NOTE 11  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 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, Germany, Switzerland, and Austria; our government services sales channel; and our public programs operations.   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 segments 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. (Note 12), and certain corporate administrative functions.  We have determined that the Companys chief operating decision maker is the 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 net income or loss excluding interest expense, income taxes, depreciation expense, amortization expense, stock-based compensation expense, 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 periodically make minor changes to our reporting structure in the normal course of operations. The segment information presented below reflects certain revisions to our reporting structure which occurred during the second quarter of fiscal 2019. Prior period segment information has been revised to conform with our current segment reporting.  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 29, 2020 Customers Gross Profit EBITDA   Enterprise Division:  Direct offices $ 37,973 $ 28,702 $ 4,734  International licensees 2,691 2,237 1,384  40,664 30,939 6,118  Education practice 10,893 6,460 (1,068)  Corporate and eliminations 2,188 1,267 (994)  Consolidated $ 53,745 $ 38,666 $ 4,056   Quarter Ended  February 28, 2019   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   Two Quarters Ended  February 29, 2020   Enterprise Division:  Direct offices $ 80,085 $ 60,113 $ 10,444  International licensees 6,411 5,357 3,419  86,496 65,470 13,863  Education practice 21,974 13,117 (2,171)  Corporate and eliminations 3,887 2,108 (2,675)  Consolidated $ 112,357 $ 80,695 $ 9,017   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  A reconciliation of our consolidated Adjusted EBITDA to consolidated net income (loss) is provided below (in thousands).     Quarter Ended Two Quarters Ended  February 29, February 28, February 29, February 28,  2020 2019 2020 2019  Segment Adjusted EBITDA $ 5,050 $ 2,852 $ 11,692 $ 7,855  Corporate expenses (994) (1,888) (2,675) (3,722)  Consolidated Adjusted EBITDA 4,056 964 9,017 4,133  Stock-based compensation expense (1,793) (1,043) (3,644) (1,989)  Decrease (increase) in the fair value of  contingent consideration liabilities 182 (52) 91 (76)  Knowledge Capital wind-down costs - - (389) -  Licensee transition costs - (428) - (488)  Depreciation (1,653) (1,697) (3,273) (3,251)  Amortization (1,170) (1,300) (2,340) (2,538)  Loss from operations (378) (3,556) (538) (4,209)  Interest income 13 9 18 22  Interest expense (557) (623) (1,162) (1,255)  Discount accretion on related  party receivable - 243 - 258  Loss before income taxes (922) (3,927) (1,682) (5,184)  Income tax benefit 2,019 410 2,235 310  Net income (loss) $ 1,097 $ (3,517) $ 553 $ (4,874)  Revenue by Category  The following table presents our revenue disaggregated by geographic region (in thousands).     Quarter Ended Two Quarters Ended  February 29, February 28, February 29, February 28,  2020 2019 2020 2019   Americas $ 42,721 $ 39,839 $ 86,756 $ 80,757  Asia Pacific 7,089 7,398 17,228 16,678  Europe/Middle East/Africa 3,935 3,119 8,373 6,750  $ 53,745 $ 50,356 $ 112,357 $ 104,185  The following table presents our revenue disaggregated by type of service (in thousands).     Quarter Ended Services and Leases and  February 29, 2020 Products Subscriptions Royalties Other Consolidated   Enterprise Division:  Direct offices $ 21,644 $ 15,172 $ 1,157 $ - $ 37,973  International licensees 410 - 2,281 - 2,691  22,054 15,172 3,438 - 40,664  Education practice 2,950 6,192 1,751 - 10,893  Corporate and eliminations - - 935 1,253 2,188  Consolidated $ 25,004 $ 21,364 $ 6,124 $ 1,253 $ 53,745   Quarter Ended  February 28, 2019   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   Two Quarters Ended  February 29, 2020   Enterprise Division:  Direct offices $ 48,895 $ 29,461 $ 1,729 $ - $ 80,085  International licensees 1,000 - 5,411 - 6,411  49,895 29,461 7,140 - 86,496  Education practice 6,535 13,010 2,429 - 21,974  Corporate and eliminations - - 1,314 2,573 3,887  Consolidated $ 56,430 $ 42,471 $ 10,883 $ 2,573 $ 112,357   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