolidated balance sheet. During the quarter and two quarters ended February 28, 2019, we capitalized $2.3 million and $3.8 million of costs to obtain revenue contracts and amortized $2.2 million and $4.8 million to selling, general, and administrative expense, respectively.

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

Acquisition Of Germany, Switzerland, And Austria Licensee

6 Months Ended

Feb. 28, 2019

Acquisition Of Germany, Switzerland, And Austria Licensee [Abstract]

Acquisition Of Germany, Switzerland, And Austria Licensee

NOTE 3 – ACQUISITION OF GERMANY, SWITZERLAND, AND AUSTRIA LICENSEE

On December 5, 2018, we purchased all of the equity of Leadership Institut GmbH, a Munich, Germany based company with wholly owned subsidiary companies in Switzerland and Austria. Leadership Institut GmbH previously operated as an independent licensee that provided our training and products to Germany, Switzerland, and Austria (GSA). We intend to transition the GSA licensee operation to a directly owned office similar to the fiscal 2017 transition of the licensee operation in China. The purchase price was $0.2 million in cash, plus $0.8 million in forgiveness of liabilities owed to the Company from the pre-existing relationship at the purchase date. There is no contingent consideration obligations or other additional consideration associated with the purchase of the former GSA licensee. We accounted for the acquisition of Leadership Institut Gmbh as a business combination in the second quarter of fiscal 2019. We also expect to incur additional costs for severance, legal, and other related acquisition expenses. These additional costs are expected to total approximately $0.8 million and will be expensed as incurred in selling, general, and administrative expense. The acquisition of the GSA licensee will provide us with the opportunity to operate a directly owned office in one of the world’s largest economic markets and is expected to provide significant future growth opportunities. The total purchase price consisted of the following (in thousands):



Cash paid at closing	$	159
Accounts receivable from GSA licensee		798
Total purchase price	$	957

The major classes of assets and liabilities to which we have preliminarily allocated the purchase price were as follows (in thousands):



Cash acquired	$	127
Accounts receivable, net		564
Inventories, net		80
Prepaid and other current assets		45
Intangible assets		741
Property and equipment		27
Other long-term assets		11
Assets acquired		1,595
Accounts payable		(208)
Accrued liabilities		(383)
Income taxes payable		(47)
Liabilities assumed		(638)
	$	957

The preliminary allocation of the purchase price to the intangible assets acquired was as follows (in thousands):



			Weighted Average
Description		Amount	Life
Reacquisition of license rights	$	360	3 years
Localized content		202	3 years
Customer relationships		179	3 years
	$	741

We have included the financial results of the former GSA licensee in our financial results since the date of acquisition. For the quarter ended February 28, 2019, the new direct office that serves the GSA region had $0.5 million of sales and a $0.2 million operating loss. During the second quarter of the prior year, we recognized $0.1 million of royalty revenue from the GSA licensee. For the twelve months ended August 31, 2018, the former GSA licensee had $3.3 million of sales and a $1.3 million pre-tax tax loss.

Inventories

6 Months Ended

Feb. 28, 2019

Inventories [Abstract]

Inventories

NOTE 4 – 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,
		2019		2018
Finished goods	$	2,818	$	3,130
Raw materials		22		30
	$	2,840	$	3,160

Fair Value Of Financial Instruments

6 Months Ended

Feb. 28, 2019

Fair Value Of Financial Instruments [Abstract]

Fair Value Of Financial Instruments

NOTE 5 – FAIR VALUE OF FINANCIAL INSTRUMENTS

At February 28, 2019, 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, 2018 were utilized during the current period (with updated estimates) to arrive at the estimated fair values of the contingent consideration liabilities on the reporting date. The fair value of the contingent consideration liabilities from the acquisitions of Robert Gregory Partners (RGP) and Jhana Education (Jhana) changed as follows during the two quarters ended February 28, 2019 (in thousands):



	Balance at		Change in				Balance at
	August 31, 2018		Fair Value		Payments		February 28, 2019
RGP Acquisition	$	606	$	9	$	-	$	615
Jhana Acquisition		3,942		67		(301)		3,708
	$	4,548	$	76	$	(301)	$	4,323

Approximately $1.0 million of the Jhana contingent consideration liability was recorded as a component of accrued liabilities on our condensed consolidated balance sheet at February 28, 2019. The remainder of our contingent consideration liabilities are classified as other long-term liabilities. 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

6 Months Ended

Feb. 28, 2019

Stock-Based Compensation [Abstract]

Stock-Based Compensation

NOTE 6 – STOCK-BASED COMPENSATION

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



		Quarter Ended			Two Quarters Ended
		February 28,		February 28,		February 28,		February 28,
		2019		2018		2019		2018
Long-term incentive awards	$	824	$	582	$	1,557	$	1,373
Restricted stock awards		175		160		350		292
Employee stock purchase plan		44		37		82		71
	$	1,043	$	779	$	1,989	$	1,736

During the quarter and two quarters ended February 28, 2019, we issued 39,803 shares and 50,932 shares of our common stock under various stock-based compensation arrangements. Our stock-based compensation plans allow shares to be withheld to cover statutory income taxes if so elected by the award recipient. During the quarter ended February 28, 2019, we withheld 241 shares of our common stock for statutory taxes on stock-based compensation arrangements. The following is a description of the developments in our stock-based compensation plans during the quarter and two quarters ended February 28, 2019.

Fiscal 2019 Restricted Stock Award

Our annual restricted stock award granted to non-employee members of the Board of Directors is administered under the terms of the 2019 Franklin Covey Co. 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 award is granted in January (following the annual shareholders’ meeting) of each year. For the fiscal 2019 award, each eligible director received a whole-share grant equal to $100,000 with a one-year vesting period. Our restricted stock award activity during the two quarters ended February 28, 2019 consisted of the following:



			Weighted-Average
			Grant Date
	Number of		Fair Value
	Shares		Per Share
Restricted stock awards at
August 31, 2018	23,338	$	30.00
Granted	28,525		24.54
Forfeited	-		-
Vested	(23,338)		30.00
Restricted stock awards at
February 28, 2019	28,525	$	24.54

At February 28, 2019, there was $0.6 million of unrecognized compensation expense remaining on the fiscal 2019 Board of Director restricted share award.

Fiscal 2019 Time-Based Award

On January 25, 2019, the Organization and Compensation Committee (the Compensation Committee) of the Board of Directors approved a new incentive plan award for the Chief Executive Officer, Chief Financial Officer, and Chief People Officer that has a two-year time-based vesting (service) condition. A total of 11,915 shares were issued to the participants in connection with this award. The fair value of this award was calculated by multiplying the number of shares times the closing price of the Company’s common stock on the grant date, which was $24.54 per share. The fair value of this award totals $0.3 million, which will be expensed evenly over the two-year service period.

