Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2019 | Apr. 24, 2019 | |
Document and Entity Information | ||
Entity Registrant Name | REGIS CORP | |
Entity Central Index Key | 0000716643 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 39,326,526 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Current assets: | ||||||
Cash and cash equivalents | $ 71,146 | $ 110,399 | ||||
Receivables, net | 33,737 | 52,430 | ||||
Inventories | 90,869 | 79,363 | ||||
Other current assets | 32,386 | 47,867 | ||||
Total current assets | 228,138 | 290,059 | ||||
Property and equipment, net | 83,629 | 99,288 | ||||
Goodwill | 378,560 | 412,643 | ||||
Other intangibles, net | 9,346 | 10,557 | ||||
Other assets | 32,768 | 37,616 | ||||
Other assets | 6,529 | 6,572 | ||||
Total assets | 738,970 | 856,735 | ||||
Current liabilities: | ||||||
Accounts payable | 57,021 | 57,738 | ||||
Accrued expenses | 83,490 | 100,716 | ||||
Total current liabilities | 140,511 | 158,454 | ||||
Long-term debt | 90,000 | 90,000 | ||||
Long-term lease liability | 17,505 | 0 | ||||
Other noncurrent liabilities | 115,144 | 121,843 | ||||
Total liabilities | 363,160 | 370,297 | ||||
Commitments and contingencies (Note 7) | ||||||
Shareholders’ equity: | ||||||
Common stock, $0.05 par value; issued and outstanding 39,433,124 and 45,258,571 common shares at March 31, 2019 and June 30, 2018 respectively | 1,972 | 2,263 | ||||
Additional paid-in capital | 93,515 | 194,436 | ||||
Accumulated other comprehensive income | 9,050 | 9,656 | ||||
Retained earnings | 271,273 | 280,083 | ||||
Total shareholders’ equity | 375,810 | $ 425,010 | 486,438 | $ 497,667 | $ 514,173 | $ 493,620 |
Total liabilities and shareholders’ equity | $ 738,970 | $ 856,735 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2019 | Jun. 30, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock issued (in shares) | 39,433,124 | 45,258,571 |
Common stock outstanding (in shares) | 39,433,124 | 45,258,571 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | ||
Revenues: | |||||
Total revenues | $ 258,343 | $ 305,783 | $ 820,849 | $ 935,096 | |
Operating expenses: | |||||
Cost of service | 111,632 | 132,081 | 348,060 | 406,767 | |
Cost of product | 31,167 | 37,139 | 99,698 | 107,165 | |
Site operating expenses | 34,339 | 37,548 | 106,723 | 116,175 | |
General and administrative | 41,694 | 45,727 | 135,257 | 129,485 | |
Rent | 32,332 | 39,391 | 102,952 | 147,280 | |
Depreciation and amortization | 8,630 | 9,558 | 27,732 | 46,764 | |
Non-cash TBG mall location restructuring charge | 20,711 | 0 | 20,711 | 0 | |
Total operating expenses | 280,505 | 301,444 | 841,133 | 953,636 | |
Operating (loss) income | (22,162) | 4,339 | (20,284) | (18,540) | |
Other (expense) income: | |||||
Interest expense | (1,354) | (5,095) | (3,432) | (9,402) | |
Gain from sale of salon assets to franchisees, net | 11,489 | 237 | 10,394 | 255 | |
Interest income and other, net | 464 | 1,495 | 1,453 | 3,934 | |
(Loss) income from continuing operations before income taxes | (11,563) | 976 | (11,869) | (23,753) | |
Income tax (expense) benefit | (3,248) | 2,609 | (2,988) | 77,875 | |
(Loss) income from continuing operations | (14,811) | 3,585 | (14,857) | 54,122 | |
Income (loss) from TBG discontinued operations, net of taxes | 178 | (10,605) | 6,027 | (50,973) | |
Net (loss) income | $ (14,633) | $ (7,020) | $ (8,830) | $ 3,149 | |
Basic: | |||||
(Loss) income from continuing operations (in dollars per share) | $ (0.37) | $ 0.08 | $ (0.35) | $ 1.16 | |
Income (loss) from TBG discontinued operations (in dollars per share) | 0 | (0.23) | 0.14 | (1.09) | |
Net (loss) income per share, basic (in dollars per share) | [1] | (0.36) | (0.15) | (0.21) | 0.07 |
Diluted: | |||||
(Loss) income from continuing operations (in dollars per share) | (0.37) | 0.08 | (0.35) | 1.15 | |
Income (loss) from TBG discontinued operations (in dollars per share) | 0 | (0.22) | 0.14 | (1.08) | |
Net (loss) income per share, diluted (in dollars per share) | [1] | $ (0.36) | $ (0.15) | $ (0.21) | $ 0.07 |
Weighted average common and common equivalent shares outstanding: | |||||
Basic (in shares) | 40,314 | 46,612 | 42,900 | 46,684 | |
Diluted (in shares) | 40,314 | 47,153 | 42,900 | 47,093 | |
Service | |||||
Revenues: | |||||
Total revenues | $ 181,809 | $ 222,022 | $ 580,076 | $ 680,930 | |
Product | |||||
Revenues: | |||||
Total revenues | 53,766 | 64,911 | 173,006 | 197,701 | |
Royalties and fees | |||||
Revenues: | |||||
Total revenues | $ 22,768 | $ 18,850 | $ 67,767 | $ 56,465 | |
[1] | Total is a recalculation; line items calculated individually may not sum to total due to rounding. |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net (loss) income | $ (14,633) | $ (7,020) | $ (8,830) | $ 3,149 |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | 905 | (1,372) | (606) | 904 |
Reclassification adjustments for losses included in net (loss) income (Note 3) | 0 | 0 | 0 | 6,152 |
Net current period foreign currency translation adjustments | 905 | (1,372) | (606) | 7,056 |
Comprehensive (loss) income | $ (13,728) | $ (8,392) | $ (9,436) | $ 10,205 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY Statement - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income | Retained Earnings |
Balance (in shares) at Jun. 30, 2017 | 46,400,367 | ||||
Balance at Jun. 30, 2017 | $ 493,620 | $ 2,320 | $ 214,109 | $ 3,415 | $ 273,776 |
Net income (loss) | 3,149 | ||||
Foreign currency translation adjustments | 7,056 | 7,056 | |||
Stock repurchase program (in shares) | (585,967) | ||||
Stock repurchase program | (9,635) | $ (30) | (9,605) | ||
Exercise of SARs (in shares) | 27,793 | ||||
Exercise of SARs | (276) | $ 2 | (278) | ||
Stock-based compensation | 5,933 | 5,933 | |||
Shares issued through franchise stock incentive program (in shares) | 522 | ||||
Shares issued through franchise stock incentive program | 7 | $ 0 | 7 | ||
Net restricted stock activity (in shares) | 283,534 | ||||
Net restricted stock activity | (2,003) | $ 14 | (2,017) | ||
Minority interest | (184) | (184) | |||
Balance (in shares) at Mar. 31, 2018 | 46,126,249 | ||||
Balance at Mar. 31, 2018 | 497,667 | $ 2,306 | 208,149 | 10,471 | 276,741 |
Balance (in shares) at Dec. 31, 2017 | 46,688,423 | ||||
Balance at Dec. 31, 2017 | 514,173 | $ 2,335 | 216,301 | 11,843 | 283,694 |
Net income (loss) | (7,020) | (7,020) | |||
Foreign currency translation adjustments | (1,372) | (1,372) | |||
Stock repurchase program (in shares) | (585,967) | ||||
Stock repurchase program | (9,635) | $ (30) | (9,605) | ||
Exercise of SARs (in shares) | 18,697 | ||||
Exercise of SARs | (183) | $ 1 | (184) | ||
Stock-based compensation | 1,690 | 1,690 | |||
Net restricted stock activity (in shares) | 5,096 | ||||
Net restricted stock activity | (53) | (53) | |||
Minority interest | 67 | 67 | |||
Balance (in shares) at Mar. 31, 2018 | 46,126,249 | ||||
Balance at Mar. 31, 2018 | $ 497,667 | $ 2,306 | 208,149 | 10,471 | 276,741 |
Balance (in shares) at Jun. 30, 2018 | 45,258,571 | 45,258,571 | |||
Balance at Jun. 30, 2018 | $ 486,438 | $ 2,263 | 194,436 | 9,656 | 280,083 |
Net income (loss) | (8,830) | ||||
Foreign currency translation adjustments | $ (606) | (606) | |||
Stock repurchase program (in shares) | (6,023,523) | (6,023,523) | |||
Stock repurchase program | $ (106,252) | $ (301) | (105,951) | ||
Exercise of SARs (in shares) | 15,412 | ||||
Exercise of SARs | (204) | $ 1 | (205) | ||
Stock-based compensation | 7,065 | 7,065 | |||
Net restricted stock activity (in shares) | 182,664 | ||||
Net restricted stock activity | (1,821) | $ 9 | (1,830) | ||
Minority interest | $ 20 | 20 | |||
Balance (in shares) at Mar. 31, 2019 | 39,433,124 | 39,433,124 | |||
Balance at Mar. 31, 2019 | $ 375,810 | $ 1,972 | 93,515 | 9,050 | 271,273 |
Balance (in shares) at Dec. 31, 2018 | 41,472,468 | ||||
Balance at Dec. 31, 2018 | 425,010 | $ 2,074 | 128,964 | 8,145 | 285,827 |
Net income (loss) | (14,633) | (14,633) | |||
Foreign currency translation adjustments | $ 905 | 905 | |||
Stock repurchase program (in shares) | (2,050,430) | (2,050,430) | |||
Stock repurchase program | $ (37,920) | $ (102) | (37,818) | ||
Exercise of SARs (in shares) | 7,080 | ||||
Exercise of SARs | (101) | (101) | |||
Stock-based compensation | 2,512 | 2,512 | |||
Net restricted stock activity (in shares) | 4,006 | ||||
Net restricted stock activity | (42) | (42) | |||
Minority interest | $ 79 | 79 | |||
Balance (in shares) at Mar. 31, 2019 | 39,433,124 | 39,433,124 | |||
Balance at Mar. 31, 2019 | $ 375,810 | $ 1,972 | $ 93,515 | $ 9,050 | $ 271,273 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) $ in Thousands | 9 Months Ended | |
Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) | |
Cash flows from operating activities: | ||
Net (loss) income | $ (8,830) | $ 3,149 |
Adjustments to reconcile net (loss) income to net cash used in operating activities: | ||
Non-cash impairment and other adjustments related to TBG discontinued operations | (163) | 37,020 |
Depreciation and amortization | 24,727 | 29,736 |
Depreciation related to TBG discontinued operations | 0 | 3,723 |
Deferred income taxes | (6,034) | (85,026) |
Gain on life insurance | 0 | (7,986) |
Non-cash TBG mall location restructuring charge | 20,711 | 0 |
Gain from sale of salon assets to franchisees, net | (10,394) | (255) |
Salon asset impairments | 3,005 | 11,099 |
Accumulated other comprehensive income reclassification adjustment | 0 | 6,152 |
Stock-based compensation | 7,065 | 6,483 |
Amortization of debt discount and financing costs | 206 | 4,011 |
Other non-cash items affecting earnings | (492) | (287) |
Changes in operating assets and liabilities, excluding the effects of asset sales | (50,074) | (29,483) |
Net cash used in operating activities | (20,273) | (21,664) |
Cash flows from investing activities: | ||
Capital expenditures | (23,160) | (20,065) |
Capital expenditures related to TBG discontinued operations | 0 | (1,171) |
Proceeds from sale of assets to franchisees | 54,619 | 5,620 |
Proceeds from company-owned life insurance policies | 24,617 | 18,108 |
Net cash provided by investing activities | 56,076 | 2,492 |
Cash flows from financing activities: | ||
Borrowings on revolving credit facilities | 0 | 90,000 |
Repayment of long-term debt and capital lease obligations | 0 | (124,230) |
Repurchase of common stock | (105,364) | (9,634) |
Settlement of equity awards | 0 | (550) |
Taxes paid for shares withheld | (2,447) | (2,279) |
Net proceeds from sale and leaseback transaction | 18,068 | 0 |
Net cash used in financing activities | (89,743) | (46,693) |
Effect of exchange rate changes on cash and cash equivalents | 5 | (30) |
Decrease in cash, cash equivalents, and restricted cash | (53,935) | (65,895) |
Cash, cash equivalents and restricted cash: | ||
Beginning of period | 94,839 | |
Beginning of period, total cash, cash equivalents and restricted cash | 148,774 | 209,986 |
End of period | $ 94,839 | $ 144,091 |
BASIS OF PRESENTATION OF UNAUDI
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: | 9 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The unaudited interim Condensed Consolidated Financial Statements of Regis Corporation (the "Company") as of March 31, 2019 and for the three and nine months ended March 31, 2019 and 2018 , reflect, in the opinion of management, all adjustments necessary to fairly state the consolidated financial position of the Company as of March 31, 2019 and its consolidated results of operations, comprehensive (loss) income , changes in equity and cash flows for the interim periods. Adjustments consist only of normal recurring items, except for any discussed in the notes below. The results of operations and cash flows for any interim period are not necessarily indicative of results of operations and cash flows for the full year. The accompanying interim unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, they do not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP). The unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2018 and other documents filed or furnished with the SEC during the current fiscal year. Goodwill: As of March 31, 2019 and June 30, 2018 , the Company-owned reporting unit had $151.1 million and $184.8 million of goodwill, respectively, and the Franchise salons reporting unit had $227.4 million and $227.9 million of goodwill, respectively. See Note 9 to the unaudited interim Condensed Consolidated Financial Statements. The Company assesses goodwill impairment on an annual basis, during the Company’s fourth fiscal quarter, and between annual assessments if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying amount. An interim impairment analysis was not required in the nine months ended March 31, 2019. The Company performs its annual impairment assessment as of April 30. For the fiscal year 2018 annual impairment assessment, due to the transformational efforts completed during the year, the Company elected to forgo the optional Step 0 assessment and performed the quantitative impairment analysis on the Company-owned and Franchise reporting units. The Company compared the carrying value of the reporting units, including goodwill, to their estimated fair value. The results of these assessments indicated that the estimated fair value of our reporting units exceeded their carrying value. The Franchise reporting unit had substantial headroom and the Company-owned reporting unit had headroom of approximately 24% . The fair value of the Company-owned reporting unit was determined based on a discounted cash flow analysis and comparable market multiples. The assumptions used in determining fair value were the number and pace of salons sold to franchisees, proceeds for salon sales, weighted average cost of capital, general and administrative expenses and utilization of net operating loss benefits. We selected the assumptions by considering our historical financial performance and trends, historical salon sale proceeds and estimated salon sale activities. The preparation of our fair value estimate includes uncertain factors and requires significant judgments and estimates which are subject to change. A 100 basis point increase in our weighted average cost of capital within the Company-owned reporting unit would result in a reduction in headroom to approximately 17% . Other uncertain factors or events exist which may result in a future triggering event and require us to perform an interim impairment analysis with respect to the carrying value of goodwill for the Company-owned reporting unit prior to our annual assessment. These internal and external factors include but are not limited to the following: • Changes in the company-owned salon strategy, • Franchise expansion and sales opportunities, • Future market earnings multiples deterioration, • Our financial performance falls short of our projections due to internal operating factors, • Economic recession, • Reduced salon traffic, as defined by total transactions, and/or revenue, • Deterioration of industry trends, • Increased competition, • Inability to reduce general and administrative expenses as company-owned salon count potentially decreases, • Other factors causing our cash flow to deteriorate. If the triggering event analysis indicates the fair value of the Company-owned reporting unit has potentially fallen below more than the 24% headroom, we may be required to perform an updated impairment assessment which may result in a non-cash impairment charge to reduce the carrying value of goodwill. Assessing goodwill for impairment requires management to make assumptions and to apply judgment, including forecasting future sales and expenses, and selecting appropriate discount rates, which can be affected by economic conditions and other factors that can be difficult to predict. The Company does not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions it uses in its goodwill impairment assessment. However, if actual results are not consistent with the estimates and assumptions used in the calculations, or if there are significant changes to the Company's planned strategy for company-owned salons, the Company may be exposed to future impairment losses that could be material. Non-Current Assets Held for Sale: In March 2019, the Company announced that entered into a ten year lease for a new corporate headquarters and would be selling the land and buildings in Edina, MN, currently used for its headquarters. The non-current assets held for sale represent the net book value of the land of $1.7 and $1.7 million and buildings of $4.8 and $4.9 million , as of March 31, 2019 and June 30, 2018, respectively. No impairments were identified as of March 31, 2019. Accounting Standards Recently Adopted by the Company: Revenue from Contracts with Customers In May 2014, the FASB issued amended guidance for revenue recognition which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company retrospectively adopted these