Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Aug. 14, 2020 | Dec. 31, 2019 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Jun. 30, 2020 | ||
Document Transition Report | false | ||
Entity File Number | 1-12725 | ||
Entity Registrant Name | Regis Corp | ||
Entity Incorporation, State or Country Code | MN | ||
Entity Tax Identification Number | 41-0749934 | ||
Entity Address, Address Line One | 3701 Wayzata Boulevard, Suite 500 | ||
Entity Address, City or Town | Minneapolis | ||
Entity Address, State or Province | MN | ||
Entity Address, Postal Zip Code | 55416 | ||
City Area Code | 952 | ||
Local Phone Number | 947-7777 | ||
Title of 12(b) Security | Common Stock, $0.05 par value | ||
Trading Symbol | RGS | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 440,137,327 | ||
Entity Common Stock, Shares Outstanding | 35,626,078 | ||
Documents Incorporated by Reference | Portions of the registrant's definitive Proxy Statement for the annual fiscal 2020 meeting of shareholders (the "2020 Proxy Statement") (to be filed pursuant to Regulation 14A within 120 days after the registrant's fiscal year-end of June 30, 2020) are incorporated by reference into Part III. | ||
Entity Central Index Key | 0000716643 | ||
Amendment Flag | false | ||
Current Fiscal Year End Date | --06-30 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY |
CONSOLIDATED BALANCE SHEET
CONSOLIDATED BALANCE SHEET - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 113,667 | $ 70,141 |
Receivables, net | 31,030 | 30,143 |
Inventories | 62,597 | 77,322 |
Other current assets | 19,138 | 33,216 |
Total current assets | 226,432 | 210,822 |
Property and equipment, net | 57,176 | 78,090 |
Goodwill | 227,457 | 345,718 |
Other intangibles, net | 4,579 | 8,761 |
Right of use asset (Note 6) | 786,216 | |
Other assets | 40,934 | 34,170 |
Non-current assets held for sale (Note 1) | 0 | 5,276 |
Total assets | 1,342,794 | 682,837 |
Current liabilities: | ||
Accounts payable | 50,918 | 47,532 |
Accrued expenses | 48,825 | 80,751 |
Short-term lease liability (Note 6) | 137,271 | |
Total current liabilities | 237,014 | 128,283 |
Long-term debt, net | 177,500 | 90,000 |
Long-term lease liability (Note 6) | 680,454 | |
Long-term financing liabilities | 27,981 | 28,910 |
Other non-current liabilities | 94,142 | 111,399 |
Total liabilities | 1,217,091 | 358,592 |
Commitments and Contingencies | ||
Shareholders' equity: | ||
Common stock, $0.05 par value; issued and outstanding, 35,625,716 and 36,869,249 common shares at June 30, 2020 and 2019, respectively | 1,781 | 1,843 |
Additional paid-in capital | 22,011 | 47,152 |
Accumulated other comprehensive income | 7,449 | 9,342 |
Retained earnings | 94,462 | 265,908 |
Total shareholders' equity | 125,703 | 324,245 |
Total liabilities and shareholders' equity | $ 1,342,794 | $ 682,837 |
CONSOLIDATED BALANCE SHEET (Par
CONSOLIDATED BALANCE SHEET (Parenthetical) - $ / shares | Jun. 30, 2020 | Jun. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, issued (in shares) | 35,625,716 | 36,869,249 |
Common stock, outstanding (in shares) | 35,625,716 | 36,869,249 |
CONSOLIDATED STATEMENT OF OPERA
CONSOLIDATED STATEMENT OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | ||
Revenues: | ||||
Franchise rental income | $ 127,203 | |||
Total revenue | 669,729 | $ 1,069,039 | $ 1,235,479 | |
Operating expenses: | ||||
Site operating expenses | 71,543 | 141,031 | 154,067 | |
General and administrative | 130,953 | 177,004 | 174,045 | |
Depreciation and amortization | 36,952 | 37,848 | 58,205 | |
Long-lived asset impairment | 22,560 | 0 | 0 | |
TBG mall restructuring | 2,333 | 21,816 | 0 | |
Goodwill impairment | 40,164 | 0 | 0 | |
Total operating expenses | 815,067 | 1,091,158 | 1,240,618 | |
Operating loss | (145,338) | (22,119) | (5,139) | |
Other (expense) income: | ||||
Interest expense | (7,522) | (4,795) | (10,492) | |
(Loss) gain from sale of salon assets to franchisees, net | (27,306) | 2,918 | 241 | |
Interest income and other, net | 3,353 | 1,729 | 5,199 | |
Loss from continuing operations before income taxes | (176,813) | (22,267) | (10,191) | |
Income tax benefit | 4,619 | 2,145 | 69,812 | |
(Loss) income from continuing operations | (172,194) | (20,122) | 59,621 | |
Income (loss) from discontinued operations, net of taxes | 832 | 5,896 | (53,185) | |
Net (loss) income | $ (171,362) | $ (14,226) | $ 6,436 | |
Basic: | ||||
(Loss) Income from continuing operations (in dollars per share) | $ (4.79) | $ (0.48) | $ 1.28 | |
Income (loss) from discontinued operations (in dollars per share) | 0.02 | 0.14 | (1.14) | |
Net (loss) income per share, basic (in dollars per share) | [1] | (4.77) | (0.34) | 0.14 |
Diluted: | ||||
(Loss) Income from continuing operations (in dollars per share) | (4.79) | (0.48) | 1.27 | |
Income (loss) from discontinued operations (in dollars per share) | 0.02 | 0.14 | (1.13) | |
Net (loss) income per share, diluted (in dollars per share) | [1] | $ (4.77) | $ (0.34) | $ 0.14 |
Weighted average common and common equivalent shares outstanding: | ||||
Basic (in shares) | 35,936 | 41,829 | 46,517 | |
Diluted (in shares) | 35,936 | 41,829 | 47,035 | |
Non Franchise Lease | ||||
Operating expenses: | ||||
Rent | $ 76,382 | $ 131,816 | $ 183,096 | |
Franchisor | ||||
Operating expenses: | ||||
Rent | 127,203 | |||
Service | ||||
Revenues: | ||||
Revenues | 331,538 | 749,660 | 899,345 | |
Operating expenses: | ||||
Cost of service and products sold | 222,279 | 452,827 | 530,582 | |
Product | ||||
Revenues: | ||||
Revenues | 137,586 | 225,618 | 258,740 | |
Operating expenses: | ||||
Cost of service and products sold | 84,698 | 128,816 | 140,623 | |
Royalties and fees | ||||
Revenues: | ||||
Revenues | $ 73,402 | $ 93,761 | $ 77,394 | |
[1] | Total is a recalculation; line items calculated individually may not sum to total due to rounding. |
CONSOLIDATED STATEMENT OF COMPR
CONSOLIDATED STATEMENT OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net (loss) income | $ (171,362) | $ (14,226) | $ 6,436 |
Other comprehensive (loss) income, net of tax: | |||
Foreign currency translation adjustments | (1,462) | 185 | (168) |
Reclassification adjustments for losses included in net income (Note 3) | 0 | 0 | 6,152 |
Net current period foreign currency translation adjustments | (1,462) | 185 | 5,984 |
Recognition of deferred compensation | (431) | (499) | 336 |
Other comprehensive (loss) income | (1,893) | (314) | 6,320 |
Comprehensive (loss) income | $ (173,255) | $ (14,540) | $ 12,756 |
CONSOLIDATED STATEMENT OF SHARE
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Retained Earnings |
Balance (in shares) at Jun. 30, 2017 | 46,400,367 | ||||
Balance at Jun. 30, 2017 | $ 493,345 | $ 2,320 | $ 214,109 | $ 3,336 | $ 273,580 |
Increase (Decrease) in Stockholders' Equity | |||||
Net (loss) income | 6,436 | 6,436 | |||
Foreign currency translation | 5,984 | 5,984 | |||
Stock repurchase program (in shares) | (1,469,057) | ||||
Stock repurchase program | (24,798) | $ (74) | (24,724) | ||
Exercise of SARs (in shares) | 33,342 | ||||
Exercise of SARs | (330) | $ 2 | (332) | ||
Stock-based compensation | 7,475 | 7,475 | |||
Shares issued through franchise stock incentive program (in shares) | 522 | ||||
Shares issued through franchise stock incentive program | 7 | 7 | |||
Recognition of deferred compensation (Note 11) | 336 | 336 | |||
Net restricted stock activity (in shares) | 293,397 | ||||
Net restricted stock activity | (2,084) | $ 15 | (2,099) | ||
Minority interest (Note 1) | 67 | 67 | |||
Balance (in shares) at Jun. 30, 2018 | 45,258,571 | ||||
Balance at Jun. 30, 2018 | 486,438 | $ 2,263 | 194,436 | 9,656 | 280,083 |
Increase (Decrease) in Stockholders' Equity | |||||
Net (loss) income | (14,226) | (14,226) | |||
Foreign currency translation | 185 | 185 | |||
Stock repurchase program (in shares) | (8,605,430) | ||||
Stock repurchase program | (154,545) | $ (431) | (154,114) | ||
Exercise of SARs (in shares) | 22,263 | ||||
Exercise of SARs | (221) | $ 1 | (222) | ||
Stock-based compensation | 9,003 | 9,003 | |||
Recognition of deferred compensation (Note 11) | (499) | (499) | |||
Net restricted stock activity (in shares) | 193,845 | ||||
Net restricted stock activity | (1,941) | $ 10 | (1,951) | ||
Minority interest (Note 1) | $ 51 | 51 | |||
Balance (in shares) at Jun. 30, 2019 | 36,869,249 | 36,869,249 | |||
Balance at Jun. 30, 2019 | $ 324,245 | $ 1,843 | 47,152 | 9,342 | 265,908 |
Increase (Decrease) in Stockholders' Equity | |||||
Net (loss) income | (171,362) | (171,362) | |||
Foreign currency translation | (1,462) | (1,462) | |||
Stock repurchase program (in shares) | (1,504,000) | ||||
Stock repurchase program | (26,356) | $ (75) | (26,281) | ||
Exercise of SARs (in shares) | 1,776 | ||||
Exercise of SARs | 28 | 28 | |||
Stock-based compensation | 3,275 | 3,275 | |||
Recognition of deferred compensation (Note 11) | (431) | (431) | |||
Net restricted stock activity (in shares) | 258,691 | ||||
Net restricted stock activity | (2,150) | $ 13 | (2,163) | ||
Minority interest (Note 1) | $ (84) | (84) | |||
Balance (in shares) at Jun. 30, 2020 | 35,625,716 | 35,625,716 | |||
Balance at Jun. 30, 2020 | $ 125,703 | $ 1,781 | $ 22,011 | $ 7,449 | $ 94,462 |
CONSOLIDATED STATEMENT OF CASH
CONSOLIDATED STATEMENT OF CASH FLOWS $ in Thousands | 12 Months Ended | |||||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | ||||
Cash flows from operating activities: | ||||||
Net (loss) income | $ (171,362) | $ (14,226) | $ 6,436 | |||
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: | ||||||
Non-cash adjustments related to discontinued operations | (1,098) | 306 | 38,826 | |||
Depreciation and amortization | 33,101 | 33,261 | 39,433 | |||
Depreciation related to discontinued operations | 0 | 0 | 3,738 | |||
Long-lived asset impairment | 3,851 | 4,587 | 11,092 | |||
Long-lived asset impairment | 22,560 | 0 | 0 | |||
Deferred income taxes | (3,934) | (9,812) | (80,241) | |||
Gain on life insurance proceeds | 0 | 0 | (7,986) | |||
Gain from sale of company headquarters, net | (2,513) | 0 | 0 | |||
Loss (gain) from sale of salon assets to franchisees, net | 27,306 | (2,918) | (241) | |||
Non-cash TBG mall location restructuring charge (Note 3) | 0 | 21,008 | 0 | |||
Goodwill impairment | 40,164 | 0 | 0 | |||
Accumulated other comprehensive income reclassification adjustments (Note 3) | 0 | 0 | 6,152 | |||
Stock-based compensation | 3,275 | 9,003 | 8,269 | |||
Amortization of debt discount and financing costs | 398 | 275 | 4,080 | |||
Other non-cash items affecting earnings | (539) | (903) | (294) | |||
Changes in operating assets and liabilities: | ||||||
Receivables | (3,902) | [1] | (17,304) | [1] | (12,081) | [1] |
Inventories | (2,255) | [1] | (8,492) | [1] | 13,940 | [1] |
Income tax receivable | (1,804) | [1] | (703) | [1] | 527 | [1] |
Other current assets | 2,827 | [1] | (783) | [1] | 239 | [1] |
Other assets | (10,094) | [1] | (5,546) | [1] | (11,229) | [1] |
Accounts payable | 4,588 | [1] | (5,836) | [1] | (1,103) | [1] |
Accrued expenses | (27,622) | [1] | (20,158) | [1] | (10,940) | [1] |
Net lease liabilities | 276 | [1] | 0 | [1] | 0 | [1] |
Other non-current liabilities | 368 | [1] | 717 | [1] | (6,027) | [1] |
Net cash (used in) provided by operating activities: | (86,409) | (17,524) | 2,590 | |||
Cash flows from investing activities: | ||||||
Capital expenditures | (37,494) | (31,616) | (29,571) | |||
Capital expenditures related to discontinued operations | 0 | 0 | (1,171) | |||
Proceeds from sale of company headquarters | 8,996 | 0 | 0 | |||
Proceeds from sale of assets to franchisees | 91,616 | 94,787 | 11,582 | |||
Costs associated with sale of assets to franchisees | (2,089) | 0 | 0 | |||
Proceeds from company-owned life insurance policies | 0 | 24,617 | 18,108 | |||
Net cash provided by (used in) investing activities: | 61,029 | 87,788 | (1,052) | |||
Cash flows from financing activities: | ||||||
Borrowings on revolving credit facility | 213,000 | 0 | 90,000 | |||
Repayments of revolving credit facility | (125,500) | 0 | (124,230) | |||
Repurchase of common stock | (28,246) | (152,661) | (24,798) | |||
Proceeds from sale and leaseback transactions | 0 | 28,821 | 0 | |||
Sale and leaseback payments | (769) | (378) | 0 | |||
Taxes paid for shares withheld | (2,320) | (2,477) | (2,413) | |||
Settlement of equity awards | 0 | 0 | (794) | |||
Net cash provided by (used in) financing activities: | 56,165 | (126,695) | (62,235) | |||
Effect of exchange rate changes on cash and cash equivalents | (284) | 35 | (514) | |||
Increase (decrease) in cash, cash equivalents and restricted cash | 30,501 | (56,396) | (61,211) | |||
Cash, cash equivalents and restricted cash: | ||||||
Beginning of year | 122,880 | 92,379 | 148,775 | |||
Cash and cash equivalents included in current assets held for sale | 0 | 0 | ||||
Beginning of year | 92,379 | 148,775 | 209,986 | |||
End of year | $ 122,880 | $ 92,379 | $ 148,775 | |||
[1] | Changes in operating assets and liabilities exclude assets and liabilities sold or acquired. |
BUSINESS DESCRIPTION AND SUMMAR
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Business Description: Regis Corporation (the "Company") franchises, owns and operates technology-enabled hairstyling and hair care salons throughout the United States (U.S.), the United Kingdom (U.K.), Canada and Puerto Rico. The business is evaluated in two segments, Franchise salons and Company-owned salons. See Note 15 to the Consolidated Financial Statements. Franchised salons throughout the U.S. and Canada are primarily located in strip shopping centers or Walmart Supercenters. Salons in the U.K. are franchised locations and operate in leading department stores, mass merchants and high-street locations. Substantially all of the hairstyling and hair care salons owned and operated by the Company in the U.S., Canada and Puerto Rico are located in leased space in strip shopping centers, malls or Walmart Supercenters. COVID-19 Impact: During fiscal year 2020, the global coronavirus pandemic (COVID-19) had an adverse impact on operations, including the closure of all company-owned salons and almost all franchise locations from March 2020 due to government mandates. Salons continued to be closed until April 23, 2020 when franchise salons began re-opening slowly, as government, state and local restrictions eased. As of June 30, 2020 approximately 87% of franchise salons were open. Company-owned salons were closed through May 21, 2020 and are gradually re-opening. As of June 30, 2020, approximately 54% of company-owned salons were open. As salons re-open, the Company is taking additional measures across its portfolio of franchise and company-owned salons to facilitate customer and employee safety. As a result, COVID-19 has and will continue to negatively affect revenue and profitability. To offset the loss of revenue, in April 2020, the Company implemented a furlough program for a substantial majority of the workforce across the corporate office, field support, and distribution centers; and reductions in the pay for executives and other working employees. The furlough program was in effect for the majority of the fiscal fourth quarter with a substantial majority returning to work in June 2020. Despite actions taken to resume business operations, COVID-19, and the volatile regional and global economic conditions stemming from the pandemic, as well as reactions to future pandemics or resurgences of COVID-19, could potentially prolong and intensify the impact of the global crisis on our business. The economic disruption due to COVID-19 was determined to be a triggering event and as a result, management assessed its long-term assets, including long-lived salon assets, right of use assets, goodwill and other intangibles for impairment. Impairments were recorded related to long-lived salon assets (Note 7), right of use assets (Note 6), intangible assets (Note 4) and goodwill (Notes 1 and 5). As the COVID-19 pandemic continues, management will reassess all long-term assets and further impairment may result. Consolidation: The Consolidated Financial Statements include the accounts of the Company and its subsidiaries after the elimination of intercompany accounts and transactions. All material subsidiaries are wholly owned. The Company consolidates variable interest entities where it has determined it is the primary beneficiary of those entities' operations. Variable Interest Entities : The Company has interests in certain privately-held entities through arrangements that do not involve voting interests. Such entities, known as a variable interest entity (VIE), are required to be consolidated by its primary beneficiary. The Company evaluates whether or not it is the primary beneficiary for each VIE using a qualitative assessment that considers the VIE's purpose and design, the involvement of each of the interest holders and the risk and benefits of the VIE. As of June 30, 2020, the Company has one VIE, Roosters MGC International LLC (Roosters), where the Company is the primary beneficiary. The Company owns an 84.0% ownership interest in Roosters. As of June 30, 2020, total assets, total liabilities and total shareholders' equity of Roosters were $13.2, $4.8 and $8.4 million, respectively. As of June 30, 2019, total assets, total liabilities and total shareholders' equity of Roosters were $9.6, $1.7, and $7.9 million, respectively. Net income attributable to the non-controlling interest in Roosters was immaterial for fiscal years 2020, 2019 and 2018. Shareholders' equity attributable to the non-controlling interest in Roosters was $1.0 million as of June 30, 2020 and 2019, respectively, and recorded within retained earnings on the Consolidated Balance Sheet. The Company accounts for its investment in Empire Education Group, Inc. (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 EEG’s common stock, as well as the right to appoint four of the five members of EEG’s Board of Directors. The Company wrote off its investment balance in EEG in fiscal year 2016. During fiscal year 2020, the Company signed an agreement to sell its interest in EEG to the other shareholder. The transaction is expected to close in fiscal year 2021, at which time the Company expects to record an immaterial non-operating gain. Use of Estimates: The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. For the three months ended June 30, 2020, the impact of the decline in business activity brought about by the COVID-19 pandemic continues to evolve. As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods. Cash, Cash Equivalents and Restricted Cash: Cash equivalents consist of investments in short-term, highly liquid securities having original maturities of three months or less, which are made as a part of the Company's cash management activity. The carrying values of these assets approximate their fair market values. The Company primarily utilizes a cash management system with a series of separate accounts consisting of lockbox accounts for receiving cash, concentration accounts that funds are moved to and several "zero balance" disbursement accounts for funding of payroll and accounts payable. As a result of the Company's cash management system, checks issued, but not presented to the banks for payment, may create negative book cash balances. There were no checks outstanding in excess of related book cash balances at June 30, 2020 and 2019. Restricted cash within other current assets primarily relates to consolidated advertising cooperatives funds which can only be used to settle obligations of the respective cooperatives and contractual obligations to collateralize the Company's self-insurance programs. The self-insurance restricted cash arrangement can be canceled by the Company at any time if substituted with letters of credit. The table below reconciles the cash and cash equivalents balances and restricted cash balances, recorded within other current assets on the Consolidated Balance Sheet to the amount of cash, cash equivalents and restricted cash reported on the Consolidated Statement of Cash Flows: June 30, 2020 2019 (Dollars in thousands) Cash and cash equivalents $ 113,667 $ 70,141 Restricted cash, included in other current assets 9,213 22,238 Total cash, cash equivalents and restricted cash $ 122,880 $ 92,379 Receivables and Allowance for Doubtful Accounts: The receivable balance on the Company's Consolidated Balance Sheet primarily includes credit card receivables, accounts and notes receivable from franchisees and receivables related to salons sold to franchisees. The balance is presented net of an allowance for expected losses (i.e., doubtful accounts), related to receivables from the Company's franchisees. The Company monitors the financial condition of its franchisees and records provisions for estimated losses on receivables when it believes franchisees are unable to make their required payments based on factors such as delinquencies and aging trends. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses related to existing accounts and notes receivables. As of June 30, 2020, 2019 and 2018, the allowance for doubtful accounts was $6.9, $2.0 and $1.2 million, respectively. The allowance for doubtful accounts increased in fiscal year 2020 due to an increased risk in collecting franchise receivables due to decreased franchisee cash flows as a result of the government-mandated salon closures due to the COVID-19 pandemic. Material movement was also recorded within the allowance for doubtful accounts in fiscal year 2019 due to the TBG restructuring activity. See Notes 2 and 3 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. At June 30, 2018, the receivable balance also included $24.6 million related to the cash surrender value of company-owned life insurance policies surrendered prior to June 30, 2018. The Company received these proceeds in July 2018. Inventories: Inventories of finished goods consist principally of hair care products for retail product sales. A portion of inventories are also used for salon services consisting of hair color, hair care products including shampoo and conditioner and hair care treatments including permanents, neutralizers and relaxers. Inventories are stated at the lower of cost or market, with cost determined on a weighted average cost basis. Physical inventory counts are performed primarily in the fourth quarter of the fiscal year for salons and throughout the year at the distribution centers. Product and service inventories are adjusted based on the physical inventory counts. During the fiscal year, cost of retail product sold to salon guests is determined based on the weighted average cost of product sold, adjusted for an estimated shrinkage factor. The cost of product used in salon services is determined by applying an estimated percentage of total cost of service to service revenues. These estimates are updated quarterly based on cycle count results for the distribution centers, service sales mix, discounting, special promotions and other factors. The Company has inventory valuation reserves for excess and obsolete inventories, or other factors that may render inventories unmarketable at their historical costs. Estimates of the future demand for the Company's inventory and anticipated changes in formulas and packaging are some of the other factors used by management in assessing the net realizable value of inventories. Activity in the inventory valuation reserves during fiscal years 2020, 2019 and 2018 was not significant. Property and Equipment: Property and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation of property and equipment is computed using the straight-line method over their estimated useful asset lives (30 to 39 years for buildings, 10 years or lease life for improvements and three The Company capitalizes both internal and external costs of developing or obtaining computer software for internal use. Costs incurred to develop internal-use software during the application development stage are capitalized, while data conversion, training and maintenance costs associated with internal-use software are expensed as incurred. Estimated useful lives range from three Expenditures for maintenance and repairs and minor renewals and betterments, which do not improve or extend the life of the respective assets, are expensed. All other expenditures for renewals and betterments are capitalized. The assets and related depreciation and amortization accounts are adjusted for property retirements and disposals with the resulting gain or loss included in operating income. Fully depreciated or amortized assets remain in the accounts until retired from service. Non-Current Assets Held for Sale: In March 2019, the Company announced that it had entered into a ten year lease for a new corporate headquarters and would be selling the land and buildings currently used for its headquarters. The non-current assets held for sale represent the net book value of the land of $1.7 million and buildings of $3.6 million as of June 30, 2019. The sale was completed in December 2019 for proceeds of $9.0 million, resulting in a net gain on sale of $2.5 million, which was recorded in Interest income and other, net on the Condensed Consolidated Statement of Operations. Right of Use Asset, Lease Liabilities and Rent Expense: At contract inception, the Company determines whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. If the contract provides the Company the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, the Company considers it to be, or contain, a lease. The Company leases its company-owned salons and some of its corporate facilities under operating leases. The original terms of the salon leases range from 1 to 20 years with many leases renewable for additional 5 to 10 year terms at the option of the Company. The right of use asset and lease liability includes one renewal options as leases for leases expected to be renewed. The Company also has variable lease payments that are based on sales levels. For most leases, the Company is required to pay real estate taxes and other occupancy expense. The Company also leases the premises in which the majority of its franchisees operate and has entered into corresponding sublease arrangements with franchisees. These leases, generally with terms of approximately 5 years, are expected to be renewed on expiration. All additional lease costs are passed through to the franchisees. Upon adopting Topic 842, the Company now records the rental payments due from franchisees as franchise rental income and the corresponding amounts owed to landlords as franchise rent expense on the Consolidated Statement of Operations. For franchise and company-owned salon operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. The right of use (ROU) asset is initially and subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, less any accrued lease payments and unamortized lease incentives received, if any. The Company’s consolidated Right of Use Asset (ROUA) balance was $786.2 million as of June 30, 2020. As noted above, the ROU asset is a long-lived asset that is subject to impairment testing annually or as triggering events occur. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Generally, the non-lease components such as real estate taxes and other occupancy expenses are separate from rent expense within the lease and are not allocated to the lease liability. The discount rate used to determine the present value of the lease payments is the Company's estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as the interest rate implicit in the lease cannot generally be determined. The Company uses the portfolio approach in applying the discount rate based on original lease term. For purposes of recognizing incentives and minimum rental expenses on a straight-line basis, the Company uses the date it obtains the legal right to use and control the leased space to begin amortization, which is generally when the Company enters the space and begins to make improvements in preparation of its intended use. Certain leases provide for contingent rents, which are determined as a percentage of revenues in excess of specified levels. The Company records a contingent rent liability in accrued expenses on the Consolidated Balance Sheet, along with the corresponding rent expense in the Consolidated Statement of Operations, when specified levels have been achieved or when management determines that achieving the specified levels during the fiscal year is probable. Salon Long-Lived Asset and Right of Use Asset Impairment Assessments: The Company assesses impairment of long-lived salon assets and right of use 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. The first step is to assess recoverability, and in doing that, the undiscounted cash flows are compared to the carrying value. If the undiscounted estimated cash flows are less than the carrying value of the assets, the Company calculates an impairment charge based on the difference between the carrying value of the asset group and its fair value. The fair value of the salon long-lived asset group is estimated using market participant methods based on the best information available. The fair value of the right of use asset is estimated by determining what a market participant would pay over the life of the primary asset in the group, discounted back to June 30, 2020. See Note 6 for further discussion related to right of use asset impairment. Judgments made by management related to the expected useful lives of long-lived assets and the ability to realize undiscounted cash flows in excess of the carrying amounts of such assets are affected by factors such as the ongoing maintenance and improvement of the assets, changes in economic conditions and changes in operating performance. As the ongoing expected cash flows and carrying amounts of long-lived assets are assessed, these factors could cause the Company to realize material impairment charges. Long-lived property and equipment asset impairment charges related to continuing operations of $3.9, $4.6 and $11.1 million were recorded during fiscal years 2020, 2019 and 2018, respectively, are recorded in Depreciation and Amortization in the Consolidated Statement of Operations. A long-lived asset, including right of use and salon property and equipment, impairment charge of $22.6 million was recorded during fiscal year 2020, and is separately stated on Consolidated Statement of Operations. Of the total $22.6 million long-lived asset impairment charge, $17.4 million was allocated to the right of use asset and $5.2 million was allocated to salon property and equipment. Goodwill: As of June 30, 2020 and 2019, the Franchise salons reporting unit had $227.5 and $227.9 million of goodwill and the Company-owned reporting unit had $0 and $117.8 million of goodwill, respectively. See Note 5 to the Consolidated Financial Statements. The Company assesses goodwill impairment on an annual basis as of April 30, 2020, and between annual assessments if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Goodwill impairment assessments are performed at the reporting unit level, which is the same as the Company’s operating segments. In fiscal year 2020, the Company adopted ASU 2017-04, which simplified the test for goodwill impairment. Under this accounting standard, the Company performed its interim impairment test and annual impairment tests by comparing the fair value of a reporting unit to its carrying amount. The Company then records an impairment charge for the amount that the carrying amount exceeds the fair value. This eliminates Step 2 from the goodwill impairment test to simplify the subsequent measure of goodwill. Prior to the adoption, the goodwill assessment involved a one-step comparison of the reporting unit’s fair value to its carrying value, including goodwill (Step 1). If the reporting unit’s fair value exceeded its carrying value, no further procedures were required. However, if the reporting unit’s fair value was less than the carrying value, an impairment charge was recorded for the difference between the fair value and carrying value of the reporting unit. In applying the goodwill impairment assessment, the Company could assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting units was less than its carrying value (Step 0). Qualitative factors could include, but were not limited to, economic, market and industry conditions, cost factors and overall financial performance of the reporting unit. If after assessing these qualitative factors, the Company determined it is “more-likely-than-not” that the carrying value was less than the fair value, then performing Step 1 of the goodwill impairment assessment was unnecessary. The carrying value of each reporting unit is based on the assets and liabilities associated with the operations of the reporting unit, including allocation of shared or corporate balances among reporting units. Allocations are generally based on the number of salons in each reporting unit as a percent of total company-owned salons or expenses of the reporting unit as a percent of total company expenses. The Company calculates estimated fair values of the reporting units based on discounted cash flows utilizing estimates in annual revenue, service and product margins, fixed expense rates, allocated corporate overhead, franchise and company-owned salon counts, proceeds from the sale of company-owned salons to franchisees and long-term growth rates for determining terminal value. Where available and as appropriate, comparative market multiples are used in conjunction with the results of the discounted cash flows. The Company engages third-party valuation consultants to assist in evaluating the Company's estimated fair value calculations. Following is a description of the goodwill impairment assessments for each of the fiscal years: Fiscal 2020 During the third quarter of fiscal year 2020, the Company determined a triggering event occurred, resulting in quantitative impairment tests performed over the goodwill. This determination was made considering the reduced sales and profitability