Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Mar. 31, 2017 | Apr. 27, 2017 | |
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, 2017 | |
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 | 46,308,537 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus (Q1,Q2,Q3,FY) | Q3 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEET - USD ($) $ in Thousands | Mar. 31, 2017 | Jun. 30, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 168,689 | $ 147,346 |
Receivables, net | 22,893 | 24,691 |
Inventories | 127,307 | 134,212 |
Other current assets | 48,402 | 51,765 |
Total current assets | 367,291 | 358,014 |
Property and equipment, net | 155,689 | 183,321 |
Goodwill | 416,140 | 417,393 |
Other intangibles, net | 14,027 | 15,185 |
Other assets | 62,182 | 62,019 |
Total assets | 1,015,329 | 1,035,932 |
Current liabilities: | ||
Accounts payable | 53,171 | 59,884 |
Accrued expenses | 130,050 | 135,431 |
Total current liabilities | 183,221 | 195,315 |
Long-term debt, net | 120,351 | 119,606 |
Other noncurrent liabilities | 206,228 | 201,610 |
Total liabilities | 509,800 | 516,531 |
Commitments and contingencies | ||
Shareholders’ equity: | ||
Common stock, $0.05 par value; issued and outstanding 46,305,679 and 46,154,410 common shares at March 31, 2017 and June 30, 2016, respectively | 2,315 | 2,308 |
Additional paid-in capital | 215,610 | 207,475 |
Accumulated other comprehensive income | 456 | 5,068 |
Retained earnings | 287,148 | 304,550 |
Total shareholders’ equity | 505,529 | 519,401 |
Total liabilities and shareholders’ equity | $ 1,015,329 | $ 1,035,932 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Mar. 31, 2017 | Jun. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Common stock par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock issued (in shares) | 46,305,679 | 46,154,410 |
Common stock outstanding (in shares) | 46,305,679 | 46,154,410 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues: | ||||
Service | $ 319,470 | $ 344,063 | $ 978,222 | $ 1,034,751 |
Product | 81,497 | 86,722 | 254,395 | 272,977 |
Royalties and fees | 11,636 | 11,780 | 35,071 | 35,434 |
Total revenues | 412,603 | 442,565 | 1,267,688 | 1,343,162 |
Operating expenses: | ||||
Cost of service | 207,816 | 217,046 | 626,690 | 651,486 |
Cost of product | 40,693 | 43,000 | 127,902 | 136,420 |
Site operating expenses | 40,339 | 42,912 | 126,981 | 138,145 |
General and administrative | 49,783 | 42,606 | 130,780 | 134,554 |
Rent | 69,758 | 74,388 | 212,278 | 223,666 |
Depreciation and amortization | 16,998 | 16,992 | 48,973 | 51,877 |
Total operating expenses | 425,387 | 436,944 | 1,273,604 | 1,336,148 |
Operating (loss) income | (12,784) | 5,621 | (5,916) | 7,014 |
Other income (expense): | ||||
Interest expense | (2,156) | (2,405) | (6,526) | (7,141) |
Interest income and other, net | 393 | 1,017 | 2,416 | 2,958 |
(Loss) income before income taxes and equity in loss of affiliated companies | (14,547) | 4,233 | (10,026) | 2,831 |
Income tax expense | (3,858) | (6,317) | (7,317) | (4,926) |
Equity in loss of affiliated companies, net of income taxes | (50) | 0 | (50) | (14,783) |
Net loss | $ (18,455) | $ (2,084) | $ (17,393) | $ (16,878) |
Net loss per share: | ||||
Basic and diluted (in dollars per share) | $ (0.40) | $ (0.04) | $ (0.38) | $ (0.34) |
Weighted average common and common equivalent shares outstanding: | ||||
Basic and diluted (in shares) | 46,360 | 46,991 | 46,304 | 49,287 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net loss | $ (18,455) | $ (2,084) | $ (17,393) | $ (16,878) |
Other comprehensive income (loss): | ||||
Foreign currency translation adjustments | 248 | 1,806 | (4,590) | (4,801) |
Recognition of deferred compensation | (22) | 0 | (22) | 0 |
Other comprehensive income (loss) | 226 | 1,806 | (4,612) | (4,801) |
Comprehensive loss | $ (18,229) | $ (278) | $ (22,005) | $ (21,679) |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities: | ||
Net loss | $ (17,393) | $ (16,878) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 41,351 | 44,261 |
Equity in loss of affiliated companies | 50 | 14,783 |
Deferred income taxes | 6,419 | 3,607 |
Gain from sale of salon assets, net | (53) | (827) |
Salon asset impairments | 7,622 | 7,616 |
Stock-based compensation | 9,498 | 7,492 |
Amortization of debt discount and financing costs | 1,054 | 1,249 |
Other non-cash items affecting earnings | 150 | 195 |
Changes in operating assets and liabilities, excluding the effects of asset sales | (1,884) | (21,908) |
Net cash provided by operating activities | 46,814 | 39,590 |
Cash flows from investing activities: | ||
Capital expenditures | (25,420) | (22,689) |
Proceeds from sale of assets | 594 | 1,472 |
Change in restricted cash | 999 | 6,985 |
Proceeds from company-owned life insurance policies | 876 | 2,948 |
Net cash used in investing activities | (22,951) | (11,284) |
Cash flows from financing activities: | ||
Repayments of long-term debt and capital lease obligations | 0 | (2) |
Repurchase of common stock | 0 | (97,033) |
Purchase of noncontrolling interest | 0 | (684) |
Employee taxes paid for shares withheld | (1,228) | (698) |
Settlement of equity awards | (440) | 0 |
Net cash used in financing activities | (1,668) | (98,417) |
Effect of exchange rate changes on cash and cash equivalents | (852) | (1,037) |
Increase (decrease) in cash and cash equivalents | 21,343 | (71,148) |