standards on July 1, 2018. The impact of these standards was applied to all periods presented and the cumulative effect of applying the standard was recognized at the beginning of the earliest period presented. See Note 2 to the unaudited Condensed Consolidated Financial Statements for additional information regarding the impact of the adoption of the revenue recognition guidance. Restricted Cash In November 2016, the FASB issued cash flow guidance requiring restricted cash and restricted cash equivalents to be included in the cash and cash equivalent balances in the statement of cash flows. Transfers between cash and cash equivalents and restricted cash are no longer presented in the statement of cash flows and a reconciliation between the balance sheet and statement of cash flows must be disclosed. The Company retrospectively adopted this guidance on July 1, 2018. The impact of this standard was applied to all periods presented. As a result of including restricted cash in the beginning and end of period balances, cash, cash equivalents and restricted cash presented in the statement of cash flows increased $38.4 million , $23.6 million and $37.6 million as of June 30, 2018, March 31, 2019 and June 30, 2017, respectively. Statement of Cash Flows In August 2016, the FASB issued updated cash flow guidance clarifying cash flow classification and presentation for certain items. The Company retrospectively adopted this guidance on July 1, 2018. The adoption of this standard did not have a material impact on the Company's consolidated statement of cash flows. A ccounting Standards Recently Issued But Not Yet Adopted by the Company: Leases In February 2016, the FASB issued updated guidance requiring organizations that lease assets to recognize the rights and obligations created by those leases on the consolidated balance sheet. The new standard is effective for the Company in the first quarter of fiscal year 2020, with early adoption permitted. In July 2018, the FASB issued ASU 2018-11, which provides companies with the option to apply the new lease standard either at the beginning of the earliest comparative period presented or in the period of adoption. The Company will elect this optional transition relief amendment that allows for a cumulative-effect adjustment in the period of adoption and will not restate prior periods. The Company will also elect the package of practical expedients that do not require reassessment of whether existing contracts are or contain leases, lease classification or initial direct costs. The Company is leveraging its lease management system to facilitate the adoption of this standard and is evaluating business processes and internal controls related to lease accounting to assist in the application of the new guidance. The Company is continuing to evaluate the effect the new standard will have on the Company's consolidated financial statements but expects this adoption will result in a material increase in the assets and liabilities on the Company's consolidated balance sheet, as substantially all its operating lease commitments, including leases signed on behalf of franchisees, will be subject to the new guidance. The Company does not expect the adoption of the new guidance to have a material impact on net income, cash flows or compliance with debt agreements. |
REVENUE RECOGNITION_
REVENUE RECOGNITION: | 9 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION: | REVENUE RECOGNITION: In May 2014, the FASB issued amended guidance for revenue recognition which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company adopted the amended revenue recognition guidance, ASC Topic 606, on July 1, 2018 using the full retrospective transition method which required the adjustment of each prior reporting period presented. The adjusted amounts include the application of a practical expedient that permitted the Company to reflect the aggregate effect of all modifications that occurred prior to fiscal year 2017 when identifying the satisfied and unsatisfied performance obligation, determining the transaction price and allocating the transaction price to the satisfied and unsatisfied performance obligation. As a result of adopting this new standard, the Company is providing its updated revenue recognition policies. Revenue Recognition and Deferred Revenue: Revenue recognized at point of sale Company-owned salon revenues are recognized at the time when the services are provided. Product revenues for Company-owned salons are recognized when the guest receives and pays for the merchandise. Revenues from purchases made with gift cards are also recorded when the guest takes possession of the merchandise or services are provided. Gift cards issued by the Company are recorded as a liability (deferred revenue) upon sale and recognized as revenue upon redemption by the customer. Gift card breakage, the amount of gift cards which will not be redeemed, is recognized proportional to redemptions using estimates based on historical redemption patterns. Product sales by the Company to its franchisees are included within product revenues in the unaudited Condensed Consolidated Statement of Operations and recorded at the time product is delivered to the franchisee. Payment for franchisee product revenue is generally collected within 30 days of delivery. Revenue recognized over time Franchise revenues primarily include royalties, advertising fund fees, franchise fees and other fees. Royalty and advertising fund revenues represent sales-based royalties that are recognized in the period in which the sales occur. Generally, royalty and advertising fund revenue is billed and collected monthly in arrears. Advertising fund revenues and expenditures, which must be spent on marketing and related activities per the franchise agreements, are recorded on a gross basis within the unaudited Condensed Consolidated Statement of Operations. This increases both the gross amount of reported franchise revenue and site operating expense and generally has no impact on operating income and net income. Franchise fees are billed and received upon the signing of the franchise agreement. Upon adoption of the new revenue recognition guidance, recognition of these fees is deferred until the salon opening and is then recognized over the term of the franchise agreement, typically ten years . Under previous guidance the initial franchise fees were recognized in full upon salon opening. The following table disaggregates revenue by timing of revenue recognition and is reconciled to reportable segment revenues as follows: Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Company-owned Franchise Company-owned Franchise (in thousands) Revenue recognized at a point in time: Service $ 181,809 $ — $ 222,022 $ — Product 39,427 14,339 49,980 14,931 Total revenue recognized at a point in time $ 221,236 $ 14,339 $ 272,002 $ 14,931 Revenue recognized over time: Royalty and other franchise fees $ — $ 14,339 $ — $ 12,322 Advertising fund fees — 8,429 — 6,528 Total revenue recognized over time — 22,768 — 18,850 Total revenue $ 221,236 $ 37,107 $ 272,002 $ 33,781 Nine Months Ended March 31, 2019 Nine Months Ended March 31, 2018 Company-owned Franchise Company-owned Franchise (in thousands) Revenue recognized at a point in time: Service $ 580,076 $ — $ 680,930 $ — Product 125,220 47,786 159,980 37,721 Total revenue recognized at a point in time $ 705,296 $ 47,786 $ 840,910 $ 37,721 Revenue recognized over time: Royalty and other franchise fees $ — $ 43,495 $ — $ 36,733 Advertising fund fees — 24,272 — 19,732 Total revenue recognized over time — 67,767 — 56,465 Total revenue $ 705,296 $ 115,553 $ 840,910 $ 94,186 Information about receivables, broker fees and deferred revenue subject to the amended revenue recognition guidance is as follows: March 31, June 30, Balance Sheet Classification (in thousands) Receivables from contracts with customers, net $ 23,904 $ 21,504 Accounts receivable, net Broker fees $ 16,904 $ 14,002 Other assets Deferred revenue: Current Gift card liability $ 3,439 $ 3,320 Accrued expenses Deferred franchise fees unopened salons 137 2,306 Accrued expenses Deferred franchise fees open salons 3,767 3,030 Accrued expenses Total current deferred revenue $ 7,343 $ 8,656 Non-current Deferred franchise fees unopened salons $ 13,941 $ 11,161 Other non-current liabilities Deferred franchise fees open salons 21,943 18,346 Other non-current liabilities Total non-current deferred revenue $ 35,884 $ 29,507 Receivables relate primarily to payments due for royalties, franchise fees, advertising fees, and sales of salon services and product. The receivables balance is presented net of an allowance for expected losses (i.e., doubtful accounts), primarily related to receivables from franchisees. As of March 31, 2019 and June 30, 2018 , the balance in the allowance for doubtful accounts was $15.7 and $1.2 million , respectively. The increase in the allowance for doubtful accounts is due to reserving for $12.7 million of TBG receivables in the three months ended March 31, 2019 (see Note 3). Broker fees are the costs associated with using external brokers to identify new franchisees. These fees are paid upon the signing of the franchise agreement and recognized as General and Administrative expense over the term of the agreement. The adoption of the amended revenue recognition guidance did not significantly change the Company's accounting for broker fees. The following table is a rollforward of the broker fee balance for the periods indicated (in thousands): Balance as of June 30, 2018 $ 14,002 Additions 4,393 Amortization (1,484 ) Write-offs (7 ) Balance as of March 31, 2019 $ 16,904 Deferred revenue includes the gift card liability and deferred franchise fees for unopened salons and open salons. Gift card revenue for the three months ended March 31, 2019 and 2018 was $1.8 and $1.9 million , respectively, and for the nine months ended March 31, 2019 and 2018 was $4.0 and $4.6 million , respectively. Deferred franchise fees related to open salons are generally recognized on a straight-line basis over the term of the franchise agreement. Franchise fee revenue for the three months ended March 31, 2019 and 2018 was $0.9 and $0.7 million , respectively, and for the nine months ended March 31, 2019 and 2018 was $2.6 and $2.0 million . Estimated revenue expected to the recognized in the future related to deferred franchise fees for open salons as of March 31, 2019 is as follows (in thousands): Remainder of 2019 $ 840 2020 3,631 2021 3,543 2022 3,423 2023 3,246 Thereafter 11,027 Total $ 25,710 The amended revenue recognition guidance impacted the Company's previously reported financial statements as follows: CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) June 30, 2018 (Dollars in thousands) Adjustments for new revenue recognition guidance Previously Franchise Advertising Gift Card Reported Fees Funds Breakage Taxes Adjusted ASSETS Current assets: Cash and cash equivalents $ 110,399 $ — $ — $ — $ — $ 110,399 Receivables, net 52,430 — — — — 52,430 Inventories 79,363 — — — — 79,363 Other current assets 47,867 — — — — 47,867 Total current assets 290,059 — — — — 290,059 Property and equipment, net 99,288 — — — — 99,288 Goodwill 412,643 — — — — 412,643 Other intangibles, net 10,557 — — — — 10,557 Other assets 37,616 — — — — 37,616 Non-current assets held for sale (Note 1) 6,572 — — — — 6,572 Total assets $ 856,735 $ — $ — $ — $ — $ 856,735 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 57,738 $ — $ — $ — $ — $ 57,738 Accrued expenses 97,630 3,030 — 56 — 100,716 Total current liabilities 155,368 3,030 — 56 — 158,454 Long-term debt 90,000 — — — — 90,000 Other noncurrent liabilities 107,875 18,346 — — (4,378 ) 121,843 Total liabilities 353,243 21,376 — 56 (4,378 ) 370,297 Commitments and contingencies (Note 7) Shareholders’ equity: 0 Common stock 2,263 — — — — 2,263 Additional paid-in capital 194,436 — — — — 194,436 Accumulated other comprehensive income 9,568 88 — — — 9,656 Retained earnings 297,225 (21,464 ) — (56 ) 4,378 280,083 Total shareholders’ equity 503,492 (21,376 ) — (56 ) 4,378 486,438 Total liabilities and shareholders’ equity $ 856,735 $ — $ — $ — $ — $ 856,735 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) For The Three Months Ended March 31, 2018 (Dollars and shares in thousands, except per share data amounts) Adjustments for new revenue recognition guidance Previously Franchise Advertising Gift Card Reported Fees Funds Breakage Taxes Adjusted Revenues: Service $ 221,926 $ — $ — $ 96 $ — $ 222,022 Product 64,887 — — 24 — 64,911 Royalties and fees 13,988 (1,666 ) 6,528 — — 18,850 300,801 (1,665 ) 6,527 120 — 305,783 Operating expenses: Cost of service 132,081 — — — — 132,081 Cost of product 37,139 — — — — 37,139 Site operating expenses 31,021 — 6,527 — — 37,548 General and administrative 45,727 — — — — 45,727 Rent 39,391 — — — — 39,391 Depreciation and amortization 9,558 — — — — 9,558 Total operating expenses 294,917 — 6,527 — — 301,444 Operating income 5,884 (1,665 ) — 120 — 4,339 Other (expense) income: Interest expense (5,095 ) — — — — (5,095 ) Gain from sale of salon assets to franchisees, net 237 — — — — 237 Interest income and other, net 1,548 — — (53 ) — 1,495 Income from continuing operations before income taxes 2,574 (1,665 ) — 67 — 976 Income tax expense 2,225 — — — 384 2,609 Income from continuing operations 4,799 (1,665 ) — 67 384 3,585 Loss from TBG discontinued operations, net of taxes (10,605 ) — — — — (10,605 ) Net loss $ (5,806 ) $ (1,665 ) $ — $ 67 $ 384 $ (7,020 ) Net loss per share: Basic: Income from continuing operations (1) $ 0.10 $ (0.04 ) $ 0.00 $ 0.00 $ 0.01 $ 0.08 Loss from TBG discontinued operations (0.23 ) 0.00 0.00 0.00 0.00 (0.23 ) Net loss per share, basic (1) $ (0.12 ) $ (0.04 ) $ 0.00 $ 0.00 $ 0.01 $ (0.15 ) Diluted: Income from continuing operations (1) $ 0.10 $ (0.04 ) $ 0.00 $ 0.00 $ 0.01 $ 0.08 Loss from TBG discontinued operations (0.22 ) 0.00 0.00 0.00 0.00 (0.22 ) Net loss per share, diluted (1) $ (0.12 ) $ (0.04 ) $ 0.00 $ 0.00 $ 0.01 $ (0.15 ) Weighted average common and common equivalent shares outstanding: Basic 46,612 46,612 46,612 46,612 46,612 46,612 Diluted 47,153 47,153 47,153 47,153 47,153 47,153 _____________________________________________________________________________ (1) Total is a recalculation; line items calculated individually may not sum to total due to rounding. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) For The Nine Months Ended March 31, 2018 (Dollars and shares in thousands, except per share data amounts) Adjustments for new revenue recognition guidance Previously Franchise Advertising Gift Card Reported Fees Funds Breakage Taxes Adjusted Revenues: Service $ 680,699 $ — $ — $ 231 $ — $ 680,930 Product 197,643 — — 58 — 197,701 Royalties and fees 40,847 (4,114 ) 19,732 — — 56,465 919,189 (4,114 ) 19,732 289 — 935,096 Operating expenses: Cost of service 406,767 — — — — 406,767 Cost of product 107,165 — — — — 107,165 Site operating expenses 96,443 — 19,732 — — 116,175 General and administrative 129,485 — — — — 129,485 Rent 147,280 — — — — 147,280 Depreciation and amortization 46,764 — — — — 46,764 Total operating expenses 933,904 — 19,732 — — 953,636 Operating income (14,715 ) (4,114 ) — 289 — (18,540 ) Other (expense) income: Interest expense (9,402 ) — — — — (9,402 ) Gain from sale of salon assets to franchisees, net 255 — — — — 255 Interest income and other, net 4,919 — — (985 ) — 3,934 Income from continuing operations before income taxes (18,943 ) (4,114 ) — (696 ) — (23,753 ) Income tax expense 73,855 — — — 4,020 77,875 Income from continuing operations 54,912 (4,114 ) — (696 ) 4,020 54,122 Loss from TBG discontinued operations, net of taxes (50,973 ) — — — — (50,973 ) Net loss $ 3,939 $ (4,114 ) $ — $ (696 ) $ 4,020 $ 3,149 Net loss per share: Basic: Income from continuing operations (1) $ 1.18 $ (0.09 ) $ 0.00 $ (0.01 ) $ 0.09 $ 1.16 Loss from TBG discontinued operations (1.09 ) 0.00 0.00 0.00 0.00 (1.09 ) Net loss per share, basic (1) $ 0.08 $ (0.09 ) $ 0.00 $ (0.01 ) $ 0.09 $ 0.07 Diluted: Income from continuing operations (1) $ 1.17 $ (0.09 ) $ 0.00 $ (0.01 ) $ 0.09 $ 1.15 Loss from TBG discontinued operations (1.08 ) 0.00 0.00 0.00 0.00 (1.08 ) Net loss per share, diluted (1) $ 0.08 $ (0.09 ) $ 0.00 $ (0.01 ) $ 0.09 $ 0.07 Weighted average common and common equivalent shares outstanding: Basic 46,684 46,684 46,684 46,684 46,684 46,684 Diluted 47,093 47,093 47,093 47,093 47,093 47,093 _____________________________________________________________________________ (1) Total is a recalculation; line items calculated individually may not sum to total due to rounding. |
TBG DISCONTINUED OPERATIONS_
TBG DISCONTINUED OPERATIONS: | 9 Months Ended |
Mar. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
