Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Mar. 31, 2015 | Apr. 23, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | REGIS CORP | |
Entity Central Index Key | 716643 | |
Document Type | 10-Q | |
Document Period End Date | 31-Mar-15 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -24 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 54,579,891 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | Q3 |
CONDENSED_CONSOLIDATED_BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Current assets: | ||
Cash and cash equivalents | $212,951 | $378,627 |
Receivables, net | 23,993 | 25,808 |
Inventories | 131,883 | 137,151 |
Other current assets | 63,972 | 71,680 |
Total current assets | 432,799 | 613,266 |
Property and equipment, net | 228,195 | 266,538 |
Goodwill | 418,158 | 425,264 |
Other intangibles, net | 17,283 | 19,812 |
Investment in affiliates | 17,024 | 28,611 |
Other assets | 61,864 | 62,458 |
Total assets | 1,175,323 | 1,415,949 |
Current liabilities: | ||
Long-term debt, current portion | 4 | 173,501 |
Accounts payable | 63,284 | 68,491 |
Accrued expenses | 143,794 | 142,720 |
Total current liabilities | 207,082 | 384,712 |
Long-term debt and capital lease obligations | 120,000 | 120,002 |
Other noncurrent liabilities | 201,661 | 190,454 |
Total liabilities | 528,743 | 695,168 |
Commitments and contingencies (Note 6) | ||
Shareholders' equity: | ||
Common stock, $0.05 par value; issued and outstanding 54,579,808 and 56,651,166 common shares at March 31, 2015 and June 30, 2014, respectively | 2,729 | 2,833 |
Additional paid-in capital | 311,264 | 337,837 |
Accumulated other comprehensive income | 6,955 | 22,651 |
Retained earnings | 325,632 | 357,460 |
Total shareholders’ equity | 646,580 | 720,781 |
Total liabilities and shareholders’ equity | $1,175,323 | $1,415,949 |
CONDENSED_CONSOLIDATED_BALANCE1
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) (Parenthetical) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $0.05 | $0.05 |
Common stock, shares issued | 54,579,808 | 56,651,166 |
Common stock, shares outstanding | 54,579,808 | 56,651,166 |
CONDENSED_CONSOLIDATED_STATEME
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Revenues: | ||||
Service | $352,015 | $367,230 | $1,067,079 | $1,099,916 |
Product | 91,143 | 94,309 | 274,596 | 278,821 |
Royalties and fees | 10,802 | 10,022 | 32,723 | 29,774 |
Total revenues | 453,960 | 471,561 | 1,374,398 | 1,408,511 |
Operating expenses: | ||||
Cost of service | 216,830 | 226,344 | 659,736 | 674,772 |
Cost of product | 45,117 | 46,146 | 138,924 | 140,631 |
Site operating expenses | 47,116 | 50,215 | 145,643 | 151,260 |
General and administrative | 44,082 | 43,120 | 135,934 | 127,758 |
Rent | 76,516 | 80,614 | 230,913 | 238,788 |
Depreciation and amortization | 19,044 | 28,343 | 60,815 | 76,815 |
Goodwill impairment | 0 | 0 | 0 | 34,939 |
Total operating expenses | 448,705 | 474,782 | 1,371,965 | 1,444,963 |
Operating income (loss) | 5,255 | -3,221 | 2,433 | -36,452 |
Other income (expense): | ||||
Interest expense | -2,273 | -6,299 | -7,843 | -15,956 |
Interest income and other, net | 390 | 261 | 1,307 | 1,144 |
Income (loss) from continuing operations before income taxes and equity in (loss) income of affiliated companies | 3,372 | -9,259 | -4,103 | -51,264 |
Income taxes | -6,797 | -857 | -15,865 | -72,812 |
Equity in (loss) income of affiliated companies, net of income taxes | -285 | 23 | -11,865 | 4,762 |
Loss from continuing operations | -3,710 | -10,093 | -31,833 | -119,314 |
Income from discontinued operations, net of taxes | 0 | 609 | 0 | 609 |
Net loss | ($3,710) | ($9,484) | ($31,833) | ($118,705) |
Loss from continuing operations, basic and diluted | ||||
Loss from continuing operations, basic and diluted (in usd per share) | ($0.07) | ($0.18) | ($0.58) | ($2.11) |
Income from discontinued operations, basic and diluted (in usd per share) | $0 | $0.01 | $0 | $0.01 |
Net loss per share, basic and diluted (in usd per share) | ($0.07) | ($0.17) | ($0.58) | ($2.10) |
Weighted average common and common equivalent shares outstanding: | ||||
Basic and diluted (in shares) | 54,837 | 56,473 | 55,248 | 56,450 |
Cash dividends declared per common share (in usd per share) | $0 | $0 | $0 | $0.12 |
CONDENSED_CONSOLIDATED_STATEME1
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | ($3,710) | ($9,484) | ($31,833) | ($118,705) |
Other comprehensive loss, net of tax: | ||||
Foreign currency translation adjustments during the period | -6,851 | -2,208 | -15,696 | -1,225 |
Other comprehensive loss | -6,851 | -2,208 | -15,696 | -1,225 |
Comprehensive loss | ($10,561) | ($11,692) | ($47,529) | ($119,930) |
CONDENSED_CONSOLIDATED_STATEME2
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 |
Cash flows from operating activities: | ||
Net loss | ($31,833) | ($118,705) |
Adjustments to reconcile net loss to net cash provided by operating activities | ||
Depreciation and amortization | 51,478 | 61,540 |
Equity in loss (income) of affiliated companies | 11,865 | -4,762 |
Deferred income taxes | 12,631 | 68,669 |
Salon asset impairment | 9,337 | 15,275 |
Gain on sale of salon assets | -723 | 0 |
Loss on write down of inventories | 0 | 854 |
Goodwill impairment | 0 | 34,939 |
Stock-based compensation | 6,342 | 4,899 |
Amortization of debt discount and financing costs | 1,336 | 6,027 |
Other non-cash items affecting earnings | 266 | 177 |
Changes in operating assets and liabilities, excluding the effects of sales and acquisitions | 11,628 | 14,801 |
Net cash provided by operating activities | 72,327 | 83,714 |
Cash flows from investing activities: | ||
Capital expenditures | -29,689 | -34,977 |
Proceeds from sale of assets (asset acquisitions, net of cash acquired), net | 1,961 | -1 |
Proceeds from loans and investments | 0 | 5,056 |
Net cash used in investing activities | -27,728 | -29,922 |
Cash flows from financing activities: | ||
Proceeds from issuance of long-term debt, net of fees | 0 | 118,058 |
Repayments of long-term debt and capital lease obligations | -173,749 | -5,234 |
Repurchase of common stock | -32,890 | 0 |
Dividends paid | 0 | -6,793 |
Net cash (used in) provided by financing activities | -206,639 | 106,031 |
Effect of exchange rate changes on cash and cash equivalents | -3,636 | 489 |
(Decrease) increase in cash and cash equivalents | -165,676 | 160,312 |
Cash and cash equivalents: | ||
Beginning of period | 378,627 | 200,488 |
End of period | $212,951 | $360,800 |
BASIS_OF_PRESENTATION_OF_UNAUD
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY (Notes) | 9 Months Ended | ||||||
Mar. 31, 2015 | |||||||