Cash and cash equivalents: | ||
Beginning of period | 147,346 | 212,279 |
End of period | $ 168,689 | $ 141,131 |
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, 2017 | |
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, 2017 and for the three and nine months ended March 31, 2017 and 2016 , reflect, in the opinion of management, all adjustments necessary to fairly state the consolidated financial position of the Company as of March 31, 2017 and its consolidated results of operations, comprehensive loss and cash flows for the interim periods. Adjustments consist only of normal recurring items, except for any discussed in the notes below. The results of operations and cash flows for any interim period are not necessarily indicative of results of operations and cash flows for the full year. The Condensed Consolidated Balance Sheet data for June 30, 2016 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, 2016 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, 2017 , the Company granted various equity awards including restricted stock units (RSUs) and performance-based restricted stock units (PSUs). 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, 2017 Three Months Nine Months Restricted stock units — 427,217 Performance-based restricted stock units (1) — 393,045 _____________________________ (1) Includes 66,082 incremental PSUs earned in connection with the achievement of fiscal year 2016 performance metrics. Total compensation cost for stock-based payment arrangements totaled $5.1 and $2.5 million for the three months ended March 31, 2017 and 2016 , respectively, and $9.5 and $7.5 million for the nine months ended March 31, 2017 and 2016 , respectively, recorded within general and administrative expense on the unaudited Condensed Consolidated Statement of Operations. Total compensation cost for stock-based payment arrangements for the three and nine months ended March 31, 2017 includes $2.6 million related to the termination of former executive officers. In connection with the termination of a former executive officer, the Company settled certain PSUs for cash of $0.4 million during the three and nine months ended March 31, 2017 . 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 are recorded within depreciation and amortization in the Consolidated Statement of Operations . A summary of long-lived asset impairment charges follows: For the Three Months Ended March 31, For the Nine Months Ended March 31, 2017 2016 2017 2016 (Dollars in thousands) North American Value $ 2,939 $ 1,807 $ 6,216 $ 6,015 North American Premium 267 761 1,149 1,513 International 30 7 257 88 Total $ 3,236 $ 2,575 $ 7,622 $ 7,616 Recent Accounting Standards Adopted by the Company: 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 Company early adopted this guidance in the first quarter of fiscal year 2017, applying it retrospectively. The Condensed Consolidated Statement of Cash Flows for the nine months ended March 31, 2016 reflects the reclassification of employee taxes paid for shares withheld of $0.7 million from operating to financing activities, in accordance with this new guidance. The other provisions of this new guidance did not have a material impact on the Company's consolidated financial statements. 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 Company adopted this standard in the first quarter of fiscal year 2017, applying it retrospectively. The Condensed Consolidated Balance Sheet as of June 30, 2016 reflects the reclassification of debt issuance costs of $0.8 million from other assets to long-term debt, net. A ccounting 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 but expects this adoption will result in a material increase in the assets and liabilities on the Company's consolidated balance sheet. 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 expects to adopt this guidance in fiscal year 2019 using the modified retrospective method of adoption. While the Company is continuing to assess all potential impacts of the standard, the Company currently believes the most significant impact relates to the timing of recognition for gift card breakage, although it is not expected to have a material impact on the Company's consolidated financial statements. The Company is continuing to evaluate the impact the adoption of this new guidance will have on these and other revenue transactions, in addition to the impact on related disclosures. Goodwill Impairment In January 2017, the FASB issued updated guidance simplifying the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which required a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance is effective for the Company in the first quarter of fiscal year 2020, with early adoption permitted. Intra-Entity Transfers Other Than Inventory In October 2016, the FASB issued guidance on the accounting for income tax effects of intercompany transfers of assets other than inventory. The guidance requires entities to recognize the income tax impact of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the assets have been sold to an outside party. The guidance is effective for the Company in the first quarter of fiscal year 2019, with early adoption permitted. The Company does not expect the adoption of this standard to have a material impact on the Company's consolidated financial statements. Restricted Cash In November 2016, the FASB