Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2016 | Apr. 21, 2016 | |
Document and Entity Information | ||
Entity Registrant Name | REGIS CORP | |
Entity Central Index Key | 716,643 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --06-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 46,450,807 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Jun. 30, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 141,131 | $ 212,279 |
Receivables, net | 23,699 | 24,631 |
Inventories | 139,614 | 128,610 |
Other current assets | 56,986 | 62,762 |
Total current assets | 361,430 | 428,282 |
Property and equipment, net | 186,644 | 218,157 |
Goodwill | 417,273 | 418,953 |
Other intangibles, net | 15,600 | 17,069 |
Investment in affiliates | 525 | 15,321 |
Other assets | 52,930 | 64,233 |
Total assets | 1,034,402 | 1,162,015 |
Current liabilities: | ||
Long-term debt and capital lease obligations, current | 0 | 2 |
Accounts payable | 54,229 | 63,302 |
Accrued expenses | 145,434 | 153,362 |
Total current liabilities | 199,663 | 216,666 |
Long-term debt | 120,248 | 120,000 |
Other noncurrent liabilities | 199,320 | 197,905 |
Total liabilities | $ 519,231 | $ 534,571 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Common stock, $0.05 par value; issued and outstanding 46,449,991 and 53,664,366 common shares at March 31, 2016 and June 30, 2015, respectively | $ 2,323 | $ 2,683 |
Additional paid-in capital | 209,194 | 298,396 |
Accumulated other comprehensive income | 4,705 | 9,506 |
Retained earnings | 298,949 | 316,859 |
Total shareholders’ equity | 515,171 | 627,444 |
Total liabilities and shareholders’ equity | $ 1,034,402 | $ 1,162,015 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Mar. 31, 2016 | Jun. 30, 2015 |
Statement of Financial Position [Abstract] | ||
Common stock par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock issued (in shares) | 46,449,991 | 53,664,366 |
Common stock outstanding (in shares) | 46,449,991 | 53,664,366 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Revenues: | ||||
Service | $ 344,063 | $ 352,015 | $ 1,034,751 | $ 1,067,079 |
Product | 86,722 | 91,143 | 272,977 | 274,596 |
Royalties and fees | 11,780 | 10,802 | 35,434 | 32,723 |
Total revenues | 442,565 | 453,960 | 1,343,162 | 1,374,398 |
Operating expenses: | ||||
Cost of service | 217,046 | 216,830 | 651,486 | 659,736 |
Cost of product | 43,000 | 45,117 | 136,420 | 138,924 |
Site operating expenses | 42,912 | 47,116 | 138,145 | 144,057 |
General and administrative | 42,606 | 44,082 | 134,554 | 135,934 |
Rent | 74,388 | 76,369 | 223,666 | 230,955 |
Depreciation and amortization | 16,992 | 19,044 | 51,877 | 60,815 |
Total operating expenses | 436,944 | 448,558 | 1,336,148 | 1,370,421 |
Operating income | 5,621 | 5,402 | 7,014 | 3,977 |
Other income (expense): | ||||
Interest expense | (2,405) | (2,273) | (7,141) | (7,843) |
Interest income and other, net | 1,017 | 390 | 2,958 | 1,307 |
Income (loss) before income taxes and equity in loss of affiliated companies | 4,233 | 3,519 | 2,831 | (2,559) |
Income taxes | (6,317) | (7,997) | (4,926) | (16,845) |
Equity in loss of affiliated companies, net of income taxes | 0 | (285) | (14,783) | (11,865) |
Net loss | $ (2,084) | $ (4,763) | $ (16,878) | $ (31,269) |
Net loss per share: | ||||
Basic and diluted (in dollars per share) | $ (0.04) | $ (0.09) | $ (0.34) | $ (0.57) |
Weighted average common and common equivalent shares outstanding: | ||||
Basic and diluted (in shares) | 46,991 | 54,837 | 49,287 | 55,248 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (2,084) | $ (4,763) | $ (16,878) | $ (31,269) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments during the period | 1,806 | (6,851) | (4,801) | (15,696) |
Other comprehensive income (loss) | 1,806 | (6,851) | (4,801) | (15,696) |
Comprehensive loss | $ (278) | $ (11,614) | $ (21,679) | $ (46,965) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Statement of Cash Flows [Abstract] | ||
Net loss | $ (16,878) | $ (31,269) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 44,261 | 51,478 |
Equity in loss of affiliated companies | 14,783 | 11,865 |
Deferred income taxes | 3,607 | 13,393 |
Salon asset impairment | 7,616 | 9,337 |
Gain on sale of salon assets | (827) | (723) |
Stock-based compensation | 7,492 | 6,342 |
Amortization of debt discount and financing costs | 1,249 | 1,336 |
Other non-cash items affecting earnings | 195 | 266 |
Changes in operating assets and liabilities, excluding the effects of asset sales | (22,606) | 10,302 |
Net cash provided by operating activities | 38,892 | 72,327 |
Cash flows from investing activities: | ||
Capital expenditures | (22,689) | (29,689) |
Proceeds from sale of assets | 1,472 | 1,961 |
Change in restricted cash | 6,985 | 0 |
Proceeds from company-owned life insurance policies | 2,948 | 0 |
Net cash used in investing activities | (11,284) | (27,728) |
Cash flows from financing activities: | ||
Repayments of long-term debt and capital lease obligations | (2) | (173,749) |
Repurchase of common stock | (97,033) | (32,890) |
Purchase of noncontrolling interest | (684) | 0 |
Net cash used in financing activities | (97,719) | (206,639) |
Effect of exchange rate changes on cash and cash equivalents | (1,037) | (3,636) |
Decrease in cash and cash equivalents | (71,148) | (165,676) |
Cash and cash equivalents: | ||
Beginning of period | 212,279 | 378,627 |
End of period | $ 141,131 | $ 212,951 |
BASIS OF PRESENTATION OF UNAUDI
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: | 9 Months Ended |
Mar. 31, 2016 | |
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, 2016 and for the three and nine months ended March 31, 2016 and 2015 reflect, in the opinion of management, all adjustments necessary to fairly state the consolidated financial position of the Company as of March 31, 2016 and the consolidated results of its operations, comprehensive loss 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, 2015 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, 2015 and other documents filed or furnished with the Securities and Exchange Commission (SEC) during the current fiscal year. Stock-Based Employee Compensation: During the nine months ended March 31, 2016 , the Company granted 308,055 restricted stock units (RSUs), 690,461 equity-based stock appreciation rights (SARs) and 410,153 performance share units (PSUs), which includes 118,967 incremental performance share units earned in connection with the achievement of fiscal year 2015 performance metrics. The Company did not grant any equity awards during the three months ended March 31, 2016 . During the nine months ended March 31, 2016 , the volatility assumption was updated from 38% to 30% . Otherwise there were no significant changes to the assumptions or methodology 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. Total compensation cost for stock-based payment arrangements totaled $2.5 and $2.3 million for the three months ended March 31, 2016 and 2015 , respectively, and $7.5 and $6.3 million for the nine months ended March 31, 2016 and 2015 , respectively, recorded within general and administrative expense on the unaudited Condensed Consolidated Statement of Operations. 