TBG DISCONTINUED OPERATIONS | TBG DISCONTINUED OPERATIONS: In October 2017, the Company sold substantially all its mall-based salon business in North America, representing 858 salons, and substantially all its International segment, representing approximately 250 salons in the UK, to The Bea utiful Group ("TBG"), an affiliate of Regent, a private equity firm based in Los Angeles, California, who operates these locations as franchise locations. For the International segment, the Company entered into a share purchase agreement with TBG for minimal consideration. The Company classified the results of its mall-based business and its International segment as discontinued operations for all periods presented in the Condensed Consolidated Statement of Operations. In connection with the sale of the mall-based business and the International segment, the Company performed an impairment assessment of the asset groups. The Company recognized net impairment charges within discontinued operations based on the difference between the expected sale prices and the carrying value of the asset groups. The following summarizes the results of our TBG discontinued operations for the periods presented: For the Three Months Ended March 31, For the Nine Months Ended March 31, 2019 2018 2019 2018 (Dollars in thousands) (Dollars in thousands) Revenue $ — $ — $ — $ 101,140 Income (loss) from TBG discontinued operations, before income taxes 224 (13,545 ) (862 ) (57,385 ) Income tax (expense) benefit on TBG discontinued operations (46 ) 2,940 6,889 6,412 Income (loss) from TBG discontinued operations, net of income taxes $ 178 $ (10,605 ) $ 6,027 $ (50,973 ) For the three months ended March 31, 2019 , the $0.2 million income from discontinued operations includes actuarial insurance accrual adjustments associated with the transaction. For the nine months ended March 31, 2019 , the $6.0 million income from discontinued operations includes $6.9 million of income tax benefits associated with the wind-down and transfer of legal entities related to discontinued operations and $0.2 million of actuarial insurance accrual adjustments associated with the transaction, partly offset by $1.0 million of professional fees. For the three months ended March 31, 2018 , included within the $10.6 million loss from discontinued operations were $11.7 million of asset impairment charges, $1.2 million of loss from operations and $0.6 million of professional fees associated with the transaction, partly offset by a $2.9 million income tax benefit. For the nine months ended March 31, 2018 , included within the $51.0 million loss from discontinued operations were $40.8 million of asset impairment charges, $6.2 million of cumulative foreign currency translation adjustment associated with the Company's liquidation of substantially all foreign entities with British pound denominated currencies, $4.0 million of loss from operations and $6.4 million of professional fees associated with the transaction, partly offset by a $6.4 million income tax benefit. As part of the sale of the mall-based business, TBG agreed to pay for the value of certain inventory, prepaid rent and assumed specific liabilities, including lease liabilities. In March 2018, the Company entered into discussions with TBG regarding a waiver of working capital and prepaid rent payments associated with the original transaction and the financing of certain receivables to assist TBG with its cash flow and operational needs. Based on those discussions as of March 31, 2018, the Company fully reserved for the working capital and prepaid rent amount of $11.7 million which was recorded in discontinued operations in the Condensed Consolidated Statement of Operations in the third quarter of fiscal year 2018. In August 2018, the Company entered into promissory notes for approximately $11.7 million in working capital receivables and $8.0 million in accounts receivables, a majority of which was for inventory purchases. All notes have a maturity date of August 2, 2020. Pursuant to the working capital notes, such notes would be forgiven as of the maturity date and exchanged for a three-year contingent payment right that is payable upon the occurrence of certain TBG monetization events if no default had occurred under such notes and certain other conditions are met. Based on TBG’s inability to meet the requirements of the promissory notes, including non-payment of amounts due to the Company, the Company recorded a full reserve against such notes. In addition, the Company has recorded additional reserves of approximately $11.6 million for inventory and $1.1 million for outstanding royalties that TBG has failed to pay. As of March 31, 2019, the Company has fully reserved for all amounts invoiced to TBG. The total note and receivables reserve in the third quarter of fiscal year 2019 was $20.7 million and is recorded in the TBG mall location restructuring line of the unaudited Condensed Consolidated Statement of Operations. TBG's business has continued to decline. The Company continues to have conversations with TBG focused on how to assist TBG with its cash flow and operational needs. The following summarizes the TBG related charges for the periods presented: For the Three Months Ended March 31, For the Nine Months Ended March 31, Income Statement Classification 2019 2018 2019 2018 (Dollars in thousands) TBG mall location restructuring $ 20,711 $ — $ 20,711 $ — TBG mall location restructuring Working capital and prepaid rent receivable reserve — (11,697 ) — (11,697 ) Income (loss) from TBG discontinued operations Other charges 224 (1,848 ) (862 ) (45,688 ) Income (loss) from TBG discontinued operations Income (loss) from TBG discontinued operations, before income taxes 224 (13,545 ) (862 ) (57,385 ) Income (loss) from TBG discontinued operations Income tax (expense) benefit on TBG discontinued operations (46 ) 2,940 6,889 6,412 Income (loss) from TBG discontinued operations Income (loss) from TBG discontinued operations, net of income taxes $ 178 $ (10,605 ) $ 6,027 $ (50,973 ) Income (loss) from TBG discontinued operations Other than the items presented in the Consolidated Statement of Cash Flows, there were no other significant non-cash operating activities or any significant non-cash investing activities related to discontinued operations for the three and nine months ended March 31, 2019 and 2018 . The Company utilized the consolidation of variable interest entities guidance to determine whether or not TBG was a variable interest entity (VIE), and if so, whether the Company was the primary beneficiary of TBG. As of March 31, 2019 , the Company concluded that TBG is a VIE, based on the fact that the equity investment at risk in TBG is not sufficient. The Company determined that it is not the primary beneficiary of TBG based on its exposure to the expected losses of TBG and as it is not the variable interest holder that is most closely associated within the relationship and the significance of the activities of TBG. The exposure to loss related to the Company's involvement with TBG is the guarantee of the operating leases for certain TBG operated salons. As of March 31, 2019, prior to any mitigation efforts which may be available, the Company remains liable for up to $64.8 million associated with remaining TBG salon lease commitments, should TBG not perform. |
EARNINGS PER SHARE_
EARNINGS PER SHARE: | 9 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE: The Company’s basic earnings per share is calculated as net (loss) income divided by weighted average common shares outstanding, excluding unvested outstanding RSAs, RSUs and PSUs. The Company’s diluted earnings per share is calculated as net (loss) income divided by weighted average common shares and common share equivalents outstanding, which includes shares issued under the Company’s stock-based compensation plans. Stock-based awards with exercise prices greater than the average market price of the Company’s common stock are excluded from the computation of diluted earnings per share. For the three and nine months ended March 31, 2019 , 1,023,038 and 1,006,589 , respectively, common stock equivalents of dilutive common stock were excluded in the diluted earnings per share calculations due to the net loss from continuing operations. For the three and nine months ended March 31, 2018 , 541,405 and 409,646 , respectively, common stock equivalents of dilutive common stock were included in the diluted earnings per share calculations due to the net income from continuing operations. The computation of weighted average shares outstanding, assuming dilution, excluded 608,944 and 550,948 of stock-based awards during the three months ended March 31, 2019 and 2018 , respectively, and 542,329 and 730,377 of stock-based awards during the nine months ended March 31, 2019 and 2018 , respectively, as they were not dilutive under the treasury stock method. |
SHAREHOLDERS' EQUITY_
SHAREHOLDERS' EQUITY: | 9 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY: Stock-Based Employee Compensation: During the nine months ended March 31, 2019 , the Company granted various equity awards including restricted stock units (RSUs) and performance-based restricted stock units (PSUs). A summary of equity awards granted is as follows: For the Three Months Ended March 31, 2019 For the Nine Months Ended March 31, 2019 Restricted stock units — 338,859 Performance-based restricted stock units — 733,688 The RSUs granted to employees vest in equal amounts over a three -year period subsequent to the grant date, cliff vest after a three -year period or cliff vest after a five -year period subsequent to the grant date. The PSUs granted to employees have a three year performance period ending June 30, 2021 linked to the Company's stock price reaching a specified volume weighted average closing price for a 50 day period that ends on June 30, 2021. The PSUs granted to certain executives include an additional two year service period after the performance period. Of the total PSUs granted, 52,590 PSUs have a maximum vesting percentage of 200% based on the level of performance achieved for the respective award, while the remaining PSUs have a maximum vesting percentage of 100% . Total compensation cost for stock-based payment arrangements totaling $2.5 and $1.9 million for the three months ended March 31, 2019 and 2018 , respectively, and $7.1 and $6.5 million for the nine months ended March 31, 2019 and 2018 , respectively, was recorded within general and administrative expense on the unaudited Condensed Consolidated Statement of Operations. Share Repurchases: During the three and nine months ended March 31, 2019 , the Company repurchased 2.1 million and 6.0 million shares, respectively, for $37.9 million and $106.3 million , respectively, under a previously approved stock repurchase program. At March 31, 2019 , $129.1 million remains outstanding under the approved stock repurchase program. |
INCOME TAXES_
INCOME TAXES: | 9 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES: A summary of income tax (expense) benefit and corresponding effective tax rates is as follows: For the Three Months Ended March 31, For the Nine Months Ended March 31, 2019 2018 2019 2018 (Dollars in thousands) Income tax (expense) benefit $ (3,248 ) $ 2,609 $ (2,988 ) $ 77,875 Effective tax rate (28.1 %) (267.3 %) (25.2 %) 327.9 % The recorded tax provisions and effective tax rates for the three and nine months ended March 31, 2019 and three and nine months ended March 31, 2018 were different than what would normally be expected primarily due to the impact of tax legislation commonly referred to as the Tax Cuts and Jobs Act, state conformity of the new federal provisions and the deferred tax valuation allowance. The majority of the tax provision in periods ended prior to December 31, 2017 related to non-cash tax expense for tax benefits on certain indefinite-lived assets that the Company could not recognize for reporting purposes. The Company is no longer subject to IRS examinations for years before 2013. Furthermore, with limited exceptions, the Company is no longer subject to state and international income tax examinations by tax authorities for years before 2012. |
COMMITMENTS AND CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES: | 9 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES: The Company is a defendant in various lawsuits and claims arising out of the normal course of business. Like certain other large retail employers, the Company has been faced with allegations of purported class-wide consumer and wage and hour violations. Litigation is inherently unpredictable and the outcome of these matters cannot presently be determined. Although the actions are being vigorously defended, the Company could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period. |
CASH, CASH EQUIVALETS AND RESTR
CASH, CASH EQUIVALETS AND RESTRICTED CASH: | 9 Months Ended |
Mar. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | CASH, CASH EQUIVALENTS AND RESTRICTED CASH: The table below reconciles the cash and cash equivalents balances and restricted cash balances, recorded in other current assets from the unaudited Condensed Consolidated Balance Sheet to the amount of cash, cash equivalents and restricted cash reported on the unaudited Condensed Consolidated Statement of Cash flows: March 31, June 30, (Dollars in thousands) Cash and cash equivalents $ 71,146 $ 110,399 Restricted cash, included in Other current assets (1) 23,693 38,375 Total cash, cash equivalents and restricted cash $ 94,839 $ 148,774 _______________________________________________________________________________ (1) Restricted cash within Other current assets primarily relates to consolidated advertising cooperatives funds which can only be used to settle obligations of the respective cooperatives and contractual obligations to collateralize the Company's self-insurance programs. |
GOODWILL AND OTHER INTANGIBLES_
GOODWILL AND OTHER INTANGIBLES: | 9 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES: The table below contains details related to the Company's goodwill: Company-owned Franchise Consolidated (Dollars in thousands) Goodwill, net at June 30, 2018 $ 184,788 $ 227,855 $ 412,643 Translation rate adjustments (147 ) (408 ) (555 ) Derecognition related to sale of salon assets to franchisees (1) (33,528 ) — (33,528 ) Goodwill, net at March 31, 2019 $ 151,113 $ 227,447 $ 378,560 _______________________________________________________________________________ (1) Goodwill is derecognized for salons sold to franchisees with positive cash flows. The amount of goodwill derecognized is determined by a fraction (the numerator of which is the trailing-twelve months EBITDA of the salon being sold and the denominator of which is the estimated annualized EBITDA of the Company-owned reporting unit) that is applied to the total goodwill balance of the Company-owned reporting unit. The table below presents other intangible assets: March 31, 2019 June 30, 2018 Cost (1) Accumulated Amortization (1) Net Cost (1) Accumulated Amortization (1) Net (Dollars in thousands) Amortized intangible assets: Brand assets and trade names $ 7,830 $ (4,236 ) $ 3,594 $ 8,128 $ (4,260 ) $ 3,868 Franchise agreements 9,675 (7,888 ) 1,787 9,763 (7,712 ) 2,051 Lease intangibles 13,474 (9,884 ) 3,590 13,997 (9,770 ) 4,227 Other 1,966 (1,591 ) 375 1,983 (1,572 ) 411 $ 32,945 $ (23,599 ) $ 9,346 $ 33,871 $ (23,314 ) $ 10,557 _______________________________________________________________________________ (1) The change in the gross carrying value and accumulated amortization of other intangible assets is impacted by foreign currency. |
FINANCING ARRANGEMENTS_
FINANCING ARRANGEMENTS: | 9 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | FINANCING ARRANGEMENTS: The Company’s long-term debt consists of the following: Revolving Credit Facility Maturity Date Interest Rate March 31, June 30, (Fiscal Year) (Dollars in thousands) Revolving credit facility 2023 3.75% $ 90,000 $ 90,000 As of March 31, 2019 and June 30, 2018 , the Company has $90.0 million of outstanding borrowings under a $295.0 million revolving credit facility. At March 31, 2019 and June 30, 2018 , the Company has outstanding standby letters of credit under the revolving credit facility of $23.0 million and $1.5 million , respectively, primarily related to the Company's self-insurance program. The unused available credit under the facility was $182.0 million and $203.5 million , respectively. Amounts outstanding under the revolving credit facility are due at maturity in March 2023. Sale and Leaseback Transaction The Company’s long-term lease liability consists of the following: Maturity Date Interest Rate March 31, June 30, (Fiscal Year) (Dollars in thousands) Long-term lease liability 2033 3.30% $ 17,505 $ — In November 2018, the Company sold its Salt Lake City Distribution Center to an unrelated party. The Company is leasing the property back for 15 years with the option to renew three times for five year periods. As the Company plans to lease the property for more than 75% of its economic life, the sales proceeds received from the buyer-lessor are recognized as a financial liability. This financial liability is reduced based on the rental payments made under the lease that are allocated between principal and interest. As of March 31, 2019 , the current portion of the Company’s lease liability was $0.6 million . As of March 31, 2019, future lease payments due are as follows: Remainder of 2019 $ 302 2020 1,120 2021 1,157 2022 1,171 2023 1,186 Thereafter 13,265 Total $ 18,201 The Company was in compliance with all covenants and requirements of its financing arrangements as of and during the three and nine months ended March 31, 2019 . |