Fiscal 2019 Long-Term Incentive Plan Award

On October 1, 2018, the Compensation Committee of the Board of Directors granted a new long-term incentive plan (LTIP) award to our executive officers and members of senior management. The fiscal 2019 LTIP award is similar to the fiscal 2018 LTIP award and has three tranches, one of which has a time-based vesting condition and two of which have performance-based vesting conditions as described below:

Time-Based Award Shares – Twenty-five percent of the 2019 LTIP award shares vest to participants after three years of service. The total number of shares that may be earned by participants after three years of service is 36,470 shares. The number of shares awarded in this tranche is not variable and will not fluctuate based on financial measures.

Performance-Based Award Shares – The remaining two tranches of the 2019 LTIP award are based on fiscal 2021 qualified adjusted earnings before interest, taxes, depreciation, and amortization (Adjusted EBITDA) and fiscal 2021 subscription service sales, respectively. 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 number of shares that may be earned for achieving 100 percent of the performance-based objectives (target award threshold) totals 109,409 shares. The maximum number of shares that may be awarded in connection with the performance-based tranches of the 2019 LTIP totals 218,818 shares.

The fiscal 2019 LTIP has a three-year life and expires on August 31, 2021.

Compensation expense recognized during the quarter and two quarters ended February 28, 2019, for long-term incentive plan awards in the table above includes expense related to awards granted in previous periods for which the performance conditions we believe are probable of being achieved.

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 two quarters ended February 28, 2019, we issued 10,730 shares and 21,218 shares of our common stock to participants in the ESPP.

Income Taxes	6 Months Ended
Income Taxes	Feb. 28, 2019
Income Taxes [Abstract]
Income Taxes	NOTE 7 – 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 was phased in, resulting in a U.S. statutory federal rate of 25.7 percent during fiscal 2018 and a 21 percent rate for fiscal 2019 and subsequent fiscal years. Other provisions of the 2017 Tax Act, which were not effective for us in fiscal 2018, are now effective for fiscal 2019 and future years, including limitations on the deductibility of interest and executive compensation as well as anti-deferral provisions on Global Intangible Low-Taxed Income (GILTI). We recorded an income tax benefit of $0.3 million for the two quarters ended February 28, 2019 on a pre-tax loss of $5.2 million, resulting in an effective tax benefit rate of 6.0 percent. Our effective benefit rate was adversely affected by GILTI tax expense, non-deductible expenses, and effective foreign tax rates which are significantly higher than the U.S. statutory rate. We recorded GILTI tax expense totaling $0.3 million during the first two quarters of fiscal 2019, based on the earnings of our foreign subsidiaries. Net operating loss carryforwards prevented us from using foreign tax credits against this tax. Unlike regular foreign tax credits, we permanently forego any unused foreign tax credits applicable to GILTI.

Loss Per Share

6 Months Ended

Feb. 28, 2019

Loss Per Share [Abstract]

Loss Per Share

NOTE 8 – 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				Two Quarters Ended
		February 28,		February 28,		February 28,		February 28,
		2019		2018		2019		2018
Numerator for basic and
diluted loss per share:
Net loss	$	(3,517)	$	(2,740)	$	(4,874)	$	(5,132)

Denominator for basic and
diluted loss per share:
Basic weighted average shares
outstanding		13,937		13,867		13,927		13,796
Effect of dilutive securities:
Stock options and other
stock-based awards		-		-		-		-
Diluted weighted average
shares outstanding		13,937		13,867		13,927		13,796

EPS Calculations:
Net loss per share:
Basic and diluted	$	(0.25)	$	(0.20)	$	(0.35)	$	(0.37)

Since we incurred a net loss for the quarter and two quarters ended February 28, 2019, no potentially dilutive securities are included in the calculations 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 February 28, 2019 would have been approximately 214,000 shares.

Segment Information

6 Months Ended

Feb. 28, 2019

Segment Information [Abstract]

Segment Information

NOTE 9 – SEGMENT INFORMATION

Segment Information

Our sales are primarily comprised of training and consulting services. Our internal reporting and operating structure is currently organized around two divisions. The Enterprise Division, which consists of our Direct Office and International Licensee segments and the Education Division, which is comprised of our Education practice. Based on the applicable guidance, our operations are now comprised of three reportable segments and a 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, and our new offices in Germany, Switzerland, and Austria; our government services sales channel; and our public programs operations.

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.

International Licensees – Our independently owned international licensees provide our offerings and services in countries where we do not have a directly-owned office. These licensee partners allow us to expand the reach of our services to large multinational organizations as well as smaller organizations in their countries. This segment’s results are primarily comprised of royalty revenues received from these licensees.

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 is 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. Adjusted EBITDA is a non-GAAP financial measure. 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 adjustments for changes in the fair value of contingent liabilities from business acquisitions. The Company references this non-GAAP financial measure in its 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, 2019		Customers		Gross Profit		EBITDA

Enterprise Division:
Direct offices	$	36,414	$	27,294	$	2,543
International licensees		2,906		2,221		1,218
		39,320		29,515		3,761
Education practice		9,698		5,429		(909)
Corporate and eliminations		1,338		422		(1,888)
Consolidated	$	50,356	$	35,366	$	964

Quarter Ended
February 28, 2018

Enterprise Division:
Direct offices	$	33,275	$	24,881	$	1,331
International licensees		3,046		2,364		1,162
		36,321		27,245		2,493
Education practice		9,007		5,163		(1,151)
Corporate and eliminations		1,219		336		(2,010)
Consolidated	$	46,547	$	32,744	$	(668)

Two Quarters Ended
February 28, 2019

Enterprise Division:
Direct offices	$	74,885	$	54,364	$	6,183
International licensees		6,583		5,084		2,846
		81,468		59,448		9,029
Education practice		20,044		11,822		(1,174)
Corporate and eliminations		2,673		878		(3,722)
Consolidated	$	104,185	$	72,148	$	4,133

Two Quarters Ended
February 28, 2018

Enterprise Division:
Direct offices	$	67,471	$	49,442	$	3,723
International licensees		6,366		4,866		2,572
		73,837		54,308		6,295
Education practice		18,183		10,593		(1,993)
Corporate and eliminations		2,459		711		(4,368)
Consolidated	$	94,479	$	65,612	$	(66)

