Franklin Covey (FC) 10-Q 7 Jan 22 2022 Q1 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	3 Months Ended
	Nov. 30, 2021	Dec. 31, 2021
Document And Entity Information [Abstract]
Document Type	10-Q
Document Fiscal Period Focus	Q1
Current Fiscal Year End Date	--08-31
Document Fiscal Year Focus	2022
Document Quarterly Report	true
Document Period End Date	Nov. 30, 2021
Document Transition Report	false
Entity File Number	001-11107
Entity Registrant Name	FRANKLIN COVEY CO.
Entity Incorporation, State or Country Code	UT
Entity Tax Identification Number	87-0401551
Entity Address, Address Line One	2200 West Parkway Boulevard
Entity Address, City or Town	Salt Lake City
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84119-2099
City Area Code	801
Local Phone Number	817-1776
Title of 12(b) Security	Common Stock, $.05 Par Value
Trading Symbol	FC
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		14,297,151
Amendment Flag	false
Entity Central Index Key	0000886206

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Nov. 30, 2021	Aug. 31, 2021
Current assets:
Cash and cash equivalents	$ 51,250	$ 47,417
Accounts receivable, less allowance for doubtful accounts of $4,701 and $4,643	51,692	70,680
Inventories	2,579	2,496
Prepaid expenses and other current assets	16,162	16,115
Total current assets	121,683	136,708
Property and equipment, net	10,585	11,525
Intangible assets, net	48,667	50,097
Goodwill	31,220	31,220
Deferred income tax assets	4,259	4,951
Other long-term assets	14,246	15,153
Total assets	230,660	249,654
Current liabilities:
Current portion of notes payable	5,835	5,835
Current portion of financing obligation	2,963	2,887
Accounts payable	5,485	6,948
Deferred subscription revenue	65,812	74,772
Other deferred revenue	11,958	11,117
Accrued liabilities	26,107	34,980
Total current liabilities	118,160	136,539
Notes payable, less current portion	11,759	12,975
Financing obligation, less current portion	10,387	11,161
Other liabilities	7,942	8,741
Deferred income tax liabilities	375	375
Total liabilities	148,623	169,791
Shareholders’ equity:
Common stock, $0.05 par value; 40,000 shares authorized, 27,056 shares issued	1,353	1,353
Additional paid-in capital	213,504	214,888
Retained earnings	67,403	63,591
Accumulated other comprehensive income	565	709
Treasury stock at cost, 12,757 shares and 12,889 shares	(200,788)	(200,678)
Total shareholders’ equity	82,037	79,863
Total liabilities and shareholders' equity	$ 230,660	$ 249,654

Condensed Consolidated Balanc_2

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Nov. 30, 2021	Aug. 31, 2021
Condensed Consolidated Balance Sheets [Abstract]
Allowance for doubtful accounts	$ 4,701	$ 4,643
Common stock, par value	$ 0.05	$ 0.05
Common stock, shares authorized	40,000	40,000
Common stock, shares issued	27,056	27,056
Treasury stock, shares	12,757	12,889

Condensed Consolidated Statemen

Condensed Consolidated Statements Of Operations And Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Nov. 30, 2021	Nov. 30, 2020
Condensed Consolidated Statements Of Operations And Comprehensive Income (Loss) [Abstract]
Net sales	$ 61,259	$ 48,324
Cost of sales	13,661	11,938
Gross profit	47,598	36,386
Selling, general, and administrative	39,343	33,683
Depreciation	1,279	1,741
Amortization	1,431	1,131
Income (loss) from operations	5,545	(169)
Interest income	15	24
Interest expense	(446)	(568)
Income (loss) before income taxes	5,114	(713)
Income tax provision	(1,302)	(179)
Net income (loss)	$ 3,812	$ (892)
Net income (loss) per share:
Basic and diluted	$ 0.27	$ (0.06)
Weighted average number of common shares:
Basic	14,246	13,977
Diluted	14,312	13,977
COMPREHENSIVE INCOME (LOSS)
Net income (loss)	$ 3,812	$ (892)
Foreign currency translation adjustments, net of income taxes of $0 and $0	(144)	307
Comprehensive income (loss)	$ 3,668	$ (585)

Condensed Consolidated Statem_2

Condensed Consolidated Statements Of Operations And Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2021	Nov. 30, 2020
Condensed Consolidated Statements Of Operations And Comprehensive Income (Loss) [Abstract]
Foreign currency translation adjustments, income taxes	$ 0	$ 0