FAIR VALUE MEASUREMENTS_
FAIR VALUE MEASUREMENTS: | 9 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS: Fair value measurements are categorized into one of three levels based on the lowest level of significant input used: Level 1 (unadjusted quoted prices in active markets); Level 2 (observable market inputs available at the measurement date, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). Assets and Liabilities Measured at Fair Value on a Recurring Basis As of March 31, 2019 and June 30, 2018 , the estimated fair value of the Company’s cash, cash equivalents, restricted cash, receivables and accounts payable approximated their carrying values. As of March 31, 2019 and June 30, 2018 , the estimated fair value of the Company's debt was $90.0 million and the carrying value was $90.0 million . As of March 31, 2019 the estimated fair value of the Company’s long-term financial liability was $17.5 million . The estimated fair values of the Company's debt and long-term financial liability are based on Level 2 inputs. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis We measure certain assets, including the Company’s equity method investments, tangible fixed and other assets and goodwill, at fair value on a nonrecurring basis when they are deemed to be other than temporarily impaired. The fair values of these assets are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. The following impairments were based on fair values using Level 3 inputs: For the Three Months Ended March 31, For the Nine Months Ended March 31, 2019 2018 2019 2018 (Dollars in thousands) Long-lived assets $ 702 $ 313 $ 3,005 $ 9,565 |
SEGMENT INFORMATION_
SEGMENT INFORMATION: | 9 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION: Segment information is prepared on the same basis that the chief operating decision maker reviews financial information for operational decision-making purposes. The Company’s reportable operating segments consisted of the following salons: March 31, 2019 June 30, 2018 COMPANY-OWNED SALONS: SmartStyle/Cost Cutters in Walmart Stores 1,591 1,660 Supercuts 568 928 Signature Style 1,217 1,378 Total Company-owned Salons 3,376 3,966 as a percent of total Company-owned and Franchise salons 43.6 % 49.1 % FRANCHISE SALONS: SmartStyle/Cost Cutters in Walmart Stores 591 561 Supercuts 2,164 1,739 Signature Style 740 745 Total franchise locations, excluding TBG mall locations 3,495 3,045 as a percent of total Company-owned and Franchise salons 45.1 % 37.7 % Total North America TBG mall locations (1) 617 807 as a percent of total Company-owned and Franchise salons 8.0 % 10.0 % Total North American Salons 4,112 3,852 Total International TBG Salons (1) 263 262 as a percent of total Company-owned and Franchise salons 3.4 % 3.2 % Total Franchise Salons 4,375 4,114 as a percent of total Company-owned and Franchise salons 56.4 % 50.9 % OWNERSHIP INTEREST LOCATIONS: Equity ownership interest locations 87 88 Grand Total, System-wide 7,838 8,168 ____________________________________ (1) Canadian and Puerto Rican salons are included in the North American salon totals. As of March 31, 2019 , the Company-owned operating segment is comprised primarily of SmartStyle ® , Supercuts ® , Cost Cutters ® , and other regional trade names and the Franchise operating segment is comprised primarily of Supercuts ® , Regis ® , MasterCuts ® , SmartStyle ® , Cost Cutters ® , First Choice Haircutters ® , Roosters ® and Magicuts ® concepts. Financial information concerning the Company's reportable operating segments is shown in the following table: For the Three Months Ended March 31, 2019 Company-owned Franchise Corporate Consolidated (Dollars in thousands) Revenues: Service $ 181,809 $ — $ — $ 181,809 Product 39,427 14,339 — 53,766 Royalties and fees — 22,768 — 22,768 221,236 37,107 — 258,343 Operating expenses: Cost of service 111,632 — — 111,632 Cost of product 19,992 11,175 — 31,167 Site operating expenses 25,894 8,445 — 34,339 General and administrative 14,505 7,526 19,663 41,694 Rent 31,964 190 178 32,332 Depreciation and amortization 6,519 240 1,871 8,630 TBG mall location restructuring — 20,711 — 20,711 Total operating expenses 210,506 48,287 21,712 280,505 Operating income (loss) 10,730 (11,180 ) (21,712 ) (22,162 ) Other (expense) income: Interest expense — — (1,354 ) (1,354 ) Gain from sale of salon assets to franchisees, net — — 11,489 11,489 Interest income and other, net — — 464 464 Income (loss) from continuing operations before income taxes $ 10,730 $ (11,180 ) $ (11,113 ) $ (11,563 ) For the Three Months Ended March 31, 2018 Company-owned Franchise Corporate Consolidated (Dollars in thousands) Revenues: Service $ 222,022 $ — $ — $ 222,022 Product 49,980 14,931 — 64,911 Royalties and fees — 18,850 — 18,850 272,002 33,781 — 305,783 Operating expenses: Cost of service 132,081 — — 132,081 Cost of product 25,137 12,002 — 37,139 Site operating expenses 31,022 6,526 — 37,548 General and administrative 18,051 6,590 21,086 45,727 Rent 39,094 51 246 39,391 Depreciation and amortization 7,276 92 2,190 9,558 TBG mall location restructuring — — — — Total operating expenses 252,661 25,261 23,522 301,444 Operating income (loss) 19,341 8,520 (23,522 ) 4,339 Other (expense) income: Interest expense — — (5,095 ) (5,095 ) Gain from sale of salon assets to franchisees, net — — 237 237 Interest income and other, net — — 1,495 1,495 Income (loss) from continuing operations before income taxes $ 19,341 $ 8,520 $ (26,885 ) $ 976 For the Nine Months Ended March 31, 2019 Company-owned Franchise Corporate Consolidated (Dollars in thousands) Revenues: Service $ 580,076 $ — $ — $ 580,076 Product 125,220 47,786 — 173,006 Royalties and fees — 67,767 — 67,767 705,296 115,553 — 820,849 Operating expenses: Cost of service 348,060 — — 348,060 Cost of product 61,661 38,037 — 99,698 Site operating expenses 82,435 24,288 — 106,723 General and administrative 45,084 24,656 65,517 135,257 Rent 101,908 468 576 102,952 Depreciation and amortization 21,304 613 5,815 27,732 TBG mall location restructuring — 20,711 — 20,711 Total operating expenses 660,452 108,773 71,908 841,133 Operating income (loss) 44,844 6,780 (71,908 ) (20,284 ) Other (expense) income: Interest expense — — (3,432 ) (3,432 ) Gain from sale of salon assets to franchisees, net — — 10,394 10,394 Interest income and other, net — — 1,453 1,453 Income (loss) from continuing operations before income taxes $ 44,844 $ 6,780 $ (63,493 ) $ (11,869 ) For the Nine Months Ended March 31, 2018 Company-owned Franchise Corporate Consolidated (Dollars in thousands) Revenues: Service $ 680,930 $ — $ — $ 680,930 Product 159,980 37,721 — 197,701 Royalties and fees — 56,465 — 56,465 840,910 94,186 — 935,096 Operating expenses: Cost of service 406,767 — — 406,767 Cost of product 77,628 29,537 — 107,165 Site operating expenses 96,443 19,732 — 116,175 General and administrative 51,822 19,005 58,658 129,485 Rent 146,376 168 736 147,280 Depreciation and amortization 39,224 275 7,265 46,764 TBG mall location restructuring — — — — Total operating expenses 818,260 68,717 66,659 953,636 Operating income (loss) 22,650 25,469 (66,659 ) (18,540 ) Other (expense) income: Interest expense — — (9,402 ) (9,402 ) Gain from sale of salon assets to franchisees, net — — 255 255 Interest income and other, net — — 3,934 3,934 Income (loss) from continuing operations before income taxes $ 22,650 $ 25,469 $ (71,872 ) $ (23,753 ) |
BASIS OF PRESENTATION OF UNAU_2
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Policies) | 9 Months Ended |
Mar. 31, 2019 | |
Accounting Policies [Abstract] | |
Goodwill | The Company assesses goodwill impairment on an annual basis, during the Company’s fourth fiscal quarter, and between annual assessments if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying amount. An interim impairment analysis was not required in the nine months ended March 31, 2019. The Company performs its annual impairment assessment as of April 30. For the fiscal year 2018 annual impairment assessment, due to the transformational efforts completed during the year, the Company elected to forgo the optional Step 0 assessment and performed the quantitative impairment analysis on the Company-owned and Franchise reporting units. The Company compared the carrying value of the reporting units, including goodwill, to their estimated fair value. The results of these assessments indicated that the estimated fair value of our reporting units exceeded their carrying value. The Franchise reporting unit had substantial headroom and the Company-owned reporting unit had headroom of approximately 24% . The fair value of the Company-owned reporting unit was determined based on a discounted cash flow analysis and comparable market multiples. The assumptions used in determining fair value were the number and pace of salons sold to franchisees, proceeds for salon sales, weighted average cost of capital, general and administrative expenses and utilization of net operating loss benefits. We selected the assumptions by considering our historical financial performance and trends, historical salon sale proceeds and estimated salon sale activities. The preparation of our fair value estimate includes uncertain factors and requires significant judgments and estimates which are subject to change. A 100 basis point increase in our weighted average cost of capital within the Company-owned reporting unit would result in a reduction in headroom to approximately 17% . Other uncertain factors or events exist which may result in a future triggering event and require us to perform an interim impairment analysis with respect to the carrying value of goodwill for the Company-owned reporting unit prior to our annual assessment. These internal and external factors include but are not limited to the following: • Changes in the company-owned salon strategy, • Franchise expansion and sales opportunities, • Future market earnings multiples deterioration, • Our financial performance falls short of our projections due to internal operating factors, • Economic recession, • Reduced salon traffic, as defined by total transactions, and/or revenue, • Deterioration of industry trends, • Increased competition, • Inability to reduce general and administrative expenses as company-owned salon count potentially decreases, • Other factors causing our cash flow to deteriorate. If the triggering event analysis indicates the fair value of the Company-owned reporting unit has potentially fallen below more than the 24% headroom, we may be required to perform an updated impairment assessment which may result in a non-cash impairment charge to reduce the carrying value of goodwill. Assessing goodwill for impairment requires management to make assumptions and to apply judgment, including forecasting future sales and expenses, and selecting appropriate discount rates, which can be affected by economic conditions and other factors that can be difficult to predict. The Company does not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions it uses in its goodwill impairment assessment. However, if actual results are not consistent with the estimates and assumptions used in the calculations, or if there are significant changes to the Company's planned strategy for company-owned salons, the Company may be exposed to future impairment losses that could be material. |
Accounting Standards | Accounting Standards Recently Adopted by the Company: Revenue from Contracts with Customers In May 2014, the FASB issued amended guidance for revenue recognition which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company retrospectively adopted these standards on July 1, 2018. The impact of these standards was applied to all periods presented and the cumulative effect of applying the standard was recognized at the beginning of the earliest period presented. See Note 2 to the unaudited Condensed Consolidated Financial Statements for additional information regarding the impact of the adoption of the revenue recognition guidance. Restricted Cash In November 2016, the FASB issued cash flow guidance requiring restricted cash and restricted cash equivalents to be included in the cash and cash equivalent balances in the statement of cash flows. Transfers between cash and cash equivalents and restricted cash are no longer presented in the statement of cash flows and a reconciliation between the balance sheet and statement of cash flows must be disclosed. The Company retrospectively adopted this guidance on July 1, 2018. The impact of this standard was applied to all periods presented. As a result of including restricted cash in the beginning and end of period balances, cash, cash equivalents and restricted cash presented in the statement of cash flows increased $38.4 million , $23.6 million and $37.6 million as of June 30, 2018, March 31, 2019 and June 30, 2017, respectively. Statement of Cash Flows In August 2016, the FASB issued updated cash flow guidance clarifying cash flow classification and presentation for certain items. The Company retrospectively adopted this guidance on July 1, 2018. The adoption of this standard did not have a material impact on the Company's consolidated statement of cash flows. A ccounting Standards Recently Issued But Not Yet Adopted by the Company: Leases In February 2016, the FASB issued updated guidance requiring organizations that lease assets to recognize the rights and obligations created by those leases on the consolidated balance sheet. The new standard is effective for the Company in the first quarter of fiscal year 2020, with early adoption permitted. In July 2018, the FASB issued ASU 2018-11, which provides companies with the option to apply the new lease standard either at the beginning of the earliest comparative period presented or in the period of adoption. The Company will elect this optional transition relief amendment that allows for a cumulative-effect adjustment in the period of adoption and will not restate prior periods. The Company will also elect the package of practical expedients that do not require reassessment of whether existing contracts are or contain leases, lease classification or initial direct costs. The Company is leveraging its lease management system to facilitate the adoption of this standard and is evaluating business processes and internal controls related to lease accounting to assist in the application of the new guidance. The Company is continuing to evaluate the effect the new standard will have on the Company's consolidated financial statements but expects this adoption will result in a material increase in the assets and liabilities on the Company's consolidated balance sheet, as substantially all its operating lease commitments, including leases signed on behalf of franchisees, will be subject to the new guidance. The Company does not expect the adoption of the new guidance to have a material impact on net income, cash flows or compliance with debt agreements. |