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



	Quarter Ended				Two Quarters Ended
		February 28,		February 28,		February 28,		February 28,
		2019		2018		2019		2018
Segment Adjusted EBITDA	$	2,852	$	1,342	$	7,855	$	4,302
Corporate expenses		(1,888)		(2,010)		(3,722)		(4,368)
Consolidated Adjusted EBITDA		964		(668)		4,133		(66)
Stock-based compensation expense		(1,043)		(779)		(1,989)		(1,736)
Increase in contingent consideration liabilities		(52)		(477)		(76)		(652)
Licensee transition costs		(428)		-		(488)		-
ERP system implementation costs		-		(429)		-		(855)
Depreciation		(1,697)		(1,379)		(3,251)		(2,280)
Amortization		(1,300)		(1,395)		(2,538)		(2,791)
Loss from operations		(3,556)		(5,127)		(4,209)		(8,380)
Interest income		9		25		22		59
Interest expense		(623)		(692)		(1,255)		(1,240)
Discount accretion on related
party receivable		243		29		258		56
Loss before income taxes		(3,927)		(5,765)		(5,184)		(9,505)
Income tax benefit		410		3,025		310		4,373
Net loss	$	(3,517)	$	(2,740)	$	(4,874)	$	(5,132)

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,
		2019		2018		2019		2018

Americas	$	39,839	$	34,786	$	80,757	$	70,751
Asia Pacific		7,398		8,711		16,678		17,491
Europe/Middle East/Africa		3,119		3,050		6,750		6,237
	$	50,356	$	46,547	$	104,185	$	94,479

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



Quarter Ended		Services and						Leases and
February 28, 2019		Products		Subscriptions		Royalties		Other		Consolidated

Enterprise Division:
Direct offices	$	23,102	$	12,416	$	896	$	-	$	36,414
International licensees		517		-		2,389		-		2,906
		23,619		12,416		3,285		-		39,320
Education practice		2,583		5,368		1,747		-		9,698
Corporate and eliminations		-		-		-		1,338		1,338
Consolidated	$	26,202	$	17,784	$	5,032	$	1,338	$	50,356

Quarter Ended
February 28, 2018

Enterprise Division:
Direct offices	$	22,108	$	9,982	$	1,185	$	-	$	33,275
International licensees		568		-		2,478		-		3,046
		22,676		9,982		3,663		-		36,321
Education practice		3,396		3,749		1,862		-		9,007
Corporate and eliminations		-		-		-		1,219		1,219
Consolidated	$	26,072	$	13,731	$	5,525	$	1,219	$	46,547

Two Quarters Ended
February 28, 2019

Enterprise Division:
Direct offices	$	48,111	$	25,091	$	1,683	$	-	$	74,885
International licensees		1,389		-		5,194		-		6,583
		49,500		25,091		6,877		-		81,468
Education practice		6,501		11,080		2,463		-		20,044
Corporate and eliminations		-		-		-		2,673		2,673
Consolidated	$	56,001	$	36,171	$	9,340	$	2,673	$	104,185

Two Quarters Ended
February 28, 2018

Enterprise Division:
Direct offices	$	46,981	$	19,099	$	1,391	$	-	$	67,471
International licensees		1,059		-		5,307		-		6,366
		48,040		19,099		6,698		-		73,837
Education practice		8,181		7,482		2,520		-		18,183
Corporate and eliminations		-		-		-		2,459		2,459
Consolidated	$	56,221	$	26,581	$	9,218	$	2,459	$	94,479

Investment In FC Organizational Products

6 Months Ended

Feb. 28, 2019

Investment In FC Organizational Products [Abstract]

Investment In FC Organizational Products

NOTE 10 – 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 ASC 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 February 28, 2019.

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. During the quarter ended February 28, 2019 we received $1.4 million of cash from FCOP. Receivables from FCOP are reported as components of other current and other long-term assets based on their expected payment dates and consisted of the following at dates indicated (in thousands):



		February 28,		August 31,
		2019		2018
Other current assets	$	694	$	1,123
Other long-term assets		-		411
	$	694	$	1,534

During the past couple of years, we received larger payments from FCOP than previously anticipated. Based on the payments received during the second quarter of fiscal 2019 and amounts currently expected to be received during fiscal 2020, all remaining receivables from FCOP are now classified as current assets. Accordingly, we accelerated the accretion of the remaining discount on these receivables during the quarter ended February 28, 2019, which totaled $0.2 million. Amounts receivable from FCOP at August 31, 2018 are presented net of $0.3 million discount.

Basis Of Presentation (Policy)

6 Months Ended

Feb. 28, 2019

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.

Our fiscal year ends on August 31 of each year and our fiscal quarters end on the last day of November, February, and May of each year.

Accounting Pronouncements Issued And Adopted

Accounting Pronouncements Issued and Adopted

The cumulative after-tax effects of the changes made to our consolidated balance sheet from the adoption of Topic 606 were as follows (in thousands):




		August 31,		ASC 606		September 1,
		2018		Adjustments		2018
Assets:
Other current assets	$	10,893	$	109	$	11,002
Deferred income tax assets		3,222		1,005		4,227

Liabilities and Shareholders' Equity:
Deferred revenue		51,888		2,008		53,896
Other liabilities		5,501		2,249		7,750
Retained earnings		63,569		(3,143)		60,426



		February 28,		February 28,
		2019		2019		Impact of
		As Reported		Without ASC 606		ASC 606
Revenue	$	50,356	$	49,895	$	461
Cost of sales		14,990		14,990		-
Selling, general, and administrative		35,925		35,914		11
Income tax benefit		410		517		(107)
Net loss		(3,517)		(3,860)		343

Net loss per share:
Basic and diluted	$	(0.25)	$	(0.28)



		Two Quarters		Two Quarters
		Ended February 28,		Ended February 28,
		2019		2019		Impact of
		As Reported		Without ASC 606		ASC 606
Revenue	$	104,185	$	102,653	$	1,532
Cost of sales		32,037		32,037		-
Selling, general, and administrative		70,568		70,486		82
Income tax benefit		310		652		(342)
Net loss		(4,874)		(5,982)		1,108

Net loss per share:
Basic and diluted	$	(0.35)	$	(0.43)

Selected condensed consolidated balance sheet line items as of February 28, 2019, which were impacted by the adoption of the new standard, are as follows (in thousands):


		February 28,		February 28,
		2019		2019		Impact of
		As Reported		Without ASC 606		ASC 606
Assets:
Prepaid expenses and other current assets	$	12,879	$	12,853	$	26
Deferred income tax assets		5,652		4,989		663
Total assets		190,176		189,487		689

Liabilities and Shareholders' Equity:
Deferred revenue		45,209		44,262		947
Other liabilities		7,490		5,712		1,778
Retained earnings		55,552		57,588		(2,036)
Total liabilities and shareholders' equity		190,176		189,487		689

The adoption of ASC Topic 606 did not have a material impact on our cash flows from operating, investing, or financing activities.