issued updated cash flow guidance requiring restricted cash and restricted cash equivalents to be included in the cash and cash equivalent balances in the statement of cash flows. Transfers between cash and cash equivalents and restricted cash will no longer be presented in the statement of cash flows and a reconciliation between the balance sheet and statement of cash flows must be disclosed. The guidance is effective for the Company beginning in the first quarter of fiscal year 2019, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on the Company's consolidated statement of cash flows. Statement of Cash Flows In August 2016, the FASB issued updated cash flow guidance clarifying cash flow classification and presentation for certain items. The guidance is effective for the Company beginning in the first quarter of fiscal year 2019, with early adoption permitted. The Company does not expect the adoption of this standard to have a material impact on the Company's consolidated statement of cash flows. |
INVESTMENT IN AFFILIATES_
INVESTMENT IN AFFILIATES: | 9 Months Ended |
Mar. 31, 2017 | |
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, 2017 , the Company had a 54.6% ownership interest in EEG and no remaining investment value as the Company fully impaired its investment in EEG as of December 31, 2015. The Company has not recorded any equity income or losses related to its investment in EEG subsequent to the impairment. The Company will record equity income related to the Company's investment in EEG once EEG's cumulative income exceeds its cumulative losses, measured from the date of impairment. 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 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, 2017 2016 2017 2016 (Dollars in thousands) Equity losses $ — $ — $ — $ (1,832 ) Other than temporary impairment — — — (12,954 ) Total losses related to EEG $ — $ — $ — $ (14,786 ) 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, 2017 2016 2017 2016 (Unaudited) (Dollars in thousands) Gross revenues $ 32,660 $ 31,573 $ 93,715 $ 101,237 Gross profit 10,287 2,851 27,429 18,257 Operating income (loss) 554 (3,288 ) 336 (6,578 ) Net income (loss) 425 (2,784 ) (48 ) (6,142 ) |
EARNINGS PER SHARE_
EARNINGS PER SHARE: | 9 Months Ended |
Mar. 31, 2017 | |
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. For the three months ended March 31, 2017 and 2016 , 492,524 and 587,992 , respectively, and for the nine months ended March 31, 2017 and 2016 , 547,171 and 497,715 , 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 2,239,467 and 2,075,264 of stock-based awards during the three months ended March 31, 2017 and 2016 , respectively, and 2,317,889 and 2,166,338 of stock-based awards during the nine months ended March 31, 2017 and 2016 , respectively, as they were not dilutive under the treasury stock method. |
SHAREHOLDERS' EQUITY_
SHAREHOLDERS' EQUITY: | 9 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS’ EQUITY: Additional Paid-In Capital: The $8.1 million increase in additional paid-in capital during the nine months ended March 31, 2017 was primarily due to $9.1 million of stock-based compensation, partly offset by other stock-based compensation activity of $1.0 million . |
INCOME TAXES_
INCOME TAXES: | 9 Months Ended |
Mar. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES: During the three and nine months ended March 31, 2017 , the Company recognized tax expense of $3.9 and $7.3 million , respectively, with corresponding effective tax rates of (26.5)% and (73.0)% . 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% . The recorded tax provision and effective tax rates for the three and nine months ended March 31, 2017 and 2016 were different than what would normally be expected primarily due to the impact of the deferred tax valuation allowance. The majority of the tax provision 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 in place against most of its deferred tax assets and is expected to approximate $7.7 million of expense for the fiscal year ending June 30, 2017. 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 were moved to the IRS Appeals Division for outstanding IRS proposed audit adjustments. The Company believes its income tax positions and deductions will be sustained and will continue to vigorously defend such positions. All earlier tax years are closed to examination. With limited exceptions, the Company is no longer subject to state and international income tax examinations by tax authorities for years before fiscal year 2012. |
COMMITMENTS AND CONTINGENCIES_
COMMITMENTS AND CONTINGENCIES: | 9 Months Ended |
Mar. 31, 2017 | |
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 certain issues that have resulted from the IRS' examination of fiscal 2010 through 2013 federal income tax returns. Final resolution of these issues is not expected to have a material impact on the Company's financial position. |
GOODWILL AND OTHER INTANGIBLES_
GOODWILL AND OTHER INTANGIBLES: | 9 Months Ended |
Mar. 31, 2017 | |