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 estimated fair value of the assets. The fair value of the long-lived assets is estimated using a discounted cash flow model based on the best information available, including salon level revenues and expenses. Long-lived asset impairment charges of $7.6 and $9.3 million have been recorded within depreciation and amortization in the Consolidated Statement of Operations for the nine months ended March 31, 2016 and 2015 , respectively . Revisions: As disclosed in Note 1 of the Form 10-K for the fiscal year ended June 30, 2015, the Company revised certain prior year amounts. The following is a summary of the impact the revisions had on net loss: For the Periods Ended March 31, 2015 Three Months Nine Months (Dollars in thousands) Net loss, as reported $ (3,710 ) $ (31,833 ) Revisions: Deferred rent, pre-tax (1) 147 (42 ) Previous out of period items, pre-tax (2) — 1,586 Tax impact (1,200 ) (980 ) Total revision impact (1,053 ) 564 Net loss, as revised $ (4,763 ) $ (31,269 ) _______________________________________________________________________________ (1) The Company recognizes rental expense on a straight-line basis at the time the leased space becomes available to the Company. During the fourth quarter of fiscal year 2015, the Company determined its deferred rent balance was understated. Accordingly, the unaudited Condensed Consolidated Financial Statements have been revised to correctly state its deferred rent balances and rent expense. This revision had no impact on cash provided by operations or cash and cash equivalents for the quarter. (2) Also, in the fourth quarter of fiscal year 2015, the Company revised certain prior year amounts to correctly recognize understatements of self-insurance accruals. This revision had no impact on cash provided by operations or cash and cash equivalents for the quarter. The Company assessed the materiality of these misstatements on prior periods' financial statements in accordance with SEC Staff Accounting Bulletin ("SAB") No. 99, Materiality, codified in ASC 250 ("ASC 250"), Presentation of Financial Statements, and concluded these misstatements were not material to any prior annual or interim periods. Accordingly, in accordance with ASC 250 (SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), the unaudited Condensed Consolidated Financial Statements as of March 31, 2015 , which are presented herein, have been revised. The following are selected line items from the Company's unaudited Condensed Consolidated Financial Statements illustrating the effect of these revisions: CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (Dollars in thousands, except per share data) For the Periods Ended March 31, 2015 Three Months Nine Months As Previously Reported Revision As Revised As Previously Reported Revision As Revised Site operating expenses $ 47,116 $ — $ 47,116 $ 145,643 $ (1,586 ) $ 144,057 Rent 76,516 (147 ) 76,369 230,913 42 230,955 Income (loss) before income taxes and equity in loss of affiliated companies 3,372 147 3,519 (4,103 ) 1,544 (2,559 ) Income taxes (6,797 ) (1,200 ) (7,997 ) (15,865 ) (980 ) (16,845 ) Net loss $ (3,710 ) $ (1,053 ) $ (4,763 ) $ (31,833 ) $ 564 $ (31,269 ) Net loss per share: Basic and diluted earnings per share (1) $ (0.07 ) $ (0.02 ) $ (0.09 ) $ (0.58 ) $ 0.01 $ (0.57 ) _______________________________________________________________________________ (1) Total is a recalculation; line items calculated individually may not sum to total due to rounding. CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) (Dollars in thousands) For the Periods Ended March 31, 2015 Three Months Nine Months As Previously Reported Revision As Revised As Previously Reported Revision As Revised Net loss $ (3,710 ) $ (1,053 ) $ (4,763 ) $ (31,833 ) $ 564 $ (31,269 ) Comprehensive loss $ (10,561 ) $ (1,053 ) $ (11,614 ) $ (47,529 ) $ 564 $ (46,965 ) CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (Dollars in thousands) Nine Months Ended March 31, 2015 As Previously Reported Revision As Revised Cash flows from operating activities: Net loss $ (31,833 ) $ 564 $ (31,269 ) Deferred income taxes 12,631 762 13,393 Changes in operating assets and liabilities, excluding the effects of acquisitions 11,628 (1,326 ) 10,302 Prior Period Adjustments: During the three months ended March 31, 2016, the Company identified certain errors related to the overstatement of interest expense, insurance expense and telephone expense, and the understatement of depreciation expense in prior periods. Because these items were not material to the Company's consolidated financial statements for any prior periods or the current quarter, the Company recorded a correcting cumulative adjustment during the three months ended March 31, 2016. The impact of these items on the Company's Consolidated Statement of Operations decreased interest expense by $0.6 million , decreased site operating expenses by $0.5 million , increased depreciation expense by $0.3 million , and decreased net loss by $0.8 million . Recent Accounting Standards Adopted by the Company: Balance Sheet Classification of Deferred Taxes In November 2015, the Financial Accounting Standards Board (FASB) issued updated guidance requiring all deferred tax assets and liabilities be presented as noncurrent. The Company early adopted this guidance in the second quarter of fiscal 2016, prospectively. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. Accounting Standards Recently Issued But Not Yet Adopted by the Company: Leases In February 2016, the FASB issued updated guidance requiring organizations that lease assets to recognize the rights and obligations created by those leases on the consolidated balance sheet. The new standard is effective for the Company in the first quarter of fiscal year 2020, with early adoption permitted. The Company is currently evaluating the effect the new standard will have on the Company's consolidated financial statements. Stock Compensation In March 2016, the FASB issued updated guidance simplifying the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the consolidated statement of cash flows. The new standard is effective for the Company in the first quarter of fiscal year 2018, with early adoption permitted. The Company is currently evaluating the effect the new standard will have on the Company's consolidated financial statements. Revenue from Contracts with Customers In May 2014, the 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. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The guidance is effective for the Company in the first quarter of fiscal year 2019, with early adoption permitted at the beginning of fiscal year 2018. The standard allows for either full retrospective adoption, meaning the standard is applied to all of the periods presented, or modified retrospective adoption, meaning the standard is applied only to the most current period presented in the financial statements. 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 effect this guidance will have on its related disclosures. Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued updated guidance requiring debt issuance costs related to a recognized debt liability to be presented in the consolidated balance sheet as a direct reduction from the carrying amount of the debt liability. The guidance is effective for the Company in the first quarter of fiscal year 2017. The Company does not expect the adoption of this guidance to have a material impact on the Company's consolidated financial statements. |
INVESTMENT IN AFFILIATES_
INVESTMENT IN AFFILIATES: | 9 Months Ended |
Mar. 31, 2016 | |
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, 2016 , the Company had a 54.6% ownership interest in EEG and no remaining investment value. The table below summarizes losses recorded by the Company related to EEG: For the Three Months Ended March 31, For the Nine Months Ended March 31, 2016 2015 2016 2015 (Dollars in thousands) Equity losses (1) $ — $ (282 ) $ (1,832 ) $ (7,207 ) Other than temporary impairment — — (12,954 ) (4,654 ) Total losses related to EEG $ — $ (282 ) $ (14,786 ) $ (11,861 ) _____________________________ (1) For the nine months ended March 31, 2015, includes $6.9 million of expense related to a non-cash deferred tax valuation allowance recorded by EEG. The fiscal year 2016 impairment charge resulted from EEG's significantly lower financial projections due to continued declines in enrollment, revenue and profitability. The full impairment of the investment follows previous non-cash impairment charges, EEG's impairment of goodwill and its establishment of a deferred tax valuation allowance in prior quarters. While the Company could be responsible for certain liabilities associated with this venture, the Company does not currently expect them to have a material impact on the Company's financial position. 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. The table below presents the summarized Statement of Operations information for EEG: For the Three Months Ended March 31, For the Nine Months Ended March 31, 2016 2015 2016 2015 (Unaudited) (Dollars in thousands) Gross revenues $ 31,573 $ 38,419 $ 101,237 $ 117,220 Gross profit 2,851 10,078 18,257 29,419 Operating (loss) income (3,288 ) 301 (6,578 ) (403 ) Net loss (2,784 ) (358 ) (6,142 ) (13,365 ) |
EARNINGS PER SHARE_
EARNINGS PER SHARE: | 9 Months Ended |
Mar. 31, 2016 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE: The Company’s basic earnings per share is calculated as net income (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 income 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. In fiscal year 2015, the Company’s diluted earnings per share would have reflected the assumed conversion under the Company’s convertible debt, if the impact was dilutive, along with the exclusion of interest expense, net of taxes. For the three months ended March 31, 2016 and 2015 , 587,992 and 210,023 , respectively, and for the nine months ended March 31, 2016 and 2015 , 497,715 and 187,959 , 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 2,075,264 and 1,481,206 of stock-based awards during the three months ended March 31, 2016 and 2015 , respectively, and 2,166,338 and 1,176,364 of stock-based awards during the nine months ended March 31, 2016 and 2015 , respectively, as they were not dilutive under the treasury stock method. The computation of weighted average shares outstanding for the nine months ended March 31, 2015 also excluded 619,507 of shares from convertible debt as they were not dilutive. |
SHAREHOLDERS' EQUITY_
SHAREHOLDERS' EQUITY: | 9 Months Ended |
Mar. 31, 2016 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY: Additional Paid-In Capital: The $89.2 million decrease in additional paid-in capital during the nine months ended March 31, 2016 was primarily due to $97.0 million of common stock repurchases, partly offset by $7.5 million of stock-based compensation. During the three and nine months ended March 31, 2016 , the Company repurchased 1,392,058 shares for $20.0 million and 7,355,052 shares for $97.0 million , respectively, under a previously approved stock repurchase program. At March 31, 2016 , $64.0 million remains outstanding under the approved stock repurchase program. |
INCOME TAXES_
INCOME TAXES: | 9 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES: During the three and nine months ended March 31, 2016 , the Company recognized tax expense of $6.3 and $4.9 million , respectively, with corresponding effective tax rates of 149.2% and 174.0% . During the three and nine months ended March 31, 2015 , the Company recognized tax expense of $8.0 and $16.8 million , respectively, with corresponding effective tax rates of 227.3% and (658.3)% . The recorded income tax expense and effective tax rates for the three and nine months ended March 31, 2016 and 2015 were different than what would normally be expected due to the impact of the deferred tax valuation allowance. The majority of the tax expense related to non-cash tax expense for tax benefits on certain indefinite-lived assets the Company cannot recognize for reporting purposes. This non-cash impact will continue as long as the Company has a valuation allowance against most of its deferred tax assets and is expected to approximate $8.0 million of expense for the year ending June 30, 2016. The Company’s U.S. federal income tax returns for the fiscal years 2010 through 2013 have been examined by the Internal Revenue Service (IRS) and are moving to the IRS Appeals Division for outstanding IRS proposed audit adjustments. The Company believes its income tax positions will be sustained and will continue to vigorously defend such positions. All earlier tax years are closed to U.S. federal income tax examination. With limited exceptions, the Company is no longer subject to state and international income tax examinations by tax authorities for years before 2011. |
COMMITMENTS AND CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES: | 9 Months Ended |
Mar. 31, 2016 | |