Condensed Consolidated Statem_3

Condensed Consolidated Statements Of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2021	Nov. 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)	$ 3,812	$ (892)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	2,710	2,872
Amortization of capitalized curriculum costs	789	889
Stock-based compensation	1,649	1,158
Deferred income taxes	679	(111)
Change in fair value of contingent consideration liabilities	28	62
Amortization of right-of-use operating lease assets	225	259
Changes in assets and liabilities, net of effect of acquired businesses:
Decrease in accounts receivable, net	18,829	13,482
Decrease (increase) in inventories	(92)	309
Decrease (increase) in prepaid expenses and other assets	196	(176)
Decrease in accounts payable and accrued liabilities	(9,825)	(2,721)
Decrease in deferred revenue	(8,219)	(3,625)
Decrease in income taxes payable/receivable	(47)	(111)
Decrease in other long-term liabilities	(570)	(519)
Net cash provided by operating activities	10,164	10,876
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	(520)	(185)
Curriculum development costs	(243)	(263)
Net cash used for investing activities	(763)	(448)
CASH FLOWS FROM FINANCING ACTIVITIES
Principal payments on notes payable	(1,250)	(1,250)
Principal payments on financing obligation	(698)	(628)
Purchases of common stock for treasury	(3,488)	(1,530)
Payment of contingent consideration liabilities	(368)	(329)
Proceeds from sales of common stock held in treasury	344	256
Net cash used for financing activities	(5,460)	(3,481)
Effect of foreign currency exchange rates on cash and cash equivalents	(108)	176
Net increase in cash and cash equivalents	3,833	7,123
Cash and cash equivalents at the beginning of the period	47,417	27,137
Cash and cash equivalents at the end of the period	51,250	34,260
Supplemental disclosure of cash flow information:
Cash paid for income taxes	577	403
Cash paid for interest	410	562
Non-cash investing and financing activities:
Purchases of property and equipment financed by accounts payable	238	20
Acquisition of right-of-use operating lease assets for operating lease liabilities	$ 142	$ 726

Condensed Consolidated Statem_4

Condensed Consolidated Statements Of Shareholders' Equity - USD ($) $ 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, 2020	27,056,000
Beginning balance at Aug. 31, 2020	$ 1,353	$ 211,920	$ 49,968	$ 641
Beginning balance, shares, Treasury at Aug. 31, 2020					(13,175,000)
Beginning balance, Treasury at Aug. 31, 2020					$ (204,429)
Issuance of common stock from treasury, shares					236,000
Issuance of common stock from treasury		(3,411)			$ 3,668
Purchase of treasury shares, shares					(89,000)
Purchase of treasury shares					$ (1,530)
Stock-based compensation		1,158
Cumulative translation adjustments				307		$ 307
Net income (loss)			(892)			(892)
Ending balance, shares at Nov. 30, 2020	27,056,000
Ending balance at Nov. 30, 2020	$ 1,353	209,667	49,076	948
Ending balance, shares, Treasury at Nov. 30, 2020					(13,028,000)
Ending balance, Treasury at Nov. 30, 2020					$ (202,291)
Beginning balance, shares at Aug. 31, 2021	27,056,000
Beginning balance at Aug. 31, 2021	$ 1,353	214,888	63,591	709		$ 79,863
Beginning balance, shares, Treasury at Aug. 31, 2021					(12,889,000)
Beginning balance, Treasury at Aug. 31, 2021					$ (200,678)
Issuance of common stock from treasury, shares					217,000	216,752
Issuance of common stock from treasury		(3,033)			$ 3,378
Purchase of treasury shares, shares					(85,000)
Purchase of treasury shares					$ (3,488)
Stock-based compensation		1,649
Cumulative translation adjustments				(144)		$ (144)
Net income (loss)			3,812			3,812
Ending balance, shares at Nov. 30, 2021	27,056,000
Ending balance at Nov. 30, 2021	$ 1,353	$ 213,504	$ 67,403	$ 565		$ 82,037
Ending balance, shares, Treasury at Nov. 30, 2021					(12,757,000)
Ending balance, Treasury at Nov. 30, 2021					$ (200,788)