Accounting Pronouncements Issued Not Yet Adopted

Basis Of Presentation (Tables)

6 Months Ended

Feb. 28, 2019

Basis Of Presentation [Abstract]

Schedule Of Cumulative After-Tax Effects On Balance Sheet




		August 31,		ASC 606		September 1,
		2018		Adjustments		2018
Assets:
Other current assets	$	10,893	$	109	$	11,002
Deferred income tax assets		3,222		1,005		4,227

Liabilities and Shareholders' Equity:
Deferred revenue		51,888		2,008		53,896
Other liabilities		5,501		2,249		7,750
Retained earnings		63,569		(3,143)		60,426

Schedule Of Statements Of Operations Impacted By Adoption Of New Accounting Standard



		February 28,		February 28,
		2019		2019		Impact of
		As Reported		Without ASC 606		ASC 606
Revenue	$	50,356	$	49,895	$	461
Cost of sales		14,990		14,990		-
Selling, general, and administrative		35,925		35,914		11
Income tax benefit		410		517		(107)
Net loss		(3,517)		(3,860)		343

Net loss per share:
Basic and diluted	$	(0.25)	$	(0.28)



		Two Quarters		Two Quarters
		Ended February 28,		Ended February 28,
		2019		2019		Impact of
		As Reported		Without ASC 606		ASC 606
Revenue	$	104,185	$	102,653	$	1,532
Cost of sales		32,037		32,037		-
Selling, general, and administrative		70,568		70,486		82
Income tax benefit		310		652		(342)
Net loss		(4,874)		(5,982)		1,108

Net loss per share:
Basic and diluted	$	(0.35)	$	(0.43)

Balance Sheet Impacted By Adoption Of New Accounting Standard


		February 28,		February 28,
		2019		2019		Impact of
		As Reported		Without ASC 606		ASC 606
Assets:
Prepaid expenses and other current assets	$	12,879	$	12,853	$	26
Deferred income tax assets		5,652		4,989		663
Total assets		190,176		189,487		689

Liabilities and Shareholders' Equity:
Deferred revenue		45,209		44,262		947
Other liabilities		7,490		5,712		1,778
Retained earnings		55,552		57,588		(2,036)
Total liabilities and shareholders' equity		190,176		189,487		689

Acquisition Of Germany, Switzerland, And Austria Licensee (Tables) - Germany, Switzerland, And Austria Licensee [Member]

6 Months Ended

Feb. 28, 2019

Business Acquisition [Line Items]

Schedule Of Total Purchase Price



Cash paid at closing	$	159
Accounts receivable from GSA licensee		798
Total purchase price	$	957

Schedule Of Estimated Fair Values Of Assets Acquired, Liabilities Assumed, and Identifiable Intangible Assets



Cash acquired	$	127
Accounts receivable, net		564
Inventories, net		80
Prepaid and other current assets		45
Intangible assets		741
Property and equipment		27
Other long-term assets		11
Assets acquired		1,595
Accounts payable		(208)
Accrued liabilities		(383)
Income taxes payable		(47)
Liabilities assumed		(638)
	$	957

Schedule Of Assets Acquired Amortized Over Estimated Useful Lives



			Weighted Average
Description		Amount	Life
Reacquisition of license rights	$	360	3 years
Localized content		202	3 years
Customer relationships		179	3 years
	$	741

Inventories (Tables)

6 Months Ended

Feb. 28, 2019

Inventories [Abstract]

Components Of Inventories



		February 28,		August 31,
		2019		2018
Finished goods	$	2,818	$	3,130
Raw materials		22		30
	$	2,840	$	3,160

Fair Value Of Financial Instruments (Tables)

6 Months Ended

Feb. 28, 2019

Fair Value Of Financial Instruments [Abstract]

Schedule Of Contingent Consideration Liability



	Balance at		Change in				Balance at
	August 31, 2018		Fair Value		Payments		February 28, 2019
RGP Acquisition	$	606	$	9	$	-	$	615
Jhana Acquisition		3,942		67		(301)		3,708
	$	4,548	$	76	$	(301)	$	4,323

Stock-Based Compensation (Tables)

6 Months Ended

Feb. 28, 2019

Stock-Based Compensation [Abstract]

Total Cost Of Stock-Based Compensation



		Quarter Ended			Two Quarters Ended
		February 28,		February 28,		February 28,		February 28,
		2019		2018		2019		2018
Long-term incentive awards	$	824	$	582	$	1,557	$	1,373
Restricted stock awards		175		160		350		292
Employee stock purchase plan		44		37		82		71
	$	1,043	$	779	$	1,989	$	1,736

Restricted Stock Award Activity



			Weighted-Average
			Grant Date
	Number of		Fair Value
	Shares		Per Share
Restricted stock awards at
August 31, 2018	23,338	$	30.00
Granted	28,525		24.54
Forfeited	-		-
Vested	(23,338)		30.00
Restricted stock awards at
February 28, 2019	28,525	$	24.54

Loss Per Share (Tables)

6 Months Ended

Feb. 28, 2019

Loss Per Share [Abstract]

Computation Of Loss Per Share



	Quarter Ended				Two Quarters Ended
		February 28,		February 28,		February 28,		February 28,
		2019		2018		2019		2018
Numerator for basic and
diluted loss per share:
Net loss	$	(3,517)	$	(2,740)	$	(4,874)	$	(5,132)

Denominator for basic and
diluted loss per share:
Basic weighted average shares
outstanding		13,937		13,867		13,927		13,796
Effect of dilutive securities:
Stock options and other
stock-based awards		-		-		-		-
Diluted weighted average
shares outstanding		13,937		13,867		13,927		13,796

EPS Calculations:
Net loss per share:
Basic and diluted	$	(0.25)	$	(0.20)	$	(0.35)	$	(0.37)

Segment Information (Tables)

6 Months Ended

Feb. 28, 2019

Segment Information [Abstract]

Schedule Of Segment Operations



		Sales to
Quarter Ended		External				Adjusted
February 28, 2019		Customers		Gross Profit		EBITDA

Enterprise Division:
Direct offices	$	36,414	$	27,294	$	2,543
International licensees		2,906		2,221		1,218
		39,320		29,515		3,761
Education practice		9,698		5,429		(909)
Corporate and eliminations		1,338		422		(1,888)
Consolidated	$	50,356	$	35,366	$	964

Quarter Ended
February 28, 2018

Enterprise Division:
Direct offices	$	33,275	$	24,881	$	1,331
International licensees		3,046		2,364		1,162
		36,321		27,245		2,493
Education practice		9,007		5,163		(1,151)
Corporate and eliminations		1,219		336		(2,010)
Consolidated	$	46,547	$	32,744	$	(668)

Two Quarters Ended
February 28, 2019

Enterprise Division:
Direct offices	$	74,885	$	54,364	$	6,183
International licensees		6,583		5,084		2,846
		81,468		59,448		9,029
Education practice		20,044		11,822		(1,174)
Corporate and eliminations		2,673		878		(3,722)
Consolidated	$	104,185	$	72,148	$	4,133

Two Quarters Ended
February 28, 2018

Enterprise Division:
Direct offices	$	67,471	$	49,442	$	3,723
International licensees		6,366		4,866		2,572
		73,837		54,308		6,295
Education practice		18,183		10,593		(1,993)
Corporate and eliminations		2,459		711		(4,368)
Consolidated	$	94,479	$	65,612	$	(66)