projections for the reporting units, driven by the COVID-19 pandemic and related economic disruption. The triggering event experienced in the third quarter impacted both reporting units of the business, Franchise and Company-owned. The Company engaged a third-party valuation specialist to perform an impairment analysis on the Franchise reporting unit of the business. The Company-owned reporting unit is comprised of a portfolio of salons that the Company intends to sell to franchisees or close in the short-term as part of the transition to a fully-franchised model. As a result, the Company-owned reporting unit has a limited life which allows the Company to perform its own impairment analysis on the Company-owned reporting unit. For the goodwill impairment analysis, management utilized a combination of both a discounted cash flows approach and market approach to evaluate the Franchise reporting unit, and the discounted cash flows approach to evaluate the Company-owned reporting unit. The discounted cash flow models reflect management's assumptions regarding revenue growth rates, economic and market trends including deterioration from the current COVID-19 pandemic, cost structure, and other expectations about the anticipated short-term and long-term operating results of the reporting units. For the Franchise reporting unit, the number of salons to be sold to franchisees and the discount rate of 13 percent were significant assumptions utilized in the discounted cash flow. For the Company-owned reporting unit, proceeds from the sale of salons to franchisees and number of salon venditions were the significant assumptions utilized in its discounted cash flow. As a result of the impairment testing, the Franchise reporting unit, which has goodwill of $227.5 million, was determined to have a fair value that exceeded carrying value by approximately 50 percent. The Company-owned reporting unit was determined to have a carrying value in excess of its fair value, resulting in a goodwill impairment charge of $40.2 million. Prior to the COVID-19 pandemic, the Company had been derecognizing Company-owned goodwill as part of the calculation of gain or loss on the sale of salons to franchisees. The Company-owned reporting unit has no remaining goodwill, so there will be no further derecognition of Company-owned goodwill. The Company performed its annual impairment assessment as of April 30, 2020 and noted no significant changes to the carrying value or the fair value of the Franchise reporting unit which would indicate that the headroom dropped below the 50 percent determined as of March 31, 2020. If a future triggering event analysis or the Company's annual impairment assessment indicates the fair value of the Franchise reporting unit has potentially fallen below more than the 50 percent headroom, we may be required to perform an updated impairment assessment which may result in a non-cash impairment charge to reduce the carrying value of goodwill. Assessing goodwill for impairment requires management to make assumptions and to apply judgment, including forecasting future sales, future salon sales to franchisees and selecting appropriate discount rates, which can be affected by economic conditions and other factors that can be difficult to predict. The Company does not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions it uses to calculate impairment losses of goodwill. However, if actual results are not consistent with the estimates and assumptions used in the calculations, or if management is unable to expand its franchise base, the Company may be exposed to future impairment losses that could be material. Fiscal 2019 During the fiscal year 2019, the Company did not experience any triggering events that required an interim goodwill analysis. The Company performed its annual impairment assessment as of April 30. For the fiscal year 2019 annual impairment assessment, due to the transformational efforts completed during the year, the Company elected to forgo the optional Step 0 assessment and performed the quantitative impairment analysis on the Franchise and Company-owned reporting units. The Company compared the carrying value of the reporting units, including goodwill, to their estimated fair value. The results of these assessments indicated that the estimated fair value of the Company's reporting units exceeded their carrying value. The Franchise reporting unit had substantial headroom and the Company-owned reporting unit had headroom of approximately 20%. Fiscal Year 2018 During the first quarter of fiscal year 2018, the Company experienced a triggering event due to the redefining of its operating segments as the Company's mall-based business and International segment met the criteria to be classified as held for sale and as a discontinued operation as of September 30, 2017. The Company's reporting changed to two reporting units: Franchise and Company-owned. Prior to this change the Company had four reporting units: North American Value, North American Premium, North American Franchise and International. Pursuant to the change in operating segments, the Company performed a goodwill impairment assessment on its North American Value reporting unit. The Company assessed qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit was less than their carrying values (Step 0). The Company determined it is “more-likely-than-not” that the carrying value of the reporting unit was less than the fair value. Accordingly, the Company did not perform a quantitative analysis. Based on the changes to the operating segment structure, there was no goodwill reallocated from the North American Value reporting unit related to the mall-based business that was subsequently sold as the mall-based business previously included in the North American Value reporting unit was projected to incur future losses. The Company did not perform a goodwill impairment assessment for the North American Franchise reporting unit during the first quarter of fiscal year 2018, as this reporting unit was not impacted by the triggering event. The North American Premium and International units did not have any goodwill. The Company performed its annual impairment assessment as of April 30. For the fiscal year 2018 annual impairment assessment, due to the transformational efforts completed during the year, the Company elected to forgo the optional Step 0 assessment and performed the quantitative impairment analysis on the Franchise and Company-owned reporting units. The Company compared the carrying value of the reporting units, including goodwill, to their estimated fair value. The results of these assessments indicated that the estimated fair value of our reporting units exceeded their carrying value. The Franchise reporting unit had substantial headroom and the Company-owned reporting unit had headroom of approximately 24%. The fair value of the Company-owned reporting unit was determined based on a discounted cash flow analysis and comparable market multiples. The assumptions used in determining fair value were similar to than those used in fiscal year 2019. Investments In Affiliates: The Company has equity investments in securities of certain privately held entities. The Company accounts for these investments under the equity or cost method of accounting. The Company's investments have no value as of June 30, 2020 and 2019. Self-Insurance Accruals: The Company uses a combination of third party insurance and self-insurance for a number of risks including workers' compensation, health insurance, employment practice liability and general liability claims. The liability represents the Company's estimate of the undiscounted ultimate cost of uninsured claims incurred as of the Consolidated Balance Sheet date. The Company estimates self-insurance liabilities using a number of factors, primarily based on independent third-party actuarially-determined amounts, historical claims experience, estimates of incurred but not reported claims, demographic factors and severity factors. Although the Company does not expect the amounts ultimately paid to differ significantly from the estimates, self-insurance accruals could be affected if future claims experience differs significantly from historical trends and actuarial assumptions. For fiscal years 2020, 2019 and 2018, the Company recorded decreases (increases) in expense for changes in estimates related to prior year open policy periods of $3.1, $(1.3) and $1.2 million, respectively. The Company updates loss projections quarterly and adjusts its liability to reflect updated projections. The updated loss projections consider new claims and developments associated with existing claims for each open policy period. As certain claims can take years to settle, the Company has multiple policy periods open at any point in time. As of June 30, 2020, the Company had $8.5 and $20.3 million recorded in current liabilities and non-current liabilities, respectively, related to the Company's self-insurance accruals. As of June 30, 2019, the Company had $10.1 and $23.6 million recorded in current liabilities and non-current liabilities, respectively, related to the Company's self-insurance accruals. Revenue Recognition and Deferred Revenue: Franchise revenues primarily include royalties, advertising fund fees and initial franchise fees. Royalties and advertising fund revenues represent sales-based royalties that are re |
REVENUE RECOGNITION
REVENUE RECOGNITION | 12 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
REVENUE RECOGNITION | REVENUE RECOGNITION: In May 2014, the FASB issued amended guidance for revenue recognition which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company adopted the amended revenue recognition guidance, ASC Topic 606, on July 1, 2018 using the full retrospective transition method which required the adjustment of each prior reporting period presented. As a result of adopting this new standard, the Company is providing its updated revenue recognition policies. Revenue Recognition and Deferred Revenue: Revenue recognized at point of sale Company-owned salon revenues are recognized at the time when the services are provided. Product revenues for company-owned salons are recognized when the guest receives and pays for the merchandise. Revenues from purchases made with gift cards are also recorded when the guest takes possession of the merchandise or services are provided. Gift cards issued by the Company are recorded as a liability (deferred revenue) upon sale and recognized as revenue upon redemption by the customer. Gift card breakage, the amount of gift cards which will not be redeemed, is recognized proportional to redemptions using estimates based on historical redemption patterns. Product sales by the Company to its franchisees are included within product revenues in the Consolidated Statement of Operations and recorded at the time product is delivered to the franchisee. Payment for franchisee product revenue is generally collected within 30 to 90 days of delivery. Revenue recognized over time Franchise revenues primarily include royalties, advertising fund cooperatives fees, franchise fees and other fees. Royalty and advertising fund revenues represent sales-based royalties that are recognized in the period in which the sales occur. Generally, royalty and advertising fund revenue is billed and collected monthly in arrears. Advertising fund revenues and expenditures, which must be spent on marketing and related activities per the franchise agreements, are recorded on a gross basis within the Consolidated Statement of Operations. This increases both the gross amount of reported franchise revenue and site operating expense and generally has no impact on operating income and net income. Franchise fees are billed and received upon the signing of the franchise agreement. Recognition of these fees is deferred until the salon opening and is then recognized over the term of the franchise agreement, typically ten years. Franchise rental income is a result of the Company signing leases on behalf of franchisees as the primary obligor and entering into a sublease arrangement with the franchise. The Company recognizes franchise rental income and expense when it is due to the landlord. The following table disaggregates revenue by timing of revenue recognition and is reconciled to reportable segment revenues as follows: For the Year Ended June 30, 2020 For the Year Ended June 30, 2019 Franchise Company-owned Franchise Company-owned (Dollars in thousands) Revenue recognized at a point in time: Service $ — $ 331,538 $ — $ 749,660 Product 52,421 85,165 59,905 165,713 Total revenue recognized at a point in time $ 52,421 $ 416,703 $ 59,905 $ 915,373 Revenue recognized over time: Royalty and other franchise fees $ 60,061 $ — $ 59,688 $ — Advertising fund fees 13,341 — 34,073 — Franchise rental income 127,203 — — — Total revenue recognized over time 200,605 — 93,761 — Total revenue $ 253,026 $ 416,703 $ 153,666 $ 915,373 Information about receivables, broker fees and deferred revenue subject to the revenue recognition guidance is as follows: June 30, June 30, Balance Sheet Classification (Dollars in thousands) Receivables from contracts with customers, net $ 22,991 $ 23,210 Accounts receivable, net Broker fees $ 20,516 $ 17,819 Other assets Deferred revenue: Current Gift card liability $ 2,543 $ 3,050 Accrued expenses Deferred franchise fees unopened salons 77 193 Accrued expenses Deferred franchise fees open salons 5,537 4,164 Accrued expenses Total current deferred revenue $ 8,157 $ 7,407 Non-current Deferred franchise fees unopened salons $ 11,855 $ 15,173 Other non-current liabilities Deferred franchise fees open salons 33,623 24,194 Other non-current liabilities Total non-current deferred revenue $ 45,478 $ 39,367 Receivables relate primarily to payments due for royalties, franchise fees, advertising fees, franchise product sales and sales of salon services and product paid by credit card. The receivables balance is presented net of an allowance for expected losses (i.e., doubtful accounts), related to receivables from franchisees. As of June 30, 2020 and 2019, the balance in the allowance for doubtful accounts was $6.9 and $2.0 million, respectively. The increase is due to an increased risk in collecting franchise receivables due to decreased franchisee cash flows as a result of the government-mandated salon closures due to the COVID-19 pandemic. The following table is a rollforward of the allowance for doubtful accounts for the periods indicated (in thousands): Balance as of June 30, 2019 $ 2,025 Provision for doubtful accounts 5,958 Write-offs (1,084) Balance as of June 30, 2020 $ 6,899 Broker fees are the costs associated with using external brokers to identify new franchisees. These fees are paid upon the signing of the franchise agreement and recognized as General and Administrative expense over the term of the agreement. The following table is a rollforward of the broker fee balance for the periods indicated (in thousands): Balance as of June 30, 2019 $ 17,819 Additions 5,606 Amortization (2,852) Write-offs (57) Balance as of June 30, 2020 $ 20,516 Deferred revenue includes the gift card liability and deferred franchise fees for unopened salons and open salons. Gift card revenue for the years ended June 30, 2020 and 2019 was $2.4 and $5.3 million, respectively. Deferred franchise fees related to open salons are generally recognized on a straight-line basis over the term of the franchise agreement. Franchise fee revenue for the twelve months ended June 30, 2020 and 2019 was $5.2 and $3.6 million, respectively. Estimated revenue expected to the recognized in the future related to deferred franchise fees for open salons as of June 30, 2020 is as follows (in thousands): 2021 $ 5,471 2022 5,351 2023 5,174 2024 4,939 2025 4,577 Thereafter 13,648 Total $ 39,160 |
TBG DISCONTINUED OPERATIONS AND
TBG DISCONTINUED OPERATIONS AND RESTRUCTURING | 12 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
TBG DISCONTINUED OPERATIONS AND RESTRUCTURING | TBG DISCONTINUED OPERATIONS AND RESTRUCTURING The Beautiful Group (TBG) : In October 2017, the Company sold substantially all of its mall-based salon business in North America, representing 858 salons, to The Beautiful Group (TBG), an affiliate of Regent, a private equity firm based in Los Angeles, California, who operated these locations as franchise locations until June 2019. In addition, the Company entered into a share purchase agreement for substantially all of its International segment, representing approximately 250 salons in the UK, with TBG operating these locations as franchise locations until they were transferred to another franchisee in fiscal year 2020. The Company classified the results of its mall-based business and its International segment as a discontinued operation for all periods presented in the Consolidated Statement of Operations. In fiscal years 2018 and 2019, TBG salons were operating at a loss and TBG struggled to pay the Company for the receivables related to the original purchase agreements as well as royalty and product receivables. The Company reserved for $11.7 million of receivables in fiscal 2018 and an additional $20.7 million of receivables in fiscal 2019. In the second quarter of fiscal year 2020, TBG transferred 207 of its North American mall-based salons to the Company. The 207 North American mall-based salons transferred were the salons that the Company was the guarantor of the lease obligation. The transfer of the 207 mall-based salons occurred on December 31, 2019, so the operational results of these mall-based salons are included in the Consolidated Statement of Operations beginning in the third quarter. The assets acquired and liabilities assumed were not material to the Consolidated Balance Sheet. As of June 30, 2020, prior to any mitigation efforts which may be available, the Company remains liable for up to approximately $23 million related to its mall-based salon lease commitments on the 166 salons that remain open, a $18 million reduction from June 30, 2019. The commitments are included in our lease liabilities. The following summarizes the results of TBG related charges and TBG discontinued operations for the periods presented: Fiscal Years 2020 2019 2018 (Dollars in thousands) Revenue $ — $ — $ 101,140 TBG Mall Restructuring: Accounts and notes receivable reserves — 20,711 — Other charges (1) 2,333 1,105 — Total TBG mall restructuring $ 2,333 $ 21,816 $ — TBG Discontinued Operations: Working capital and prepaid rent receivable reserve — — 11,697 Other charges (2) (3) (1,063) 1,221 47,848 (Income) loss from TBG discontinued operations, before taxes (1,063) 1,221 59,545 Income tax expense (benefit) on TBG discontinued operations (4) 231 (7,117) (6,360) (Income) loss from TBG discontinued operations, net of tax $ (832) $ (5,896) $ 53,185 _______________________________________________________________________________ (1) In fiscal year 2020, the Company recorded professional fees associated with the transfer of the mall salons back to the Company as TBG mall restructuring charges. (2) In fiscal years 2020 and 2019, the Company recorded professional fees related to the transaction, as well as insurance adjustments associated with the discontinued operations. (3) In fiscal year 2018, the Company recorded $43.0 million of asset impairment charges, $6.2 million of cumulative foreign currency translation adjustment, $3.6 million of loss from operations and $6.8 million of professional fees. (4) Income taxes have been allocated to continuing and discontinued operations based on the methodology required by accounting for income taxes guidance. SmartStyle restructuring : In January 2018, the Company closed 597 non-performing company-owned SmartStyle salons. The 597 non-performing salons generated negative cash flow of approximately $15 million during the twelve months ended September 30, 2017. The action delivers on the Company's commitment to restructure its salon portfolio to improve shareholder value and position the Company for long-term growth. A summary of costs associated with the SmartStyle salon restructuring for fiscal year 2018 is as follows: Financial Line Item Fiscal Year 2018 (Dollars in thousands) Inventory reserves Cost of Service $ 656 Inventory reserves Cost of Product 586 Severance General and administrative 897 Long-lived fixed asset impairment Depreciation and amortization 5,460 Asset retirement obligation Depreciation and amortization 7,680 Lease termination and other related closure costs Rent 27,290 Deferred rent Rent (3,291) Total $ 39,278 In addition, the Company recorded approximately $1.9 million of other related costs to the SmartStyle restructuring, primarily warehouse related costs. Substantially all related costs associated with the SmartStyle salon restructuring requiring cash outflow were complete as of June 30, 2018. Foreign currency translation adjustment: In fiscal year 2018, the Company incurred $6.2 million of cumulative foreign currency translation adjustment associated with the Company's liquidation of substantially all foreign entities with British pound denominated currencies. |
OTHER FINANCIAL STATEMENT DATA
OTHER FINANCIAL STATEMENT DATA | 12 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
OTHER FINANCIAL STATEMENT DATA | OTHER FINANCIAL STATEMENT DATA The following provides additional information concerning selected balance sheet accounts: June 30, 2020 2019 (Dollars in thousands) Other current assets: Prepaids $ 5,165 $ 9,527 Restricted cash 9,213 22,238 Other 4,760 1,451 $ 19,138 $ 33,216 Property and equipment: Buildings and improvements 36,379 29,165 Equipment, furniture and leasehold improvements 198,983 309,561 Internal use software 71,212 67,465 306,574 406,191 Less accumulated depreciation and amortization (249,398) (328,101) $ 57,176 $ 78,090 Accrued expenses: Payroll and payroll related costs $ 18,204 $ 34,909 Insurance 10,278 12,935 Rent and related real estate costs 4,179 6,332 Other 16,164 26,575 $ 48,825 $ 80,751 Other non-current liabilities: Deferred income taxes $ 13,916 $ 17,924 Deferred rent (1) — 14,006 Insurance 20,301 23,565 Deferred benefits 11,106 12,457 Deferred franchise fees 45,478 39,367 Other 3,341 4,080 $ 94,142 $ 111,399 _______________________________________________________________________________ (1) Upon adoption of ASC 842 in fiscal year 2020, the Company no longer reports deferred rent. The following provides additional information concerning other intangibles, net: June 30, 2020 2019 Weighted Average Amortization Periods (1) Cost (2) Accumulated Net Weighted Average Amortization Periods (1) Cost (2) Accumulated Net (In years) (Dollars in thousands) (In years) (Dollars in thousands) Brand assets and trade names 33 $ 6,494 $ (3,609) $ 2,885 33 $ 6,909 $ (3,659) $ 3,250 Franchise agreements 19 9,558 (8,194) 1,364 19 9,783 (8,057) 1,726 Lease intangibles (3) 0 — — — 20 13,490 (10,065) 3,425 Other 20 874 (544) 330 20 883 (523) 360 Total 24 $ 16,926 $ (12,347) $ 4,579 22 $ 31,065 $ (22,304) $ 8,761 _______________________________________________________________________________ (1) All intangible assets have been assigned an estimated finite useful life and are amortized on a straight-line basis over the number of years that approximate their expected period of benefit (ranging from three (2) The change in the gross carrying value and accumulated amortization of other intangible assets is impacted by foreign currency. (3) A $2.5 million lease intangible impairment was recorded in the fourth fiscal quarter as a result of the COVID-19 triggering event. Total amortization expense related to intangible assets during fiscal years 2020, 2019 and 2018 was approximately $1.3 million in each year. As of June 30, 2020, future estimated amortization expense related to intangible assets is estimated as follows (in thousands): 2021 $ 467 2022 438 2023 425 2024 363 2025 366 Thereafter 2,520 Total $ 4,579 The following provides supplemental disclosures of cash flow activity: Fiscal Years 2020 2019 2018 (Dollars in thousands) Cash paid for: Interest $ 7,390 $ 4,408 $ 7,022 Taxes and penalties, net 2,150 2,096 2,397 Non-cash investing activities: Unpaid capital expenditures 2,569 3,873 9,209 |
GOODWILL
GOODWILL | 12 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
GOODWILL | GOODWILL The table below contains details related to the Company's goodwill: June 30, 2020 2019 Gross Accumulated Net Gross Accumulated Net (Dollars in thousands) Goodwill $ 341,721 $ (114,264) $ 227,457 $ 419,818 $ (74,100) $ 345,718 _______________________________________________________________________________ (1) The change in the gross carrying value of goodwill relates to goodwill derecognized for salons sold to franchisees and foreign currency translation adjustments. (2) In fiscal year 2011, the Company realized a $74.1 million goodwill impairment loss associated with the Company-owned reporting unit (the previous North American Value reporting unit). (3) In fiscal year 2020, the Company realized a $40.2 million goodwill impairment associated with the Company-owned reporting unit. Prior to the COVID-19 pandemic, the Company had been derecognizing Company-owned goodwill as part of the calculation of gain or loss on the sale of salons to franchisees. Following the goodwill impairment in fiscal year 2020, the Company-owned reporting unit has no remaining goodwill, so there will be no further derecognition of Company-owned goodwill. The table below contains details related to the Company's goodwill: Franchise Company-owned Consolidated (Dollars in thousands) Goodwill, net at June 30, 2019 $ 227,928 $ 117,790 $ 345,718 Translation rate adjustments (471) (660) (1,131) Derecognition related to sale of salon assets to franchisees (1) — (76,966) (76,966) Goodwill impairment — (40,164) (40,164) Goodwill, net at June 30, 2020 $ 227,457 $ — $ 227,457 _______________________________________________________________________________ |
LEASES
LEASES | 12 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
LEASES | LEASES At contract inception, the Company determines whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. If the contract provides the Company the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, the Company considers it to be, or contain, a lease. The Company leases its company-owned salons and some of its corporate facilities under operating leases. The original terms of the salon leases range from 1 to 20 years with many leases renewable for additional 5 to 10 year terms at the option of the Company. In addition to the obligation to make fixed rental payments for use of the salons, the Company also has variable lease payments that are based on sales levels. For most leases, the Company is required to pay real estate taxes and other occupancy expenses. Total rent expense includes the following: June 30, 2020 2019 2018 (Dollars in thousands) Minimum rent (1) $ 60,703 $ 108,892 $ 157,828 Percentage rent based on sales 2,043 4,754 4,324 Real estate taxes and other expenses 13,636 18,170 20,944 Total $ 76,382 $ 131,816 $ 183,096 _______________________________________________________________________________ (1) Pursuant to ASC 420, fiscal year 2018 includes lease termination and other related closure costs of $27.3 million and a deferred rent benefit of $3.3 million related to restructuring of the company-owned SmartStyle portfolio that occurred in January 2018. The Company also leases the premises in which the majority of its franchisees operate, where the Company retains the head lease primary obligation, and has entered into corresponding sublease arrangements with franchisees. These leases, generally with terms of approximately 5 years, are expected to be renewed on expiration. All lease related costs are passed through to the franchisees. The Company retains the primary obligation for the head lease and upon adopting Topic 842, the Company records the rental payments due from franchisees as franchise rental income and the corresponding amounts owed to landlords as franchise rent expense on the Consolidated Statement of Operations. In fiscal year 2020, franchise rental income and franchise rent expense were $127.2 million. In April 2020, the FASB issued a question and answer document focused on the application of lease accounting guidance to lease concessions provided as a result of COVID-19 (the “Lease Modification Q&A”). The Lease Modification Q&A provides entities with the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease when the total cash flows resulting from the modified lease are substantially similar to the cash flows in the original lease. The Company elected this FASB relief for COVID-19-related rent concessions for the Walmart rent abatement received in April and May 2020 and has elected not to remeasure the related lease liability and right of use asset for Walmart leases. The Walmart rent abatement was recognized as a reduction of variable rent expense of $2.7 million in the fourth fiscal quarter of 2020. Additionally, included in accounts payable as of June 30, 2020 is approximately $20 million of rental payments that were due but the Company had not paid. The Company has elected to account for these rent deferrals as if no changes to the lease contract were made and, as noted above, has increased its accounts payable as the lease payments accrue. For franchise and company-owned salon operating leases, the lease liability is initially measured at the present value of the unpaid lease payments at the lease commencement date. The Right of Use (ROU) asset is initially measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, less any accrued lease payments and unamortized lease incentives received, if any. The Company’s consolidated Right of Use Asset (ROUA) balance was $786.2 million as of June 30, 2020. For leases classified as operating leases, expense for lease payments is recognized on a straight-line basis over the lease term. Generally, the non-lease components such as real estate taxes and other occupancy expenses are separate from rent expense within the lease and are not included in the measurement of the lease liability because these charges are variable. The discount rate used to determine the present value of the lease payments is the Company's estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as the interest rate implicit in the lease cannot generally be determined. The Company uses the portfolio approach in applying the discount rate based on original lease term. The weighted average remaining lease term was 6.87 years and the weighted-average discount rate was 3.95% for all salon operating leases as of June 30, 2020. A lessee’s right of use asset is subject to the same asset impairment guidance in ASC 360, Property, Plant, and Equipment, applied to other elements of property, plant, and equipment. The Company has identified its asset groups at the individual salon level as this represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. As a result of COVID-19 and the related store closures that occurred during the fourth fiscal quarter of 2020, the Company determined that a triggering event had occurred pursuant to ASC 360-10-35-21 given that there had been a significant adverse change in the business climate that could affect the value of its salon long-lived asset groups combined with a significant adverse change in the extent or manner in which the salon long-lived groups were being used. As a result, management assessed all of its salon asset groups, which included the related ROU assets, for impairment in accordance with ASC 360. The first step in the impairment test under ASC 360 is to determine whether the long-lived assets are recoverable, which is determined by comparing the net carrying value of the salon asset group to the undiscounted net cash flows to be generated from the use and eventual disposition of that asset group. Estimating cash flows for purposes of the recoverability test is subjective and requires significant judgment. Estimated future cash flows used for the purposes of the recoverability test were based upon historical cash flows for the salons, adjusted for expected changes in future market conditions related to COVID-19 and other factors. The period of time used to determine the estimates of the future cash flows for the recoverability test was based on the remaining useful life of the primary asset of the group, which was the ROU asset in all cases. Step two of the long-lived asset impairment test requires that the fair value of the asset group be determined when calculating the amount of any impairment loss. For the salon asset groups that failed the recoverability test, an impairment loss was measured as the amount by which the carrying amount of the asset group exceeds its fair value. The Company applied the fair value guidance within ASC 820-10 to determine the fair value of the asset group from the perspective of a market-participant considering, among other things, appropriate discount rates, multiple valuation techniques, the most advantageous market, and assumptions about the highest and best use of the asset group. To determine the fair value of the salon asset groups, the Company utilized market-participant assumptions, rather than the Company’s own assumptions about how it intends to use the asset group. The fair value of the salon long-lived asset group is estimated using market participant methods based on the best information available. The significant judgments and assumptions utilized to determine the fair value of the salon asset groups include; the market rent of comparable properties based on recently negotiated leases as applicable, the asset group’s projected sales for fiscal years 2021 through 2023 for properties with no recently negotiated leases, and a discount rate. The Company engaged a third-party valuation specialist to assist with the research related to inputs used in their determination of the fair value of the ROU asset which included providing information related to significant inputs and assumptions utilized in the measurement of the impairment loss. Of the total $22.6 million long-lived asset impairment charge in the Consolidated Statement of Operations, $17.4 million related to the right of use asset included in the salon asset groups. The impairment loss for each salon asset group that was recognized was allocated among the long-lived assets of the group on a pro rata basis using their relative carrying amounts. Additionally, the impairment losses did not reduce the carrying amount of an individual asset below its fair value, including for the ROU assets included in the salon asset groups. Assessing the long-lived assets for impairment requires management to make assumptions and to apply judgment which can be affected by economic conditions and other factors that can be difficult to predict. The Company does not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions it uses to calculate impairment losses for its long-lived asset, including its ROU assets. However, the ultimate severity and longevity of the COVID-19 pandemic is unknown therefore, if actual results are not consistent with the estimates and assumptions used in the calculations, the Company may be exposed to future impairment losses that could be material. As of June 30, 2020, future operating lease commitments to be paid and received by the Company were as follows: Fiscal Year Leases For Franchise Salons Leases For Company-Owned Salons Corporate Leases Total Operating Lease Payments Sublease Income To Be Received From Franchisees Net Rent Commitments 2021 $ 121,149 $ 43,705 $ 1,781 $ 166,635 $ (121,149) $ 45,486 2022 110,951 36,628 1,410 148,989 (110,951) 38,038 2023 100,640 31,943 1,447 134,030 (100,640) 33,390 2024 90,649 28,057 1,484 120,190 (90,649) 29,541 2025 79,398 23,746 1,522 104,666 (79,398) 25,268 Thereafter 190,793 59,994 7,818 258,605 (190,793) 67,812 Total future obligations $ 693,580 $ 224,073 $ 15,462 $ 933,115 $ (693,580) $ 239,535 Less amounts representing interest 85,432 27,193 2,765 115,390 Present value of lease liabilities $ 608,148 $ 196,880 $ 12,697 $ 817,725 Less current lease liabilities 99,217 36,767 1,287 137,271 Long-term lease liabilities $ 508,931 $ 160,113 $ 11,410 $ 680,454 |