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, 2015 and for the three and nine months ended March 31, 2015 and 2014, reflect, in the opinion of management, all adjustments necessary to fairly state the consolidated financial position of the Company as of March 31, 2015 and the consolidated results of its operations and its 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 Condensed Consolidated Balance Sheet data for June 30, 2014 was derived from audited Consolidated Financial Statements, but does 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, 2014 and other documents filed or furnished with the Securities and Exchange Commission (SEC) during the current fiscal year. | |||||||
Stock-Based Employee Compensation: | |||||||
During the three and nine months ended March 31, 2015, the Company granted various equity awards including restricted stock units (RSUs), equity-based stock appreciation rights (SARs) and performance share units (PSUs). During the nine months ended March 31, 2015, the dividend yield assumption was updated to 0%. During the three months ended March 31, 2015, the expected volatility assumption was updated to 38%. Otherwise there were no other significant changes to the assumptions used in calculating the fair value of SARs. All grants relate to stock incentive plans that have been approved by the shareholders of the Company. | |||||||
A summary of equity awards granted is as follows: | |||||||
For the Periods Ended March 31, 2015 | |||||||
Three Months | Nine Months | ||||||
Restricted stock units | 176,263 | 477,771 | |||||
Equity-based stock appreciation rights | 363,970 | 814,304 | |||||
Performance share units | — | 199,337 | |||||
Total compensation cost for stock-based payment arrangements totaled $2.3 and $1.3 million for the three months ended March 31, 2015 and 2014, respectively, and $6.3 and $4.9 million for the nine months ended March 31, 2015 and 2014, respectively, recorded within general and administrative expense on the unaudited Condensed Consolidated Statement of Operations. | |||||||
During fiscal year 2014, the Company granted 0.1 million PSUs with a performance metric based upon achieving a three-year cumulative adjusted earnings before interest, income taxes and depreciation and amortization balance. As of March 31, 2015, the Company does not expect any of these units to be earned and has not recorded any net expense associated with these awards. However, future compensation expense for the unvested awards could reach a maximum of $1.9 million if the maximum performance metric is earned. | |||||||
Long-Lived Asset Impairment Assessments, Excluding Goodwill: | |||||||
The Company assesses impairment of long-lived 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 our use of the assets. Impairment is evaluated based on the sum of undiscounted estimated future cash flows expected to result from use of the long-lived 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 assets' estimated fair value. The fair value of the long-lived assets is estimated using a discounted cash flow model based on the best information available, including market data and salon level revenues and expenses. Long-lived asset impairment charges are recorded within depreciation and amortization in the unaudited Condensed Consolidated Statement of Operations. | |||||||
Accounting Standards Recently Issued But Not Yet Adopted by the Company: | |||||||
Revenue from Contracts with Customers | |||||||
In May 2014, the Financial Accounting Standards Board (FASB) issued updated guidance for revenue recognition. The updated accounting guidance provides a comprehensive new revenue recognition model that requires a Company to recognize revenue to depict the exchange for goods or services to a customer at an amount that reflects the consideration it expects to receive for those goods or services. Currently the guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. This guidance will be effective in the first quarter of fiscal year 2018, however, FASB has proposed deferring the effective date until the first quarter of fiscal year 2019. This update permits the use of either the retrospective or simplified transition method. The Company does not expect the adoption of this update to have a material impact on the Company's consolidated financial statements and is evaluating the impact this guidance will have on its related disclosures. |
INVESTMENT_IN_AFFILIATES
INVESTMENT IN AFFILIATES: | 9 Months Ended |
Mar. 31, 2015 | |
Investments in and Advances to Affiliates, Schedule of Investments [Abstract] | |
INVESTMENT IN AFFILIATES | INVESTMENT IN AFFILIATES: |
Empire Education Group, Inc. (EEG) | |
As of March 31, 2015, the Company's ownership interest in EEG was 54.6% and the carrying amount of the Company's investment in EEG was $16.5 million. | |
The Company utilized consolidation of variable interest entities guidance to determine whether or not its investment in EEG was a variable interest entity (VIE), and if so, whether the Company was the primary beneficiary of the VIE. The Company concluded that EEG was not a VIE based on the fact that EEG had sufficient equity at risk. The Company accounts for EEG as an equity investment under the voting interest model, as the Company has granted the other shareholder of EEG an irrevocable proxy to vote a certain number of the Company’s shares such that the other shareholder of EEG has voting control of 51.0% of EEG’s common stock, as well as the right to appoint four of the five members of EEG’s Board of Directors. | |
During the nine months ended March 31, 2015, the Company recorded its share of a non-cash deferred tax asset valuation allowance recorded by EEG of $6.9 million and an other than temporary non-cash impairment charge of $4.7 million on its investment in EEG due to recent declines in enrollment, revenue and profitability. The Company did not receive a tax benefit on the impairment charge. Due to economic, regulatory and other factors, the Company may be required to record additional non-cash impairment charges related to its investment in EEG and such impairments could be material. The exposure to loss related to the Company’s involvement with EEG is the carrying value of the investment. | |
During the three months ended March 31, 2015 and 2014, the Company recorded $(0.3) and $0.0 million, respectively, of equity (losses) earnings related to its investment in EEG. During the nine months ended March 31, 2015 and 2014, the Company recorded $(7.2) and $1.7 million, respectively, of equity (losses) earnings related to its investment in EEG. | |
MY Style | |
During the nine months ended March 31, 2014, the Company recovered $3.1 million on its previously impaired investments in MY Style’s parent company, Yamano Holding Corporation ("Yamano"), which is reported in equity in (loss) income of affiliated companies on the unaudited Condensed Consolidated Statement of Operations. The Company reported gains associated with Yamano's redemption within equity in (loss) income of affiliated companies, net of income taxes, on the unaudited Condensed Consolidated Statement of Operations. |