Basis Of Presentation

Basis Of Presentation	3 Months Ended
	Nov. 30, 2021
Basis Of Presentation [Abstract]
Basis Of Presentation	NOTE 1 – BASIS OF PRESENTATION General Franklin Covey Co. (hereafter referred to as us, we, our, or the Company) is a global company focused on organizational performance improvement. Our mission is to “enable greatness in people and organizations everywhere,” and our global structure is designed to help individuals and organizations achieve sustained superior performance through changes in human behavior. We are fundamentally a content and solutions company, and we believe that our offerings and services create the connection between capabilities and results. We have a wide range of content delivery options, including: the All Access Pass (AAP) subscription, the Leader in Me membership, and other intellectual property licenses; digital online learning; on-site training; training led through certified facilitators; blended learning; and organization-wide transformational processes, including consulting and coaching. We believe our investments in digital delivery modalities over the past few years have enabled us to deliver our content to clients in a high-quality learning environment whether those clients are working remotely or in a centralized location. We believe that our clients are able to utilize our content to create cultures whose hallmarks are high-performing, collaborative individuals, led by effective, trust-building leaders who execute with excellence and deliver measurably improved results for all of their key stakeholders. We have some of the best-known offerings in the training industry, including a suite of individual-effectiveness and leadership-development training content based on the best-selling books, The 7 Habits of Highly Effective People, The Speed of Trust, The Leader in Me, The 4 Disciplines of Execution, and Multipliers, and proprietary content in the areas of 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, 2021. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the quarter ended November 30, 2021 are not necessarily indicative of results expected for the entire fiscal year ending August 31, 2022, or for any future periods. Note on the Continuing COVID-19 Pandemic The COVID-19 pandemic continues to produce difficult economic and operating conditions for certain areas of our business, including our international direct offices and licensee partners as countries and local municipalities have maintained a variety of measures designed to contain the spread of the virus. These measures included the closure of offices, schools, and other meeting spaces. These efforts persist in the face of new variants, increasing cases, and ongoing uncertainty regarding the pandemic. While our content is able to be presented digitally and is translated into numerous languages, the technology base differs significantly among countries, which may impede the smooth delivery of content to remote work locations. We remain optimistic about the future as we continue to see signs of economic recovery in the United States and many of the other countries in which we operate as companies, schools, and individuals are adapting, and the positive effect of vaccinations and therapeutics are enabling some economies to open and recover. However, emerging variants continue to create uncertainty and many countries, states, and local governments may continue to implement additional lockdowns or other containment measures in future periods. These measures change rapidly to new and perceived threats and may have an adverse impact on our results of operations in future periods. We will continue to monitor developments related to the COVID-19 pandemic, including supply chain issues, and their actual and potential impacts on our financial position, results of operations, and liquidity. Accounting Pronouncements Issued and Adopted In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update No. 2019-12, Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. The guidance in ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, although early adoption is permitted. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The adoption of ASU 2019-12 did not have a material impact on our consolidated financial statements.

Inventories

Inventories	3 Months Ended
	Nov. 30, 2021
Inventories [Abstract]
Inventories	NOTE 2 – INVENTORIES Inventories are stated at the lower of cost or net realizable value, cost being determined using the first-in, first-out method, and were comprised of the following (in thousands): November 30, August 31, 2021 2021Finished goods$ 2,551 $ 2,468Raw materials 28 28 $ 2,579 $ 2,496

Fair Value Of Financial Instrum

Fair Value Of Financial Instruments	3 Months Ended
	Nov. 30, 2021
Fair Value Of Financial Instruments [Abstract]
Fair Value Of Financial Instruments	NOTE 3 – FAIR VALUE OF FINANCIAL INSTRUMENTS At November 30, 2021, the carrying value of our financial instruments approximated their fair values. The fair values of our contingent consideration liabilities from previous business acquisitions are considered “Level 3” measurements because we use various estimates in the valuation models to project the timing and amount of future contingent payments. The fair value of the contingent consideration liability from the acquisition of Jhana Education (Jhana) changed as follows during the quarter ended November 30, 2021 (in thousands): Balance at August 31, 2021 $ 2,095 Change in fair value 28Payments (368)Balance at November 30, 2021 $ 1,755 At each quarterly reporting date, we estimate the fair value of our contingent liability from the acquisition of Jhana through the use of a Monte Carlo simulation. Based on the timing of expected payments, $1.4 million of the Jhana contingent consideration liability was recorded in accrued liabilities at November 30, 2021. The remaining $0.4 million of the Jhana contingent consideration liability is reported in 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 and comprehensive income (loss).

Revenue Recognition

Revenue Recognition	3 Months Ended
	Nov. 30, 2021
Revenue Recognition [Abstract]
Revenue Recognition	NOTE 4 – REVENUE RECOGNITION Contract Balances Our deferred revenue totaled $80.2 million at November 30, 2021 and $88.6 million at August 31, 2021, of which $2.4 million and $2.7 million were classified as components of other long-term liabilities at November 30, 2021, and August 31, 2021, respectively. The amount of deferred revenue that was generated from subscription offerings totaled $67.8 million at November 30, 2021 and $77.0 million at August 31, 2021. During the quarter ended November 30, 2021, we recognized $28.4 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. Remaining transaction price represents contracted revenue that has not yet been recognized, including unearned revenue and unbilled amounts that will be recognized as revenue in future periods. Transaction price is influenced by factors such as seasonality, the average length of the contract term, and the ability of the Company to continue to enter multi-year non-cancellable contracts. At November 30, 2021, we had $121.1 million of remaining performance obligations, including the amount of deferred revenue related to our subscription offerings. The remaining performance obligation does not include other deferred revenue, as amounts included in other deferred revenue include items such as deposits that are generally refundable at the client’s request prior to the satisfaction of the obligation. Disaggregated Revenue Information Refer to Note 7, Segment Information, to these condensed consolidated financial statements for our disaggregated revenue information.

