SEGMENT INFORMATION

12 Months Ended

Jun. 30, 2020

Segment information is prepared on the same basis the chief operating decision maker reviews financial information for operational decision-making purposes. During the first quarter of fiscal year 2018, the Company redefined its operating segments to reflect how the chief operating decision maker evaluates the business as a result of the sale of the mall-based business and International segment sale. See Note 1 to the Consolidated Financial Statements. The Company now reports its operations in two operating segments: Franchise salons and Company-owned salons. The Company's operating segments are its reportable operating segments. Prior to this change, the Company had four operating segments: North American Value, North American Premium, North American Franchise, and International. The Company did not operate under the realigned operating segment structure prior to the first quarter of fiscal year 2018.

The Franchise salons reportable operating segment is comprised of 5,209 franchised salons located mainly in strip center locations and Walmart Supercenters. Franchise salons offer high quality, convenient and value priced hair care and beauty services and retail products. This segment operates primarily in the United States and Canada and primarily includes the Supercuts, SmartStyle, Cost Cutters, First Choice Haircutters, Roosters and Magicuts concepts.

The Company-owned salons reportable operating segment is comprised of 1,632 company-owned salons located mainly in strip center locations and Walmart Supercenters. Company-owned salons offer high quality, convenient and value priced hair care and beauty services and retail products. SmartStyle, Supercuts, Cost Cutters and other regional trade names operating in the United States, Canada and Puerto Rico are generally within the Company-owned salons segment.

Financial information concerning the Company's reportable operating segments is shown in the following table:


	For the Year Ended June 30, 2020
	Franchise		Company - owned		Corporate⁽¹⁾		Consolidated

	(Dollars in thousands)
Revenues:
Service	$	—	$	331,538	$	—	$	331,538
Product	52,421		85,165		—		137,586
Royalties and fees	73,402		—		—		73,402
Franchise rental income	127,203		—		—		127,203
	253,026		416,703		—		669,729
Operating expenses:
Cost of service	—		222,279		—		222,279
Cost of product	40,032		44,666		—		84,698
Site operating expenses	13,341		58,202		—		71,543
General and administrative	33,725		24,638		72,590		130,953
Rent	872		72,921		2,589		76,382
Franchise rent expense	127,203		—		—		127,203
Depreciation and amortization	922		29,113		6,917		36,952
Long-lived asset impairment	1,712		20,848		—		22,560
TBG restructuring	2,333		—		—		2,333
Goodwill impairment	—		40,164		—		40,164
Total operating expenses	220,140		512,831		82,096		815,067
Operating income (loss)	32,886		(96,128)		(82,096)		(145,338)
Other (expense) income:
Interest expense	—		—		(7,522)		(7,522)
Gain from sale of salon assets to franchisees, net	—		—		(27,306)		(27,306)
Interest income and other, net	—		—		3,353		3,353
Income (loss) from continuing operations before income taxes	$	32,886	$	(96,128)	$	(113,571)	$	(176,813)


	For the Year Ended June 30, 2019
	Franchise		Company-owned		Corporate⁽¹⁾		Consolidated

	(Dollars in thousands)
Revenues:
Service	$	—	$	749,660	$	—	$	749,660
Product	59,905		165,713		—		225,618
Royalties and fees	93,761		—		—		93,761
	153,666		915,373		—		1,069,039
Operating expenses:
Cost of service	—		452,827		—		452,827
Cost of product	47,219		81,597		—		128,816
Site operating expenses	34,099		106,932		—		141,031
General and administrative	32,888		57,219		86,897		177,004
Rent	740		130,214		862		131,816
Depreciation and amortization	762		28,263		8,823		37,848
TBG restructuring	21,816		—		—		21,816
Total operating expenses	137,524		857,052		96,582		1,091,158
Operating income (loss)	16,142		58,321		(96,582)		(22,119)
Other (expense) income:
Interest expense	—		—		(4,795)		(4,795)
Gain from sale of salon assets to franchisees, net	—		—		2,918		2,918
Interest income and other, net	—		—		1,729		1,729
Income (loss) from continuing operations before income taxes	$	16,142	$	58,321	$	(96,730)	$	(22,267)


	For the Year Ended June 30, 2018
	Franchise		Company - owned		Corporate⁽¹⁾		Consolidated

	(Dollars in thousands)
Revenues:
Service	$	—	$	899,345	$	—	$	899,345
Product	53,703		205,037		—		258,740
Royalties and fees	77,394		—		—		77,394
	131,097		1,104,382		—		1,235,479
Operating expenses:
Cost of service	—		530,582		—		530,582
Cost of product	42,128		98,495		—		140,623
Site operating expenses	26,818		127,249		—		154,067
General and administrative	25,880		67,163		81,002		174,045
Rent	269		181,869		958		183,096
Depreciation and amortization	365		48,508		9,332		58,205
Total operating expenses	95,460		1,053,866		91,292		1,240,618
Operating income (loss)	35,637		50,516		(91,292)		(5,139)
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	—		—		5,199		5,199
Income (loss) from continuing operations before income taxes	$	35,637	$	50,516	$	(96,344)	$	(10,191)

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(1)Corporate consists primarily of unallocated general and administrative expenses, including expenses associated with salon support, depreciation and amortization related to our corporate headquarters and unallocated insurance, benefit and compensation programs, including stock-based compensation.

The Company's chief operating decision maker does not evaluate reportable segments using assets and capital expenditure information.

Total revenues and property and equipment, net associated with business operations in the U.S. and all other countries in aggregate were as follows:


	June 30,
	2020						2019						2018
	Total Revenues		Property and Equipment, Net		Total Revenues		Property and Equipment, Net		Total Revenues		Property and Equipment, Net

	(Dollars in thousands)
U.S.	$	613,652	$	56,532	$	972,994	$	75,789	$	1,132,041	$	95,956
Other countries	56,077		644		96,045		2,301		103,438		3,332
Total	$	669,729	$	57,176	$	1,069,039	$	78,090	$	1,235,479	$	99,288