LEASES | LEASES At contract inception, the Company determines whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. If the contract provides the Company the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, the Company considers it to be, or contain, a lease. The Company leases its company-owned salons and some of its corporate facilities under operating leases. The original terms of the salon leases range from 1 to 20 years with many leases renewable for additional 5 to 10 year terms at the option of the Company. In addition to the obligation to make fixed rental payments for use of the salons, the Company also has variable lease payments that are based on sales levels. For most leases, the Company is required to pay real estate taxes and other occupancy expenses. Total rent expense includes the following: June 30, 2020 2019 2018 (Dollars in thousands) Minimum rent (1) $ 60,703 $ 108,892 $ 157,828 Percentage rent based on sales 2,043 4,754 4,324 Real estate taxes and other expenses 13,636 18,170 20,944 Total $ 76,382 $ 131,816 $ 183,096 _______________________________________________________________________________ (1) Pursuant to ASC 420, fiscal year 2018 includes lease termination and other related closure costs of $27.3 million and a deferred rent benefit of $3.3 million related to restructuring of the company-owned SmartStyle portfolio that occurred in January 2018. The Company also leases the premises in which the majority of its franchisees operate, where the Company retains the head lease primary obligation, and has entered into corresponding sublease arrangements with franchisees. These leases, generally with terms of approximately 5 years, are expected to be renewed on expiration. All lease related costs are passed through to the franchisees. The Company retains the primary obligation for the head lease and upon adopting Topic 842, the Company records the rental payments due from franchisees as franchise rental income and the corresponding amounts owed to landlords as franchise rent expense on the Consolidated Statement of Operations. In fiscal year 2020, franchise rental income and franchise rent expense were $127.2 million. In April 2020, the FASB issued a question and answer document focused on the application of lease accounting guidance to lease concessions provided as a result of COVID-19 (the “Lease Modification Q&A”). The Lease Modification Q&A provides entities with the option to elect to account for lease concessions as though the enforceable rights and obligations existed in the original lease when the total cash flows resulting from the modified lease are substantially similar to the cash flows in the original lease. The Company elected this FASB relief for COVID-19-related rent concessions for the Walmart rent abatement received in April and May 2020 and has elected not to remeasure the related lease liability and right of use asset for Walmart leases. The Walmart rent abatement was recognized as a reduction of variable rent expense of $2.7 million in the fourth fiscal quarter of 2020. Additionally, included in accounts payable as of June 30, 2020 is approximately $20 million of rental payments that were due but the Company had not paid. The Company has elected to account for these rent deferrals as if no changes to the lease contract were made and, as noted above, has increased its accounts payable as the lease payments accrue. For franchise and company-owned salon operating leases, the lease liability is initially measured at the present value of the unpaid lease payments at the lease commencement date. The Right of Use (ROU) asset is initially measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, less any accrued lease payments and unamortized lease incentives received, if any. The Company’s consolidated Right of Use Asset (ROUA) balance was $786.2 million as of June 30, 2020. For leases classified as operating leases, expense for lease payments is recognized on a straight-line basis over the lease term. Generally, the non-lease components such as real estate taxes and other occupancy expenses are separate from rent expense within the lease and are not included in the measurement of the lease liability because these charges are variable. The discount rate used to determine the present value of the lease payments is the Company's estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as the interest rate implicit in the lease cannot generally be determined. The Company uses the portfolio approach in applying the discount rate based on original lease term. The weighted average remaining lease term was 6.87 years and the weighted-average discount rate was 3.95% for all salon operating leases as of June 30, 2020. A lessee’s right of use asset is subject to the same asset impairment guidance in ASC 360, Property, Plant, and Equipment, applied to other elements of property, plant, and equipment. The Company has identified its asset groups at the individual salon level as this represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other groups of assets and liabilities. As a result of COVID-19 and the related store closures that occurred during the fourth fiscal quarter of 2020, the Company determined that a triggering event had occurred pursuant to ASC 360-10-35-21 given that there had been a significant adverse change in the business climate that could affect the value of its salon long-lived asset groups combined with a significant adverse change in the extent or manner in which the salon long-lived groups were being used. As a result, management assessed all of its salon asset groups, which included the related ROU assets, for impairment in accordance with ASC 360. The first step in the impairment test under ASC 360 is to determine whether the long-lived assets are recoverable, which is determined by comparing the net carrying value of the salon asset group to the undiscounted net cash flows to be generated from the use and eventual disposition of that asset group. Estimating cash flows for purposes of the recoverability test is subjective and requires significant judgment. Estimated future cash flows used for the purposes of the recoverability test were based upon historical cash flows for the salons, adjusted for expected changes in future market conditions related to COVID-19 and other factors. The period of time used to determine the estimates of the future cash flows for the recoverability test was based on the remaining useful life of the primary asset of the group, which was the ROU asset in all cases. Step two of the long-lived asset impairment test requires that the fair value of the asset group be determined when calculating the amount of any impairment loss. For the salon asset groups that failed the recoverability test, an impairment loss was measured as the amount by which the carrying amount of the asset group exceeds its fair value. The Company applied the fair value guidance within ASC 820-10 to determine the fair value of the asset group from the perspective of a market-participant considering, among other things, appropriate discount rates, multiple valuation techniques, the most advantageous market, and assumptions about the highest and best use of the asset group. To determine the fair value of the salon asset groups, the Company utilized market-participant assumptions, rather than the Company’s own assumptions about how it intends to use the asset group. The fair value of the salon long-lived asset group is estimated using market participant methods based on the best information available. The significant judgments and assumptions utilized to determine the fair value of the salon asset groups include; the market rent of comparable properties based on recently negotiated leases as applicable, the asset group’s projected sales for fiscal years 2021 through 2023 for properties with no recently negotiated leases, and a discount rate. The Company engaged a third-party valuation specialist to assist with the research related to inputs used in their determination of the fair value of the ROU asset which included providing information related to significant inputs and assumptions utilized in the measurement of the impairment loss. Of the total $22.6 million long-lived asset impairment charge in the Consolidated Statement of Operations, $17.4 million related to the right of use asset included in the salon asset groups. The impairment loss for each salon asset group that was recognized was allocated among the long-lived assets of the group on a pro rata basis using their relative carrying amounts. Additionally, the impairment losses did not reduce the carrying amount of an individual asset below its fair value, including for the ROU assets included in the salon asset groups. Assessing the long-lived assets for impairment requires management to make assumptions and to apply judgment which can be affected by economic conditions and other factors that can be difficult to predict. The Company does not believe there is a reasonable likelihood that there will be a material change in the estimates or assumptions it uses to calculate impairment losses for its long-lived asset, including its ROU assets. However, the ultimate severity and longevity of the COVID-19 pandemic is unknown therefore, if actual results are not consistent with the estimates and assumptions used in the calculations, the Company may be exposed to future impairment losses that could be material. As of June 30, 2020, future operating lease commitments to be paid and received by the Company were as follows: Fiscal Year Leases For Franchise Salons Leases For Company-Owned Salons Corporate Leases Total Operating Lease Payments Sublease Income To Be Received From Franchisees Net Rent Commitments 2021 $ 121,149 $ 43,705 $ 1,781 $ 166,635 $ (121,149) $ 45,486 2022 110,951 36,628 1,410 148,989 (110,951) 38,038 2023 100,640 31,943 1,447 134,030 (100,640) 33,390 2024 90,649 28,057 1,484 120,190 (90,649) 29,541 2025 79,398 23,746 1,522 104,666 (79,398) 25,268 Thereafter 190,793 59,994 7,818 258,605 (190,793) 67,812 Total future obligations $ 693,580 $ 224,073 $ 15,462 $ 933,115 $ (693,580) $ 239,535 Less amounts representing interest 85,432 27,193 2,765 115,390 Present value of lease liabilities $ 608,148 $ 196,880 $ 12,697 $ 817,725 Less current lease liabilities 99,217 36,767 1,287 137,271 Long-term lease liabilities $ 508,931 $ 160,113 $ 11,410 $ 680,454 |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 12 Months Ended |
Jun. 30, 2020 | |
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 June 30, 2020 and 2019, the estimated fair value of the Company’s cash, cash equivalents, restricted cash, receivables and accounts payable approximated their carrying values. As of June 30, 2020, the estimated fair value of the Company's debt was $177.5 million, which approximated its carrying value. As of June 30, 2020, the estimated fair value of the long-term financial liability was $28.0 million, which approximated its carrying value. The estimated fair value of the Company's debt and long-term financial liability are based on Level 2 inputs. Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis We measure certain assets, including the Company’s equity method investments, tangible fixed and other assets and goodwill, at fair value on a nonrecurring basis when they are deemed to be other than temporarily impaired. The fair values of these assets are determined, when applicable, based on valuation techniques using the best information available, and may include quoted market prices, market comparables and discounted cash flow projections. The following impairment charges were based on fair values using Level 3 inputs: Fiscal Year 2020 2019 2018 (Dollars in thousands) Goodwill $ 40,164 $ — $ — Salon asset impairments (1) 3,851 4,587 11,092 Long-lived assets impairment (1) 22,560 — — _______________________________________________________________________________ (1) See Note 1 to the Consolidated Financial Statements. |
FINANCING ARRANGEMENTS
FINANCING ARRANGEMENTS | 12 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
FINANCING ARRANGEMENTS | FINANCING ARRANGEMENTS The Company's long-term debt consists of the following: Revolving Credit Facility June 30, Maturity Date 2020 2019 2020 2019 (Fiscal year) (Interest rate %) (Dollars in thousands) Revolving credit facility 2023 5.50% 3.65% $ 177,500 $ 90,000 At June 30, 2020, cash, cash equivalents and marketable securities totaled $113.7 million. As of June 30, 2020, the Company had $177.5 million of outstanding borrowings under a $295.0 million revolving credit facility. At June 30, 2020, the Company had outstanding standby letters of credit under the revolving credit facility of $21.0 million, primarily related to the Company's self-insurance program. The unused available credit under the facility was $96.5 million at June 30, 2020. The Company increased its outstanding borrowings from June 30, 2019 to June 30, 2020 by making a draw on the credit facility of $183.0 million in March of 2020. The $183.0 million draw was done to increase the Company's cash position and preserve financial flexibility as the Company experienced significant business interruption due to the COVID-19 pandemic. In the fourth quarter of fiscal year 2020, the Company repaid $125.5 million. As of June 30, 2020, the Company had cash, cash equivalents and restricted cash of $122.9 million and current liabilities of $237.0 million. In May of 2020, the Company amended its $295.0 million revolving credit facility that expires in March 2023. The amendment to the revolving credit facility provides relief for the maximum consolidated net leverage ratio covenant and the minimum fixed charge coverage ratio covenant. Without such amendment, the Company would have been in violation of the covenants as of March 31, 2020, which could have resulted in default. Under the new terms of the amendment, the Company is required to maintain a minimum liquidity of not less than $75.0 million, and provides the Company's lenders security in the Company's assets, adds additional guarantors and grants a first priority lien and security interest to the lenders in substantially all of the Company’s and the guarantors’ existing and future property. The amendment also increases the applicable interest rate margins and facility fees applicable to the loans and inserts a 1.25% LIBOR floor. The applicable margin for loans bearing interest at LIBOR ranges from 3.75%-4.25%, the applicable margin for loans bearing interest at the base rate ranges from 2.75%-3.25% and the facility fee ranges from 0.5%-0.75%, each depending on average utilization of the revolving line of credit. This amendment gives the Company flexibility throughout the uncertainty generated by the business disruption caused by the COVID-19 pandemic, as well as the Company's navigation through its strategic transformation. The Company was in compliance with all covenants and other requirements of the financing arrangements as of June 30, 2020 and believes it will continue to be in compliance for at least one year from our filing date. Senior Term Notes In fiscal year 2018, the Company redeemed all of its 5.5% senior term notes that were due December 2019 (Senior Term Notes) for $124.2 million, which included a $1.2 million premium. The Company utilized $90.0 million under the revolving credit facility and cash on hand of $34.2 million to repay the Senior Term Notes. As a result of redeeming the Senior Term Notes, the Company recorded $1.7 million of additional interest expense related to the unamortized debt discount and debt issuance costs during the fiscal year 2018. Sale and Leaseback Transactions The Company’s long-term lease liability consists of the following: Maturity Date Interest Rate June 30, June 30, (Fiscal year) (Dollars in thousands) Financial liability - Salt Lake City Distribution Center 2034 3.30% $ 16,773 $ 17,354 Financial liability - Chattanooga Distribution Center 2034 3.70% 11,208 11,556 Long-term financing liabilities $ 27,981 $ 28,910 In fiscal year 2019, the Company sold its Salt Lake City and Chattanooga Distribution Centers to an unrelated party. The Company is leasing the properties back for 15 years with the option to renew. As the Company plans to lease the property for more than 75% of its economic life, the sales proceeds received from the buyer-lessor are recognized as a financial liability. This financial liability is reduced based on the rental payments made under the lease that are allocated between principal and interest. As of June 30, 2020, the current portion of the Company’s lease liabilities was $0.9 million, which was recorded in accrued expenses on the Consolidated Balance Sheet. The weighted average remaining lease term was 13.6 years and the weighted-average discount rate was 3.46% for financing leases as of June 30, 2020. As of June 30, 2020, future lease payments due are as follows: Fiscal year Salt Lake City Distribution Center Chattanooga Distribution Center (Dollars in thousands) 2021 $ 1,157 $ 817 2022 1,171 829 2023 1,186 842 2024 1,200 854 2025 1,215 867 Thereafter 10,683 8,414 Total $ 16,612 $ 12,623 These lease payments were not impacted by the adoption of ASC 842. The financing lease liability does not include interest. Future lease payments above are due per the lease agreement and include embedded interest. Therefore, the total payments do not equal the liability. Total interest expense for the financing leases was $0.7 million for the year ended June 30, 2020, including a one-time $0.4 million credit to interest related to 75% of the April and May rent being waived due to the COVID-19 pandemic. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Contingencies: The Company is self-insured for most workers' compensation, employment practice liability and general liability. Workers' compensation and general liability losses are subject to per occurrence and aggregate annual liability limitations. The Company is insured for losses in excess of these limitations. The Company is also self-insured for health care claims for eligible participating employees subject to certain deductibles and limitations. The Company determines its liability for claims incurred but not reported on an actuarial basis. Litigation and Settlements: The Company is a defendant in various lawsuits and claims arising out of the normal course of business. Like certain other large retail employers, the Company has been faced with allegations of purported class-wide consumer and wage and hour violations. Litigation is inherently unpredictable and the outcome of these matters cannot presently be determined. Although the actions are being vigorously defended, the Company could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period. The Company is a defendant in two wage and hour lawsuits in California. The first, a class action in U.S. District Court, alleges various violations of the California Labor Code, including but not limited to failure to pay wages, failure to permit rest breaks, failure to pay all wages due on termination of employment, waiting time penalties, failure to provide accurate wage statements and violation of the business and professions code. This case has preliminarily settled, pending approval of the court and class, for $2.1 million. The second, a class action filed in California Superior Court, alleges various violations of the California Labor Code as well as PAGA penalties. Barring successful objection from plaintiffs’ attorneys to the first class action, the second case will be subsumed into the first case’s settlement. As of June 30, 2019 and 2020, $1.5 and $2.1 million, respectively, was included within accrued expenses on the Condensed Consolidated Balance Sheet related to these class action lawsuits. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES The components of loss from continuing operations before income taxes are as follows: Fiscal Years 2020 2019 2018 (Dollars in thousands) Loss before income taxes U.S. $ (165,260) $ (17,513) $ (16,604) International (11,553) (4,754) 6,413 $ (176,813) $ (22,267) $ (10,191) The benefit for income taxes consists of: Fiscal Years 2020 2019 2018 (Dollars in thousands) Current: U.S. $ (925) $ (519) $ 2,151 International 238 1,069 1,894 Deferred: U.S. (3,353) (2,303) (73,728) International (579) (392) (129) $ (4,619) $ (2,145) $ (69,812) The benefit for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory rate to earnings (loss) before income taxes, as a result of the following: Fiscal Years 2020 2019 2018 U.S. statutory rate 21.0 % 21.0 % 28.0 % State income taxes, net of federal income tax benefit 4.0 0.5 14.8 Valuation allowance (1) (29.4) (14.5) 560.8 Foreign income taxes at other than U.S. rates (0.6) 0.9 (0.5) Work opportunity tax credits 0.4 7.2 15.2 Deferred tax rate remeasurement — — 99.0 Uncertain tax positions (6.2) 1.0 (15.9) Stock-based compensation 0.1 2.2 (15.8) Capital loss 15.0 — — Other, net (2) (1.7) (8.7) (0.6) 2.6 % 9.6 % 685.0 % _______________________________________________________________________________ (1) See Note 1 to the Consolidated Financial Statements. (2) The (1.7)% of Other, net in fiscal year 2020 includes the rate impact of goodwill derecognition and impairment and miscellaneous items of (1.2)% and (0.6)%, respectively. Miscellaneous items do not include the rate impact of any items in excess of 5% of computed tax. The (8.7)% of Other, net in fiscal year 2019 includes the rate impact of goodwill derecognition and miscellaneous items of (5.9)% and (2.8)%, respectively. Miscellaneous items do not include any items in excess of 5% of computed tax. The (0.6)% of Other, net in fiscal year 2018 does not include the rate impact of any items in excess of 5% of computed tax. The components of the net deferred tax assets and liabilities are as follows: June 30, 2020 2019 (Dollars in thousands) Deferred tax assets: Deferred rent $ — $ 3,816 Payroll and payroll related costs 9,903 11,696 Net operating loss carryforwards 64,402 48,208 Tax credit carryforwards 37,072 36,966 Capital loss carryforwards 14,978 — Deferred franchise fees 9,342 7,508 Operating lease liabilities 202,940 — Financing lease liabilities 7,157 7,387 Other 8,214 8,709 Subtotal $ 354,008 $ 124,290 Valuation allowance (122,447) (70,707) Total deferred tax assets $ 231,561 $ 53,583 Deferred tax liabilities: Goodwill and intangibles $ (40,904) $ (62,378) Operating lease assets (197,304) — Other (7,269) (9,129) Total deferred tax liabilities $ (245,477) $ (71,507) Net deferred tax liability $ (13,916) $ (17,924) Significant components of the valuation allowance which occurred during fiscal year 2020 are as follows: • On March 27, 2020, the U.S. government enacted the Coronavirus Aid, Relief and Economic Security Act (CARES Act) in response to the COVID-19 pandemic. The CARES Act included several significant business tax provisions that, among other items, eliminated the taxable income limit and granted business a five-year carryback for certain net operating losses (NOLs), accelerated refunds of previously generated corporate alternative minimum tax (AMT) credits, temporarily loosened the business interest limitation under section 163(j) and corrected certain provisions under the Tax Cuts and Jobs Act (TCJA). In connection with the CARES Act, NOLs resulting from accounting periods which straddled December 31, 2017 are now considered definite-lived NOLs. Therefore, the Company established a U.S. valuation allowance against the NOLs generated during its fiscal year 2018 and recorded a net tax expense of $14.7 million in continuing operations. • The Company determined that it no longer had sufficient U.S. indefinite-lived taxable temporary differences to support realization of its U.S. indefinite-lived NOLs and its existing U.S. deferred tax assets that upon reversal are expected to generate indefinite-lived NOLs. As a result, the Company recorded an additional $17.0 million valuation allowance on its U.S. federal indefinite-lived deferred tax assets. • The Company further recognized a capital loss and established a corresponding valuation allowance of $14.9 million on investment outside basis previously impaired for financial accounting purposes. The Company also expects to receive a refund of approximately $1.4 million due to accelerated refunds of AMT credits as a result of the CARES Act. At June 30, 2020, the Company has tax effected federal, state, Canada, and U.K. net operating loss carryforwards of approximately $43.6, $16.7, $3.8 and $0.3 million, respectively. The Company's federal loss carryforward consists of $27.3 million that will expire from fiscal years 2034 to 2038 and $16.3 million that has no expiration. The state loss carryforwards consist of $15.7 million that will expire from fiscal years 2021 to 2040 and $1.0 million that has no expiration. The Canada loss carryforward will expire from fiscal years 2036 to 2040. The U.K. loss carryforward has no expiration. The Company's tax credit carryforward of $37.1 million primarily consist of Work Opportunity Tax Credits that will expire from fiscal years 2031 to 2040. The Company's capital loss carryforward of $14.9 million will expire in fiscal year 2025. We consider the earnings of certain non-U.S. subsidiaries to be indefinitely invested outside the United States. Accordingly, we have not recorded deferred taxes related to the U.S. federal and state income taxes and foreign withholding taxes on approximately $30.3 million of undistributed earnings of foreign subsidiaries which have been reinvested outside the United States. As a result of the Tax Cuts and Jobs Act of 2017, taxes payable on the remittance of such earnings is expected to be minimal. The Company files tax returns and pays tax primarily in the U.S., Canada, the U.K. and Luxembourg as well as states, cities, and provinces within these jurisdictions. The Company is no longer subject to IRS examinations for years before 2014. With limited exceptions, the Company is no longer subject to state and international income tax examination by tax authorities for years before 2012. A rollforward of the unrecognized tax benefits is as follows: Fiscal Years 2020 2019 2018 (Dollars in thousands) Balance at beginning of period $ 2,763 $ 3,027 $ 1,388 Additions based on tax positions related to the current year, primarily salon vendition activity and tax positions related to a capital loss 11,985 287 553 (Reductions)/additions based on tax positions of prior years (223) (154) 1,608 Reductions on tax positions related to the expiration of the statute of limitations (480) (397) (177) Settlements — — (345) Balance at end of period $ 14,045 $ 2,763 $ 3,027 If the Company were to prevail on all unrecognized tax benefits recorded, a net benefit of approximately $1.3 million would be recorded in the effective tax rate. Interest and penalties associated with unrecognized tax benefits are recorded within income tax expense. During each of the fiscal years 2020, 2019 and 2018, the Company recorded interest and penalties of approximately $0.1 million as additions to the accrual, net of the respective reversal of previously accrued interest and penalties. As of June 30, 2020, the Company had accrued interest and penalties related to unrecognized tax benefits of $1.1 million. This amount is not included in the gross unrecognized tax benefits noted above. It is reasonably possible the amount of the unrecognized tax benefit with respect to certain of our unrecognized tax positions will increase or decrease during the next fiscal year. However, an estimate of the amount or range of the change cannot be made at this time. |
BENEFIT PLANS
BENEFIT PLANS | 12 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
BENEFIT PLANS | BENEFIT PLANS Regis Retirement Savings Plan: The Company maintains a defined contribution 401(k) plan, the Regis Retirement Savings Plan (RRSP). The RRSP is a defined contribution profit sharing plan with a 401(k) feature that is intended to qualify under Section 401(a) of the Internal Revenue Code (the Code) and is subject to the Employee Retirement Income Security Act of 1974 (ERISA). The 401(k) portion of the RRSP is a cash or deferred arrangement intended to qualify under section 401(k) of the Code and under which eligible employees may elect to contribute a percentage of their eligible compensation. Employees who are 18 years of age or older and who were not highly compensated employees as defined by the Code during the preceding RRSP year are eligible to participate in the RRSP commencing with the first day of the month following their completion of one month of service. The discretionary employer contribution profit sharing portion of the RRSP is a noncontributory defined contribution component covering full-time and part-time employees of the Company who have at least one year of eligible service, defined as 1,000 hours of service during the RRSP year, are employed by the Company on the last day of the RRSP year and are employed at Salon Support, distribution centers, as field leaders, artistic directors or consultants, and that are not highly compensated employees as defined by the Code. Participants' interest in the noncontributory defined contribution component become 20.0% vested after completing two years of service with vesting increasing 20.0% for each additional year of service, and with participants becoming fully vested after six Nonqualified Deferred Salary Plan: The Company maintains a Nonqualified Deferred Salary Plan (Executive Plan), which covers Company officers and all other employees who are highly compensated as defined by the Code. The discretionary employer contribution portion of the Executive Plan is a profit sharing component in which a participant's interest becomes 20.0% vested after completing two years of service with vesting increasing 20.0% for each additional year of service, and with participants becoming fully vested after six Regis Individual Secured Retirement Plan (RiSRP): The Company maintains a Regis Individual Secured Retirement Plan (RiSRP), pursuant to which eligible employees may use post-tax dollars to purchase life insurance benefits. Salon Support employees at the director level and above, as well as regional vice presidents, are eligible to participate. The Company may make discretionary contributions on behalf of participants within the RiSRP, which may be calculated as a matching contribution. The participant is the owner of the life insurance policy under the RiSRP. Stock Purchase Plan: The Company has an employee stock purchase plan (ESPP) available to qualifying employees. Under the terms of the ESPP, eligible employees may purchase the Company's common stock through payroll deductions. The Company contributes an amount equal to 15.0% of the purchase price of the stock to be purchased on the open market and pays all expenses of the ESPP and its administration, not to exceed an aggregate contribution of $11.8 million. As of June 30, 2020, the Company's cumulative contributions to the ESPP totaled $11.1 million. Deferred Compensation Contracts: The Company has unfunded deferred compensation contracts covering certain current and former key executives. Effective June 30, 2012, these contracts were amended and the benefits were frozen. Expense associated with the deferred compensation contracts included in general and administrative expenses on the Consolidated Statement of Operations totaled zero for fiscal years 2020 and 2019, and $0.2 million for fiscal year 2018. The table below presents the projected benefit obligation of these deferred compensation contracts in the Consolidated Balance Sheet: June 30, 2020 2019 (Dollars in thousands) Current portion (included in accrued liabilities) $ 302 $ 1,183 Long-term portion (included in other non-current liabilities) 4,637 4,416 $ 4,939 $ 5,599 The accumulated other comprehensive (loss) income for the deferred compensation contracts, consisting of primarily unrecognized actuarial income, was $0.1 and $0.5 million at June 30, 2020 and 2019, respectively. The Company had previously agreed to pay the former Vice Chairman and his spouse an annual benefit for life. Costs associated with this benefit included in general and administrative expenses on the Consolidated Statement of Operations totaled $0.4, $0.4 and $0.3 million for fiscal years 2020, 2019 and 2018, respectively. Related obligations totaled $2.4 million at June 30, 2020 and 2019, with $0.5 million within accrued expenses at June 30, 2020 and 2019, and the remainder included in other non-current liabilities in the Consolidated Balance Sheet. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 12 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