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. See Note 5 to the unaudited Condensed Consolidated Financial Statements for discussion regarding the status of certain issues that have resulted from the IRS' audits. In addition, the Company is currently under payroll tax examination by the IRS for calendar years 2012 through 2014. |
GOODWILL AND OTHER INTANGIBLES_
GOODWILL AND OTHER INTANGIBLES: | 9 Months Ended |
Mar. 31, 2016 | |
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: March 31, 2016 June 30, 2015 Gross Accumulated Impairment (1) Net Gross Accumulated Net (Dollars in thousands) Goodwill $ 670,934 $ (253,661 ) $ 417,273 $ 672,614 $ (253,661 ) $ 418,953 _____________________________ (1) The table below contains additional information regarding accumulated impairment losses: Fiscal Year Impairment Charge Reporting Unit (2) (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) See Note 10 to the unaudited Condensed Consolidated Financial Statements. (3) The change in the gross carrying value of goodwill relates to foreign currency. The table below presents other intangible assets: March 31, 2016 June 30, 2015 Cost (1) Accumulated Amortization (1) Net Cost (1) Accumulated Amortization (1) Net (Dollars in thousands) Amortized intangible assets: Brand assets and trade names $ 8,190 $ (3,670 ) $ 4,520 $ 8,415 $ (3,551 ) $ 4,864 Franchise agreements 9,834 (7,020 ) 2,814 10,093 (6,934 ) 3,159 Lease intangibles 14,546 (8,472 ) 6,074 14,601 (7,960 ) 6,641 Other 5,853 (3,661 ) 2,192 6,115 (3,710 ) 2,405 $ 38,423 $ (22,823 ) $ 15,600 $ 39,224 $ (22,155 ) $ 17,069 _____________________________ (1) The change in the gross carrying value and accumulated amortization of other intangible assets relates to foreign currency. |
FINANCING ARRANGEMENTS_
FINANCING ARRANGEMENTS: | 9 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | FINANCING ARRANGEMENTS: The Company’s long-term debt consists of the following: Amounts outstanding Maturity Dates Interest Rate March 31, June 30, (fiscal year) (Dollars in thousands) Convertible senior notes 2015 5.00% $ — $ — Senior term notes - 5.75% 2018 5.75 — 120,000 Senior term notes - 5.50% 2020 5.50 120,248 — Revolving credit facility 2018 — — — Equipment and leasehold notes payable 2015 - 2016 4.90 - 8.75 — 2 120,248 120,002 Less current portion — (2 ) Long-term portion $ 120,248 $ 120,000 Convertible Senior Notes In July 2014, the Company settled its $172.5 million 5.0% convertible senior notes 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. Interest expense related to the 5.0% contractual interest coupon and amortization of the debt discount was $0.4 and $0.3 million for the nine months ended March 31, 2015 , respectively. Senior Term Notes In December 2015, the Company exchanged its $120.0 million 5.75% senior notes due December 2017 for $123.0 million 5.5% senior notes due December 2019 (Senior Term Notes). The Senior Term Notes were issued at a $3.0 million discount which will be amortized to interest expense over the term of the notes. The Company accounted for this non-cash exchange as a debt modification, as it was with the same lenders and the changes in terms were not considered substantial. Interest on the Senior Term Notes is payable semi-annually in arrears on June 1 and December 1 of each year. The Senior Term Notes are unsecured and not guaranteed by any of the Company’s subsidiaries or any third parties. The following table contains details related to the Company's Senior Term Notes: March 31, 2016 (Dollars in thousands) Principal amount on the Senior Term Notes $ 123,000 Unamortized debt discount (2,752 ) Net carrying amount of Senior Term Notes $ 120,248 Revolving Credit Facility As of March 31, 2016 and June 30, 2015 , the Company had no outstanding borrowings under this facility. Additionally, the Company had outstanding standby letters of credit under the facility of $1.6 and $2.1 million at March 31, 2016 and June 30, 2015 , respectively, primarily related to the Company's self-insurance program. In January 2016, the Company amended its revolving credit facility primarily reducing the borrowing capacity from $400.0 to $200.0 million . Unused available credit under the facility at March 31, 2016 and June 30, 2015 was $198.4 and $397.9 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, 2016 . |
FAIR VALUE MEASUREMENTS_
FAIR VALUE MEASUREMENTS: | 9 Months Ended |
Mar. 31, 2016 | |
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, 2016 and June 30, 2015 , the Company’s cash, cash equivalents, restricted cash, receivables, accounts payable and debt approximated their carrying values. The estimated fair value of the Company's debt is 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 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. The following impairments were based on fair values using Level 3 inputs: For the Three Months Ended March 31, For the Nine Months Ended March 31, 2016 2015 2016 2015 (Dollars in thousands) Long-lived assets (1) $ (2,575 ) $ (2,385 ) $ (7,616 ) $ (9,337 ) Investment in EEG (2) — — (12,954 ) (4,654 ) _____________________________ (1) See Note 1 to the unaudited Condensed Consolidated Financial Statements. (2) See Note 2 to the unaudited Condensed Consolidated Financial Statements. |
SEGMENT INFORMATION_
SEGMENT INFORMATION: | 9 Months Ended |
Mar. 31, 2016 | |
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, 2016 , the Company’s reportable operating segments consisted of the following salons: Company-owned Franchised Total North American Value 5,806 2,454 8,260 North American Premium 702 — 702 International 348 — 348 Total 6,856 2,454 9,310 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 2016 2015 2016 2015 (Dollars in thousands) Revenues: North American Value $ 347,976 $ 349,443 $ 1,046,198 $ 1,049,552 North American Premium 69,451 76,817 215,628 234,603 International 25,138 27,700 81,336 90,243 $ 442,565 $ 453,960 $ 1,343,162 $ 1,374,398 Operating income (loss) (1): North American Value $ 35,706 $ 33,229 $ 94,316 $ 90,060 North American Premium (4,580 ) (4,138 ) (10,903 ) (10,947 ) International (629 ) 398 (1,130 ) 1,424 Total segment operating income 30,497 29,489 82,283 80,537 Unallocated Corporate (24,876 ) (24,087 ) (75,269 ) (76,560 ) Operating income $ 5,621 $ 5,402 $ 7,014 $ 3,977 _____________________________ (1) Amounts for fiscal year 2015 have been revised. See Note 1 to the unaudited Condensed Consolidated Financial Statements. |
BASIS OF PRESENTATION OF UNAU17
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 9 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
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 estimated fair value of the assets. The fair value of the long-lived assets is estimated using a discounted cash flow model based on the best information available, including salon level revenues and expenses. |
