REVENUE RECOGNITION (Tables)

12 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

The following table disaggregates revenue by timing of revenue recognition and is reconciled to reportable segment revenues as follows:



	Year ended June 30, 2019				Year ended June 30, 2018
	Company-owned		Franchise		Company-owned		Franchise
	(in thousands)
Revenue recognized at a point in time:
Service	$	749,660	$	—	$	899,345	$	—
Product	165,713		59,905		205,037		53,703
Total revenue recognized at a point in time	$	915,373	$	59,905	$	1,104,382	$	53,703

Revenue recognized over time:
Royalty and other franchise fees	$	—	$	59,688	$	—	$	50,576
Advertising fund fees	—		34,073		—		26,818
Total revenue recognized over time	—		93,761		—		77,394
Total revenue	$	915,373	$	153,666	$	1,104,382	$	131,097

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:



	June 30, 2019		June 30, 2018		Balance Sheet Classification
	(in thousands)
Receivables from contracts with customers, net	$	23,210	$	21,504	Accounts receivable, net
Broker fees	$	17,819	$	14,002	Other assets

Deferred revenue:
Current
Gift card liability	$	3,050	$	3,320	Accrued expenses
Deferred franchise fees unopened salons	193		2,306		Accrued expenses
Deferred franchise fees open salons	4,164		3,030		Accrued expenses
Total current deferred revenue	$	7,407	$	8,656
Non-current
Deferred franchise fees unopened salons	$	15,173	$	11,161	Other non-current liabilities
Deferred franchise fees open salons	24,194		18,346		Other non-current liabilities
Total non-current deferred revenue	$	39,367	$	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	5,976
Amortization	(1,625		)
Write-offs	(534		)
Balance as of June 30, 2019	$	17,819

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 June 30, 2019 is as follows (in thousands):



2020	$	4,164
2021	3,898
2022	3,778
2023	3,602
2024	3,367
Thereafter	9,549
Total	$	28,358

Schedules of impact of revenue recognition policy

The amended revenue recognition guidance impacted the Company's previously reported financial statements as follows:

CONSOLIDATED BALANCE SHEET

June 30, 2018

(Dollars in thousands)



			Adjustments for new revenue recognition guidance
	Previously		Franchise			Advertising		Gift Card
	Reported		Fees			Funds		Breakage			Taxes			As Restated
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	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
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

CONSOLIDATED STATEMENT OF OPERATIONS

For The Twelve Months Ended June 30, 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	$	899,051		$	—		$	—	$	294		$	—	$	899,345
Product	258,666			—			—		74			—		258,740
Royalties and fees	56,357			(5,781		)	26,818		—			—		77,394
	1,214,074			(5,781		)	26,818		368			—		1,235,479
Operating expenses:
Cost of service	530,582			—			—		—			—		530,582
Cost of product	140,623			—			—		—			—		140,623
Site operating expenses	127,249			—			26,818		—			—		154,067
General and administrative	174,045			—			—		—			—		174,045
Rent	183,096			—			—		—			—		183,096
Depreciation and amortization	58,205			—			—		—			—		58,205
Total operating expenses	1,213,800			—			26,818		—			—		1,240,618

Operating income (loss)	274			(5,781		)	—		368			—		(5,139		)
	274			-5781			0		368			0		-5139
Other (expense) income:
Interest expense	(10,492		)	—			—		—			—		(10,492		)
Gain from sale of salon assets to franchisees, net	241			—			—		—			—		241
Interest income and other, net	6,429			—			—		(1,230		)	—		5,199

Loss from continuing operations before income taxes	(3,548		)	(5,781		)	—		(862		)	—		(10,191		)

Income tax benefit	65,434			—			—		—			4,378		69,812

Income from continuing operations	61,886			(5,781		)	—		(862		)	4,378		59,621

Loss from TBG discontinued operations, net of taxes	(53,185		)	—			—		—			—		(53,185		)

Net income (loss)	$	8,701		$	(5,781	)	$	—	$	(862	)	$	4,378	$	6,436

Net loss per share:
Basic:
Income from continuing operations (1)	$	1.33		$	(0.12	)	$	0.00	$	(0.02	)	$	0.09	$	1.28
Loss from TBG discontinued operations	(1.14		)	0.00			0.00		0.00			0.00		(1.14		)
Net loss per share, basic (1)	$	0.19		$	(0.12	)	$	0.00	$	(0.02	)	$	0.09	$	0.14
Diluted:
Income from continuing operations (1)	$	1.32		$	(0.12	)	$	0.00	$	(0.02	)	$	0.09	$	1.27
Loss from TBG discontinued operations	(1.13		)	0.00			0.00		0.00			0.00		(1.13		)
Net loss per share, diluted (1)	$	0.18		$	(0.12	)	$	0.00	$	(0.02	)	$	0.09	$	0.14

Weighted average common and common equivalent shares outstanding:
Basic	46,517			46,517			46,517		46,517			46,517		46,517
Diluted	47,035			47,035			47,035		47,035			47,035		47,035

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(1)Total is a recalculation; line items calculated individually may not sum to total due to rounding.