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, 2017 June 30, 2016 Gross Accumulated Impairment (1) Net Gross Accumulated Net (Dollars in thousands) Goodwill $ 669,801 $ (253,661 ) $ 416,140 $ 671,054 $ (253,661 ) $ 417,393 ____________________________ (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 is impacted by foreign currency. The table below presents other intangible assets: March 31, 2017 June 30, 2016 Cost (1) Accumulated Amortization (1) Net Cost (1) Accumulated Amortization (1) Net (Dollars in thousands) Amortized intangible assets: Brand assets and trade names $ 8,058 $ (3,887 ) $ 4,171 $ 8,206 $ (3,746 ) $ 4,460 Franchise agreements 9,683 (7,243 ) 2,440 9,853 (7,116 ) 2,737 Lease intangibles 14,463 (9,149 ) 5,314 14,535 (8,649 ) 5,886 Other 5,546 (3,444 ) 2,102 5,748 (3,646 ) 2,102 $ 37,750 $ (23,723 ) $ 14,027 $ 38,342 $ (23,157 ) $ 15,185 _____________________________ (1) The change in the gross carrying value and accumulated amortization of other intangible assets is impacted by foreign currency. |
FINANCING ARRANGEMENTS_
FINANCING ARRANGEMENTS: | 9 Months Ended |
Mar. 31, 2017 | |
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) Senior Term Notes, net 2020 5.50% $ 120,351 $ 119,606 Revolving credit facility 2018 — — — $ 120,351 $ 119,606 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 is being amortized to interest expense over the term of the notes. 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, 2017 June 30, 2016 (Dollars in thousands) Principal amount on the Senior Term Notes $ 123,000 $ 123,000 Unamortized debt discount (2,002 ) (2,565 ) Unamortized debt issuance costs (647 ) (829 ) Senior Term Notes, net $ 120,351 $ 119,606 Revolving Credit Facility As of March 31, 2017 and June 30, 2016 , the Company had no outstanding borrowings under this $200 million facility. The Company had outstanding standby letters of credit under the facility of $1.5 and $1.6 million at March 31, 2017 and June 30, 2016 , respectively, primarily related to the Company's self-insurance program, therefore, unused available credit under the facility at March 31, 2017 and June 30, 2016 was $198.5 and $198.4 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, 2017 . |
FAIR VALUE MEASUREMENTS_
FAIR VALUE MEASUREMENTS: | 9 Months Ended |
Mar. 31, 2017 | |
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, 2017 and June 30, 2016 , the estimated fair value of the Company’s cash, cash equivalents, restricted cash, receivables and accounts payable approximated their carrying values. As of March 31, 2017 , the estimated fair value of the Company's debt was $125.4 million and the carrying value was $123.0 million , excluding the $2.0 million unamortized debt discount and $0.6 million unamortized debt issuance costs. As of June 30, 2016 , the estimated fair value of the Company's debt approximated its carrying value. 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 these assets 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, 2017 2016 2017 2016 (Dollars in thousands) Long-lived assets (1) $ (3,236 ) $ (2,575 ) $ (7,622 ) $ (7,616 ) Investment in EEG (2) — — — (12,954 ) _____________________________ (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, 2017 | |
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, 2017 , the Company’s reportable operating segments consisted of the following salons: Company-owned Franchised Total North American Value 5,601 2,550 8,151 North American Premium 573 — 573 International 301 11 312 Total 6,475 2,561 9,036 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 2017 2016 2017 2016 (Dollars in thousands) Revenues : North American Value $ 335,173 $ 347,976 $ 1,017,385 $ 1,046,198 North American Premium 57,150 69,451 184,741 215,628 International 20,280 25,138 65,562 81,336 $ 412,603 $ 442,565 $ 1,267,688 $ 1,343,162 Depreciation and amortization expense: North American Value $ 12,251 $ 11,268 $ 33,994 $ 35,486 North American Premium 1,945 2,457 6,106 6,694 International 510 551 1,803 2,013 Total segment depreciation and amortization expense 14,706 14,276 41,903 44,193 Unallocated Corporate 2,292 2,716 7,070 7,684 $ 16,998 $ 16,992 $ 48,973 $ 51,877 Operating income (loss): North American Value $ 25,636 $ 35,706 $ 85,047 $ 94,316 North American Premium (6,269 ) (4,580 ) (14,173 ) (10,903 ) International (917 ) (629 ) (1,651 ) (1,130 ) Total segment operating income 18,450 30,497 69,223 82,283 Unallocated Corporate (31,234 ) (24,876 ) (75,139 ) (75,269 ) Operating (loss) income (12,784 ) 5,621 (5,916 ) 7,014 Interest expense (2,156 ) (2,405 ) (6,526 ) (7,141 ) Interest income and other, net 393 1,017 2,416 2,958 (Loss) income before income taxes and equity in loss of affiliated companies $ (14,547 ) $ 4,233 $ (10,026 ) $ 2,831 |
SUBSEQUENT EVENTS_
SUBSEQUENT EVENTS: | 9 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS: On April 17, 2017, the Company announced Hugh E. Sawyer was appointed as President and Chief Executive Officer and a member of the Company's Board of Directors, replacing Daniel J. Hanrahan, effective April 17, 2017. In connection with this appointment, the Company granted Mr. Sawyer 89,686 restricted stock units subject to the satisfaction of performance goals related to the Company's stock price and 1,000,000 equity-based stock appreciation rights. |
(Policies)
(Policies) | 9 Months Ended |
Mar. 31, 2017 | |
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. Long-lived asset impairment charges are recorded within depreciation and amortization in the Consolidated Statement of Operations . |