Revenue Recognition | In May 2014, the FASB issued amended guidance for revenue recognition which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company adopted the amended revenue recognition guidance, ASC Topic 606, on July 1, 2018 using the full retrospective transition method which required the adjustment of each prior reporting period presented. The adjusted amounts include the application of a practical expedient that permitted the Company to reflect the aggregate effect of all modifications that occurred prior to fiscal year 2017 when identifying the satisfied and unsatisfied performance obligation, determining the transaction price and allocating the transaction price to the satisfied and unsatisfied performance obligation. As a result of adopting this new standard, the Company is providing its updated revenue recognition policies. Revenue Recognition and Deferred Revenue: Revenue recognized at point of sale Company-owned salon revenues are recognized at the time when the services are provided. Product revenues for Company-owned salons are recognized when the guest receives and pays for the merchandise. Revenues from purchases made with gift cards are also recorded when the guest takes possession of the merchandise or services are provided. Gift cards issued by the Company are recorded as a liability (deferred revenue) upon sale and recognized as revenue upon redemption by the customer. Gift card breakage, the amount of gift cards which will not be redeemed, is recognized proportional to redemptions using estimates based on historical redemption patterns. Product sales by the Company to its franchisees are included within product revenues in the unaudited Condensed Consolidated Statement of Operations and recorded at the time product is delivered to the franchisee. Payment for franchisee product revenue is generally collected within 30 days of delivery. Revenue recognized over time Franchise revenues primarily include royalties, advertising fund fees, franchise fees and other fees. Royalty and advertising fund revenues represent sales-based royalties that are recognized in the period in which the sales occur. Generally, royalty and advertising fund revenue is billed and collected monthly in arrears. Advertising fund revenues and expenditures, which must be spent on marketing and related activities per the franchise agreements, are recorded on a gross basis within the unaudited Condensed Consolidated Statement of Operations. This increases both the gross amount of reported franchise revenue and site operating expense and generally has no impact on operating income and net income. Franchise fees are billed and received upon the signing of the franchise agreement. Upon adoption of the new revenue recognition guidance, recognition of these fees is deferred until the salon opening and is then recognized over the term of the franchise agreement, typically ten years . Under previous guidance the initial franchise fees were recognized in full upon salon opening. |
Fair Value Measurements | We measure certain assets, including the Company’s equity method investments, tangible fixed and other assets and goodwill, at fair value on a nonrecurring basis when they are deemed to be other than temporarily impaired. The fair values of these assets are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. |
REVENUE RECOGNITION_ (Tables)
REVENUE RECOGNITION: (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The following table disaggregates revenue by timing of revenue recognition and is reconciled to reportable segment revenues as follows: Three Months Ended March 31, 2019 Three Months Ended March 31, 2018 Company-owned Franchise Company-owned Franchise (in thousands) Revenue recognized at a point in time: Service $ 181,809 $ — $ 222,022 $ — Product 39,427 14,339 49,980 14,931 Total revenue recognized at a point in time $ 221,236 $ 14,339 $ 272,002 $ 14,931 Revenue recognized over time: Royalty and other franchise fees $ — $ 14,339 $ — $ 12,322 Advertising fund fees — 8,429 — 6,528 Total revenue recognized over time — 22,768 — 18,850 Total revenue $ 221,236 $ 37,107 $ 272,002 $ 33,781 Nine Months Ended March 31, 2019 Nine Months Ended March 31, 2018 Company-owned Franchise Company-owned Franchise (in thousands) Revenue recognized at a point in time: Service $ 580,076 $ — $ 680,930 $ — Product 125,220 47,786 159,980 37,721 Total revenue recognized at a point in time $ 705,296 $ 47,786 $ 840,910 $ 37,721 Revenue recognized over time: Royalty and other franchise fees $ — $ 43,495 $ — $ 36,733 Advertising fund fees — 24,272 — 19,732 Total revenue recognized over time — 67,767 — 56,465 Total revenue $ 705,296 $ 115,553 $ 840,910 $ 94,186 |
Schedule of receivables, broker fees and deferred revenue | Information about receivables, broker fees and deferred revenue subject to the amended revenue recognition guidance is as follows: March 31, June 30, Balance Sheet Classification (in thousands) Receivables from contracts with customers, net $ 23,904 $ 21,504 Accounts receivable, net Broker fees $ 16,904 $ 14,002 Other assets Deferred revenue: Current Gift card liability $ 3,439 $ 3,320 Accrued expenses Deferred franchise fees unopened salons 137 2,306 Accrued expenses Deferred franchise fees open salons 3,767 3,030 Accrued expenses Total current deferred revenue $ 7,343 $ 8,656 Non-current Deferred franchise fees unopened salons $ 13,941 $ 11,161 Other non-current liabilities Deferred franchise fees open salons 21,943 18,346 Other non-current liabilities Total non-current deferred revenue $ 35,884 $ 29,507 |
Broker fees | The following table is a rollforward of the broker fee balance for the periods indicated (in thousands): Balance as of June 30, 2018 $ 14,002 Additions 4,393 Amortization (1,484 ) Write-offs (7 ) Balance as of March 31, 2019 $ 16,904 |
Estimated revenue expected to be recognized | Estimated revenue expected to the recognized in the future related to deferred franchise fees for open salons as of March 31, 2019 is as follows (in thousands): Remainder of 2019 $ 840 2020 3,631 2021 3,543 2022 3,423 2023 3,246 Thereafter 11,027 Total $ 25,710 |
Schedules of impact of revenue recognition policy | The amended revenue recognition guidance impacted the Company's previously reported financial statements as follows: CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) June 30, 2018 (Dollars in thousands) Adjustments for new revenue recognition guidance Previously Franchise Advertising Gift Card Reported Fees Funds Breakage Taxes Adjusted ASSETS Current assets: Cash and cash equivalents $ 110,399 $ — $ — $ — $ — $ 110,399 Receivables, net 52,430 — — — — 52,430 Inventories 79,363 — — — — 79,363 Other current assets 47,867 — — — — 47,867 Total current assets 290,059 — — — — 290,059 Property and equipment, net 99,288 — — — — 99,288 Goodwill 412,643 — — — — 412,643 Other intangibles, net 10,557 — — — — 10,557 Other assets 37,616 — — — — 37,616 Non-current assets held for sale (Note 1) 6,572 — — — — 6,572 Total assets $ 856,735 $ — $ — $ — $ — $ 856,735 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Accounts payable $ 57,738 $ — $ — $ — $ — $ 57,738 Accrued expenses 97,630 3,030 — 56 — 100,716 Total current liabilities 155,368 3,030 — 56 — 158,454 Long-term debt 90,000 — — — — 90,000 Other noncurrent liabilities 107,875 18,346 — — (4,378 ) 121,843 Total liabilities 353,243 21,376 — 56 (4,378 ) 370,297 Commitments and contingencies (Note 7) Shareholders’ equity: 0 Common stock 2,263 — — — — 2,263 Additional paid-in capital 194,436 — — — — 194,436 Accumulated other comprehensive income 9,568 88 — — — 9,656 Retained earnings 297,225 (21,464 ) — (56 ) 4,378 280,083 Total shareholders’ equity 503,492 (21,376 ) — (56 ) 4,378 486,438 Total liabilities and shareholders’ equity $ 856,735 $ — $ — $ — $ — $ 856,735 CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) For The Three Months Ended March 31, 2018 (Dollars and shares in thousands, except per share data amounts) Adjustments for new revenue recognition guidance Previously Franchise Advertising Gift Card Reported Fees Funds Breakage Taxes Adjusted Revenues: Service $ 221,926 $ — $ — $ 96 $ — $ 222,022 Product 64,887 — — 24 — 64,911 Royalties and fees 13,988 (1,666 ) 6,528 — — 18,850 300,801 (1,665 ) 6,527 120 — 305,783 Operating expenses: Cost of service 132,081 — — — — 132,081 Cost of product 37,139 — — — — 37,139 Site operating expenses 31,021 — 6,527 — — 37,548 General and administrative 45,727 — — — — 45,727 Rent 39,391 — — — — 39,391 Depreciation and amortization 9,558 — — — — 9,558 Total operating expenses 294,917 — 6,527 — — 301,444 Operating income 5,884 (1,665 ) — 120 — 4,339 Other (expense) income: Interest expense (5,095 ) — — — — (5,095 ) Gain from sale of salon assets to franchisees, net 237 — — — — 237 Interest income and other, net 1,548 — — (53 ) — 1,495 Income from continuing operations before income taxes 2,574 (1,665 ) — 67 — 976 Income tax expense 2,225 — — — 384 2,609 Income from continuing operations 4,799 (1,665 ) — 67 384 3,585 Loss from TBG discontinued operations, net of taxes (10,605 ) — — — — (10,605 ) Net loss $ (5,806 ) $ (1,665 ) $ — $ 67 $ 384 $ (7,020 ) Net loss per share: Basic: Income from continuing operations (1) $ 0.10 $ (0.04 ) $ 0.00 $ 0.00 $ 0.01 $ 0.08 Loss from TBG discontinued operations (0.23 ) 0.00 0.00 0.00 0.00 (0.23 ) Net loss per share, basic (1) $ (0.12 ) $ (0.04 ) $ 0.00 $ 0.00 $ 0.01 $ (0.15 ) Diluted: Income from continuing operations (1) $ 0.10 $ (0.04 ) $ 0.00 $ 0.00 $ 0.01 $ 0.08 Loss from TBG discontinued operations (0.22 ) 0.00 0.00 0.00 0.00 (0.22 ) Net loss per share, diluted (1) $ (0.12 ) $ (0.04 ) $ 0.00 $ 0.00 $ 0.01 $ (0.15 ) Weighted average common and common equivalent shares outstanding: Basic 46,612 46,612 46,612 46,612 46,612 46,612 Diluted 47,153 47,153 47,153 47,153 47,153 47,153 _____________________________________________________________________________ (1) Total is a recalculation; line items calculated individually may not sum to total due to rounding. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) For The Nine Months Ended March 31, 2018 (Dollars and shares in thousands, except per share data amounts) Adjustments for new revenue recognition guidance Previously Franchise Advertising Gift Card Reported Fees Funds Breakage Taxes Adjusted Revenues: Service $ 680,699 $ — $ — $ 231 $ — $ 680,930 Product 197,643 — — 58 — 197,701 Royalties and fees 40,847 (4,114 ) 19,732 — — 56,465 919,189 (4,114 ) 19,732 289 — 935,096 Operating expenses: Cost of service 406,767 — — — — 406,767 Cost of product 107,165 — — — — 107,165 Site operating expenses 96,443 — 19,732 — — 116,175 General and administrative 129,485 — — — — 129,485 Rent 147,280 — — — — 147,280 Depreciation and amortization 46,764 — — — — 46,764 Total operating expenses 933,904 — 19,732 — — 953,636 Operating income (14,715 ) (4,114 ) — 289 — (18,540 ) Other (expense) income: Interest expense (9,402 ) — — — — (9,402 ) Gain from sale of salon assets to franchisees, net 255 — — — — 255 Interest income and other, net 4,919 — — (985 ) — 3,934 Income from continuing operations before income taxes (18,943 ) (4,114 ) — (696 ) — (23,753 ) Income tax expense 73,855 — — — 4,020 77,875 Income from continuing operations 54,912 (4,114 ) — (696 ) 4,020 54,122 Loss from TBG discontinued operations, net of taxes (50,973 ) — — — — (50,973 ) Net loss $ 3,939 $ (4,114 ) $ — $ (696 ) $ 4,020 $ 3,149 Net loss per share: Basic: Income from continuing operations (1) $ 1.18 $ (0.09 ) $ 0.00 $ (0.01 ) $ 0.09 $ 1.16 Loss from TBG discontinued operations (1.09 ) 0.00 0.00 0.00 0.00 (1.09 ) Net loss per share, basic (1) $ 0.08 $ (0.09 ) $ 0.00 $ (0.01 ) $ 0.09 $ 0.07 Diluted: Income from continuing operations (1) $ 1.17 $ (0.09 ) $ 0.00 $ (0.01 ) $ 0.09 $ 1.15 Loss from TBG discontinued operations (1.08 ) 0.00 0.00 0.00 0.00 (1.08 ) Net loss per share, diluted (1) $ 0.08 $ (0.09 ) $ 0.00 $ (0.01 ) $ 0.09 $ 0.07 Weighted average common and common equivalent shares outstanding: Basic 46,684 46,684 46,684 46,684 46,684 46,684 Diluted 47,093 47,093 47,093 47,093 47,093 47,093 _____________________________________________________________________________ (1) Total is a recalculation; line items calculated individually may not sum to total due to rounding. |
TBG DISCONTINUED OPERATIONS_ (T
TBG DISCONTINUED OPERATIONS: (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of discontinued operations | The following summarizes the results of our TBG discontinued operations for the periods presented: For the Three Months Ended March 31, For the Nine Months Ended March 31, 2019 2018 2019 2018 (Dollars in thousands) (Dollars in thousands) Revenue $ — $ — $ — $ 101,140 Income (loss) from TBG discontinued operations, before income taxes 224 (13,545 ) (862 ) (57,385 ) Income tax (expense) benefit on TBG discontinued operations (46 ) 2,940 6,889 6,412 Income (loss) from TBG discontinued operations, net of income taxes $ 178 $ (10,605 ) $ 6,027 $ (50,973 ) The following summarizes the TBG related charges for the periods presented: For the Three Months Ended March 31, For the Nine Months Ended March 31, Income Statement Classification 2019 2018 2019 2018 (Dollars in thousands) TBG mall location restructuring $ 20,711 $ — $ 20,711 $ — TBG mall location restructuring Working capital and prepaid rent receivable reserve — (11,697 ) — (11,697 ) Income (loss) from TBG discontinued operations Other charges 224 (1,848 ) (862 ) (45,688 ) Income (loss) from TBG discontinued operations Income (loss) from TBG discontinued operations, before income taxes 224 (13,545 ) (862 ) (57,385 ) Income (loss) from TBG discontinued operations Income tax (expense) benefit on TBG discontinued operations (46 ) 2,940 6,889 6,412 Income (loss) from TBG discontinued operations Income (loss) from TBG discontinued operations, net of income taxes $ 178 $ (10,605 ) $ 6,027 $ (50,973 ) Income (loss) from TBG discontinued operations |
SHAREHOLDERS' EQUITY_ (Tables)
SHAREHOLDERS' EQUITY: (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of restricted stock awards activity | A summary of equity awards granted is as follows: For the Three Months Ended March 31, 2019 For the Nine Months Ended March 31, 2019 Restricted stock units — 338,859 Performance-based restricted stock units — 733,688 |
INCOME TAXES_ (Tables)
INCOME TAXES: (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Summary of income tax benefit (expense) and corresponding effective tax rates | A summary of income tax (expense) benefit and corresponding effective tax rates is as follows: For the Three Months Ended March 31, For the Nine Months Ended March 31, 2019 2018 2019 2018 (Dollars in thousands) Income tax (expense) benefit $ (3,248 ) $ 2,609 $ (2,988 ) $ 77,875 Effective tax rate (28.1 %) (267.3 %) (25.2 %) 327.9 % |
CASH, CASH EQUIVALETS AND RES_2
CASH, CASH EQUIVALETS AND RESTRICTED CASH: (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Schedule of cash and cash equivalents | The table below reconciles the cash and cash equivalents balances and restricted cash balances, recorded in other current assets from the unaudited Condensed Consolidated Balance Sheet to the amount of cash, cash equivalents and restricted cash reported on the unaudited Condensed Consolidated Statement of Cash flows: March 31, June 30, (Dollars in thousands) Cash and cash equivalents $ 71,146 $ 110,399 Restricted cash, included in Other current assets (1) 23,693 38,375 Total cash, cash equivalents and restricted cash $ 94,839 $ 148,774 _______________________________________________________________________________ (1) Restricted cash within Other current assets primarily relates to consolidated advertising cooperatives funds which can only be used to settle obligations of the respective cooperatives and contractual obligations to collateralize the Company's self-insurance programs. |
Schedule of restricted cash and cash equivalents | The table below reconciles the cash and cash equivalents balances and restricted cash balances, recorded in other current assets from the unaudited Condensed Consolidated Balance Sheet to the amount of cash, cash equivalents and restricted cash reported on the unaudited Condensed Consolidated Statement of Cash flows: March 31, June 30, (Dollars in thousands) Cash and cash equivalents $ 71,146 $ 110,399 Restricted cash, included in Other current assets (1) 23,693 38,375 Total cash, cash equivalents and restricted cash $ 94,839 $ 148,774 _______________________________________________________________________________ (1) Restricted cash within Other current assets primarily relates to consolidated advertising cooperatives funds which can only be used to settle obligations of the respective cooperatives and contractual obligations to collateralize the Company's self-insurance programs. |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLES: (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of recorded goodwill | The table below contains details related to the Company's goodwill: Company-owned Franchise Consolidated (Dollars in thousands) Goodwill, net at June 30, 2018 $ 184,788 $ 227,855 $ 412,643 Translation rate adjustments (147 ) (408 ) (555 ) Derecognition related to sale of salon assets to franchisees (1) (33,528 ) — (33,528 ) Goodwill, net at March 31, 2019 $ 151,113 $ 227,447 $ 378,560 _______________________________________________________________________________ (1) Goodwill is derecognized for salons sold to franchisees with positive cash flows. The amount of goodwill derecognized is determined by a fraction (the numerator of which is the trailing-twelve months EBITDA of the salon being sold and the denominator of which is the estimated annualized EBITDA of the Company-owned reporting unit) that is applied to the total goodwill balance of the Company-owned reporting unit. |
Schedule of other intangible assets | The table below presents other intangible assets: March 31, 2019 June 30, 2018 Cost (1) Accumulated Amortization (1) Net Cost (1) Accumulated Amortization (1) Net (Dollars in thousands) Amortized intangible assets: Brand assets and trade names $ 7,830 $ (4,236 ) $ 3,594 $ 8,128 $ (4,260 ) $ 3,868 Franchise agreements 9,675 (7,888 ) 1,787 9,763 (7,712 ) 2,051 Lease intangibles 13,474 (9,884 ) 3,590 13,997 (9,770 ) 4,227 Other 1,966 (1,591 ) 375 1,983 (1,572 ) 411 $ 32,945 $ (23,599 ) $ 9,346 $ 33,871 $ (23,314 ) $ 10,557 _______________________________________________________________________________ (1) The change in the gross carrying value and accumulated amortization of other intangible assets is impacted by foreign currency. |