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Nov. 30, 2021
Stock-Based Compensation [Abstract]
Stock-Based Compensation	NOTE 5 – STOCK-BASED COMPENSATION Our stock-based compensation was comprised of the following for the periods presented (in thousands): Quarter Ended November 30, November 30, 2021 2020Long-term incentive awards$ 1,123  $ 946 Strive acquisition compensation 279  -Restricted stock awards 175  175 Employee stock purchase plan 57  37 Fully-vested share awards 15  - $ 1,649  $ 1,158  During the quarter ended November 30, 2021, we issued 216,752 shares of our common stock under various stock-based compensation arrangements, including our employee stock purchase plan (ESPP). Our stock-based compensation plans also allow shares to be withheld to cover statutory income taxes if so elected by the award recipient. During the quarter ended November 30, 2021, we withheld 85,095 shares of our common stock for taxes on stock-based compensation arrangements, which had a total fair value of $3.5 million. Employee Stock Purchase Plan We have an employee stock purchase plan that offers qualified employees the opportunity to purchase shares of our common stock at a price equal to 85 percent of the average fair market value of our common stock on the last trading day of each fiscal quarter. During the quarter ended November 30, 2021, we issued 9,379 shares of our common stock to participants in the ESPP.

Income (Loss) Per Share

Income (Loss) Per Share	3 Months Ended
	Nov. 30, 2021
Income (Loss) Per Share [Abstract]
Income (Loss) Per Share	NOTE 6 – INCOME (LOSS) PER SHARE The following schedule shows the calculation of income (loss) per share for the periods presented (in thousands, except per-share amounts). Quarter Ended November 30, November 30, 2021 2020Numerator for basic and diluted loss per share: Net income (loss)$ 3,812 $ (892) Denominator for basic and diluted loss per share: Basic weighted average shares outstanding 14,246  13,977 Effect of dilutive securities: Other stock-based awards 66  -Diluted weighted average shares outstanding 14,312  13,977  EPS Calculations: Net income (loss) per share: Basic and diluted$ 0.27 $ (0.06)

