SEGMENT INFORMATION (Tables)

9 Months Ended

Mar. 31, 2021

Schedule of reportable operating segment salons

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


	March 31, 2021		June 30, 2020

FRANCHISE SALONS:
SmartStyle/Cost Cutters in Walmart Stores	1,569		1,317
Supercuts	2,357		2,508
Portfolio Brands (1)	1,233		1,217
Total North American salons	5,159		5,042
Total International salons (2)	158		167
Total Franchise salons	5,317		5,209
as a percent of total Franchise and Company-owned salons	86.6	%	76.1	%

COMPANY-OWNED SALONS:
SmartStyle/Cost Cutters in Walmart Stores	373		751
Supercuts	124		210
Portfolio Brands (1)	267		505
Mall-based (3)	62		166
Total Company-owned salons	826		1,632
as a percent of total Franchise and Company-owned salons	13.4	%	23.9	%

OWNERSHIP INTEREST LOCATIONS:
Equity ownership interest locations	78		82

Grand Total, System-wide	6,221		6,923

_______________________________________________________________________________

(1)Portfolio Brands was previously referred to as Signature Style.

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

(3)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:


	Three Months Ended March 31, 2021
	Franchise		Company-owned		Corporate		Consolidated

	(Dollars in thousands)

Revenues:
Service	$	—	$	24,645	$	—	$	24,645
Product	13,079		7,691		—		20,770
Royalties and fees	23,535		—		—		23,535
Franchise rental income	31,317		—		—		31,317
Total revenue	67,931		32,336		—		100,267

Operating expenses:
Cost of service	—		15,821		—		15,821
Cost of product	11,148		10,120		—		21,268
Site operating expenses	5,600		7,766		—		13,366
General and administrative	7,450		1,525		15,607		24,582
Rent	101		7,229		671		8,001
Franchise rent expense	31,317		—		—		31,317
Depreciation and amortization	333		1,687		1,600		3,620
Long-lived asset impairment	22		811		—		833


Total operating expenses	55,971		44,959		17,878		118,808
Operating income (loss)	11,960		(12,623)		(17,878)		(18,541)
Other (expense) income:
Interest expense	—		—		(3,163)		(3,163)
Loss from sale of salon assets to franchisees, net	—		—		(4,575)		(4,575)
Interest income and other, net	—		—		15,099		15,099
Income (loss) from continuing operations before income taxes	$	11,960	$	(12,623)	$	(10,517)	$	(11,180)


	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	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	(7,789)		11,449		—		3,660
General and administrative	8,657		4,566		18,648		31,871
Rent	176		17,585		904		18,665
Franchise rent expense	31,821		—		—		31,821
Depreciation and amortization	292		9,799		268		10,359
TBG mall location restructuring	146		—		—		146
Goodwill impairment	—		40,164		—		40,164
Total operating expenses	44,755		148,607		19,820		213,182
Operating income (loss)	11,082		(50,661)		(19,820)		(59,399)
Other (expense) income:
Interest expense	—		—		(1,712)		(1,712)
Loss from sale of salon assets to franchisees, net	—		—		(7,858)		(7,858)
Interest income and other, net	—		—		148		148
Income (loss) from continuing operations before income taxes	$	11,082	$	(50,661)	$	(29,242)	$	(68,821)


	Nine Months Ended March 31, 2021
	Franchise		Company-owned		Corporate		Consolidated

	(Dollars in thousands)

Revenues:
Service	$	—	$	90,040	$	—	$	90,040
Product	41,057		27,608		—		68,665
Royalties and fees	61,393		—		—		61,393
Franchise rental income	95,885		—		—		95,885
Total revenue	198,335		117,648		—		315,983

Operating expenses:
Cost of service	—		66,441		—		66,441
Cost of product	33,117		21,723		—		54,840
Site operating expenses	14,858		22,097		—		36,955
General and administrative	23,055		6,936		47,428		77,419
Rent	1,063		31,019		2,046		34,128
Franchise rent expense	95,885		—		—		95,885
Depreciation and amortization	896		11,080		5,408		17,384
Long-lived asset impairment	726		9,091		—		9,817


Total operating expenses	169,600		168,387		54,882		392,869
Operating income (loss)	28,735		(50,739)		(54,882)		(76,886)
Other (expense) income:
Interest expense	—		—		(10,626)		(10,626)
Loss from sale of salon assets to franchisees, net	—		—		(8,463)		(8,463)
Interest income and other, net	—		—		15,616		15,616
Income (loss) from continuing operations before income taxes	$	28,735	$	(50,739)	$	(58,355)	$	(80,359)


	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	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	13,341		49,591		—		62,932
General and administrative	25,990		22,263		56,934		105,187
Rent	767		60,748		1,909		63,424
Franchise rent expense	96,875		—		—		96,875
Depreciation and amortization	662		21,844		4,980		27,486
TBG mall location restructuring	2,368		—		—		2,368
Goodwill impairment	—		40,164		—		40,164
Total operating expenses	174,807		447,727		63,823		686,357
Operating income (loss)	33,417		(46,365)		(63,823)		(76,771)
Other (expense) income:
Interest expense	—		—		(4,615)		(4,615)
Loss from sale of salon assets to franchisees, net	—		—		(26,125)		(26,125)
Interest income and other, net	—		—		3,188		3,188
Income (loss) from continuing operations before income taxes	$	33,417	(46,365)		$	(91,375)	$	(104,323)