EARNINGS_PER_SHARE
EARNINGS PER SHARE: | 9 Months Ended |
Mar. 31, 2015 | |
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 restricted stock awards, RSUs and 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 value of the Company’s common stock are excluded from the computation of diluted earnings per share. The Company’s diluted earnings per share would also reflect the assumed conversion under the Company’s convertible debt, if the impact was dilutive, along with the exclusion of interest expense, net of taxes. The impact of the convertible debt is excluded from the computation of diluted earnings per share when interest expense per common share obtainable upon conversion is greater than basic earnings per share. | |
Net loss from continuing operations available to common shareholders and net loss from continuing operations for diluted earnings per share under the if-converted method were the same for all periods presented. | |
Impacting the net loss available to common shareholders was a $1.5 million error related to prior periods that was recorded during the second quarter of fiscal year 2015, related to an understatement of self-insurance accruals in prior periods. Because this item was not material to the Company’s consolidated financial statements for any prior periods or the second quarter of fiscal year 2015, the Company recorded a correcting cumulative adjustment during the second quarter of fiscal year 2015. The impact of this item for the nine months ended March 31, 2015 on the Company’s Consolidated Statement of Operations increased site operating expense and net loss from continuing operations by $1.5 million. | |
For the three months ended March 31, 2015 and 2014, 210,023 and 142,536, respectively, and for the nine months ended March 31, 2015 and 2014, 187,959 and 124,189, respectively, of common stock equivalents of potentially dilutive common stock were excluded from the diluted earnings per share calculation due to the net loss from continuing operations. | |
The computation of weighted average shares outstanding, assuming dilution, excluded 1,481,206 and 1,936,388 of stock-based awards during the three months ended March 31, 2015 and 2014, respectively, and 1,176,364 and 1,712,855 of stock-based awards during the nine months ended March 31, 2015 and 2014, respectively, as they were not dilutive under the treasury stock method. The computation of weighted average shares outstanding, assuming dilution, also excluded 619,507 and 11,304,707 of shares from convertible debt as they were not dilutive for the nine months ended March 31, 2015 and 2014, respectively, and 11,316,328 as they were not dilutive for the three months ended March 31, 2014. |
SHAREHOLDERS_EQUITY
SHAREHOLDERS' EQUITY: | 9 Months Ended |
Mar. 31, 2015 | |
SHAREHOLDERS' EQUITY: | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY: |
Additional Paid-In Capital: | |
The $26.6 million decrease in additional paid-in capital during the nine months ended March 31, 2015 was primarily due to $32.9 million of common stock repurchases, partly offset by $6.3 million of stock-based compensation. | |
During the three and nine months ended March 31, 2015, the Company repurchased 610,346 shares for $10.0 million and 2,147,744 shares for $32.9 million, respectively, under a previously approved stock repurchase program. At March 31, 2015, $25.9 million remained outstanding under the approved stock repurchase program. On April 21, 2015, consistent with the Company's capital allocation policy, the Company’s Board of Directors authorized an additional $50.0 million to be expended for the repurchase of the Company’s stock. |
INCOME_TAXES
INCOME TAXES: | 9 Months Ended |
Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES: |
During the three and nine months ended March 31, 2015, the Company recognized tax expense of $6.8 and $15.9 million, respectively, with corresponding effective tax rates of 201.6% and (386.7)%. During the three and nine months ended March 31, 2014, the Company recognized tax expense of $0.9 and $72.8 million, respectively, with corresponding effective tax rates of (9.3)% and (142.0)%. During the third quarter of fiscal year 2015, the Company incurred a non-cash charge of $2.0 million to establish a valuation allowance against the majority of the Company’s Canadian deferred tax assets. The primary reason for this charge was the operations in one of the Company's Canadian entities experienced declining financial performance and reported cumulative pretax losses for the twelve consecutive quarters ended March 31, 2015. | |
The recorded tax expense and effective tax rates for the three and nine months ended March 31, 2015 were different than what would normally be expected primarily due to $4.3 and $10.9 million, respectively, of non-cash tax expense relating to tax benefits on certain indefinite-lived assets that the Company cannot recognize for reporting purposes and the valuation allowance associated with the Company’s deferred tax assets. | |
The recorded tax expense and effective tax rate for the three and nine months ended March 31, 2014 were different than would be expected due to the effect of the non-cash valuation allowance established against the Company’s deferred tax assets and the tax effect of the second quarter non-cash goodwill impairment charge which was only partly deductible for income tax purposes. | |
The Company’s U.S. federal income tax returns for fiscal years 2010 through 2014 are currently under audit by the Internal Revenue Service (IRS). All earlier tax years are closed to examination. The Company has outstanding audit issues with the IRS for fiscal years 2010 and 2011 for which the IRS has proposed additional adjustments. The Company believes its income tax positions and deductions will be sustained and intends to vigorously defend its position on these issues and, accordingly, has appealed to the IRS Appeals Division. Final resolution of these issues is not expected to have a material impact on the Company’s financial position. For state tax audits, the statute of limitations generally runs three to four years resulting in a number of returns being open for tax audits dating back to fiscal year 2010. The Company is currently under audit in a number of states in which the statute of limitations has been extended back for fiscal years 2007 and forward. |
COMMITMENTS_AND_CONTINGENCIES
COMMITMENTS AND CONTINGENCIES: | 9 Months Ended |
Mar. 31, 2015 | |
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. | |