EARNINGS PER SHARE | EARNINGS PER SHARE The Company’s basic earnings per share is calculated as net (loss) income divided by weighted average common shares outstanding, excluding unvested outstanding restricted stock awards (RSAs), restricted stock units (RSUs) and stock-settled performance units (PSUs). The Company’s diluted earnings per share is calculated as net (loss) 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 fiscal years 2020 and 2019, 963,456 and 1,341,421 of common stock equivalents of dilutive common stock, respectively, were excluded from the diluted earnings per share calculation due to net loss from continuing operations. For fiscal year 2018, 518,236 common stock equivalents of dilutive common stock were included in the diluted earnings per share calculation due to net income from continuing operations. The computation of weighted average shares outstanding, assuming dilution, excluded the following stock-based awards as they were not dilutive under the treasury stock method: Fiscal Year 2020 2019 2018 Equity-based compensation awards 315,312 118,246 634,292 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
STOCK-BASED COMPENSATION | STOCK-BASED COMPENSATIONThe Company grants long-term equity-based awards under the 2018 Long Term Incentive Plan (the 2018 Plan). The 2018 Plan, which was approved by the Company's shareholders at its 2018 Annual Meeting, provides for the granting of nonqualified stock options, equity-based stock appreciation rights (SARs), RSAs, RSUs and PSUs, as well as cash-based performance grants, to employees and non-employee directors of the Company. Under the 2018 Plan, a maximum of 3,818,895 shares are approved for issuance. The 2018 Plan incorporates a fungible share design, under which full value awards (such as RSUs and PSUs) count against the shares reserved for issuance at a rate 2.0 times higher than appreciation awards (such as SARs and stock options). As of June 30, 2020, a maximum of 3,774,266 shares were available for grant under the 2018 Plan. All unvested awards are subject to forfeiture in event of termination of employment, unless accelerated. SAR and RSU awards granted under the 2018 Plan generally include various acceleration terms, including upon retirement for participants aged sixty-two years or older or who are aged fifty-five The Company also has outstanding awards under the 2016 Long Term Incentive Plan (the 2016 Plan), although the 2016 Plan terminated in October 2018 and no additional awards have since been or will be made under the 2016 Plan. The 2016 Plan provided for the granting of SARs, RSAs, RSUs and PSUs, as well as cash-based performance grants, to employees and non-employee directors of the Company. The Company also has outstanding awards under the Amended and Restated 2004 Long Term Incentive Plan (the 2004 Plan), although the 2004 Plan terminated in October 2016 and no additional awards have since been or will be made under the 2004 Plan. The 2004 Plan provided for the granting of nonqualified stock options, SARs, RSAs, RSUs and PSUs, as well as cash-based performance grants, to employees and non-employee directors of the Company. Under the 2018 Plan, 2016 Plan and the 2004 Plan, stock-based awards are granted at an exercise price or initial value equal to the fair market value on the date of grant. There were no SARs granted in fiscal year 2020. Using the fair value of each grant on the date of grant, the weighted average fair values per stock-based compensation award granted during fiscal years 2020, 2019 and 2018 were as follows: Fiscal Years 2020 2019 2018 RSUs (1) $ 16.48 $ 21.12 $ 13.43 PSUs (1) 12.09 14.05 15.74 _______________________________________________________________________________ (1) The fair value of market-based RSUs and PSUs granted are estimated on the date of grant using a Monte Carlo valuation model. The significant assumptions used in determining the estimated fair value of the market-based awards granted during fiscal years 2020, 2019 and 2018 were as follows: Fiscal Years 2020 2019 2018 Risk-free interest rate 1.43 % 2.31 - 2.68% 1.66 - 2.59% Expected volatility 33.9 % 34.2 - 34.6% 33.4 - 37.1% Expected dividend yield — % — % — % The risk free interest rate is determined based on the U.S. Treasury rates approximating the expected life of the market-based RSUs and PSUs granted. Expected volatility is established based on historical volatility of the Company's stock price. The Company uses historical data to estimate pre-vesting forfeiture rates. Stock-based compensation expense was as follows: Fiscal Years 2020 2019 2018 (Dollars in thousands) SARs $ — $ 1,497 $ 2,252 RSAs, RSUs, & PSUs 3,275 7,506 6,017 Total stock-based compensation expense (recorded in G&A) 3,275 9,003 8,269 Less: Income tax benefit (1) (688) (1,891) (1,736) Total stock-based compensation expense, net of tax $ 2,587 $ 7,112 $ 6,533 _______________________________________________________________________________ (1) Federal statutory income tax rate of 21% utilized in fiscal years 2020, 2019 and 2018. The Company recorded a stock compensation benefit of $1.6 million in fiscal year 2020 related to performance awards that did not meet the vesting requirements. Stock Appreciation Rights & Stock Options: SARs and stock options granted under the 2018 Plan, 2016 Plan and the 2004 Plan generally vest ratably over a three Activity for all the Company's outstanding SARs and stock options is as follows: Shares Weighted Weighted- Aggregate SARs Stock Outstanding balance at June 30, 2019 1,321 10 $ 11.97 Granted — — — Forfeited/Expired (36) (9) 16.69 Exercised — (1) 18.61 Outstanding balance at June 30, 2020 1,285 — $ 11.79 6.08 $ (4,639) Exercisable at June 30, 2020 1,285 — $ 11.79 6.08 $ (4,639) Unvested awards, net of estimated forfeitures — — $ — — $ — Restricted Stock Units: RSUs granted to employees under the 2018 Plan, 2016 Plan and 2004 Plan generally vest ratably over a three three Activity for all the Company's RSUs is as follows: Shares/Units Weighted Aggregate Intrinsic RSUs Outstanding balance at June 30, 2019 850 $ 16.42 Granted 257 16.48 Forfeited (166) 17.29 Vested (235) 11.88 Outstanding balance at June 30, 2020 706 $ 17.72 $ 5,775 Vested at June 30, 2020 263 $ 15.94 $ 2,151 Unvested awards, net of estimated forfeitures 381 $ 18.68 $ 3,117 As of June 30, 2020, there was $3.8 million of unrecognized expense related to RSUs that is expected to be recognized over a weighted-average period of 1.75 years. Performance Share Units: PSUs are grants of restricted stock units which are earned based on the achievement of performance goals established by the Compensation Committee over a performance period. Activity for all of the Company's PSUs is as follows: Shares/Units Weighted Aggregate Intrinsic PSUs Outstanding balance at June 30, 2019 980 $ 14.10 Granted 74 12.09 Forfeited (165) 14.57 Vested (179) 12.93 Outstanding balance at June 30, 2020 710 $ 13.90 $ 5,808 Vested at June 30, 2020 — $ — $ — Unvested awards, net of estimated forfeitures 396 $ 13.34 $ 3,239 _______________________________________________________________________________ (1) Includes actual or expected payout rates as set forth in the performance criteria. In connection with the termination of former executive officers, the Company settled certain PSUs for cash of $0.8 million during fiscal year 2018. PSUs granted in fiscal year 2020 have a performance period of three years, after which they will vest to the extent earned. There was $0.3 million of total unrecognized compensation expense related to the unvested awards to be recognized over 2.2 years. PSUs granted in fiscal year 2019 have a performance period of three years, after which they will vest to the extent earned. There was $3.3 million of total unrecognized compensation expense related to the unvested awards to be recognized over 1.2 years. PSUs granted in fiscal year 2018 have a performance period of three years, ending June 30, 2020. As of June 30, 2020, these awards have not been earned and will not vest to the extent earned. As a result, the Company recorded a benefit of $1.6 million in fiscal year 2020. |
SHAREHOLDERS' EQUITY
SHAREHOLDERS' EQUITY | 12 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
SHAREHOLDERS' EQUITY | SHAREHOLDERS' EQUITY Authorized Shares and Designation of Preferred Class: The Company has 100.0 million shares of capital stock authorized, par value $0.05, of which all outstanding shares, and shares available under the Stock Option Plans, have been designated as common. Shareholders' Rights Plan: The Company previously had a shareholders' rights plan, which expired by its terms in December 2016. Share Repurchase Program: In May 2000, the Company's Board approved a stock repurchase program with no stated expiration date. Originally, the program authorized up to $50.0 million to be expended for the repurchase of the Company's stock. The Board elected to increase this maximum to $100.0 million in August 2003, to $200.0 million in May 2005, to $300.0 million in April 2007, to $350.0 million in April 2015, to $400.0 million in September 2015, to $450.0 million in January 2016, and to $650.0 million in August 2018. All repurchased shares become authorized but unissued shares of the Company. The timing and amounts of any repurchases depends on many factors, including the market price of the common stock and overall market conditions. As of June 30, 2020, 30.0 million shares have been cumulatively repurchased for $595.4 million, and $54.6 million remained outstanding under the approved stock repurchase program. Accumulated Other Comprehensive Income: The components of accumulated other comprehensive income are as follows: June 30, 2020 2019 2018 (Dollars in thousands) Foreign currency translation $ 7,391 $ 8,853 $ 8,668 Unrealized gain on deferred compensation contracts 58 489 988 Accumulated other comprehensive income $ 7,449 $ 9,342 $ 9,656 |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Jun. 30, 2020 | |
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. During the first quarter of fiscal year 2018, the Company redefined its operating segments to reflect how the chief operating decision maker evaluates the business as a result of the sale of the mall-based business and International segment sale. See Note 1 to the Consolidated Financial Statements. The Company now reports its operations in two operating segments: Franchise salons and Company-owned salons. The Company's operating segments are its reportable operating segments. Prior to this change, the Company had four operating segments: North American Value, North American Premium, North American Franchise, and International. The Company did not operate under the realigned operating segment structure prior to the first quarter of fiscal year 2018. The Franchise salons reportable operating segment is comprised of 5,209 franchised salons located mainly in strip center locations and Walmart Supercenters. Franchise salons offer high quality, convenient and value priced hair care and beauty services and retail products. This segment operates primarily in the United States and Canada and primarily includes the Supercuts, SmartStyle, Cost Cutters, First Choice Haircutters, Roosters and Magicuts concepts. The Company-owned salons reportable operating segment is comprised of 1,632 company-owned salons located mainly in strip center locations and Walmart Supercenters. Company-owned salons offer high quality, convenient and value priced hair care and beauty services and retail products. SmartStyle, Supercuts, Cost Cutters and other regional trade names operating in the United States, Canada and Puerto Rico are generally within the Company-owned salons segment. Financial information concerning the Company's reportable operating segments is shown in the following table: For the Year Ended June 30, 2020 Franchise Company - owned Corporate (1) Consolidated (Dollars in thousands) Revenues: Service $ — $ 331,538 $ — $ 331,538 Product 52,421 85,165 — 137,586 Royalties and fees 73,402 — — 73,402 Franchise rental income 127,203 — — 127,203 253,026 416,703 — 669,729 Operating expenses: Cost of service — 222,279 — 222,279 Cost of product 40,032 44,666 — 84,698 Site operating expenses 13,341 58,202 — 71,543 General and administrative 33,725 24,638 72,590 130,953 Rent 872 72,921 2,589 76,382 Franchise rent expense 127,203 — — 127,203 Depreciation and amortization 922 29,113 6,917 36,952 Long-lived asset impairment 1,712 20,848 — 22,560 TBG restructuring 2,333 — — 2,333 Goodwill impairment — 40,164 — 40,164 Total operating expenses 220,140 512,831 82,096 815,067 Operating income (loss) 32,886 (96,128) (82,096) (145,338) Other (expense) income: Interest expense — — (7,522) (7,522) Gain from sale of salon assets to franchisees, net — — (27,306) (27,306) Interest income and other, net — — 3,353 3,353 Income (loss) from continuing operations before income taxes $ 32,886 $ (96,128) $ (113,571) $ (176,813) For the Year Ended June 30, 2019 Franchise Company-owned Corporate (1) Consolidated (Dollars in thousands) Revenues: Service $ — $ 749,660 $ — $ 749,660 Product 59,905 165,713 — 225,618 Royalties and fees 93,761 — — 93,761 153,666 915,373 — 1,069,039 Operating expenses: Cost of service — 452,827 — 452,827 Cost of product 47,219 81,597 — 128,816 Site operating expenses 34,099 106,932 — 141,031 General and administrative 32,888 57,219 86,897 177,004 Rent 740 130,214 862 131,816 Depreciation and amortization 762 28,263 8,823 37,848 TBG restructuring 21,816 — — 21,816 Total operating expenses 137,524 857,052 96,582 1,091,158 Operating income (loss) 16,142 58,321 (96,582) (22,119) Other (expense) income: Interest expense — — (4,795) (4,795) Gain from sale of salon assets to franchisees, net — — 2,918 2,918 Interest income and other, net — — 1,729 1,729 Income (loss) from continuing operations before income taxes $ 16,142 $ 58,321 $ (96,730) $ (22,267) For the Year Ended June 30, 2018 Franchise Company - owned Corporate (1) Consolidated (Dollars in thousands) Revenues: Service $ — $ 899,345 $ — $ 899,345 Product 53,703 205,037 — 258,740 Royalties and fees 77,394 — — 77,394 131,097 1,104,382 — 1,235,479 Operating expenses: Cost of service — 530,582 — 530,582 Cost of product 42,128 98,495 — 140,623 Site operating expenses 26,818 127,249 — 154,067 General and administrative 25,880 67,163 81,002 174,045 Rent 269 181,869 958 183,096 Depreciation and amortization 365 48,508 9,332 58,205 Total operating expenses 95,460 1,053,866 91,292 1,240,618 Operating income (loss) 35,637 50,516 (91,292) (5,139) Other (expense) income: Interest expense — — (10,492) (10,492) Gain from sale of salon assets to franchisees, net — — 241 241 Interest income and other, net — — 5,199 5,199 Income (loss) from continuing operations before income taxes $ 35,637 $ 50,516 $ (96,344) $ (10,191) _______________________________________________________________________________ (1) Corporate consists primarily of unallocated general and administrative expenses, including expenses associated with salon support, depreciation and amortization related to our corporate headquarters and unallocated insurance, benefit and compensation programs, including stock-based compensation. The Company's chief operating decision maker does not evaluate reportable segments using assets and capital expenditure information. Total revenues and property and equipment, net associated with business operations in the U.S. and all other countries in aggregate were as follows: June 30, 2020 2019 2018 Total Property and Total Property and Total Property and (Dollars in thousands) U.S. $ 613,652 $ 56,532 $ 972,994 $ 75,789 $ 1,132,041 $ 95,956 Other countries 56,077 644 96,045 2,301 103,438 3,332 Total $ 669,729 $ 57,176 $ 1,069,039 $ 78,090 $ 1,235,479 $ 99,288 |
QUARTERLY FINANCIAL DATA (UNAUD
QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended |
Jun. 30, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
QUARTERLY FINANCIAL DATA (UNAUDITED) | QUARTERLY FINANCIAL DATA (UNAUDITED) Summarized quarterly data for fiscal years 2020 and 2019 follows: Quarter Ended September 30 December 31 March 31 (1) June 30 (2) Year Ended (Dollars in thousands, except per share amounts) 2020 Revenues $ 247,038 $ 208,765 $ 153,783 $ 60,143 $ 669,729 Cost of service and product revenues, excluding depreciation and amortization 116,809 94,616 76,496 19,056 306,977 Operating loss (9,906) (7,466) (59,399) (68,567) (145,338) Loss from continuing operations (14,178) (16,520) (67,842) (73,654) (172,194) Income from discontinued operations 373 79 301 79 832 Net loss (13,805) (16,441) (67,541) (73,575) (171,362) Loss from continuing operations per share, basic (4) (0.39) (0.46) (1.89) (2.05) (4.79) Income from discontinued operations per share, basic (4) 0.01 — 0.01 — 0.02 Net loss per share, basic (4) (0.38) (0.46) (1.88) (2.05) (4.77) Loss from continuing operations per share, diluted (4) (0.39) (0.46) (1.89) (2.05) (4.79) Income from discontinued operations per share, diluted (4) 0.01 — 0.01 — 0.02 Net loss per share, diluted (4) (0.38) (0.46) (1.88) (2.05) (4.77) Quarter Ended September 30 December 31 March 31 (3) June 30 Year Ended (Dollars in thousands, except per share amounts) 2019 Revenues $ 287,835 $ 274,671 $ 258,343 $ 248,190 $ 1,069,039 Cost of service and product revenues, excluding depreciation and amortization 153,678 151,281 142,799 133,885 581,643 Operating income (loss) 3,429 (1,551) (22,162) (1,835) (22,119) (Loss) income from continuing operations (463) 417 (14,811) (5,265) (20,122) (Loss) income from discontinued operations (264) 6,113 178 (131) 5,896 Net (loss) income (727) 6,530 (14,633) (5,396) (14,226) (Loss) income from continuing operations per share, basic (4) (0.01) 0.01 (0.37) (0.14) (0.48) (Loss) income from discontinued operations per share, basic (4) (0.01) 0.14 — — 0.14 Net (loss) income per share, basic (4) (0.02) 0.15 (0.36) (0.14) (0.34) (Loss) income from continuing operations per share, diluted (4) (0.01) 0.01 (0.37) (0.14) (0.48) (Loss) income from discontinued operations per share, diluted (4) (0.01) 0.14 — — 0.14 Net (loss) income per share, diluted (4) (0.02) 0.15 (0.36) (0.14) (0.34) _______________________________________________________________________________ (1) During the third quarter of fiscal year 2020, the Company recorded a $40.2 million goodwill impairment charge related to the Company-owned reporting unit (see revision explanation below). (2) During the fourth quarter of fiscal year 2020, government-mandated salon closures in response to the COVID-19 pandemic significantly reduced operating income. Additionally, the economic disruption caused by COVID-19 triggered a $22.6 million long-lived asset impairment charge. (3) During the third quarter of fiscal year 2019, the Company recorded a $20.7 million restructuring charge related to TBG mall locations. The reserve was a non-cash charge to reserve for notes and receivables due from TBG. (4) Total is an annual recalculation; line items calculated quarterly may not sum to total. Line items may not sum due to rounding. Revision of Second and Third Quarter 2020 Unaudited Results: During the fourth quarter of 2020, the Company identified an error in the calculation of the goodwill derecognition associated with the sale of salons to franchisees in the second quarter and third quarter. In the second quarter, goodwill derecognition was understated by $6.7 million, resulting in the loss from the sale of salons to franchisees and net loss being understated and goodwill being overstated by $6.7 million. During the third quarter, goodwill derecognition was overstated by $2.35 million. As of March 31, 2020, the Company fully impaired its remaining Company-owned goodwill with the amount of goodwill impairment being overstated by $4.4 million in the third quarter. The Company assessed the applicable guidance issued by the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) and concluded these misstatements were not material, individually or in the aggregate, to the Company’s Unaudited Condensed Consolidated Financial Statements for the aforementioned interim periods. However, to facilitate comparisons among periods, the company has decided to revise its previously issued second and third quarter unaudited condensed consolidated financial information. Three months ended December 31, 2019 As Previously Reported Adjustments (1) As Revised (Dollars in thousands, except per share amounts) Loss from sale of salon assets to franchisees, net (a) $ (5,692) $ (6,715) $ (12,407) Interest income and other, net (b) 4,346 (1,477) 2,869 Loss from continuing operations before income taxes (10,276) (8,192) (18,468) Income tax benefit 795 1,153 1,948 Net loss (9,402) (7,039) (16,441) Net loss per share (0.26) (0.20) (0.46) Comprehensive loss (8,861) (7,039) (15,900) Goodwill as of December 31, 2019 293,019 (6,715) 286,304 Other assets as of December 31, 2019 38,144 1,477 36,667 Other non-current liabilities as of December 31, 2019 95,979 (1,153) 94,826 Three months ended March 31, 2020 As Previously Reported Adjustments (2) As Revised (Dollars in thousands, except per share amounts) Rent expense (d) $ 19,243 $ (578) $ 18,665 Goodwill impairment (c) 44,529 (4,365) 40,164 Operating loss (64,342) 4,943 (59,399) Loss from sale of salon assets to franchisees, net (10,208) 2,350 (7,858) Interest income and other, net (1,329) 1,477 148 Loss from continuing operations before income taxes (77,591) 8,770 (68,821) Income tax benefit 2,253 (1,274) 979 Net loss (75,037) 7,496 (67,541) Net loss per share (2.10) 0.22 (1.88) Comprehensive loss (77,519) 7,496 (70,023) Short term lease liability as of March 31, 2020 149,482 (578) 148,904 Other non-current liabilities as of March 31, 2020 92,698 121 92,819 Six months ended December 31, 2019 As Previously Reported Adjustments (1) As Revised (Dollars in thousands, except per share amounts) Loss from sale of salon assets to franchisees, net $ (11,552) $ (6,715) $ (18,267) Interest income and other, net 4,517 (1,477) 3,040 Loss from continuing operations before income taxes (27,310) (8,192) (35,502) Income tax benefit 3,651 1,153 4,804 Net loss (23,207) (7,039) (30,246) Net loss per share (0.64) (0.20) (0.84) Comprehensive loss (23,069) (7,039) (30,108) Nine months ended March 31, 2020 As Previously Reported Adjustments (2) As Revised (Dollars in thousands, except per share amounts) Rent expense $ 64,002 $ (578) $ 63,424 Goodwill impairment 44,529 (4,365) 40,164 Operating loss (81,714) 4,943 (76,771) Loss from sale of salon assets to franchisees, net (21,760) (4,365) (26,125) Interest income and other, net 3,188 — 3,188 Loss from continuing operations before income taxes (104,901) 578 (104,323) Income tax benefit 5,904 (121) 5,783 Net loss (98,244) 457 (97,787) Net loss per share (2.73) 0.01 (2.72) Comprehensive loss (100,588) 457 (100,131) _______________________________________________________________________________ (1) The Company revised the amounts originally reported for the second quarter of fiscal year 2020 for the following items: (a) Recorded an additional $6.7 million loss from the sale of salons to franchisees, net that should have been recorded in the second quarter. The error in the Company's goodwill derecognition estimation calculation was identified in the fourth quarter. The goodwill derecognition was understated which understated the loss of the sale of salons to franchisees, net. The error impacted the three and six months ended December 31, 2019. (b) Recorded a reduction to the gain on the sale of a building, included in interest income and other, net related to the sale of the Company's headquarters which occurred in the second quarter. Previously, the Company identified this error during the third quarter and recorded and disclosed the correction in the third quarter as an out-of-period adjustment. The correction applies to the three and six months ended December 31, 2019. (2) The Company revised the amounts originally reported for the third quarter of fiscal year 2020 for the following items: (c) During the third quarter goodwill derecognition was overstated by $2.4 million. As of March 31, 2020 the Company impaired its remaining Company-owned goodwill, with the amount of goodwill impairment being overstated by $4.4 million. As the second quarter error which understated goodwill derecognition was not identified until the fourth quarter, goodwill impairment and loss from the sale of salons to franchisees, net were misstated in the third quarter. The Company recorded a $4.4 million decrease to goodwill impairment and a $2.4 million decrease to loss from the sale of salon assets to franchisees, net to correct the error. Net loss for the nine months ended March 31, 2020 was not misstated. However, goodwill impairment and the loss from the sales of salons to franchisees, net were misstated in the nine months ended March 31, 2020 with goodwill impairment overstated by $4.4 million and loss from the sale of salons to franchisees, net understated by $4.4 million. (d) Adjusted third quarter rent expense to include a $0.6 million benefit to rent expense that related to leases signed in the third quarter, but not identified until the fourth quarter. The net loss for the three and nine months were both impacted by the misstatement. |
BUSINESS DESCRIPTION AND SUMM_2
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Consolidation | Consolidation: The Consolidated Financial Statements include the accounts of the Company and its subsidiaries after the elimination of intercompany accounts and transactions. All material subsidiaries are wholly owned. The Company consolidates variable interest entities where it has determined it is the primary beneficiary of those entities' operations. |
Variable Interest Entities | Variable Interest Entities : The Company has interests in certain privately-held entities through arrangements that do not involve voting interests. Such entities, known as a variable interest entity (VIE), are required to be consolidated by its primary beneficiary. The Company evaluates whether or not it is the primary beneficiary for each VIE using a qualitative assessment that considers the VIE's purpose and design, the involvement of each of the interest holders and the risk and benefits of the VIE. As of June 30, 2020, the Company has one VIE, Roosters MGC International LLC (Roosters), where the Company is the primary beneficiary. The Company owns an 84.0% ownership interest in Roosters. As of June 30, 2020, total assets, total liabilities and total shareholders' equity of Roosters were $13.2, $4.8 and $8.4 million, respectively. As of June 30, 2019, total assets, total liabilities and total shareholders' equity of Roosters were $9.6, $1.7, and $7.9 million, respectively. Net income attributable to the non-controlling interest in Roosters was immaterial for fiscal years 2020, 2019 and 2018. Shareholders' equity attributable to the non-controlling interest in Roosters was $1.0 million as of June 30, 2020 and 2019, respectively, and recorded within retained earnings on the Consolidated Balance Sheet. |
Use of Estimates | Use of Estimates: The preparation of Consolidated Financial Statements in conformity with accounting principles generally accepted in the United States of America (GAAP) requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. For the three months ended June 30, 2020, the impact of the decline in business activity brought about by the COVID-19 pandemic continues to evolve. As a result, many of our estimates and assumptions required increased judgment and carry a higher degree of variability and volatility. As events continue to evolve and additional information becomes available, our estimates may change materially in future periods. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash: Cash equivalents consist of investments in short-term, highly liquid securities having original maturities of three months or less, which are made as a part of the Company's cash management activity. The carrying values of these assets approximate their fair market values. The Company primarily utilizes a cash management system with a series of separate accounts consisting of lockbox accounts for receiving cash, concentration accounts that funds are moved to and several "zero balance" disbursement accounts for funding of payroll and accounts payable. As a result of the Company's cash management system, checks issued, but not presented to the banks for payment, may create negative book cash balances. There were no checks outstanding in excess of related book cash balances at June 30, 2020 and 2019. Restricted cash within other current assets primarily relates to consolidated advertising cooperatives funds which can only be used to settle obligations of the respective cooperatives and contractual obligations to collateralize the Company's self-insurance programs. The self-insurance restricted cash arrangement can be canceled by the Company at any time if substituted with letters of credit. The table below reconciles the cash and cash equivalents balances and restricted cash balances, recorded within other current assets on the Consolidated Balance Sheet to the amount of cash, cash equivalents and restricted cash reported on the Consolidated Statement of Cash Flows: June 30, 2020 2019 (Dollars in thousands) Cash and cash equivalents $ 113,667 $ 70,141 Restricted cash, included in other current assets 9,213 22,238 Total cash, cash equivalents and restricted cash $ 122,880 $ 92,379 |
Receivables and Allowance for Doubtful Accounts | Receivables and Allowance for Doubtful Accounts:The receivable balance on the Company's Consolidated Balance Sheet primarily includes credit card receivables, accounts and notes receivable from franchisees and receivables related to salons sold to franchisees. The balance is presented net of an allowance for expected losses (i.e., doubtful accounts), related to receivables from the Company's franchisees. The Company monitors the financial condition of its franchisees and records provisions for estimated losses on receivables when it believes franchisees are unable to make their required payments based on factors such as delinquencies and aging trends. The allowance for doubtful accounts is the Company's best estimate of the amount of probable credit losses related to existing accounts and notes receivables. |
Inventories | Inventories: Inventories of finished goods consist principally of hair care products for retail product sales. A portion of inventories are also used for salon services consisting of hair color, hair care products including shampoo and conditioner and hair care treatments including permanents, neutralizers and relaxers. Inventories are stated at the lower of cost or market, with cost determined on a weighted average cost basis. Physical inventory counts are performed primarily in the fourth quarter of the fiscal year for salons and throughout the year at the distribution centers. Product and service inventories are adjusted based on the physical inventory counts. During the fiscal year, cost of retail product sold to salon guests is determined based on the weighted average cost of product sold, adjusted for an estimated shrinkage factor. The cost of product used in salon services is determined by applying an estimated percentage of total cost of service to service revenues. These estimates are updated quarterly based on cycle count results for the distribution centers, service sales mix, discounting, special promotions and other factors. |
Property and Equipment | Property and Equipment: Property and equipment are carried at cost, less accumulated depreciation and amortization. Depreciation of property and equipment is computed using the straight-line method over their estimated useful asset lives (30 to 39 years for buildings, 10 years or lease life for improvements and three The Company capitalizes both internal and external costs of developing or obtaining computer software for internal use. Costs incurred to develop internal-use software during the application development stage are capitalized, while data conversion, training and maintenance costs associated with internal-use software are expensed as incurred. Estimated useful lives range from three Expenditures for maintenance and repairs and minor renewals and betterments, which do not improve or extend the life of the respective assets, are expensed. All other expenditures for renewals and betterments are capitalized. The assets and related depreciation and amortization accounts are adjusted for property retirements and disposals with the resulting gain or loss included in operating income. Fully depreciated or amortized assets remain in the accounts until retired from service. |