Recent Accounting Standards Adopted and Not Yet Adopted by the Company | Leases In February 2016, the FASB issued updated guidance requiring organizations that lease assets to recognize the rights and obligations created by those leases on the consolidated balance sheet. The new standard is effective for the Company in the first quarter of fiscal year 2020, with early adoption permitted. The Company is currently evaluating the effect the new standard will have on the Company's consolidated financial statements. Stock Compensation In March 2016, the FASB issued updated guidance simplifying the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities and classification on the consolidated statement of cash flows. The new standard is effective for the Company in the first quarter of fiscal year 2018, with early adoption permitted. The Company is currently evaluating the effect the new standard will have on the Company's consolidated financial statements. Revenue from Contracts with Customers In May 2014, the 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. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The guidance is effective for the Company in the first quarter of fiscal year 2019, with early adoption permitted at the beginning of fiscal year 2018. The standard allows for either full retrospective adoption, meaning the standard is applied to all of the periods presented, or modified retrospective adoption, meaning the standard is applied only to the most current period presented in the financial statements. 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 effect this guidance will have on its related disclosures. Simplifying the Presentation of Debt Issuance Costs In April 2015, the FASB issued updated guidance requiring debt issuance costs related to a recognized debt liability to be presented in the consolidated balance sheet as a direct reduction from the carrying amount of the debt liability. The guidance is effective for the Company in the first quarter of fiscal year 2017. The Company does not expect the adoption of this guidance to have a material impact on the Company's consolidated financial statements. Balance Sheet Classification of Deferred Taxes In November 2015, the Financial Accounting Standards Board (FASB) issued updated guidance requiring all deferred tax assets and liabilities be presented as noncurrent. The Company early adopted this guidance in the second quarter of fiscal 2016, prospectively. The adoption of this standard did not have a material impact on the Company's consolidated financial statements. |
BASIS OF PRESENTATION OF UNAU18
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Accounting Policies [Abstract] | |
Schedule of error corrections and prior period adjustments | As disclosed in Note 1 of the Form 10-K for the fiscal year ended June 30, 2015, the Company revised certain prior year amounts. The following is a summary of the impact the revisions had on net loss: For the Periods Ended March 31, 2015 Three Months Nine Months (Dollars in thousands) Net loss, as reported $ (3,710 ) $ (31,833 ) Revisions: Deferred rent, pre-tax (1) 147 (42 ) Previous out of period items, pre-tax (2) — 1,586 Tax impact (1,200 ) (980 ) Total revision impact (1,053 ) 564 Net loss, as revised $ (4,763 ) $ (31,269 ) _______________________________________________________________________________ (1) The Company recognizes rental expense on a straight-line basis at the time the leased space becomes available to the Company. During the fourth quarter of fiscal year 2015, the Company determined its deferred rent balance was understated. Accordingly, the unaudited Condensed Consolidated Financial Statements have been revised to correctly state its deferred rent balances and rent expense. This revision had no impact on cash provided by operations or cash and cash equivalents for the quarter. (2) Also, in the fourth quarter of fiscal year 2015, the Company revised certain prior year amounts to correctly recognize understatements of self-insurance accruals. This revision had no impact on cash provided by operations or cash and cash equivalents for the quarter. The Company assessed the materiality of these misstatements on prior periods' financial statements in accordance with SEC Staff Accounting Bulletin ("SAB") No. 99, Materiality, codified in ASC 250 ("ASC 250"), Presentation of Financial Statements, and concluded these misstatements were not material to any prior annual or interim periods. Accordingly, in accordance with ASC 250 (SAB No. 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements), the unaudited Condensed Consolidated Financial Statements as of March 31, 2015 , which are presented herein, have been revised. The following are selected line items from the Company's unaudited Condensed Consolidated Financial Statements illustrating the effect of these revisions: CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (Dollars in thousands, except per share data) For the Periods Ended March 31, 2015 Three Months Nine Months As Previously Reported Revision As Revised As Previously Reported Revision As Revised Site operating expenses $ 47,116 $ — $ 47,116 $ 145,643 $ (1,586 ) $ 144,057 Rent 76,516 (147 ) 76,369 230,913 42 230,955 Income (loss) before income taxes and equity in loss of affiliated companies 3,372 147 3,519 (4,103 ) 1,544 (2,559 ) Income taxes (6,797 ) (1,200 ) (7,997 ) (15,865 ) (980 ) (16,845 ) Net loss $ (3,710 ) $ (1,053 ) $ (4,763 ) $ (31,833 ) $ 564 $ (31,269 ) Net loss per share: Basic and diluted earnings per share (1) $ (0.07 ) $ (0.02 ) $ (0.09 ) $ (0.58 ) $ 0.01 $ (0.57 ) _______________________________________________________________________________ (1) Total is a recalculation; line items calculated individually may not sum to total due to rounding. CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) (Dollars in thousands) For the Periods Ended March 31, 2015 Three Months Nine Months As Previously Reported Revision As Revised As Previously Reported Revision As Revised Net loss $ (3,710 ) $ (1,053 ) $ (4,763 ) $ (31,833 ) $ 564 $ (31,269 ) Comprehensive loss $ (10,561 ) $ (1,053 ) $ (11,614 ) $ (47,529 ) $ 564 $ (46,965 ) CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) (Dollars in thousands) Nine Months Ended March 31, 2015 As Previously Reported Revision As Revised Cash flows from operating activities: Net loss $ (31,833 ) $ 564 $ (31,269 ) Deferred income taxes 12,631 762 13,393 Changes in operating assets and liabilities, excluding the effects of acquisitions 11,628 (1,326 ) 10,302 |
INVESTMENT IN AFFILIATES_ INVES
INVESTMENT IN AFFILIATES: INVESTMENT IN AFFILIATES: (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Investments, All Other Investments [Abstract] | |