In addition, the Company is a nominal defendant, and nine current and former directors and officers of the Company were named defendants, in a shareholder derivative action in Minnesota state court. The derivative shareholder action alleged that the individual defendants breached their fiduciary duties to the Company in connection with their approval of certain executive compensation arrangements and certain related party transactions. The Board of Directors appointed a Special Litigation Committee to investigate the claims and allegations made in the derivative action, and to decide on behalf of the Company whether the claims and allegations should be pursued. In April 2014, the Special Litigation Committee issued a report and concluded the claims and allegations should not be pursued, and in September 2014 the case was dismissed by court order. In a collateral proceeding, the plaintiff filed a motion for an award of fees in November 2014. The Company has opposed the motion and this collateral proceeding is pending. | |
See Note 5 to the unaudited Condensed Consolidated Financial Statements for discussion regarding certain issues that have resulted from the IRS' audit of fiscal years 2010 and 2011. |
GOODWILL_AND_OTHER_INTANGIBLES
GOODWILL AND OTHER INTANGIBLES: | 9 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||
GOODWILL AND OTHER INTANGIBLES | GOODWILL AND OTHER INTANGIBLES: | ||||||||||||||||||||||||
The table below contains details related to the Company’s recorded goodwill: | |||||||||||||||||||||||||
31-Mar-15 | 30-Jun-14 | ||||||||||||||||||||||||
Gross | Accumulated | Net (2) | Gross | Accumulated | Net (2) | ||||||||||||||||||||
Carrying | Impairment (1) | Carrying | Impairment (1) | ||||||||||||||||||||||
Value (3) | Value (3) | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Goodwill | $ | 671,819 | $ | (253,661 | ) | $ | 418,158 | $ | 678,925 | $ | (253,661 | ) | $ | 425,264 | |||||||||||
_____________________________ | |||||||||||||||||||||||||
-1 | The table below contains additional information regarding accumulated impairment losses: | ||||||||||||||||||||||||
Fiscal Year | Impairment Charge | Reporting Unit | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
2009 | $ | (41,661 | ) | International | |||||||||||||||||||||
2010 | (35,277 | ) | North American Premium | ||||||||||||||||||||||
2011 | (74,100 | ) | North American Value | ||||||||||||||||||||||
2012 | (67,684 | ) | North American Premium | ||||||||||||||||||||||
2014 | (34,939 | ) | North American Premium | ||||||||||||||||||||||
Total | $ | (253,661 | ) | ||||||||||||||||||||||
_____________________________ | |||||||||||||||||||||||||
(2) Remaining net goodwill relates to the Company’s North American Value reporting unit. | |||||||||||||||||||||||||
(3) The change in the gross carrying value of goodwill relates to foreign currency. | |||||||||||||||||||||||||
The table below presents other intangible assets: | |||||||||||||||||||||||||
31-Mar-15 | 30-Jun-14 | ||||||||||||||||||||||||
Cost | Accumulated | Net | Cost | Accumulated | Net | ||||||||||||||||||||
Amortization | Amortization | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Amortized intangible assets: | |||||||||||||||||||||||||
Brand assets and trade names | $ | 8,252 | $ | (3,384 | ) | $ | 4,868 | $ | 9,203 | $ | (3,510 | ) | $ | 5,693 | |||||||||||
Franchise agreements | 9,971 | (6,769 | ) | 3,202 | 11,063 | (7,163 | ) | 3,900 | |||||||||||||||||
Lease intangibles | 14,570 | (7,759 | ) | 6,811 | 14,775 | (7,326 | ) | 7,449 | |||||||||||||||||
Other | 4,693 | (2,291 | ) | 2,402 | 5,074 | (2,304 | ) | 2,770 | |||||||||||||||||
$ | 37,486 | $ | (20,203 | ) | $ | 17,283 | $ | 40,115 | $ | (20,303 | ) | $ | 19,812 | ||||||||||||
FINANCING_ARRANGEMENTS
FINANCING ARRANGEMENTS: | 9 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Debt Disclosure [Abstract] | |||||||||||||
FINANCING ARRANGEMENTS | FINANCING ARRANGEMENTS: | ||||||||||||
The Company’s long-term debt consisted of the following: | |||||||||||||
Amounts outstanding | |||||||||||||
Maturity Dates | Interest Rate | March 31, | June 30, | ||||||||||
2015 | 2014 | ||||||||||||
(fiscal year) | (Dollars in thousands) | ||||||||||||
Convertible senior notes | 2015 | 5.00% | $ | — | $ | 172,246 | |||||||
Senior term notes | 2018 | 5.75 | 120,000 | 120,000 | |||||||||
Revolving credit facility | 2018 | — | — | — | |||||||||
Equipment and leasehold notes payable | 2015 - 2016 | 4.90 - 8.75 | 4 | 1,257 | |||||||||
120,004 | 293,503 | ||||||||||||
Less current portion | (4 | ) | (173,501 | ) | |||||||||
Long-term portion | $ | 120,000 | $ | 120,002 | |||||||||
Convertible Senior Notes | |||||||||||||
In July 2009, the Company issued $172.5 million aggregate principal amount of 5.0% convertible senior notes due July 2014. In July 2014, the Company settled the convertible senior notes with $172.5 million in cash. The notes were unsecured, senior obligations of the Company and interest was payable semi-annually in arrears on January 15 and July 15 of each year at a rate of 5.0% per year. For the nine months ended March 31, 2015 and 2014, interest expense related to the 5.0% contractual interest coupon was $0.4 and $6.5 million, respectively, and interest expense related to the amortization of the debt discount was $0.3 and $4.3 million, respectively. For the three months ended March 31, 2014, interest expense related to the 5.0% contractual interest coupon and amortization of debt discount was $2.2 and $1.4 million, respectively. | |||||||||||||
Senior Term Notes | |||||||||||||
In November 2013, the Company issued $120.0 million aggregate principal amount of 5.75% senior notes due December 2017 (Senior Term Notes). Net proceeds from the issuance of the Senior Term Notes were $118.1 million. Interest on the Senior Term Notes is payable semi-annually in arrears on June 1 and December 1 of each year at a rate of 5.75% per year. The Senior Term Notes are unsecured and not guaranteed by any of the Company’s subsidiaries or any third parties. | |||||||||||||
Revolving Credit Facility | |||||||||||||
As of March 31, 2015 and June 30, 2014, the Company had no outstanding borrowings under this facility. Additionally, the Company had outstanding standby letters of credit under the facility of $2.1 and $2.2 million at March 31, 2015 and June 30, 2014, respectively, primarily related to the Company's self-insurance program. Unused available credit under the facility at March 31, 2015 and June 30, 2014 was $397.9 and $397.8 million, respectively. | |||||||||||||
The Company was in compliance with all covenants and requirements of its financing arrangements as of and during the three months ended March 31, 2015. |
FAIR_VALUE_MEASUREMENTS
FAIR VALUE MEASUREMENTS: | 9 Months Ended |
Mar. 31, 2015 | |
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 that are Measured at Fair Value on a Recurring Basis | |