Recent Accounting Standards Adopted and Not Yet Adopted by the Company | Recent Accounting Standards Adopted by the Company: 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 Company early adopted this guidance in the first quarter of fiscal year 2017, applying it retrospectively. The Condensed Consolidated Statement of Cash Flows for the nine months ended March 31, 2016 reflects the reclassification of employee taxes paid for shares withheld of $0.7 million from operating to financing activities, in accordance with this new guidance. The other provisions of this new guidance did not have a material impact on the Company's consolidated financial statements. 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 Company adopted this standard in the first quarter of fiscal year 2017, applying it retrospectively. The Condensed Consolidated Balance Sheet as of June 30, 2016 reflects the reclassification of debt issuance costs of $0.8 million from other assets to long-term debt, net. A ccounting 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 but expects this adoption will result in a material increase in the assets and liabilities on the Company's consolidated balance sheet. 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 expects to adopt this guidance in fiscal year 2019 using the modified retrospective method of adoption. While the Company is continuing to assess all potential impacts of the standard, the Company currently believes the most significant impact relates to the timing of recognition for gift card breakage, although it is not expected to have a material impact on the Company's consolidated financial statements. The Company is continuing to evaluate the impact the adoption of this new guidance will have on these and other revenue transactions, in addition to the impact on related disclosures. Goodwill Impairment In January 2017, the FASB issued updated guidance simplifying the accounting for goodwill impairment. The guidance removes Step 2 of the goodwill impairment test, which required a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance is effective for the Company in the first quarter of fiscal year 2020, with early adoption permitted. Intra-Entity Transfers Other Than Inventory In October 2016, the FASB issued guidance on the accounting for income tax effects of intercompany transfers of assets other than inventory. The guidance requires entities to recognize the income tax impact of an intra-entity transfer of an asset other than inventory when the transfer occurs, rather than when the assets have been sold to an outside party. The guidance is effective for the Company in the first quarter of fiscal year 2019, with early adoption permitted. The Company does not expect the adoption of this standard to have a material impact on the Company's consolidated financial statements. Restricted Cash In November 2016, the FASB issued updated cash flow guidance requiring restricted cash and restricted cash equivalents to be included in the cash and cash equivalent balances in the statement of cash flows. Transfers between cash and cash equivalents and restricted cash will no longer be presented in the statement of cash flows and a reconciliation between the balance sheet and statement of cash flows must be disclosed. The guidance is effective for the Company beginning in the first quarter of fiscal year 2019, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on the Company's consolidated statement of cash flows. Statement of Cash Flows In August 2016, the FASB issued updated cash flow guidance clarifying cash flow classification and presentation for certain items. The guidance is effective for the Company beginning in the first quarter of fiscal year 2019, with early adoption permitted. The Company does not expect the adoption of this standard to have a material impact on the Company's consolidated statement of cash flows. |
BASIS OF PRESENTATION OF UNAU19
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of equity awards granted | A summary of equity awards granted is as follows: For the Periods Ended March 31, 2017 Three Months Nine Months Restricted stock units — 427,217 Performance-based restricted stock units (1) — 393,045 _____________________________ (1) Includes 66,082 incremental PSUs earned in connection with the achievement of fiscal year 2016 performance metrics. |
Schedule of long-lived asset impairment charges | A summary of long-lived asset impairment charges follows: For the Three Months Ended March 31, For the Nine Months Ended March 31, 2017 2016 2017 2016 (Dollars in thousands) North American Value $ 2,939 $ 1,807 $ 6,216 $ 6,015 North American Premium 267 761 1,149 1,513 International 30 7 257 88 Total $ 3,236 $ 2,575 $ 7,622 $ 7,616 |
INVESTMENT IN AFFILIATES_ INVES
INVESTMENT IN AFFILIATES: INVESTMENT IN AFFILIATES: (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Investments, All Other Investments [Abstract] | |
Summary 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, 2017 2016 2017 2016 (Dollars in thousands) Equity losses $ — $ — $ — $ (1,832 ) Other than temporary impairment — — — (12,954 ) Total losses related to EEG $ — $ — $ — $ (14,786 ) 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, 2017 2016 2017 2016 (Unaudited) (Dollars in thousands) Gross revenues $ 32,660 $ 31,573 $ 93,715 $ 101,237 Gross profit 10,287 2,851 27,429 18,257 Operating income (loss) 554 (3,288 ) 336 (6,578 ) Net income (loss) 425 (2,784 ) (48 ) (6,142 ) |
GOODWILL AND OTHER INTANGIBLE21