Right of Use Asset, Lease Liabilities and Rent Expense | Right of Use Asset, Lease Liabilities and Rent Expense: At contract inception, the Company determines whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. If the contract provides the Company the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, the Company considers it to be, or contain, a lease. The Company leases its company-owned salons and some of its corporate facilities under operating leases. The original terms of the salon leases range from 1 to 20 years with many leases renewable for additional 5 to 10 year terms at the option of the Company. The right of use asset and lease liability includes one renewal options as leases for leases expected to be renewed. The Company also has variable lease payments that are based on sales levels. For most leases, the Company is required to pay real estate taxes and other occupancy expense. The Company also leases the premises in which the majority of its franchisees operate and has entered into corresponding sublease arrangements with franchisees. These leases, generally with terms of approximately 5 years, are expected to be renewed on expiration. All additional lease costs are passed through to the franchisees. Upon adopting Topic 842, the Company now records the rental payments due from franchisees as franchise rental income and the corresponding amounts owed to landlords as franchise rent expense on the Consolidated Statement of Operations. For franchise and company-owned salon operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. The right of use (ROU) asset is initially and subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, less any accrued lease payments and unamortized lease incentives received, if any. The Company’s consolidated Right of Use Asset (ROUA) balance was $786.2 million as of June 30, 2020. As noted above, the ROU asset is a long-lived asset that is subject to impairment testing annually or as triggering events occur. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Generally, the non-lease components such as real estate taxes and other occupancy expenses are separate from rent expense within the lease and are not allocated to the lease liability. The discount rate used to determine the present value of the lease payments is the Company's estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as the interest rate implicit in the lease cannot generally be determined. The Company uses the portfolio approach in applying the discount rate based on original lease term. For purposes of recognizing incentives and minimum rental expenses on a straight-line basis, the Company uses the date it obtains the legal right to use and control the leased space to begin amortization, which is generally when the Company enters the space and begins to make improvements in preparation of its intended use. Certain leases provide for contingent rents, which are determined as a percentage of revenues in excess of specified levels. The Company records a contingent rent liability in accrued expenses on the Consolidated Balance Sheet, along with the corresponding rent expense in the Consolidated Statement of Operations, when specified levels have been achieved or when management determines that achieving the specified levels during the fiscal year is probable. |
Right of Use Asset Lease Liabilities and Rent Expense | Right of Use Asset, Lease Liabilities and Rent Expense: At contract inception, the Company determines whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. If the contract provides the Company the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, the Company considers it to be, or contain, a lease. The Company leases its company-owned salons and some of its corporate facilities under operating leases. The original terms of the salon leases range from 1 to 20 years with many leases renewable for additional 5 to 10 year terms at the option of the Company. The right of use asset and lease liability includes one renewal options as leases for leases expected to be renewed. The Company also has variable lease payments that are based on sales levels. For most leases, the Company is required to pay real estate taxes and other occupancy expense. The Company also leases the premises in which the majority of its franchisees operate and has entered into corresponding sublease arrangements with franchisees. These leases, generally with terms of approximately 5 years, are expected to be renewed on expiration. All additional lease costs are passed through to the franchisees. Upon adopting Topic 842, the Company now records the rental payments due from franchisees as franchise rental income and the corresponding amounts owed to landlords as franchise rent expense on the Consolidated Statement of Operations. For franchise and company-owned salon operating leases, the lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date. The right of use (ROU) asset is initially and subsequently measured throughout the lease term at the carrying amount of the lease liability, plus initial direct costs, less any accrued lease payments and unamortized lease incentives received, if any. The Company’s consolidated Right of Use Asset (ROUA) balance was $786.2 million as of June 30, 2020. As noted above, the ROU asset is a long-lived asset that is subject to impairment testing annually or as triggering events occur. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Generally, the non-lease components such as real estate taxes and other occupancy expenses are separate from rent expense within the lease and are not allocated to the lease liability. The discount rate used to determine the present value of the lease payments is the Company's estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as the interest rate implicit in the lease cannot generally be determined. The Company uses the portfolio approach in applying the discount rate based on original lease term. For purposes of recognizing incentives and minimum rental expenses on a straight-line basis, the Company uses the date it obtains the legal right to use and control the leased space to begin amortization, which is generally when the Company enters the space and begins to make improvements in preparation of its intended use. Certain leases provide for contingent rents, which are determined as a percentage of revenues in excess of specified levels. The Company records a contingent rent liability in accrued expenses on the Consolidated Balance Sheet, along with the corresponding rent expense in the Consolidated Statement of Operations, when specified levels have been achieved or when management determines that achieving the specified levels during the fiscal year is probable. |
Salon Long-Lived Asset and Right of Use Asset Impairment Assessments | Salon Long-Lived Asset and Right of Use Asset Impairment Assessments: The Company assesses impairment of long-lived salon assets and right of use 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. The first step is to assess recoverability, and in doing that, the undiscounted cash flows are compared to the carrying value. If the undiscounted estimated cash flows are less than the carrying value of the assets, the Company calculates an impairment charge based on the difference between the carrying value of the asset group and its fair value. The fair value of the salon long-lived asset group is estimated using market participant methods based on the best information available. The fair value of the right of use asset is estimated by determining what a market participant would pay over the life of the primary asset in the group, discounted back to June 30, 2020. See Note 6 for further discussion related to right of use asset impairment. Judgments made by management related to the expected useful lives of long-lived assets and the ability to realize undiscounted cash flows in excess of the carrying amounts of such assets are affected by factors such as the ongoing maintenance and improvement of the assets, changes in economic conditions and changes in operating performance. As the ongoing expected cash flows and carrying amounts of long-lived assets are assessed, these factors could cause the Company to realize material impairment charges. |
Goodwill | Goodwill: As of June 30, 2020 and 2019, the Franchise salons reporting unit had $227.5 and $227.9 million of goodwill and the Company-owned reporting unit had $0 and $117.8 million of goodwill, respectively. See Note 5 to the Consolidated Financial Statements. The Company assesses goodwill impairment on an annual basis as of April 30, 2020, and between annual assessments if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Goodwill impairment assessments are performed at the reporting unit level, which is the same as the Company’s operating segments. In fiscal year 2020, the Company adopted ASU 2017-04, which simplified the test for goodwill impairment. Under this accounting standard, the Company performed its interim impairment test and annual impairment tests by comparing the fair value of a reporting unit to its carrying amount. The Company then records an impairment charge for the amount that the carrying amount exceeds the fair value. This eliminates Step 2 from the goodwill impairment test to simplify the subsequent measure of goodwill. Prior to the adoption, the goodwill assessment involved a one-step comparison of the reporting unit’s fair value to its carrying value, including goodwill (Step 1). If the reporting unit’s fair value exceeded its carrying value, no further procedures were required. However, if the reporting unit’s fair value was less than the carrying value, an impairment charge was recorded for the difference between the fair value and carrying value of the reporting unit. In applying the goodwill impairment assessment, the Company could assess qualitative factors to determine whether it is more likely than not that the fair value of the reporting units was less than its carrying value (Step 0). Qualitative factors could include, but were not limited to, economic, market and industry conditions, cost factors and overall financial performance of the reporting unit. If after assessing these qualitative factors, the Company determined it is “more-likely-than-not” that the carrying value was less than the fair value, then performing Step 1 of the goodwill impairment assessment was unnecessary. The carrying value of each reporting unit is based on the assets and liabilities associated with the operations of the reporting unit, including allocation of shared or corporate balances among reporting units. Allocations are generally based on the number of salons in each reporting unit as a percent of total company-owned salons or expenses of the reporting unit as a percent of total company expenses. The Company calculates estimated fair values of the reporting units based on discounted cash flows utilizing estimates in annual revenue, service and product margins, fixed expense rates, allocated corporate overhead, franchise and company-owned salon counts, proceeds from the sale of company-owned salons to franchisees and long-term growth rates for determining terminal value. Where available and as appropriate, comparative market multiples are used in conjunction with the results of the discounted cash flows. The Company engages third-party valuation consultants to assist in evaluating the Company's estimated fair value calculations. |
Investments in Affiliates | Investments In Affiliates:The Company has equity investments in securities of certain privately held entities. The Company accounts for these investments under the equity or cost method of accounting. |
Self-Insurance Accruals | Self-Insurance Accruals: The Company uses a combination of third party insurance and self-insurance for a number of risks including workers' compensation, health insurance, employment practice liability and general liability claims. The liability represents the Company's estimate of the undiscounted ultimate cost of uninsured claims incurred as of the Consolidated Balance Sheet date. The Company estimates self-insurance liabilities using a number of factors, primarily based on independent third-party actuarially-determined amounts, historical claims experience, estimates of incurred but not reported claims, demographic factors and severity factors. Although the Company does not expect the amounts ultimately paid to differ significantly from the estimates, self-insurance accruals could be affected if future claims experience differs significantly from historical trends and actuarial assumptions. For fiscal years 2020, 2019 and 2018, the Company recorded decreases (increases) in expense for changes in estimates related to prior year open policy periods of $3.1, $(1.3) and $1.2 million, respectively. The Company updates loss projections quarterly and adjusts its liability to reflect updated projections. The updated loss projections consider new claims and developments associated with existing claims for each open policy period. As certain claims can take years to settle, the Company has multiple policy periods open at any point in time. |
Revenue Recognition and Deferred Revenue, Classification of Expenses, Consideration Received from Vendors, Shipping and Handling Costs | Revenue Recognition and Deferred Revenue: Franchise revenues primarily include royalties, advertising fund fees and initial franchise fees. Royalties and advertising fund revenues represent sales-based royalties that are recognized as revenue in the period in which the sales occur. The Company defers franchise fees until the salon is open and then recognizes the revenue over the term of the franchise agreement. See Note 2 to the Consolidated Financial Statements. Product sales by the Company to its franchisees are included within product revenues on the Consolidated Statement of Operations and recorded at the time product is delivered to franchise locations. Company-owned salon revenues are recognized at the time when the services are provided. Product revenues are recognized when the guest receives and pays for the merchandise. Classification of Expenses: The following discussion provides the primary costs classified in each major expense category: Cost of service— labor costs related to salon employees and the cost of product used in providing service. Cost of product— cost of product sold to guests, labor costs related to selling retail product and the cost of product sold to franchisees. Site operating— direct costs incurred by the Company's salons, such as advertising, workers' compensation, insurance, utilities and janitorial costs. General and administrative— costs associated with field supervision, costs associated with salon training, distribution centers and corporate offices (such as salaries and professional fees), including cost incurred to support franchise operations. Consideration Received from Vendors: The Company receives consideration for a variety of vendor-sponsored programs. These programs primarily include volume rebates and promotion and advertising reimbursements. With respect to volume rebates, the Company estimates the amount of rebate it will receive and accrues it as a reduction to the cost of inventory over the period in which the rebate is earned based upon historical purchasing patterns and the terms of the volume rebate program. A quarterly analysis is performed in order to ensure the estimated rebate accrued is reasonable and any necessary adjustments are recorded. Shipping and Handling Costs: Shipping and handling costs are incurred to store, move and ship product from the Company's distribution centers to franchise and company-owned locations and include an allocation of internal overhead. Such shipping and handling costs related to product shipped to company-owned locations are included in site operating expenses in the Consolidated Statement of Operations. Shipping and handling costs related to shipping product to franchise locations totaled $8.6, $7.7 and $6.1 million during fiscal years 2020, 2019 and 2018, respectively, and are included within general and administrative expenses on the Consolidated Statement of Operations. Any amounts billed to franchisees for shipping and handling are included in product revenues within the Consolidated Statement of Operations. In May 2014, the FASB issued amended guidance for revenue recognition which provides a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers. The Company adopted the amended revenue recognition guidance, ASC Topic 606, on July 1, 2018 using the full retrospective transition method which required the adjustment of each prior reporting period presented. As a result of adopting this new standard, the Company is providing its updated revenue recognition policies. Revenue Recognition and Deferred Revenue: Revenue recognized at point of sale Company-owned salon revenues are recognized at the time when the services are provided. Product revenues for company-owned salons are recognized when the guest receives and pays for the merchandise. Revenues from purchases made with gift cards are also recorded when the guest takes possession of the merchandise or services are provided. Gift cards issued by the Company are recorded as a liability (deferred revenue) upon sale and recognized as revenue upon redemption by the customer. Gift card breakage, the amount of gift cards which will not be redeemed, is recognized proportional to redemptions using estimates based on historical redemption patterns. Product sales by the Company to its franchisees are included within product revenues in the Consolidated Statement of Operations and recorded at the time product is delivered to the franchisee. Payment for franchisee product revenue is generally collected within 30 to 90 days of delivery. Revenue recognized over time Franchise revenues primarily include royalties, advertising fund cooperatives fees, franchise fees and other fees. Royalty and advertising fund revenues represent sales-based royalties that are recognized in the period in which the sales occur. Generally, royalty and advertising fund revenue is billed and collected monthly in arrears. Advertising fund revenues and expenditures, which must be spent on marketing and related activities per the franchise agreements, are recorded on a gross basis within the Consolidated Statement of Operations. This increases both the gross amount of reported franchise revenue and site operating expense and generally has no impact on operating income and net income. Franchise fees are billed and received upon the signing of the franchise agreement. Recognition of these fees is deferred until the salon opening and is then recognized over the term of the franchise agreement, typically ten years. Franchise rental income is a result of the Company signing leases on behalf of franchisees as the primary obligor and entering into a sublease arrangement with the franchise. The Company recognizes franchise rental income and expense when it is due to the landlord. |
Advertising and Advertising Funds | Advertising and Advertising Funds:Advertising costs consist of the Company’s corporate funded advertising costs, the Company’s advertising fund contributions and Franchisee’s advertising fund contributions. Corporate funded advertising costs are expensed as incurred. The Company has various franchising programs supporting certain of its franchise salon concepts. Most maintain advertising funds that provide comprehensive advertising and sales promotion support. Salons, both franchise and company-owned, are required to participate in the advertising funds for the same salon concept. The Company assists in the administration of the advertising funds, however, a group of individuals consisting of franchisee representatives has control over all of the expenditures and operates the funds in accordance with franchise operating and other agreements. Advertising fund contributions are expensed when the contribution is made. |
Stock-Based Employee Compensation Plans | Stock-Based Employee Compensation Plans: The Company recognizes stock-based compensation expense based on the fair value of the awards at the grant date. Compensation expense is recognized on a straight-line basis over the requisite service period of the award (or to the date a participant becomes eligible for retirement, if earlier). The Company uses fair value methods that require the input of subjective assumptions, including the expected term, expected volatility, dividend yield and risk-free interest rate. |
Sales Taxes | Sales Taxes: Sales taxes are recorded on a net basis (rather than as both revenue and an expense) within the Company's Consolidated Statement of Operations. |
Income Taxes | Income Taxes: Deferred income tax assets and liabilities are recognized for the expected future tax consequences of events that have been included in the Consolidated Financial Statements or income tax returns. Deferred income tax assets and liabilities are determined based on the differences between the financial statement and tax basis of assets and liabilities using currently enacted tax rates in effect for the years in which the differences are expected to reverse. We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. The Company evaluates all evidence, including recent financial performance, the existence of cumulative year losses and our forecast of future taxable income, to assess the need for a valuation allowance against our deferred tax assets. While the determination of whether or not to record a valuation allowance is not fully governed by a specific objective test, accounting guidance places significant weight on recent financial performance. The Company has a valuation allowance on its deferred tax assets of $122.4 and $70.7 million at June 30, 2020 and 2019, respectively. If we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we would make necessary adjustments to the deferred tax asset valuation allowance, which would reduce the provision for income taxes. Significant components of the valuation allowance which occurred during fiscal year 2020 are as follows: • In connection with the Coronavirus Aid, Relief and Economic Security Act (CARES Act), NOLs resulting from accounting periods which straddled December 31, 2017 are now considered definite-lived NOLs. Therefore, the Company established a valuation allowance against the U.S. NOLs generated during its fiscal year 2018 and recorded a net tax expense of $14.7 million. • The Company determined that it no longer had sufficient U.S. indefinite-lived taxable temporary differences to support realization of its U.S. indefinite-lived NOLs and its existing U.S. deferred tax assets that upon reversal are expected to generate indefinite-lived NOLs. As a result, the Company recorded an additional $17.0 million valuation allowance on its U.S. federal indefinite-lived deferred tax assets. • The Company recognized a capital loss and established a corresponding valuation allowance of $14.9 million on investment outside basis previously impaired for financial accounting purposes. The Company reserves for unrecognized tax benefits, interest and penalties related to anticipated tax audit positions in the U.S. and other tax jurisdictions based on an estimate of whether additional taxes will be due. If payment of these amounts ultimately proves to be unnecessary, the reversal of these liabilities would result in tax benefits being recognized in the period in which it is determined that the liabilities are no longer necessary. If the estimate of unrecognized tax benefits, interest and penalties proves to be less than the ultimate assessment, additional expenses would result. Inherent in the measurement of deferred balances are certain judgments and interpretations of tax laws and published guidance with respect to the Company's operations. Income tax expense is primarily the current tax payable for the period and the change during the period in certain deferred tax assets and liabilities. See Note 10 to the Consolidated Financial Statements in Part II, Item 8, of this Form 10-K. |
Net (Loss) Income Per Share | Net (Loss) Income Per Share: The Company's basic earnings per share is calculated as net (loss) income divided by weighted average common shares outstanding, excluding unvested outstanding restricted stock awards and restricted stock units. The Company's dilutive earnings per share is calculated as net (loss) income divided by weighted average common shares and common share equivalents outstanding, which includes shares issuable under the Company's stock option plan and long-term incentive plan and dilutive securities. Stock-based awards with exercise prices greater than the average market value of the Company's common stock are excluded from the computation of diluted earnings per share. |
Comprehensive (Loss) Income | Comprehensive (Loss) Income: Components of comprehensive (loss) income include net (loss) income, foreign currency translation adjustments and recognition of deferred compensation, net of tax within shareholders' equity. |
Foreign Currency Translation | Foreign Currency Translation:The Consolidated Balance Sheet, Consolidated Statement of Operations and Consolidated Statement of Cash Flows of the Company's international operations are measured using local currency as the functional currency. Assets and liabilities of these subsidiaries are translated at the exchange rates in effect at each Balance Sheet date. Translation adjustments arising from the use of differing exchange rates from period to period are included in accumulated other comprehensive income within shareholders' equity. Statement of Operations accounts are translated at the average rates of exchange prevailing during the year. |
Accounting Standards Recently Adopted and Recently Issued But Not Yet Adopted by the Company | Accounting Standards Recently Adopted by the Company: Simplifying the Test for Goodwill Impairment In fiscal year 2020, the Company adopted ASU 2017-04, "Intangibles - Goodwill and Other (Topic 350)" for the interim impairment test performed due to the triggering event noted above, for the quarter ended March 31, 2020. Under this accounting standard, the Company performed its interim impairment test and annual impairment tests by comparing the fair value of a reporting unit to its carrying amount. The Company then records an impairment charge for the amount that the carrying amount exceeds the fair value. This eliminates Step 2 from the goodwill impairment test to simplify the subsequent measure of goodwill. 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 Company adopted ASU 2016-02, "Leases (Topic 842)" and all subsequent ASUs that modified Topic 842 as of July 1, 2019 using the modified retrospective method and elected the option to not restate comparative periods in the year of adoption. The Company also elected the package of practical expedients that do not require reassessment of whether existing contracts are or contain leases, lease classification or initial direct costs. The Company has also made an accounting policy election to keep leases with an initial term of 12 months or less off of the Consolidated Balance Sheet. Under adoption of Topic 842, the Company recorded a right of use asset and lease liability of $980.8 and $993.7 million, respectively. The difference between the assets and liabilities are attributable to the reclassification of certain existing lease-related assets and liabilities as an adjustment to the right of use assets. The decrease in the right of use asset and lease liability from July 1, 2019 to June 30, 2020 was due to lease modifications and salon closures. Additionally, the right of use asset was impaired in the fourth fiscal quarter. The Lease Liability reflects a present value of the Company's current minimum lease payments for existing operating leases primarily relating to real estate leases, over a lease term which includes one option, as options are reasonably assured of being exercised, discounted using a collateralized incremental borrowing rate. The Company will use the portfolio approach in applying the discount rate. The accounting guidance for lessors remained largely unchanged from previous guidance, with the exception of the presentation of rent payments that the Company passes through to franchisees (lessees). These costs are generally paid by the Company and reimbursed by the franchisee. Historically, these costs have been recorded on a net basis within rent expense in the Consolidated Statements of Operations, but are now presented on a gross basis upon adoption of the new guidance. The adoption of the new guidance resulted in the recognition of franchise rental income and franchise rent expense of $127.2 million during fiscal year 2020. See Note 6 for further information about our transition to Topic 842 and the newly required disclosures. Accounting Standards Recently Issued But Not Yet Adopted by the Company: In June 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-13 "Measurement of Credit Losses on Financial Instruments", which modifies the measurement of expected credit losses of certain financial instruments. The Company will adopt the standard in the first quarter of 2021, as required, and does not expect the standard to materially affect consolidated net earnings, financial position, or cash flows. The Company does not expect that any other recently issued accounting pronouncements will have a material effect on our financial statements. |
BUSINESS DESCRIPTION AND SUMM_3
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Cash and Cash Equivalents | The table below reconciles the cash and cash equivalents balances and restricted cash balances, recorded within other current assets on the Consolidated Balance Sheet to the amount of cash, cash equivalents and restricted cash reported on the Consolidated Statement of Cash Flows: June 30, 2020 2019 (Dollars in thousands) Cash and cash equivalents $ 113,667 $ 70,141 Restricted cash, included in other current assets 9,213 22,238 Total cash, cash equivalents and restricted cash $ 122,880 $ 92,379 |
Restricted Cash | The table below reconciles the cash and cash equivalents balances and restricted cash balances, recorded within other current assets on the Consolidated Balance Sheet to the amount of cash, cash equivalents and restricted cash reported on the Consolidated Statement of Cash Flows: June 30, 2020 2019 (Dollars in thousands) Cash and cash equivalents $ 113,667 $ 70,141 Restricted cash, included in other current assets 9,213 22,238 Total cash, cash equivalents and restricted cash $ 122,880 $ 92,379 |
Advertising Costs | The Company's advertising costs are included in site operating expenses in the Consolidated Statement of Operations and consist of the following: Fiscal Years 2020 2019 2018 (Dollars in thousands) Corporate funded advertising costs $ 13,210 $ 21,581 $ 19,803 Advertising fund contributions from company-owned salons 3,715 12,929 16,834 Advertising fund contributions from franchisees (1) 13,341 34,073 26,818 Total advertising costs $ 30,266 $ 68,583 $ 63,455 _____________________________________________________________________________ (1) Includes the refunding of $14.9 million of previously collected cooperative fees to franchisees as a direct result of the COVID-19 pandemic. |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of revenue | The following table disaggregates revenue by timing of revenue recognition and is reconciled to reportable segment revenues as follows: For the Year Ended June 30, 2020 For the Year Ended June 30, 2019 Franchise Company-owned Franchise Company-owned (Dollars in thousands) Revenue recognized at a point in time: Service $ — $ 331,538 $ — $ 749,660 Product 52,421 85,165 59,905 165,713 Total revenue recognized at a point in time $ 52,421 $ 416,703 $ 59,905 $ 915,373 Revenue recognized over time: Royalty and other franchise fees $ 60,061 $ — $ 59,688 $ — Advertising fund fees 13,341 — 34,073 — Franchise rental income 127,203 — — — Total revenue recognized over time 200,605 — 93,761 — Total revenue $ 253,026 $ 416,703 $ 153,666 $ 915,373 |
Schedule of receivables, broker fees and deferred revenue | Information about receivables, broker fees and deferred revenue subject to the revenue recognition guidance is as follows: June 30, June 30, Balance Sheet Classification (Dollars in thousands) Receivables from contracts with customers, net $ 22,991 $ 23,210 Accounts receivable, net Broker fees $ 20,516 $ 17,819 Other assets Deferred revenue: Current Gift card liability $ 2,543 $ 3,050 Accrued expenses Deferred franchise fees unopened salons 77 193 Accrued expenses Deferred franchise fees open salons 5,537 4,164 Accrued expenses Total current deferred revenue $ 8,157 $ 7,407 Non-current Deferred franchise fees unopened salons $ 11,855 $ 15,173 Other non-current liabilities Deferred franchise fees open salons 33,623 24,194 Other non-current liabilities Total non-current deferred revenue $ 45,478 $ 39,367 |
Allowance for doubtful accounts | The following table is a rollforward of the allowance for doubtful accounts for the periods indicated (in thousands): Balance as of June 30, 2019 $ 2,025 Provision for doubtful accounts 5,958 Write-offs (1,084) Balance as of June 30, 2020 $ 6,899 |
Broker fees | The following table is a rollforward of the broker fee balance for the periods indicated (in thousands): Balance as of June 30, 2019 $ 17,819 Additions 5,606 Amortization (2,852) Write-offs (57) Balance as of June 30, 2020 $ 20,516 |
Estimated revenue expected to be recognized | Estimated revenue expected to the recognized in the future related to deferred franchise fees for open salons as of June 30, 2020 is as follows (in thousands): 2021 $ 5,471 2022 5,351 2023 5,174 2024 4,939 2025 4,577 Thereafter 13,648 Total $ 39,160 |
TBG DISCONTINUED OPERATIONS A_2