As of March 31, 2015, the Company’s financial instruments included cash, cash equivalents, receivables, accounts payable and debt. The fair value of cash, cash equivalents, receivables and accounts payable approximated their carrying values as of March 31, 2015 and June 30, 2014. As of March 31, 2015 and June 30, 2014, the estimated fair value of the Company's debt was $119.4 million and $292.5 million, respectively, and the carrying value was $120.0 million and $293.5 million, respectively. | |
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 the Company’s investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. During the three and nine months ended March 31, 2015, the Company recorded $2.4 and $9.3 million of long-lived asset impairment charges. See Note 1 to the unaudited Condensed Consolidated Financial Statements. During the nine months ended March 31, 2015, the Company's investment in EEG was written down to its implied fair value of $16.8 million, resulting in a non-cash impairment charge of $4.7 million. See Note 2 to the unaudited Condensed Consolidated Financial Statements. There were no other assets measured at fair value on a nonrecurring basis during the three months ended March 31, 2015. |
DISCONTINUED_OPERATIONS
DISCONTINUED OPERATIONS | 9 Months Ended |
Mar. 31, 2015 | |
Discontinued Operations and Disposal Groups [Abstract] | |
DISCONTINUED OPERATIONS | DISCONTINUED OPERATIONS: |
On February 16, 2009, the Company sold its Trade Secret salon concept and reported the sale as a discontinued operation. During the three and nine months ended March 31, 2014, the Company recorded a $0.6 million tax benefit in discontinued operations related to the release of tax reserves associated with this disposition. |
SEGMENT_INFORMATION
SEGMENT INFORMATION: | 9 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
SEGMENT INFORMATION | SEGMENT INFORMATION: | ||||||||||||||||
Segment information is prepared on the same basis the chief operating decision maker reviews financial information for operational decision-making purposes. | |||||||||||||||||
As of March 31, 2015, the Company’s reportable operating segments consisted of the following salons: | |||||||||||||||||
Company-owned | Franchised | Total | |||||||||||||||
North American Value | 5,962 | 2,273 | 8,235 | ||||||||||||||
North American Premium | 755 | — | 755 | ||||||||||||||
International | 362 | — | 362 | ||||||||||||||
Total | 7,079 | 2,273 | 9,352 | ||||||||||||||
The North American Value operating segment is comprised primarily of SmartStyle, Supercuts, MasterCuts, Cost Cutters, and other regional trade names. The North American Premium operating segment is comprised primarily of the Regis salon concept and the International operating segment includes Supercuts, Regis and Sassoon salon concepts. | |||||||||||||||||
The Company's operating segment results were as follows: | |||||||||||||||||
For the Three Months | For the Nine Months | ||||||||||||||||
Ended March 31, | Ended March 31, | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Revenues: | |||||||||||||||||
North American Value | $ | 349,443 | $ | 358,788 | $ | 1,049,552 | $ | 1,066,116 | |||||||||
North American Premium | 76,817 | 82,878 | 234,603 | 251,862 | |||||||||||||
International | 27,700 | 29,895 | 90,243 | 90,533 | |||||||||||||
Total segment revenues | $ | 453,960 | $ | 471,561 | $ | 1,374,398 | $ | 1,408,511 | |||||||||
Operating income (loss): | |||||||||||||||||
North American Value | $ | 33,098 | $ | 29,989 | $ | 88,781 | $ | 86,826 | |||||||||
North American Premium (1) | (4,154 | ) | (3,853 | ) | (11,212 | ) | (44,001 | ) | |||||||||
International | 398 | (3,109 | ) | 1,424 | (2,871 | ) | |||||||||||
Total segment operating income | 29,342 | 23,027 | 78,993 | 39,954 | |||||||||||||
Unallocated Corporate | (24,087 | ) | (26,248 | ) | (76,560 | ) | (76,406 | ) | |||||||||
Operating income (loss) | $ | 5,255 | $ | (3,221 | ) | $ | 2,433 | $ | (36,452 | ) | |||||||
_____________________________ | |||||||||||||||||
-1 | The nine months ended March 31, 2014 includes a non-cash goodwill impairment charge of $34.9 million. |
BASIS_OF_PRESENTATION_OF_UNAUD1
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Accounting Policies [Abstract] | |||||||
Stock-Based Employee Compensation | Stock-Based Employee Compensation: | ||||||
During the three and nine months ended March 31, 2015, the Company granted various equity awards including restricted stock units (RSUs), equity-based stock appreciation rights (SARs) and performance share units (PSUs). During the nine months ended March 31, 2015, the dividend yield assumption was updated to 0%. During the three months ended March 31, 2015, the expected volatility assumption was updated to 38%. Otherwise there were no other significant changes to the assumptions used in calculating the fair value of SARs. All grants relate to stock incentive plans that have been approved by the shareholders of the Company. | |||||||
A summary of equity awards granted is as follows: | |||||||
For the Periods Ended March 31, 2015 | |||||||
Three Months | Nine Months | ||||||
Restricted stock units | 176,263 | 477,771 | |||||
Equity-based stock appreciation rights | 363,970 | 814,304 | |||||
Performance share units | — | 199,337 | |||||
Total compensation cost for stock-based payment arrangements totaled $2.3 and $1.3 million for the three months ended March 31, 2015 and 2014, respectively, and $6.3 and $4.9 million for the nine months ended March 31, 2015 and 2014, respectively, recorded within general and administrative expense on the unaudited Condensed Consolidated Statement of Operations. | |||||||
During fiscal year 2014, the Company granted 0.1 million PSUs with a performance metric based upon achieving a three-year cumulative adjusted earnings before interest, income taxes and depreciation and amortization balance. As of March 31, 2015, the Company does not expect any of these units to be earned and has not recorded any net expense associated with these awards. However, future compensation expense for the unvested awards could reach a maximum of $1.9 million if the maximum performance metric is earned. | |||||||
Long-Lived Asset Impairment Assessments, Excluding Goodwill | Long-Lived Asset Impairment Assessments, Excluding Goodwill: | ||||||
The Company assesses impairment of long-lived 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 our use of the assets. Impairment is evaluated based on the sum of undiscounted estimated future cash flows expected to result from use of the long-lived 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 assets' estimated fair value. The fair value of the long-lived assets is estimated using a discounted cash flow model based on the best information available, including market data and salon level revenues and expenses. Long-lived asset impairment charges are recorded within depreciation and amortization in the unaudited Condensed Consolidated Statement of Operations. | |||||||
