QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended | |||||
OR | |||||
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | ☐ | ☒ | ||||||||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
Emerging growth company |
Title of each class | Trading symbol | Name of exchange | ||||||||||||
March 31, 2021 | June 30, 2020 | |||||||||||||
ASSETS | ||||||||||||||
Current assets: | ||||||||||||||
Cash and cash equivalents | $ | $ | ||||||||||||
Receivables, net | ||||||||||||||
Inventories | ||||||||||||||
Other current assets | ||||||||||||||
Total current assets | ||||||||||||||
Property and equipment, net | ||||||||||||||
Goodwill (Note 9) | ||||||||||||||
Other intangibles, net | ||||||||||||||
Right of use asset (Note 10) | ||||||||||||||
Other assets | ||||||||||||||
Total assets | $ | $ | ||||||||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||||||
Current liabilities: | ||||||||||||||
Accounts payable | $ | $ | ||||||||||||
Accrued expenses | ||||||||||||||
Short-term lease liability (Note 10) | ||||||||||||||
Total current liabilities | ||||||||||||||
Long-term debt, net (Note 11) | ||||||||||||||
Long-term lease liability (Note 10) | ||||||||||||||
Long-term financing liabilities (Note 11) | ||||||||||||||
Other non-current liabilities | ||||||||||||||
Total liabilities | ||||||||||||||
Commitments and contingencies (Note 7) | ||||||||||||||
Shareholders’ equity: | ||||||||||||||
Common stock, $ | ||||||||||||||
Additional paid-in capital | ||||||||||||||
Accumulated other comprehensive income | ||||||||||||||
Retained earnings | ||||||||||||||
Total shareholders’ equity | ||||||||||||||
Total liabilities and shareholders’ equity | $ | $ |
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Service | $ | $ | $ | $ | ||||||||||||||||||||||
Product | ||||||||||||||||||||||||||
Royalties and fees | ||||||||||||||||||||||||||
Franchise rental income (Note 10) | ||||||||||||||||||||||||||
Total revenue | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Cost of service | ||||||||||||||||||||||||||
Cost of product | ||||||||||||||||||||||||||
Site operating expenses | ||||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||
Rent (Note 10) | ||||||||||||||||||||||||||
Franchise rent expense | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Long-lived asset impairment | ||||||||||||||||||||||||||
TBG mall location restructuring (Note 3) | ||||||||||||||||||||||||||
Goodwill impairment | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Operating loss | ( | ( | ( | ( | ||||||||||||||||||||||
Other (expense) income: | ||||||||||||||||||||||||||
Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
Loss from sale of salon assets to franchisees, net | ( | ( | ( | ( | ||||||||||||||||||||||
Interest income and other, net | ||||||||||||||||||||||||||
Loss from continuing operations before income taxes | ( | ( | ( | ( | ||||||||||||||||||||||
Income tax benefit | ||||||||||||||||||||||||||
Loss from continuing operations | ( | ( | ( | ( | ||||||||||||||||||||||
Income from discontinued operations, net of taxes (Note 3) | ||||||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Net loss per share: | ||||||||||||||||||||||||||
Basic and diluted: | ||||||||||||||||||||||||||
Loss from continuing operations | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Income from discontinued operations | ||||||||||||||||||||||||||
Net loss per share, basic and diluted (1) | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Weighted average common and common equivalent shares outstanding: | ||||||||||||||||||||||||||
Basic and diluted | ||||||||||||||||||||||||||
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
Net loss | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||||||||
Foreign currency translation adjustments | ( | ( | ||||||||||||||||||||||||
Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Retained Earnings | Total | ||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Foreign currency translation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Exercise of SARs | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net restricted stock activity | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Balance, March 31, 2021 | $ | $ | $ | $ | $ |
Three Months Ended March 31, 2020 | ||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Retained Earnings | Total | ||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||
Balance, December 31, 2019 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Foreign currency translation | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Net restricted stock activity | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||
Minority interest | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance, March 31, 2020 | $ | $ | $ | $ | $ |
Nine Months Ended March 31, 2021 | ||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Retained Earnings | Total | ||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||
Balance, June 30, 2020 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Foreign currency translation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Exercise of SARs | — | ( | — | — | ( | |||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net restricted stock activity | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Minority interest | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance, March 31, 2021 | $ | $ | $ | $ | $ |
Nine Months Ended March 31, 2020 | ||||||||||||||||||||||||||||||||||||||
Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Retained Earnings | Total | ||||||||||||||||||||||||||||||||||
Shares | Amount | |||||||||||||||||||||||||||||||||||||
Balance, June 30, 2019 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Foreign currency translation | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Stock repurchase program | ( | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Exercise of SARs | — | — | — | |||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net restricted stock activity | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
Minority interest | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Balance, March 31, 2020 | $ | $ | $ | $ | $ |
Nine Months Ended March 31, | ||||||||||||||
2021 | 2020 | |||||||||||||
Cash flows from operating activities: | ||||||||||||||
Net loss | $ | ( | $ | ( | ||||||||||
Adjustments to reconcile net loss to cash used in operating activities: | ||||||||||||||
Non-cash adjustments related to discontinued operations | ( | |||||||||||||
Depreciation and amortization | ||||||||||||||
Salon asset impairment | ||||||||||||||
Long-lived asset impairment | ||||||||||||||
Deferred income taxes | ( | ( | ||||||||||||
Inventory reserve | ||||||||||||||
Gain from disposal of distribution center assets | ( | |||||||||||||
Gain from sale of company headquarters, net | ( | |||||||||||||
Loss from sale of salon assets to franchisees, net | ||||||||||||||
Goodwill impairment | ||||||||||||||
Stock-based compensation | ||||||||||||||
Amortization of debt discount and financing costs | ||||||||||||||
Other non-cash items affecting earnings | ( | |||||||||||||
Changes in operating assets and liabilities, excluding the effects of asset sales (1) | ( | ( | ||||||||||||
Net cash used in operating activities | ( | ( | ||||||||||||
Cash flows from investing activities: | ||||||||||||||
Capital expenditures | ( | ( | ||||||||||||
Proceeds from sale of assets to franchisees | ||||||||||||||
Costs associated with sale of salon assets to franchisees | ( | ( | ||||||||||||
Proceeds from company-owned life insurance policies | ||||||||||||||
Proceeds from sale of company headquarters | ||||||||||||||
Net cash (used in) provided by investing activities | ( | |||||||||||||
Cash flows from financing activities: | ||||||||||||||
Borrowings on revolving credit facility | ||||||||||||||
Repayments of revolving credit facility | ( | |||||||||||||
Repurchase of common stock | ( | |||||||||||||
Taxes paid for shares withheld | ( | ( | ||||||||||||
Minority interest buyout | ( | |||||||||||||
Distribution center lease payments | ( | ( | ||||||||||||
Net cash (used in) provided by financing activities | ( | |||||||||||||
Effect of exchange rate changes on cash and cash equivalents | ( | |||||||||||||
(Decrease) increase in cash, cash equivalents, and restricted cash | ( | |||||||||||||
Cash, cash equivalents and restricted cash: | ||||||||||||||
Beginning of period | ||||||||||||||
End of period | $ | $ |
Three Months Ended March 31, 2021 | Three Months Ended March 31, 2020 | |||||||||||||||||||||||||
Franchise | Company-owned | Franchise | Company-owned | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Revenue recognized at a point in time: | ||||||||||||||||||||||||||
Service | $ | $ | $ | $ | ||||||||||||||||||||||
Product | ||||||||||||||||||||||||||
Total revenue recognized at a point in time | $ | $ | $ | $ | ||||||||||||||||||||||
Revenue recognized over time: | ||||||||||||||||||||||||||
Royalty and other franchise fees | $ | $ | $ | $ | ||||||||||||||||||||||
Advertising fund fees (refunds), net (1) | ( | |||||||||||||||||||||||||
Franchise rental income | ||||||||||||||||||||||||||
Total revenue recognized over time | ||||||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Nine Months Ended March 31, 2021 | Nine Months Ended March 31, 2020 | |||||||||||||||||||||||||
Franchise | Company-owned | Franchise | Company-owned | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Revenue recognized at a point in time: | ||||||||||||||||||||||||||
Service | $ | $ | $ | $ | ||||||||||||||||||||||
Product | ||||||||||||||||||||||||||
Total revenue recognized at a point in time | $ | $ | $ | $ | ||||||||||||||||||||||
Revenue recognized over time: | ||||||||||||||||||||||||||
Royalty and other franchise fees | $ | $ | $ | $ | ||||||||||||||||||||||
Advertising fund fees | ||||||||||||||||||||||||||
Franchise rental income | ||||||||||||||||||||||||||
Total revenue recognized over time | ||||||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
March 31, 2021 | June 30, 2020 | Balance Sheet Classification | ||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||
Receivables from contracts with customers, net | $ | $ | Accounts receivable, net | |||||||||||||||||
Broker fees | Other assets | |||||||||||||||||||
Deferred revenue: | ||||||||||||||||||||
Current | ||||||||||||||||||||
Gift card liability | $ | $ | Accrued expenses | |||||||||||||||||
Deferred franchise fees unopened salons | Accrued expenses | |||||||||||||||||||
Deferred franchise fees open salons | Accrued expenses | |||||||||||||||||||
Total current deferred revenue: | $ | $ | ||||||||||||||||||
Non-current | ||||||||||||||||||||
Deferred franchise fees unopened salons | $ | $ | Other non-current liabilities | |||||||||||||||||
Deferred franchise fees open salons | Other non-current liabilities | |||||||||||||||||||
Total non-current deferred revenue | $ | $ |
Balance as of June 30, 2020 | $ | |||||||
Provision for doubtful accounts (1) | ||||||||
Provision for franchisee rent (2) | ||||||||
Write-offs | ( | |||||||
Balance as of March 31, 2021 | $ |
Balance as of June 30, 2020 | $ | |||||||
Additions | ||||||||
Amortization | ( | |||||||
Write-offs | ( | |||||||
Balance as of March 31, 2021 | $ |
Remainder of 2021 | $ | |||||||
2022 | ||||||||
2023 | ||||||||
2024 | ||||||||
2025 | ||||||||
Thereafter | ||||||||
Total | $ |
Three Months Ended March 31, 2021 | Nine Months Ended March 31, 2021 | |||||||||||||
Restricted stock units | ||||||||||||||
Performance-based restricted stock units | ||||||||||||||
Stock option units |
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Income tax benefit | $ | $ | $ | $ | ||||||||||||||||||||||
Effective tax rate | % | % | % | % |
March 31, 2021 | June 30, 2020 | ||||||||||
(Dollars in thousands) | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash, included in Other current assets (1) | |||||||||||
Total cash, cash equivalents and restricted cash | $ | $ |
Franchise Reporting Unit | ||||||||
(Dollars in thousands) | ||||||||
Goodwill, net at June 30, 2020 | $ | |||||||
Translation rate adjustments | ||||||||
Goodwill, net at March 31, 2021 | $ |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||
Minimum rent | $ | $ | $ | $ | |||||||||||||||||||
Percentage rent based on sales | |||||||||||||||||||||||
Real estate taxes and other expenses | |||||||||||||||||||||||
Lease termination (benefit) expense (1) | ( | ||||||||||||||||||||||
Lease liability benefit (2) | ( | ( | |||||||||||||||||||||
Corporate segment rent | |||||||||||||||||||||||
Franchise segment non-reimbursable rent | |||||||||||||||||||||||
Total | $ | $ | $ | $ |
Fiscal Year | Leases for Franchise Salons | Leases for Company-owned Salons | Corporate Leases | Total Operating Lease Payments | Sublease Income To Be Received From Franchisees | Net Rent Commitments | ||||||||||||||||||||||||||||||||
Remainder of 2021 | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
2022 | ( | |||||||||||||||||||||||||||||||||||||
2023 | ( | |||||||||||||||||||||||||||||||||||||
2024 | ( | |||||||||||||||||||||||||||||||||||||
2025 | ( | |||||||||||||||||||||||||||||||||||||
Thereafter | ( | |||||||||||||||||||||||||||||||||||||
Total future obligations | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
Less amounts representing interest | ||||||||||||||||||||||||||||||||||||||
Present value of lease liabilities | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
Less current lease liabilities | ||||||||||||||||||||||||||||||||||||||
Long-term lease liabilities | $ | $ | $ | $ |
Maturity Date | March 31, 2021 | March 31, 2021 | June 30, 2020 | |||||||||||||||||||||||
(Fiscal Year) | (Interest rate %) | (Dollars in thousands) | ||||||||||||||||||||||||
Revolving credit facility | 2023 | $ | $ |
Maturity Date | Interest Rate | March 31, 2021 | June 30, 2020 | |||||||||||||||||||||||
(Fiscal Year) | (Dollars in thousands) | |||||||||||||||||||||||||