Reconciliation Of Adjusted EBITDA



	Quarter Ended				Two Quarters Ended
		February 28,		February 28,		February 28,		February 28,
		2019		2018		2019		2018
Segment Adjusted EBITDA	$	2,852	$	1,342	$	7,855	$	4,302
Corporate expenses		(1,888)		(2,010)		(3,722)		(4,368)
Consolidated Adjusted EBITDA		964		(668)		4,133		(66)
Stock-based compensation expense		(1,043)		(779)		(1,989)		(1,736)
Increase in contingent consideration liabilities		(52)		(477)		(76)		(652)
Licensee transition costs		(428)		-		(488)		-
ERP system implementation costs		-		(429)		-		(855)
Depreciation		(1,697)		(1,379)		(3,251)		(2,280)
Amortization		(1,300)		(1,395)		(2,538)		(2,791)
Loss from operations		(3,556)		(5,127)		(4,209)		(8,380)
Interest income		9		25		22		59
Interest expense		(623)		(692)		(1,255)		(1,240)
Discount accretion on related
party receivable		243		29		258		56
Loss before income taxes		(3,927)		(5,765)		(5,184)		(9,505)
Income tax benefit		410		3,025		310		4,373
Net loss	$	(3,517)	$	(2,740)	$	(4,874)	$	(5,132)

Disaggregation Of Revenue

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,
		2019		2018		2019		2018

Americas	$	39,839	$	34,786	$	80,757	$	70,751
Asia Pacific		7,398		8,711		16,678		17,491
Europe/Middle East/Africa		3,119		3,050		6,750		6,237
	$	50,356	$	46,547	$	104,185	$	94,479

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



Quarter Ended		Services and						Leases and
February 28, 2019		Products		Subscriptions		Royalties		Other		Consolidated

Enterprise Division:
Direct offices	$	23,102	$	12,416	$	896	$	-	$	36,414
International licensees		517		-		2,389		-		2,906
		23,619		12,416		3,285		-		39,320
Education practice		2,583		5,368		1,747		-		9,698
Corporate and eliminations		-		-		-		1,338		1,338
Consolidated	$	26,202	$	17,784	$	5,032	$	1,338	$	50,356

Quarter Ended
February 28, 2018

Enterprise Division:
Direct offices	$	22,108	$	9,982	$	1,185	$	-	$	33,275
International licensees		568		-		2,478		-		3,046
		22,676		9,982		3,663		-		36,321
Education practice		3,396		3,749		1,862		-		9,007
Corporate and eliminations		-		-		-		1,219		1,219
Consolidated	$	26,072	$	13,731	$	5,525	$	1,219	$	46,547

Two Quarters Ended
February 28, 2019

Enterprise Division:
Direct offices	$	48,111	$	25,091	$	1,683	$	-	$	74,885
International licensees		1,389		-		5,194		-		6,583
		49,500		25,091		6,877		-		81,468
Education practice		6,501		11,080		2,463		-		20,044
Corporate and eliminations		-		-		-		2,673		2,673
Consolidated	$	56,001	$	36,171	$	9,340	$	2,673	$	104,185

Two Quarters Ended
February 28, 2018

Enterprise Division:
Direct offices	$	46,981	$	19,099	$	1,391	$	-	$	67,471
International licensees		1,059		-		5,307		-		6,366
		48,040		19,099		6,698		-		73,837
Education practice		8,181		7,482		2,520		-		18,183
Corporate and eliminations		-		-		-		2,459		2,459
Consolidated	$	56,221	$	26,581	$	9,218	$	2,459	$	94,479

Investment In FC Organizational Products (Tables)

6 Months Ended

Feb. 28, 2019

Investment In FC Organizational Products [Abstract]

Components Of Other Current And Other Long-Term Assets



		February 28,		August 31,
		2019		2018
Other current assets	$	694	$	1,123
Other long-term assets		-		411
	$	694	$	1,534

Basis Of Presentation (Narrative) (Details) $ in Millions	6 Months Ended
Basis Of Presentation (Narrative) (Details) $ in Millions	Feb. 28, 2019 country item	Sep. 01, 2018 USD ($)
Business Acquisition [Line Items]
Number of areas of expertise \| item	7
Number of important distinguishing characteristics from competitors \| item	3
Accounting Standards Update 2014-09 [Member]
Business Acquisition [Line Items]
Cumulative effect on retained earnings \| $		$ 4.1
Cumulative effect on retained earnings, net of tax \| $		$ 3.1
Minimum [Member]
Business Acquisition [Line Items]
Number of countries in which entity operates \| country	150

Basis Of Presentation (Schedule Of Cumulative After-Tax Effects On Balance Sheet) (Details) - USD ($) $ in Thousands	Feb. 28, 2019	Sep. 01, 2018	Aug. 31, 2018
Assets:
Deferred income tax assets	$ 5,652		$ 3,222
Liabilities and Shareholders' Equity:
Deferred revenue	45,209		51,888
Other liabilities	7,490		5,501
Retained earnings	55,552		63,569
Accounting Standards Update 2014-09 [Member]
Assets:
Other current assets		$ 11,002	10,893
Deferred income tax assets	5,652	4,227	3,222
Liabilities and Shareholders' Equity:
Deferred revenue	45,209	53,896	51,888
Other liabilities	7,490	7,750	5,501
Retained earnings	$ 55,552	60,426	$ 63,569
ASC 606 Adjustments [Member] \| Accounting Standards Update 2014-09 [Member]
Assets:
Other current assets		109
Deferred income tax assets		1,005
Liabilities and Shareholders' Equity:
Deferred revenue		2,008
Other liabilities		2,249
Retained earnings		$ (3,143)

Basis Of Presentation (Schedule Of Statements Of Operations Impacted By Adoption Of New Accounting Standard) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2019	Feb. 28, 2018	Feb. 28, 2019	Feb. 28, 2018
Revenue	$ 50,356	$ 46,547	$ 104,185	$ 94,479
Cost of sales	14,990	13,803	32,037	28,867
Selling, general, and administrative	35,925	35,097	70,568	68,921
Income tax benefit	(410)	(3,025)	(310)	(4,373)
Net loss	$ (3,517)	$ (2,740)	$ (4,874)	$ (5,132)
Net loss per share:
Basic and diluted	$ (0.25)	$ (0.20)	$ (0.35)	$ (0.37)
Accounting Standards Update 2014-09 [Member]
Revenue	$ 50,356		$ 104,185
Cost of sales	14,990		32,037
Selling, general, and administrative	35,925		70,568
Income tax benefit	410		310
Net loss	$ (3,517)		$ (4,874)
Net loss per share:
Basic and diluted	$ (0.25)		$ (0.35)
Accounting Standards Update 2014-09 [Member] \| Without ASC 606 [Member]
Revenue	$ 49,895		$ 102,653
Cost of sales	14,990		32,037
Selling, general, and administrative	35,914		70,486
Income tax benefit	517		652
Net loss	$ (3,860)		$ (5,982)
Net loss per share:
Basic and diluted	$ (0.28)		$ (0.43)
Accounting Standards Update 2014-09 [Member] \| Impact Of ASC 606 [Member]
Revenue	$ 461		$ 1,532
Selling, general, and administrative	11		82
Income tax benefit	(107)		(342)
Net loss	$ 343		$ 1,108