GOODWILL AND OTHER INTANGIBLES: (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of recorded goodwill | The table below contains details related to the Company’s recorded goodwill: March 31, 2017 June 30, 2016 Gross Accumulated Impairment (1) Net Gross Accumulated Net (Dollars in thousands) Goodwill $ 669,801 $ (253,661 ) $ 416,140 $ 671,054 $ (253,661 ) $ 417,393 ____________________________ (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 is impacted by foreign currency. |
Schedule of other intangible assets | The table below presents other intangible assets: March 31, 2017 June 30, 2016 Cost (1) Accumulated Amortization (1) Net Cost (1) Accumulated Amortization (1) Net (Dollars in thousands) Amortized intangible assets: Brand assets and trade names $ 8,058 $ (3,887 ) $ 4,171 $ 8,206 $ (3,746 ) $ 4,460 Franchise agreements 9,683 (7,243 ) 2,440 9,853 (7,116 ) 2,737 Lease intangibles 14,463 (9,149 ) 5,314 14,535 (8,649 ) 5,886 Other 5,546 (3,444 ) 2,102 5,748 (3,646 ) 2,102 $ 37,750 $ (23,723 ) $ 14,027 $ 38,342 $ (23,157 ) $ 15,185 _____________________________ (1) The change in the gross carrying value and accumulated amortization of other intangible assets is impacted by foreign currency. |
FINANCING ARRANGEMENTS_ (Tables
FINANCING ARRANGEMENTS: (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | 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) Senior Term Notes, net 2020 5.50% $ 120,351 $ 119,606 Revolving credit facility 2018 — — — $ 120,351 $ 119,606 The following table contains details related to the Company's Senior Term Notes: March 31, 2017 June 30, 2016 (Dollars in thousands) Principal amount on the Senior Term Notes $ 123,000 $ 123,000 Unamortized debt discount (2,002 ) (2,565 ) Unamortized debt issuance costs (647 ) (829 ) Senior Term Notes, net $ 120,351 $ 119,606 |
FAIR VALUE MEASUREMENTS_ FAIR V
FAIR VALUE MEASUREMENTS: FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value impairments | 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, 2017 2016 2017 2016 (Dollars in thousands) Long-lived assets (1) $ (3,236 ) $ (2,575 ) $ (7,622 ) $ (7,616 ) Investment in EEG (2) — — — (12,954 ) _____________________________ (1) See Note 1 to the unaudited Condensed Consolidated Financial Statements. (2) See Note 2 to the unaudited Condensed Consolidated Financial Statements. |
SEGMENT INFORMATION_ (Tables)
SEGMENT INFORMATION: (Tables) | 9 Months Ended |
Mar. 31, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Company's reportable operating segments | As of March 31, 2017 , the Company’s reportable operating segments consisted of the following salons: Company-owned Franchised Total North American Value 5,601 2,550 8,151 North American Premium 573 — 573 International 301 11 312 Total 6,475 2,561 9,036 |
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 2017 2016 2017 2016 (Dollars in thousands) Revenues : North American Value $ 335,173 $ 347,976 $ 1,017,385 $ 1,046,198 North American Premium 57,150 69,451 184,741 215,628 International 20,280 25,138 65,562 81,336 $ 412,603 $ 442,565 $ 1,267,688 $ 1,343,162 Depreciation and amortization expense: North American Value $ 12,251 $ 11,268 $ 33,994 $ 35,486 North American Premium 1,945 2,457 6,106 6,694 International 510 551 1,803 2,013 Total segment depreciation and amortization expense 14,706 14,276 41,903 44,193 Unallocated Corporate 2,292 2,716 7,070 7,684 $ 16,998 $ 16,992 $ 48,973 $ 51,877 Operating income (loss): North American Value $ 25,636 $ 35,706 $ 85,047 $ 94,316 North American Premium (6,269 ) (4,580 ) (14,173 ) (10,903 ) International (917 ) (629 ) (1,651 ) (1,130 ) Total segment operating income 18,450 30,497 69,223 82,283 Unallocated Corporate (31,234 ) (24,876 ) (75,139 ) (75,269 ) Operating (loss) income (12,784 ) 5,621 (5,916 ) 7,014 Interest expense (2,156 ) (2,405 ) (6,526 ) (7,141 ) Interest income and other, net 393 1,017 2,416 2,958 (Loss) income before income taxes and equity in loss of affiliated companies $ (14,547 ) $ 4,233 $ (10,026 ) $ 2,831 |
BASIS OF PRESENTATION OF UNAU25
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Summary of Equity Awards Granted (Details) - shares | 3 Months Ended | 9 Months Ended |
Mar. 31, 2017 | Mar. 31, 2017 | |
Restricted stock units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock granted (in shares) | 0 | 427,217 |
Performance share units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock granted (in shares) | 0 | 393,045 |
Performance share units | 2016 Performance Metrics | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock granted (in shares) | 66,082 |
BASIS OF PRESENTATION OF UNAU26
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Stock-based employees compensation [Line Items] | ||||
Stock-based compensation | $ 5,100 | $ 2,500 | $ 9,498 | $ 7,492 |
Former Executive Officer | ||||
Stock-based employees compensation [Line Items] | ||||
Stock-based compensation | 2,600 | 2,600 | ||
Former Executive Officer | Performance share units | ||||
Stock-based employees compensation [Line Items] | ||||
Cash to settle equity awards | $ 400 | $ 400 |
BASIS OF PRESENTATION OF UNAU27
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Summary of Long-lived Asset Impairment Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Salon asset impairments | $ 3,236 | $ 2,575 | $ 7,622 | $ 7,616 |
North American Value | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Salon asset impairments | 2,939 | 1,807 | 6,216 | 6,015 |