Schedule of equity method investments | The table below summarizes losses recorded by the Company related to EEG: For the Three Months Ended March 31, For the Nine Months Ended March 31, 2016 2015 2016 2015 (Dollars in thousands) Equity losses (1) $ — $ (282 ) $ (1,832 ) $ (7,207 ) Other than temporary impairment — — (12,954 ) (4,654 ) Total losses related to EEG $ — $ (282 ) $ (14,786 ) $ (11,861 ) _____________________________ (1) For the nine months ended March 31, 2015, includes $6.9 million of expense related to a non-cash deferred tax valuation allowance recorded by EEG. The table below presents the summarized Statement of Operations information for EEG: For the Three Months Ended March 31, For the Nine Months Ended March 31, 2016 2015 2016 2015 (Unaudited) (Dollars in thousands) Gross revenues $ 31,573 $ 38,419 $ 101,237 $ 117,220 Gross profit 2,851 10,078 18,257 29,419 Operating (loss) income (3,288 ) 301 (6,578 ) (403 ) Net loss (2,784 ) (358 ) (6,142 ) (13,365 ) |
GOODWILL AND OTHER INTANGIBLE20
GOODWILL AND OTHER INTANGIBLES: (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
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: March 31, 2016 June 30, 2015 Gross Accumulated Impairment (1) Net Gross Accumulated Net (Dollars in thousands) Goodwill $ 670,934 $ (253,661 ) $ 417,273 $ 672,614 $ (253,661 ) $ 418,953 _____________________________ (1) The table below contains additional information regarding accumulated impairment losses: Fiscal Year Impairment Charge Reporting Unit (2) (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) See Note 10 to the unaudited Condensed Consolidated Financial Statements. (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: March 31, 2016 June 30, 2015 Cost (1) Accumulated Amortization (1) Net Cost (1) Accumulated Amortization (1) Net (Dollars in thousands) Amortized intangible assets: Brand assets and trade names $ 8,190 $ (3,670 ) $ 4,520 $ 8,415 $ (3,551 ) $ 4,864 Franchise agreements 9,834 (7,020 ) 2,814 10,093 (6,934 ) 3,159 Lease intangibles 14,546 (8,472 ) 6,074 14,601 (7,960 ) 6,641 Other 5,853 (3,661 ) 2,192 6,115 (3,710 ) 2,405 $ 38,423 $ (22,823 ) $ 15,600 $ 39,224 $ (22,155 ) $ 17,069 _____________________________ (1) The change in the gross carrying value and accumulated amortization of other intangible assets relates to foreign currency. |
FINANCING ARRANGEMENTS_ (Tables
FINANCING ARRANGEMENTS: (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | The following table contains details related to the Company's Senior Term Notes: March 31, 2016 (Dollars in thousands) Principal amount on the Senior Term Notes $ 123,000 Unamortized debt discount (2,752 ) Net carrying amount of Senior Term Notes $ 120,248 The Company’s long-term debt consists of the following: Amounts outstanding Maturity Dates Interest Rate March 31, June 30, (fiscal year) (Dollars in thousands) Convertible senior notes 2015 5.00% $ — $ — Senior term notes - 5.75% 2018 5.75 — 120,000 Senior term notes - 5.50% 2020 5.50 120,248 — Revolving credit facility 2018 — — — Equipment and leasehold notes payable 2015 - 2016 4.90 - 8.75 — 2 120,248 120,002 Less current portion — (2 ) Long-term portion $ 120,248 $ 120,000 |
FAIR VALUE MEASUREMENTS_ (Table
FAIR VALUE MEASUREMENTS: (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of impairments based on fair values using Level 3 inputs | The following impairments were based on fair values using Level 3 inputs: For the Three Months Ended March 31, For the Nine Months Ended March 31, 2016 2015 2016 2015 (Dollars in thousands) Long-lived assets (1) $ (2,575 ) $ (2,385 ) $ (7,616 ) $ (9,337 ) Investment in EEG (2) — — (12,954 ) (4,654 ) |
SEGMENT INFORMATION_ (Tables)
SEGMENT INFORMATION: (Tables) | 9 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Company's reportable operating segments | As of March 31, 2016 , the Company’s reportable operating segments consisted of the following salons: Company-owned Franchised Total North American Value 5,806 2,454 8,260 North American Premium 702 — 702 International 348 — 348 Total 6,856 2,454 9,310 |
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 2016 2015 2016 2015 (Dollars in thousands) Revenues: North American Value $ 347,976 $ 349,443 $ 1,046,198 $ 1,049,552 North American Premium 69,451 76,817 215,628 234,603 International 25,138 27,700 81,336 90,243 $ 442,565 $ 453,960 $ 1,343,162 $ 1,374,398 Operating income (loss) (1): North American Value $ 35,706 $ 33,229 $ 94,316 $ 90,060 North American Premium (4,580 ) (4,138 ) (10,903 ) (10,947 ) International (629 ) 398 (1,130 ) 1,424 Total segment operating income 30,497 29,489 82,283 80,537 Unallocated Corporate (24,876 ) (24,087 ) (75,269 ) (76,560 ) Operating income $ 5,621 $ 5,402 $ 7,014 $ 3,977 _____________________________ (1) Amounts for fiscal year 2015 have been revised. See Note 1 to the unaudited Condensed Consolidated Financial Statements. |
BASIS OF PRESENTATION OF UNAU24
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Jun. 30, 2015 | |
Stock-based employees compensation [Line Items] | |||||
Expected volatility rate | 30.00% | 38.00% | |||
Stock-based compensation | $ 2,500 | $ 2,300 | $ 7,492 | $ 6,342 | |
Tangible Asset Impairment Charges [Abstract] | |||||
Salon asset impairment | $ 2,575 | $ 2,385 | $ 7,616 | $ 9,337 | |
Restricted stock units | |||||
Stock-based employees compensation [Line Items] | |||||
Stock granted (in shares) | 308,055 | ||||
Equity-based stock appreciation rights | |||||
Stock-based employees compensation [Line Items] | |||||
Stock granted (in shares) | 690,461 | ||||
Performance share units | |||||
Stock-based employees compensation [Line Items] | |||||
Stock granted (in shares) | 410,153 | ||||
Performance share units | 2015 Performance Metrics | |||||
Stock-based employees compensation [Line Items] | |||||
Stock granted (in shares) | 118,967 |
BASIS OF PRESENTATION OF UNAU25
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Impact of Revisions (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net loss | $ (2,084) | $ (4,763) | $ (16,878) | $ (31,269) |
Revisions: | ||||
Deferred rent, pre-tax | (74,388) | (76,369) | (223,666) | (230,955) |
Previous out of period items, pre-tax | (42,912) | (47,116) | (138,145) | (144,057) |
Tax impact | $ (6,317) | (7,997) | $ (4,926) | (16,845) |
Prior Period Adjustment | As Previously Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net loss | (3,710) | (31,833) | ||
Revisions: | ||||
Deferred rent, pre-tax | (76,516) | (230,913) | ||
Previous out of period items, pre-tax | (47,116) | (145,643) | ||
Tax impact | (6,797) | (15,865) | ||
Prior Period Adjustment | Revision | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Net loss | (1,053) | 564 | ||
Revisions: | ||||
Deferred rent, pre-tax | 147 | (42) | ||
Previous out of period items, pre-tax | 0 | 1,586 | ||
Tax impact | $ (1,200) | $ (980) |
BASIS OF PRESENTATION OF UNAU26