Basis Of Presentation (Balance Sheet Impacted By Adoption Of New Accounting Standard) (Details) - USD ($) $ in Thousands	Feb. 28, 2019	Sep. 01, 2018	Aug. 31, 2018
Assets:
Prepaid expenses and other current assets	$ 12,879		$ 14,757
Deferred income tax assets	5,652		3,222
Total assets	190,176		213,875
Liabilities and Shareholders' Equity:
Deferred revenue	45,209		51,888
Other liabilities	7,490		5,501
Retained earnings	55,552		63,569
Total liabilities and shareholders' equity	190,176		213,875
Accounting Standards Update 2014-09 [Member]
Assets:
Prepaid expenses and other current assets	12,879
Deferred income tax assets	5,652	$ 4,227	3,222
Total assets	190,176
Liabilities and Shareholders' Equity:
Deferred revenue	45,209	53,896	51,888
Other liabilities	7,490	7,750	5,501
Retained earnings	55,552	$ 60,426	$ 63,569
Total liabilities and shareholders' equity	190,176
Without ASC 606 [Member] \| Accounting Standards Update 2014-09 [Member]
Assets:
Prepaid expenses and other current assets	12,853
Deferred income tax assets	4,989
Total assets	189,487
Liabilities and Shareholders' Equity:
Deferred revenue	44,262
Other liabilities	5,712
Retained earnings	57,588
Total liabilities and shareholders' equity	189,487
Impact Of ASC 606 [Member] \| Accounting Standards Update 2014-09 [Member]
Assets:
Prepaid expenses and other current assets	26
Deferred income tax assets	663
Total assets	689
Liabilities and Shareholders' Equity:
Deferred revenue	947
Other liabilities	1,778
Retained earnings	(2,036)
Total liabilities and shareholders' equity	$ 689

Revenue Recognition (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Feb. 28, 2019	Feb. 28, 2019	Aug. 31, 2018
Deferred revenue	$ 48.4	$ 48.4	$ 52.9
Other long-term liabilities	3.2	3.2	1.0
Remaining performance obligations	$ 64.5	$ 64.5
Percentage of remaining performance obligations will be recognized	75.00%	75.00%
Minimum [Member]
Receivables collection period		30 days
Maximum [Member]
Receivables collection period		120 days
Direct Sales Force Commissions [Member]
Capitalized contract cost	$ 6.2	$ 6.2
Obtain Revenue Contracts [Member] \| Quarter [Member]
Capitalized contract cost	2.3	2.3
Obtain Revenue Contracts [Member] \| Two Quarters [Member]
Capitalized contract cost	3.8	3.8
Selling, General, And Administrative Expense [Member]
Capitalized contract cost, amortized	2.2	4.8
Subscription [Member]
Deferred revenue	39.6	39.6	$ 48.4
Deferred revenue recognized	$ 14.0	$ 30.1

Acquisition Of Germany, Switzerland, And Austria Licensee (Narrative) (Details) - USD ($)		3 Months Ended		6 Months Ended		12 Months Ended
	Dec. 05, 2018	Feb. 28, 2019	Feb. 28, 2018	Feb. 28, 2019	Feb. 28, 2018	Aug. 31, 2018
Business Acquisition, Contingent Consideration [Line Items]
Contingent consideration		$ 4,323,000		$ 4,323,000		$ 4,548,000
Payment of contingent consideration				301,000	$ 44,000
Sales		50,356,000	$ 46,547,000	104,185,000	94,479,000
Income (loss) from operations		(3,556,000)	(5,127,000)	(4,209,000)	$ (8,380,000)
Royalty [Member]
Business Acquisition, Contingent Consideration [Line Items]
Sales			$ 100,000
Germany, Switzerland, And Austria Licensee [Member]
Business Acquisition, Contingent Consideration [Line Items]
Purchase price in cash	$ 159,000
Forgiveness of liabilities owed to company via expense to selling, general, and administrative expense	$ 798,000
Contingent consideration		0		$ 0
Sales		500,000
Income (loss) from operations		$ 200,000
Former GSA Licensee [Member]
Business Acquisition, Contingent Consideration [Line Items]
Sales						3,300,000
Pre-tax loss						$ 1,300,000

Acquisition Of Germany, Switzerland, And Austria Licensee (Schedule Of Total Purchase Price) (Details) - Germany, Switzerland, And Austria Licensee [Member] $ in Thousands	Dec. 05, 2018 USD ($)
Business Acquisition [Line Items]
Cash paid at closing	$ 159
Accounts receivable from GSA licensee	798
Total purchase price	$ 957

Acquisition Of Germany, Switzerland, And Austria Licensee (Schedule Of Estimated Fair Values Of Assets Acquired, Liabilities Assumed, and Identifiable Intangible Assets) (Details) - Germany, Switzerland, And Austria Licensee [Member] $ in Thousands	Dec. 05, 2018 USD ($)
Business Acquisition, Contingent Consideration [Line Items]
Cash acquired	$ 127
Accounts receivable, net	564
Inventories, net	80
Prepaid expenses and other current assets	45
Intangible assets	741
Property and equipment	27
Other long-term assets	11
Assets acquired	1,595
Accounts payable	(208)
Accrued liabilities	(383)
Income taxes payable	(47)
Liabilities assumed	(638)
Purchase price	$ 957

Acquisition Of Germany, Switzerland, And Austria Licensee (Schedule Of Assets Acquired Amortized Over Estimated Useful Lives) (Details) - Germany, Switzerland, And Austria Licensee [Member] $ in Thousands	Dec. 05, 2018 USD ($)
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 741
Reacquisition Of License Rights [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 360
Reacquisition Of License Rights [Member] \| Weighted Average [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years
Localized Content [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 202
Localized Content [Member] \| Weighted Average [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years
Customer Relationships [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Intangible assets acquired	$ 179
Customer Relationships [Member] \| Weighted Average [Member]
Acquired Finite-Lived Intangible Assets [Line Items]
Estimated Useful Life	3 years

Inventories (Components Of Inventories) (Details) - USD ($) $ in Thousands	Feb. 28, 2019	Aug. 31, 2018	Aug. 31, 2017
Inventories [Abstract]
Finished goods	$ 2,818		$ 3,130
Raw materials	22		30
Inventories	$ 2,840	$ 3,160	$ 3,160