Accounting Standards Recently Issued But Not Yet Adopted by the Company | Accounting Standards Recently Issued But Not Yet Adopted by the Company: | ||||||
Revenue from Contracts with Customers | |||||||
In May 2014, the Financial Accounting Standards Board (FASB) issued updated guidance for revenue recognition. The updated accounting guidance provides a comprehensive new revenue recognition model that requires a Company to recognize revenue to depict the exchange for goods or services to a customer at an amount that reflects the consideration it expects to receive for those goods or services. Currently the guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. This guidance will be effective in the first quarter of fiscal year 2018, however, FASB has proposed deferring the effective date until the first quarter of fiscal year 2019. This update permits the use of either the retrospective or simplified transition method. The Company does not expect the adoption of this update to have a material impact on the Company's consolidated financial statements and is evaluating the impact this guidance will have on its related disclosures. | |||||||
Earnings Per Share | Impacting the net loss available to common shareholders was a $1.5 million error related to prior periods that was recorded during the second quarter of fiscal year 2015, related to an understatement of self-insurance accruals in prior periods. Because this item was not material to the Company’s consolidated financial statements for any prior periods or the second quarter of fiscal year 2015, the Company recorded a correcting cumulative adjustment during the second quarter of fiscal year 2015. The impact of this item for the nine months ended March 31, 2015 on the Company’s Consolidated Statement of Operations increased site operating expense and net loss from continuing operations by $1.5 million. |
BASIS_OF_PRESENTATION_OF_UNAUD2
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 9 Months Ended | ||||||
Mar. 31, 2015 | |||||||
Accounting Policies [Abstract] | |||||||
Stock-Based Employee Compensation | A summary of equity awards granted is as follows: | ||||||
For the Periods Ended March 31, 2015 | |||||||
Three Months | Nine Months | ||||||
Restricted stock units | 176,263 | 477,771 | |||||
Equity-based stock appreciation rights | 363,970 | 814,304 | |||||
Performance share units | — | 199,337 | |||||
GOODWILL_AND_OTHER_INTANGIBLES1
GOODWILL AND OTHER INTANGIBLES: (Tables) | 9 Months Ended | ||||||||||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||
Schedule of the Company's recorded goodwill | The table below contains details related to the Company’s recorded goodwill: | ||||||||||||||||||||||||
31-Mar-15 | 30-Jun-14 | ||||||||||||||||||||||||
Gross | Accumulated | Net (2) | Gross | Accumulated | Net (2) | ||||||||||||||||||||
Carrying | Impairment (1) | Carrying | Impairment (1) | ||||||||||||||||||||||
Value (3) | Value (3) | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Goodwill | $ | 671,819 | $ | (253,661 | ) | $ | 418,158 | $ | 678,925 | $ | (253,661 | ) | $ | 425,264 | |||||||||||
_____________________________ | |||||||||||||||||||||||||
-1 | The table below contains additional information regarding accumulated impairment losses: | ||||||||||||||||||||||||
Fiscal Year | Impairment Charge | Reporting Unit | |||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
2009 | $ | (41,661 | ) | International | |||||||||||||||||||||
2010 | (35,277 | ) | North American Premium | ||||||||||||||||||||||
2011 | (74,100 | ) | North American Value | ||||||||||||||||||||||
2012 | (67,684 | ) | North American Premium | ||||||||||||||||||||||
2014 | (34,939 | ) | North American Premium | ||||||||||||||||||||||
Total | $ | (253,661 | ) | ||||||||||||||||||||||
_____________________________ | |||||||||||||||||||||||||
(2) Remaining net goodwill relates to the Company’s North American Value reporting unit. | |||||||||||||||||||||||||
(3) The change in the gross carrying value of goodwill relates to foreign currency. | |||||||||||||||||||||||||
Schedule of other intangible assets | The table below presents other intangible assets: | ||||||||||||||||||||||||
31-Mar-15 | 30-Jun-14 | ||||||||||||||||||||||||
Cost | Accumulated | Net | Cost | Accumulated | Net | ||||||||||||||||||||
Amortization | Amortization | ||||||||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||||||||
Amortized intangible assets: | |||||||||||||||||||||||||
Brand assets and trade names | $ | 8,252 | $ | (3,384 | ) | $ | 4,868 | $ | 9,203 | $ | (3,510 | ) | $ | 5,693 | |||||||||||
Franchise agreements | 9,971 | (6,769 | ) | 3,202 | 11,063 | (7,163 | ) | 3,900 | |||||||||||||||||
Lease intangibles | 14,570 | (7,759 | ) | 6,811 | 14,775 | (7,326 | ) | 7,449 | |||||||||||||||||
Other | 4,693 | (2,291 | ) | 2,402 | 5,074 | (2,304 | ) | 2,770 | |||||||||||||||||
$ | 37,486 | $ | (20,203 | ) | $ | 17,283 | $ | 40,115 | $ | (20,303 | ) | $ | 19,812 | ||||||||||||
FINANCING_ARRANGEMENTS_Tables
FINANCING ARRANGEMENTS: (Tables) | 9 Months Ended | ||||||||||||
Mar. 31, 2015 | |||||||||||||
Debt Disclosure [Abstract] | |||||||||||||
Schedule of long-term debt | The Company’s long-term debt consisted of the following: | ||||||||||||
Amounts outstanding | |||||||||||||
Maturity Dates | Interest Rate | March 31, | June 30, | ||||||||||
2015 | 2014 | ||||||||||||
(fiscal year) | (Dollars in thousands) | ||||||||||||
Convertible senior notes | 2015 | 5.00% | $ | — | $ | 172,246 | |||||||
Senior term notes | 2018 | 5.75 | 120,000 | 120,000 | |||||||||
Revolving credit facility | 2018 | — | — | — | |||||||||
Equipment and leasehold notes payable | 2015 - 2016 | 4.90 - 8.75 | 4 | 1,257 | |||||||||
120,004 | 293,503 | ||||||||||||
Less current portion | (4 | ) | (173,501 | ) | |||||||||
Long-term portion | $ | 120,000 | $ | 120,002 | |||||||||
SEGMENT_INFORMATION_Tables
SEGMENT INFORMATION: (Tables) | 9 Months Ended | ||||||||||||||||
Mar. 31, 2015 | |||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||
Schedule of Company's reportable operating segments | As of March 31, 2015, the Company’s reportable operating segments consisted of the following salons: | ||||||||||||||||
Company-owned | Franchised | Total | |||||||||||||||
North American Value | 5,962 | 2,273 | 8,235 | ||||||||||||||
North American Premium | 755 | — | 755 | ||||||||||||||
International | 362 | — | 362 | ||||||||||||||
Total | 7,079 | 2,273 | 9,352 | ||||||||||||||
Schedule of summarized financial information of reportable operating segments | The Company's operating segment results were as follows: | ||||||||||||||||