Financial liability - Salt Lake City Distribution Center | 2034 | $ | $ | |||||||||||||||||||||||
Financial liability - Chattanooga Distribution Center | 2034 | |||||||||||||||||||||||||
Long- term financing liability | $ | $ |
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Goodwill | $ | $ | $ | $ | ||||||||||||||||||||||
Long-lived asset impairment (1) |
March 31, 2021 | June 30, 2020 | |||||||||||||
FRANCHISE SALONS: | ||||||||||||||
SmartStyle/Cost Cutters in Walmart Stores | ||||||||||||||
Supercuts | ||||||||||||||
Portfolio Brands (1) | ||||||||||||||
Total North American salons | ||||||||||||||
Total International salons (2) | ||||||||||||||
Total Franchise salons | ||||||||||||||
as a percent of total Franchise and Company-owned salons | % | % | ||||||||||||
COMPANY-OWNED SALONS: | ||||||||||||||
SmartStyle/Cost Cutters in Walmart Stores | ||||||||||||||
Supercuts | ||||||||||||||
Portfolio Brands (1) | ||||||||||||||
Mall-based (3) | ||||||||||||||
Total Company-owned salons | ||||||||||||||
as a percent of total Franchise and Company-owned salons | % | % | ||||||||||||
OWNERSHIP INTEREST LOCATIONS: | ||||||||||||||
Equity ownership interest locations | ||||||||||||||
Grand Total, System-wide |
Three Months Ended March 31, 2021 | ||||||||||||||||||||||||||
Franchise | Company-owned | Corporate | Consolidated | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Service | $ | $ | $ | $ | ||||||||||||||||||||||
Product | ||||||||||||||||||||||||||
Royalties and fees | ||||||||||||||||||||||||||
Franchise rental income | ||||||||||||||||||||||||||
Total revenue | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Cost of service | ||||||||||||||||||||||||||
Cost of product | ||||||||||||||||||||||||||
Site operating expenses | ||||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||
Rent | ||||||||||||||||||||||||||
Franchise rent expense | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Long-lived asset impairment | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Operating income (loss) | ( | ( | ( | |||||||||||||||||||||||
Other (expense) income: | ||||||||||||||||||||||||||
Interest expense | ( | ( | ||||||||||||||||||||||||
Loss from sale of salon assets to franchisees, net | ( | ( | ||||||||||||||||||||||||
Interest income and other, net | ||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | $ | ( | $ | ( | $ | ( |
Three Months Ended March 31, 2020 | ||||||||||||||||||||||||||
Franchise | Company-owned | Corporate | Consolidated | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Service | $ | $ | $ | $ | ||||||||||||||||||||||
Product | ||||||||||||||||||||||||||
Royalties and fees | ||||||||||||||||||||||||||
Franchise rental income | ||||||||||||||||||||||||||
Total revenue | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Cost of service | ||||||||||||||||||||||||||
Cost of product | ||||||||||||||||||||||||||
Site operating expenses | ( | |||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||
Rent | ||||||||||||||||||||||||||
Franchise rent expense | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
TBG mall location restructuring | ||||||||||||||||||||||||||
Goodwill impairment | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Operating income (loss) | ( | ( | ( | |||||||||||||||||||||||
Other (expense) income: | ||||||||||||||||||||||||||
Interest expense | ( | ( | ||||||||||||||||||||||||
Loss from sale of salon assets to franchisees, net | ( | ( | ||||||||||||||||||||||||
Interest income and other, net | ||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | $ | ( | $ | ( | $ | ( |
Nine Months Ended March 31, 2021 | ||||||||||||||||||||||||||
Franchise | Company-owned | Corporate | Consolidated | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Service | $ | $ | $ | $ | ||||||||||||||||||||||
Product | ||||||||||||||||||||||||||
Royalties and fees | ||||||||||||||||||||||||||
Franchise rental income | ||||||||||||||||||||||||||
Total revenue | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Cost of service | ||||||||||||||||||||||||||
Cost of product | ||||||||||||||||||||||||||
Site operating expenses | ||||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||
Rent | ||||||||||||||||||||||||||
Franchise rent expense | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
Long-lived asset impairment | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Operating income (loss) | ( | ( | ( | |||||||||||||||||||||||
Other (expense) income: | ||||||||||||||||||||||||||
Interest expense | ( | ( | ||||||||||||||||||||||||
Loss from sale of salon assets to franchisees, net | ( | ( | ||||||||||||||||||||||||
Interest income and other, net | ||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | $ | ( | $ | ( | $ | ( |
Nine Months Ended March 31, 2020 | ||||||||||||||||||||||||||
Franchise | Company-owned | Corporate | Consolidated | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Revenues: | ||||||||||||||||||||||||||
Service | $ | $ | $ | $ | ||||||||||||||||||||||
Product | ||||||||||||||||||||||||||
Royalties and fees | ||||||||||||||||||||||||||
Franchise rental income | ||||||||||||||||||||||||||
Total revenue | ||||||||||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||||
Cost of service | ||||||||||||||||||||||||||
Cost of product | ||||||||||||||||||||||||||
Site operating expenses | ||||||||||||||||||||||||||
General and administrative | ||||||||||||||||||||||||||
Rent | ||||||||||||||||||||||||||
Franchise rent expense | ||||||||||||||||||||||||||
Depreciation and amortization | ||||||||||||||||||||||||||
TBG mall location restructuring | ||||||||||||||||||||||||||
Goodwill impairment | ||||||||||||||||||||||||||
Total operating expenses | ||||||||||||||||||||||||||
Operating income (loss) | ( | ( | ( | |||||||||||||||||||||||
Other (expense) income: | ||||||||||||||||||||||||||
Interest expense | ( | ( | ||||||||||||||||||||||||
Loss from sale of salon assets to franchisees, net | ( | ( | ||||||||||||||||||||||||
Interest income and other, net | ||||||||||||||||||||||||||
Income (loss) from continuing operations before income taxes | $ | ( | $ | ( | $ | ( |
Three Months Ended March 31, 2020 | ||||||||||||||||||||
As Previously Reported | Adjustments | As Revised | ||||||||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||||||
Rent expense (1) | $ | $ | ( | $ | ||||||||||||||||
Goodwill impairment (2) | ( | |||||||||||||||||||
Operating loss | ( | ( | ||||||||||||||||||
Loss from sale of salon assets to franchisees, net | ( | ( | ||||||||||||||||||
Interest income and other, net | ( | |||||||||||||||||||
Loss from continuing operations before income taxes | ( | ( | ||||||||||||||||||
Income tax benefit | ( | |||||||||||||||||||
Net loss | ( | ( | ||||||||||||||||||
Net loss per share | ( | ( | ||||||||||||||||||
Comprehensive loss | ( | ( |
Nine Months Ended March 31, 2020 | ||||||||||||||||||||
As Previously Reported | Adjustments | As Revised | ||||||||||||||||||
(Dollars in thousands, except per share amounts) | ||||||||||||||||||||
Rent expense (1) | $ | $ | ( | $ | ||||||||||||||||
Goodwill impairment (2) | ( | |||||||||||||||||||
Operating loss | ( | ( | ||||||||||||||||||
Loss from sale of salon assets to franchisees, net | ( | ( | ( | |||||||||||||||||
Interest income and other, net | ||||||||||||||||||||
Loss from continuing operations before income taxes | ( | ( | ||||||||||||||||||
Income tax benefit | ( | |||||||||||||||||||
Net loss | ( | ( | ||||||||||||||||||
Net loss per share | ( | ( | ||||||||||||||||||
Comprehensive loss | ( | ( |
Three Months Ended March 31, | Increase (Decrease) | Nine Months Ended March 31, | Increase (Decrease) | |||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||||||||||||||
Salons sold to franchisees | 126 | 375 | (249) | 408 | 1,363 | (955) | ||||||||||||||||||||||||||||||||
Cash proceeds received | $ | 595 | $ | 18,502 | $ | (17,907) | $ | 7,743 | $ | 87,916 | $ | (80,173) | ||||||||||||||||||||||||||
(Loss) gain on venditions, excluding goodwill derecognition | $ | (4,575) | $ | 9,628 | $ | (14,203) | $ | (8,463) | $ | 50,841 | $ | (59,304) | ||||||||||||||||||||||||||
Non-cash goodwill derecognition | — | (17,486) | 17,486 | — | (76,966) | 76,966 | ||||||||||||||||||||||||||||||||
Loss from sale of salon assets to franchisees, net | $ | (4,575) | $ | (7,858) | $ | 3,283 | $ | (8,463) | $ | (26,125) | $ | 17,662 |
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
SmartStyle | (19.6) | % | (9.5) | % | (28.7) | % | (4.8) | % | ||||||||||||||||||
Supercuts | (22.3) | (3.7) | (29.9) | (1.4) | ||||||||||||||||||||||
Portfolio Brands | (17.9) | (4.8) | (26.6) | (2.7) | ||||||||||||||||||||||
Consolidated system-wide same store sales | (20.7) | % | (5.4) | % | (28.7) | % | (2.7) | % |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | 2021 | 2021 | 2020 | 2021 | 2020 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||
($ in millions) | % of Total Revenues (1) | (Decrease) Increase | ($ in millions) | % of Total Revenues (1) | (Decrease) Increase | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Service revenues | $ | 24.6 | $ | 78.4 | 24.5 | % | 51.0 | % | (2,650) | $ | 90.0 | $ | 322.1 | 28.6 | % | 52.8 | % | (2,420) | |||||||||||||||||||||||||||||||||||||||||
Product revenues | 20.8 | 34.9 | 20.8 | 22.7 | (190) | 68.7 | 124.5 | 21.7 | 20.4 | 130 | |||||||||||||||||||||||||||||||||||||||||||||||||
Royalties and fees | 23.5 | 8.7 | 23.5 | 5.7 | 1,780 | 61.4 | 66.1 | 19.4 | 10.8 | 860 | |||||||||||||||||||||||||||||||||||||||||||||||||
Franchise rental income | 31.3 | 31.8 | 31.2 | 20.7 | 1,050 | 95.9 | 96.9 | 30.3 | 15.9 | 1,440 | |||||||||||||||||||||||||||||||||||||||||||||||||
Cost of service (2) | 15.8 | 54.8 | 64.2 | 69.9 | (570) | 66.4 | 212.7 | 73.8 | 66.0 | 780 | |||||||||||||||||||||||||||||||||||||||||||||||||
Cost of product (2) | 21.3 | 21.7 | 102.4 | 62.2 | 4,020 | 54.8 | 75.3 | 79.8 | 60.5 | 1,930 | |||||||||||||||||||||||||||||||||||||||||||||||||
Site operating expenses | 13.4 | 3.7 | 13.4 | 2.4 | 1,100 | 37.0 | 62.9 | 11.7 | 10.3 | 140 | |||||||||||||||||||||||||||||||||||||||||||||||||
General and administrative | 24.6 | 31.9 | 24.6 | 20.7 | 390 | 77.4 | 105.2 | 24.5 | 17.3 | 720 | |||||||||||||||||||||||||||||||||||||||||||||||||
Rent | 8.0 | 18.7 | 8.0 | 12.2 | (420) | 34.1 | 63.4 | 10.8 | 10.4 | 40 | |||||||||||||||||||||||||||||||||||||||||||||||||
Franchise rent expense | 31.3 | 31.8 | 31.2 | 20.7 | 1,050 | 95.9 | 96.9 | 30.3 | 15.9 | 1,440 | |||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and amortization | 3.6 | 10.4 | 3.6 | 6.8 | (320) | 17.4 | 27.5 | 5.5 | 4.5 | 100 | |||||||||||||||||||||||||||||||||||||||||||||||||
Long-lived asset impairment | 0.8 | — | 0.8 | — | N/A | 9.8 | — | 3.1 | — | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||
TBG restructuring | — | 0.1 | — | 0.1 | (10) | — | 2.4 | — | 0.4 | (40) | |||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill impairment | — | 40.2 | — | 26.1 | (2,610) | — | 40.2 | — | 6.6 | (660) | |||||||||||||||||||||||||||||||||||||||||||||||||
Operating loss (3) | (18.5) | (59.4) | (18.5) | (38.6) | 2,010 | (76.9) | (76.8) | (24.3) | (12.6) | (1,170) | |||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | (3.2) | (1.7) | (3.2) | (1.1) | (210) | (10.6) | (4.6) | (3.4) | (0.8) | (260) | |||||||||||||||||||||||||||||||||||||||||||||||||
Loss from sale of salon assets to franchisees, net | (4.6) | (7.9) | (4.6) | (5.1) | 50 | (8.5) | (26.1) | (2.7) | (4.3) | 160 | |||||||||||||||||||||||||||||||||||||||||||||||||
Interest income and other, net | 15.1 | 0.1 | 15.1 | 0.1 | 1,500 | 15.6 | 3.2 | 4.9 | 0.5 | 440 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income tax benefit (4) | 0.3 | 1.0 | 3.0 | 1.4 | N/A | 1.4 | 5.8 | 1.7 | 5.5 | N/A | |||||||||||||||||||||||||||||||||||||||||||||||||
Income from discontinued operations, net of income taxes | — | 0.3 | — | 0.2 | (20) | — | 0.8 | — | 0.1 | (10) |
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
(Dollars in thousands) | ||||||||||||||||||||||||||
Franchise salons: | ||||||||||||||||||||||||||
Product | $ | 13,079 | $ | 15,318 | $ | 41,057 | $ | 45,287 | ||||||||||||||||||
Royalties and fees | 23,535 | 8,698 | 61,393 | 66,062 | ||||||||||||||||||||||
Franchise rental income | 31,317 | 31,821 | 95,885 | 96,875 | ||||||||||||||||||||||
Total, Franchise salons | $ | 67,931 | $ | 55,837 | $ | 198,335 | $ | 208,224 | ||||||||||||||||||
Franchise salon same-store sales decrease (1) | (19.3) | % | (4.1) | % | (27.6) | % | (1.8) | % | ||||||||||||||||||
Company-owned salons: | ||||||||||||||||||||||||||
SmartStyle | $ | 11,056 | $ | 46,277 | $ | 43,802 | $ | 197,912 | ||||||||||||||||||
Supercuts | 5,743 | 11,743 | 17,562 | 53,063 | ||||||||||||||||||||||
Portfolio Brands | 15,537 | 39,926 | 56,284 | 150,387 | ||||||||||||||||||||||
Total, Company-owned salons | $ | 32,336 | $ | 97,946 | $ | 117,648 | $ | 401,362 | ||||||||||||||||||
Company-owned salon same-store sales decrease (2) | (28.8) | % | (7.9) | % | (33.8) | % | (3.9) | % | ||||||||||||||||||
Consolidated revenues | $ | 100,267 | $ | 153,783 | $ | 315,983 | $ | 609,586 | ||||||||||||||||||
Percent change from prior year | (34.8) | % | (40.5) | % | (48.2) | % | (25.7) | % |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||
2021 | 2020 | Increase (Decrease) | 2021 | 2020 | Increase (Decrease) | ||||||||||||||||||||||||||||||
(Dollars in millions) | (Dollars in millions) | ||||||||||||||||||||||||||||||||||
Revenue | |||||||||||||||||||||||||||||||||||
Product | 13.1 | 15.3 | (2.2) | 41.1 | 45.3 | (4.2) | |||||||||||||||||||||||||||||
Royalties and fees | 23.5 | 8.7 | 14.8 | 61.4 | 66.1 | (4.7) | |||||||||||||||||||||||||||||
Franchise rental income | 31.3 | 31.8 | (0.5) | 95.9 | 96.9 | (1.0) | |||||||||||||||||||||||||||||
Total franchise salons revenue (1) | $ | 67.9 | $ | 55.8 | $ | 12.1 | $ | 198.3 | $ | 208.2 | $ | (9.9) | |||||||||||||||||||||||
Franchise same-store sales (2) | (19.3) | % | (4.1) | % | (27.6) | % | (1.8) | % | |||||||||||||||||||||||||||
