SEGMENT INFORMATION

6 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION:

Segment information is prepared on the same basis that the chief operating decision maker (CODM) reviews financial information for operational decision-making purposes. The Company's reportable operating segments consisted of the following salons:

	December 31, 2022		June 30, 2022
FRANCHISE SALONS:
Supercuts	2,160		2,264
SmartStyle/Cost Cutters in Walmart Stores	1,605		1,646
Portfolio Brands	1,293		1,344
Total North American salons	5,058		5,254
Total International salons (1)	138		141
Total Franchise salons	5,196		5,395
as a percent of total Franchise and Company-owned salons	98.6	%	98.1	%
COMPANY-OWNED SALONS:
Supercuts	10		18
SmartStyle/Cost Cutters in Walmart Stores	48		49
Portfolio Brands	17		38
Total Company-owned salons	75		105
as a percent of total Franchise and Company-owned salons	1.4	%	1.9	%
OWNERSHIP INTEREST LOCATIONS:
Equity ownership interest locations	76		76
Grand Total, System-wide	5,347		5,576

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(1)Canadian and Puerto Rican salons are included in the North American salon totals.

As of December 31, 2022, 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 Supercuts®, SmartStyle®, and other regional trade names.

Financial information concerning the Company's reportable operating segments is shown in the tables below. Segment information is presented in the same way that the Company internally organizes the business for assessing performance and making decisions regarding allocation of resources. In the second quarter of fiscal year 2023, the Company revised its internal reporting such that the CODM’s primary measures of segment performance are revenue and segment adjusted EBITDA. Revenue and segment adjusted EBITDA are regularly reviewed by the CODM to make decisions about resources to be allocated to the segments, assess current performance and forecast future performance. Segment adjusted EBITDA is defined as income from continuing operations before interest, income taxes, depreciation and amortization. Consistent with our internal management reporting, unallocated expenses include certain items impacting comparability. These unallocated items are not defined terms within U.S. GAAP. They are based on how management views the business, makes financial, operating and planning decisions and evaluates the Company's ongoing performance and are not attributable to either segment. Unallocated fees include distribution center wind down fees, inventory reserve, one-time professional fees and settlements, severance expense, the benefit from lease liability decreases in excess of previously impaired ROUA, lease termination fees, asset retirement obligation costs and long-lived asset impairment charges. Figures for prior reporting periods have been restated to conform to the current period.

	Three Months Ended December 31,				Six Months Ended December 31,
	2022		2021		2022		2021
	(Dollars in thousands)
Revenues:
Franchise	$	57,354	$	64,227	$	116,111	$	133,040
Company-owned	2,613		5,043		5,727		13,048
Total revenue	59,967		69,270		121,838		146,088
Segment adjusted EBITDA:
Franchise	7,532		5,721		12,523		2,256
Company-owned	303		(3,133)		(863)		(4,688)
Total	7,835		2,588		11,660		(2,432)
Unallocated expenses	(2,064)		(1,935)		(2,631)		(1,417)
Depreciation and amortization	(3,793)		(1,605)		(5,044)		(3,144)
Long-lived asset impairment	—		(52)		—		(215)
Interest expense	(4,519)		(3,270)		(8,336)		(6,397)
Income tax benefit (expense)	—		164		(28)		213
Income (loss) from discontinued operations	134		(818)		3,440		(1,914)
Total net loss	$	(2,407)	$	(4,928)	$	(939)	$	(15,306)