SEGMENT INFORMATION:

Segment information is prepared on the same basis the chief operating decision maker reviews financial information for operational decision-making purposes.

The Company’s reportable operating segments consisted of the following salons:



	September 30, 2018		June 30, 2018
COMPANY-OWNED SALONS:

SmartStyle/Cost Cutters in Walmart Stores	1,622		1,660
Supercuts	865		928
Signature Style	1,335		1,378
Total Company-owned Salons	3,822		3,966
as a percent of total Company-owned and Franchise salons	47.6	%	49.1	%

FRANCHISE SALONS:

SmartStyle/Cost Cutters in Walmart Stores	596		561
Supercuts	1,812		1,739
Signature Style	753		745
Total franchise locations, excluding TBG	3,161		3,045
as a percent of total Company-owned and Franchise salons	39.4	%	37.7	%

TBG	781		807
as a percent of total Company-owned and Franchise salons	9.7	%	10.0	%

Total North American Salons	3,942		3,852

Total International TBG Salons (1)	263		262
as a percent of total Company-owned and Franchise salons	3.3	%	3.2	%

Total Franchise Salons	4,205		4,114
as a percent of total Company-owned and Franchise salons	52.4	%	50.9	%

OWNERSHIP INTEREST LOCATIONS:

Equity ownership interest locations	88		88

Grand Total, System-wide	8,115		8,168

____________________________________


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

As of September 30, 2018, the Company-owned operating segment is comprised primarily of SmartStyle^®, Supercuts^®, Cost Cutters^®, and other regional trade names and the Franchise operating segment is comprised primarily of Supercuts^®, Regis^®, MasterCuts^®, SmartStyle^®, Cost Cutters^®, First Choice Haircutters^®, Roosters^® and Magicuts^® concepts. The Corporate segment represents home office and other unallocated costs.

Financial information concerning the Company's reportable operating segments is shown in the following table:



	For the Three Months Ended September 30, 2018
	Company-owned		Franchise		Corporate			Consolidated
	(Dollars in thousands)
Revenues:
Service	$	207,848	$	—	$	—		$	207,848
Product	41,962		15,629		—			57,591
Royalties and fees	—		22,396		—			22,396
	249,810		38,025		—			287,835
Operating expenses:
Cost of service	121,497		—		—			121,497
Cost of product	19,768		12,413		—			32,181
Site operating expenses	28,845		7,976		—			36,821
General and administrative	16,381		7,664		23,682			47,727
Rent	35,686		94		198			35,978
Depreciation and amortization	8,057		158		1,987			10,202
Total operating expenses	230,234		28,305		25,867			284,406
Operating income (loss)	19,576		9,720		(25,867		)	3,429
Other (expense) income:
Interest expense	—		—		(1,006		)	(1,006		)
Loss from sale of salon assets to franchisees, net	—		—		(3,960		)	(3,960		)
Interest income and other, net	—		—		360			360
Income (loss) from continuing operations before income taxes	$	19,576	$	9,720	$	(30,473	)	$	(1,177	)



	For the Three Months Ended September 30, 2017
	Company-owned		Franchise		Corporate			Consolidated
	(Dollars in thousands)
Revenues:
Service	$	235,630	$	—	$	—		$	235,630
Product	53,236		7,722		—			60,958
Royalties and fees	—		18,876		—			18,876
	288,866		26,598		—			315,464
Operating expenses:
Cost of service	139,836		—		—			139,836
Cost of product	24,447		5,715		—			30,162
Site operating expenses	33,302		6,727		—			40,029
General and administrative	15,824		5,546		13,796			35,166
Rent	42,123		47		246			42,416
Depreciation and amortization	9,894		92		2,269			12,255
Total operating expenses	265,426		18,127		16,311			299,864
Operating income (loss)	23,440		8,471		(16,311		)	15,600
Other (expense) income:
Interest expense	—		—		(2,138		)	(2,138		)
Gain from sale of salon assets to franchisees, net	—		—		122			122
Interest income and other, net	—		—		420			420
Income (loss) from continuing operations before income taxes	$	23,440	$	8,471	$	(17,907	)	$	14,004