Operating income | $ | 12.0 | $ | 11.2 | $ | 0.8 | $ | 28.7 | $ | 35.8 | $ | (7.1) | |||||||||||||||||||||||
Operating loss from TBG restructuring | — | (0.1) | 0.1 | — | (2.4) | 2.4 | |||||||||||||||||||||||||||||
Total operating income (1) | $ | 12.0 | $ | 11.1 | $ | 0.9 | $ | 28.7 | $ | 33.4 | $ | (4.7) |
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
SmartStyle | (18.1) | % | (10.9) | % | (25.8) | % | (8.6) | % | ||||||||||||||||||
Supercuts | (21.5) | (3.3) | (29.4) | (0.9) | ||||||||||||||||||||||
Portfolio Brands | (15.1) | (3.5) | (24.6) | (1.7) | ||||||||||||||||||||||
Total | (19.3) | % | (4.1) | % | (27.6) | % | (1.8) | % |
Three Months Ended March 31, | Nine Months Ended March 31, | ||||||||||||||||||||||||||||||||||
2021 | 2020 | Increase (Decrease) (1) | 2021 | 2020 | Increase (Decrease) (1) | ||||||||||||||||||||||||||||||
(Dollars in millions) | (Dollars in millions) | ||||||||||||||||||||||||||||||||||
Total revenue | $ | 32.3 | $ | 97.9 | $ | (65.6) | $ | 117.6 | $ | 401.4 | $ | (283.7) | |||||||||||||||||||||||
Company-owned same-store sales | (28.8) | % | (7.9) | % | (33.8) | % | (3.9) | % | |||||||||||||||||||||||||||
Operating loss | $ | (12.6) | $ | (50.7) | $ | 38.0 | $ | (50.7) | $ | (46.4) | $ | (4.4) |
Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||||||||||||
SmartStyle | (24.4) | % | (9.0) | % | (33.3) | % | (3.8) | % | ||||||||||||||||||
Supercuts | (34.1) | (6.7) | (38.0) | (4.9) | ||||||||||||||||||||||
Portfolio Brands | (28.4) | (6.5) | (32.4) | (3.5) | ||||||||||||||||||||||
Total | (28.8) | % | (7.9) | % | (33.8) | % | (3.9) | % |
As of | Debt to Capitalization (1) | Basis Point Increase (Decrease) (2) | ||||||||||||
March 31, 2021 | 78.2 | % | 1,620 | |||||||||||
June 30, 2020 | 62.0 | % | 3,520 |
Period | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs | Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (in thousands) | ||||||||||||||||||||||
1/1/21 - 1/31/21 | — | $ | — | 29,974,657 | $ | 54,573 | ||||||||||||||||||||
2/1/21 - 2/28/21 | — | — | 29,974,657 | 54,573 | ||||||||||||||||||||||
3/1/21 - 3/31/21 | — | — | 29,974,657 | 54,573 | ||||||||||||||||||||||
Total | — | $ | — | 29,974,657 | $ | 54,573 |
President and Chief Executive Officer of Regis Corporation: Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||
Executive Vice President and Chief Financial Officer of Regis Corporation: Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||||
Chief Executive Officer and Chief Financial Officer of Regis Corporation: Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | ||||||||
Exhibit 101 | The following financial information from Regis Corporation's Quarterly Report on Form 10-Q for the quarterly and year-to-date periods ended March 31, 2021, formatted in Inline Xtensible Business Reporting Language (iXBRL) and filed electronically herewith: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Earnings; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) the Notes to the Consolidated Financial Statements. | |||||||
Exhibit 104 | The cover page from Regis Corporation's Quarterly Report on Form 10-Q for the quarterly and year-to-date periods ended March 31, 2021, formatted in iXBRL (included as Exhibit 101). |
Date: May 6, 2021 | By: | /s/ Kersten D. Zupfer | ||||||
Kersten D. Zupfer | ||||||||
Executive Vice President and Chief Financial Officer | ||||||||
(Principal Accounting Officer) | ||||||||
May 6, 2021 | ||||||||
/s/ Felipe A. Athayde | ||||||||
Felipe A. Athayde, President and Chief Executive Officer |
May 6, 2021 | ||||||||
/s/ Kersten D. Zupfer | ||||||||
Kersten D. Zupfer, Executive Vice President and Chief Financial Officer |
May 6, 2021 | ||||||||
/s/ Felipe A. Athayde | ||||||||
Felipe A. Athayde, President and Chief Executive Officer | ||||||||
May 6, 2021 | ||||||||
/s/ Kersten D. Zupfer | ||||||||
Kersten D. Zupfer, Executive Vice President and Chief Financial Officer |
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) - $ / shares |
Mar. 31, 2021 |
Jun. 30, 2020 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock issued (in shares) | 35,789,825 | 35,625,716 |
Common stock outstanding (in shares) | 35,789,825 | 35,625,716 |
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|||
Revenues: | ||||||
Franchise rental income | $ 31,317 | $ 31,821 | $ 95,885 | $ 96,875 | ||
Total revenues | 100,267 | 153,783 | 315,983 | 609,586 | ||
Operating expenses: | ||||||
Site operating expenses | 13,366 | 3,660 | 36,955 | 62,932 | ||
General and administrative | 24,582 | 31,871 | 77,419 | 105,187 | ||
Rent | 31,300 | 31,800 | 95,900 | 96,900 | ||
Depreciation and amortization | 3,620 | 10,359 | 17,384 | 27,486 | ||
Long-lived asset impairment | 833 | 0 | 9,817 | 0 | ||
TBG mall location restructuring (Note 3) | 0 | 146 | 0 | 2,368 | ||
Goodwill impairment | 0 | 40,164 | 0 | 40,164 | ||
Total operating expenses | 118,808 | 213,182 | 392,869 | 686,357 | ||
Operating loss | (18,541) | (59,399) | (76,886) | (76,771) | ||
Other (expense) income: | ||||||
Interest expense | (3,163) | (1,712) | (10,626) | (4,615) | ||
Loss from sale of salon assets to franchisees, net | (4,575) | (7,858) | (8,463) | (26,125) | ||
Interest income and other, net | 15,099 | 148 | 15,616 | 3,188 | ||
Loss from continuing operations before income taxes | (11,180) | (68,821) | (80,359) | (104,323) | ||
Income tax benefit | 333 | 979 | 1,368 | 5,783 | ||
Loss from continuing operations | (10,847) | (67,842) | (78,991) | (98,540) | ||
Income from discontinued operations, net of taxes (Note 3) | 0 | 301 | 0 | 753 | ||
Net loss | $ (10,847) | $ (67,541) | $ (78,991) | $ (97,787) | ||
Basic and diluted: | ||||||
Loss from continuing operations (in dollars per share) | $ (0.30) | $ (1.89) | $ (2.20) | $ (2.74) | ||
Income from discontinued operations (in dollars per share) | 0.00 | 0.01 | 0.00 | 0.02 | ||
Net loss per share, basic and diluted (in dollars per share) | [1] | $ (0.30) | $ (1.88) | $ (2.20) | $ (2.72) | |
Weighted average common and common equivalent shares outstanding: | ||||||
Basic and diluted (in shares) | 36,011 | 35,815 | 35,929 | 35,958 | ||
Non-Franchise Lease | ||||||
Operating expenses: | ||||||
Rent | $ 8,001 | $ 18,665 | $ 34,128 | $ 63,424 | ||
Franchisor | ||||||
Operating expenses: | ||||||
Rent | 31,317 | 31,821 | 95,885 | 96,875 | ||
Service | ||||||
Revenues: | ||||||
Revenues | 24,645 | 78,387 | 90,040 | 322,133 | ||
Operating expenses: | ||||||
Cost of services and products | 15,821 | 54,824 | 66,441 | 212,664 | ||
Product | ||||||
Revenues: | ||||||
Revenues | 20,770 | 34,877 | 68,665 | 124,516 | ||
Operating expenses: | ||||||
Cost of services and products | 21,268 | 21,672 | 54,840 | 75,257 | ||
Royalties and fees | ||||||
Revenues: | ||||||
Revenues | $ 23,535 | $ 8,698 | $ 61,393 | $ 66,062 | ||
|
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (10,847) | $ (67,541) | $ (78,991) | $ (97,787) |
Foreign currency translation adjustments | 306 | (2,482) | 1,643 | (2,344) |
Comprehensive loss | $ (10,541) | $ (70,023) | $ (77,348) | $ (100,131) |
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
9 Months Ended |
---|---|
Mar. 31, 2021 | |
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, 2021 and for the three and nine months ended March 31, 2021 and 2020, reflect, in the opinion of management, all adjustments necessary to fairly state the consolidated financial position of the Company as of March 31, 2021 and its consolidated results of operations, comprehensive loss, shareholders' 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, 2020 and other documents filed or furnished with the SEC during the current fiscal year. Impact of COVID-19 on Business Operations: During the period ended March 31, 2021, the global coronavirus pandemic (COVID-19) had an adverse impact on operations, including prolonged government-mandated salon closures in California and Ontario, in addition to other U.S. states and Canadian provinces during the three and nine months ended March 31, 2021. The COVID-19 pandemic continues to impact salon guest visits resulting in a significant reduction in revenue and traffic. Due to the economic disruption caused by the COVID-19 pandemic, the Company faces a greater degree of uncertainty than normal in making judgments and estimates needed to apply the Company's significant accounting policies. Actual results and outcomes may differ from management's estimates and assumptions. Inventory: The Company has inventory valuation reserves for excess and obsolete inventories, or other factors that may render inventories unmarketable at their historical costs. For the three and nine months ended March 31, 2021, the Company recorded $5.3 and $6.9 million of inventory excess and obsolescence charges, respectively. The increase in the reserve in the three months ended March 31, 2021 was related to management's decision to exit its product sales business and wind down operations at the Company's two distribution centers. The expense was recorded to Cost of product in the unaudited Condensed Consolidated Statement of Operations and is a non-cash add back to Net loss on the unaudited Condensed Consolidated Statement of Cash Flows. Salon Long-Lived Asset and Right of Use Asset Impairment Assessments: The Company assesses impairment of long-lived salon assets and right of use (ROU) assets at the individual salon level, as this is the lowest level for which identifiable cash flows are largely independent of other groups of assets and liabilities, when events or changes in circumstances indicate the carrying value of the assets or the asset grouping may not be recoverable. Factors considered in deciding when to perform an impairment review include significant under-performance of an individual salon in relation to expectations, significant economic or geographic trends, and significant changes or planned changes in the use of the assets. The first step is to assess recoverability, and in doing that, the undiscounted salon cash flows are compared to the carrying value of the salon assets. If the undiscounted estimated cash flows are less than the carrying value of the assets, the Company calculates an impairment charge based on the difference between the carrying value of the asset group and its fair value. The fair value of the salon long-lived asset group is estimated using market participant methods based on the best information available. See Note 10 of the unaudited Condensed Consolidated Financial Statements for further discussion related to the ROU asset impairment. Judgments made by management related to the expected useful lives of long-lived assets and the ability to realize undiscounted cash flows in excess of the carrying amounts of such assets are affected by factors such as changes in economic conditions and changes in operating performance. As the ongoing expected cash flows and carrying amounts of long-lived assets are assessed, these factors could cause the Company to realize material impairment charges. Long-lived asset impairment charges, including ROU and salon property and equipment, of $0.8 and $9.8 million were recorded in the three and nine months ended March 31, 2021, respectively, on the unaudited Condensed Consolidated Statement of Operations. Of the total long-lived asset impairment charges, $0.3 and $6.3 million, respectively, were allocated to the ROU asset and $0.5 and $3.5 million, respectively, were allocated to salon property and equipment. Long-lived salon property and equipment asset impairment charges of $1.2 and $3.9 million were recorded during the three and nine months ended March 31, 2020, respectively, and are recorded in Depreciation and amortization in the unaudited Condensed Consolidated Statement of Operations. Goodwill: As of March 31, 2021 and June 30, 2020, the Franchise reporting unit had $229.2 and $227.5 million, respectively, of goodwill. For further information, see Note 9 of the unaudited 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 three and nine months ended March 31, 2021. The COVID-19 pandemic, which began in March 2020, was an interim triggering event in fiscal year 2020. The Company assessed its goodwill as of March 31, 2020 and determined that the Company-owned goodwill was fully impaired. As a result, the Company recorded a goodwill impairment charge of $40.2 million in the three and nine months ended March 31, 2020. The Company performs its annual impairment assessment as of April 30. For the fiscal year 2020 annual impairment assessment, due to the impact of the COVID-19 pandemic, the Company elected to forgo the optional Step 0 assessment and performed the quantitative impairment analysis on the Franchise reporting unit. The Company compared the carrying value of the reporting unit, including goodwill, to the estimated fair value. The result of the assessment indicated that the estimated fair value of the Company's reporting unit exceeded its carrying value by approximately 50 percent. For the goodwill impairment analysis, management utilized a combination of both a discounted cash flows approach and a market approach. The key assumptions utilized in the analysis were the number of salons to be sold to franchisees and the discount rate. If a future triggering event occurs or if during the Company's annual impairment assessment the fair value of the Franchise reporting unit has decreased significantly, it may result in a non-cash impairment charge that reduces the carrying value of goodwill. Depreciation: Depreciation expense in the three and nine months ended March 31, 2021 includes $0.8 and $3.4 million of asset retirement obligations, which are cash expenses. Minority Interest: In December 2020, the Company purchased its non-controlling interest in Roosters from the minority shareholders. The Company paid $0.6 million to obtain 100% ownership. The payment is recorded in cash used in financing activities on the unaudited Condensed Consolidated Statement of Cash Flows.