FINANCING ARRANGEMENTS_ (Tables
FINANCING ARRANGEMENTS: (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | The Company’s long-term debt consists of the following: Revolving Credit Facility Maturity Date Interest Rate March 31, June 30, (Fiscal Year) (Dollars in thousands) Revolving credit facility 2023 3.75% $ 90,000 $ 90,000 |
Schedule of long-term financial liability | As of March 31, 2019, future lease payments due are as follows: Remainder of 2019 $ 302 2020 1,120 2021 1,157 2022 1,171 2023 1,186 Thereafter 13,265 Total $ 18,201 The Company’s long-term lease liability consists of the following: Maturity Date Interest Rate March 31, June 30, (Fiscal Year) (Dollars in thousands) Long-term lease liability 2033 3.30% $ 17,505 $ — |
FAIR VALUE MEASUREMENTS_ (Table
FAIR VALUE MEASUREMENTS: (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value impairments | The following impairments were based on fair values using Level 3 inputs: For the Three Months Ended March 31, For the Nine Months Ended March 31, 2019 2018 2019 2018 (Dollars in thousands) Long-lived assets $ 702 $ 313 $ 3,005 $ 9,565 |
SEGMENT INFORMATION_ (Tables)
SEGMENT INFORMATION: (Tables) | 9 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Schedule of reportable operating segment salons | The Company’s reportable operating segments consisted of the following salons: March 31, 2019 June 30, 2018 COMPANY-OWNED SALONS: SmartStyle/Cost Cutters in Walmart Stores 1,591 1,660 Supercuts 568 928 Signature Style 1,217 1,378 Total Company-owned Salons 3,376 3,966 as a percent of total Company-owned and Franchise salons 43.6 % 49.1 % FRANCHISE SALONS: SmartStyle/Cost Cutters in Walmart Stores 591 561 Supercuts 2,164 1,739 Signature Style 740 745 Total franchise locations, excluding TBG mall locations 3,495 3,045 as a percent of total Company-owned and Franchise salons 45.1 % 37.7 % Total North America TBG mall locations (1) 617 807 as a percent of total Company-owned and Franchise salons 8.0 % 10.0 % Total North American Salons 4,112 3,852 Total International TBG Salons (1) 263 262 as a percent of total Company-owned and Franchise salons 3.4 % 3.2 % Total Franchise Salons 4,375 4,114 as a percent of total Company-owned and Franchise salons 56.4 % 50.9 % OWNERSHIP INTEREST LOCATIONS: Equity ownership interest locations 87 88 Grand Total, System-wide 7,838 8,168 ____________________________________ (1) Canadian and Puerto Rican salons are included in the North American salon totals. |
Schedule of summarized financial information of reportable operating segments | Financial information concerning the Company's reportable operating segments is shown in the following table: For the Three Months Ended March 31, 2019 Company-owned Franchise Corporate Consolidated (Dollars in thousands) Revenues: Service $ 181,809 $ — $ — $ 181,809 Product 39,427 14,339 — 53,766 Royalties and fees — 22,768 — 22,768 221,236 37,107 — 258,343 Operating expenses: Cost of service 111,632 — — 111,632 Cost of product 19,992 11,175 — 31,167 Site operating expenses 25,894 8,445 — 34,339 General and administrative 14,505 7,526 19,663 41,694 Rent 31,964 190 178 32,332 Depreciation and amortization 6,519 240 1,871 8,630 TBG mall location restructuring — 20,711 — 20,711 Total operating expenses 210,506 48,287 21,712 280,505 Operating income (loss) 10,730 (11,180 ) (21,712 ) (22,162 ) Other (expense) income: Interest expense — — (1,354 ) (1,354 ) Gain from sale of salon assets to franchisees, net — — 11,489 11,489 Interest income and other, net — — 464 464 Income (loss) from continuing operations before income taxes $ 10,730 $ (11,180 ) $ (11,113 ) $ (11,563 ) For the Three Months Ended March 31, 2018 Company-owned Franchise Corporate Consolidated (Dollars in thousands) Revenues: Service $ 222,022 $ — $ — $ 222,022 Product 49,980 14,931 — 64,911 Royalties and fees — 18,850 — 18,850 272,002 33,781 — 305,783 Operating expenses: Cost of service 132,081 — — 132,081 Cost of product 25,137 12,002 — 37,139 Site operating expenses 31,022 6,526 — 37,548 General and administrative 18,051 6,590 21,086 45,727 Rent 39,094 51 246 39,391 Depreciation and amortization 7,276 92 2,190 9,558 TBG mall location restructuring — — — — Total operating expenses 252,661 25,261 23,522 301,444 Operating income (loss) 19,341 8,520 (23,522 ) 4,339 Other (expense) income: Interest expense — — (5,095 ) (5,095 ) Gain from sale of salon assets to franchisees, net — — 237 237 Interest income and other, net — — 1,495 1,495 Income (loss) from continuing operations before income taxes $ 19,341 $ 8,520 $ (26,885 ) $ 976 For the Nine Months Ended March 31, 2019 Company-owned Franchise Corporate Consolidated (Dollars in thousands) Revenues: Service $ 580,076 $ — $ — $ 580,076 Product 125,220 47,786 — 173,006 Royalties and fees — 67,767 — 67,767 705,296 115,553 — 820,849 Operating expenses: Cost of service 348,060 — — 348,060 Cost of product 61,661 38,037 — 99,698 Site operating expenses 82,435 24,288 — 106,723 General and administrative 45,084 24,656 65,517 135,257 Rent 101,908 468 576 102,952 Depreciation and amortization 21,304 613 5,815 27,732 TBG mall location restructuring — 20,711 — 20,711 Total operating expenses 660,452 108,773 71,908 841,133 Operating income (loss) 44,844 6,780 (71,908 ) (20,284 ) Other (expense) income: Interest expense — — (3,432 ) (3,432 ) Gain from sale of salon assets to franchisees, net — — 10,394 10,394 Interest income and other, net — — 1,453 1,453 Income (loss) from continuing operations before income taxes $ 44,844 $ 6,780 $ (63,493 ) $ (11,869 ) For the Nine Months Ended March 31, 2018 Company-owned Franchise Corporate Consolidated (Dollars in thousands) Revenues: Service $ 680,930 $ — $ — $ 680,930 Product 159,980 37,721 — 197,701 Royalties and fees — 56,465 — 56,465 840,910 94,186 — 935,096 Operating expenses: Cost of service 406,767 — — 406,767 Cost of product 77,628 29,537 — 107,165 Site operating expenses 96,443 19,732 — 116,175 General and administrative 51,822 19,005 58,658 129,485 Rent 146,376 168 736 147,280 Depreciation and amortization 39,224 275 7,265 46,764 TBG mall location restructuring — — — — Total operating expenses 818,260 68,717 66,659 953,636 Operating income (loss) 22,650 25,469 (66,659 ) (18,540 ) Other (expense) income: Interest expense — — (9,402 ) (9,402 ) Gain from sale of salon assets to franchisees, net — — 255 255 Interest income and other, net — — 3,934 3,934 Income (loss) from continuing operations before income taxes $ 22,650 $ 25,469 $ (71,872 ) $ (23,753 ) |
BASIS OF PRESENTATION OF UNAU_3
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Goodwill (Details) $ in Thousands | Mar. 31, 2019USD ($) | Jun. 30, 2018USD ($) |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Goodwill | $ 378,560 | $ 412,643 |
Headroom Percent | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Measurement input | 0.24 | |
Increase (decrease) per 100 basis-point increase in weighted average cost of capital | (0.17) | |
Company-owned | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Goodwill | 151,113 | $ 184,788 |
Franchise | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Goodwill | $ 227,447 | $ 227,855 |
BASIS OF PRESENTATION OF UNAU_4
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Non-Current Assets Held for Sale (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Long Lived Assets Held-for-sale [Line Items] | ||
Other assets | $ 6,529 | $ 6,572 |
Land | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Other assets | 1,700 | 1,700 |
Building | ||
Long Lived Assets Held-for-sale [Line Items] | ||
Other assets | $ 4,800 | $ 4,900 |
BASIS OF PRESENTATION OF UNAU_5
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Accounting Standards Recently Adopted by the Company (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2017 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cash, cash equivalents and restricted cash | $ 94,839 | $ 148,774 | $ 208,634 |
Accounting Standards Update 2016-18 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Cash, cash equivalents and restricted cash | $ 23,600 | $ 38,400 | $ 37,600 |
REVENUE RECOGNITION_ Revenue Re
REVENUE RECOGNITION: Revenue Recognized (Details) | 9 Months Ended |
Mar. 31, 2019 | |
Revenue recognized at a point in time | |
Disaggregation of Revenue [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 30 days |
Revenue recognized over time | |
Disaggregation of Revenue [Line Items] | |
Performance obligations expected to be satisfied, expected timing | ten years |
REVENUE RECOGNITION_ Disaggrega
REVENUE RECOGNITION: Disaggregation of Revenue by Timing (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 258,343 | $ 305,783 | $ 820,849 | $ 935,096 |
Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 221,236 | 272,002 | 705,296 | 840,910 |
Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 37,107 | 33,781 | 115,553 | 94,186 |
Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 181,809 | 222,022 | 580,076 | 680,930 |
Service | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 181,809 | 222,022 | 580,076 | 680,930 |
Service | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Product | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 53,766 | 64,911 | 173,006 | 197,701 |
Product | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 39,427 | 49,980 | 125,220 | 159,980 |
Product | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 14,339 | 14,931 | 47,786 | 37,721 |
Royalties and fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 22,768 | 18,850 | 67,767 | 56,465 |
Royalties and fees | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Royalties and fees | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 22,768 | 18,850 | 67,767 | 56,465 |
Revenue recognized at a point in time | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 221,236 | 272,002 | 705,296 | 840,910 |
Revenue recognized at a point in time | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 14,339 | 14,931 | 47,786 | 37,721 |
Revenue recognized at a point in time | Service | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 181,809 | 222,022 | ||
Revenue recognized at a point in time | Service | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | ||
Revenue recognized at a point in time | Product | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 39,427 | 49,980 | ||
Revenue recognized at a point in time | Product | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 14,339 | 14,931 | ||
Revenue recognized over time | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Revenue recognized over time | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 22,768 | 18,850 | 67,767 | 56,465 |
Revenue recognized over time | Royalties and fees | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Revenue recognized over time | Royalties and fees | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 14,339 | 12,322 | 43,495 | 36,733 |
Revenue recognized over time | Advertising fund | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 0 | 0 | 0 | 0 |
Revenue recognized over time | Advertising fund | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 8,429 | $ 6,528 | $ 24,272 | $ 19,732 |
REVENUE RECOGNITION_ Receivable
REVENUE RECOGNITION: Receivables, Broker Fees and Deferred Revenue (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Revenue from Contract with Customer [Abstract] | ||
Receivables | $ 23,904 | $ 21,504 |
Broker fees | 16,904 | 14,002 |
Deferred revenue | ||
Current | 7,343 | 8,656 |
Total deferred revenue | 35,884 | 29,507 |
Gift card liability | ||
Deferred revenue | ||
Current | 3,439 | 3,320 |
Deferred franchise fees unopened salons | ||
Deferred revenue | ||
Current | 137 | 2,306 |
Non-current | 13,941 | 11,161 |
Deferred franchise fees open salons | ||
Deferred revenue | ||
Current | 3,767 | 3,030 |
Non-current | $ 21,943 | $ 18,346 |
REVENUE RECOGNITION_ Additional
REVENUE RECOGNITION: Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |||||
Allowance for doubtful accounts | $ 15,700 | $ 15,700 | $ 1,200 | ||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 258,343 | $ 305,783 | 820,849 | $ 935,096 | |
Gift Cards | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 1,800 | 1,900 | 4,000 | 4,600 | |
Franchise Fees | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenues | 900 | $ 700 | $ 2,600 | $ 2,000 | |
TBG Notes Receivable | |||||
Disaggregation of Revenue [Line Items] | |||||
TBG allowance for doubtful accounts reserve | $ 12,700 |
REVENUE RECOGNITION_ Broker Fee
REVENUE RECOGNITION: Broker Fee Balance (Details) $ in Thousands | 9 Months Ended |
Mar. 31, 2019USD ($) | |
Change In Deferred Costs [Roll Forward] | |
Balance as of June 30, 2018 | $ 14,002 |
Additions | 4,393 |
Amortization | (1,484) |
Write-offs | (7) |
Balance as of March 31, 2019 | $ 16,904 |
REVENUE RECOGNITION_ Future Est
REVENUE RECOGNITION: Future Estimated Expected Revenue (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 25,710 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 840 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 3,631 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 3,543 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 3,423 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 3,246 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 11,027 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing |
REVENUE RECOGNITION_ Impact on
REVENUE RECOGNITION: Impact on Balance Sheets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Current assets: | ||||||
Cash and cash equivalents | $ 71,146 | $ 110,399 | ||||
Receivables, net | 33,737 | 52,430 | ||||
Inventories | 90,869 | 79,363 | ||||
Other current assets | 32,386 | 47,867 | ||||
Total current assets | 228,138 | 290,059 | ||||
Property and equipment, net | 83,629 | 99,288 | ||||
Goodwill | 378,560 | 412,643 | ||||
Other intangibles, net | 9,346 | 10,557 | ||||
Other assets | 32,768 | 37,616 | ||||
Other assets | 6,529 | 6,572 | ||||
Total assets | 738,970 | 856,735 | ||||
Current liabilities: | ||||||
Accounts payable | 57,021 | 57,738 | ||||
Accrued expenses | 83,490 | 100,716 | ||||
Total current liabilities | 140,511 | 158,454 | ||||
Long-term debt | 90,000 | 90,000 | ||||
Other noncurrent liabilities | 115,144 | 121,843 | ||||
Total liabilities | 363,160 | 370,297 | ||||
Commitments and contingencies (Note 7) | ||||||
Shareholders’ equity: | ||||||
Common stock, $0.05 par value; issued and outstanding 39,433,124 and 45,258,571 common shares at March 31, 2019 and June 30, 2018 respectively | 1,972 | 2,263 | ||||
Additional paid-in capital | 93,515 | 194,436 | ||||
Accumulated other comprehensive income | 9,050 | 9,656 | ||||
Retained earnings | 271,273 | 280,083 | ||||
Total shareholders’ equity | 375,810 | $ 425,010 | 486,438 | $ 497,667 | $ 514,173 | $ 493,620 |
Total liabilities and shareholders’ equity | $ 738,970 | 856,735 | ||||
Previously Reported | ||||||
Current assets: | ||||||
Cash and cash equivalents | 110,399 | |||||
Receivables, net | 52,430 | |||||
Inventories | 79,363 | |||||
Other current assets | 47,867 | |||||
Total current assets | 290,059 | |||||
Property and equipment, net | 99,288 | |||||
Goodwill | 412,643 | |||||
Other intangibles, net | 10,557 | |||||
Other assets | 37,616 | |||||
Other assets | 6,572 | |||||
Total assets | 856,735 | |||||
Current liabilities: | ||||||
Accounts payable | 57,738 | |||||
Accrued expenses | 97,630 | |||||
Total current liabilities | 155,368 | |||||
Long-term debt | 90,000 | |||||
Other noncurrent liabilities | 107,875 | |||||
Total liabilities | 353,243 | |||||
Commitments and contingencies (Note 7) | ||||||
Shareholders’ equity: | ||||||
Common stock, $0.05 par value; issued and outstanding 39,433,124 and 45,258,571 common shares at March 31, 2019 and June 30, 2018 respectively | 2,263 | |||||
Additional paid-in capital | 194,436 | |||||
Accumulated other comprehensive income | 9,568 | |||||
Retained earnings | 297,225 | |||||
Total shareholders’ equity | 503,492 | |||||
Total liabilities and shareholders’ equity | 856,735 | |||||
Restatement Adjustment | Franchise Fees | ||||||
Current assets: | ||||||
Cash and cash equivalents | 0 | |||||
Receivables, net | 0 | |||||
Inventories | 0 | |||||
Other current assets | 0 | |||||
Total current assets | 0 | |||||
Property and equipment, net | 0 | |||||
Goodwill | 0 | |||||
Other intangibles, net | 0 | |||||
Other assets | 0 | |||||
Other assets | 0 | |||||
Total assets | 0 | |||||
Current liabilities: | ||||||
Accounts payable | 0 | |||||
Accrued expenses | 3,030 | |||||
Total current liabilities | 3,030 | |||||