TBG DISCONTINUED OPERATIONS AND RESTRUCTURING (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedules of discontinued operations | The following summarizes the results of TBG related charges and TBG discontinued operations for the periods presented: Fiscal Years 2020 2019 2018 (Dollars in thousands) Revenue $ — $ — $ 101,140 TBG Mall Restructuring: Accounts and notes receivable reserves — 20,711 — Other charges (1) 2,333 1,105 — Total TBG mall restructuring $ 2,333 $ 21,816 $ — TBG Discontinued Operations: Working capital and prepaid rent receivable reserve — — 11,697 Other charges (2) (3) (1,063) 1,221 47,848 (Income) loss from TBG discontinued operations, before taxes (1,063) 1,221 59,545 Income tax expense (benefit) on TBG discontinued operations (4) 231 (7,117) (6,360) (Income) loss from TBG discontinued operations, net of tax $ (832) $ (5,896) $ 53,185 _______________________________________________________________________________ (1) In fiscal year 2020, the Company recorded professional fees associated with the transfer of the mall salons back to the Company as TBG mall restructuring charges. (2) In fiscal years 2020 and 2019, the Company recorded professional fees related to the transaction, as well as insurance adjustments associated with the discontinued operations. (3) In fiscal year 2018, the Company recorded $43.0 million of asset impairment charges, $6.2 million of cumulative foreign currency translation adjustment, $3.6 million of loss from operations and $6.8 million of professional fees. (4) Income taxes have been allocated to continuing and discontinued operations based on the methodology required by accounting for income taxes guidance. |
Summary of costs associated with the SmartStyle salon restructuring | A summary of costs associated with the SmartStyle salon restructuring for fiscal year 2018 is as follows: Financial Line Item Fiscal Year 2018 (Dollars in thousands) Inventory reserves Cost of Service $ 656 Inventory reserves Cost of Product 586 Severance General and administrative 897 Long-lived fixed asset impairment Depreciation and amortization 5,460 Asset retirement obligation Depreciation and amortization 7,680 Lease termination and other related closure costs Rent 27,290 Deferred rent Rent (3,291) Total $ 39,278 |
OTHER FINANCIAL STATEMENT DATA
OTHER FINANCIAL STATEMENT DATA (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of additional information concerning selected balance sheet accounts | The following provides additional information concerning selected balance sheet accounts: June 30, 2020 2019 (Dollars in thousands) Other current assets: Prepaids $ 5,165 $ 9,527 Restricted cash 9,213 22,238 Other 4,760 1,451 $ 19,138 $ 33,216 Property and equipment: Buildings and improvements 36,379 29,165 Equipment, furniture and leasehold improvements 198,983 309,561 Internal use software 71,212 67,465 306,574 406,191 Less accumulated depreciation and amortization (249,398) (328,101) $ 57,176 $ 78,090 Accrued expenses: Payroll and payroll related costs $ 18,204 $ 34,909 Insurance 10,278 12,935 Rent and related real estate costs 4,179 6,332 Other 16,164 26,575 $ 48,825 $ 80,751 Other non-current liabilities: Deferred income taxes $ 13,916 $ 17,924 Deferred rent (1) — 14,006 Insurance 20,301 23,565 Deferred benefits 11,106 12,457 Deferred franchise fees 45,478 39,367 Other 3,341 4,080 $ 94,142 $ 111,399 _______________________________________________________________________________ (1) Upon adoption of ASC 842 in fiscal year 2020, the Company no longer reports deferred rent. |
Schedule of additional information concerning other intangibles, net | The following provides additional information concerning other intangibles, net: June 30, 2020 2019 Weighted Average Amortization Periods (1) Cost (2) Accumulated Net Weighted Average Amortization Periods (1) Cost (2) Accumulated Net (In years) (Dollars in thousands) (In years) (Dollars in thousands) Brand assets and trade names 33 $ 6,494 $ (3,609) $ 2,885 33 $ 6,909 $ (3,659) $ 3,250 Franchise agreements 19 9,558 (8,194) 1,364 19 9,783 (8,057) 1,726 Lease intangibles (3) 0 — — — 20 13,490 (10,065) 3,425 Other 20 874 (544) 330 20 883 (523) 360 Total 24 $ 16,926 $ (12,347) $ 4,579 22 $ 31,065 $ (22,304) $ 8,761 _______________________________________________________________________________ (1) All intangible assets have been assigned an estimated finite useful life and are amortized on a straight-line basis over the number of years that approximate their expected period of benefit (ranging from three (2) The change in the gross carrying value and accumulated amortization of other intangible assets is impacted by foreign currency. |
Schedule of future estimated amortization expense related to amortizable intangible assets | As of June 30, 2020, future estimated amortization expense related to intangible assets is estimated as follows (in thousands): 2021 $ 467 2022 438 2023 425 2024 363 2025 366 Thereafter 2,520 Total $ 4,579 |
Schedule of supplemental disclosures of cash flow activity | The following provides supplemental disclosures of cash flow activity: Fiscal Years 2020 2019 2018 (Dollars in thousands) Cash paid for: Interest $ 7,390 $ 4,408 $ 7,022 Taxes and penalties, net 2,150 2,096 2,397 Non-cash investing activities: Unpaid capital expenditures 2,569 3,873 9,209 |
GOODWILL (Tables)
GOODWILL (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill | The table below contains details related to the Company's goodwill: June 30, 2020 2019 Gross Accumulated Net Gross Accumulated Net (Dollars in thousands) Goodwill $ 341,721 $ (114,264) $ 227,457 $ 419,818 $ (74,100) $ 345,718 _______________________________________________________________________________ (1) The change in the gross carrying value of goodwill relates to goodwill derecognized for salons sold to franchisees and foreign currency translation adjustments. (2) In fiscal year 2011, the Company realized a $74.1 million goodwill impairment loss associated with the Company-owned reporting unit (the previous North American Value reporting unit). (3) In fiscal year 2020, the Company realized a $40.2 million goodwill impairment associated with the Company-owned reporting unit. Prior to the COVID-19 pandemic, the Company had been derecognizing Company-owned goodwill as part of the calculation of gain or loss on the sale of salons to franchisees. Following the goodwill impairment in fiscal year 2020, the Company-owned reporting unit has no remaining goodwill, so there will be no further derecognition of Company-owned goodwill. The table below contains details related to the Company's goodwill: Franchise Company-owned Consolidated (Dollars in thousands) Goodwill, net at June 30, 2019 $ 227,928 $ 117,790 $ 345,718 Translation rate adjustments (471) (660) (1,131) Derecognition related to sale of salon assets to franchisees (1) — (76,966) (76,966) Goodwill impairment — (40,164) (40,164) Goodwill, net at June 30, 2020 $ 227,457 $ — $ 227,457 _______________________________________________________________________________ |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Schedule of Rent Expenses | June 30, 2020 2019 2018 (Dollars in thousands) Minimum rent (1) $ 60,703 $ 108,892 $ 157,828 Percentage rent based on sales 2,043 4,754 4,324 Real estate taxes and other expenses 13,636 18,170 20,944 Total $ 76,382 $ 131,816 $ 183,096 _______________________________________________________________________________ (1) Pursuant to ASC 420, fiscal year 2018 includes lease termination and other related closure costs of $27.3 million and a deferred rent benefit of $3.3 million related to restructuring of the company-owned SmartStyle portfolio that occurred in January 2018. |
Lessor, Future Operating Lease Commitments | As of June 30, 2020, future operating lease commitments to be paid and received by the Company were as follows: Fiscal Year Leases For Franchise Salons Leases For Company-Owned Salons Corporate Leases Total Operating Lease Payments Sublease Income To Be Received From Franchisees Net Rent Commitments 2021 $ 121,149 $ 43,705 $ 1,781 $ 166,635 $ (121,149) $ 45,486 2022 110,951 36,628 1,410 148,989 (110,951) 38,038 2023 100,640 31,943 1,447 134,030 (100,640) 33,390 2024 90,649 28,057 1,484 120,190 (90,649) 29,541 2025 79,398 23,746 1,522 104,666 (79,398) 25,268 Thereafter 190,793 59,994 7,818 258,605 (190,793) 67,812 Total future obligations $ 693,580 $ 224,073 $ 15,462 $ 933,115 $ (693,580) $ 239,535 Less amounts representing interest 85,432 27,193 2,765 115,390 Present value of lease liabilities $ 608,148 $ 196,880 $ 12,697 $ 817,725 Less current lease liabilities 99,217 36,767 1,287 137,271 Long-term lease liabilities $ 508,931 $ 160,113 $ 11,410 $ 680,454 |
Lessee, Future Operating Lease Commitments | As of June 30, 2020, future operating lease commitments to be paid and received by the Company were as follows: Fiscal Year Leases For Franchise Salons Leases For Company-Owned Salons Corporate Leases Total Operating Lease Payments Sublease Income To Be Received From Franchisees Net Rent Commitments 2021 $ 121,149 $ 43,705 $ 1,781 $ 166,635 $ (121,149) $ 45,486 2022 110,951 36,628 1,410 148,989 (110,951) 38,038 2023 100,640 31,943 1,447 134,030 (100,640) 33,390 2024 90,649 28,057 1,484 120,190 (90,649) 29,541 2025 79,398 23,746 1,522 104,666 (79,398) 25,268 Thereafter 190,793 59,994 7,818 258,605 (190,793) 67,812 Total future obligations $ 693,580 $ 224,073 $ 15,462 $ 933,115 $ (693,580) $ 239,535 Less amounts representing interest 85,432 27,193 2,765 115,390 Present value of lease liabilities $ 608,148 $ 196,880 $ 12,697 $ 817,725 Less current lease liabilities 99,217 36,767 1,287 137,271 Long-term lease liabilities $ 508,931 $ 160,113 $ 11,410 $ 680,454 |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair values using Level 3 inputs | The following impairment charges were based on fair values using Level 3 inputs: Fiscal Year 2020 2019 2018 (Dollars in thousands) Goodwill $ 40,164 $ — $ — Salon asset impairments (1) 3,851 4,587 11,092 Long-lived assets impairment (1) 22,560 — — _______________________________________________________________________________ (1) See Note 1 to the Consolidated Financial Statements. |
FINANCING ARRANGEMENTS (Tables)
FINANCING ARRANGEMENTS (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | The Company's long-term debt consists of the following: Revolving Credit Facility June 30, Maturity Date 2020 2019 2020 2019 (Fiscal year) (Interest rate %) (Dollars in thousands) Revolving credit facility 2023 5.50% 3.65% $ 177,500 $ 90,000 |
Summary of sale leaseback transactions | The Company’s long-term lease liability consists of the following: Maturity Date Interest Rate June 30, June 30, (Fiscal year) (Dollars in thousands) Financial liability - Salt Lake City Distribution Center 2034 3.30% $ 16,773 $ 17,354 Financial liability - Chattanooga Distribution Center 2034 3.70% 11,208 11,556 Long-term financing liabilities $ 27,981 $ 28,910 As of June 30, 2020, future lease payments due are as follows: Fiscal year Salt Lake City Distribution Center Chattanooga Distribution Center (Dollars in thousands) 2021 $ 1,157 $ 817 2022 1,171 829 2023 1,186 842 2024 1,200 854 2025 1,215 867 Thereafter 10,683 8,414 Total $ 16,612 $ 12,623 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Components of loss before income taxes | The components of loss from continuing operations before income taxes are as follows: Fiscal Years 2020 2019 2018 (Dollars in thousands) Loss before income taxes U.S. $ (165,260) $ (17,513) $ (16,604) International (11,553) (4,754) 6,413 $ (176,813) $ (22,267) $ (10,191) |
Benefit for income taxes | The benefit for income taxes consists of: Fiscal Years 2020 2019 2018 (Dollars in thousands) Current: U.S. $ (925) $ (519) $ 2,151 International 238 1,069 1,894 Deferred: U.S. (3,353) (2,303) (73,728) International (579) (392) (129) $ (4,619) $ (2,145) $ (69,812) |
Provision for income taxes, reconciliation to applicable U.S. statutory rate | The benefit for income taxes differs from the amount of income tax determined by applying the applicable U.S. statutory rate to earnings (loss) before income taxes, as a result of the following: Fiscal Years 2020 2019 2018 U.S. statutory rate 21.0 % 21.0 % 28.0 % State income taxes, net of federal income tax benefit 4.0 0.5 14.8 Valuation allowance (1) (29.4) (14.5) 560.8 Foreign income taxes at other than U.S. rates (0.6) 0.9 (0.5) Work opportunity tax credits 0.4 7.2 15.2 Deferred tax rate remeasurement — — 99.0 Uncertain tax positions (6.2) 1.0 (15.9) Stock-based compensation 0.1 2.2 (15.8) Capital loss 15.0 — — Other, net (2) (1.7) (8.7) (0.6) 2.6 % 9.6 % 685.0 % _______________________________________________________________________________ (1) See Note 1 to the Consolidated Financial Statements. |
Components of the net deferred tax assets and liabilities | The components of the net deferred tax assets and liabilities are as follows: June 30, 2020 2019 (Dollars in thousands) Deferred tax assets: Deferred rent $ — $ 3,816 Payroll and payroll related costs 9,903 11,696 Net operating loss carryforwards 64,402 48,208 Tax credit carryforwards 37,072 36,966 Capital loss carryforwards 14,978 — Deferred franchise fees 9,342 7,508 Operating lease liabilities 202,940 — Financing lease liabilities 7,157 7,387 Other 8,214 8,709 Subtotal $ 354,008 $ 124,290 Valuation allowance (122,447) (70,707) Total deferred tax assets $ 231,561 $ 53,583 Deferred tax liabilities: Goodwill and intangibles $ (40,904) $ (62,378) Operating lease assets (197,304) — Other (7,269) (9,129) Total deferred tax liabilities $ (245,477) $ (71,507) Net deferred tax liability $ (13,916) $ (17,924) |
Unrecognized tax benefits | A rollforward of the unrecognized tax benefits is as follows: Fiscal Years 2020 2019 2018 (Dollars in thousands) Balance at beginning of period $ 2,763 $ 3,027 $ 1,388 Additions based on tax positions related to the current year, primarily salon vendition activity and tax positions related to a capital loss 11,985 287 553 (Reductions)/additions based on tax positions of prior years (223) (154) 1,608 Reductions on tax positions related to the expiration of the statute of limitations (480) (397) (177) Settlements — — (345) Balance at end of period $ 14,045 $ 2,763 $ 3,027 |
BENEFIT PLANS (Tables)
BENEFIT PLANS (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Retirement Benefits [Abstract] | |
Schedule of deferred compensation | The table below presents the projected benefit obligation of these deferred compensation contracts in the Consolidated Balance Sheet: June 30, 2020 2019 (Dollars in thousands) Current portion (included in accrued liabilities) $ 302 $ 1,183 Long-term portion (included in other non-current liabilities) 4,637 4,416 $ 4,939 $ 5,599 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of weighted average number of shares | The computation of weighted average shares outstanding, assuming dilution, excluded the following stock-based awards as they were not dilutive under the treasury stock method: Fiscal Year 2020 2019 2018 Equity-based compensation awards 315,312 118,246 634,292 |
STOCK-BASED COMPENSATION (Table
STOCK-BASED COMPENSATION (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of weighted average fair values per stock-based compensation award granted | Using the fair value of each grant on the date of grant, the weighted average fair values per stock-based compensation award granted during fiscal years 2020, 2019 and 2018 were as follows: Fiscal Years 2020 2019 2018 RSUs (1) $ 16.48 $ 21.12 $ 13.43 PSUs (1) 12.09 14.05 15.74 _______________________________________________________________________________ (1) The fair value of market-based RSUs and PSUs granted are estimated on the date of grant using a Monte Carlo valuation model. The significant assumptions used in determining the estimated fair value of the market-based awards granted during fiscal years 2020, 2019 and 2018 were as follows: Fiscal Years 2020 2019 2018 Risk-free interest rate 1.43 % 2.31 - 2.68% 1.66 - 2.59% Expected volatility 33.9 % 34.2 - 34.6% 33.4 - 37.1% Expected dividend yield — % — % — % |
Schedule of assumptions used in determining estimated fair value of stock options, SARs and market-based RSUs granted | The significant assumptions used in determining the estimated fair value of the market-based awards granted during fiscal years 2020, 2019 and 2018 were as follows: Fiscal Years 2020 2019 2018 Risk-free interest rate 1.43 % 2.31 - 2.68% 1.66 - 2.59% Expected volatility 33.9 % 34.2 - 34.6% 33.4 - 37.1% Expected dividend yield — % — % — % |
Schedule of stock-based compensation expense | Stock-based compensation expense was as follows: Fiscal Years 2020 2019 2018 (Dollars in thousands) SARs $ — $ 1,497 $ 2,252 RSAs, RSUs, & PSUs 3,275 7,506 6,017 Total stock-based compensation expense (recorded in G&A) 3,275 9,003 8,269 Less: Income tax benefit (1) (688) (1,891) (1,736) Total stock-based compensation expense, net of tax $ 2,587 $ 7,112 $ 6,533 _______________________________________________________________________________ (1) Federal statutory income tax rate of 21% utilized in fiscal years 2020, 2019 and 2018. |
Schedule of activity for outstanding SARs and stock options | Activity for all the Company's outstanding SARs and stock options is as follows: Shares Weighted Weighted- Aggregate SARs Stock Outstanding balance at June 30, 2019 1,321 10 $ 11.97 Granted — — — Forfeited/Expired (36) (9) 16.69 Exercised — (1) 18.61 Outstanding balance at June 30, 2020 1,285 — $ 11.79 6.08 $ (4,639) Exercisable at June 30, 2020 1,285 — $ 11.79 6.08 $ (4,639) Unvested awards, net of estimated forfeitures — — $ — — $ — |
Schedule of activity for RSAs and RSUs | Activity for all the Company's RSUs is as follows: Shares/Units Weighted Aggregate Intrinsic RSUs Outstanding balance at June 30, 2019 850 $ 16.42 Granted 257 16.48 Forfeited (166) 17.29 Vested (235) 11.88 Outstanding balance at June 30, 2020 706 $ 17.72 $ 5,775 Vested at June 30, 2020 263 $ 15.94 $ 2,151 Unvested awards, net of estimated forfeitures 381 $ 18.68 $ 3,117 |
Schedule of activity for PSUs | Activity for all of the Company's PSUs is as follows: Shares/Units Weighted Aggregate Intrinsic PSUs Outstanding balance at June 30, 2019 980 $ 14.10 Granted 74 12.09 Forfeited (165) 14.57 Vested (179) 12.93 Outstanding balance at June 30, 2020 710 $ 13.90 $ 5,808 Vested at June 30, 2020 — $ — $ — Unvested awards, net of estimated forfeitures 396 $ 13.34 $ 3,239 _______________________________________________________________________________ (1) Includes actual or expected payout rates as set forth in the performance criteria. |
SHAREHOLDERS' EQUITY (Tables)
SHAREHOLDERS' EQUITY (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of components of accumulated other comprehensive income | The components of accumulated other comprehensive income are as follows: June 30, 2020 2019 2018 (Dollars in thousands) Foreign currency translation $ 7,391 $ 8,853 $ 8,668 Unrealized gain on deferred compensation contracts 58 489 988 Accumulated other comprehensive income $ 7,449 $ 9,342 $ 9,656 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of summarized financial information of reportable operating segments | Financial information concerning the Company's reportable operating segments is shown in the following table: For the Year Ended June 30, 2020 Franchise Company - owned Corporate (1) Consolidated (Dollars in thousands) Revenues: Service $ — $ 331,538 $ — $ 331,538 Product 52,421 85,165 — 137,586 Royalties and fees 73,402 — — 73,402 Franchise rental income 127,203 — — 127,203 253,026 416,703 — 669,729 Operating expenses: Cost of service — 222,279 — 222,279 Cost of product 40,032 44,666 — 84,698 Site operating expenses 13,341 58,202 — 71,543 General and administrative 33,725 24,638 72,590 130,953 Rent 872 72,921 2,589 76,382 Franchise rent expense 127,203 — — 127,203 Depreciation and amortization 922 29,113 6,917 36,952 Long-lived asset impairment 1,712 20,848 — 22,560 TBG restructuring 2,333 — — 2,333 Goodwill impairment — 40,164 — 40,164 Total operating expenses 220,140 512,831 82,096 815,067 Operating income (loss) 32,886 (96,128) (82,096) (145,338) Other (expense) income: Interest expense — — (7,522) (7,522) Gain from sale of salon assets to franchisees, net — — (27,306) (27,306) Interest income and other, net — — 3,353 3,353 Income (loss) from continuing operations before income taxes $ 32,886 $ (96,128) $ (113,571) $ (176,813) For the Year Ended June 30, 2019 Franchise Company-owned Corporate (1) Consolidated (Dollars in thousands) Revenues: Service $ — $ 749,660 $ — $ 749,660 Product 59,905 165,713 — 225,618 Royalties and fees 93,761 — — 93,761 153,666 915,373 — 1,069,039 Operating expenses: Cost of service — 452,827 — 452,827 Cost of product 47,219 81,597 — 128,816 Site operating expenses 34,099 106,932 — 141,031 General and administrative 32,888 57,219 86,897 177,004 Rent 740 130,214 862 131,816 Depreciation and amortization 762 28,263 8,823 37,848 TBG restructuring 21,816 — — 21,816 Total operating expenses 137,524 857,052 96,582 1,091,158 Operating income (loss) 16,142 58,321 (96,582) (22,119) Other (expense) income: Interest expense — — (4,795) (4,795) Gain from sale of salon assets to franchisees, net — — 2,918 2,918 Interest income and other, net — — 1,729 1,729 Income (loss) from continuing operations before income taxes $ 16,142 $ 58,321 $ (96,730) $ (22,267) For the Year Ended June 30, 2018 Franchise Company - owned Corporate (1) Consolidated (Dollars in thousands) Revenues: Service $ — $ 899,345 $ — $ 899,345 Product 53,703 205,037 — 258,740 Royalties and fees 77,394 — — 77,394 131,097 1,104,382 — 1,235,479 Operating expenses: Cost of service — 530,582 — 530,582 Cost of product 42,128 98,495 — 140,623 Site operating expenses 26,818 127,249 — 154,067 General and administrative 25,880 67,163 81,002 174,045 Rent 269 181,869 958 183,096 Depreciation and amortization 365 48,508 9,332 58,205 Total operating expenses 95,460 1,053,866 91,292 1,240,618 Operating income (loss) 35,637 50,516 (91,292) (5,139) Other (expense) income: Interest expense — — (10,492) (10,492) Gain from sale of salon assets to franchisees, net — — 241 241 Interest income and other, net — — 5,199 5,199 Income (loss) from continuing operations before income taxes $ 35,637 $ 50,516 $ (96,344) $ (10,191) _______________________________________________________________________________ (1) Corporate consists primarily of unallocated general and administrative expenses, including expenses associated with salon support, depreciation and amortization related to our corporate headquarters and unallocated insurance, benefit and compensation programs, including stock-based compensation. |
Schedule of total revenues and property and equipment, net associated with business operations in the U.S. and all other countries in aggregate | Total revenues and property and equipment, net associated with business operations in the U.S. and all other countries in aggregate were as follows: June 30, 2020 2019 2018 Total Property and Total Property and Total Property and (Dollars in thousands) U.S. $ 613,652 $ 56,532 $ 972,994 $ 75,789 $ 1,132,041 $ 95,956 Other countries 56,077 644 96,045 2,301 103,438 3,332 Total $ 669,729 $ 57,176 $ 1,069,039 $ 78,090 $ 1,235,479 $ 99,288 |
QUARTERLY FINANCIAL DATA (UNA_2
QUARTERLY FINANCIAL DATA (UNAUDITED) (Tables) | 12 Months Ended |
Jun. 30, 2020 | |
Quarterly Financial Information Disclosure [Abstract] | |
Schedule of quarterly financial data | Summarized quarterly data for fiscal years 2020 and 2019 follows: Quarter Ended September 30 December 31 March 31 (1) June 30 (2) Year Ended (Dollars in thousands, except per share amounts) 2020 Revenues $ 247,038 $ 208,765 $ 153,783 $ 60,143 $ 669,729 Cost of service and product revenues, excluding depreciation and amortization 116,809 94,616 76,496 19,056 306,977 Operating loss (9,906) (7,466) (59,399) (68,567) (145,338) Loss from continuing operations (14,178) (16,520) (67,842) (73,654) (172,194) Income from discontinued operations 373 79 301 79 832 Net loss (13,805) (16,441) (67,541) (73,575) (171,362) Loss from continuing operations per share, basic (4) (0.39) (0.46) (1.89) (2.05) (4.79) Income from discontinued operations per share, basic (4) 0.01 — 0.01 — 0.02 Net loss per share, basic (4) (0.38) (0.46) (1.88) (2.05) (4.77) Loss from continuing operations per share, diluted (4) (0.39) (0.46) (1.89) (2.05) (4.79) Income from discontinued operations per share, diluted (4) 0.01 — 0.01 — 0.02 Net loss per share, diluted (4) (0.38) (0.46) (1.88) (2.05) (4.77) Quarter Ended September 30 December 31 March 31 (3) June 30 Year Ended (Dollars in thousands, except per share amounts) 2019 Revenues $ 287,835 $ 274,671 $ 258,343 $ 248,190 $ 1,069,039 Cost of service and product revenues, excluding depreciation and amortization 153,678 151,281 142,799 133,885 581,643 Operating income (loss) 3,429 (1,551) (22,162) (1,835) (22,119) (Loss) income from continuing operations (463) 417 (14,811) (5,265) (20,122) (Loss) income from discontinued operations (264) 6,113 178 (131) 5,896 Net (loss) income (727) 6,530 (14,633) (5,396) (14,226) (Loss) income from continuing operations per share, basic (4) (0.01) 0.01 (0.37) (0.14) (0.48) (Loss) income from discontinued operations per share, basic (4) (0.01) 0.14 — — 0.14 Net (loss) income per share, basic (4) (0.02) 0.15 (0.36) (0.14) (0.34) (Loss) income from continuing operations per share, diluted (4) (0.01) 0.01 (0.37) (0.14) (0.48) (Loss) income from discontinued operations per share, diluted (4) (0.01) 0.14 — — 0.14 Net (loss) income per share, diluted (4) (0.02) 0.15 (0.36) (0.14) (0.34) _______________________________________________________________________________ (1) During the third quarter of fiscal year 2020, the Company recorded a $40.2 million goodwill impairment charge related to the Company-owned reporting unit (see revision explanation below). (2) During the fourth quarter of fiscal year 2020, government-mandated salon closures in response to the COVID-19 pandemic significantly reduced operating income. Additionally, the economic disruption caused by COVID-19 triggered a $22.6 million long-lived asset impairment charge. (3) During the third quarter of fiscal year 2019, the Company recorded a $20.7 million restructuring charge related to TBG mall locations. The reserve was a non-cash charge to reserve for notes and receivables due from TBG. (4) Total is an annual recalculation; line items calculated quarterly may not sum to total. Line items may not sum due to rounding. |
Schedule of error corrections and prior period adjustments | Three months ended December 31, 2019 As Previously Reported Adjustments (1) As Revised (Dollars in thousands, except per share amounts) Loss from sale of salon assets to franchisees, net (a) $ (5,692) $ (6,715) $ (12,407) Interest income and other, net (b) 4,346 (1,477) 2,869 Loss from continuing operations before income taxes (10,276) (8,192) (18,468) Income tax benefit 795 1,153 1,948 Net loss (9,402) (7,039) (16,441) Net loss per share (0.26) (0.20) (0.46) Comprehensive loss (8,861) (7,039) (15,900) Goodwill as of December 31, 2019 293,019 (6,715) 286,304 Other assets as of December 31, 2019 38,144 1,477 36,667 Other non-current liabilities as of December 31, 2019 95,979 (1,153) 94,826 Three months ended March 31, 2020 As Previously Reported Adjustments (2) As Revised (Dollars in thousands, except per share amounts) Rent expense (d) $ 19,243 $ (578) $ 18,665 Goodwill impairment (c) 44,529 (4,365) 40,164 Operating loss (64,342) 4,943 (59,399) Loss from sale of salon assets to franchisees, net (10,208) 2,350 (7,858) Interest income and other, net (1,329) 1,477 148 Loss from continuing operations before income taxes (77,591) 8,770 (68,821) Income tax benefit 2,253 (1,274) 979 Net loss (75,037) 7,496 (67,541) Net loss per share (2.10) 0.22 (1.88) Comprehensive loss (77,519) 7,496 (70,023) Short term lease liability as of March 31, 2020 149,482 (578) 148,904 Other non-current liabilities as of March 31, 2020 92,698 121 92,819 Six months ended December 31, 2019 As Previously Reported Adjustments (1) As Revised (Dollars in thousands, except per share amounts) Loss from sale of salon assets to franchisees, net $ (11,552) $ (6,715) $ (18,267) Interest income and other, net 4,517 (1,477) 3,040 Loss from continuing operations before income taxes (27,310) (8,192) (35,502) Income tax benefit 3,651 1,153 4,804 Net loss (23,207) (7,039) (30,246) Net loss per share (0.64) (0.20) (0.84) Comprehensive loss (23,069) (7,039) (30,108) Nine months ended March 31, 2020 As Previously Reported Adjustments (2) As Revised (Dollars in thousands, except per share amounts) Rent expense $ 64,002 $ (578) $ 63,424 Goodwill impairment 44,529 (4,365) 40,164 Operating loss (81,714) 4,943 (76,771) Loss from sale of salon assets to franchisees, net (21,760) (4,365) (26,125) Interest income and other, net 3,188 — 3,188 Loss from continuing operations before income taxes (104,901) 578 (104,323) Income tax benefit 5,904 (121) 5,783 Net loss (98,244) 457 (97,787) Net loss per share (2.73) 0.01 (2.72) Comprehensive loss (100,588) 457 (100,131) _______________________________________________________________________________ (1) The Company revised the amounts originally reported for the second quarter of fiscal year 2020 for the following items: (a) Recorded an additional $6.7 million loss from the sale of salons to franchisees, net that should have been recorded in the second quarter. The error in the Company's goodwill derecognition estimation calculation was identified in the fourth quarter. The goodwill derecognition was understated which understated the loss of the sale of salons to franchisees, net. The error impacted the three and six months ended December 31, 2019. (b) Recorded a reduction to the gain on the sale of a building, included in interest income and other, net related to the sale of the Company's headquarters which occurred in the second quarter. Previously, the Company identified this error during the third quarter and recorded and disclosed the correction in the third quarter as an out-of-period adjustment. The correction applies to the three and six months ended December 31, 2019. (2) The Company revised the amounts originally reported for the third quarter of fiscal year 2020 for the following items: (c) During the third quarter goodwill derecognition was overstated by $2.4 million. As of March 31, 2020 the Company impaired its remaining Company-owned goodwill, with the amount of goodwill impairment being overstated by $4.4 million. As the second quarter error which understated goodwill derecognition was not identified until the fourth quarter, goodwill impairment and loss from the sale of salons to franchisees, net were misstated in the third quarter. The Company recorded a $4.4 million decrease to goodwill impairment and a $2.4 million decrease to loss from the sale of salon assets to franchisees, net to correct the error. Net loss for the nine months ended March 31, 2020 was not misstated. However, goodwill impairment and the loss from the sales of salons to franchisees, net were misstated in the nine months ended March 31, 2020 with goodwill impairment overstated by $4.4 million and loss from the sale of salons to franchisees, net understated by $4.4 million. (d) Adjusted third quarter rent expense to include a $0.6 million benefit to rent expense that related to leases signed in the third quarter, but not identified until the fourth quarter. The net loss for the three and nine months were both impacted by the misstatement. |
BUSINESS DESCRIPTION AND SUMM_4
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Business Description (Details) - segment | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2017 | |
Accounting Policies [Abstract] | ||
Number of reportable segments | 2 | 4 |
BUSINESS DESCRIPTION AND SUMM_5
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Covid-19 Impact (Details) | Jun. 30, 2020 |
Franchise | |
Segment Reporting Information [Line Items] | |
Number of stores open | 87.00% |
Company-owned | |
Segment Reporting Information [Line Items] | |
Number of stores open | 54.00% |
BUSINESS DESCRIPTION AND SUMM_6
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Variable Interest Entities (Details) $ in Thousands | 12 Months Ended | |||
Jun. 30, 2020USD ($)membervariable_interest_entity | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017USD ($) | |
Variable interest entities | ||||
Total assets | $ 1,342,794 | $ 682,837 | ||
Total liabilities | 1,217,091 | 358,592 | ||
Total shareholders' equity | $ 125,703 | 324,245 | $ 486,438 | $ 493,345 |
Empire Education Group Inc | ||||
Variable interest entities | ||||
Number of members appointed to board of directors by investee | member | 4 | |||
Number of board of directors members | member | 5 | |||
Roosters | ||||
Variable interest entities | ||||
Number of variable interest entities | variable_interest_entity | 1 | |||
Ownership interest percentage | 84.00% | |||
Total assets | $ 13,200 | 9,600 | ||
Total liabilities | 4,800 | 1,700 | ||
Total shareholders' equity | 8,400 | 7,900 | ||
Shareholders' equity attributable to the noncontrolling interest | $ 1,000 | $ 1,000 |
BUSINESS DESCRIPTION AND SUMM_7
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Cash, Cash Equivalents and Restricted Cash (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Cash and cash equivalents | $ 113,667 | $ 70,141 | ||
Restricted cash, included in other current assets | 9,213 | 22,238 | ||
Total cash, cash equivalents and restricted cash | $ 122,880 | $ 92,379 | $ 148,775 | $ 208,634 |
BUSINESS DESCRIPTION AND SUMM_8
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Receivables and Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
Accounting Policies [Abstract] | |||
Allowance for doubtful accounts | $ 6,899 | $ 2,025 | $ 1,200 |
Cash surrender value of life insurance | $ 24,600 |
BUSINESS DESCRIPTION AND SUMM_9
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Property and Equipment: | |||
Depreciation expense | $ 31.8 | $ 31.9 | $ 38.1 |
Buildings | Minimum | |||
Property and Equipment: | |||
Estimated useful asset lives | 30 years | ||
Buildings | Maximum | |||
Property and Equipment: | |||
Estimated useful asset lives | 39 years | ||
Improvements | Maximum | |||
Property and Equipment: | |||
Estimated useful asset lives | 10 years | ||
Equipment | Minimum | |||
Property and Equipment: | |||
Estimated useful asset lives | 3 years | ||
Equipment | Maximum | |||
Property and Equipment: | |||
Estimated useful asset lives | 10 years | ||
Furniture | Minimum | |||
Property and Equipment: | |||
Estimated useful asset lives | 3 years | ||
Furniture | Maximum | |||
Property and Equipment: | |||
Estimated useful asset lives | 10 years | ||
Computer Software | Minimum | |||
Property and Equipment: | |||