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REVENUE RECOGNITION |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVENUE RECOGNITION | REVENUE RECOGNITION: 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, including sales of the hardware related to our proprietary cloud-based management and point-of-sale commerce solution, to 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 to 90 days of delivery. Revenue recognized over time Franchise revenues primarily include royalties, advertising fund cooperatives 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. The gross presentation increases both the 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. Recognition of these fees is deferred until the salon opening and is then recognized over the term of the franchise agreement, typically ten years. Franchise rental income is a result of the Company signing leases on behalf of franchisees and entering into a sublease arrangement with the franchisee. The Company recognizes franchise rental income and expense when it is due to the landlord. The following table disaggregates revenue by timing of revenue recognition and is reconciled to reportable segment revenues as follows:
_______________________________________________________________________________ (1)Fiscal year 2020 includes the refund of $14.9 million of previously collected cooperative advertising fees. Cooperative advertising fees were not refunded in fiscal year 2021.
Information about receivables, broker fees and deferred revenue subject to the current revenue recognition guidance is as follows:
Receivables relate primarily to payments due for royalties, franchise fees, advertising fees, rent, franchise product sales and sales of salon services and product paid by credit card. The receivables balance is presented net of an allowance for expected losses (i.e., doubtful accounts), primarily related to receivables from franchisees. The following table is a rollforward of the allowance for doubtful accounts for the period (in thousands):
_______________________________________________________________________________ (1)The provision for doubtful accounts is recognized as General and administrative expense in the unaudited Condensed Consolidated Statement of Operations. (2)The provision for franchisee rent is recognized as Rent in the unaudited Condensed Consolidated Statement of Operations. 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 following table is a rollforward of the broker fee balance for the periods indicated (in thousands):
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, 2021 and 2020 was $0.3 and $0.8 million, respectively, and for the nine months ended March 31, 2021 and 2020 was $0.7 and $2.3 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, 2021 and 2020 was $1.6 and $1.4 million, respectively, and for the nine months ended March 31, 2021 and 2020 was $4.9 and $3.8 million, respectively. Estimated revenue expected to be recognized in the future related to deferred franchise fees for open salons as of March 31, 2021 is as follows (in thousands):
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TBG RESTRUCTURING AND DISCONTINUED OPERATIONS |
9 Months Ended |
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Mar. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | |
TBG RESTRUCTURING AND DISCONTINUED OPERATIONS | TBG RESTRUCTURING AND DISCONTINUED OPERATIONS: In October 2017, the Company sold substantially all of its mall-based salon business in North America, representing 858 salons, to The Beautiful Group (TBG). The Company classified the results of its mall-based business as discontinued operations in the unaudited Condensed Consolidated Statement of Operations. Included in discontinued operations in fiscal year 2020 are adjustments to actuarial assumptions related to the discontinued operations. Other than the items presented in the unaudited Consolidated Statement of Cash Flows, there were no other significant non-cash operating activities or non-cash investing activities related to discontinued operations for the nine months ended March 31, 2021 and 2020. For the three and nine months ended March 31, 2020, the Company recorded $0.1 and $2.4 million of professional fees and restructuring charges related to the Company assisting TBG with operating expenses to mitigate the risk of default associated with TBG's lease obligations. In the second quarter of fiscal year 2020, TBG transferred 207 of its North American mall-based salons to the Company. The 207 North American mall-based salons transferred were the salons that the Company was the guarantor of the lease obligation. As of March 31, 2021, prior to any mitigation efforts which may be available, the Company remains liable for up to approximately $12 million related to its mall-based salon lease commitments on the 62 salons that remain open, an $11 million reduction from June 30, 2020. The commitments are included in our lease liabilities.
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EARNINGS PER SHARE |
9 Months Ended |
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Mar. 31, 2021 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE: The Company’s basic earnings per share is calculated as net loss divided by weighted average common shares outstanding, excluding unvested outstanding stock options (SOs), restricted stock units (RSUs) and stock-settled performance units (PSUs). The Company’s diluted earnings per share is calculated as net loss 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, 2021, there were 972,485 and 511,970, respectively, and for the three and nine months ended March 31, 2020 there were 663,636 and 1,145,053, respectively, common stock equivalents of dilutive common stock excluded in the diluted earnings per share calculations due to the net loss from continuing operations. The computation of weighted average shares outstanding, assuming dilution, excluded 1,261,200 and 670,997 of stock-based awards during the three months ended March 31, 2021 and 2020, respectively, and 2,240,743 and 174,698 of stock-based awards during the nine months ended March 31, 2021 and 2020, respectively, as they were not dilutive under the treasury stock method.
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SHAREHOLDERS' EQUITY |
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Stockholders' Equity Note [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY: Stock-Based Employee Compensation: During the three and nine months ended March 31, 2021, the Company granted various equity awards including RSUs, PSUs and SOs. A summary of equity awards granted is as follows:
The RSUs granted to employees during the three and nine months ended March 31, 2021 vest in equal amounts over a three-year period subsequent to the grant date, cliff vest after a one-year period, cliff vest after a three-year period or cliff vest after a five-year period subsequent to the grant date. The CEO, who was appointed in October 2020, was granted 0.4 million "sign-on" RSUs that vest pro-rated over one year. The PSUs granted to employees have a three-year performance period ending June 30, 2023 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, 2023. The PSUs granted have a maximum vesting percentage of 200% based on the level of performance achieved for the respective award. The SOs granted during the nine months ended March 31, 2021 were granted in connection with the appointment of the Company's CEO and consist of options to purchase shares of the Company's common stock. The SOs are subject to both a four-year service-based vesting condition and a performance-based vesting condition. Additionally, 0.4 million SOs are matching options that vest on the anniversary of employment up to the number of RSUs the CEO still holds of the "sign-on" RSUs. Total compensation cost for stock-based payment arrangements totaling $1.7 and $0.0 million for the three months ended March 31, 2021 and 2020, respectively, and $1.8 and $2.1 million for the nine months ended March 31, 2021 and 2020, respectively, was recorded within General and administrative expense on the unaudited Condensed Consolidated Statement of Operations. In the nine months ended March 31, 2021, stock compensation includes a $2.4 million benefit from the forfeiture of awards related to the departure of the Company's former CEO. Share Repurchases: During the nine months ended March 31, 2021, the Company did not repurchase shares under the previously approved stock repurchase program. During the nine months ended March 31, 2020, the Company repurchased 1.5 million shares for $26.4 million under a previously approved stock repurchase program. At March 31, 2021, $54.6 million remains outstanding under the approved stock repurchase program.
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INCOME TAXES |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
INCOME TAXES | INCOME TAXES: A summary of income tax benefits and corresponding effective tax rates is as follows:
The recorded tax provisions and effective tax rates for the three and nine months ended March 31, 2021 and 2020 were different than what would normally be expected primarily due to the impact of the deferred tax valuation allowance. The Company is no longer subject to IRS examinations for years before 2014. Furthermore, with limited exceptions, the Company is no longer subject to state and international income tax examinations by tax authorities for years before 2012.
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COMMITMENTS AND CONTINGENCIES |
9 Months Ended |
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Mar. 31, 2021 | |
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. The Company is a defendant in two wage and hour lawsuits in California. The first, a class action in US District Court, alleges various violations of the California Labor Code, including, but not limited to failure to pay wages, failure to permit rest breaks, failure to pay all wages due on termination of employment, waiting time penalties, failure to provide accurate wage statements and violation of the business and professions code. This case has been preliminarily settled, pending approval of the court and class, for $2.1 million. The second, a class action filed in California Superior Court, alleges various violations of the California Labor Code as well as PAGA penalties. Barring successful objection from plaintiffs’ attorneys to the first class action, the second case will be subsumed into the first case’s settlement. As of June 30, 2020 and March 31, 2021, $2.1 million was included within accrued expenses on the unaudited Condensed Consolidated Balance Sheet related to these class action lawsuits. In addition, our existing point-of-sale system supplier has challenged the development of certain parts of our technology systems in litigation brought in the Northern District of California, case No. 20-cv-02181-MMC. We have vigorously denied the allegations made by this third-party supplier and have asserted certain counterclaims against the third party. However, the dispute regarding our ownership and involvement of certain key personnel may be costly and distracting, and the outcome is currently uncertain. The Company has not recorded an expense related to damages in connection with these matters because any potential loss is not currently probable or reasonably estimable under U.S. GAAP. Additionally, the Company is unable to reasonably estimate the range of loss, if any, that may result from these matters. |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH |
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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:
_______________________________________________________________________________ (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.
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GOODWILL |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
GOODWILL | GOODWILL: The table below contains details related to the Company's goodwill:
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LEASES |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LEASES | LEASES At contract inception, the Company determines whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. If the contract provides the Company the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, the Company considers it to be, or contain, a lease. The Company leases its company-owned salons and some of its corporate facilities under operating leases. The original terms of the salon leases range from 1 to 20 years with many leases renewable for an additional 5 to 10 year term at the option of the Company. In addition to the obligation to make fixed rental payments for the use of the salons, the Company also has variable lease payments that are based on sales levels. For most leases, the Company is required to pay real estate taxes and other occupancy expenses. Total Rent includes the following:
_______________________________________________________________________________ (1)During the three and nine months ended March 31, 2021, the Company terminated the leases for 15 and 244 company-owned salons, respectively, before the lease end dates. During the three and nine months ended March 31, 2020, the Company terminated the leases for 3 and 60 company-owned salons, respectively, before the lease end dates. For the three and nine months ended March 31, 2021, lease termination fees include $0.3 and $4.9 million, respectively, of early termination payments to close salons before the lease end date to relieve the Company of future lease obligations. For the three and nine months ended March 31, 2021, lease termination fees also include $(0.5) and $1.5 million, respectively, of adjustments to accrue future lease payments for salons that are no longer operating. The early termination payments made in the nine months ended March 31, 2021 decreased the future minimum rent liability by $9.5 million plus saved the Company from the associated real estate taxes and other lease expenses. (2)For the three and nine months ended March 31, 2021, upon termination of previously impaired leases, the Company derecognized ROU assets of $3.2 and $13.3 million, respectively, and lease liabilities of $5.2 and $19.7 million, respectively, that resulted in a net gain of $2.0 and $6.4 million, respectively. In addition, the Company recognized a benefit from lease liabilities decreasing in excess of previously impaired ROU assets. The benefit recognized was $1.0 and $4.9 million in the three and nine months ended March 31, 2021, respectively. The Company leases salon premises in which the majority of its franchisees operate and has entered into corresponding sublease arrangements with franchisees. All lease costs are passed through to the franchisees. The Company records the rental payments due from franchisees as franchise rental income and the corresponding amounts owed to landlords as franchise rent expense on the unaudited Condensed Consolidated Statement of Operations. For the three months ended March 31, 2021 and 2020, franchise rental income and franchise rent expense were $31.3 and $31.8 million, respectively. For the nine months ended March 31, 2021 and 2020, franchise rental income and franchise rent expense were $95.9 and $96.9 million. These leases generally have lease terms of approximately 5 years. The Company expects to renew SmartStyle and Supercuts franchise leases upon expiration. Other leases are expected to be renewed by the franchisee upon expiration. This represents a Board-approved change in estimate that occurred in the second quarter of fiscal year 2021 and was intended to reduce lease exposure. The change in estimate resulted in a decrease to lease liabilities and right of use assets of $72.9 million, with no impact to net income. For franchise and company-owned salon operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date, including one lease term option when the lease is expected to be renewed. The ROU asset is initially and subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, less any accrued lease payments and unamortized lease incentives received, if any. The Company's consolidated ROU asset balance was $629.0 and $786.2 million as of March 31, 2021 and June 30, 2020, respectively. For leases classified as operating leases, expense for lease payments is recognized on a straight-line basis over the lease term, including the lease renewal option when the lease is expected to be renewed. Generally, the non-lease components, such as real estate taxes and other occupancy expenses, are separate from rent expense within the lease and are not included in the measurement of the lease liability because these charges are variable. The discount rate used to determine the present value of the lease payments is the Company's estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as the interest rate implicit in the lease cannot generally be determined. The Company uses the portfolio approach in applying the discount rate based on the original lease term. The weighted average remaining lease term was 6.44 and 6.87 years and the weighted average discount rate was 4.07% and 3.95% for all salon operating leases as of March 31, 2021 and June 30, 2020, respectively. A lessee’s ROU asset is subject to the same asset impairment guidance in ASC 360, Property, Plant, and Equipment, applied to other elements of property, plant, and equipment. The Company has identified its asset groups at the individual salon level as this represents the lowest level that identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Poor salon performance, primarily due to the COVID-19 pandemic, resulted in an ASC 360-10-35-21 triggering event. As a result, management assessed underperforming salon asset groups, which included the related ROU assets, for impairment in accordance with ASC 360. The first step in the impairment test under ASC 360 is to determine whether the long-lived assets are recoverable, which is determined by comparing the net carrying value of the salon asset group to the undiscounted net cash flows to be generated from the use and eventual disposition of that asset group. Estimating cash flows for purposes of the recoverability test is subjective and requires significant judgment. Estimated future cash flows used for the purposes of the recoverability test were based upon historical cash flows for the salons, adjusted for expected changes in future market conditions related to the COVID-19 pandemic, and other factors. The period of time used to determine the estimates of the future cash flows for the recoverability test was based on the remaining useful life of the primary asset of the group, which was the ROU asset in all cases. Step two of the long-lived asset impairment test requires that the fair value of the asset group be estimated when determining the amount of any impairment loss. For the salon asset groups that failed the recoverability test, an impairment loss was measured as the amount by which the carrying amount of the asset group exceeds its fair value. The Company applied the fair value guidance within ASC 820-10 to determine the fair value of the asset group from the perspective of a market-participant considering, among other things, appropriate discount rates, multiple valuation techniques, the most advantageous market, and assumptions about the highest and best use of the asset group. To determine the fair value of the salon asset groups, the Company utilized market-participant assumptions rather than the Company’s own assumptions about how it intends to use the asset group. The significant judgments and assumptions utilized to determine the fair value of the salon asset groups include; the market rent of comparable properties based on recently negotiated leases as applicable, the asset group’s projected sales for properties with no recently negotiated leases, and a discount rate. Assessing the long-lived assets for impairment requires management to make assumptions and to apply judgment which can be affected by economic conditions and other factors that can be difficult to predict. The ultimate severity and longevity of the COVID-19 pandemic is unknown and therefore, if actual results are not consistent with the estimates and assumptions used in the calculations, the Company may be exposed to future impairment losses that could be material. In the three and nine months ended March 31, 2021, the Company recognized a long-lived impairment charge of $0.8 and $9.8 million, respectively, which included $0.3 and $6.3 million, respectively, related to the right of use assets, in the unaudited Condensed Consolidated Statement of Operations. The impairments recorded for the three and nine months ended March 31, 2021 were primarily the result of triggering events identified on certain underperforming salons, salons that were identified to close in the year, and certain salons where franchisees were unable to fulfill their rent obligations. As of March 31, 2021, future operating lease commitments, including one renewal option for leases expected to be renewed, to be paid and received by the Company were as follows (in thousands):
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LEASES | LEASES At contract inception, the Company determines whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. If the contract provides the Company the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, the Company considers it to be, or contain, a lease. The Company leases its company-owned salons and some of its corporate facilities under operating leases. The original terms of the salon leases range from 1 to 20 years with many leases renewable for an additional 5 to 10 year term at the option of the Company. In addition to the obligation to make fixed rental payments for the use of the salons, the Company also has variable lease payments that are based on sales levels. For most leases, the Company is required to pay real estate taxes and other occupancy expenses. Total Rent includes the following:
_______________________________________________________________________________ (1)During the three and nine months ended March 31, 2021, the Company terminated the leases for 15 and 244 company-owned salons, respectively, before the lease end dates. During the three and nine months ended March 31, 2020, the Company terminated the leases for 3 and 60 company-owned salons, respectively, before the lease end dates. For the three and nine months ended March 31, 2021, lease termination fees include $0.3 and $4.9 million, respectively, of early termination payments to close salons before the lease end date to relieve the Company of future lease obligations. For the three and nine months ended March 31, 2021, lease termination fees also include $(0.5) and $1.5 million, respectively, of adjustments to accrue future lease payments for salons that are no longer operating. The early termination payments made in the nine months ended March 31, 2021 decreased the future minimum rent liability by $9.5 million plus saved the Company from the associated real estate taxes and other lease expenses. (2)For the three and nine months ended March 31, 2021, upon termination of previously impaired leases, the Company derecognized ROU assets of $3.2 and $13.3 million, respectively, and lease liabilities of $5.2 and $19.7 million, respectively, that resulted in a net gain of $2.0 and $6.4 million, respectively. In addition, the Company recognized a benefit from lease liabilities decreasing in excess of previously impaired ROU assets. The benefit recognized was $1.0 and $4.9 million in the three and nine months ended March 31, 2021, respectively. The Company leases salon premises in which the majority of its franchisees operate and has entered into corresponding sublease arrangements with franchisees. All lease costs are passed through to the franchisees. The Company records the rental payments due from franchisees as franchise rental income and the corresponding amounts owed to landlords as franchise rent expense on the unaudited Condensed Consolidated Statement of Operations. For the three months ended March 31, 2021 and 2020, franchise rental income and franchise rent expense were $31.3 and $31.8 million, respectively. For the nine months ended March 31, 2021 and 2020, franchise rental income and franchise rent expense were $95.9 and $96.9 million. These leases generally have lease terms of approximately 5 years. The Company expects to renew SmartStyle and Supercuts franchise leases upon expiration. Other leases are expected to be renewed by the franchisee upon expiration. This represents a Board-approved change in estimate that occurred in the second quarter of fiscal year 2021 and was intended to reduce lease exposure. The change in estimate resulted in a decrease to lease liabilities and right of use assets of $72.9 million, with no impact to net income. For franchise and company-owned salon operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date, including one lease term option when the lease is expected to be renewed. The ROU asset is initially and subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, less any accrued lease payments and unamortized lease incentives received, if any. The Company's consolidated ROU asset balance was $629.0 and $786.2 million as of March 31, 2021 and June 30, 2020, respectively. For leases classified as operating leases, expense for lease payments is recognized on a straight-line basis over the lease term, including the lease renewal option when the lease is expected to be renewed. Generally, the non-lease components, such as real estate taxes and other occupancy expenses, are separate from rent expense within the lease and are not included in the measurement of the lease liability because these charges are variable. The discount rate used to determine the present value of the lease payments is the Company's estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as the interest rate implicit in the lease cannot generally be determined. The Company uses the portfolio approach in applying the discount rate based on the original lease term. The weighted average remaining lease term was 6.44 and 6.87 years and the weighted average discount rate was 4.07% and 3.95% for all salon operating leases as of March 31, 2021 and June 30, 2020, respectively. A lessee’s ROU asset is subject to the same asset impairment guidance in ASC 360, Property, Plant, and Equipment, applied to other elements of property, plant, and equipment. The Company has identified its asset groups at the individual salon level as this represents the lowest level that identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. Poor salon performance, primarily due to the COVID-19 pandemic, resulted in an ASC 360-10-35-21 triggering event. As a result, management assessed underperforming salon asset groups, which included the related ROU assets, for impairment in accordance with ASC 360. The first step in the impairment test under ASC 360 is to determine whether the long-lived assets are recoverable, which is determined by comparing the net carrying value of the salon asset group to the undiscounted net cash flows to be generated from the use and eventual disposition of that asset group. Estimating cash flows for purposes of the recoverability test is subjective and requires significant judgment. Estimated future cash flows used for the purposes of the recoverability test were based upon historical cash flows for the salons, adjusted for expected changes in future market conditions related to the COVID-19 pandemic, and other factors. The period of time used to determine the estimates of the future cash flows for the recoverability test was based on the remaining useful life of the primary asset of the group, which was the ROU asset in all cases. Step two of the long-lived asset impairment test requires that the fair value of the asset group be estimated when determining the amount of any impairment loss. For the salon asset groups that failed the recoverability test, an impairment loss was measured as the amount by which the carrying amount of the asset group exceeds its fair value. The Company applied the fair value guidance within ASC 820-10 to determine the fair value of the asset group from the perspective of a market-participant considering, among other things, appropriate discount rates, multiple valuation techniques, the most advantageous market, and assumptions about the highest and best use of the asset group. To determine the fair value of the salon asset groups, the Company utilized market-participant assumptions rather than the Company’s own assumptions about how it intends to use the asset group. The significant judgments and assumptions utilized to determine the fair value of the salon asset groups include; the market rent of comparable properties based on recently negotiated leases as applicable, the asset group’s projected sales for properties with no recently negotiated leases, and a discount rate. Assessing the long-lived assets for impairment requires management to make assumptions and to apply judgment which can be affected by economic conditions and other factors that can be difficult to predict. The ultimate severity and longevity of the COVID-19 pandemic is unknown and therefore, if actual results are not consistent with the estimates and assumptions used in the calculations, the Company may be exposed to future impairment losses that could be material. In the three and nine months ended March 31, 2021, the Company recognized a long-lived impairment charge of $0.8 and $9.8 million, respectively, which included $0.3 and $6.3 million, respectively, related to the right of use assets, in the unaudited Condensed Consolidated Statement of Operations. The impairments recorded for the three and nine months ended March 31, 2021 were primarily the result of triggering events identified on certain underperforming salons, salons that were identified to close in the year, and certain salons where franchisees were unable to fulfill their rent obligations. As of March 31, 2021, future operating lease commitments, including one renewal option for leases expected to be renewed, to be paid and received by the Company were as follows (in thousands):
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FINANCING ARRANGEMENTS |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FINANCING ARRANGEMENTS | FINANCING ARRANGEMENTS: The Company’s long-term debt consists of the following: Revolving Credit Facility
At March 31, 2021, cash and cash equivalents totaled $34.5 million. As of March 31, 2021, the Company has $177.5 million of outstanding borrowings under a $295.0 million revolving credit facility. At March 31, 2021, the Company has outstanding standby letters of credit under the revolving credit facility of $18.7 million, primarily related to the Company's self-insurance program. The unused available credit under the facility was $98.8 million as of March 31, 2021. The Company's liquidity, which includes the unused available balance under the credit facility and unrestricted cash and cash equivalents, totaled $133.3 million as of March 31, 2021. The revolving credit facility has a minimum liquidity covenant of $75.0 million. As of March 31, 2021, the Company had cash, cash equivalents and restricted cash of $40.4 million and current liabilities of $203.2 million. The Company is in compliance with all covenants and other requirements of the financing arrangements as of March 31, 2021 and believes it will continue to be in compliance for at least one year from our filing date. Sale and Leaseback Transaction The Company’s long-term financing liabilities consists of the following:
In fiscal year 2019, the Company sold its Salt Lake City and Chattanooga Distribution Centers to an unrelated party. At the time of the sale, the transactions were considered failed sale and leaseback transactions, as the Company had planned to lease the property for more than 75% of its economic life. The sale proceeds received from the buyer-lessor were recognized as a financial liability, which was reduced based on the rental payments made under the lease that were allocated between principal and interest. In the third quarter of fiscal year 2021, as a result of the Company exiting its wholesale product sales business, the Company informed the landlord of its intention to exit the leased spaces. Because the Company no longer plans to lease the distribution centers for the majority of the assets’ useful lives, these transactions are subsequently considered sale and leaseback transactions. As a result, the Company derecognized the financial liability of $28.5 million and the carrying value of the related assets of $13.6 million and recognized a gain of $14.9 million for the difference between the liability and asset. The gain on distribution centers was recorded to Interest income and other, net in the unaudited Condensed Consolidation Statement of Operations. As the leases for the two distribution centers meet the sale and leaseback criteria, the Company recognized a right of use asset and lease liability of $20.3 million on the unaudited Condensed Consolidated Balance Sheet as of March 31, 2021.
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FAIR VALUE MEASUREMENTS |
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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, 2021 and June 30, 2020, the estimated fair value of the Company’s cash, cash equivalents, restricted cash, receivables, accounts payable, debt and long-term financial liabilities approximated their carrying values. 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, when applicable, 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:
_______________________________________________________________________________ (1)Long-lived asset impairment charges, including right of use and salon property and equipment, are separately stated on the unaudited Condensed Consolidated Statement of Operations for the three and nine months ended March 31, 2021. Long-lived salon property and equipment asset impairment charges are recorded in Depreciation and amortization in the unaudited Condensed Consolidated Statement of Operations for the three and nine months ended March 31, 2020. See Note 1 to the unaudited Condensed Consolidated Financial Statements.
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SEGMENT INFORMATION |
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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:
_______________________________________________________________________________ (1)Portfolio Brands was previously referred to as Signature Style. (2)Canadian and Puerto Rican salons are included in the North American salon totals. (3)The mall-based salons were acquired from TBG on December 31, 2019. They are included in continuing operations under the Company-owned operating segment from January 1, 2020. As of March 31, 2021, the Franchise operating segment is comprised primarily of Supercuts®, SmartStyle®, Cost Cutters®, First Choice Haircutters®, Magicuts®, and Roosters® concepts and the Company-owned operating segment is comprised primarily of SmartStyle®, Supercuts®, Cost Cutters®, and other regional trade names. Financial information concerning the Company's reportable operating segments is shown in the following tables:
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REVISION OF THIRD QUARTER 2020 UNAUDITED RESULTS |
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Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
REVISION OF THIRD QUARTER 2020 UNAUDITED RESULTS | REVISION OF THIRD QUARTER 2020 UNAUDITED RESULTS: During the fourth quarter of 2020, the Company identified an error in the calculation of the goodwill derecognition associated with the sale of salons to franchisees in the second quarter and third quarter. During the third quarter, goodwill derecognition was overstated by $2.4 million. As of March 31, 2020, the Company fully impaired its remaining Company-owned goodwill with the amount of goodwill impairment being overstated by $4.4 million in the third quarter. The Company assessed the applicable guidance issued by the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) and concluded these misstatements were not material, individually or in the aggregate, to the Company’s Unaudited Condensed Consolidated Financial Statements for the aforementioned interim periods. However, to facilitate comparisons among periods, the Company has decided to revise its previously issued second and third quarter unaudited condensed consolidated financial information.
_______________________________________________________________________________ The Company revised the amounts originally reported for the third quarter of fiscal year 2020 for the following items: (1)Adjusted third quarter rent expense includes a $0.6 million benefit related to leases signed in the third quarter, but not identified until the fourth quarter. The net loss for the three and nine months ended March 31, 2020 were both impacted by the misstatement. (2)During the third quarter, goodwill derecognition was overstated by $2.4 million. As of March 31, 2020, the Company impaired its remaining Company-owned goodwill, with the amount of goodwill impairment being overstated by $4.4 million. As the second quarter error which understated goodwill derecognition was not identified until the fourth quarter, goodwill impairment and loss from the sale of salons to franchisees, net were misstated in the third quarter. The Company recorded a $4.4 million decrease to goodwill impairment and a $2.4 million decrease to loss from the sale of salon assets to franchisees, net to correct the error. Net loss for the nine months ended March 31, 2020 was not misstated. However, goodwill impairment and the loss from the sales of salons to franchisees, net were misstated in the nine months ended March 31, 2020, with goodwill impairment overstated by $4.4 million and loss from the sale of salons to franchisees, net understated by $4.4 million.
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BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
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Accounting Policies [Abstract] | |
Salon Long-Lived Asset and Right of Use Asset Impairment Assessments | Salon Long-Lived Asset and Right of Use Asset Impairment Assessments: The Company assesses impairment of long-lived salon assets and right of use (ROU) assets at the individual salon level, as this is the lowest level for which identifiable cash flows are largely independent of other groups of assets and liabilities, when events or changes in circumstances indicate the carrying value of the assets or the asset grouping may not be recoverable. Factors considered in deciding when to perform an impairment review include significant under-performance of an individual salon in relation to expectations, significant economic or geographic trends, and significant changes or planned changes in the use of the assets. The first step is to assess recoverability, and in doing that, the undiscounted salon cash flows are compared to the carrying value of the salon assets. If the undiscounted estimated cash flows are less than the carrying value of the assets, the Company calculates an impairment charge based on the difference between the carrying value of the asset group and its fair value. The fair value of the salon long-lived asset group is estimated using market participant methods based on the best information available. See Note 10 of the unaudited Condensed Consolidated Financial Statements for further discussion related to the ROU asset impairment. Judgments made by management related to the expected useful lives of long-lived assets and the ability to realize undiscounted cash flows in excess of the carrying amounts of such assets are affected by factors such as changes in economic conditions and changes in operating performance. As the ongoing expected cash flows and carrying amounts of long-lived assets are assessed, these factors could cause the Company to realize material impairment charges.