For the Three Months | For the Nine Months | ||||||||||||||||
Ended March 31, | Ended March 31, | ||||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||||
(Dollars in thousands) | |||||||||||||||||
Revenues: | |||||||||||||||||
North American Value | $ | 349,443 | $ | 358,788 | $ | 1,049,552 | $ | 1,066,116 | |||||||||
North American Premium | 76,817 | 82,878 | 234,603 | 251,862 | |||||||||||||
International | 27,700 | 29,895 | 90,243 | 90,533 | |||||||||||||
Total segment revenues | $ | 453,960 | $ | 471,561 | $ | 1,374,398 | $ | 1,408,511 | |||||||||
Operating income (loss): | |||||||||||||||||
North American Value | $ | 33,098 | $ | 29,989 | $ | 88,781 | $ | 86,826 | |||||||||
North American Premium (1) | (4,154 | ) | (3,853 | ) | (11,212 | ) | (44,001 | ) | |||||||||
International | 398 | (3,109 | ) | 1,424 | (2,871 | ) | |||||||||||
Total segment operating income | 29,342 | 23,027 | 78,993 | 39,954 | |||||||||||||
Unallocated Corporate | (24,087 | ) | (26,248 | ) | (76,560 | ) | (76,406 | ) | |||||||||
Operating income (loss) | $ | 5,255 | $ | (3,221 | ) | $ | 2,433 | $ | (36,452 | ) | |||||||
_____________________________ | |||||||||||||||||
-1 | The nine months ended March 31, 2014 includes a non-cash goodwill impairment charge of $34.9 million. |
BASIS_OF_PRESENTATION_OF_UNAUD3
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2014 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected dividend rate | 0.00% | ||||
Expected volatility rate | 38.00% | ||||
Stock-based compensation | $2,300,000 | $1,300,000 | $6,342,000 | $4,899,000 | |
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grants in the period | 176,263 | 477,771 | |||
Stock Appreciation Rights (SARs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grants in the period | 363,970 | 814,304 | |||
Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grants in the period | 0 | 199,337 | |||
Performance Shares | Long term incentive plan 2004 [Member] | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Grants in the period | 100,000 | ||||
Award requisite service period | 3 years | ||||
Compensation not yet recognized | $1,900,000 | $1,900,000 |
INVESTMENT_IN_AFFILIATES_Detai
INVESTMENT IN AFFILIATES: (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2014 | |
Investment in affiliates | |||||
Investment in affiliates | $17,024,000 | $17,024,000 | $28,611,000 | ||
Equity in income (loss), net of income taxes | -285,000 | 23,000 | -11,865,000 | 4,762,000 | |
Empire Education Group Inc | |||||
Investment in affiliates | |||||
Equity Method Investment, Ownership Percentage | 54.60% | 54.60% | |||
Investment in affiliates | 16,500,000 | 16,500,000 | |||
Equity Method Investment Voting Control Held by Investee | 51.00% | 51.00% | |||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 6,900,000 | ||||
Non-cash impairment charge | 4,700,000 | ||||
Equity in income (loss), net of income taxes | -300,000 | 0 | -7,200,000 | 1,700,000 | |
Yamano Holding Corporation | MY Style | |||||
Investment in affiliates | |||||
Equity in income (loss), net of income taxes | $3,100,000 | ||||
Empire Education Group Inc | |||||
Investment in affiliates | |||||
Number of members appointed to board of directors by EGG | 4 | ||||
Number of members on board of directors | 5 |
EARNINGS_PER_SHARE_Details
EARNINGS PER SHARE: (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Share data, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Awards excluded from earnings per share calculations | ||||
Awards excluded from diluted earnings per share computation (in shares) | 210,023 | 142,536 | 187,959 | 124,189 |
Equity Based Compensation Awards | ||||
Awards excluded from earnings per share calculations | ||||
Awards excluded from diluted earnings per share computation (in shares) | 1,481,206 | 1,936,388 | 1,176,364 | 1,712,855 |
Shares issuable upon conversion of debt | ||||
Awards excluded from earnings per share calculations | ||||
Awards excluded from diluted earnings per share computation (in shares) | 11,316,328 | 619,507 | 11,304,707 | |
Scenario, Adjustment | Adjustment Prior Period Errors Net Income | ||||
Awards excluded from earnings per share calculations | ||||
Quantifying Misstatement in Current Year Financial Statements, Amount | -1.5 | |||
Scenario, Adjustment | Adjustment Prior Period Errors Site Operating Expenses | ||||
Awards excluded from earnings per share calculations | ||||
Quantifying Misstatement in Current Year Financial Statements, Amount | 1.5 |
SHAREHOLDERS_EQUITY_Details
SHAREHOLDERS' EQUITY: (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | Apr. 21, 2015 | |
Additional Paid-In Capital: | |||||
Increase (decrease) in additional paid-in capital | ($26,600,000) | ||||
Repurchase of common stock | -10,000,000 | -32,890,000 | 0 | ||
Stock-based compensation | 2,300,000 | 1,300,000 | 6,342,000 | 4,899,000 | |
Repurchase of common stock (shares) | 610,346 | 2,147,744 | |||
Outstanding amount remaining under the approved stock repurchase program, | 25,900,000 | 25,900,000 | |||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Stock Repurchase Program, Authorized Amount | $50,000,000 |
INCOME_TAXES_Details
INCOME TAXES: (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 | |
(Benefit) provision for income taxes | ||||
Income tax (benefit) expense | $6,797,000 | $857,000 | $15,865,000 | $72,812,000 |
Effective tax rate (as a percent) | 201.60% | -9.30% | -386.70% | -142.00% |
Valuation Allowance [Line Items] | ||||
Deferred Income Tax Expense (Benefit) | 12,631,000 | 68,669,000 | ||
Indefinite-lived Intangible Assets | ||||
Valuation Allowance [Line Items] | ||||
Deferred Income Tax Expense (Benefit) | 4,300,000 | 10,900,000 | ||
CANADA | ||||
Valuation Allowance [Line Items] | ||||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | $2,000,000 |
COMMITMENTS_AND_CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES: (Details) | 9 Months Ended |
Mar. 31, 2015 | |
defendant | |
Commitments and Contingencies Disclosure [Abstract] | |
Number of current and former directors and officers who are named defendants | 9 |
GOODWILL_AND_OTHER_INTANGIBLES2
GOODWILL AND OTHER INTANGIBLES: (Details) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 | Jun. 30, 2012 | Jun. 30, 2010 | Jun. 30, 2011 | Jun. 30, 2009 |
In Thousands, unless otherwise specified | ||||||
Goodwill | ||||||
Goodwill, Gross | $671,819 | $678,925 | ||||
Accumulated Impairment | -253,661 | -253,661 | ||||
Goodwill | 418,158 | 425,264 | ||||
North American Premium | ||||||
Goodwill | ||||||
Accumulated Impairment | -34,939 | -67,684 | -35,277 | |||
North American Value | ||||||
Goodwill | ||||||
Accumulated Impairment | -74,100 | |||||
International | ||||||
Goodwill | ||||||
Accumulated Impairment | ($41,661) |