Estimated useful asset lives | 3 years | ||
Computer Software | Maximum | |||
Property and Equipment: | |||
Estimated useful asset lives | 10 years | ||
Software Development | Minimum | |||
Property and Equipment: | |||
Estimated useful asset lives | 3 years | ||
Software Development | Maximum | |||
Property and Equipment: | |||
Estimated useful asset lives | 7 years |
BUSINESS DESCRIPTION AND SUM_10
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Non-Current Assets Held for Sale (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Dec. 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Mar. 31, 2019 | |
Long Lived Assets Held-for-sale [Line Items] | |||||
Term of contract | 10 years | ||||
Non-current assets held for sale | $ 0 | $ 5,276 | |||
Proceeds from sale of company headquarters | $ 9,000 | 8,996 | 0 | $ 0 | |
Gain from sale of company headquarters, net | $ 2,500 | $ (2,513) | 0 | $ 0 | |
Minimum | |||||
Long Lived Assets Held-for-sale [Line Items] | |||||
Term of contract | 1 year | ||||
Maximum | |||||
Long Lived Assets Held-for-sale [Line Items] | |||||
Term of contract | 20 years | ||||
Land | |||||
Long Lived Assets Held-for-sale [Line Items] | |||||
Non-current assets held for sale | 1,700 | ||||
Buildings | |||||
Long Lived Assets Held-for-sale [Line Items] | |||||
Non-current assets held for sale | $ 3,600 |
BUSINESS DESCRIPTION AND SUM_11
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Right of Use Asset, Lease Liabilities and Rent Expense (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2019 |
Lessee, Lease, Description [Line Items] | ||
Term of contract | 10 years | |
Lessor, term of contract | 5 years | |
Right of use asset | $ 786,216 | |
Minimum | ||
Lessee, Lease, Description [Line Items] | ||
Renewal term | 5 years | |
Term of contract | 1 year | |
Maximum | ||
Lessee, Lease, Description [Line Items] | ||
Renewal term | 10 years | |
Term of contract | 20 years |
BUSINESS DESCRIPTION AND SUM_12
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Salon Long-Lived Asset and Right of Use Asset Impairment Assessments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Segment Reporting Information [Line Items] | |||
Long-lived asset, including right of use and salon property and equipment, impairment charge | $ 22,560 | $ 0 | $ 0 |
Right of use asset impairment | 17,400 | ||
Long-lived asset impairment | 3,851 | $ 4,587 | $ 11,092 |
Salon property and equipment | |||
Segment Reporting Information [Line Items] | |||
Long-lived asset impairment | $ 5,200 |
BUSINESS DESCRIPTION AND SUM_13
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Goodwill (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Mar. 31, 2020USD ($) | Sep. 30, 2017reporting_unit | Mar. 31, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Jun. 30, 2017reporting_unit | Dec. 31, 2019USD ($) | |
Goodwill [Line Items] | ||||||||
Goodwill | $ 227,457,000 | $ 345,718,000 | $ 286,304,000 | |||||
Goodwill impairment | $ 40,164,000 | $ 40,164,000 | 40,164,000 | 0 | $ 0 | |||
Number of reporting units | reporting_unit | 2 | 4 | ||||||
Franchise reporting unit | ||||||||
Goodwill [Line Items] | ||||||||
Goodwill | $ 227,500,000 | 227,900,000 | ||||||
Percentage of fair value in excess of carrying amount | 50.00% | 50.00% | 50.00% | |||||
Franchise reporting unit | Discount Rate | ||||||||
Goodwill [Line Items] | ||||||||
Goodwill measurement input | 13.00% | |||||||
Company-owned reporting unit | ||||||||
Goodwill [Line Items] | ||||||||
Goodwill | $ 0 | $ 117,800,000 | ||||||
Percentage of fair value in excess of carrying amount | 20.00% | 24.00% | ||||||
Goodwill impairment | $ 40,200,000 | |||||||
North American Premium | ||||||||
Goodwill [Line Items] | ||||||||
Goodwill | $ 0 | |||||||
International salons | ||||||||
Goodwill [Line Items] | ||||||||
Goodwill | $ 0 |
BUSINESS DESCRIPTION AND SUM_14
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Self-Insurance Accruals, Right of Use Asset, Lease Liabilities and Rent Expense, Shipping and Handling Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Self-Insurance Accruals | |||
(Increase) decrease in self-insurance expense due to change in estimates related to prior year open policy periods | $ 3.1 | $ (1.3) | $ 1.2 |
Self-insurance accruals, current | 8.5 | 10.1 | |
Self-insurance accruals, noncurrent | 20.3 | 23.6 | |
Shipping and Handling | |||
Shipping and Handling Costs: | |||
Costs of goods sold | $ 8.6 | $ 7.7 | $ 6.1 |
BUSINESS DESCRIPTION AND SUM_15
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Advertising, Income Taxes, Foreign Currency Translation, Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Advertising Expense | |||
Corporate funded advertising costs | $ 13,210 | $ 21,581 | $ 19,803 |
Advertising fund contributions from company-owned salons | 3,715 | 12,929 | 16,834 |
Advertising fund contributions from franchisees | 13,341 | 34,073 | 26,818 |
Total advertising costs | 30,266 | 68,583 | 63,455 |
Cooperative advertising income | 14,900 | ||
Advertising funds, assets | 4,300 | 23,600 | |
Advertising funds, liabilities | 4,300 | 23,600 | |
Income Taxes | |||
Deferred tax assets, valuation allowance | 122,447 | 70,707 | |
Net tax expense, valuation allowance against NOLs generated in 2018 | 14,700 | ||
Additional valuation allowance | 17,000 | ||
Foreign Currency Translation | |||
Foreign currency (loss) gain | (100) | 100 | (100) |
Cumulative foreign currency translation loss | 0 | $ 0 | 6,152 |
Capital loss carryforward | |||
Income Taxes | |||
Valuation allowance | $ 14,900 | ||
Foreign entities with British pound currencies | Discontinued Operations, Disposed of by Sale | |||
Foreign Currency Translation | |||
Cumulative foreign currency translation loss | $ 6,200 |
BUSINESS DESCRIPTION AND SUM_16
BUSINESS DESCRIPTION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Recent Accounting Standards (Details) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020USD ($)lease_renewal_option | Jul. 01, 2019USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right of use asset | $ 786,216 | |
Operating lease liability | $ 817,725 | |
Lease renewal options | lease_renewal_option | 1 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right of use asset | $ 980,800 | |
Operating lease liability | $ 993,700 | |
Franchise rent expense | $ 127,200 | |
Franchise rental income | $ 127,200 |
REVENUE RECOGNITION - Additiona
REVENUE RECOGNITION - Additional Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Allowance for doubtful accounts | $ 6,899 | $ 2,025 | $ 1,200 |
Revenue recognized at a point in time | |||
Disaggregation of Revenue [Line Items] | |||
Performance obligations expected to be satisfied, expected timing | 30 to 90 days | ||
Revenue recognized over time | |||
Disaggregation of Revenue [Line Items] | |||
Performance obligations expected to be satisfied, expected timing | ten years | ||
Gift Cards | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 2,400 | 5,300 | |
Franchise Fees | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 5,200 | $ 3,600 |
REVENUE RECOGNITION - Disaggreg
REVENUE RECOGNITION - Disaggregation of Revenue by Timing (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Franchise rental income | $ 127,203 | ||||||||||
Total revenue | $ 60,143 | $ 153,783 | $ 208,765 | $ 247,038 | $ 248,190 | $ 258,343 | $ 274,671 | $ 287,835 | 669,729 | $ 1,069,039 | $ 1,235,479 |
Operating Segments | Franchise | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Franchise rental income | 127,203 | ||||||||||
Total revenue | 253,026 | 153,666 | 131,097 | ||||||||
Operating Segments | Company-owned | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Franchise rental income | 0 | ||||||||||
Total revenue | 416,703 | 915,373 | 1,104,382 | ||||||||
Revenue recognized at a point in time | Operating Segments | Franchise | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 52,421 | 59,905 | |||||||||
Revenue recognized at a point in time | Operating Segments | Company-owned | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 416,703 | 915,373 | |||||||||
Revenue recognized over time | Operating Segments | Franchise | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Franchise rental income | 127,203 | ||||||||||
Total revenue | 200,605 | 93,761 | |||||||||
Revenue recognized over time | Operating Segments | Company-owned | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Franchise rental income | 0 | ||||||||||
Total revenue | 0 | 0 | |||||||||
Service | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 331,538 | 749,660 | 899,345 | ||||||||
Service | Operating Segments | Franchise | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 0 | 0 | 0 | ||||||||
Service | Operating Segments | Company-owned | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 331,538 | 749,660 | 899,345 | ||||||||
Service | Revenue recognized at a point in time | Operating Segments | Franchise | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 0 | 0 | |||||||||
Service | Revenue recognized at a point in time | Operating Segments | Company-owned | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 331,538 | 749,660 | |||||||||
Product | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 137,586 | 225,618 | 258,740 | ||||||||
Product | Operating Segments | Franchise | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 52,421 | 59,905 | 53,703 | ||||||||
Product | Operating Segments | Company-owned | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 85,165 | 165,713 | 205,037 | ||||||||
Product | Revenue recognized at a point in time | Operating Segments | Franchise | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 52,421 | 59,905 | |||||||||
Product | Revenue recognized at a point in time | Operating Segments | Company-owned | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 85,165 | 165,713 | |||||||||
Royalties and fees | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 73,402 | 93,761 | 77,394 | ||||||||
Royalties and fees | Operating Segments | Franchise | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 73,402 | 93,761 | 77,394 | ||||||||
Royalties and fees | Operating Segments | Company-owned | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 0 | 0 | $ 0 | ||||||||
Royalties and fees | Revenue recognized over time | Operating Segments | Franchise | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 60,061 | 59,688 | |||||||||
Royalties and fees | Revenue recognized over time | Operating Segments | Company-owned | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 0 | 0 | |||||||||
Advertising fund fees | Revenue recognized over time | Operating Segments | Franchise | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 13,341 | 34,073 | |||||||||
Advertising fund fees | Revenue recognized over time | Operating Segments | Company-owned | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 0 | $ 0 |
REVENUE RECOGNITION - Receivabl
REVENUE RECOGNITION - Receivables, Broker Fees and Deferred Revenue (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Receivables from contracts with customers, net | $ 22,991 | $ 23,210 |
Broker fees | 20,516 | 17,819 |
Deferred revenue | ||
Current deferred revenue | 8,157 | 7,407 |
Non-current deferred revenue | 45,478 | 39,367 |
Gift Cards | ||
Deferred revenue | ||
Current deferred revenue | 2,543 | 3,050 |
Franchise Fees, Unopened Salons | ||
Deferred revenue | ||
Current deferred revenue | 77 | 193 |
Non-current deferred revenue | 11,855 | 15,173 |
Franchise Fees, Opened Salons | ||
Deferred revenue | ||
Current deferred revenue | 5,537 | 4,164 |
Non-current deferred revenue | $ 33,623 | $ 24,194 |
REVENUE RECOGNITION - Allowance
REVENUE RECOGNITION - Allowance for Doubtful Accounts (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance as of June 30, 2019 | $ 2,025 | $ 1,200 |
Provision for doubtful accounts | 5,958 | |
Write-offs | (1,084) | |
Balance as of June 30, 2020 | $ 6,899 | $ 2,025 |
REVENUE RECOGNITION - Broker Fe
REVENUE RECOGNITION - Broker Fee Balance (Details) $ in Thousands | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Change In Deferred Costs [Roll Forward] | |
Balance as of June 30, 2019 | $ 17,819 |
Additions | 5,606 |
Amortization | (2,852) |
Write-offs | (57) |
Balance as of June 30, 2020 | $ 20,516 |
REVENUE RECOGNITION - Future Es
REVENUE RECOGNITION - Future Estimated Expected Revenue (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 39,160 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 5,471 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 5,351 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 5,174 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 4,939 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 4,577 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-07-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligations expected to be satisfied | $ 13,648 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations expected to be satisfied, expected timing |
TBG DISCONTINUED OPERATIONS A_3
TBG DISCONTINUED OPERATIONS AND RESTRUCTURING - Additional Information (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||
Dec. 31, 2019salon | Mar. 31, 2019USD ($) | Jun. 30, 2020USD ($)salonstore | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Jan. 31, 2018salon | Oct. 31, 2017salon | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of stores | store | 1,632 | |||||||
Number of stores transferred | salon | 207 | |||||||
Salon lease commitments | $ 23,000 | |||||||
Decrease in lease commitments | 18,000 | |||||||
Negative cash flow | (30,501) | $ 56,396 | $ 61,211 | |||||
TBG mall restructuring | $ 20,700 | 2,333 | 21,816 | 0 | ||||
Cumulative foreign currency translation loss | $ 0 | 0 | 6,152 | |||||
Mall-based Salons | Company-owned | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of stores | salon | 166 | |||||||
Discontinued Operations, Disposed of by Sale | Mall-Based Salons and International Segment | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Promissory note receivable | $ 20,700 | 11,700 | ||||||
Cumulative foreign currency translation loss | 6,200 | |||||||
Facility Closing | Smartstyle Restructuring | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of non-performing stores | salon | 597 | |||||||
Negative cash flow | $ 15,000 | |||||||
TBG mall restructuring | $ 1,900 | |||||||
North America | Facility Closing | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of stores | salon | 858 | |||||||
United Kingdom | Facility Closing | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Number of stores | salon | 250 |
TBG DISCONTINUED OPERATIONS A_4
TBG DISCONTINUED OPERATIONS AND RESTRUCTURING - Schedule of Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Restructuring Charges [Abstract] | |||||||||||
Provision for doubtful accounts | $ 5,958 | ||||||||||
Total TBG mall restructuring | $ 20,700 | 2,333 | $ 21,816 | $ 0 | |||||||
TBG Discontinued Operations: | |||||||||||
(Income) loss from TBG discontinued operations, net of tax | $ (79) | $ (301) | $ (79) | $ (373) | $ 131 | $ (178) | $ (6,113) | $ 264 | (832) | (5,896) | 53,185 |
Mall-Based Salons and International Segment | Discontinued Operations, Disposed of by Sale | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Revenues | 0 | 0 | 101,140 | ||||||||
TBG Discontinued Operations: | |||||||||||
Working capital and prepaid rent receivable reserve | 0 | 0 | 11,697 | ||||||||
Other charges | (1,063) | 1,221 | 47,848 | ||||||||
(Income) loss from TBG discontinued operations, before taxes | (1,063) | 1,221 | 59,545 | ||||||||
Income tax expense (benefit) on TBG discontinued operations | 231 | (7,117) | (6,360) | ||||||||
(Income) loss from TBG discontinued operations, net of tax | (832) | (5,896) | 53,185 | ||||||||
Impairment loss | 43,000 | ||||||||||
Foreign currency transaction loss | 6,200 | ||||||||||
Loss from operations | 3,600 | ||||||||||
Professional fees | 6,800 | ||||||||||
TBG Mall Restructuring | |||||||||||
Restructuring Charges [Abstract] | |||||||||||
Provision for doubtful accounts | 0 | 20,711 | 0 | ||||||||
Other charges | 2,333 | 1,105 | 0 | ||||||||
Total TBG mall restructuring | $ 2,333 | $ 21,816 | $ 0 |
TBG DISCONTINUED OPERATIONS A_5
TBG DISCONTINUED OPERATIONS AND RESTRUCTURING - Smartstyle Restructuring (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||
Long-lived asset impairment | $ 3,851 | $ 4,587 | $ 11,092 |
Facility Closing | |||
Restructuring Cost and Reserve [Line Items] | |||
Lease termination and other related closure costs | 27,300 | ||
Deferred rent | (3,300) | ||
Facility Closing | Smartstyle Restructuring | |||
Restructuring Cost and Reserve [Line Items] | |||
Inventory reserves, cost of service | 656 | ||
Inventory reserve, cost of product | 586 | ||
Severance | 897 | ||
Long-lived asset impairment | 5,460 | ||
Asset retirement obligation | 7,680 | ||
Lease termination and other related closure costs | 27,290 | ||
Deferred rent | (3,291) | ||
Total | $ 39,278 |
OTHER FINANCIAL STATEMENT DAT_2
OTHER FINANCIAL STATEMENT DATA - Schedule of Additional Information Concerning Selected Balance Sheet Accounts (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Jun. 30, 2018 |
Other current assets: | |||||
Prepaids | $ 5,165 | $ 9,527 | |||
Restricted cash | 9,213 | 22,238 | |||
Other | 4,760 | 1,451 | |||
Other current assets | 19,138 | 33,216 | |||
Property and equipment: | |||||
Property and equipment, gross | 306,574 | 406,191 | |||
Less accumulated depreciation and amortization | (249,398) | (328,101) | |||
Property and equipment, net | 57,176 | 78,090 | $ 99,288 | ||
Accrued expenses: | |||||
Payroll and payroll related costs | 18,204 | 34,909 | |||
Insurance | 10,278 | 12,935 | |||
Rent and related real estate costs | 4,179 | 6,332 | |||
Other | 16,164 | 26,575 | |||
Accrued expenses | 48,825 | 80,751 | |||
Other non-current liabilities: | |||||
Deferred income taxes | 13,916 | 17,924 | |||
Deferred rent | 14,006 | ||||
Insurance | 20,301 | 23,565 | |||
Deferred benefits | 11,106 | 12,457 | |||
Deferred franchise fees | 45,478 | 39,367 | |||
Other | 3,341 | 4,080 | |||
Other noncurrent liabilities | 94,142 | $ 92,819 | $ 94,826 | 111,399 | |
Buildings and improvements | |||||
Property and equipment: | |||||
Property and equipment, gross | 36,379 | 29,165 | |||
Equipment, furniture and leasehold improvements | |||||
Property and equipment: | |||||
Property and equipment, gross | 198,983 | 309,561 | |||
Internal use software | |||||
Property and equipment: | |||||
Property and equipment, gross | $ 71,212 | $ 67,465 |
OTHER FINANCIAL STATEMENT DAT_3
OTHER FINANCIAL STATEMENT DATA - Schedule of Additional Information Concerning Other Intangibles, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | |
Amortized intangible assets: | |||
Weighted Average Amortization Periods | 24 years | 22 years | |
Cost | $ 16,926 | $ 16,926 | $ 31,065 |
Accumulated Amortization | (12,347) | (12,347) | (22,304) |
Total | 4,579 | 4,579 | $ 8,761 |
Right of use asset impairment | $ 17,400 | ||
Minimum | |||
Amortized intangible assets: | |||
Weighted Average Amortization Periods | 3 years | ||
Maximum | |||
Amortized intangible assets: | |||
Weighted Average Amortization Periods | 40 years | ||
Brand assets and trade names | |||
Amortized intangible assets: | |||
Weighted Average Amortization Periods | 33 years | 33 years | |
Cost | 6,494 | $ 6,494 | $ 6,909 |
Accumulated Amortization | (3,609) | (3,609) | (3,659) |
Total | 2,885 | $ 2,885 | $ 3,250 |
Franchise agreements | |||
Amortized intangible assets: | |||
Weighted Average Amortization Periods | 19 years | 19 years | |
Cost | 9,558 | $ 9,558 | $ 9,783 |
Accumulated Amortization | (8,194) | (8,194) | (8,057) |
Total | 1,364 | $ 1,364 | $ 1,726 |
Lease intangibles | |||
Amortized intangible assets: | |||
Weighted Average Amortization Periods | 0 years | 20 years | |
Cost | 0 | $ 0 | $ 13,490 |
Accumulated Amortization | 0 | 0 | (10,065) |
Total | 0 | $ 0 | $ 3,425 |
Impairment of intangible assets | 2,500 | ||
Other | |||
Amortized intangible assets: | |||
Weighted Average Amortization Periods | 20 years | 20 years | |
Cost | 874 | $ 874 | $ 883 |
Accumulated Amortization | (544) | (544) | (523) |
Total | $ 330 | $ 330 | $ 360 |
OTHER FINANCIAL STATEMENT DAT_4
OTHER FINANCIAL STATEMENT DATA - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Text Block [Abstract] | |||
Amortization of intangible assets | $ 1.3 | $ 1.3 | $ 1.3 |
OTHER FINANCIAL STATEMENT DAT_5
OTHER FINANCIAL STATEMENT DATA - Schedule of Intangible Asset Amortization Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Future estimated amortization expense related to amortizable intangible assets | ||
2021 | $ 467 | |
2022 | 438 | |
2023 | 425 | |
2024 | 363 | |
2025 | 366 | |
Thereafter | 2,520 | |
Total | $ 4,579 | $ 8,761 |
OTHER FINANCIAL STATEMENT DAT_6
OTHER FINANCIAL STATEMENT DATA - Supplementary Cash Flow Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Cash paid for: | |||
Interest | $ 7,390 | $ 4,408 | $ 7,022 |
Taxes and penalties, net | 2,150 | 2,096 | 2,397 |
Non-cash investing activities: | |||
Unpaid capital expenditures | $ 2,569 | $ 3,873 | $ 9,209 |
GOODWILL - Schedule of Goodwill
GOODWILL - Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Mar. 31, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2011 | Dec. 31, 2019 | |
Goodwill [Line Items] | |||||||
Gross Carrying Value | $ 341,721 | $ 419,818 | |||||
Accumulated Impairment | (114,264) | (74,100) | |||||
Net | 227,457 | 345,718 | $ 286,304 | ||||
Goodwill impairment | $ 40,164 | $ 40,164 | $ 40,164 | $ 0 | $ 0 | ||
North American Value | |||||||
Goodwill [Line Items] | |||||||
Goodwill impairment | $ 74,100 |
GOODWILL - Additional Schedule
GOODWILL - Additional Schedule of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Goodwill [Roll Forward] | |||||
Goodwill, net at beginning of period | $ 286,304 | $ 345,718 | $ 345,718 | ||
Translation rate adjustments | (1,131) | ||||
Derecognition related to sale of salon assets to franchisees | (76,966) | ||||
Goodwill impairment | $ (40,164) | (40,164) | (40,164) | $ 0 | $ 0 |
Goodwill, net at end of period | 227,457 | 345,718 | |||
Franchise | |||||
Goodwill [Roll Forward] | |||||
Goodwill, net at beginning of period | 227,928 | 227,928 | |||
Translation rate adjustments | (471) | ||||
Derecognition related to sale of salon assets to franchisees | 0 | ||||
Goodwill impairment | 0 | ||||
Goodwill, net at end of period | 227,457 | 227,928 | |||
Company-owned | |||||
Goodwill [Roll Forward] | |||||
Goodwill, net at beginning of period | $ 117,790 | 117,790 | |||
Translation rate adjustments | (660) | ||||
Derecognition related to sale of salon assets to franchisees | (76,966) | ||||
Goodwill impairment | (40,164) | ||||
Goodwill, net at end of period | $ 0 | $ 117,790 |
LEASES - Narrative (Details)
LEASES - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Jul. 01, 2019 | Mar. 31, 2019 | |
Lessor, Lease, Description [Line Items] | ||||||
Term of contract | 10 years | |||||
Lessor, term of contract | 5 years | 5 years | ||||
Variable lease cost, adjustment | $ 2,700 | |||||
Rent payable | 20,000 | $ 20,000 | ||||
Right of use asset | $ 786,216 | $ 786,216 | ||||
Weighted average remaining lease term | 6 years 10 months 13 days | 6 years 10 months 13 days | ||||
Weighted average discount rate | 3.95% | 3.95% | ||||
Long-lived asset impairment | $ 22,560 | $ 0 | $ 0 | |||
Right of use asset impairment | 17,400 | |||||
Accounting Standards Update 2016-02 | ||||||
Lessor, Lease, Description [Line Items] | ||||||
Franchise rent expense | 127,200 | |||||
Franchise rental income | $ 127,200 | |||||
Right of use asset | $ 980,800 | |||||
Minimum | ||||||
Lessor, Lease, Description [Line Items] | ||||||
Term of contract | 1 year | 1 year | ||||
Renewal term | 5 years | 5 years | ||||
Maximum | ||||||
Lessor, Lease, Description [Line Items] | ||||||
Term of contract | 20 years | 20 years | ||||
Renewal term | 10 years | 10 years |
LEASES - Rent Expense (Details)
LEASES - Rent Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Lessor, Lease, Description [Line Items] | |||||
Franchise rent expense | $ 18,665 | $ 63,424 | |||
Non Franchise Lease | |||||
Lessor, Lease, Description [Line Items] | |||||
Minimum rent | $ 60,703 | $ 108,892 | $ 157,828 | ||
Percentage rent based on sales | 2,043 | 4,754 | 4,324 | ||
Real estate taxes and other expenses | 13,636 | 18,170 | 20,944 | ||
Franchise rent expense | $ 76,382 | $ 131,816 | 183,096 | ||
Facility Closing | |||||
Lessor, Lease, Description [Line Items] | |||||
Lease termination and other related closure costs | 27,300 | ||||
Deferred rent | $ 3,300 |
LEASES - Future Operating Commi
LEASES - Future Operating Commitments to be Paid and Received (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Mar. 31, 2020 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2021 | $ 166,635 | |
2022 | 148,989 | |
2023 | 134,030 | |
2024 | 120,190 | |
2025 | 104,666 | |
Thereafter | 258,605 | |
Total future obligations | 933,115 | |
Less amounts representing interest | 115,390 | |
Present value of lease liabilities | 817,725 | |
Less current lease liabilities | 137,271 | $ 148,904 |
Long-term lease liability | 680,454 | |
Lessor, Operating Lease, Payments, Fiscal Year Maturity [Abstract] | ||
2021 | (121,149) | |
2022 | (110,951) | |
2023 | (100,640) | |
2024 | (90,649) | |
2025 | (79,398) | |
Thereafter | (190,793) | |
Total future obligations | (693,580) | |
Lessor Operating Lease Payments Net of Sublease Income Fiscal Year Maturity Abstract [Abstract] | ||
2021 | 45,486 | |
2022 | 38,038 | |
2023 | 33,390 | |
2024 | 29,541 | |
2025 | 25,268 | |
Thereafter | 67,812 | |
Total future obligations | 239,535 | |
Operating Segments | Franchise | ||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2021 | 121,149 | |
2022 | 110,951 | |
2023 | 100,640 | |
2024 | 90,649 | |
2025 | 79,398 | |
Thereafter | 190,793 | |
Total future obligations | 693,580 | |
Less amounts representing interest | 85,432 | |
Present value of lease liabilities | 608,148 | |
Less current lease liabilities | 99,217 | |
Long-term lease liability | 508,931 | |
Operating Segments | Company-owned | ||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2021 | 43,705 | |
2022 | 36,628 | |
2023 | 31,943 | |
2024 | 28,057 | |
2025 | 23,746 | |
Thereafter | 59,994 | |
Total future obligations | 224,073 | |
Less amounts representing interest | 27,193 | |
Present value of lease liabilities | 196,880 | |
Less current lease liabilities | 36,767 | |
Long-term lease liability | 160,113 | |
Corporate | ||
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2021 | 1,781 | |
2022 | 1,410 | |
2023 | 1,447 | |
2024 | 1,484 | |
2025 | 1,522 | |
Thereafter | 7,818 | |
Total future obligations | 15,462 | |
Less amounts representing interest | 2,765 | |
Present value of lease liabilities | 12,697 | |
Less current lease liabilities | 1,287 | |
Long-term lease liability | $ 11,410 |
FAIR VALUE MEASUREMENTS - Addit
FAIR VALUE MEASUREMENTS - Additional Information (Details) $ in Millions | Jun. 30, 2020USD ($) |
Fair Value Disclosures [Abstract] | |
Debt, fair value | $ 177.5 |
Long-term financial liability, fair value | $ 28 |
FAIR VALUE MEASUREMENTS - Sched
FAIR VALUE MEASUREMENTS - Schedule of Impairments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Goodwill | $ 40,164 | $ 40,164 | $ 40,164 | $ 0 | $ 0 |
Long-lived asset impairment | 22,560 | 0 | 0 | ||
Fair Value, Measurements, Nonrecurring | Fair Value, Inputs, Level 3 | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Goodwill | 40,164 | 0 | 0 | ||
Salon asset impairments | 3,851 | 4,587 | 11,092 | ||
Long-lived asset impairment | $ 22,560 | $ 0 | $ 0 |
FINANCING ARRANGEMENTS - Schedu
FINANCING ARRANGEMENTS - Schedule of Long-term Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 177,500 | $ 90,000 |
Line of Credit | Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Interest rate | 5.50% | 3.65% |
Long-term debt | $ 177,500 | $ 90,000 |
FINANCING ARRANGEMENTS - Revolv
FINANCING ARRANGEMENTS - Revolving Credit Facility (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||||
May 31, 2020 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | Jun. 30, 2017 | |
Debt Instrument [Line Items] | |||||||
Cash and cash equivalents | $ 113,667,000 | $ 113,667,000 | $ 70,141,000 | ||||
Long-term debt | 177,500,000 | 177,500,000 | 90,000,000 | ||||
Repayments of revolving credit facility | 125,500,000 | 0 | $ 124,230,000 | ||||
Cash, cash equivalent and restricted cash | 122,880,000 | 122,880,000 | 92,379,000 | 148,775,000 | $ 209,986,000 | ||
Current liabilities | 237,014,000 | 237,014,000 | 128,283,000 | ||||
Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Cash and cash equivalents | 113,700,000 | 113,700,000 | |||||
Long-term debt | 177,500,000 | 177,500,000 | $ 90,000,000 | ||||
Maximum borrowing capacity | 295,000,000 | 295,000,000 | |||||
Revolving credit facility remaining borrowing capacity | 96,500,000 | 96,500,000 | |||||
Proceeds from lines of credit | $ 183,000,000 | $ 90,000,000 | |||||
Repayments of revolving credit facility | 125,500,000 | ||||||
Minimum liquidity | $ 75,000,000 | ||||||
Line of Credit | Standby Letters of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Long-term line of credit | $ 21,000,000 | $ 21,000,000 | |||||
Minimum | Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Facility fee | 0.50% | ||||||
Maximum | Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Facility fee | 0.75% | ||||||
LIBOR floor | Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread (as a percent) | 1.25% | ||||||
LIBOR | Minimum | Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread (as a percent) | 3.75% | ||||||
LIBOR | Maximum | Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread (as a percent) | 4.25% | ||||||
Base rate | Minimum | Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread (as a percent) | 2.75% | ||||||
Base rate | Maximum | Line of Credit | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread (as a percent) | 3.25% |
FINANCING ARRANGEMENTS - Senior
FINANCING ARRANGEMENTS - Senior Term Notes (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Jun. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | |
Senior Notes | Senior term notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.50% | |||
Repurchase amount | $ 124.2 | |||
Unamortized premium | 1.2 | |||
Repayments of debt | 34.2 | |||
Interest expense | 1.7 | |||
Revolving Credit Facility | Line of Credit | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 5.50% | 3.65% | ||
Proceeds from lines of credit | $ 183 | $ 90 |
FINANCING ARRANGEMENTS - Sche_2
FINANCING ARRANGEMENTS - Schedule of Sale and Leaseback Transactions (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Sale Leaseback Transaction [Line Items] | ||
Long-term lease liabilities | $ 27,981 | $ 28,910 |
Salt Lake City Distribution Center | ||
Sale Leaseback Transaction [Line Items] | ||
Interest Rate | 3.30% | |
Long-term lease liabilities | $ 16,773 | 17,354 |
Chattanooga Distribution Center | ||
Sale Leaseback Transaction [Line Items] | ||
Interest Rate | 3.70% | |
Long-term lease liabilities | $ 11,208 | $ 11,556 |
FINANCING ARRANGEMENTS - Sale a
FINANCING ARRANGEMENTS - Sale and Leaseback Transactions (Details) $ in Millions | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Debt Disclosure [Abstract] | |
Term of contract | 15 years |
Current lease liability | $ 0.9 |
Weighted average lease term | 13 years 7 months 6 days |
Weighted average discount rate | 3.46% |
Interest expense | $ 0.7 |
Interest expense adjustment | $ 0.4 |
Percent of rent waived | 75.00% |
FINANCING ARRANGEMENTS - Sale_2
FINANCING ARRANGEMENTS - Sale and Leaseback Transactions-Future Lease Payments (Details) $ in Thousands | Jun. 30, 2020USD ($) |
Salt Lake City Distribution Center | |
Sale Leaseback Transaction [Line Items] | |
2021 | $ 1,157 |
2022 | 1,171 |
2023 | 1,186 |
2024 | 1,200 |
2025 | 1,215 |
Thereafter | 10,683 |
Total | 16,612 |
Chattanooga Distribution Center | |
Sale Leaseback Transaction [Line Items] | |
2021 | 817 |
2022 | 829 |
2023 | 842 |
2024 | 854 |
2025 | 867 |
Thereafter | 8,414 |
Total | $ 12,623 |
COMMITMENTS AND CONTINGENCIES -
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) $ in Millions | 12 Months Ended | |
Jun. 30, 2020USD ($)lawsuit | Jun. 30, 2019USD ($) | |
Commitments and Contingencies Disclosure [Abstract] | ||
Number of lawsuits | lawsuit | 2 | |
Amount awarded | $ 2.1 | |
Loss contingency accrual | $ 2.1 | $ 1.5 |
INCOME TAXES - Components of In
INCOME TAXES - Components of Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Loss before income taxes | |||
U.S. | $ (165,260) | $ (17,513) | $ (16,604) |
International | (11,553) | (4,754) | 6,413 |
Loss from continuing operations before income taxes | $ (176,813) | $ (22,267) | $ (10,191) |
INCOME TAXES - (Benefit) Provis
INCOME TAXES - (Benefit) Provision for Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||
Mar. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2019 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Current: | |||||||
U.S. | $ (925) | $ (519) | $ 2,151 | ||||
International | 238 | 1,069 | 1,894 | ||||
Deferred: | |||||||
U.S. | (3,353) | (2,303) | (73,728) | ||||
International | (579) | (392) | (129) | ||||
(Benefit) provision for income taxes | $ (979) | $ (1,948) | $ (4,804) | $ (5,783) | $ (4,619) | $ (2,145) | $ (69,812) |
INCOME TAXES - Effective Income
INCOME TAXES - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Provision for income taxes reconciliation | |||
U.S. statutory rate | 21.00% | 21.00% | 28.00% |
State income taxes, net of federal income tax benefit | 4.00% | 0.50% | 14.80% |
Valuation allowance | (29.40%) | (14.50%) | 560.80% |
Foreign income taxes at other than U.S. rates | (0.60%) | 0.90% | (0.50%) |
Work opportunity tax credits | 0.40% | 7.20% | 15.20% |
Deferred tax rate remeasurement | 0.00% | 0.00% | 99.00% |
Uncertain tax positions | (6.20%) | 1.00% | (15.90%) |
Stock-based compensation | 0.10% | 2.20% | (15.80%) |
Capital loss | 15.00% | 0.00% | 0.00% |
Other, net | (1.70%) | (8.70%) | (0.60%) |
