FRANKLIN COVEY CO Goodwill & Intangibles Disclosure
4. INTANGIBLE ASSETS AND GOODWILL
Intangible Assets
Our intangible assets were comprised of the following (in thousands):
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| Gross Carrying |
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| Accumulated |
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| Net Carrying |
AUGUST 31, 2025 |
| Amount |
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| Amortization |
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| Amount |
Finite-lived intangible assets: |
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Acquired content | $ | 49,812 |
| $ | (47,089) |
| $ | 2,723 |
License rights |
| 34,428 |
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| (28,631) |
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| 5,797 |
Customer lists |
| 15,982 |
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| (15,736) |
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| 246 |
Acquired technology |
| 7,282 |
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| (4,641) |
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| 2,641 |
Trade names |
| 1,883 |
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| (1,764) |
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| 119 |
Non-compete agreements and other |
| 930 |
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| (905) |
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| 25 |
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| 110,317 |
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| (98,766) |
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| 11,551 |
Indefinite-lived intangible asset: |
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Covey trade name |
| 23,000 |
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| - |
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| 23,000 |
| $ | 133,317 |
| $ | (98,766) |
| $ | 34,551 |
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AUGUST 31, 2024 |
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Finite-lived intangible assets: |
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Acquired content | $ | 49,806 |
| $ | (45,501) |
| $ | 4,305 |
License rights |
| 33,258 |
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| (26,889) |
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| 6,369 |
Customer lists |
| 15,982 |
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| (15,589) |
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| 393 |
Acquired technology |
| 7,282 |
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| (3,920) |
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| 3,362 |
Trade names |
| 1,883 |
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| (1,586) |
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| 297 |
Non-compete agreements and other |
| 930 |
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| (890) |
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| 40 |
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| 109,141 |
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| (94,375) |
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| 14,766 |
Indefinite-lived intangible asset: |
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Covey trade name |
| 23,000 |
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| - |
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| 23,000 |
| $ | 132,141 |
| $ | (94,375) |
| $ | 37,766 |
During fiscal 2024, we purchased the content rights for The Teacher Believed in Me (TBIM) for $1.5 million in cash. We believe the content in TBIM is compelling and fits well within our Leader in Me offering. While the author retains the copyright to TBIM, the agreement grants us broad rights for the development and use of TBIM content. The content license does not have an expiration date and the purchase price is payable in two installments of $0.8 million. We are amortizing the content license over a 10-year useful life, which is similar to other licenses, and the final payment was made in January 2025.
Our intangible assets are amortized over the estimated useful life of the asset. The range of remaining estimated useful lives and weighted-average amortization period over which we are amortizing the major categories of finite-lived intangible assets at August 31, 2025 were as follows:
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Category of Intangible Asset |
| Range of Remaining Estimated Useful Lives |
| Weighted Average Amortization Period |
Acquired content |
| 1 to 7 years |
| 30 years |
License rights |
| 2 to 8 years |
| 30 years |
Customer lists |
| 2 years |
| 12 years |
Acquired technology |
| 4 years |
| 7 years |
Trade names |
| 1 years |
| 5 years |
Non-compete agreements and other |
| 2 to 4 years |
| 3 years |
Our aggregate amortization expense from finite-lived intangible assets totaled $4.4 million, $4.2 million, and $4.3 million for the fiscal years ended August 31, 2025, 2024, and 2023. Amortization expense from our intangible assets over the next five years is expected to be as follows (in thousands):
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YEAR ENDING |
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AUGUST 31, |
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2026 | $ | 2,665 |
2027 |
| 2,440 |
2028 |
| 2,168 |
2029 |
| 1,702 |
2030 |
| 779 |
Goodwill
We performed our annual testing of goodwill in accordance with the accounting policies described in Note 1, Nature of Operations and Summary of Significant Accounting Policies. We completed a quantitative assessment of our goodwill as of August 31, 2025 and concluded there were no impairments. We do not have any accumulated impairment charges against the carrying value of our goodwill. In connection with the new reporting structure as described in Note 17, Segment Information, we performed a quantitative analysis of the fair value of each segment and allocated goodwill from the historical Direct Office segment to the newly created North America and International Direct Office segments based on their relative fair values. At August 31, 2025 and 2024, goodwill was allocated to our segments as shown below (in thousands):
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AUGUST 31, |
| 2024 |
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| Allocation |
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| 2025 |
North America | $ | 22,962 |
| $ | (3,837) |
| $ | 19,125 |
International direct offices |
| - |
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| 3,837 |
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| 3,837 |
International licensees |
| 5,928 |
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| - |
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| 5,928 |
Education practice |
| 2,330 |
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| - |
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| 2,330 |
| $ | 31,220 |
| $ | - |
| $ | 31,220 |
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Nov 12, 2025 | Showing above |
| 2024 | Nov 12, 2024 | |
| 2023 | Nov 13, 2023 | |
| 2022 | Nov 14, 2022 | |
| 2021 | Nov 12, 2021 | |
| 2020 | Nov 16, 2020 | |
| 2019 | Nov 14, 2019 | |
| 2018 | Nov 14, 2018 | |
| 2017 | Nov 14, 2017 | |
| 2016 | Nov 14, 2016 | |
| 2015 | Nov 13, 2015 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.