Long-term debt | 0 | |||||
Other noncurrent liabilities | 18,346 | |||||
Total liabilities | 21,376 | |||||
Shareholders’ equity: | ||||||
Common stock, $0.05 par value; issued and outstanding 39,433,124 and 45,258,571 common shares at March 31, 2019 and June 30, 2018 respectively | 0 | |||||
Additional paid-in capital | 0 | |||||
Accumulated other comprehensive income | 88 | |||||
Retained earnings | (21,464) | |||||
Total shareholders’ equity | (21,376) | |||||
Total liabilities and shareholders’ equity | 0 | |||||
Restatement Adjustment | Advertising Funds | ||||||
Current assets: | ||||||
Cash and cash equivalents | 0 | |||||
Receivables, net | 0 | |||||
Inventories | 0 | |||||
Other current assets | 0 | |||||
Total current assets | 0 | |||||
Property and equipment, net | 0 | |||||
Goodwill | 0 | |||||
Other intangibles, net | 0 | |||||
Other assets | 0 | |||||
Other assets | 0 | |||||
Total assets | 0 | |||||
Current liabilities: | ||||||
Accounts payable | 0 | |||||
Accrued expenses | 0 | |||||
Total current liabilities | 0 | |||||
Long-term debt | 0 | |||||
Other noncurrent liabilities | 0 | |||||
Total liabilities | 0 | |||||
Shareholders’ equity: | ||||||
Common stock, $0.05 par value; issued and outstanding 39,433,124 and 45,258,571 common shares at March 31, 2019 and June 30, 2018 respectively | 0 | |||||
Additional paid-in capital | 0 | |||||
Accumulated other comprehensive income | 0 | |||||
Retained earnings | 0 | |||||
Total shareholders’ equity | 0 | |||||
Total liabilities and shareholders’ equity | 0 | |||||
Restatement Adjustment | Gift Card Breakage | ||||||
Current assets: | ||||||
Cash and cash equivalents | 0 | |||||
Receivables, net | 0 | |||||
Inventories | 0 | |||||
Other current assets | 0 | |||||
Total current assets | 0 | |||||
Property and equipment, net | 0 | |||||
Goodwill | 0 | |||||
Other intangibles, net | 0 | |||||
Other assets | 0 | |||||
Other assets | 0 | |||||
Total assets | 0 | |||||
Current liabilities: | ||||||
Accounts payable | 0 | |||||
Accrued expenses | 56 | |||||
Total current liabilities | 56 | |||||
Long-term debt | 0 | |||||
Other noncurrent liabilities | 0 | |||||
Total liabilities | 56 | |||||
Shareholders’ equity: | ||||||
Common stock, $0.05 par value; issued and outstanding 39,433,124 and 45,258,571 common shares at March 31, 2019 and June 30, 2018 respectively | 0 | |||||
Additional paid-in capital | 0 | |||||
Accumulated other comprehensive income | 0 | |||||
Retained earnings | (56) | |||||
Total shareholders’ equity | (56) | |||||
Total liabilities and shareholders’ equity | 0 | |||||
Restatement Adjustment | Taxes | ||||||
Current assets: | ||||||
Cash and cash equivalents | 0 | |||||
Receivables, net | 0 | |||||
Inventories | 0 | |||||
Other current assets | 0 | |||||
Total current assets | 0 | |||||
Property and equipment, net | 0 | |||||
Goodwill | 0 | |||||
Other intangibles, net | 0 | |||||
Other assets | 0 | |||||
Other assets | 0 | |||||
Total assets | 0 | |||||
Current liabilities: | ||||||
Accounts payable | 0 | |||||
Accrued expenses | 0 | |||||
Total current liabilities | 0 | |||||
Long-term debt | 0 | |||||
Other noncurrent liabilities | (4,378) | |||||
Total liabilities | (4,378) | |||||
Shareholders’ equity: | ||||||
Common stock, $0.05 par value; issued and outstanding 39,433,124 and 45,258,571 common shares at March 31, 2019 and June 30, 2018 respectively | 0 | |||||
Additional paid-in capital | 0 | |||||
Accumulated other comprehensive income | 0 | |||||
Retained earnings | 4,378 | |||||
Total shareholders’ equity | 4,378 | |||||
Total liabilities and shareholders’ equity | $ 0 |
REVENUE RECOGNITION_ Impact o_2
REVENUE RECOGNITION: Impact on Statement of Operations (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | ||
Revenues: | |||||
Total revenues | $ 258,343 | $ 305,783 | $ 820,849 | $ 935,096 | |
Operating expenses: | |||||
Cost of service | 111,632 | 132,081 | 348,060 | 406,767 | |
Cost of product | 31,167 | 37,139 | 99,698 | 107,165 | |
Site operating expenses | 34,339 | 37,548 | 106,723 | 116,175 | |
General and administrative | 41,694 | 45,727 | 135,257 | 129,485 | |
Rent | 32,332 | 39,391 | 102,952 | 147,280 | |
Depreciation and amortization | 8,630 | 9,558 | 27,732 | 46,764 | |
Total operating expenses | 280,505 | 301,444 | 841,133 | 953,636 | |
Operating (loss) income | (22,162) | 4,339 | (20,284) | (18,540) | |
Other (expense) income: | |||||
Interest expense | (1,354) | (5,095) | (3,432) | (9,402) | |
Gain from sale of salon assets to franchisees, net | 11,489 | 237 | 10,394 | 255 | |
Interest income and other, net | 464 | 1,495 | 1,453 | 3,934 | |
Income from continuing operations before income taxes | (11,563) | 976 | (11,869) | (23,753) | |
Income tax (expense) benefit | (3,248) | 2,609 | (2,988) | 77,875 | |
(Loss) income from continuing operations | (14,811) | 3,585 | (14,857) | 54,122 | |
Income (loss) from TBG discontinued operations, net of taxes | 178 | (10,605) | 6,027 | (50,973) | |
Net (loss) income | $ (14,633) | $ (7,020) | $ (8,830) | $ 3,149 | |
Basic: | |||||
Income from continuing operations (in dollars per share) | $ (0.37) | $ 0.08 | $ (0.35) | $ 1.16 | |
Loss from discontinued operations (in dollars per share) | 0 | (0.23) | 0.14 | (1.09) | |
Net (loss) income per share, basic (in dollars per share) | [1] | (0.36) | (0.15) | (0.21) | 0.07 |
Diluted: | |||||
Income from continuing operations (in dollars per share) | (0.37) | 0.08 | (0.35) | 1.15 | |
Loss from discontinued operations (in dollars per share) | 0 | (0.22) | 0.14 | (1.08) | |
Net (loss) income per share, diluted (in dollars per share) | [1] | $ (0.36) | $ (0.15) | $ (0.21) | $ 0.07 |
Weighted average common and common equivalent shares outstanding: | |||||
Basic (in shares) | 40,314 | 46,612 | 42,900 | 46,684 | |
Diluted (in shares) | 40,314 | 47,153 | 42,900 | 47,093 | |
Service | |||||
Revenues: | |||||
Total revenues | $ 181,809 | $ 222,022 | $ 580,076 | $ 680,930 | |
Product | |||||
Revenues: | |||||
Total revenues | 53,766 | 64,911 | 173,006 | 197,701 | |
Royalties and fees | |||||
Revenues: | |||||
Total revenues | $ 22,768 | 18,850 | $ 67,767 | 56,465 | |
Previously Reported | |||||
Revenues: | |||||
Total revenues | 300,801 | 919,189 | |||
Operating expenses: | |||||
Cost of service | 132,081 | 406,767 | |||
Cost of product | 37,139 | 107,165 | |||
Site operating expenses | 31,021 | 96,443 | |||
General and administrative | 45,727 | 129,485 | |||
Rent | 39,391 | 147,280 | |||
Depreciation and amortization | 9,558 | 46,764 | |||
Total operating expenses | 294,917 | 933,904 | |||
Operating (loss) income | 5,884 | (14,715) | |||
Other (expense) income: | |||||
Interest expense | (5,095) | (9,402) | |||
Gain from sale of salon assets to franchisees, net | 237 | 255 | |||
Interest income and other, net | 1,548 | 4,919 | |||
Income from continuing operations before income taxes | 2,574 | (18,943) | |||
Income tax (expense) benefit | 2,225 | 73,855 | |||
(Loss) income from continuing operations | 4,799 | 54,912 | |||
Income (loss) from TBG discontinued operations, net of taxes | (10,605) | (50,973) | |||
Net (loss) income | $ (5,806) | $ 3,939 | |||
Basic: | |||||
Income from continuing operations (in dollars per share) | $ 0.10 | $ 1.18 | |||
Loss from discontinued operations (in dollars per share) | (0.23) | (1.09) | |||
Net (loss) income per share, basic (in dollars per share) | (0.12) | 0.08 | |||
Diluted: | |||||
Income from continuing operations (in dollars per share) | 0.10 | 1.17 | |||
Loss from discontinued operations (in dollars per share) | (0.22) | (1.08) | |||
Net (loss) income per share, diluted (in dollars per share) | $ (0.12) | $ 0.08 | |||
Previously Reported | Service | |||||
Revenues: | |||||
Total revenues | $ 221,926 | $ 680,699 | |||
Previously Reported | Product | |||||
Revenues: | |||||
Total revenues | 64,887 | 197,643 | |||
Previously Reported | Royalties and fees | |||||
Revenues: | |||||
Total revenues | 13,988 | 40,847 | |||
Restatement Adjustment | Franchise Fees | |||||
Revenues: | |||||
Total revenues | (1,665) | (4,114) | |||
Operating expenses: | |||||
Cost of service | 0 | 0 | |||
Cost of product | 0 | 0 | |||
Site operating expenses | 0 | 0 | |||
General and administrative | 0 | 0 | |||
Rent | 0 | 0 | |||
Depreciation and amortization | 0 | 0 | |||
Total operating expenses | 0 | 0 | |||
Operating (loss) income | (1,665) | (4,114) | |||
Other (expense) income: | |||||
Interest expense | 0 | 0 | |||
Gain from sale of salon assets to franchisees, net | 0 | 0 | |||
Interest income and other, net | 0 | 0 | |||
Income from continuing operations before income taxes | (1,665) | (4,114) | |||
Income tax (expense) benefit | 0 | 0 | |||
(Loss) income from continuing operations | (1,665) | (4,114) | |||
Income (loss) from TBG discontinued operations, net of taxes | 0 | 0 | |||
Net (loss) income | $ (1,665) | $ (4,114) | |||
Basic: | |||||
Income from continuing operations (in dollars per share) | $ (0.04) | $ (0.09) | |||
Loss from discontinued operations (in dollars per share) | 0 | 0 | |||
Net (loss) income per share, basic (in dollars per share) | (0.04) | (0.09) | |||
Diluted: | |||||
Income from continuing operations (in dollars per share) | (0.04) | (0.09) | |||
Loss from discontinued operations (in dollars per share) | 0 | 0 | |||
Net (loss) income per share, diluted (in dollars per share) | $ (0.04) | $ (0.09) | |||
Restatement Adjustment | Franchise Fees | Service | |||||
Revenues: | |||||
Total revenues | $ 0 | $ 0 | |||
Restatement Adjustment | Franchise Fees | Product | |||||
Revenues: | |||||
Total revenues | 0 | 0 | |||
Restatement Adjustment | Franchise Fees | Royalties and fees | |||||
Revenues: | |||||
Total revenues | (1,666) | (4,114) | |||
Restatement Adjustment | Advertising Funds | |||||
Revenues: | |||||
Total revenues | 6,527 | 19,732 | |||
Operating expenses: | |||||
Cost of service | 0 | 0 | |||
Cost of product | 0 | 0 | |||
Site operating expenses | 6,527 | 19,732 | |||
General and administrative | 0 | 0 | |||
Rent | 0 | 0 | |||
Depreciation and amortization | 0 | 0 | |||
Total operating expenses | 6,527 | 19,732 | |||
Operating (loss) income | 0 | 0 | |||
Other (expense) income: | |||||
Interest expense | 0 | 0 | |||
Gain from sale of salon assets to franchisees, net | 0 | 0 | |||
Interest income and other, net | 0 | 0 | |||
Income from continuing operations before income taxes | 0 | 0 | |||
Income tax (expense) benefit | 0 | 0 | |||
(Loss) income from continuing operations | 0 | 0 | |||
Income (loss) from TBG discontinued operations, net of taxes | 0 | 0 | |||
Net (loss) income | $ 0 | $ 0 | |||
Basic: | |||||
Income from continuing operations (in dollars per share) | $ 0 | $ 0 | |||
Loss from discontinued operations (in dollars per share) | 0 | 0 | |||
Net (loss) income per share, basic (in dollars per share) | 0 | 0 | |||
Diluted: | |||||
Income from continuing operations (in dollars per share) | 0 | 0 | |||
Loss from discontinued operations (in dollars per share) | 0 | 0 | |||
Net (loss) income per share, diluted (in dollars per share) | $ 0 | $ 0 | |||
Restatement Adjustment | Advertising Funds | Service | |||||
Revenues: | |||||
Total revenues | $ 0 | $ 0 | |||
Restatement Adjustment | Advertising Funds | Product | |||||
Revenues: | |||||
Total revenues | 0 | 0 | |||
Restatement Adjustment | Advertising Funds | Royalties and fees | |||||
Revenues: | |||||
Total revenues | 6,528 | 19,732 | |||
Restatement Adjustment | Gift Card Breakage | |||||
Revenues: | |||||
Total revenues | 120 | 289 | |||
Operating expenses: | |||||
Cost of service | 0 | 0 | |||
Cost of product | 0 | 0 | |||
Site operating expenses | 0 | 0 | |||
General and administrative | 0 | 0 | |||
Rent | 0 | 0 | |||
Depreciation and amortization | 0 | 0 | |||
Total operating expenses | 0 | 0 | |||
Operating (loss) income | 120 | 289 | |||
Other (expense) income: | |||||
Interest expense | 0 | 0 | |||
Gain from sale of salon assets to franchisees, net | 0 | 0 | |||
Interest income and other, net | (53) | (985) | |||
Income from continuing operations before income taxes | 67 | (696) | |||
Income tax (expense) benefit | 0 | 0 | |||
(Loss) income from continuing operations | 67 | (696) | |||
Income (loss) from TBG discontinued operations, net of taxes | 0 | 0 | |||
Net (loss) income | $ 67 | $ (696) | |||
Basic: | |||||
Income from continuing operations (in dollars per share) | $ 0 | $ (0.01) | |||
Loss from discontinued operations (in dollars per share) | 0 | 0 | |||
Net (loss) income per share, basic (in dollars per share) | 0 | (0.01) | |||
Diluted: | |||||
Income from continuing operations (in dollars per share) | 0 | (0.01) | |||
Loss from discontinued operations (in dollars per share) | 0 | 0 | |||
Net (loss) income per share, diluted (in dollars per share) | $ 0 | $ (0.01) | |||
Restatement Adjustment | Gift Card Breakage | Service | |||||
Revenues: | |||||
Total revenues | $ 96 | $ 231 | |||
Restatement Adjustment | Gift Card Breakage | Product | |||||
Revenues: | |||||
Total revenues | 24 | 58 | |||
Restatement Adjustment | Gift Card Breakage | Royalties and fees | |||||
Revenues: | |||||
Total revenues | 0 | 0 | |||
Restatement Adjustment | Taxes | |||||
Revenues: | |||||
Total revenues | 0 | 0 | |||
Operating expenses: | |||||
Cost of service | 0 | 0 | |||
Cost of product | 0 | 0 | |||
Site operating expenses | 0 | 0 | |||
General and administrative | 0 | 0 | |||
Rent | 0 | 0 | |||
Depreciation and amortization | 0 | 0 | |||
Total operating expenses | 0 | 0 | |||
Operating (loss) income | 0 | 0 | |||
Other (expense) income: | |||||
Interest expense | 0 | 0 | |||
Gain from sale of salon assets to franchisees, net | 0 | 0 | |||
Interest income and other, net | 0 | 0 | |||
Income from continuing operations before income taxes | 0 | 0 | |||
Income tax (expense) benefit | 384 | 4,020 | |||
(Loss) income from continuing operations | 384 | 4,020 | |||
Income (loss) from TBG discontinued operations, net of taxes | 0 | 0 | |||
Net (loss) income | $ 384 | $ 4,020 | |||
Basic: | |||||
Income from continuing operations (in dollars per share) | $ 0.01 | $ 0.09 | |||
Loss from discontinued operations (in dollars per share) | 0 | 0 | |||
Net (loss) income per share, basic (in dollars per share) | 0.01 | 0.09 | |||
Diluted: | |||||
Income from continuing operations (in dollars per share) | 0.01 | 0.09 | |||
Loss from discontinued operations (in dollars per share) | 0 | 0 | |||
Net (loss) income per share, diluted (in dollars per share) | $ 0.01 | $ 0.09 | |||
Restatement Adjustment | Taxes | Service | |||||
Revenues: | |||||
Total revenues | $ 0 | $ 0 | |||
Restatement Adjustment | Taxes | Product | |||||
Revenues: | |||||
Total revenues | 0 | 0 | |||
Restatement Adjustment | Taxes | Royalties and fees | |||||
Revenues: | |||||
Total revenues | $ 0 | $ 0 | |||
[1] | Total is a recalculation; line items calculated individually may not sum to total due to rounding. |
TBG DISCONTINUED OPERATIONS_ Ad
TBG DISCONTINUED OPERATIONS: Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Mar. 31, 2019USD ($)salon | Mar. 31, 2018USD ($) | Mar. 31, 2019USD ($)salon | Mar. 31, 2018USD ($) | Aug. 31, 2018USD ($) | Jun. 30, 2018salon | Oct. 31, 2017salon | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of stores | salon | 7,838 | 7,838 | 8,168 | ||||
(Loss) income from discontinued operations, net of income taxes | $ 178 | $ (10,605) | $ 6,027 | $ (50,973) | |||
Actuarial insurance accrual adjustment | 200 | ||||||
Professional fees | 1,000 | ||||||
Asset impairment charges | (163) | 37,020 | |||||
Non-cash TBG mall location restructuring charge | 20,711 | 0 | 20,711 | 0 | |||
Salon lease commitments | 64,800 | 64,800 | |||||
Discontinued Operations, Disposed of by Sale | Mall-Based Salons and International Segment | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
(Loss) income from discontinued operations, net of income taxes | 178 | (10,605) | 6,027 | (50,973) | |||
Income tax (expense) benefit on TBG discontinued operations | (46) | 2,940 | 6,889 | 6,412 | |||
Professional fees | 600 | 6,400 | |||||
Asset impairment charges | 11,700 | 40,800 | |||||
Loss from operations | 1,200 | ||||||
Foreign currency transaction loss | 6,200 | ||||||
Loss from operations | 4,000 | ||||||
Working capital and prepaid rent receivable reserve | 0 | $ 11,697 | $ 0 | $ 11,697 | |||
North America | Facility Closing | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of stores | salon | 858 | ||||||
United Kingdom | Facility Closing | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of stores | salon | 250 | ||||||
Working Capital Note Receivable | Discontinued Operations, Disposed of by Sale | Mall-Based Salons and International Segment | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Promissory note receivable | $ 11,700 | ||||||
Inventory Notes Receivable | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Financing Receivable, Gross | $ 8,000 | ||||||
TBG allowance for doubtful accounts reserve | 11,600 | ||||||