Total | 2.60% | 9.60% | 685.00% |
Rate impact of derecognition of goodwill | (1.20%) | (5.90%) | |
Rate impact of miscellaneous items | (0.60%) | (2.80%) | |
Other, net threshold percentage | 5.00% | 5.00% | 5.00% |
INCOME TAXES - Components of Ne
INCOME TAXES - Components of Net Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Deferred tax assets: | ||
Deferred rent | $ 0 | $ 3,816 |
Payroll and payroll related costs | 9,903 | 11,696 |
Net operating loss carryforwards | 64,402 | 48,208 |
Tax credit carryforwards | 37,072 | 36,966 |
Capital loss carryforwards | 14,978 | 0 |
Deferred franchise fees | 9,342 | 7,508 |
Operating lease liabilities | 202,940 | |
Financing lease liabilities | 7,157 | 7,387 |
Other | 8,214 | 8,709 |
Subtotal | 354,008 | 124,290 |
Valuation allowance | (122,447) | (70,707) |
Total deferred tax assets | 231,561 | 53,583 |
Deferred tax liabilities: | ||
Goodwill and intangibles | (40,904) | (62,378) |
Operating lease assets | (197,304) | |
Other | (7,269) | (9,129) |
Total deferred tax liabilities | (245,477) | (71,507) |
Net deferred tax liability | $ (13,916) | $ (17,924) |
INCOME TAXES - Additional Infor
INCOME TAXES - Additional Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Income Taxes | |||
Net tax expense, valuation allowance against NOLs generated in 2018 | $ 14.7 | ||
Additional valuation allowance | 17 | ||
Expected tax refund | 1.4 | ||
Tax credit carryforward amount subject to expiration | 37.1 | ||
Undistributed earnings of international subsidiaries | 30.3 | ||
Reserve on unrecognized tax benefits that would benefit the effective tax rate | 1.3 | ||
Interest and penalties | 0.1 | $ 0.1 | $ 0.1 |
Accrued interest and penalties related to unrecognized tax benefits | 1.1 | ||
Capital loss carryforward | |||
Income Taxes | |||
Valuation allowance | 14.9 | ||
Tax credit carryforward amount subject to expiration | 14.9 | ||
Domestic Tax Authority | |||
Income Taxes | |||
Operating loss carryforwards | 43.6 | ||
Operating loss carryforwards, subject to expiration | 27.3 | ||
Operating loss carryforwards, not subject to expiration | 16.3 | ||
State and Local Jurisdiction | |||
Income Taxes | |||
Operating loss carryforwards | 16.7 | ||
Operating loss carryforwards, subject to expiration | 15.7 | ||
Operating loss carryforwards, not subject to expiration | 1 | ||
Foreign Tax Authority | Canada | |||
Income Taxes | |||
Operating loss carryforwards | 3.8 | ||
Foreign Tax Authority | U.K. | |||
Income Taxes | |||
Operating loss carryforwards | $ 0.3 |
INCOME TAXES - Rollforward of U
INCOME TAXES - Rollforward of Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Rollforward of unrecognized tax benefits | |||
Balance at beginning of period | $ 2,763 | $ 3,027 | $ 1,388 |
Additions based on tax positions related to the current year, primarily salon vendition activity and tax positions related to a capital loss | 11,985 | 287 | 553 |
Reductions based on tax positions of prior years | (223) | (154) | |
Additions based on tax positions of prior years | 1,608 | ||
Reductions on tax positions related to the expiration of the statute of limitations | (480) | (397) | (177) |
Settlements | 0 | 0 | (345) |
Balance at end of period | $ 14,045 | $ 2,763 | $ 3,027 |
BENEFIT PLANS - Regis Retiremen
BENEFIT PLANS - Regis Retirement Savings Plan (Details) - Other Postretirement Benefit Plan - Regis Retirement Savings Plan | 12 Months Ended |
Jun. 30, 2020hour | |
Defined Contribution Plan Disclosure [Line Items] | |
Eligibility age to participate in 401(k) plan | 18 years |
Service period for eligibility to participation in 401(k) plan (in months) | 1 month |
Minimum period of eligible service to participate in the plan | 1 year |
Minimum eligibility service hours | 1,000 |
Percentage of noncontributory defined contribution component vested after completing two years of service | 20.00% |
Noncontributory defined contribution component, service period for initial vesting | 2 years |
Period after which noncontributory defined contribution component becomes fully vested | 6 years |
Percentage of noncontributory defined contribution component vesting after each additional year of service | 20.00% |
BENEFIT PLANS - Nonqualified De
BENEFIT PLANS - Nonqualified Deferred Salary Plan (Details) - Deferred Profit Sharing | 12 Months Ended |
Jun. 30, 2020 | |
Deferred Compensation Arrangement with Individual, Excluding Share-based Payments and Postretirement Benefits [Line Items] | |
Percentage of noncontributory defined contribution component vested after completing two years of service | 20.00% |
Minimum period of eligible service to participate in the plan | 2 years |
Percentage of noncontributory defined contribution component vesting after each additional year of service | 20.00% |
Period after which noncontributory defined contribution component becomes fully vested | 6 years |
BENEFIT PLANS - Stock Purchase
BENEFIT PLANS - Stock Purchase Plan (Details) $ in Millions | 12 Months Ended |
Jun. 30, 2020USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Cumulative employer contribution to plan | $ 11.1 |
Employee Stock | Stock Purchase Plan (ESPP) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employer contribution as percent of stock purchase price | 15.00% |
Employer contribution to plan, maximum | $ 11.8 |
BENEFIT PLANS - Deferred Compen
BENEFIT PLANS - Deferred Compensation Contracts (Details) - USD ($) | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Other comprehensive income for deferred compensation contracts | $ 58,000 | $ 489,000 | $ 988,000 |
Proceeds from company-owned life insurance policies | 0 | 24,617,000 | 18,108,000 |
Former Vice Chairman | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Proceeds from company-owned life insurance policies | 0 | 24,600,000 | 18,100,000 |
Gain on insurance proceeds | 0 | 0 | 8,000,000 |
Former Vice Chairman | General and Administrative Expense | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Projected benefit obligation | 400,000 | 400,000 | 300,000 |
Deferred Compensation Contracts | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Projected benefit obligation | 4,939,000 | 5,599,000 | |
Deferred Compensation Contracts | Key executives | General and Administrative Expense | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Compensation expense | 0 | 0 | $ 200,000 |
Deferred Compensation Contracts | Former Vice Chairman | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Compensation expense | 2,400,000 | 2,400,000 | |
Deferred Compensation Contracts | Former Vice Chairman | Accrued Liabilities | |||
Deferred Compensation Arrangement with Individual, Postretirement Benefits [Line Items] | |||
Projected benefit obligation | $ 500,000 | $ 500,000 |
BENEFIT PLANS - Schedule of Pro
BENEFIT PLANS - Schedule of Projected Benefit Obligation (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Long-term portion (included in other non-current liabilities) | $ 11,106 | $ 12,457 |
Deferred Compensation Contracts | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Projected benefit obligation | 4,939 | 5,599 |
Deferred Compensation Contracts | Accrued Liabilities | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Current portion (included in accrued liabilities) | 302 | 1,183 |
Deferred Compensation Contracts | Other Noncurrent Liabilities | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Long-term portion (included in other non-current liabilities) | $ 4,637 | $ 4,416 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - shares | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Dilutive shares included in per share calculation (in shares) | 963,456 | 1,341,421 | 518,236 |
Equity-based compensation awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 315,312 | 118,246 | 634,292 |
STOCK-BASED COMPENSATION - Addi
STOCK-BASED COMPENSATION - Additional Information (Details) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($) | Jun. 30, 2018USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for grant (in shares) | shares | 3,774,266 | ||
Employees' age required under award vesting terms | 55 years | ||
Stock compensation benefit | $ | $ (2,587) | $ (7,112) | $ (6,533) |
Fiscal Year 2018 Awards | PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of years of continuous service to be completed by an employee under award vesting terms | 3 years | ||
Stock compensation benefit | $ | $ 1,600 | ||
2018 Long Term Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares available for issuance (in shares) | shares | 3,818,895 | ||
Full value awards, appreciation multiplier | 2 | ||
Participants' age required under award vesting terms | 62 years | ||
Number of years of continuous service to be completed by an employee under award vesting terms | 15 years |
STOCK-BASED COMPENSATION - Sche
STOCK-BASED COMPENSATION - Schedule of Weighted Average Fair Values (Details) - $ / shares | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
RSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average fair values per stock based compensation award granted (in dollars per share) | $ 16.48 | $ 21.12 | $ 13.43 |
PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average fair values per stock based compensation award granted (in dollars per share) | $ 12.09 | $ 14.05 | $ 15.74 |
STOCK-BASED COMPENSATION - Sc_2
STOCK-BASED COMPENSATION - Schedule of Assumptions, Estimated Fair Value of SARs, RSUs and PSUs (Details) - RSUs and PSUs | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Assumptions used in determining estimated fair value of stock based compensation awards | |||
Risk-free interest rate | 1.43% | ||
Expected volatility | 33.90% | ||
Expected dividend yield | 0.00% | 0.00% | 0.00% |
Minimum | |||
Assumptions used in determining estimated fair value of stock based compensation awards | |||
Risk-free interest rate | 2.31% | 1.66% | |
Expected volatility | 34.20% | 33.40% | |
Maximum | |||
Assumptions used in determining estimated fair value of stock based compensation awards | |||
Risk-free interest rate | 2.68% | 2.59% | |
Expected volatility | 34.60% | 37.10% |
STOCK-BASED COMPENSATION - Sc_3
STOCK-BASED COMPENSATION - Schedule of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense (recorded in G&A) | $ 3,275 | $ 9,003 | $ 8,269 |
Less: Income tax benefit | (688) | (1,891) | (1,736) |
Total stock-based compensation expense, net of tax | 2,587 | 7,112 | 6,533 |
SARs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense (recorded in G&A) | 0 | 1,497 | 2,252 |
RSAs, RSUs, & PSUs | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense (recorded in G&A) | $ 3,275 | $ 7,506 | $ 6,017 |
STOCK-BASED COMPENSATION - Stoc
STOCK-BASED COMPENSATION - Stock Appreciation Rights & Stock Options (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended |
Jun. 30, 2020USD ($)$ / sharesshares | |
SARs and Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expiration period | 10 years |
Weighted Average Exercise Price | |
Outstanding balance at the beginning of the period (in dollars per share) | $ / shares | $ 11.97 |
Granted (in dollars per share) | $ / shares | 0 |
Forfeited/Expired (in dollars per share) | $ / shares | 16.69 |
Exercised (in dollars per share) | $ / shares | 18.61 |
Outstanding balance at the end of the period (in dollars per share) | $ / shares | 11.79 |
Exercisable at the end of the period (in dollars per share) | $ / shares | 11.79 |
Unvested options, net of estimated forfeitures (in dollars per share) | $ / shares | $ 0 |
Weighted- Average Remaining Contractual Life | |
Outstanding at the end of the period | 6 years 29 days |
Exercisable at the end of the period | 6 years 29 days |
Unvested options, net of estimated forfeitures | 0 years |
Aggregate Intrinsic Value (in thousands) | |
Outstanding balance at end of period | $ | $ (4,639) |
Exercisable | $ | (4,639) |
Unvested awards, net of estimated forfeitures | $ | $ 0 |
SARs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting or performance period | 3 years |
SARs | |
Outstanding balance at the beginning of the period (in shares) | 1,321 |
Granted (in shares) | 0 |
Forfeited/Expired (in shares) | (36) |
Exercised (in shares) | 0 |
Outstanding balance at the end of the period (in shares) | 1,285 |
Exercisable at the end of the period (in shares) | 1,285 |
Unvested awards, net of estimated forfeitures (in shares) | 0 |
SARs | Chief Executive Officer | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting or performance period | 2 years |
Stock Options | |
Stock Options | |
Outstanding balance at the beginning of the period (in shares) | 10 |
Granted (in shares) | 0 |
Forfeited/Expired (in shares) | (9) |
Exercised (in shares) | (1) |
Outstanding balance at the end of the period (in shares) | 0 |
Exercisable at the end of the period (in shares) | 0 |
Unvested awards, net of estimated forfeitures (in shares) | 0 |
Minimum | SARs and Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting or performance period | 3 years |
Maximum | SARs and Stock Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting or performance period | 5 years |
STOCK-BASED COMPENSATION - Acti
STOCK-BASED COMPENSATION - Activity of RSUs and PSUs (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Aggregate Intrinsic Value (in thousands) | |||
Stock compensation benefit | $ (2,587) | $ (7,112) | $ (6,533) |
RSUs | |||
RSUs and PSUs outstanding | |||
Nonvested at the beginning of the period (in shares) | 850 | ||
Granted (in shares) | 257 | ||
Forfeited (in shares) | (166) | ||
Vested (in shares) | (235) | ||
Nonvested at the end of the period (in shares) | 706 | 850 | |
Vested (in shares) | 263 | ||
Unvested awards, net of estimated forfeitures (in shares) | 381 | ||
Weighted Average Grant Date Fair Value | |||
Nonvested at the beginning of the period (in dollars per share) | $ 16.42 | ||
Granted (in dollars per share) | 16.48 | ||
Forfeited (in dollars per share) | 17.29 | ||
Vested (in dollars per share) | 11.88 | ||
Nonvested at the end of the period (in dollars per share) | 17.72 | $ 16.42 | |
Vested (in dollars per share) | 15.94 | ||
Unvested awards, net of estimated forfeitures (in dollars per share) | $ 18.68 | ||
Aggregate Intrinsic Value (in thousands) | |||
Nonvested at the end of the period (in dollars) | $ 5,775 | ||
Vested (in dollars) | 2,151 | ||
Unvested awards, net of estimated forfeitures (in dollars) | 3,117 | ||
Unrecognized compensation expense | $ 3,800 | ||
Weighted average period of recognition | 1 year 9 months | ||
RSUs granted to non-employee directors | |||
Aggregate Intrinsic Value (in thousands) | |||
Vesting or performance period | 1 year | ||
PSUs | |||
RSUs and PSUs outstanding | |||
Nonvested at the beginning of the period (in shares) | 980 | ||
Granted (in shares) | 74 | ||
Forfeited (in shares) | (165) | ||
Vested (in shares) | (179) | ||
Nonvested at the end of the period (in shares) | 710 | 980 | |
Vested (in shares) | 0 | ||
Unvested awards, net of estimated forfeitures (in shares) | 396 | ||
Weighted Average Grant Date Fair Value | |||
Nonvested at the beginning of the period (in dollars per share) | $ 14.10 | ||
Granted (in dollars per share) | 12.09 | $ 14.05 | $ 15.74 |
Forfeited (in dollars per share) | 14.57 | ||
Vested (in dollars per share) | 12.93 | ||
Nonvested at the end of the period (in dollars per share) | 13.90 | $ 14.10 | |
Vested (in dollars per share) | 0 | ||
Unvested awards, net of estimated forfeitures (in dollars per share) | $ 13.34 | ||
Aggregate Intrinsic Value (in thousands) | |||
Nonvested at the end of the period (in dollars) | $ 5,808 | ||
Vested (in dollars) | 0 | ||
Unvested awards, net of estimated forfeitures (in dollars) | 3,239 | ||
PSUs | Fiscal Year 2020 Awards | |||
Aggregate Intrinsic Value (in thousands) | |||
Award settlement amount | $ 300 | ||
Vesting or performance period | 2 years 2 months 12 days | ||
Number of years of continuous service to be completed by an employee under award vesting terms | 3 years | ||
PSUs | Fiscal Year 2019 Awards | |||
Aggregate Intrinsic Value (in thousands) | |||
Award settlement amount | $ 3,300 | ||
Vesting or performance period | 1 year 2 months 12 days | ||
Number of years of continuous service to be completed by an employee under award vesting terms | 3 years | ||
PSUs | Fiscal Year 2018 Awards | |||
Aggregate Intrinsic Value (in thousands) | |||
Number of years of continuous service to be completed by an employee under award vesting terms | 3 years | ||
Stock compensation benefit | $ 1,600 | ||
PSUs | Former Executive Officer | |||
Aggregate Intrinsic Value (in thousands) | |||
Award settlement amount | $ 800 | ||
Minimum | RSUs | |||
Aggregate Intrinsic Value (in thousands) | |||
Vesting or performance period | 3 years | ||
Maximum | RSUs | |||
Aggregate Intrinsic Value (in thousands) | |||
Vesting or performance period | 5 years |
SHAREHOLDERS' EQUITY - Addition
SHAREHOLDERS' EQUITY - Additional Information (Details) - USD ($) | Jun. 30, 2020 | Jun. 30, 2019 | Aug. 31, 2018 | Jan. 31, 2016 | Sep. 30, 2015 | Apr. 30, 2015 | Apr. 30, 2007 | May 31, 2005 | Aug. 31, 2003 | May 31, 2000 |
Authorized Shares and Designation of Preferred Class: | ||||||||||
Common stock authorized (in shares) | 100,000,000 | |||||||||
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 | ||||||||
Share Repurchase Program: | ||||||||||
Authorized stock repurchase amount | $ 650,000,000 | $ 450,000,000 | $ 400,000,000 | $ 350,000,000 | $ 300,000,000 | $ 200,000,000 | $ 100,000,000 | $ 50,000,000 | ||
Repurchases of common stock to date (in shares) | 30,000,000 | |||||||||
Repurchases of common stock to date | $ 595,400,000 | |||||||||
Remaining authorized repurchase amount | $ 54,600,000 |
SHAREHOLDERS' EQUITY - Componen
SHAREHOLDERS' EQUITY - Components of Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 |
Equity [Abstract] | |||
Foreign currency translation | $ 7,391 | $ 8,853 | $ 8,668 |
Unrealized gain on deferred compensation contracts | 58 | 489 | 988 |
Accumulated other comprehensive income | $ 7,449 | $ 9,342 | $ 9,656 |
SEGMENT INFORMATION - Additiona
SEGMENT INFORMATION - Additional Information (Details) | 12 Months Ended | |
Jun. 30, 2020segmentstore | Jun. 30, 2017segment | |
Segment Reporting Information [Line Items] | ||
Number of reportable segments | segment | 2 | 4 |
Number of salons | 1,632 | |
Franchised Units | ||
Segment Reporting Information [Line Items] | ||
Number of salons | 5,209 |
SEGMENT INFORMATION - Financial
SEGMENT INFORMATION - Financial Information by Reportable Operating Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Revenues: | |||||||||||||
Franchise rental income | $ 127,203 | ||||||||||||
Total revenue | $ 60,143 | $ 153,783 | $ 208,765 | $ 247,038 | $ 248,190 | $ 258,343 | $ 274,671 | $ 287,835 | 669,729 | $ 1,069,039 | $ 1,235,479 | ||
Operating expenses: | |||||||||||||
Site operating expenses | 71,543 | 141,031 | 154,067 | ||||||||||
General and administrative | 130,953 | 177,004 | 174,045 | ||||||||||
Rent | 18,665 | $ 63,424 | |||||||||||
Depreciation and amortization | 36,952 | 37,848 | 58,205 | ||||||||||
Long-lived asset impairment | 22,560 | 0 | 0 | ||||||||||
TBG restructuring | 20,700 | 2,333 | 21,816 | 0 | |||||||||
Goodwill impairment | 40,164 | 40,164 | 40,164 | 0 | 0 | ||||||||
Total operating expenses | 815,067 | 1,091,158 | 1,240,618 | ||||||||||
Operating income (loss) | $ (68,567) | (59,399) | (7,466) | $ (9,906) | $ (1,835) | $ (22,162) | $ (1,551) | $ 3,429 | (76,771) | (145,338) | (22,119) | (5,139) | |
Other (expense) income: | |||||||||||||
Interest expense | (7,522) | (4,795) | (10,492) | ||||||||||
Gain from sale of salon assets to franchisees, net | (7,858) | (12,407) | $ (18,267) | (26,125) | (27,306) | 2,918 | 241 | ||||||
Interest income and other, net | $ 148 | $ 2,869 | $ 3,040 | $ 3,188 | 3,353 | 1,729 | 5,199 | ||||||
Income (loss) from continuing operations before income taxes | (176,813) | (22,267) | (10,191) | ||||||||||
Non Franchise Lease | |||||||||||||
Operating expenses: | |||||||||||||
Rent | 76,382 | 131,816 | 183,096 | ||||||||||
Franchisor | |||||||||||||
Operating expenses: | |||||||||||||
Rent | 127,203 | ||||||||||||
Franchise | |||||||||||||
Operating expenses: | |||||||||||||
Goodwill impairment | 0 | ||||||||||||
Company-owned | |||||||||||||
Operating expenses: | |||||||||||||
Goodwill impairment | 40,164 | ||||||||||||
Operating Segments | Franchise | |||||||||||||
Revenues: | |||||||||||||
Franchise rental income | 127,203 | ||||||||||||
Total revenue | 253,026 | 153,666 | 131,097 | ||||||||||
Operating expenses: | |||||||||||||
Site operating expenses | 13,341 | 34,099 | 26,818 | ||||||||||
General and administrative | 33,725 | 32,888 | 25,880 | ||||||||||
Depreciation and amortization | 922 | 762 | 365 | ||||||||||
Long-lived asset impairment | 1,712 | ||||||||||||
TBG restructuring | 2,333 | 21,816 | |||||||||||
Goodwill impairment | 0 | ||||||||||||
Total operating expenses | 220,140 | 137,524 | 95,460 | ||||||||||
Operating income (loss) | 32,886 | 16,142 | 35,637 | ||||||||||
Other (expense) income: | |||||||||||||
Interest expense | 0 | 0 | 0 | ||||||||||
Gain from sale of salon assets to franchisees, net | 0 | 0 | 0 | ||||||||||
Interest income and other, net | 0 | 0 | 0 | ||||||||||
Income (loss) from continuing operations before income taxes | 32,886 | 16,142 | 35,637 | ||||||||||
Operating Segments | Franchise | Non Franchise Lease | |||||||||||||
Operating expenses: | |||||||||||||
Rent | 872 | 740 | 269 | ||||||||||
Operating Segments | Franchise | Franchisor | |||||||||||||
Operating expenses: | |||||||||||||
Rent | 127,203 | ||||||||||||
Operating Segments | Company-owned | |||||||||||||
Revenues: | |||||||||||||
Franchise rental income | 0 | ||||||||||||
Total revenue | 416,703 | 915,373 | 1,104,382 | ||||||||||
Operating expenses: | |||||||||||||
Site operating expenses | 58,202 | 106,932 | 127,249 | ||||||||||
General and administrative | 24,638 | 57,219 | 67,163 | ||||||||||
Depreciation and amortization | 29,113 | 28,263 | 48,508 | ||||||||||
Long-lived asset impairment | 20,848 | ||||||||||||
TBG restructuring | 0 | 0 | |||||||||||
Goodwill impairment | 40,164 | ||||||||||||
Total operating expenses | 512,831 | 857,052 | 1,053,866 | ||||||||||
Operating income (loss) | (96,128) | 58,321 | 50,516 | ||||||||||
Other (expense) income: | |||||||||||||
Interest expense | 0 | 0 | 0 | ||||||||||
Gain from sale of salon assets to franchisees, net | 0 | 0 | 0 | ||||||||||
Interest income and other, net | 0 | 0 | 0 | ||||||||||
Income (loss) from continuing operations before income taxes | (96,128) | 58,321 | 50,516 | ||||||||||
Operating Segments | Company-owned | Non Franchise Lease | |||||||||||||
Operating expenses: | |||||||||||||
Rent | 72,921 | 130,214 | 181,869 | ||||||||||
Operating Segments | Company-owned | Franchisor | |||||||||||||
Operating expenses: | |||||||||||||
Rent | 0 | ||||||||||||
Corporate | |||||||||||||
Revenues: | |||||||||||||
Franchise rental income | 0 | ||||||||||||
Total revenue | 0 | 0 | 0 | ||||||||||
Operating expenses: | |||||||||||||
Site operating expenses | 0 | 0 | 0 | ||||||||||
General and administrative | 72,590 | 86,897 | 81,002 | ||||||||||
Depreciation and amortization | 6,917 | 8,823 | 9,332 | ||||||||||
Long-lived asset impairment | 0 | ||||||||||||
TBG restructuring | 0 | 0 | |||||||||||
Goodwill impairment | 0 | ||||||||||||
Total operating expenses | 82,096 | 96,582 | 91,292 | ||||||||||
Operating income (loss) | (82,096) | (96,582) | (91,292) | ||||||||||
Other (expense) income: | |||||||||||||
Interest expense | (7,522) | (4,795) | (10,492) | ||||||||||
Gain from sale of salon assets to franchisees, net | (27,306) | 2,918 | 241 | ||||||||||
Interest income and other, net | 3,353 | 1,729 | 5,199 | ||||||||||
Income (loss) from continuing operations before income taxes | (113,571) | (96,730) | (96,344) | ||||||||||
Corporate | Non Franchise Lease | |||||||||||||
Operating expenses: | |||||||||||||
Rent | 2,589 | 862 | 958 | ||||||||||
Corporate | Franchisor | |||||||||||||
Operating expenses: | |||||||||||||
Rent | 0 | ||||||||||||
Service | |||||||||||||
Revenues: | |||||||||||||
Revenues | 331,538 | 749,660 | 899,345 | ||||||||||
Operating expenses: | |||||||||||||
Cost of service and products sold | 222,279 | 452,827 | 530,582 | ||||||||||
Service | Operating Segments | Franchise | |||||||||||||
Revenues: | |||||||||||||
Revenues | 0 | 0 | 0 | ||||||||||
Operating expenses: | |||||||||||||
Cost of service and products sold | 0 | 0 | 0 | ||||||||||
Service | Operating Segments | Company-owned | |||||||||||||
Revenues: | |||||||||||||
Revenues | 331,538 | 749,660 | 899,345 | ||||||||||
Operating expenses: | |||||||||||||
Cost of service and products sold | 222,279 | 452,827 | 530,582 | ||||||||||
Service | Corporate | |||||||||||||
Revenues: | |||||||||||||
Revenues | 0 | 0 | 0 | ||||||||||
Operating expenses: | |||||||||||||
Cost of service and products sold | 0 | 0 | 0 | ||||||||||
Product | |||||||||||||
Revenues: | |||||||||||||
Revenues | 137,586 | 225,618 | 258,740 | ||||||||||
Operating expenses: | |||||||||||||
Cost of service and products sold | 84,698 | 128,816 | 140,623 | ||||||||||
Product | Operating Segments | Franchise | |||||||||||||
Revenues: | |||||||||||||
Revenues | 52,421 | 59,905 | 53,703 | ||||||||||
Operating expenses: | |||||||||||||
Cost of service and products sold | 40,032 | 47,219 | 42,128 | ||||||||||
Product | Operating Segments | Company-owned | |||||||||||||
Revenues: | |||||||||||||
Revenues | 85,165 | 165,713 | 205,037 | ||||||||||
Operating expenses: | |||||||||||||
Cost of service and products sold | 44,666 | 81,597 | 98,495 | ||||||||||
Product | Corporate | |||||||||||||
Revenues: | |||||||||||||
Revenues | 0 | 0 | 0 | ||||||||||
Operating expenses: | |||||||||||||
Cost of service and products sold | 0 | 0 | 0 | ||||||||||
Royalties and fees | |||||||||||||
Revenues: | |||||||||||||
Revenues | 73,402 | 93,761 | 77,394 | ||||||||||
Royalties and fees | Operating Segments | Franchise | |||||||||||||
Revenues: | |||||||||||||
Revenues | 73,402 | 93,761 | 77,394 | ||||||||||
Royalties and fees | Operating Segments | Company-owned | |||||||||||||
Revenues: | |||||||||||||
Revenues | 0 | 0 | 0 | ||||||||||
Royalties and fees | Corporate | |||||||||||||
Revenues: | |||||||||||||
Revenues | $ 0 | $ 0 | $ 0 |
SEGMENT INFORMATION - Schedule
SEGMENT INFORMATION - Schedule of Revenues and Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Total revenues and long-lived assets associated with business operations | |||||||||||
Total revenue | $ 60,143 | $ 153,783 | $ 208,765 | $ 247,038 | $ 248,190 | $ 258,343 | $ 274,671 | $ 287,835 | $ 669,729 | $ 1,069,039 | $ 1,235,479 |
Property and Equipment, Net | 57,176 | 78,090 | 57,176 | 78,090 | 99,288 | ||||||
U.S. | |||||||||||
Total revenues and long-lived assets associated with business operations | |||||||||||
Total revenue | 613,652 | 972,994 | 1,132,041 | ||||||||
Property and Equipment, Net | 56,532 | 75,789 | 56,532 | 75,789 | 95,956 | ||||||
Other countries | |||||||||||
Total revenues and long-lived assets associated with business operations | |||||||||||
Total revenue | 56,077 | 96,045 | 103,438 | ||||||||
Property and Equipment, Net | $ 644 | $ 2,301 | $ 644 | $ 2,301 | $ 3,332 |
QUARTERLY FINANCIAL DATA (UNA_3
QUARTERLY FINANCIAL DATA (UNAUDITED) - Summarized Quarterly Data (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | ||||
Quarterly Financial Information Disclosure [Abstract] | ||||||||||||||||
Revenues | $ 60,143 | $ 153,783 | $ 208,765 | $ 247,038 | $ 248,190 | $ 258,343 | $ 274,671 | $ 287,835 | $ 669,729 | $ 1,069,039 | $ 1,235,479 | |||||
Cost of service and product revenues, excluding depreciation and amortization | 19,056 | 76,496 | 94,616 | 116,809 | 133,885 | 142,799 | 151,281 | 153,678 | 306,977 | 581,643 | ||||||
Operating income (loss) | (68,567) | (59,399) | (7,466) | (9,906) | (1,835) | (22,162) | (1,551) | 3,429 | $ (76,771) | (145,338) | (22,119) | (5,139) | ||||
(Loss) income from continuing operations | (73,654) | (67,842) | (16,520) | (14,178) | (5,265) | (14,811) | 417 | (463) | (172,194) | (20,122) | 59,621 | |||||
(Loss) income from discontinued operations | 79 | 301 | 79 | 373 | (131) | 178 | 6,113 | (264) | 832 | 5,896 | (53,185) | |||||
Net (loss) income | $ (73,575) | $ (67,541) | $ (16,441) | $ (13,805) | $ (5,396) | $ (14,633) | $ 6,530 | $ (727) | $ (30,246) | (97,787) | $ (171,362) | $ (14,226) | $ 6,436 | |||
(Loss) Income from continuing operations (in dollars per share) | $ (2.05) | $ (1.89) | $ (0.46) | $ (0.39) | $ (0.14) | $ (0.37) | $ 0.01 | $ (0.01) | $ (4.79) | $ (0.48) | $ 1.28 | |||||
Income (loss) from discontinued operations (in dollars per share) | 0 | 0.01 | 0 | 0.01 | 0 | 0 | 0.14 | (0.01) | 0.02 | 0.14 | (1.14) | |||||
Net (loss) income per share, basic (in dollars per share) | (2.05) | (1.88) | (0.46) | (0.38) | (0.14) | (0.36) | 0.15 | (0.02) | (4.77) | [1] | (0.34) | [1] | 0.14 | [1] | ||
(Loss) income from continuing operations, per share, diluted (in dollars per share) | (2.05) | (1.89) | (0.46) | (0.39) | (0.14) | (0.37) | 0.01 | (0.01) | (4.79) | (0.48) | 1.27 | |||||
(Loss) income from discontinued operations (in dollars per share) | 0 | 0.01 | 0 | 0.01 | 0 | 0 | 0.14 | (0.01) | 0.02 | 0.14 | (1.13) | |||||
Net (loss) income per share, diluted (in dollars per share) | $ (2.05) | $ (1.88) | $ (0.46) | $ (0.38) | $ (0.14) | $ (0.36) | $ 0.15 | $ (0.02) | $ (4.77) | [1] | $ (0.34) | [1] | $ 0.14 | [1] | ||
Goodwill impairment | $ 40,164 | $ 40,164 | $ 40,164 | $ 0 | $ 0 | |||||||||||
Long-lived asset impairment | 22,560 | 0 | 0 | |||||||||||||
TBG mall restructuring | $ 20,700 | $ 2,333 | $ 21,816 | $ 0 | ||||||||||||
[1] | Total is a recalculation; line items calculated individually may not sum to total due to rounding. |
QUARTERLY FINANCIAL DATA (UNA_4
QUARTERLY FINANCIAL DATA (UNAUDITED) - Revision of Financial Statements (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2020 | Mar. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Dec. 31, 2019 | Mar. 31, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2018 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||
Derecognition of goodwill | $ 76,966 | ||||||||||||
Rent expense | $ 18,665 | $ 63,424 | |||||||||||
Goodwill impairment | 40,164 | 40,164 | 40,164 | $ 0 | $ 0 | ||||||||
Operating loss | $ (68,567) | (59,399) | $ (7,466) | $ (9,906) | $ (1,835) | $ (22,162) | $ (1,551) | $ 3,429 | (76,771) | (145,338) | (22,119) | (5,139) | |
(Loss) gain from sale of salon assets to franchisees, net | (7,858) | (12,407) | $ (18,267) | (26,125) | (27,306) | 2,918 | 241 | ||||||
Interest income and other, net | 148 | 2,869 | 3,040 | 3,188 | 3,353 | 1,729 | 5,199 | ||||||
Loss from continuing operations before income taxes | (68,821) | (18,468) | (35,502) | (104,323) | (176,813) | (22,267) | (10,191) | ||||||
Income tax benefit | 979 | 1,948 | 4,804 | 5,783 | 4,619 | 2,145 | 69,812 | ||||||
Net (loss) income | (73,575) | $ (67,541) | $ (16,441) | $ (13,805) | (5,396) | $ (14,633) | $ 6,530 | $ (727) | $ (30,246) | $ (97,787) | (171,362) | (14,226) | 6,436 |
Net loss per share (in dollars per share) | $ (1.88) | $ (0.46) | $ (0.84) | $ (2.72) | |||||||||
Comprehensive loss | $ (70,023) | $ (15,900) | $ (30,108) | $ (100,131) | (173,255) | (14,540) | $ 12,756 | ||||||
Goodwill | 227,457 | 286,304 | 345,718 | 286,304 | 227,457 | 345,718 | |||||||
Other assets | 40,934 | 36,667 | 34,170 | 36,667 | 40,934 | 34,170 | |||||||
Short term lease liability | 137,271 | 148,904 | 148,904 | 137,271 | |||||||||
Other non-current liabilities | $ 94,142 | 92,819 | 94,826 | $ 111,399 | 94,826 | 92,819 | $ 94,142 | $ 111,399 | |||||
Previously Reported | |||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||
Rent expense | 19,243 | 64,002 | |||||||||||
Goodwill impairment | 44,529 | 44,529 | |||||||||||
Operating loss | (64,342) | (81,714) | |||||||||||
(Loss) gain from sale of salon assets to franchisees, net | (10,208) | (5,692) | (11,552) | (21,760) | |||||||||
Interest income and other, net | (1,329) | 4,346 | 4,517 | 3,188 | |||||||||
Loss from continuing operations before income taxes | (77,591) | (10,276) | (27,310) | (104,901) | |||||||||
Income tax benefit | 2,253 | 795 | 3,651 | 5,904 | |||||||||
Net (loss) income | $ (75,037) | $ (9,402) | $ (23,207) | $ (98,244) | |||||||||
Net loss per share (in dollars per share) | $ (2.10) | $ (0.26) | $ (0.64) | $ (2.73) | |||||||||
Comprehensive loss | $ (77,519) | $ (8,861) | $ (23,069) | $ (100,588) | |||||||||
Goodwill | 293,019 | 293,019 | |||||||||||
Other assets | 38,144 | 38,144 | |||||||||||
Short term lease liability | 149,482 | 149,482 | |||||||||||
Other non-current liabilities | 92,698 | 95,979 | 95,979 | 92,698 | |||||||||
Restatement Adjustment | |||||||||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||||||||||||
Derecognition of goodwill | (2,350) | 6,700 | |||||||||||
Rent expense | (578) | (578) | |||||||||||
Goodwill impairment | (4,365) | (4,365) | |||||||||||
Operating loss | 4,943 | 4,943 | |||||||||||
(Loss) gain from sale of salon assets to franchisees, net | 2,350 | (6,715) | (6,715) | (4,365) | |||||||||
Interest income and other, net | 1,477 | (1,477) | (1,477) | 0 | |||||||||
Loss from continuing operations before income taxes | 8,770 | (8,192) | (8,192) | 578 | |||||||||
Income tax benefit | (1,274) | 1,153 | 1,153 | (121) | |||||||||
Net (loss) income | $ 7,496 | $ (7,039) | $ (7,039) | $ 457 | |||||||||
Net loss per share (in dollars per share) | $ 0.22 | $ (0.20) | $ (0.20) | $ 0.01 | |||||||||
Comprehensive loss | $ 7,496 | $ (7,039) | $ (7,039) | $ 457 | |||||||||
Goodwill | (6,715) | (6,715) | |||||||||||
Other assets | 1,477 | 1,477 | |||||||||||
Short term lease liability | (578) | (578) | |||||||||||
Other non-current liabilities | $ 121 | $ (1,153) | $ (1,153) | $ 121 |
Uncategorized Items - rgs-20200
Label | Element | Value |
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents, Disposal Group, Including Discontinued Operations | us-gaap_CashCashEquivalentsRestrictedCashAndRestrictedCashEquivalentsDisposalGroupIncludingDiscontinuedOperations | $ 1,352,000 |