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Financial Statements Effect of Revisions (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) | ||||
Site operating expenses | $ 42,912 | $ 47,116 | $ 138,145 | $ 144,057 |
Rent | 74,388 | 76,369 | 223,666 | 230,955 |
Loss before income taxes and equity in income of affiliated companies | 4,233 | 3,519 | 2,831 | (2,559) |
Income taxes | (6,317) | (7,997) | (4,926) | (16,845) |
Net loss | $ (2,084) | $ (4,763) | $ (16,878) | $ (31,269) |
Net loss per share: | ||||
Basic and diluted earnings per share (in dollars per share) | $ (0.04) | $ (0.09) | $ (0.34) | $ (0.57) |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) | ||||
Net loss | $ (2,084) | $ (4,763) | $ (16,878) | $ (31,269) |
Comprehensive loss | (278) | (11,614) | (21,679) | (46,965) |
Cash flows from operating activities: | ||||
Net loss | $ (2,084) | (4,763) | (16,878) | (31,269) |
Deferred income taxes | 3,607 | 13,393 | ||
Changes in operating assets and liabilities, excluding the effects of acquisitions | $ (22,606) | 10,302 | ||
Prior Period Adjustment | As Previously Reported | ||||
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) | ||||
Site operating expenses | 47,116 | 145,643 | ||
Rent | 76,516 | 230,913 | ||
Loss before income taxes and equity in income of affiliated companies | 3,372 | (4,103) | ||
Income taxes | (6,797) | (15,865) | ||
Net loss | $ (3,710) | $ (31,833) | ||
Net loss per share: | ||||
Basic and diluted earnings per share (in dollars per share) | $ (0.07) | $ (0.58) | ||
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) | ||||
Net loss | $ (3,710) | $ (31,833) | ||
Comprehensive loss | (10,561) | (47,529) | ||
Cash flows from operating activities: | ||||
Net loss | (3,710) | (31,833) | ||
Deferred income taxes | 12,631 | |||
Changes in operating assets and liabilities, excluding the effects of acquisitions | 11,628 | |||
Prior Period Adjustment | Revision | ||||
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) | ||||
Site operating expenses | 0 | (1,586) | ||
Rent | (147) | 42 | ||
Loss before income taxes and equity in income of affiliated companies | 147 | 1,544 | ||
Income taxes | (1,200) | (980) | ||
Net loss | $ (1,053) | $ 564 | ||
Net loss per share: | ||||
Basic and diluted earnings per share (in dollars per share) | $ (0.02) | $ 0.01 | ||
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (Unaudited) | ||||
Net loss | $ (1,053) | $ 564 | ||
Comprehensive loss | (1,053) | 564 | ||
Cash flows from operating activities: | ||||
Net loss | $ (1,053) | 564 | ||
Deferred income taxes | 762 | |||
Changes in operating assets and liabilities, excluding the effects of acquisitions | $ (1,326) |
BASIS OF PRESENTATION OF UNAU27
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Prior Period Adjustments (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Adjustment for Prior Period Errors, Interest Expense | |
Quantifying Misstatement in Current Year Financial Statements [Line Items] | |
Increase (decrease) to current period statement of operations | $ (0.6) |
Adjustment for Prior Period Errors, Site Operating Expenses | |
Quantifying Misstatement in Current Year Financial Statements [Line Items] | |
Increase (decrease) to current period statement of operations | (0.5) |
Adjustment for Prior Period Errors, Depreciation Expense | |
Quantifying Misstatement in Current Year Financial Statements [Line Items] | |
Increase (decrease) to current period statement of operations | 0.3 |
Adjustment for Prior Period Errors, Net Income | |
Quantifying Misstatement in Current Year Financial Statements [Line Items] | |
Increase (decrease) to current period statement of operations | $ 0.8 |
INVESTMENT IN AFFILIATES_ (Deta
INVESTMENT IN AFFILIATES: (Details) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016USD ($)director | Mar. 31, 2015USD ($) | Mar. 31, 2016USD ($)director | Mar. 31, 2015USD ($) | |
Summarized Income (Loss) Related to EEG: | ||||
Equity in loss of affiliated companies | $ 0 | $ (285,000) | $ (14,783,000) | $ (11,865,000) |
Empire Education Group Inc | ||||
Investment in affiliates | ||||
Ownership percentage | 54.60% | 54.60% | ||
Investment value | $ 0 | $ 0 | ||
Summarized Income (Loss) Related to EEG: | ||||
Equity in loss of affiliated companies | 0 | (282,000) | (1,832,000) | (7,207,000) |
Other than temporary impairment | 0 | 0 | (12,954,000) | (4,654,000) |
Total losses related to EEG | $ 0 | (282,000) | $ (14,786,000) | (11,861,000) |
Non-cash deferred tax asset valuation allowance | 6,900,000 | |||
Voting control, as a percentage | 51.00% | 51.00% | ||
Number of members appointed to board of directors by investee | director | 4 | 4 | ||
Number of board of directors members | director | 5 | 5 | ||
Summarized Statement of Operations (Unaudited) [Abstract] | ||||
Gross revenues | $ 31,573,000 | 38,419,000 | $ 101,237,000 | 117,220,000 |
Gross profit | 2,851,000 | 10,078,000 | 18,257,000 | 29,419,000 |
Operating loss | (3,288,000) | 301,000 | (6,578,000) | (403,000) |
Net loss | $ (2,784,000) | $ (358,000) | $ (6,142,000) | $ (13,365,000) |
EARNINGS PER SHARE_ (Details)
EARNINGS PER SHARE: (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Awards excluded from earnings per share calculations | ||||
Awards excluded from diluted earnings per share computation (in shares) | 587,992 | 210,023 | 497,715 | 187,959 |
Equity Based Compensation Awards | ||||
Awards excluded from earnings per share calculations | ||||
Awards excluded from diluted earnings per share computation (in shares) | 2,075,264 | 1,481,206 | 2,166,338 | 1,176,364 |
Shares issuable upon conversion of debt | ||||
Awards excluded from earnings per share calculations | ||||
Awards excluded from diluted earnings per share computation (in shares) | 619,507 |
SHAREHOLDERS' EQUITY_ (Details)
SHAREHOLDERS' EQUITY: (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Stockholders' Equity Note [Abstract] | ||||
Increase (decrease) in additional paid-in capital | $ (89,200) | |||
Stock repurchased | $ 20,000 | 97,000 | ||
Stock-based compensation | $ 2,500 | $ 2,300 | $ 7,492 | $ 6,342 |
Stock repurchased (in shares) | 1,392,058 | 7,355,052 | ||
Outstanding amount remaining under the approved stock repurchase program | $ 64,000 | $ 64,000 |
INCOME TAXES_ (Details)
INCOME TAXES: (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | Jun. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||||
Income tax (benefit) expense | $ 6,317 | $ 7,997 | $ 4,926 | $ 16,845 | |
Effective tax rate (as a percent) | 149.20% | 227.30% | 174.00% | (658.30%) | |
Forecast | |||||
Subsequent Event [Line Items] | |||||
Non-cash income tax expense | $ 8,000 |
GOODWILL AND OTHER INTANGIBLE32
GOODWILL AND OTHER INTANGIBLES: (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Jun. 30, 2015 | Jun. 30, 2014 | Jun. 30, 2012 | Jun. 30, 2011 | Jun. 30, 2010 | Jun. 30, 2009 |