GOODWILL_AND_OTHER_INTANGIBLES3
GOODWILL AND OTHER INTANGIBLES: (Details 2) (USD $) | Mar. 31, 2015 | Jun. 30, 2014 |
In Thousands, unless otherwise specified | ||
Amortized intangible assets: | ||
Other intangibles, cost | $37,486 | $40,115 |
Other intangibles, accumulated amortization | -20,203 | -20,303 |
Other intangibles, net | 17,283 | 19,812 |
Brand assets and trade names | ||
Amortized intangible assets: | ||
Other intangibles, cost | 8,252 | 9,203 |
Other intangibles, accumulated amortization | -3,384 | -3,510 |
Other intangibles, net | 4,868 | 5,693 |
Franchise agreements | ||
Amortized intangible assets: | ||
Other intangibles, cost | 9,971 | 11,063 |
Other intangibles, accumulated amortization | -6,769 | -7,163 |
Other intangibles, net | 3,202 | 3,900 |
Lease intangibles | ||
Amortized intangible assets: | ||
Other intangibles, cost | 14,570 | 14,775 |
Other intangibles, accumulated amortization | -7,759 | -7,326 |
Other intangibles, net | 6,811 | 7,449 |
Other | ||
Amortized intangible assets: | ||
Other intangibles, cost | 4,693 | 5,074 |
Other intangibles, accumulated amortization | -2,291 | -2,304 |
Other intangibles, net | $2,402 | $2,770 |
FINANCING_ARRANGEMENTS_Details
FINANCING ARRANGEMENTS: (Details) (USD $) | 9 Months Ended | 1 Months Ended | 3 Months Ended | 1 Months Ended | |||
Mar. 31, 2015 | Mar. 31, 2014 | Jul. 31, 2014 | Mar. 31, 2014 | Nov. 30, 2013 | Jun. 30, 2014 | Jul. 31, 2009 | |
Long-term debt | |||||||
Net carrying amount of long-term debt | $120,004,000 | $293,503,000 | |||||
Less current portion | -4,000 | -173,501,000 | |||||
Long-term debt and capital lease obligations | 120,000,000 | 120,002,000 | |||||
Convertible Senior Debt | |||||||
Repayments of Long-term Debt, Long-term Capital Lease Obligations, and Capital Securities | 173,749,000 | 5,234,000 | |||||
Senior Term Notes | |||||||
Long-term Debt, Gross | 0 | 118,058,000 | |||||
Convertible senior notes | |||||||
Long-term debt | |||||||
Interest rate percentage | 5.00% | 5.00% | 5.00% | ||||
Net carrying amount of long-term debt | 0 | 172,246,000 | |||||
Convertible Senior Debt | |||||||
Repayments of Long-term Debt, Long-term Capital Lease Obligations, and Capital Securities | 172,500,000 | ||||||
Interest expense related to contractual interest coupon | 400,000 | 6,500,000 | 2,200,000 | ||||
Interest cost related to amortization of the discount | 300,000 | 4,300,000 | 1,400,000 | ||||
Senior Term Notes | |||||||
Debt Instrument, Face Amount | 172,500,000 | ||||||
Senior term notes | |||||||
Long-term debt | |||||||
Interest rate percentage | 5.75% | 5.75% | |||||
Net carrying amount of long-term debt | 120,000,000 | 120,000,000 | |||||
Senior Term Notes | |||||||
Long-term Debt, Gross | 118,100,000 | ||||||
Debt Instrument, Face Amount | 120,000,000 | ||||||
Revolving credit facility | |||||||
Long-term debt | |||||||
Net carrying amount of long-term debt | 0 | 0 | |||||
Revolving Credit Facility | |||||||
Line of Credit Facility, Amount Outstanding | 0 | 0 | |||||
Outstanding standby letters of credit | 2,100,000 | 2,200,000 | |||||
Revolving credit facility remaining borrowing capacity | 397,900,000 | 397,800,000 | |||||
Equipment and leasehold notes payable | |||||||
Long-term debt | |||||||
Interest rate percentage, minimum | 4.90% | ||||||
Interest rate percentage, maximum | 8.75% | ||||||
Net carrying amount of long-term debt | $4,000 | $1,257,000 |
FAIR_VALUE_MEASUREMENTS_Detail
FAIR VALUE MEASUREMENTS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2015 | Mar. 31, 2015 | Mar. 31, 2014 | Jun. 30, 2014 | |
Assets and liabilities measured at fair value on a recurring and nonrecurring basis | ||||
Debt Instrument, Fair Value Disclosure | $119,400,000 | $119,400,000 | $292,500,000 | |
Debt, Long-term and Short-term, Combined Amount | 120,000,000 | 120,000,000 | 293,500,000 | |
Salon asset impairment | 2,400,000 | 9,337,000 | 15,275,000 | |
Empire Education Group Inc | ||||
Assets and liabilities measured at fair value on a recurring and nonrecurring basis | ||||
Investments in affiliates, fair value | 16,800,000 | 16,800,000 | ||
Non-cash impairment charge | $4,700,000 |
DISCONTINUED_OPERATIONS_Detail
DISCONTINUED OPERATIONS (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Discontinued Operations and Disposal Groups [Abstract] | ||||
Income from discontinued operations, net of taxes | $0 | $609 | $0 | $609 |
SEGMENT_INFORMATION_Schedule_o
SEGMENT INFORMATION: Schedule of Franchisor Disclosure (Details) | Mar. 31, 2015 |
salon | |
Franchisor Disclosure [Line Items] | |
Number of stores | 9,352 |
North American Value | |
Franchisor Disclosure [Line Items] | |
Number of stores | 8,235 |
North American Premium | |
Franchisor Disclosure [Line Items] | |
Number of stores | 755 |
International | |
Franchisor Disclosure [Line Items] | |
Number of stores | 362 |
Company-owned | |
Franchisor Disclosure [Line Items] | |
Number of stores | 7,079 |
Company-owned | North American Value | |
Franchisor Disclosure [Line Items] | |
Number of stores | 5,962 |
Company-owned | North American Premium | |
Franchisor Disclosure [Line Items] | |
Number of stores | 755 |
Company-owned | International | |
Franchisor Disclosure [Line Items] | |
Number of stores | 362 |
Franchised | |
Franchisor Disclosure [Line Items] | |
Number of stores | 2,273 |
Franchised | North American Value | |
Franchisor Disclosure [Line Items] | |
Number of stores | 2,273 |
Franchised | North American Premium | |
Franchisor Disclosure [Line Items] | |
Number of stores | 0 |
Franchised | International | |
Franchisor Disclosure [Line Items] | |
Number of stores | 0 |
SEGMENT_INFORMATION_Details
SEGMENT INFORMATION: (Details) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Mar. 31, 2015 | Mar. 31, 2014 | Mar. 31, 2015 | Mar. 31, 2014 |
Segment Reporting Information [Line Items] | ||||
Total revenues | $453,960 | $471,561 | $1,374,398 | $1,408,511 |
Operating (loss) income | 5,255 | -3,221 | 2,433 | -36,452 |
Goodwill impairment | 0 | 0 | 0 | 34,939 |
North American Value [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 349,443 | 358,788 | 1,049,552 | 1,066,116 |
Operating (loss) income | 33,098 | 29,989 | 88,781 | 86,826 |
North American Premium | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 76,817 | 82,878 | 234,603 | 251,862 |
Operating (loss) income | -4,154 | -3,853 | -11,212 | -44,001 |
International | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 27,700 | 29,895 | 90,243 | 90,533 |
Operating (loss) income | 398 | -3,109 | 1,424 | -2,871 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Operating (loss) income | 29,342 | 23,027 | 78,993 | 39,954 |
Unallocated Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Operating (loss) income | ($24,087) | ($26,248) | ($76,560) | ($76,406) |