REVENUE RECOGNITION: (Tables)

3 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

The following table disaggregates revenue by timing of revenue recognition and is reconciled to reportable segment revenues as follows:



	Three Months Ended September 30, 2018				Three Months Ended September 30, 2017
	Company-owned		Franchise		Company-owned		Franchise
	(in thousands)
Revenue recognized at a point in time:
Service	$	207,848	$	—	$	235,630	$	—
Product	41,962		15,629		53,236		7,722
Total revenue recognized at a point in time	$	249,810	$	15,629	$	288,866	$	7,722

Revenue recognized over time:
Royalty and other franchise fees	$	—	$	14,420	$	—	$	12,150
Advertising fund fees	—		7,976		—		6,726
Total revenue recognized over time	$	—	$	22,396	$	—	$	18,876
Total revenue	$	249,810	$	38,025	$	288,866	$	26,598

Schedule of receivables, broker fees and deferred revenue

Information about receivables, broker fees and deferred revenue subject to the amended revenue recognition guidance is as follows:



	September 30, 2018		June 30, 2018		Balance Sheet Classification
	(in thousands)
Receivables from contracts with customers, net	$	23,004	$	21,504	Accounts receivable, net
Broker fees	$	14,657	$	14,002	Other assets

Deferred revenue:
Current
Gift card liability	$	2,974	$	3,320	Accrued expenses
Deferred franchise fees unopened salons	1,714		2,306		Accrued expenses
Deferred franchise fees open salons	3,221		3,030		Accrued expenses
Total current deferred revenue	$	7,909	$	8,656
Non-current
Deferred franchise fees unopened salons	$	12,062	$	11,161	Other non-current liabilities
Deferred franchise fees open salons	19,134		18,346		Other non-current liabilities
Total non-current deferred revenue	$	31,196	$	29,507

Broker fees

The following table is a rollforward of the broker fee balance for the periods indicated (in thousands):



Balance as of June 30, 2018	$	14,002
Additions	1,285
Amortization	(628		)
Write-offs	(2		)
Balance as of September 30, 2018	$	14,657

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 September 30, 2018 is as follows (in thousands):



Remainder of 2019	$	2,391
2020	3,133
2021	3,044
2022	2,924
2023	2,748
Thereafter	8,115
Total	$	22,355

Schedules of impact of revenue recognition policy

The amended revenue recognition guidance impacted the Company's previously reported financial statements as follows:

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

June 30, 2018

(Dollars in thousands)



			Adjustments for new revenue recognition guidance
	Previously		Franchise			Advertising		Gift Card
	Reported		Fees			Funds		Breakage			Taxes			Adjusted
ASSETS
Current assets:
Cash and cash equivalents	$	110,399	$	—		$	—	$	—		$	—		$	110,399
Receivables, net	52,430													52,430
Inventories	79,363													79,363
Other current assets	47,867													47,867
Total current assets	290,059		—			—		—			—			290,059

Property and equipment, net	105,860													105,860
Goodwill	412,643													412,643
Other intangibles, net	10,557													10,557
Other assets	37,616													37,616
Total assets	$	856,735	$	—		$	—	$	—		$	—		$	856,735

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	57,738	$	—		$	—	$	—		$	—		$	57,738
Accrued expenses	97,630		3,030					56						100,716
Total current liabilities	155,368		3,030			—		56			—			158,454

Long-term debt	90,000													90,000
Other noncurrent liabilities	107,875		18,346								(4,378		)	121,843
Total liabilities	353,243		21,376			—		56			(4,378		)	370,297
Commitments and contingencies (Note 7)
Shareholders’ equity:
Common stock	2,263													2,263
Additional paid-in capital	194,436													194,436
Accumulated other comprehensive income	9,568		88											9,656
Retained earnings	297,225		(21,464		)			(56		)	4,378			280,083

Total shareholders’ equity	503,492		(21,376		)	—		(56		)	4,378			486,438

Total liabilities and shareholders’ equity	$	856,735	$	—		$	—	$	—		$	—		$	856,735

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

For The Three Months Ended September 30, 2017

(Dollars and shares in thousands, except per share data amounts)



				Adjustments for new revenue recognition guidance
	Previously			Franchise			Advertising		Gift Card
	Reported			Fees			Funds		Breakage			Taxes			Adjusted
Revenues:
Service	$	235,559		$	—		$	—	$	71		$	—		$	235,630
Product	60,940								18						60,958
Royalties and fees	13,374			(1,224		)	6,726								18,876
	309,873			(1,224		)	6,726		89			—			315,464
Operating expenses:
Cost of service	139,836														139,836
Cost of product	30,162														30,162
Site operating expenses	33,303						6,726								40,029
General and administrative	35,166														35,166
Rent	42,416														42,416
Depreciation and amortization	12,255														12,255
Total operating expenses	293,138			—			6,726		—			—			299,864

Operating income	16,735			(1,224		)	—		89			—			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	905								(485		)				420

Income from continuing operations before income taxes	15,624			(1,224		)	—		(396		)	—			14,004

Income tax expense	(4,832		)									(727		)	(5,559		)

Income from continuing operations	10,792			(1,224		)	—		(396		)	(727		)	8,445

Loss from discontinued operations, net of taxes	(33,767		)												(33,767		)

Net loss	$	(22,975	)	$	(1,224	)	$	—	$	(396	)	$	(727	)	$	(25,322	)

Net loss per share:
Basic:
Income from continuing operations	$	0.23													$	0.18
Loss from discontinued operations	(0.72		)												(0.72		)
Net loss per share, basic (1)	$	(0.49	)												$	(0.54	)
Diluted:
Income from continuing operations	$	0.23													$	0.18
Loss from discontinued operations	(0.72		)												(0.72		)
Net loss per share, diluted (1)	$	(0.49	)												$	(0.54	)

Weighted average common and common equivalent shares outstanding:
Basic	46,677														46,677
Diluted	46,900														46,900

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(1)Total is a recalculation; line items calculated individually may not sum to total due to rounding