Segment Information

Segment Information	3 Months Ended
	Nov. 30, 2021
Segment Information [Abstract]
Segment Information	NOTE 7 – SEGMENT INFORMATION Segment Information Our sales are primarily comprised of training and consulting services and our internal reporting and operating structure is currently organized around two divisions. The Enterprise Division, which consists of our Direct Office and International Licensee segments and the Education Division, which is comprised of our Education practice. Based on the applicable guidance, our operations are comprised of three reportable segments and one corporate services group. The following is a brief description of our reportable segments: Direct Offices – Our Direct Office segment has a depth of expertise in helping organizations solve problems that require changes in human behavior, including leadership, productivity, execution, trust, and sales performance. We have a variety of principle-based offerings that help build winning and profitable cultures. This segment includes our sales personnel that serve the United States and Canada; our international sales offices located in Japan, China, the United Kingdom, Australia, Germany, Switzerland, and Austria; our government services sales channel; and our book and audio sales. International Licensees – Our independently owned international licensees provide our offerings and services in countries where we do not have a directly-owned office. These licensee partners allow us to expand the reach of our services to large multinational organizations as well as smaller organizations in their countries. This segment’s results are primarily comprised of royalty revenues received from these licensees. Education Practice – Centered around the principles found in The Leader in Me, the Education practice is dedicated to helping educational institutions build a culture that will produce great results. We believe these results are manifested by increases in student performance, improved school culture, decreased disciplinary issues, and increased teacher engagement and parental involvement. This segment includes our domestic and international Education practice operations, which are focused on sales to educational institutions such as elementary schools, high schools, and colleges and universities. Corporate and Other – Our corporate and other information includes leasing operations, shipping and handling revenues, royalty revenues from Franklin Planner Corp., and certain corporate administrative functions. We have determined that the Company’s chief operating decision maker is the Chief Executive Officer, and the primary measurement tool used in business unit performance analysis is Adjusted EBITDA, which may not be calculated as similarly titled amounts disclosed by other companies. Adjusted EBITDA is a non-GAAP financial measure. For reporting purposes, our consolidated Adjusted EBITDA may be calculated as net income (loss) excluding interest expense, income taxes, depreciation expense, intangible asset amortization expense, stock-based compensation, and certain other charges such as adjustments for changes in the fair value of contingent liabilities arising from business acquisitions. We reference this non-GAAP financial measure in our decision making because it provides supplemental information that facilitates consistent internal comparisons to the historical operating performance of prior periods and we believe it provides investors with greater transparency to evaluate operational activities and financial results. Our operations are not capital intensive and we do not own any manufacturing facilities or equipment. Accordingly, we do not allocate assets to the reportable segments for analysis purposes. Interest expense and interest income are primarily generated at the corporate level and are not allocated. Income taxes are likewise calculated and paid on a corporate level (except for entities that operate in foreign jurisdictions) and are not allocated for analysis purposes. We account for the following segment information on the same basis as the accompanying condensed consolidated financial statements (in thousands). Sales to Quarter Ended External AdjustedNovember 30, 2021 Customers Gross Profit EBITDA Enterprise Division: Direct offices$ 45,119 $ 36,202 $ 9,954International licensees 2,997 2,701 1,671 48,116 38,903 11,625Education practice 11,697 7,860 235Corporate and eliminations 1,446 835 (1,928)Consolidated$ 61,259 $ 47,598 $ 9,932 Quarter Ended November 30, 2020 Enterprise Division: Direct offices$ 36,743  $ 29,439  $ 6,703International licensees 2,596  2,285  1,284 39,339  31,724  7,987 Education practice 7,498  3,986  (2,285)Corporate and eliminations 1,487  676  (1,986)Consolidated$ 48,324  $ 36,386  $ 3,716  ‎ A reconciliation of our consolidated Adjusted EBITDA to consolidated net income (loss) is provided below (in thousands). Quarter Ended November 30, November 30, 2021 2020Segment Adjusted EBITDA$ 11,860 $ 5,702 Corporate expenses (1,928) (1,986)Consolidated Adjusted EBITDA 9,932 3,716 Stock-based compensation (1,649) (1,158)Increase in the fair value of contingent consideration liabilities (28) (62)Government COVID-19 assistance - 207 Depreciation (1,279) (1,741)Amortization (1,431) (1,131)Income (loss) from operations 5,545 (169)Interest income 15 24 Interest expense (446) (568)Income (loss) before income taxes 5,114 (713)Income tax provision (1,302) (179)Net income (loss)$ 3,812 $ (892) Revenue by Category The following table presents our revenue disaggregated by geographic region (in thousands). Quarter Ended November 30, November 30, 2021 2020 Americas$ 48,755 $ 38,327 Asia Pacific 7,797 6,806 Europe/Middle East/Africa 4,707 3,191  $ 61,259 $ 48,324  ‎ The following table presents our revenue disaggregated by type of service (in thousands). Quarter Ended Services and Leases and November 30, 2021 Products Subscriptions Royalties Other Consolidated Enterprise Division: Direct offices$ 23,851 $ 20,512 $ 756 $ - $ 45,119International licensees 404 - 2,593 - 2,997 24,255 20,512 3,349 - 48,116Education practice 3,226 7,844 627 - 11,697Corporate and eliminations - - 344 1,102 1,446Consolidated$ 27,481 $ 28,356 $ 4,320 $ 1,102 $ 61,259 Quarter Ended November 30, 2020 Enterprise Division: Direct offices$ 19,412  $ 16,614  $ 717  $ - $ 36,743 International licensees 331  - 2,265  - 2,596  19,743  16,614  2,982  - 39,339 Education practice 1,924  5,075  499  - 7,498 Corporate and eliminations - - 335  1,152  1,487 Consolidated$ 21,667  $ 21,689  $ 3,816  $ 1,152  $ 48,324

Basis Of Presentation (Policy)

Basis Of Presentation (Policy)	3 Months Ended
	Nov. 30, 2021
Basis Of Presentation [Abstract]
General	General Franklin Covey Co. (hereafter referred to as us, we, our, or the Company) is a global company focused on organizational performance improvement. Our mission is to “enable greatness in people and organizations everywhere,” and our global structure is designed to help individuals and organizations achieve sustained superior performance through changes in human behavior. We are fundamentally a content and solutions company, and we believe that our offerings and services create the connection between capabilities and results. We have a wide range of content delivery options, including: the All Access Pass (AAP) subscription, the Leader in Me membership, and other intellectual property licenses; digital online learning; on-site training; training led through certified facilitators; blended learning; and organization-wide transformational processes, including consulting and coaching. We believe our investments in digital delivery modalities over the past few years have enabled us to deliver our content to clients in a high-quality learning environment whether those clients are working remotely or in a centralized location. We believe that our clients are able to utilize our content to create cultures whose hallmarks are high-performing, collaborative individuals, led by effective, trust-building leaders who execute with excellence and deliver measurably improved results for all of their key stakeholders. We have some of the best-known offerings in the training industry, including a suite of individual-effectiveness and leadership-development training content based on the best-selling books, The 7 Habits of Highly Effective People, The Speed of Trust, The Leader in Me, The 4 Disciplines of Execution, and Multipliers, and proprietary content in the areas of 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, 2021. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates. The results of operations for the quarter ended November 30, 2021 are not necessarily indicative of results expected for the entire fiscal year ending August 31, 2022, or for any future periods.
Note On The Continuing COVID-19 Pandemic	Note on the Continuing COVID-19 Pandemic The COVID-19 pandemic continues to produce difficult economic and operating conditions for certain areas of our business, including our international direct offices and licensee partners as countries and local municipalities have maintained a variety of measures designed to contain the spread of the virus. These measures included the closure of offices, schools, and other meeting spaces. These efforts persist in the face of new variants, increasing cases, and ongoing uncertainty regarding the pandemic. While our content is able to be presented digitally and is translated into numerous languages, the technology base differs significantly among countries, which may impede the smooth delivery of content to remote work locations. We remain optimistic about the future as we continue to see signs of economic recovery in the United States and many of the other countries in which we operate as companies, schools, and individuals are adapting, and the positive effect of vaccinations and therapeutics are enabling some economies to open and recover. However, emerging variants continue to create uncertainty and many countries, states, and local governments may continue to implement additional lockdowns or other containment measures in future periods. These measures change rapidly to new and perceived threats and may have an adverse impact on our results of operations in future periods. We will continue to monitor developments related to the COVID-19 pandemic, including supply chain issues, and their actual and potential impacts on our financial position, results of operations, and liquidity.
Accounting Pronouncements Issued And Adopted	Accounting Pronouncements Issued and Adopted In December 2019, the Financial Accounting Standards Board issued Accounting Standards Update No. 2019-12, Simplifying the Accounting for Income Taxes (ASU 2019-12), which simplifies the accounting for income taxes, eliminates certain exceptions within ASC 740, Income Taxes, and clarifies certain aspects of the current guidance to promote consistency among reporting entities. The guidance in ASU 2019-12 is effective for fiscal years beginning after December 15, 2020, although early adoption is permitted. Most amendments within the standard are required to be applied on a prospective basis, while certain amendments must be applied on a retrospective or modified retrospective basis. The adoption of ASU 2019-12 did not have a material impact on our consolidated financial statements.