Goodwill | |||||||
Goodwill, Gross | $ 670,934 | $ 672,614 | |||||
Accumulated Impairment | (253,661) | (253,661) | |||||
Goodwill | $ 417,273 | $ 418,953 | |||||
Operating Segments | International | |||||||
Goodwill | |||||||
Accumulated Impairment | $ (41,661) | ||||||
Operating Segments | North American Premium | |||||||
Goodwill | |||||||
Accumulated Impairment | $ (34,939) | $ (67,684) | $ (35,277) | ||||
Operating Segments | North American Value | |||||||
Goodwill | |||||||
Accumulated Impairment | $ (74,100) |
GOODWILL AND OTHER INTANGIBLE33
GOODWILL AND OTHER INTANGIBLES: (Details 2) - USD ($) $ in Thousands | Mar. 31, 2016 | Jun. 30, 2015 |
Amortized intangible assets: | ||
Other intangibles, cost | $ 38,423 | $ 39,224 |
Other intangibles, accumulated amortization | (22,823) | (22,155) |
Other intangibles, net | 15,600 | 17,069 |
Brand assets and trade names | ||
Amortized intangible assets: | ||
Other intangibles, cost | 8,190 | 8,415 |
Other intangibles, accumulated amortization | (3,670) | (3,551) |
Other intangibles, net | 4,520 | 4,864 |
Franchise agreements | ||
Amortized intangible assets: | ||
Other intangibles, cost | 9,834 | 10,093 |
Other intangibles, accumulated amortization | (7,020) | (6,934) |
Other intangibles, net | 2,814 | 3,159 |
Lease intangibles | ||
Amortized intangible assets: | ||
Other intangibles, cost | 14,546 | 14,601 |
Other intangibles, accumulated amortization | (8,472) | (7,960) |
Other intangibles, net | 6,074 | 6,641 |
Other | ||
Amortized intangible assets: | ||
Other intangibles, cost | 5,853 | 6,115 |
Other intangibles, accumulated amortization | (3,661) | (3,710) |
Other intangibles, net | $ 2,192 | $ 2,405 |
FINANCING ARRANGEMENTS_ (Detail
FINANCING ARRANGEMENTS: (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2016 | Mar. 31, 2015 | Jun. 30, 2015 | Jan. 31, 2016 | Dec. 31, 2015 | Jul. 31, 2014 | |
Long-term debt | ||||||
Net carrying amount of long-term debt | $ 120,248,000 | $ 120,002,000 | ||||
Less current portion | 0 | (2,000) | ||||
Long-term debt | $ 120,248,000 | $ 120,000,000 | ||||
Senior Notes | Convertible senior notes | ||||||
Long-term debt | ||||||
Interest rate percentage | 5.00% | 5.00% | 5.00% | 5.00% | ||
Net carrying amount of long-term debt | $ 0 | $ 0 | ||||
Long-term debt, additional disclosures | ||||||
Debt face amount | $ 172,500,000 | |||||
Interest expense related to contractual interest coupon | $ 400,000 | |||||
Interest cost related to amortization of the discount | $ 300,000 | |||||
Senior Notes | Senior term notes - 5.75% | ||||||
Long-term debt | ||||||
Interest rate percentage | 5.75% | 5.75% | 5.75% | |||
Net carrying amount of long-term debt | $ 0 | $ 120,000,000 | ||||
Long-term debt, additional disclosures | ||||||
Debt face amount | $ 120,000,000 | |||||
Senior Notes | Senior term notes - 5.50% | ||||||
Long-term debt | ||||||
Interest rate percentage | 5.50% | 5.50% | 5.50% | |||
Net carrying amount of long-term debt | $ 120,248,000 | $ 0 | ||||
Long-term debt, additional disclosures | ||||||
Debt face amount | 123,000,000 | $ 123,000,000 | ||||
Unamortized discount | 3,000,000 | |||||
Unamortized debt discount | (2,752,000) | |||||
Revolving Credit Facility | ||||||
Long-term debt | ||||||
Net carrying amount of long-term debt | 0 | 0 | ||||
Long-term debt, additional disclosures | ||||||
Amount outstanding | 0 | 0 | ||||
Outstanding standby letters of credit | 1,600,000 | 2,100,000 | ||||
Maximum borrowing capacity | $ 200,000,000 | $ 400,000,000 | ||||
Revolving credit facility remaining borrowing capacity | $ 198,400,000 | $ 397,900,000 | ||||
Equipment and leasehold notes payable | ||||||
Long-term debt | ||||||
Interest rate percentage, minimum | 4.90% | 4.90% | ||||
Interest rate percentage, maximum | 8.75% | 8.75% | ||||
Net carrying amount of long-term debt | $ 0 | $ 2,000 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Assets and liabilities measured at fair value on a nonrecurring basis | ||||
Long-lived assets | $ (2,575) | $ (2,385) | $ (7,616) | $ (9,337) |
Empire Education Group Inc | ||||
Assets and liabilities measured at fair value on a nonrecurring basis | ||||
Investment in EEG | $ 0 | $ 0 | $ (12,954) | $ (4,654) |
SEGMENT INFORMATION_ Salon Loca
SEGMENT INFORMATION: Salon Locations (Details) | Mar. 31, 2016salon |
Franchisor Disclosure [Line Items] | |
Number of stores | 9,310 |
Company-owned | Operating Segments | |
Franchisor Disclosure [Line Items] | |
Number of stores | 6,856 |
Franchised | Operating Segments | |
Franchisor Disclosure [Line Items] | |
Number of stores | 2,454 |
North American Value | Operating Segments | |
Franchisor Disclosure [Line Items] | |
Number of stores | 8,260 |
North American Value | Company-owned | Operating Segments | |
Franchisor Disclosure [Line Items] | |
Number of stores | 5,806 |
North American Value | Franchised | Operating Segments | |
Franchisor Disclosure [Line Items] | |
Number of stores | 2,454 |
North American Premium | Operating Segments | |
Franchisor Disclosure [Line Items] | |
Number of stores | 702 |
North American Premium | Company-owned | Operating Segments | |
Franchisor Disclosure [Line Items] | |
Number of stores | 702 |
North American Premium | Franchised | Operating Segments | |
Franchisor Disclosure [Line Items] | |
Number of stores | 0 |
International | Operating Segments | |
Franchisor Disclosure [Line Items] | |
Number of stores | 348 |
International | Company-owned | Operating Segments | |
Franchisor Disclosure [Line Items] | |
Number of stores | 348 |
International | Franchised | Operating Segments | |
Franchisor Disclosure [Line Items] | |
Number of stores | 0 |
SEGMENT INFORMATION_ Operating
SEGMENT INFORMATION: Operating Results (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 442,565 | $ 453,960 | $ 1,343,162 | $ 1,374,398 |
Operating (loss) income | 5,621 | 5,402 | 7,014 | 3,977 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 442,565 | 453,960 | 1,343,162 | 1,374,398 |
Operating (loss) income | 30,497 | 29,489 | 82,283 | 80,537 |
Operating Segments | North American Value | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 347,976 | 349,443 | 1,046,198 | 1,049,552 |
Operating (loss) income | 35,706 | 33,229 | 94,316 | 90,060 |
Operating Segments | North American Premium | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 69,451 | 76,817 | 215,628 | 234,603 |
Operating (loss) income | (4,580) | (4,138) | (10,903) | (10,947) |
Operating Segments | International | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 25,138 | 27,700 | 81,336 | 90,243 |
Operating (loss) income | (629) | 398 | (1,130) | 1,424 |
Unallocated Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Operating (loss) income | $ (24,876) | $ (24,087) | $ (75,269) | $ (76,560) |