North American Premium | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Salon asset impairments | 267 | 761 | 1,149 | 1,513 |
International | ||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||
Salon asset impairments | $ 30 | $ 7 | $ 257 | $ 88 |
BASIS OF PRESENTATION OF UNAU28
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: Recent Accounting Standards Adopted by the Company (Details) - USD ($) $ in Thousands | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Jun. 30, 2016 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Net cash provided by operating activities | $ 46,814 | $ 39,590 | |
Net cash used in financing activities | $ (1,668) | (98,417) | |
Accounting Standards Update 2015-03 | Other Assets | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Debt issuance costs | $ (800) | ||
Accounting Standards Update 2015-03 | Long-term Debt | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Debt issuance costs | $ 800 | ||
New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2016-09 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Net cash provided by operating activities | (700) | ||
Net cash used in financing activities | $ 700 |
INVESTMENT IN AFFILIATES_ (Deta
INVESTMENT IN AFFILIATES: (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Investment in affiliates | ||||
Equity in loss of affiliated companies | $ 50,000 | $ 0 | $ 50,000 | $ 14,783,000 |
Empire Education Group Inc | ||||
Investment in affiliates | ||||
Ownership percentage | 54.60% | 54.60% | ||
Investment value | $ 0 | $ 0 | ||
Equity in loss of affiliated companies | 0 | 0 | 0 | 1,832,000 |
Non-cash impairment charge | 0 | 0 | 0 | (12,954,000) |
Total losses related to EEG | 0 | 0 | 0 | (14,786,000) |
(Unaudited) | ||||
Gross revenues | 32,660,000 | 31,573,000 | 93,715,000 | 101,237,000 |
Gross profit | 10,287,000 | 2,851,000 | 27,429,000 | 18,257,000 |
Operating income (loss) | 554,000 | (3,288,000) | 336,000 | (6,578,000) |
Net income (loss) | $ 425,000 | $ (2,784,000) | $ (48,000) | $ (6,142,000) |
EARNINGS PER SHARE_ (Details)
EARNINGS PER SHARE: (Details) - shares | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Awards excluded from diluted earnings per share computation (in shares) | 492,524 | 587,992 | 547,171 | 497,715 |
Equity Based Compensation Awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Awards excluded from diluted earnings per share computation (in shares) | 2,239,467 | 2,075,264 | 2,317,889 | 2,166,338 |
SHAREHOLDERS' EQUITY_ (Details)
SHAREHOLDERS' EQUITY: (Details) $ in Millions | 9 Months Ended |
Mar. 31, 2017USD ($) | |
Stockholders' Equity [Line Items] | |
Stock-based compensation | $ 9.1 |
Adjustments to APIC offset by other stock-based compensation activity | 1 |
Additional Paid-in Capital | |
Stockholders' Equity [Line Items] | |
Increase (decrease) in additional paid-in capital | $ 8.1 |
INCOME TAXES_ (Details)
INCOME TAXES: (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |||||
Income tax (benefit) expense | $ 3,858 | $ 6,317 | $ 7,317 | $ 4,926 | |
Effective tax rate (as a percent) | (26.50%) | 149.20% | (73.00%) | 174.00% | |
Forecast | |||||
Subsequent Event [Line Items] | |||||
Other noncash income tax expense | $ 7,700 |
GOODWILL AND OTHER INTANGIBLE33
GOODWILL AND OTHER INTANGIBLES: Schedules of Goodwill and Impairment (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Jun. 30, 2016 | Jun. 30, 2014 | Jun. 30, 2012 | Jun. 30, 2011 | Jun. 30, 2010 | Jun. 30, 2009 |
Goodwill | |||||||
Gross Carrying Value | $ 669,801 | $ 671,054 | |||||
Accumulated Impairment | (253,661) | (253,661) | |||||
Goodwill | $ 416,140 | $ 417,393 | |||||
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 INTANGIBLE34
GOODWILL AND OTHER INTANGIBLES: Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Jun. 30, 2016 |
Amortized intangible assets: | ||
Cost | $ 37,750 | $ 38,342 |
Accumulated amortization | (23,723) | (23,157) |
Net | 14,027 | 15,185 |
Brand assets and trade names | ||
Amortized intangible assets: | ||
Cost | 8,058 | 8,206 |
Accumulated amortization | (3,887) | (3,746) |
Net | 4,171 | 4,460 |
Franchise agreements | ||
Amortized intangible assets: | ||
Cost | 9,683 | 9,853 |
Accumulated amortization | (7,243) | (7,116) |
Net | 2,440 | 2,737 |
Lease intangibles | ||
Amortized intangible assets: | ||
Cost | 14,463 | 14,535 |
Accumulated amortization | (9,149) | (8,649) |
Net | 5,314 | 5,886 |
Other | ||
Amortized intangible assets: | ||
Cost | 5,546 | 5,748 |
Accumulated amortization | (3,444) | (3,646) |
Net | $ 2,102 | $ 2,102 |
FINANCING ARRANGEMENTS_ Schedul
FINANCING ARRANGEMENTS: Schedule of Long-term Debt (Details) - USD ($) | Mar. 31, 2017 | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||
Long-term debt | $ 120,351,000 | $ 119,606,000 | |
Senior Notes | Senior Term Notes, net | |||
Debt Instrument [Line Items] | |||
Interest rate percentage | 5.50% | 5.50% | |
Long-term debt | $ 120,351,000 | 119,606,000 | |
Line of Credit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt | $ 0 | $ 0 |
FINANCING ARRANGEMENTS_ Additio
FINANCING ARRANGEMENTS: Additional Information (Details) - USD ($) | Mar. 31, 2017 | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||
Long-term debt | $ 120,351,000 | $ 119,606,000 | |
Senior Notes | Senior Term Notes 5.75% | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 120,000,000 | ||
Interest rate percentage | 5.75% | ||