Inventories (Tables)

Inventories (Tables)	3 Months Ended
	Nov. 30, 2021
Inventories [Abstract]
Components Of Inventories	November 30, August 31, 2021 2021Finished goods$ 2,551 $ 2,468Raw materials 28 28 $ 2,579 $ 2,496

Fair Value Of Financial Instr_2

Fair Value Of Financial Instruments (Tables)	3 Months Ended
	Nov. 30, 2021
Fair Value Of Financial Instruments [Abstract]
Schedule Of Contingent Consideration Liability	Balance at August 31, 2021 $ 2,095 Change in fair value 28Payments (368)Balance at November 30, 2021 $ 1,755

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Nov. 30, 2021
Stock-Based Compensation [Abstract]
Total Cost Of Stock-Based Compensation	Quarter Ended November 30, November 30, 2021 2020Long-term incentive awards$ 1,123  $ 946 Strive acquisition compensation 279  -Restricted stock awards 175  175 Employee stock purchase plan 57  37 Fully-vested share awards 15  - $ 1,649  $ 1,158

Income (Loss) Per Share (Tables

Income (Loss) Per Share (Tables)	3 Months Ended
	Nov. 30, 2021
Income (Loss) Per Share [Abstract]
Computation Of Income (Loss) Per Share	Quarter Ended November 30, November 30, 2021 2020Numerator for basic and diluted loss per share: Net income (loss)$ 3,812 $ (892) Denominator for basic and diluted loss per share: Basic weighted average shares outstanding 14,246  13,977 Effect of dilutive securities: Other stock-based awards 66  -Diluted weighted average shares outstanding 14,312  13,977  EPS Calculations: Net income (loss) per share: Basic and diluted$ 0.27 $ (0.06)

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Nov. 30, 2021
Segment Information [Abstract]
Schedule Of Segment Operations	Sales to Quarter Ended External AdjustedNovember 30, 2021 Customers Gross Profit EBITDA Enterprise Division: Direct offices$ 45,119 $ 36,202 $ 9,954International licensees 2,997 2,701 1,671 48,116 38,903 11,625Education practice 11,697 7,860 235Corporate and eliminations 1,446 835 (1,928)Consolidated$ 61,259 $ 47,598 $ 9,932 Quarter Ended November 30, 2020 Enterprise Division: Direct offices$ 36,743  $ 29,439  $ 6,703International licensees 2,596  2,285  1,284 39,339  31,724  7,987 Education practice 7,498  3,986  (2,285)Corporate and eliminations 1,487  676  (1,986)Consolidated$ 48,324  $ 36,386  $ 3,716
Reconciliation Of Adjusted EBITDA	Quarter Ended November 30, November 30, 2021 2020Segment Adjusted EBITDA$ 11,860 $ 5,702 Corporate expenses (1,928) (1,986)Consolidated Adjusted EBITDA 9,932 3,716 Stock-based compensation (1,649) (1,158)Increase in the fair value of contingent consideration liabilities (28) (62)Government COVID-19 assistance - 207 Depreciation (1,279) (1,741)Amortization (1,431) (1,131)Income (loss) from operations 5,545 (169)Interest income 15 24 Interest expense (446) (568)Income (loss) before income taxes 5,114 (713)Income tax provision (1,302) (179)Net income (loss)$ 3,812 $ (892)
Schedule Of Revenue Disaggregated By Category	The following table presents our revenue disaggregated by geographic region (in thousands). Quarter Ended November 30, November 30, 2021 2020 Americas$ 48,755 $ 38,327 Asia Pacific 7,797 6,806 Europe/Middle East/Africa 4,707 3,191  $ 61,259 $ 48,324  ‎ The following table presents our revenue disaggregated by type of service (in thousands). Quarter Ended Services and Leases and November 30, 2021 Products Subscriptions Royalties Other Consolidated Enterprise Division: Direct offices$ 23,851 $ 20,512 $ 756 $ - $ 45,119International licensees 404 - 2,593 - 2,997 24,255 20,512 3,349 - 48,116Education practice 3,226 7,844 627 - 11,697Corporate and eliminations - - 344 1,102 1,446Consolidated$ 27,481 $ 28,356 $ 4,320 $ 1,102 $ 61,259 Quarter Ended November 30, 2020 Enterprise Division: Direct offices$ 19,412  $ 16,614  $ 717  $ - $ 36,743 International licensees 331  - 2,265  - 2,596  19,743  16,614  2,982  - 39,339 Education practice 1,924  5,075  499  - 7,498 Corporate and eliminations - - 335  1,152  1,487 Consolidated$ 21,667  $ 21,689  $ 3,816  $ 1,152  $ 48,324