Fair Value Of Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands	Feb. 28, 2019	Aug. 31, 2018
Contingent consideration	$ 4,323	$ 4,548
Jhana Education [Member]
Contingent consideration	3,708	$ 3,942
Jhana Education [Member] \| Accrued Liabilities [Member]
Contingent consideration	$ 1,000

Fair Value Of Financial Instruments (Schedule Of Contingent Consideration Liability) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2019	Feb. 28, 2018	Feb. 28, 2019	Feb. 28, 2018
Business Acquisition, Contingent Consideration [Line Items]
Contingent consideration liability at beginning of year			$ 4,548
Change in Fair Value	$ 52	$ 477	76	$ 652
Payments			(301)
Contingent consideration liability at end of quarter	4,323		4,323
Robert Gregory Partners, LLC [Member]
Business Acquisition, Contingent Consideration [Line Items]
Contingent consideration liability at beginning of year			606
Change in Fair Value			9
Payments
Contingent consideration liability at end of quarter	615		615
Jhana Education [Member]
Business Acquisition, Contingent Consideration [Line Items]
Contingent consideration liability at beginning of year			3,942
Change in Fair Value			67
Payments			(301)
Contingent consideration liability at end of quarter	$ 3,708		$ 3,708

Stock-Based Compensation (Narrative) (Details)			3 Months Ended	6 Months Ended
Stock-Based Compensation (Narrative) (Details)	Jan. 25, 2019 USD ($) $ / shares shares	Oct. 01, 2018 item shares	Feb. 28, 2019 USD ($) shares	Feb. 28, 2019 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares issued under terms of the award			39,803	50,932
Number of shares reduced, withheld for minimum statutory taxes			241
Fiscal 2019 Long Term Incentive Plan [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, 2021
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			10,730	21,218
Director [Member] \| Fiscal 2019 Restricted Stock Award Plan [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
Restricted Stock Awards [Member] \| Fiscal 2019 Restricted Stock Award Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense \| $			$ 600,000	$ 600,000
Time-Based Award [Member] \| Fiscal 2019 Time-Based Award Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Price per share \| $ / shares	$ 24.54
Vesting period of awards	2 years
Fair value of shares awarded \| $	$ 300,000
Shares issued under terms of the award	11,915
Time-Based Award [Member] \| Fiscal 2019 Long Term Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of tranches \| item		1
Performance-Based Award [Member] \| Fiscal 2019 Long Term Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of tranches \| item		2
Tranche One [Member] \| Time-Based Award [Member] \| Fiscal 2019 Long Term Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of shares plan participants are entitled to		25.00%
Vesting period of awards		3 years
Shares issued under terms of the award		36,470
Tranche Two and Three [Member] \| Performance-Based Award [Member] \| Fiscal 2019 Long Term Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of performance-based objectives		100.00%
Shares issued under terms of the award		109,409
Tranche Two and Three [Member] \| Performance-Based Award [Member] \| Minimum [Member] \| Fiscal 2019 Long Term Incentive Plan [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] \| Performance-Based Award [Member] \| Maximum [Member] \| Fiscal 2019 Long Term Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percent of performance award to be granted		200.00%
New shares granted		218,818

Stock-Based Compensation (Total Cost Of Stock-Based Compensation) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2019	Feb. 28, 2018	Feb. 28, 2019	Feb. 28, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	$ 1,043	$ 779	$ 1,989	$ 1,736
Long-Term Incentive Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	824	582	1,557	1,373
Restricted Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	175	160	350	292
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	$ 44	$ 37	$ 82	$ 71

Stock-Based Compensation (Restricted Stock Award Activity) (Details) - Restricted Stock Awards [Member]	6 Months Ended
	Feb. 28, 2019 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock awards at August 31, 2018, Number of Shares \| shares	23,338
Granted, Number of Shares \| shares	28,525
Forfeited, Number of Shares \| shares
Vested, Number of Shares \| shares	(23,338)
Restricted stock awards at February 28, 2019, Number of Shares \| shares	28,525
Restricted stock awards at August 31, 2018, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	$ 30.00
Granted, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	24.54
Forfeited, Weighted-Average Grant Date Fair Value Per Share \| $ / shares
Vested, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	30.00
Restricted stock awards at February 28, 2019, Weighted-Average Grant Date Fair Value Per Share \| $ / shares	$ 24.54

Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
Income Taxes (Narrative) (Details) - USD ($) $ in Thousands	Feb. 28, 2019	Feb. 28, 2018	Feb. 28, 2019	Feb. 28, 2018	Aug. 31, 2019	Aug. 31, 2018	Dec. 31, 2017
Income Taxes [Line Items]
Federal statutory income tax rate						25.70%	35.00%
Income tax benefit	$ (410)	$ (3,025)	$ (310)	$ (4,373)
Pre-tax loss	$ (3,927)	$ (5,765)	$ (5,184)	$ (9,505)
Negative effective tax benefit rate affected by GILTI			6.00%
GILTI tax expense			$ 300
Scenario, Forecast [Member]
Income Taxes [Line Items]
Federal statutory income tax rate					21.00%

Loss Per Share (Narrative) (Details) - shares	3 Months Ended	6 Months Ended
Loss Per Share (Narrative) (Details) - shares	Feb. 28, 2019	Feb. 28, 2019
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	214,000

Loss Per Share (Computation Of Loss Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2019	Feb. 28, 2018	Feb. 28, 2019	Feb. 28, 2018
Numerator for basic and diluted loss per share:
Net loss	$ (3,517)	$ (2,740)	$ (4,874)	$ (5,132)
Denominator for basic and diluted loss per share:
Basic weighted average shares outstanding	13,937	13,867	13,927	13,796
Effect of dilutive securities:
Stock options and other stock-based awards
Diluted weighted average shares outstanding	13,937	13,867	13,927	13,796
EPS Calculations:
Net loss per share: Basic and diluted	$ (0.25)	$ (0.20)	$ (0.35)	$ (0.37)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References + Details

Segment Information (Narrative) (Details)	6 Months Ended
Segment Information (Narrative) (Details)	Feb. 28, 2019 segment item
Segment Information [Abstract]
Number of divisions	2
Number of operating reportable segments \| segment	3
Number of corporate services group	1