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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 three and nine months ended March 31, 2021. The COVID-19 pandemic, which began in March 2020, was an interim triggering event in fiscal year 2020. The Company assessed its goodwill as of March 31, 2020 and determined that the Company-owned goodwill was fully impaired. As a result, the Company recorded a goodwill impairment charge of $40.2 million in the three and nine months ended March 31, 2020.The Company performs its annual impairment assessment as of April 30. For the fiscal year 2020 annual impairment assessment, due to the impact of the COVID-19 pandemic, the Company elected to forgo the optional Step 0 assessment and performed the quantitative impairment analysis on the Franchise reporting unit. The Company compared the carrying value of the reporting unit, including goodwill, to the estimated fair value. The result of the assessment indicated that the estimated fair value of the Company's reporting unit exceeded its carrying value by approximately 50 percent. For the goodwill impairment analysis, management utilized a combination of both a discounted cash flows approach and a market approach. The key assumptions utilized in the analysis were the number of salons to be sold to franchisees and the discount rate. If a future triggering event occurs or if during the Company's annual impairment assessment the fair value of the Franchise reporting unit has decreased significantly, it may result in a non-cash impairment charge that reduces the carrying value of goodwill. |
Revenue Recognition and Deferred Revenue | 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, including sales of the hardware related to our proprietary cloud-based management and point-of-sale commerce solution, to 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 to 90 days of delivery. Revenue recognized over time Franchise revenues primarily include royalties, advertising fund cooperatives 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. The gross presentation increases both the 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. Recognition of these fees is deferred until the salon opening and is then recognized over the term of the franchise agreement, typically ten years. Franchise rental income is a result of the Company signing leases on behalf of franchisees and entering into a sublease arrangement with the franchisee. The Company recognizes franchise rental income and expense when it is due to the landlord.
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Assets and Liabilities Measured at Fair Value on a Recurring and Nonrecurring Basis | Assets and Liabilities Measured at Fair Value on a Recurring Basis As of March 31, 2021 and June 30, 2020, the estimated fair value of the Company’s cash, cash equivalents, restricted cash, receivables, accounts payable, debt and long-term financial liabilities approximated their carrying values. 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, when applicable, based on valuation techniques using the best information available, and may include quoted market prices, market comparables and discounted cash flow projections.
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REVENUE RECOGNITION (Tables) |
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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:
_______________________________________________________________________________ (1)Fiscal year 2020 includes the refund of $14.9 million of previously collected cooperative advertising fees. Cooperative advertising fees were not refunded in fiscal year 2021.
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Schedule of receivables, broker fees and deferred revenue | Information about receivables, broker fees and deferred revenue subject to the current revenue recognition guidance is as follows:
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Rollforward of allowance for doubtful accounts | The following table is a rollforward of the allowance for doubtful accounts for the period (in thousands):
_______________________________________________________________________________ (1)The provision for doubtful accounts is recognized as General and administrative expense in the unaudited Condensed Consolidated Statement of Operations. (2)The provision for franchisee rent is recognized as Rent in the unaudited Condensed Consolidated Statement of Operations.
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Broker fees | The following table is a rollforward of the broker fee balance for the periods indicated (in thousands):
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Estimated revenue expected to be recognized | Estimated revenue expected to be recognized in the future related to deferred franchise fees for open salons as of March 31, 2021 is as follows (in thousands):
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SHAREHOLDERS' EQUITY (Tables) |
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Share-based Equity Awards Granted | A summary of equity awards granted is as follows:
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INCOME TAXES (Tables) |
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Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of income tax benefits and corresponding effective tax rates | A summary of income tax benefits and corresponding effective tax rates is as follows:
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CASH, CASH EQUIVALENTS AND RESTRICTED CASH (Tables) |
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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:
_______________________________________________________________________________ (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.
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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:
_______________________________________________________________________________ (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.
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GOODWILL (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of recorded goodwill | The table below contains details related to the Company's goodwill:
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LEASES (Tables) |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Real Estate Taxes and Other Occupancy Expenses | Total Rent includes the following:
_______________________________________________________________________________ (1)During the three and nine months ended March 31, 2021, the Company terminated the leases for 15 and 244 company-owned salons, respectively, before the lease end dates. During the three and nine months ended March 31, 2020, the Company terminated the leases for 3 and 60 company-owned salons, respectively, before the lease end dates. For the three and nine months ended March 31, 2021, lease termination fees include $0.3 and $4.9 million, respectively, of early termination payments to close salons before the lease end date to relieve the Company of future lease obligations. For the three and nine months ended March 31, 2021, lease termination fees also include $(0.5) and $1.5 million, respectively, of adjustments to accrue future lease payments for salons that are no longer operating. The early termination payments made in the nine months ended March 31, 2021 decreased the future minimum rent liability by $9.5 million plus saved the Company from the associated real estate taxes and other lease expenses. (2)For the three and nine months ended March 31, 2021, upon termination of previously impaired leases, the Company derecognized ROU assets of $3.2 and $13.3 million, respectively, and lease liabilities of $5.2 and $19.7 million, respectively, that resulted in a net gain of $2.0 and $6.4 million, respectively. In addition, the Company recognized a benefit from lease liabilities decreasing in excess of previously impaired ROU assets. The benefit recognized was $1.0 and $4.9 million in the three and nine months ended March 31, 2021, respectively.
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Lessor, Future Operating Lease Commitments | As of March 31, 2021, future operating lease commitments, including one renewal option for leases expected to be renewed, to be paid and received by the Company were as follows (in thousands):
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Lessee, Future Operating Lease Commitments | As of March 31, 2021, future operating lease commitments, including one renewal option for leases expected to be renewed, to be paid and received by the Company were as follows (in thousands):
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FINANCING ARRANGEMENTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of long-term debt | The Company’s long-term debt consists of the following: Revolving Credit Facility
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Schedule of long-term financial liability | The Company’s long-term financing liabilities consists of the following:
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FAIR VALUE MEASUREMENTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of fair value impairments | The following impairments were based on fair values using Level 3 inputs:
_______________________________________________________________________________ (1)Long-lived asset impairment charges, including right of use and salon property and equipment, are separately stated on the unaudited Condensed Consolidated Statement of Operations for the three and nine months ended March 31, 2021. Long-lived salon property and equipment asset impairment charges are recorded in Depreciation and amortization in the unaudited Condensed Consolidated Statement of Operations for the three and nine months ended March 31, 2020. See Note 1 to the unaudited Condensed Consolidated Financial Statements.
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SEGMENT INFORMATION (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of reportable operating segment salons | The Company’s reportable operating segments consisted of the following salons:
_______________________________________________________________________________ (1)Portfolio Brands was previously referred to as Signature Style. (2)Canadian and Puerto Rican salons are included in the North American salon totals. (3)The mall-based salons were acquired from TBG on December 31, 2019. They are included in continuing operations under the Company-owned operating segment from January 1, 2020.
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Schedule of summarized financial information of reportable operating segments | Financial information concerning the Company's reportable operating segments is shown in the following tables:
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REVISION OF THIRD QUARTER 2020 UNAUDITED RESULTS (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Changes and Error Corrections [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Revision of Previously Issued Unaudited Condensed Consolidated Financial Information | However, to facilitate comparisons among periods, the Company has decided to revise its previously issued second and third quarter unaudited condensed consolidated financial information.
_______________________________________________________________________________ The Company revised the amounts originally reported for the third quarter of fiscal year 2020 for the following items: (1)Adjusted third quarter rent expense includes a $0.6 million benefit related to leases signed in the third quarter, but not identified until the fourth quarter. The net loss for the three and nine months ended March 31, 2020 were both impacted by the misstatement. (2)During the third quarter, goodwill derecognition was overstated by $2.4 million. As of March 31, 2020, the Company impaired its remaining Company-owned goodwill, with the amount of goodwill impairment being overstated by $4.4 million. As the second quarter error which understated goodwill derecognition was not identified until the fourth quarter, goodwill impairment and loss from the sale of salons to franchisees, net were misstated in the third quarter. The Company recorded a $4.4 million decrease to goodwill impairment and a $2.4 million decrease to loss from the sale of salon assets to franchisees, net to correct the error. Net loss for the nine months ended March 31, 2020 was not misstated. However, goodwill impairment and the loss from the sales of salons to franchisees, net were misstated in the nine months ended March 31, 2020, with goodwill impairment overstated by $4.4 million and loss from the sale of salons to franchisees, net understated by $4.4 million.
|
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Inventory (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Accounting Changes and Error Corrections [Abstract] | |||
Inventory reserve | $ 5,300 | $ 6,875 | $ 0 |
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Salon Long-Lived Asset and Right of Use Asset Impairment Assessments (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Accounting Policies [Abstract] | ||||
Long-lived asset impairment | $ 833 | $ 0 | $ 9,817 | $ 0 |
Operating lease, impairment loss | 300 | 6,300 | ||
Salon asset impairment | $ 500 | $ 1,200 | $ 3,500 | $ 3,900 |
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Goodwill (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
Jun. 30, 2020 |
|
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Goodwill | $ 229,221 | $ 229,221 | $ 227,457 | ||
Goodwill impairment | 0 | $ 40,164 | 0 | $ 40,164 | |
Franchise Reporting Unit | |||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||||
Goodwill | $ 229,200 | $ 229,200 | $ 227,500 | ||
Percentage of fair value in excess of carrying amount | 50.00% |
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Depreciation (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2021 |
|
Accounting Policies [Abstract] | ||
Depreciation expense, asset retirement obligation | $ 0.8 | $ 3.4 |
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Minority Interest (Details) - USD ($) $ in Thousands |
1 Months Ended | 9 Months Ended | |
---|---|---|---|
Dec. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Noncontrolling Interest [Line Items] | |||
Minority interest buyout | $ 562 | $ 0 | |
Roosters | |||
Noncontrolling Interest [Line Items] | |||
Minority interest buyout | $ 600 | ||
Non-controlling interest, ownership percentage | 100.00% |
REVENUE RECOGNITION Revenue Recognized (Details) |
9 Months Ended |
---|---|
Mar. 31, 2021 | |
Revenue recognized at a point in time | |
Disaggregation of Revenue [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 30 to 90 days |
Revenue recognized over time | |
Disaggregation of Revenue [Line Items] | |
Performance obligations expected to be satisfied, expected timing | ten years |