Inventories (Components Of Inve

Inventories (Components Of Inventories) (Details) - USD ($) $ in Thousands	Nov. 30, 2021	Aug. 31, 2021
Inventories [Abstract]
Finished goods	$ 2,551	$ 2,468
Raw materials	28	28
Inventories	$ 2,579	$ 2,496

Fair Value Of Financial Instr_3

Fair Value Of Financial Instruments (Narrative) (Details) - USD ($) $ in Thousands	Nov. 30, 2021	Aug. 31, 2021
Jhana [Member]
Contingent consideration	$ 1,755	$ 2,095
Jhana [Member] | Other Long-Term Liabilities [Member]
Contingent consideration	400
Jhana And RGP [Member] | Accrued Liabilities [Member]
Contingent consideration	$ 1,400

Fair Value Of Financial Instr_4

Fair Value Of Financial Instruments (Schedule Of Contingent Consideration Liability) (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2021	Nov. 30, 2020
Business Acquisition, Contingent Consideration [Line Items]
Change in fair value	$ 28	$ 62
Jhana [Member]
Business Acquisition, Contingent Consideration [Line Items]
Contingent Liability at beginning	2,095
Change in fair value	28
Payments	(368)
Contingent Liability at ending	$ 1,755

Revenue Recognition (Narrative)

Revenue Recognition (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended
	Nov. 30, 2021	Aug. 31, 2021
Deferred revenue	$ 80.2	$ 88.6
Other long-term liabilities	2.4	2.7
Remaining performance obligations	121.1
Subscription Offerings [Member]
Deferred revenue	67.8	$ 77
Subscription [Member]
Deferred revenue recognized	$ 28.4

Stock-Based Compensation (Narra

Stock-Based Compensation (Narrative) (Details) $ in Millions	3 Months Ended
	Nov. 30, 2021USD ($)shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common stock issued from treasury stock	216,752
Shares withheld for tax	85,095
Shares withheld for tax, fair value | $	$ 3.5
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Price of common stock as a percent of the average fair market value	85.00%
Shares issued to employee stock purchase plan participants	9,379

Stock-Based Compensation (Total

Stock-Based Compensation (Total Cost Of Stock-Based Compensation) (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2021	Nov. 30, 2020
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	$ 1,649	$ 1,158
Long-Term Incentive Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	1,123	946
Strive Acquisition Compensation [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	279
Restricted Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	175	175
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	57	$ 37
Fully-Vested Share Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Compensation cost	$ 15

Income (Loss) Per Share (Comput

Income (Loss) Per Share (Computation Of Income (Loss) Per Share) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Nov. 30, 2021	Nov. 30, 2020
Numerator for basic and diluted loss per share:
Net income (loss)	$ 3,812	$ (892)
Denominator for basic and diluted loss per share:
Basic weighted average shares outstanding	14,246	13,977
Effect of dilutive securities:
Other stock-based awards	66
Diluted weighted average shares outstanding	14,312	13,977
EPS Calculations:
Net income (loss) per share: Basic and diluted	$ 0.27	$ (0.06)

Segment Information (Narrative)

Segment Information (Narrative) (Details)	3 Months Ended
	Nov. 30, 2021itemsegment
Segment Information [Abstract]
Number of divisions	2
Number of operating reportable segments | segment	3
Number of corporate services group	1

