SEGMENT INFORMATION: (Tables)

9 Months Ended

Mar. 31, 2020

Schedule of reportable operating segment salons

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


	March 31, 2020		June 30, 2019
FRANCHISE SALONS:
SmartStyle/Cost Cutters in Walmart Stores	1,219		615
Supercuts	2,522		2,340
Signature Style	1,215		766
Total North American salons	4,956		3,721
Total International salons (1)	170		230
Total Franchise salons	5,126		3,951
as a percent of total Franchise and Company-owned salons	73.9	%	56.0	%
Total Franchisees	955		907

COMPANY-OWNED SALONS:
SmartStyle/Cost Cutters in Walmart Stores	873		1,550
Supercuts	217		403
Signature Style	535		1,155
Mall-based (2)	190		—
Total Company-owned salons	1,815		3,108
as a percent of total Franchise and Company-owned salons	26.1	%	44.0	%

OWNERSHIP INTEREST LOCATIONS:
Equity ownership interest locations	85		86

Grand Total, System-wide	7,026		7,145

_______________________________________________________________________________

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

(2)The mall-based salons were acquired from TBG on December 31, 2019. They are included in continuing operations under the Company-owned operating segment from January 1, 2020.

Schedule of summarized financial information of reportable operating segments

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


	For the Three Months Ended March 31, 2020
	Franchise		Company-owned		Corporate		Consolidated
	(Dollars in thousands)
Revenues:
Service	$	—	$	78,387	$	—	$	78,387
Product	15,318		19,559		—		34,877
Royalties and fees (1)	8,698		—		—		8,698
Franchise rental income	31,821		—		—		31,821
Total revenue	55,837		97,946		—		153,783

Operating expenses:
Cost of service	—		54,824		—		54,824
Cost of product	11,452		10,220		—		21,672
Site operating expenses (1)	(7,789)		11,449		—		3,660
General and administrative	8,657		4,566		18,648		31,871
Rent	176		18,163		904		19,243
Franchise rent expense	31,821		—		—		31,821
Depreciation and amortization	292		9,799		268		10,359
TBG restructuring	146		—		—		146
Goodwill impairment	—		44,529		—		44,529
Total operating expenses	44,755		153,550		19,820		218,125
Operating income (loss)	11,082		(55,604)		(19,820)		(64,342)
Other (expense) income:
Interest expense	—		—		(1,712)		(1,712)
Loss from sale of salon assets to franchisees, net	—		—		(10,208)		(10,208)
Interest income and other, net	—		—		(1,329)		(1,329)
Income (loss) from continuing operations before income taxes	$	11,082	$	(55,604)	$	(33,069)	$	(77,591)

(1) Includes the refund of $14.9 million of previously collected cooperative adverting fees, which reduced franchise royalties and fees and site operating expense and had no net impact on the operating loss.


	For the Three Months Ended March 31, 2019
	Franchise		Company-owned		Corporate		Consolidated
	(Dollars in thousands)
Revenues:
Service	$	—	$	181,809	$	—	$	181,809
Product	14,339		39,427		—		53,766
Royalties and fees	22,768		—		—		22,768
Total revenue	37,107		221,236		—		258,343

Operating expenses:
Cost of service	—		111,632		—		111,632
Cost of product	11,175		19,992		—		31,167
Site operating expenses	8,445		25,894		—		34,339
General and administrative	7,526		14,505		19,663		41,694
Rent	190		31,964		178		32,332
Depreciation and amortization	240		6,519		1,871		8,630
TBG mall location restructuring	20,711		—		—		20,711
Total operating expenses	48,287		210,506		21,712		280,505
Operating (loss) income	(11,180)		10,730		(21,712)		(22,162)
Other (expense) income:
Interest expense	—		—		(1,354)		(1,354)
Gain from sale of salon assets to franchisees, net	—		—		11,489		11,489
Interest income and other, net	—		—		464		464
(Loss) income from continuing operations before income taxes	$	(11,180)	$	10,730	$	(11,113)	$	(11,563)


	For the Nine Months Ended March 31, 2020
	Franchise		Company-owned		Corporate		Consolidated
	(Dollars in thousands)
Revenues:
Service	$	—	$	322,133	$	—	$	322,133
Product	45,287		79,229		—		124,516
Royalties and fees (1)	66,062		—		—		66,062
Franchise rental income	96,875		—		—		96,875
Total revenue	208,224		401,362		—		609,586

Operating expenses:
Cost of service	—		212,664		—		212,664
Cost of product	34,804		40,453		—		75,257
Site operating expenses (1)	13,341		49,591		—		62,932
General and administrative	25,990		22,263		56,934		105,187
Rent	767		61,326		1,909		64,002
Franchise rent expense	96,875		—		—		96,875
Depreciation and amortization	662		21,844		4,980		27,486
TBG restructuring	2,368		—		—		2,368
Goodwill impairment	—		44,529		—		44,529
Total operating expenses	174,807		452,670		63,823		691,300
Operating income (loss)	33,417		(51,308)		(63,823)		(81,714)
Other (expense) income:
Interest expense	—		—		(4,615)		(4,615)
Loss from sale of salon assets to franchisees, net	—		—		(21,760)		(21,760)
Interest income and other, net	—		—		3,188		3,188
Income (loss) from continuing operations before income taxes	$	33,417	$	(51,308)	$	(87,010)	$	(104,901)

(1) Includes the refund of $14.9 million of previously collected cooperative adverting costs, which reduced franchise royalties and fees and site operating expense and had no net impact on the operating loss.


	For the Nine Months Ended March 31, 2019
	Franchise		Company-owned		Corporate		Consolidated
	(Dollars in thousands)
Revenues:
Service	$	—	$	580,076	$	—	$	580,076
Product	47,786		125,220		—		173,006
Royalties and fees	67,767		—		—		67,767
Total revenue	115,553		705,296		—		820,849

Operating expenses:
Cost of service	—		348,060		—		348,060
Cost of product	38,037		61,661		—		99,698
Site operating expenses	24,288		82,435		—		106,723
General and administrative	24,656		45,084		65,517		135,257
Rent	468		101,908		576		102,952
Depreciation and amortization	613		21,304		5,815		27,732
TBG mall location restructuring	20,711		—		—		20,711
Total operating expenses	108,773		660,452		71,908		841,133
Operating income (loss)	6,780		44,844		(71,908)		(20,284)
Other (expense) income:
Interest expense	—		—		(3,432)		(3,432)
Loss from sale of salon assets to franchisees, net	—		—		10,394		10,394
Interest income and other, net	—		—		1,453		1,453
Income (loss) from continuing operations before income taxes	$	6,780	44,844		$	(63,493)	$	(11,869)