REVENUE RECOGNITION Disaggregation of Revenue by Timing (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Disaggregation of Revenue [Line Items] | ||||
Franchise rental income | $ 31,317 | $ 31,821 | $ 95,885 | $ 96,875 |
Total revenues | 100,267 | 153,783 | 315,983 | 609,586 |
Refund of cooperative advertising fees | 14,900 | |||
Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Franchise rental income | 31,317 | 31,821 | 95,885 | 96,875 |
Total revenues | 67,931 | 55,837 | 198,335 | 208,224 |
Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Franchise rental income | 0 | 0 | 0 | 0 |
Total revenues | 32,336 | 97,946 | 117,648 | 401,362 |
Service | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 24,645 | 78,387 | 90,040 | 322,133 |
Service | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Service | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 24,645 | 78,387 | 90,040 | 322,133 |
Product | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 20,770 | 34,877 | 68,665 | 124,516 |
Product | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 13,079 | 15,318 | 41,057 | 45,287 |
Product | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 7,691 | 19,559 | 27,608 | 79,229 |
Royalties and fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 23,535 | 8,698 | 61,393 | 66,062 |
Royalties and fees | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 23,535 | 8,698 | 61,393 | 66,062 |
Royalties and fees | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Revenue recognized at a point in time | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 13,079 | 15,318 | 41,057 | 45,287 |
Revenue recognized at a point in time | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 32,336 | 97,946 | 117,648 | 401,362 |
Revenue recognized at a point in time | Service | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Revenue recognized at a point in time | Service | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 24,645 | 78,387 | 90,040 | 322,133 |
Revenue recognized at a point in time | Product | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 13,079 | 15,318 | 41,057 | 45,287 |
Revenue recognized at a point in time | Product | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 7,691 | 19,559 | 27,608 | 79,229 |
Revenue recognized over time | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Franchise rental income | 31,317 | 31,821 | 95,885 | 96,875 |
Total revenues | 54,852 | 40,519 | 157,278 | 162,937 |
Revenue recognized over time | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Franchise rental income | 0 | 0 | 0 | 0 |
Total revenues | 0 | 0 | 0 | 0 |
Revenue recognized over time | Royalties and fees | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 17,955 | 16,487 | 46,589 | 52,721 |
Revenue recognized over time | Royalties and fees | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Revenue recognized over time | Advertising fun fees (refunds), net | Operating Segments | Franchise | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 5,580 | (7,789) | 14,804 | 13,341 |
Revenue recognized over time | Advertising fun fees (refunds), net | Operating Segments | Company-owned | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
REVENUE RECOGNITION Receivables, Broker Fees and Deferred Revenue (Details) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Jun. 30, 2020 |
---|---|---|
Revenue from Contract with Customer [Abstract] | ||
Receivables | $ 22,106 | $ 22,991 |
Broker fees | 19,599 | 20,516 |
Deferred revenue | ||
Current | 8,345 | 8,157 |
Non-current | 40,657 | 45,478 |
Gift card liability | ||
Deferred revenue | ||
Current | 2,336 | 2,543 |
Deferred franchise fees unopened salons | ||
Deferred revenue | ||
Current | 80 | 77 |
Non-current | 7,656 | 11,855 |
Deferred franchise fees open salons | ||
Deferred revenue | ||
Current | 5,929 | 5,537 |
Non-current | $ 33,001 | $ 33,623 |
REVENUE RECOGNITION Additional Information (Details) - USD ($) $ in Millions |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Gift Cards | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 0.3 | $ 0.8 | $ 0.7 | $ 2.3 |
Franchise Fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 1.6 | $ 1.4 | $ 4.9 | $ 3.8 |
REVENUE RECOGNITION Allowance For Doubtful Accounts (Details) $ in Thousands |
9 Months Ended |
---|---|
Mar. 31, 2021
USD ($)
| |
Revenue from Contract with Customer [Abstract] | |
Balance as of June 30, 2020 | $ 6,899 |
Provision for doubtful accounts | 792 |
Provision for franchisee rent | 907 |
Write-offs | (1,436) |
Balance as of March 31, 2021 | $ 7,162 |
REVENUE RECOGNITION Broker Fee Balance (Details) $ in Thousands |
9 Months Ended |
---|---|
Mar. 31, 2021
USD ($)
| |
Change In Deferred Costs [Roll Forward] | |
Balance as of June 30, 2020 | $ 20,516 |
Additions | 1,573 |
Amortization | (2,369) |
Write-offs | (121) |
Balance as of March 31, 2021 | $ 19,599 |
REVENUE RECOGNITION Future Estimated Expected Revenue (Details) $ in Thousands |
Mar. 31, 2021
USD ($)
|
---|---|
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 38,930 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 1,505 |
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]: 2021-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 5,901 |
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 | $ 5,725 |
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 | $ 5,483 |
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]: 2024-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 5,092 |
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]: 2025-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 15,224 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing |
TBG RESTRUCTURING AND DISCONTINUED OPERATIONS (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | |||||
---|---|---|---|---|---|---|---|
Mar. 31, 2021
USD ($)
salon
|
Mar. 31, 2020
USD ($)
|
Dec. 31, 2019
salon
|
Mar. 31, 2021
USD ($)
salon
|
Mar. 31, 2020
USD ($)
|
Jun. 30, 2020
salon
|
Oct. 31, 2017
salon
|
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of stores | 6,221 | 6,221 | 6,923 | ||||
Restructuring charges | $ | $ 0 | $ 146 | $ 0 | $ 2,368 | |||
Number of stores transferred | 207 | ||||||
Salon lease commitments | $ | $ 12,000 | 12,000 | |||||
Reduction in lease commitments | $ | $ (11,000) | ||||||
Company-owned | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of stores | 826 | 826 | 1,632 | ||||
Mall-based | Company-owned | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of stores | 62 | 62 | 166 | ||||
North America | Facility Closing | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||
Number of stores | 858 |
EARNINGS PER SHARE (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common stock equivalents included in the diluted earnings per share calculation (in shares) | 663,636 | 1,145,053 | ||
Common Stock | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Common stock equivalents included in the diluted earnings per share calculation (in shares) | 972,485 | 511,970 | ||
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) | 1,261,200 | 670,997 | 2,240,743 | 174,698 |
SHAREHOLDERS' EQUITY Equity Awards Granted (Details) - shares |
3 Months Ended | 9 Months Ended |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2021 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock granted, options (in shares) | 0 | 1,458,680 |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock granted (in shares) | 47,303 | 891,825 |
Performance-based restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock granted (in shares) | 0 | 62,290 |
SHAREHOLDERS' EQUITY Stock-Based Employee Compensation, Additional Information (Details) - USD ($) $ in Millions |
1 Months Ended | 3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|---|
Oct. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock granted, options (in shares) | 0 | 1,458,680 | |||
Share-based compensation expense (benefit) | $ 1.7 | $ (0.0) | $ 1.8 | $ 2.1 | |
CEO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share-based compensation expense (benefit) | $ (2.4) | ||||
Restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock granted (in shares) | 47,303 | 891,825 | |||
Restricted stock units | CEO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 1 year | ||||
Stock granted (in shares) | 400,000 | ||||
Restricted stock units | Tranche 1 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Vesting percentage | 33.33% | ||||
Restricted stock units | Tranche 2 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 1 year | ||||
Vesting percentage | 33.33% | ||||
Restricted stock units | Tranche 3 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Vesting percentage | 33.33% | ||||
Restricted stock units | Tranche 4 | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 5 years | ||||
Performance-based restricted stock units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 3 years | ||||
Stock granted (in shares) | 0 | 62,290 | |||
Threshold trading days | 50 days | ||||
Performance-based restricted stock units | Maximum | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting percentage | 200.00% | ||||
Stock Options | CEO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Service-based vesting | 4 years | ||||
Matching Stock Options | CEO | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting period | 4 years | ||||
Stock granted, options (in shares) | 400,000 |
SHAREHOLDERS' EQUITY Share Repurchases (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Stockholders' Equity Note [Abstract] | ||
Stock repurchased during period (in shares) | 0 | 1,500,000 |
Stock repurchase program | $ 26,356 | |
Remaining authorized repurchase amount | $ 54,600 |
INCOME TAXES Summary of Income Tax Benefits (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax benefit | $ 333 | $ 979 | $ 1,368 | $ 5,783 |
Effective tax rate | 3.00% | 1.40% | 1.70% | 5.50% |
COMMITMENTS AND CONTINGENCIES (Details) - Consumer And Wage Violations - USD ($) $ in Millions |
9 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Jun. 30, 2020 |
|
Loss Contingencies [Line Items] | ||
Class action lawsuit settlement | $ 2.1 | |
Loss contingency accrual | $ 2.1 | $ 2.1 |
CASH, CASH EQUIVALENTS AND RESTRICTED CASH Schedule of Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
---|---|---|---|---|
Cash and Cash Equivalents [Abstract] | ||||
Cash and cash equivalents | $ 34,510 | $ 113,667 | ||
Restricted cash, included in Other current assets | 5,859 | 9,213 | ||
Total cash, cash equivalents and restricted cash | $ 40,369 | $ 122,880 | $ 255,782 | $ 92,379 |
GOODWILL Changes in Goodwill (Details) $ in Thousands |
9 Months Ended |
---|---|
Mar. 31, 2021
USD ($)
| |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill, net at June 30, 2020 | $ 227,457 |
Translation rate adjustments | 1,764 |
Goodwill, net at March 31, 2021 | $ 229,221 |
LEASES Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
Jun. 30, 2020 |
|
Lessor, Lease, Description [Line Items] | |||||
Franchise rental income | $ 31,317 | $ 31,821 | $ 95,885 | $ 96,875 | |
Rent expense | $ 31,300 | 31,800 | $ 95,900 | 96,900 | |
Lessor, term of contract | 5 years | 5 years | |||
Right of use asset | $ 629,006 | $ 629,006 | $ 786,216 | ||
Operating lease liability | $ 659,458 | $ 659,458 | |||
Weighted average remaining lease term | 6 years 5 months 8 days | 6 years 5 months 8 days | 6 years 10 months 13 days | ||
Weighted average discount rate | 4.07% | 4.07% | 3.95% | ||
Long-lived asset impairment | $ 833 | $ 0 | $ 9,817 | $ 0 | |
Operating lease, impairment loss | 300 | 6,300 | |||
Lease Recognition | |||||
Lessor, Lease, Description [Line Items] | |||||
Right of use asset | (72,900) | (72,900) | |||
Operating lease liability | $ (72,900) | $ (72,900) | |||
Minimum | |||||
Lessor, Lease, Description [Line Items] | |||||
Lessee, term of contract | 1 year | 1 year | |||
Lessee, renewal term | 5 years | 5 years | |||
Maximum | |||||
Lessor, Lease, Description [Line Items] | |||||
Lessee, term of contract | 20 years | 20 years | |||
Lessee, renewal term | 10 years | 10 years |
LEASES Real Estate Taxes and Other Occupancy Expenses (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021
USD ($)
salon
|
Mar. 31, 2020
USD ($)
franchisee
|
Mar. 31, 2021
USD ($)
salon
|
Mar. 31, 2020
USD ($)
franchisee
|
|
Lessee, Lease, Description [Line Items] | ||||
Total | $ 31,300 | $ 31,800 | $ 95,900 | $ 96,900 |
Number of terminated leases | 15 | 3 | 244 | 60 |
Early termination penalty payments | $ 300 | $ 4,900 | ||
Adjustments to expected future lease payments for underperforming salons | (500) | 1,500 | ||
Decrease in future minimum rent liability | 9,500 | |||
Derecognized right-of-use asset | 3,200 | 13,300 | ||
Derecognized lease liability | 5,200 | 19,700 | ||
Gain on termination of lease | 2,000 | 6,400 | ||
Impairment benefit | 1,000 | 4,900 | ||
Non-Franchise Lease | ||||
Lessee, Lease, Description [Line Items] | ||||
Minimum rent | 8,400 | $ 13,571 | 28,605 | $ 48,638 |
Percentage rent based on sales | 3 | 298 | 78 | 2,145 |
Real estate taxes and other expenses | 1,989 | 3,672 | 7,147 | 9,842 |
Lease termination (benefit) expense | (154) | 44 | 6,484 | 123 |
Lease liability benefit | (3,009) | 0 | (11,295) | 0 |
Corporate segment rent | 671 | 904 | 2,046 | 1,909 |
Franchise segment non-reimbursable rent | 101 | 176 | 1,063 | 767 |
Total | $ 8,001 | $ 18,665 | $ 34,128 | $ 63,424 |
LEASES Future Operating Lease Commitments (Details) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Jun. 30, 2020 |
---|---|---|
Leases, Operating [Abstract] | ||
Remainder of 2021 | $ 38,498 | |
2022 | 142,883 | |
2023 | 123,904 | |
2024 | 106,527 | |
2025 | 87,249 | |
Thereafter | 256,046 | |
Total future obligations | 755,107 | |
Less amounts representing interest | 95,649 | |
Present value of lease liabilities | 659,458 | |
Less current lease liabilities | 123,224 | $ 137,271 |
Long-term lease liabilities | 536,234 | $ 680,454 |
Sublease Income To Be Received From Franchisees | ||
Remainder of 2021 | (30,985) | |
2022 | (116,803) | |
2023 | (103,418) | |
2024 | (91,108) | |
2025 | (77,655) | |
Thereafter | (216,156) | |
Total future obligations | (636,125) | |
Net Rent Commitments | ||
Remainder of 2021 | 7,513 | |
2022 | 26,080 | |
2023 | 20,486 | |
2024 | 15,419 | |
2025 | 9,594 | |
Thereafter | 39,890 | |
Total future obligations | 118,982 | |
Operating Segments | Franchise | ||
Leases, Operating [Abstract] | ||
Remainder of 2021 | 30,985 | |
2022 | 116,803 | |
2023 | 103,418 | |
2024 | 91,108 | |
2025 | 77,655 | |
Thereafter | 216,156 | |
Total future obligations | 636,125 | |
Less amounts representing interest | 78,998 | |
Present value of lease liabilities | 557,127 | |
Less current lease liabilities | 99,351 | |
Long-term lease liabilities | 457,776 | |
Operating Segments | Company-owned | ||
Leases, Operating [Abstract] | ||
Remainder of 2021 | 6,537 | |
2022 | 22,514 | |