Segment Information (Schedule O

Segment Information (Schedule Of Segment Operations) (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2021	Nov. 30, 2020
Segment Reporting Information [Line Items]
Sales to External Customers	$ 61,259	$ 48,324
Gross Profit	47,598	36,386
Adjusted EBITDA	9,932	3,716
Operating Segments [Member]
Segment Reporting Information [Line Items]
Adjusted EBITDA	11,860	5,702
Operating Segments [Member] | Enterprise Division [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	48,116	39,339
Gross Profit	38,903	31,724
Adjusted EBITDA	11,625	7,987
Operating Segments [Member] | Education Division [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	11,697	7,498
Gross Profit	7,860	3,986
Adjusted EBITDA	235	(2,285)
Operating Segments [Member] | Direct Offices [Member] | Enterprise Division [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	45,119	36,743
Gross Profit	36,202	29,439
Adjusted EBITDA	9,954	6,703
Operating Segments [Member] | International Licensees [Member] | Enterprise Division [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	2,997	2,596
Gross Profit	2,701	2,285
Adjusted EBITDA	1,671	1,284
Corporate And Eliminations [Member]
Segment Reporting Information [Line Items]
Sales to External Customers	1,446	1,487
Gross Profit	835	676
Adjusted EBITDA	$ (1,928)	$ (1,986)

Segment Information (Reconcilia

Segment Information (Reconciliation Of Adjusted EBITDA) (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2021	Nov. 30, 2020
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	$ 9,932	$ 3,716
Stock-based compensation	(1,649)	(1,158)
Reduction (increase) in contingent consideration liabilities	(28)	(62)
Government COVID-19 assistance		207
Depreciation	(1,279)	(1,741)
Amortization	(1,431)	(1,131)
Income (loss) from operations	5,545	(169)
Interest income	15	24
Interest expense	(446)	(568)
Income (loss) before income taxes	5,114	(713)
Income tax provision	(1,302)	(179)
Net income (loss)	3,812	(892)
Operating Segments [Member]
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	11,860	5,702
Corporate And Eliminations [Member]
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	(1,928)	(1,986)
Corporate [Member]
Segment Reporting Information [Line Items]
Consolidated Adjusted EBITDA	$ (1,928)	$ (1,986)

Segment Information (Schedule_2

Segment Information (Schedule Of Revenue Disaggregated By Geographic Region) (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2021	Nov. 30, 2020
Disaggregation of Revenue [Line Items]
Revenue	$ 61,259	$ 48,324
Americas [Member]
Disaggregation of Revenue [Line Items]
Revenue	48,755	38,327
Asia Pacific [Member]
Disaggregation of Revenue [Line Items]
Revenue	7,797	6,806
Europe/Middle East/Africa [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 4,707	$ 3,191

Segment Information (Schedule_3

Segment Information (Schedule Of Revenue Disaggregated By Type Of Service) (Details) - USD ($) $ in Thousands	3 Months Ended
	Nov. 30, 2021	Nov. 30, 2020
Disaggregation of Revenue [Line Items]
Revenue	$ 61,259	$ 48,324
Corporate [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,446	1,487
Services And Products [Member]
Disaggregation of Revenue [Line Items]
Revenue	27,481	21,667
Subscriptions [Member]
Disaggregation of Revenue [Line Items]
Revenue	28,356	21,689
Royalties [Member]
Disaggregation of Revenue [Line Items]
Revenue	4,320	3,816
Royalties [Member] | Corporate [Member]
Disaggregation of Revenue [Line Items]
Revenue	344	335
Leases And Other [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,102	1,152
Leases And Other [Member] | Corporate [Member]
Disaggregation of Revenue [Line Items]
Revenue	1,102	1,152
Operating Segments [Member] | Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	48,116	39,339
Operating Segments [Member] | Education Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	11,697	7,498
Operating Segments [Member] | Direct Offices [Member] | Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	45,119	36,743
Operating Segments [Member] | International Licensees [Member] | Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	2,997	2,596
Operating Segments [Member] | Services And Products [Member] | Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	24,255	19,743
Operating Segments [Member] | Services And Products [Member] | Education Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	3,226	1,924
Operating Segments [Member] | Services And Products [Member] | Direct Offices [Member] | Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	23,851	19,412
Operating Segments [Member] | Services And Products [Member] | International Licensees [Member] | Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	404	331
Operating Segments [Member] | Subscriptions [Member] | Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	20,512	16,614
Operating Segments [Member] | Subscriptions [Member] | Education Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	7,844	5,075
Operating Segments [Member] | Subscriptions [Member] | Direct Offices [Member] | Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	20,512	16,614
Operating Segments [Member] | Royalties [Member] | Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	3,349	2,982
Operating Segments [Member] | Royalties [Member] | Education Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	627	499
Operating Segments [Member] | Royalties [Member] | Direct Offices [Member] | Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	756	717
Operating Segments [Member] | Royalties [Member] | International Licensees [Member] | Enterprise Division [Member]
Disaggregation of Revenue [Line Items]
Revenue	$ 2,593	$ 2,265