Outstanding Royalties | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
TBG allowance for doubtful accounts reserve | $ 1,100 |
TBG DISCONTINUED OPERATIONS_ Sc
TBG DISCONTINUED OPERATIONS: Schedule of Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income (loss) from TBG discontinued operations, net of income taxes | $ 178 | $ (10,605) | $ 6,027 | $ (50,973) |
Mall-Based Salons and International Segment | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Revenues | 0 | 0 | 0 | 101,140 |
Income (loss) from TBG discontinued operations, before income taxes | 224 | (13,545) | (862) | (57,385) |
Income tax (expense) benefit on TBG discontinued operations | (46) | 2,940 | 6,889 | 6,412 |
Income (loss) from TBG discontinued operations, net of income taxes | $ 178 | $ (10,605) | $ 6,027 | $ (50,973) |
TBG DISCONTINUED OPERATIONS_ TB
TBG DISCONTINUED OPERATIONS: TBG Related Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Non-cash TBG mall location restructuring charge | $ 20,711 | $ 0 | $ 20,711 | $ 0 |
Income (loss) from TBG discontinued operations, net of income taxes | 178 | (10,605) | 6,027 | (50,973) |
Mall-Based Salons and International Segment | Discontinued Operations, Disposed of by Sale | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Working capital and prepaid rent receivable reserve | 0 | (11,697) | 0 | (11,697) |
Other charges | 224 | |||
Other charges | (1,848) | (862) | (45,688) | |
Income (loss) from TBG discontinued operations, before income taxes | 224 | (13,545) | (862) | (57,385) |
Income tax (expense) benefit on TBG discontinued operations | 46 | (2,940) | (6,889) | (6,412) |
Income (loss) from TBG discontinued operations, net of income taxes | $ 178 | $ (10,605) | $ 6,027 | $ (50,973) |
EARNINGS PER SHARE_ (Details)
EARNINGS PER SHARE: (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||||
Common stock equivalents included in the diluted earnings per share calculation (in shares) | 541,405 | 409,646 | ||
Common Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Awards excluded from diluted earnings per share computation (in shares) | 1,023,038 | 1,006,589 | ||
Equity Based Compensation Awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Awards excluded from diluted earnings per share computation (in shares) | 608,944 | 550,948 | 542,329 | 730,377 |
SHAREHOLDERS' EQUITY_ Schedule
SHAREHOLDERS' EQUITY: Schedule of Equity Awards Granted (Details) - shares | 3 Months Ended | 9 Months Ended |
Mar. 31, 2019 | Mar. 31, 2019 | |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock granted (in shares) | 0 | 338,859 |
Performance-based restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock granted (in shares) | 0 | 733,688 |
SHAREHOLDERS' EQUITY_ Stock-Bas
SHAREHOLDERS' EQUITY: Stock-Based Employee Compensation, Additional Information (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019USD ($)shares | Mar. 31, 2018USD ($) | Mar. 31, 2019USD ($)dayshares | Mar. 31, 2018USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation | $ | $ 2.5 | $ 1.9 | $ 7.1 | $ 6.5 |
Restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Stock granted (in shares) | 0 | 338,859 | ||
Restricted stock units | Minimum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Restricted stock units | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 5 years | |||
Restricted stock units | Tranche 1 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33.33% | |||
Restricted stock units | Tranche 2 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33.33% | |||
Restricted stock units | Tranche 3 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 33.33% | |||
Performance-based restricted stock units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 3 years | |||
Threshold trading days | day | 50 | |||
Additional service period | 2 years | |||
Stock granted (in shares) | 0 | 733,688 | ||
Performance-based restricted stock units | Tranche 1 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock granted (in shares) | 52,590 | |||
Performance-based restricted stock units | Tranche 1 | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 200.00% | |||
Performance-based restricted stock units | Tranche 2 | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting percentage | 100.00% |
SHAREHOLDERS' EQUITY_ Share Rep
SHAREHOLDERS' EQUITY: Share Repurchases (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Stockholders' Equity Note [Abstract] | ||||
Stock repurchased during period (in shares) | 2,050,430 | 6,023,523 | ||
Stock repurchase program | $ 37,920 | $ 9,635 | $ 106,252 | $ 9,635 |
Remaining authorized repurchase amount | $ 129,100 | $ 129,100 |
INCOME TAXES_ Summary of Income
INCOME TAXES: Summary of Income Tax Benefit (expense) and corresponding effective tax rates (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax (expense) benefit | $ (3,248) | $ 2,609 | $ (2,988) | $ 77,875 |
Effective tax rate | (28.10%) | (267.30%) | (25.20%) | 327.90% |
CASH, CASH EQUIVALETS AND RES_3
CASH, CASH EQUIVALETS AND RESTRICTED CASH: (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 | Jun. 30, 2017 |
Cash and Cash Equivalents [Abstract] | |||
Cash and cash equivalents | $ 71,146 | $ 110,399 | |
Restricted cash, included in Other current assets | 23,693 | 38,375 | |
Total cash, cash equivalents and restricted cash | $ 94,839 | $ 148,774 | $ 208,634 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLES: Changes in Goodwill (Details) $ in Thousands | 9 Months Ended |
Mar. 31, 2019USD ($) | |
Goodwill [Roll Forward] | |
Goodwill, net at June 30, 2018 | $ 412,643 |
Translation rate adjustments | (555) |
Derecognition related to sale of salon assets to franchisees | (33,528) |
Goodwill, net at March 31, 2019 | 378,560 |
Company-owned | |
Goodwill [Roll Forward] | |
Goodwill, net at June 30, 2018 | 184,788 |
Translation rate adjustments | (147) |
Goodwill, net at March 31, 2019 | 151,113 |
Franchise | |
Goodwill [Roll Forward] | |
Goodwill, net at June 30, 2018 | 227,855 |
Translation rate adjustments | (408) |
Derecognition related to sale of salon assets to franchisees | 0 |
Goodwill, net at March 31, 2019 | $ 227,447 |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLES: Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Amortized intangible assets: | ||
Cost | $ 32,945 | $ 33,871 |
Accumulated Amortization | (23,599) | (23,314) |
Net | 9,346 | 10,557 |
Brand assets and trade names | ||
Amortized intangible assets: | ||
Cost | 7,830 | 8,128 |
Accumulated Amortization | (4,236) | (4,260) |
Net | 3,594 | 3,868 |
Franchise agreements | ||
Amortized intangible assets: | ||
Cost | 9,675 | 9,763 |
Accumulated Amortization | (7,888) | (7,712) |
Net | 1,787 | 2,051 |
Lease intangibles | ||
Amortized intangible assets: | ||
Cost | 13,474 | 13,997 |
Accumulated Amortization | (9,884) | (9,770) |
Net | 3,590 | 4,227 |
Other | ||
Amortized intangible assets: | ||
Cost | 1,966 | 1,983 |
Accumulated Amortization | (1,591) | (1,572) |
Net | $ 375 | $ 411 |
FINANCING ARRANGEMENTS_ Schedul
FINANCING ARRANGEMENTS: Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jun. 30, 2018 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 90,000 | $ 90,000 |
Line of Credit | Revolving Credit Facility | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Interest rate percentage | 3.75% | |
Long-term debt | $ 90,000 | $ 90,000 |
FINANCING ARRANGEMENTS_ Revolvi
FINANCING ARRANGEMENTS: Revolving Credit Facility (Details) - USD ($) | Mar. 31, 2019 | Jun. 30, 2018 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 90,000,000 | $ 90,000,000 |
Line of Credit | Revolving Credit Facility | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Long-term debt | 90,000,000 | 90,000,000 |
Maximum borrowing capacity | 295,000,000 | 295,000,000 |
Unused borrowing capacity, amount | 182,000,000 | 203,500,000 |
Line of Credit | Letter of Credit | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Long-term line of credit | $ 23,000,000 | $ 1,500,000 |
FINANCING ARRANGEMENTS_ Sched_2
FINANCING ARRANGEMENTS: Schedule of Long-term Financial Liability (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2019 | Jun. 30, 2018 | |
Debt Disclosure [Abstract] | ||
Interest Rate | 3.30% | |
Long-term lease liability | $ 17,505 | $ 0 |
FINANCING ARRANGEMENTS_ Sale an
FINANCING ARRANGEMENTS: Sale and Leaseback Transaction (Details) $ in Millions | Mar. 31, 2019USD ($) | Nov. 30, 2018renewal_option |
Debt Disclosure [Abstract] | ||
Term of contract | 15 years | |
Number of renewal options | renewal_option | 3 | |
Renewal term | 5 years | |
Lease period as a percent of economic life (more than) | 75.00% | |
Short-term financial liability | $ | $ 0.6 |
FINANCING ARRANGEMENTS_ Sched_3
FINANCING ARRANGEMENTS: Schedule of Future Minimum Lease Payments (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Minimum Lease Payments, Sale Leaseback Transactions, Fiscal Year Maturity [Abstract] | |
Remainder of 2019 | $ 302 |
2020 | 1,120 |
2021 | 1,157 |
2022 | 1,171 |
2023 | 1,186 |
Thereafter | 13,265 |
Total | $ 18,201 |
FAIR VALUE MEASUREMENTS_ (Detai
FAIR VALUE MEASUREMENTS: (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Jun. 30, 2018 | |
Assets and liabilities measured at fair value on a nonrecurring basis | |||||
Long-term debt, fair value | $ 90,000 | $ 90,000 | $ 90,000 | ||
Long-term debt | 90,000 | 90,000 | 90,000 | ||
Long-term lease liability | 17,505 | 17,505 | $ 0 | ||
Long-lived assets | 3,005 | $ 11,099 | |||
Level 2 | |||||
Assets and liabilities measured at fair value on a nonrecurring basis | |||||
Long-term lease liability | 17,500 | 17,500 | |||
Nonrecurring | Level 3 | |||||
Assets and liabilities measured at fair value on a nonrecurring basis | |||||
Long-lived assets | $ 702 | $ 313 | $ 3,005 | $ 9,565 |
SEGMENT INFORMATION_ Reportable
SEGMENT INFORMATION: Reportable Operating Segment Salons (Details) - salon | Mar. 31, 2019 | Jun. 30, 2018 |
Franchisor Disclosure [Line Items] | ||
Number of salons | 7,838 | 8,168 |
Equity ownership interest locations | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 87 | 88 |
Company-owned | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 3,376 | 3,966 |
Salons as a percent of total Company-owned and Franchise salons | 43.60% | 49.10% |
Company-owned | SmartStyle/Cost Cutters in Walmart Stores | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 1,591 | 1,660 |
Company-owned | Supercuts | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 568 | 928 |
Company-owned | Signature Style | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 1,217 | 1,378 |
Franchise | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 4,375 | 4,114 |
Salons as a percent of total Company-owned and Franchise salons | 56.40% | 50.90% |
Franchise | North American | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 4,112 | 3,852 |
Franchise | International | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 263 | 262 |
Salons as a percent of total Company-owned and Franchise salons | 3.40% | 3.20% |
Franchise | Total franchise locations, excluding TBG mall locations | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 3,495 | 3,045 |
Salons as a percent of total Company-owned and Franchise salons | 45.10% | 37.70% |
Franchise | SmartStyle/Cost Cutters in Walmart Stores | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 591 | 561 |
Franchise | Supercuts | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 2,164 | 1,739 |
Franchise | Signature Style | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 740 | 745 |
Franchise | Total North America TBG mall locations (1) | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 617 | 807 |
Salons as a percent of total Company-owned and Franchise salons | 8.00% | 10.00% |
SEGMENT INFORMATION_ Operating
SEGMENT INFORMATION: Operating Results (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues: | ||||
Total revenues | $ 258,343 | $ 305,783 | $ 820,849 | $ 935,096 |
Operating expenses: | ||||
Cost of service | 111,632 | 132,081 | 348,060 | 406,767 |
Cost of product | 31,167 | 37,139 | 99,698 | 107,165 |
Site operating expenses | 34,339 | 37,548 | 106,723 | 116,175 |
General and administrative | 41,694 | 45,727 | 135,257 | 129,485 |
Rent | 32,332 | 39,391 | 102,952 | 147,280 |
Depreciation and amortization | 8,630 | 9,558 | 27,732 | 46,764 |
TBG mall location restructuring (Note 3) | 20,711 | 0 | 20,711 | 0 |
Total operating expenses | 280,505 | 301,444 | 841,133 | 953,636 |
Operating (loss) income | (22,162) | 4,339 | (20,284) | (18,540) |
Other (expense) income: | ||||
Interest expense | (1,354) | (5,095) | (3,432) | (9,402) |
Gain from sale of salon assets to franchisees, net | 11,489 | 237 | 10,394 | 255 |
Interest income and other, net | 464 | 1,495 | 1,453 | 3,934 |
(Loss) income from continuing operations before income taxes | (11,563) | 976 | (11,869) | (23,753) |
Operating Segments | Company-owned | ||||
Revenues: | ||||
Total revenues | 221,236 | 272,002 | 705,296 | 840,910 |
Operating expenses: | ||||
Cost of service | 111,632 | 132,081 | 348,060 | 406,767 |
Cost of product | 19,992 | 25,137 | 61,661 | 77,628 |
Site operating expenses | 25,894 | 31,022 | 82,435 | 96,443 |
General and administrative | 14,505 | 18,051 | 45,084 | 51,822 |
Rent | 31,964 | 39,094 | 101,908 | 146,376 |
Depreciation and amortization | 6,519 | 7,276 | 21,304 | 39,224 |
TBG mall location restructuring (Note 3) | 0 | 0 | 0 | 0 |
Total operating expenses | 210,506 | 252,661 | 660,452 | 818,260 |
Operating (loss) income | 10,730 | 19,341 | 44,844 | 22,650 |
Other (expense) income: | ||||
Interest expense | 0 | 0 | 0 | 0 |
Gain from sale of salon assets to franchisees, net | 0 | 0 | 0 | 0 |
Interest income and other, net | 0 | 0 | 0 | 0 |
(Loss) income from continuing operations before income taxes | 10,730 | 19,341 | 44,844 | 22,650 |
Operating Segments | Franchise | ||||
Revenues: | ||||
Total revenues | 37,107 | 33,781 | 115,553 | 94,186 |
Operating expenses: | ||||
Cost of service | 0 | 0 | 0 | 0 |
Cost of product | 11,175 | 12,002 | 38,037 | 29,537 |
Site operating expenses | 8,445 | 6,526 | 24,288 | 19,732 |
General and administrative | 7,526 | 6,590 | 24,656 | 19,005 |
Rent | 190 | 51 | 468 | 168 |
Depreciation and amortization | 240 | 92 | 613 | 275 |
TBG mall location restructuring (Note 3) | 20,711 | 0 | 20,711 | 0 |
Total operating expenses | 48,287 | 25,261 | 108,773 | 68,717 |
Operating (loss) income | (11,180) | 8,520 | 6,780 | 25,469 |
Other (expense) income: | ||||
Interest expense | 0 | 0 | 0 | 0 |
Gain from sale of salon assets to franchisees, net | 0 | 0 | 0 | 0 |
Interest income and other, net | 0 | 0 | 0 | 0 |
(Loss) income from continuing operations before income taxes | (11,180) | 8,520 | 6,780 | 25,469 |
Unallocated Corporate | ||||
Operating expenses: | ||||
General and administrative | 19,663 | 21,086 | 65,517 | 58,658 |
Rent | 178 | 246 | 576 | 736 |
Depreciation and amortization | 1,871 | 2,190 | 5,815 | 7,265 |
TBG mall location restructuring (Note 3) | 0 | 0 | 0 | 0 |
Total operating expenses | 21,712 | 23,522 | 71,908 | 66,659 |
Operating (loss) income | (21,712) | (23,522) | (71,908) | (66,659) |
Other (expense) income: | ||||
Interest expense | (1,354) | (5,095) | (3,432) | (9,402) |
Gain from sale of salon assets to franchisees, net | 11,489 | 237 | 10,394 | 255 |
Interest income and other, net | 464 | 1,495 | 1,453 | 3,934 |
(Loss) income from continuing operations before income taxes | (11,113) | (26,885) | (63,493) | (71,872) |
Service | ||||
Revenues: | ||||
Total revenues | 181,809 | 222,022 | 580,076 | 680,930 |
Service | Operating Segments | Company-owned | ||||
Revenues: | ||||
Total revenues | 181,809 | 222,022 | 580,076 | 680,930 |
Service | Operating Segments | Franchise | ||||
Revenues: | ||||
Total revenues | 0 | 0 | 0 | 0 |
Product | ||||
Revenues: | ||||
Total revenues | 53,766 | 64,911 | 173,006 | 197,701 |
Product | Operating Segments | Company-owned | ||||
Revenues: | ||||
Total revenues | 39,427 | 49,980 | 125,220 | 159,980 |
Product | Operating Segments | Franchise | ||||
Revenues: | ||||
Total revenues | 14,339 | 14,931 | 47,786 | 37,721 |
Royalties and fees | ||||
Revenues: | ||||
Total revenues | 22,768 | 18,850 | 67,767 | 56,465 |
Royalties and fees | Operating Segments | Company-owned | ||||
Revenues: | ||||
Total revenues | 0 | 0 | 0 | 0 |
Royalties and fees | Operating Segments | Franchise | ||||
Revenues: | ||||
Total revenues | $ 22,768 | $ 18,850 | $ 67,767 | $ 56,465 |
Uncategorized Items - rgs-20190
Label | Element | Value |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Disposal Group, Including Discontinued Operations | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsDisposalGroupIncludingDiscontinuedOperations | $ 1,352,000 |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Disposal Group, Including Discontinued Operations | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsDisposalGroupIncludingDiscontinuedOperations | $ 0 |