Senior Notes | Senior Term Notes, net | |||
Debt Instrument [Line Items] | |||
Debt face amount | $ 123,000,000 | ||
Interest rate percentage | 5.50% | 5.50% | |
Unamortized discount | $ 2,002,000 | 2,565,000 | $ 3,000,000 |
Long-term debt | 120,351,000 | 119,606,000 | |
Line of Credit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Long-term debt | 0 | 0 | |
Maximum borrowing capacity | 200,000,000 | ||
Outstanding standby letters of credit | 1,500,000 | 1,600,000 | |
Revolving credit facility remaining borrowing capacity | $ 198,500,000 | $ 198,400,000 |
FINANCING ARRANGEMENTS_ Sched37
FINANCING ARRANGEMENTS: Schedule of Senior Term Notes (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Jun. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||
Senior Term Notes, net | $ 120,351 | $ 119,606 | |
Senior Notes | Senior Term Notes, net | |||
Debt Instrument [Line Items] | |||
Principal amount on the Senior Term Notes | 123,000 | 123,000 | |
Unamortized debt discount | (2,002) | (2,565) | $ (3,000) |
Unamortized debt issuance costs | (647) | (829) | |
Senior Term Notes, net | $ 120,351 | $ 119,606 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | Jun. 30, 2016 | Dec. 31, 2015 | |
Assets and liabilities measured at fair value on a nonrecurring basis | ||||||
Long-lived assets | $ (3,236) | $ (2,575) | $ (7,622) | $ (7,616) | ||
Empire Education Group Inc | ||||||
Assets and liabilities measured at fair value on a nonrecurring basis | ||||||
Investment in EEG | 0 | $ 0 | 0 | $ (12,954) | ||
Senior Notes | Senior Term Notes, net | ||||||
Assets and liabilities measured at fair value on a nonrecurring basis | ||||||
Debt fair value | 125,400 | 125,400 | ||||
Debt, gross | 123,000 | 123,000 | $ 123,000 | |||
Unamortized discount | 2,002 | 2,002 | 2,565 | $ 3,000 | ||
Unamortized debt issuance costs | $ 647 | $ 647 | $ 829 |
SEGMENT INFORMATION_ Salon Loca
SEGMENT INFORMATION: Salon Locations (Details) | Mar. 31, 2017salon |
Franchisor Disclosure [Line Items] | |
Number of stores | 9,036 |
Company-owned | |
Franchisor Disclosure [Line Items] | |
Number of stores | 6,475 |
Franchised | |
Franchisor Disclosure [Line Items] | |
Number of stores | 2,561 |
North American Value | |
Franchisor Disclosure [Line Items] | |
Number of stores | 8,151 |
North American Value | Company-owned | |
Franchisor Disclosure [Line Items] | |
Number of stores | 5,601 |
North American Value | Franchised | |
Franchisor Disclosure [Line Items] | |
Number of stores | 2,550 |
North American Premium | |
Franchisor Disclosure [Line Items] | |
Number of stores | 573 |
North American Premium | Company-owned | |
Franchisor Disclosure [Line Items] | |
Number of stores | 573 |
North American Premium | Franchised | |
Franchisor Disclosure [Line Items] | |
Number of stores | 0 |
International | |
Franchisor Disclosure [Line Items] | |
Number of stores | 312 |
International | Company-owned | |
Franchisor Disclosure [Line Items] | |
Number of stores | 301 |
International | Franchised | |
Franchisor Disclosure [Line Items] | |
Number of stores | 11 |
SEGMENT INFORMATION_ Operating
SEGMENT INFORMATION: Operating Results (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Mar. 31, 2017 | Mar. 31, 2016 | |
Segment Reporting Information [Line Items] | ||||
Total revenues | $ 412,603 | $ 442,565 | $ 1,267,688 | $ 1,343,162 |
Depreciation and amortization | 16,998 | 16,992 | 48,973 | 51,877 |
Operating (loss) income | (12,784) | 5,621 | (5,916) | 7,014 |
Interest expense | (2,156) | (2,405) | (6,526) | (7,141) |
Interest income and other, net | 393 | 1,017 | 2,416 | 2,958 |
(Loss) income before income taxes and equity in loss of affiliated companies | (14,547) | 4,233 | (10,026) | 2,831 |
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 412,603 | 442,565 | 1,267,688 | 1,343,162 |
Depreciation and amortization | 14,706 | 14,276 | 41,903 | 44,193 |
Operating (loss) income | 18,450 | 30,497 | 69,223 | 82,283 |
Operating Segments | North American Value | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 335,173 | 347,976 | 1,017,385 | 1,046,198 |
Depreciation and amortization | 12,251 | 11,268 | 33,994 | 35,486 |
Operating (loss) income | 25,636 | 35,706 | 85,047 | 94,316 |
Operating Segments | North American Premium | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 57,150 | 69,451 | 184,741 | 215,628 |
Depreciation and amortization | 1,945 | 2,457 | 6,106 | 6,694 |
Operating (loss) income | (6,269) | (4,580) | (14,173) | (10,903) |
Operating Segments | International | ||||
Segment Reporting Information [Line Items] | ||||
Total revenues | 20,280 | 25,138 | 65,562 | 81,336 |
Depreciation and amortization | 510 | 551 | 1,803 | 2,013 |
Operating (loss) income | (917) | (629) | (1,651) | (1,130) |
Unallocated Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 2,292 | 2,716 | 7,070 | 7,684 |
Operating (loss) income | $ (31,234) | $ (24,876) | $ (75,139) | $ (75,269) |
SUBSEQUENT EVENTS_ (Details)
SUBSEQUENT EVENTS: (Details) - shares | Apr. 17, 2017 | Mar. 31, 2017 | Mar. 31, 2017 |
Restricted stock units | |||
Subsequent Event [Line Items] | |||
Stock granted (in shares) | 0 | 427,217 | |
Subsequent Event | Restricted stock units | |||
Subsequent Event [Line Items] | |||
Stock granted (in shares) | 89,686 | ||
Subsequent Event | Stock appreciation rights | |||
Subsequent Event [Line Items] | |||
Stock granted (in shares) | 1,000,000 |