Segment Information (Schedule Of Segment Operations) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2019	Feb. 28, 2018	Feb. 28, 2019	Feb. 28, 2018
Segment Reporting Information [Line Items]
Sales to External Customers	$ 50,356	$ 46,547	$ 104,185	$ 94,479
Gross Profit	35,366	32,744	72,148	65,612
Adjusted EBITDA	964	(668)	4,133	(66)
Operating Segments [Member]
Segment Reporting Information [Line Items]
Adjusted EBITDA	2,852	1,342	7,855	4,302
Operating Segments [Member] \| Enterprise Division [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	39,320	36,321	81,468	73,837
Gross Profit	29,515	27,245	59,448	54,308
Adjusted EBITDA	3,761	2,493	9,029	6,295
Operating Segments [Member] \| Education Practice [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	9,698	9,007	20,044	18,183
Gross Profit	5,429	5,163	11,822	10,593
Adjusted EBITDA	(909)	(1,151)	(1,174)	(1,993)
Operating Segments [Member] \| Direct Offices [Member] \| Enterprise Division [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	36,414	33,275	74,885	67,471
Gross Profit	27,294	24,881	54,364	49,442
Adjusted EBITDA	2,543	1,331	6,183	3,723
Operating Segments [Member] \| International Licensees [Member] \| Enterprise Division [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	2,906	3,046	6,583	6,366
Gross Profit	2,221	2,364	5,084	4,866
Adjusted EBITDA	1,218	1,162	2,846	2,572
Corporate And Eliminations [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	1,338	1,219	2,673	2,459
Gross Profit	422	336	878	711
Adjusted EBITDA	$ (1,888)	$ (2,010)	$ (3,722)	$ (4,368)

Segment Information (Reconciliation Of Adjusted EBITDA) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2019	Feb. 28, 2018	Feb. 28, 2019	Feb. 28, 2018
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	$ 964	$ (668)	$ 4,133	$ (66)
Stock-based compensation expense	(1,043)	(779)	(1,989)	(1,736)
Increase in contingent consideration liabilities	(52)	(477)	(76)	(652)
Licensee transition costs	(428)		(488)
ERP system implementation costs		(429)		(855)
Depreciation	(1,697)	(1,379)	(3,251)	(2,280)
Amortization	(1,300)	(1,395)	(2,538)	(2,791)
Loss from operations	(3,556)	(5,127)	(4,209)	(8,380)
Interest income	9	25	22	59
Interest expense	(623)	(692)	(1,255)	(1,240)
Discount accretion on related party receivable	243	29	258	56
Loss before income taxes	(3,927)	(5,765)	(5,184)	(9,505)
Income tax benefit	410	3,025	310	4,373
Net loss	(3,517)	(2,740)	(4,874)	(5,132)
Operating Segments [Member]
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	2,852	1,342	7,855	4,302
Corporate And Eliminations [Member]
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	$ (1,888)	$ (2,010)	$ (3,722)	$ (4,368)

Segment Information (Disaggregation Of Revenue By Geographic Region) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2019	Feb. 28, 2018	Feb. 28, 2019	Feb. 28, 2018
Disaggregation of Revenue [Line Items]
Revenue	$ 50,356	$ 46,547	$ 104,185	$ 94,479
Americas [Member]
Disaggregation of Revenue [Line Items]
Revenue	39,839	34,786	80,757	70,751
Asia Pacific [Member]
Disaggregation of Revenue [Line Items]
Revenue	7,398	8,711	16,678	17,491
Europe/Middle East/Africa [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 3,119	$ 3,050	$ 6,750	$ 6,237

Segment Information (Disaggregation Of Revenue By Type Of Service) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Feb. 28, 2019	Feb. 28, 2018	Feb. 28, 2019	Feb. 28, 2018
Disaggregation of Revenue [Line Items]
Revenue	$ 50,356	$ 46,547	$ 104,185	$ 94,479
Education Practice [Member]
Disaggregation of Revenue [Line Items]
Revenue	9,698	9,007
Services And Products [Member]
Disaggregation of Revenue [Line Items]
Revenue	26,202	26,072	56,001	56,221
Services And Products [Member] \| Education Practice [Member]
Disaggregation of Revenue [Line Items]
Revenue	2,583	3,396
Subscriptions [Member]
Disaggregation of Revenue [Line Items]
Revenue	17,784	13,731	36,171	26,581
Subscriptions [Member] \| Education Practice [Member]
Disaggregation of Revenue [Line Items]
Revenue	5,368	3,749
Royalties [Member]
Disaggregation of Revenue [Line Items]
Revenue	5,032	5,525	9,340	9,218
Royalties [Member] \| Education Practice [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,747	1,862
Leases And Other [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,338	1,219	2,673	2,459
Operating Segments [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	39,320	36,321	81,468	73,837
Operating Segments [Member] \| Education Practice [Member]
Disaggregation of Revenue [Line Items]
Revenue			20,044	18,183
Operating Segments [Member] \| Direct Offices [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	36,414	33,275	74,885	67,471
Operating Segments [Member] \| International Licensees [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	2,906	3,046	6,583	6,366
Operating Segments [Member] \| Services And Products [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	23,619	22,676	49,500	48,040
Operating Segments [Member] \| Services And Products [Member] \| Education Practice [Member]
Disaggregation of Revenue [Line Items]
Revenue			6,501	8,181
Operating Segments [Member] \| Services And Products [Member] \| Direct Offices [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	23,102	22,108	48,111	46,981
Operating Segments [Member] \| Services And Products [Member] \| International Licensees [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	517	568	1,389	1,059
Operating Segments [Member] \| Subscriptions [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	12,416	9,982	25,091	19,099
Operating Segments [Member] \| Subscriptions [Member] \| Education Practice [Member]
Disaggregation of Revenue [Line Items]
Revenue			11,080	7,482
Operating Segments [Member] \| Subscriptions [Member] \| Direct Offices [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	12,416	9,982	25,091	19,099
Operating Segments [Member] \| Royalties [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	3,285	3,663	6,877	6,698
Operating Segments [Member] \| Royalties [Member] \| Education Practice [Member]
Disaggregation of Revenue [Line Items]
Revenue			2,463	2,520
Operating Segments [Member] \| Royalties [Member] \| Direct Offices [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	896	1,185	1,683	1,391
Operating Segments [Member] \| Royalties [Member] \| International Licensees [Member] \| Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	2,389	2,478	5,194	5,307
Corporate And Eliminations [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,338	1,219	2,673	2,459
Corporate And Eliminations [Member] \| Leases And Other [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 1,338	$ 1,219	$ 2,673	$ 2,459

Investment In FC Organizational Products (Narrative) (Details) - FCOP [Member] - USD ($) $ in Millions	3 Months Ended
	Feb. 28, 2019	Aug. 31, 2018
Related Party Transaction [Line Items]
Percent ownership interest in related party	19.50%
Cash from related parties	$ 1.4
Discount on receivable from related party	$ 0.2	$ 0.3

Investment In FC Organizational Products (Components Of Other Current And Other Long-Term Assets) (Details) - USD ($) $ in Thousands	Feb. 28, 2019	Aug. 31, 2018
Other Assets [Line Items]
Other long-term assets	$ 11,015	$ 12,935
FCOP [Member]
Other Assets [Line Items]
Other current assets	694	1,123
Other long-term assets		411
Other assets	$ 694	$ 1,534