2023 | 16,936 | |
2024 | 11,803 | |
2025 | 5,911 | |
Thereafter | 12,559 | |
Total future obligations | 76,260 | |
Less amounts representing interest | 6,462 | |
Present value of lease liabilities | 69,798 | |
Less current lease liabilities | 21,705 | |
Long-term lease liabilities | 48,093 | |
Unallocated Corporate | ||
Leases, Operating [Abstract] | ||
Remainder of 2021 | 976 | |
2022 | 3,566 | |
2023 | 3,550 | |
2024 | 3,616 | |
2025 | 3,683 | |
Thereafter | 27,331 | |
Total future obligations | 42,722 | |
Less amounts representing interest | 10,189 | |
Present value of lease liabilities | 32,533 | |
Less current lease liabilities | 2,168 | |
Long-term lease liabilities | $ 30,365 |
FINANCING ARRANGEMENTS Schedule of Long-term Debt (Details) - USD ($) $ in Thousands |
Mar. 31, 2021 |
Jun. 30, 2020 |
---|---|---|
Debt Instrument [Line Items] | ||
Long-term debt | $ 177,500 | $ 177,500 |
Line of Credit | Revolving Credit Facility | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Interest rate percentage | 5.00% | |
Long-term debt | $ 177,500 | $ 177,500 |
FINANCING ARRANGEMENTS Revolving Credit Facility (Details) - USD ($) |
Mar. 31, 2021 |
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
---|---|---|---|---|
Debt Instrument [Line Items] | ||||
Cash, cash equivalents and marketable securities | $ 34,500,000 | |||
Long-term debt | 177,500,000 | $ 177,500,000 | ||
Liquidity amount | 133,300,000 | |||
Cash, cash equivalents, and restricted cash | 40,369,000 | 122,880,000 | $ 255,782,000 | $ 92,379,000 |
Current liabilities | 203,228,000 | 237,014,000 | ||
Line of Credit | Revolving Credit Facility | Revolving credit facility | ||||
Debt Instrument [Line Items] | ||||
Long-term debt | 177,500,000 | $ 177,500,000 | ||
Maximum borrowing capacity | 295,000,000.0 | |||
Long-term line of credit | 18,700,000 | |||
Unused borrowing capacity, amount | 98,800,000 | |||
Minimum liquidity | $ 75,000,000.0 |
FINANCING ARRANGEMENTS Schedule of Long-term Financial Liability (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Mar. 31, 2021 |
Jun. 30, 2020 |
|
Debt Instrument [Line Items] | ||
Long- term financing liability | $ 0 | $ 27,981 |
Salt Lake City Distribution Center | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.30% | |
Long- term financing liability | $ 0 | 16,773 |
Chattanooga Distribution Center | ||
Debt Instrument [Line Items] | ||
Interest rate | 3.70% | |
Long- term financing liability | $ 0 | $ 11,208 |
FINANCING ARRANGEMENTS Sale and Leaseback Transaction (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021
USD ($)
|
Mar. 31, 2021
USD ($)
lease
|
Mar. 31, 2020
USD ($)
|
Jun. 30, 2020
USD ($)
|
|
Sale Leaseback Transaction [Line Items] | ||||
Gain on sale and leaseback transaction | $ 14,878 | $ 0 | ||
Right of use asset | $ 629,006 | 629,006 | $ 786,216 | |
Operating lease liability | 659,458 | 659,458 | ||
Salt Lake City and Chattanooga Distribution Centers | ||||
Sale Leaseback Transaction [Line Items] | ||||
Financial liability, derecognized | 28,500 | 28,500 | ||
Carrying value of assets sold | 13,600 | $ 13,600 | ||
Gain on sale and leaseback transaction | 14,900 | |||
Number of distribution centers | lease | 2 | |||
Right of use asset | 20,300 | $ 20,300 | ||
Operating lease liability | $ 20,300 | $ 20,300 |
FAIR VALUE MEASUREMENTS Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Assets and liabilities measured at fair value on a nonrecurring basis | ||||
Goodwill impairment | $ 0 | $ 40,164 | $ 0 | $ 40,164 |
Long-lived asset impairment | 833 | 0 | 9,817 | 0 |
Nonrecurring | Level 3 | ||||
Assets and liabilities measured at fair value on a nonrecurring basis | ||||
Goodwill impairment | 0 | 40,164 | 0 | 40,164 |
Long-lived asset impairment | $ 833 | $ 1,208 | $ 9,817 | $ 3,851 |
SEGMENT INFORMATION Reportable Operating Segment Salons (Details) - salon |
Mar. 31, 2021 |
Jun. 30, 2020 |
---|---|---|
Franchisor Disclosure [Line Items] | ||
Number of salons | 6,221 | 6,923 |
Equity ownership interest locations | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 78 | 82 |
Franchise | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 5,317 | 5,209 |
Salons as a percent of total Company-owned and Franchise salons | 86.60% | 76.10% |
Franchise | North American | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 5,159 | 5,042 |
Franchise | International | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 158 | 167 |
Franchise | SmartStyle/Cost Cutters in Walmart Stores | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 1,569 | 1,317 |
Franchise | Supercuts | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 2,357 | 2,508 |
Franchise | Portfolio Brands | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 1,233 | 1,217 |
Company-owned | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 826 | 1,632 |
Salons as a percent of total Company-owned and Franchise salons | 13.40% | 23.90% |
Company-owned | SmartStyle/Cost Cutters in Walmart Stores | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 373 | 751 |
Company-owned | Supercuts | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 124 | 210 |
Company-owned | Portfolio Brands | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 267 | 505 |
Company-owned | Mall-based | ||
Franchisor Disclosure [Line Items] | ||
Number of salons | 62 | 166 |
SEGMENT INFORMATION Operating Results (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Revenues: | ||||
Franchise rental income | $ 31,317 | $ 31,821 | $ 95,885 | $ 96,875 |
Total revenues | 100,267 | 153,783 | 315,983 | 609,586 |
Operating expenses: | ||||
Site operating expenses | 13,366 | 3,660 | 36,955 | 62,932 |
General and administrative | 24,582 | 31,871 | 77,419 | 105,187 |
Rent | 31,300 | 31,800 | 95,900 | 96,900 |
Depreciation and amortization | 3,620 | 10,359 | 17,384 | 27,486 |
Long-lived asset impairment | 833 | 0 | 9,817 | 0 |
TBG mall location restructuring | 0 | 146 | 0 | 2,368 |
Goodwill impairment | 0 | 40,164 | 0 | 40,164 |
Total operating expenses | 118,808 | 213,182 | 392,869 | 686,357 |
Operating loss | (18,541) | (59,399) | (76,886) | (76,771) |
Other (expense) income: | ||||
Interest expense | (3,163) | (1,712) | (10,626) | (4,615) |
Loss from sale of salon assets to franchisees, net | (4,575) | (7,858) | (8,463) | (26,125) |
Interest income and other, net | 15,099 | 148 | 15,616 | 3,188 |
Loss from continuing operations before income taxes | (11,180) | (68,821) | (80,359) | (104,323) |
Non-Franchise Lease | ||||
Operating expenses: | ||||
Rent | 8,001 | 18,665 | 34,128 | 63,424 |
Franchisor | ||||
Operating expenses: | ||||
Rent | 31,317 | 31,821 | 95,885 | 96,875 |
Operating Segments | Franchise | ||||
Revenues: | ||||
Franchise rental income | 31,317 | 31,821 | 95,885 | 96,875 |
Total revenues | 67,931 | 55,837 | 198,335 | 208,224 |
Operating expenses: | ||||
Site operating expenses | 5,600 | (7,789) | 14,858 | 13,341 |
General and administrative | 7,450 | 8,657 | 23,055 | 25,990 |
Depreciation and amortization | 333 | 292 | 896 | 662 |
Long-lived asset impairment | 22 | 726 | ||
TBG mall location restructuring | 146 | 2,368 | ||
Goodwill impairment | 0 | 0 | ||
Total operating expenses | 55,971 | 44,755 | 169,600 | 174,807 |
Operating loss | 11,960 | 11,082 | 28,735 | 33,417 |
Other (expense) income: | ||||
Interest expense | 0 | 0 | 0 | 0 |
Loss from sale of salon assets to franchisees, net | 0 | 0 | 0 | 0 |
Interest income and other, net | 0 | 0 | 0 | 0 |
Loss from continuing operations before income taxes | 11,960 | 11,082 | 28,735 | 33,417 |
Operating Segments | Franchise | Non-Franchise Lease | ||||
Operating expenses: | ||||
Rent | 101 | 176 | 1,063 | 767 |
Operating Segments | Franchise | Franchisor | ||||
Operating expenses: | ||||
Rent | 31,317 | 31,821 | 95,885 | 96,875 |
Operating Segments | Company-owned | ||||
Revenues: | ||||
Franchise rental income | 0 | 0 | 0 | 0 |
Total revenues | 32,336 | 97,946 | 117,648 | 401,362 |
Operating expenses: | ||||
Site operating expenses | 7,766 | 11,449 | 22,097 | 49,591 |
General and administrative | 1,525 | 4,566 | 6,936 | 22,263 |
Depreciation and amortization | 1,687 | 9,799 | 11,080 | 21,844 |
Long-lived asset impairment | 811 | 9,091 | ||
TBG mall location restructuring | 0 | 0 | ||
Goodwill impairment | 40,164 | 40,164 | ||
Total operating expenses | 44,959 | 148,607 | 168,387 | 447,727 |
Operating loss | (12,623) | (50,661) | (50,739) | (46,365) |
Other (expense) income: | ||||
Interest expense | 0 | 0 | 0 | 0 |
Loss from sale of salon assets to franchisees, net | 0 | 0 | 0 | 0 |
Interest income and other, net | 0 | 0 | 0 | 0 |
Loss from continuing operations before income taxes | (12,623) | (50,661) | (50,739) | (46,365) |
Operating Segments | Company-owned | Non-Franchise Lease | ||||
Operating expenses: | ||||
Rent | 7,229 | 17,585 | 31,019 | 60,748 |
Operating Segments | Company-owned | Franchisor | ||||
Operating expenses: | ||||
Rent | 0 | 0 | 0 | 0 |
Unallocated Corporate | ||||
Revenues: | ||||
Franchise rental income | 0 | 0 | 0 | 0 |
Total revenues | 0 | 0 | 0 | 0 |
Operating expenses: | ||||
Site operating expenses | 0 | 0 | 0 | 0 |
General and administrative | 15,607 | 18,648 | 47,428 | 56,934 |
Depreciation and amortization | 1,600 | 268 | 5,408 | 4,980 |
Long-lived asset impairment | 0 | 0 | ||
TBG mall location restructuring | 0 | 0 | ||
Goodwill impairment | 0 | 0 | ||
Total operating expenses | 17,878 | 19,820 | 54,882 | 63,823 |
Operating loss | (17,878) | (19,820) | (54,882) | (63,823) |
Other (expense) income: | ||||
Interest expense | (3,163) | (1,712) | (10,626) | (4,615) |
Loss from sale of salon assets to franchisees, net | (4,575) | (7,858) | (8,463) | (26,125) |
Interest income and other, net | 15,099 | 148 | 15,616 | 3,188 |
Loss from continuing operations before income taxes | (10,517) | (29,242) | (58,355) | (91,375) |
Unallocated Corporate | Non-Franchise Lease | ||||
Operating expenses: | ||||
Rent | 671 | 904 | 2,046 | 1,909 |
Unallocated Corporate | Franchisor | ||||
Operating expenses: | ||||
Rent | 0 | 0 | 0 | 0 |
Service | ||||
Revenues: | ||||
Revenues | 24,645 | 78,387 | 90,040 | 322,133 |
Operating expenses: | ||||
Cost of services and products | 15,821 | 54,824 | 66,441 | 212,664 |
Service | Operating Segments | Franchise | ||||
Revenues: | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating expenses: | ||||
Cost of services and products | 0 | 0 | 0 | 0 |
Service | Operating Segments | Company-owned | ||||
Revenues: | ||||
Revenues | 24,645 | 78,387 | 90,040 | 322,133 |
Operating expenses: | ||||
Cost of services and products | 15,821 | 54,824 | 66,441 | 212,664 |
Service | Unallocated Corporate | ||||
Revenues: | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating expenses: | ||||
Cost of services and products | 0 | 0 | 0 | 0 |
Product | ||||
Revenues: | ||||
Revenues | 20,770 | 34,877 | 68,665 | 124,516 |
Operating expenses: | ||||
Cost of services and products | 21,268 | 21,672 | 54,840 | 75,257 |
Product | Operating Segments | Franchise | ||||
Revenues: | ||||
Revenues | 13,079 | 15,318 | 41,057 | 45,287 |
Operating expenses: | ||||
Cost of services and products | 11,148 | 11,452 | 33,117 | 34,804 |
Product | Operating Segments | Company-owned | ||||
Revenues: | ||||
Revenues | 7,691 | 19,559 | 27,608 | 79,229 |
Operating expenses: | ||||
Cost of services and products | 10,120 | 10,220 | 21,723 | 40,453 |
Product | Unallocated Corporate | ||||
Revenues: | ||||
Revenues | 0 | 0 | 0 | 0 |
Operating expenses: | ||||
Cost of services and products | 0 | 0 | 0 | 0 |
Royalties and fees | ||||
Revenues: | ||||
Revenues | 23,535 | 8,698 | 61,393 | 66,062 |
Royalties and fees | Operating Segments | Franchise | ||||
Revenues: | ||||
Revenues | 23,535 | 8,698 | 61,393 | 66,062 |
Royalties and fees | Operating Segments | Company-owned | ||||
Revenues: | ||||
Revenues | 0 | 0 | 0 | 0 |
Royalties and fees | Unallocated Corporate | ||||
Revenues: | ||||
Revenues | $ 0 | $ 0 | $ 0 | $ 0 |
REVISION OF THIRD QUARTER 2020 UNAUDITED RESULTS Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Goodwill impairment | $ 0 | $ (40,164) | $ 0 | $ (40,164) |
Adjustments | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Goodwill written off related to sale of salon assets | 2,400 | |||
Goodwill impairment | $ 4,365 | $ 4,365 |
REVISION OF THIRD QUARTER 2020 UNAUDITED RESULTS Schedule of Accounting Adjustment (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 9 Months Ended | ||||
---|---|---|---|---|---|---|
Mar. 31, 2021 |
Mar. 31, 2020 |
Mar. 31, 2021 |
Mar. 31, 2020 |
|||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Rent | $ 31,300 | $ 31,800 | $ 95,900 | $ 96,900 | ||
Goodwill impairment | 0 | 40,164 | 0 | 40,164 | ||
Operating loss | (18,541) | (59,399) | (76,886) | (76,771) | ||
Loss from sale of salon assets to franchisees, net | (4,575) | (7,858) | (8,463) | (26,125) | ||
Interest income and other, net | 15,099 | 148 | 15,616 | 3,188 | ||
Loss from continuing operations before income taxes | (11,180) | (68,821) | (80,359) | (104,323) | ||
Income tax benefit | 333 | 979 | 1,368 | 5,783 | ||
Net loss | $ (10,847) | $ (67,541) | $ (78,991) | $ (97,787) | ||
Net loss per share (in dollar per share) | [1] | $ (0.30) | $ (1.88) | $ (2.20) | $ (2.72) | |
Comprehensive loss | $ (10,541) | $ (70,023) | $ (77,348) | $ (100,131) | ||
Non-Franchise Lease | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Rent | $ 8,001 | 18,665 | $ 34,128 | 63,424 | ||
As Previously Reported | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Goodwill impairment | 44,529 | 44,529 | ||||
Operating loss | (64,342) | (81,714) | ||||
Loss from sale of salon assets to franchisees, net | (10,208) | (21,760) | ||||
Interest income and other, net | (1,329) | 3,188 | ||||
Loss from continuing operations before income taxes | (77,591) | (104,901) | ||||
Income tax benefit | 2,253 | 5,904 | ||||
Net loss | $ (75,037) | $ (98,244) | ||||
Net loss per share (in dollar per share) | $ (2.10) | $ (2.73) | ||||
Comprehensive loss | $ (77,519) | $ (100,588) | ||||
As Previously Reported | Non-Franchise Lease | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Rent | 19,243 | 64,002 | ||||
Adjustments | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Rent | (600) | |||||
Goodwill impairment | (4,365) | (4,365) | ||||
Operating loss | 4,943 | 4,943 | ||||
Loss from sale of salon assets to franchisees, net | 2,350 | (4,365) | ||||
Interest income and other, net | 1,477 | 0 | ||||
Loss from continuing operations before income taxes | 8,770 | 578 | ||||
Income tax benefit | (1,274) | (121) | ||||
Net loss | $ 7,496 | $ 457 | ||||
Net loss per share (in dollar per share) | $ 0.22 | $ 0.01 | ||||
Comprehensive loss | $ 7,496 | $ 457 | ||||
Goodwill written off related to sale of salon assets | (2,400) | |||||
Adjustments | Non-Franchise Lease | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Rent | $ (578) | $ (578) | ||||
|
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