SEGMENT INFORMATION

9 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

SEGMENT INFORMATION

SEGMENT INFORMATION:

Segment information is prepared on the same basis that the chief operating decision maker (CODM) reviews financial information for operational decision-making purposes. The Company's reportable operating segments consisted of the following salons:

	March 31, 2023		June 30, 2022
FRANCHISE SALONS:
Supercuts	2,123		2,264
SmartStyle/Cost Cutters in Walmart Stores	1,535		1,646
Portfolio Brands	1,265		1,344
Total North American salons	4,923		5,254
Total International salons (1)	134		141
Total Franchise salons	5,057		5,395
as a percent of total Franchise and Company-owned salons	98.6	%	98.1	%
COMPANY-OWNED SALONS:
Supercuts	7		18
SmartStyle/Cost Cutters in Walmart Stores	48		49
Portfolio Brands	15		38
Total Company-owned salons	70		105
as a percent of total Franchise and Company-owned salons	1.4	%	1.9	%
OWNERSHIP INTEREST LOCATIONS:
Equity ownership interest locations	76		76
Grand Total, System-wide	5,203		5,576

_______________________________________________________________________________

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

As of March 31, 2023, the Franchise operating segment is comprised primarily of Supercuts®, SmartStyle®, Cost Cutters®, First Choice Haircutters®, Magicuts®, and Roosters® concepts and the Company-owned operating segment is comprised primarily of Supercuts®, SmartStyle®, and other regional trade names.

Financial information concerning the Company's reportable operating segments is shown in the table below. Segment information is presented in the same way that the Company internally organizes the business for assessing performance and making decisions regarding allocation of resources. In the second quarter of fiscal year 2023, the Company revised its internal reporting such that the CODM’s primary measures of segment performance are revenue and segment adjusted EBITDA. Revenue and segment adjusted EBITDA are regularly reviewed by the CODM to make decisions about resources to be allocated to the segments, assess current performance and forecast future performance. Asset information by segment is not provided to the CODM. Segment adjusted EBITDA is defined as income from continuing operations before interest, income taxes, depreciation, amortization and impairment. Consistent with our internal management reporting, unallocated expenses include certain items impacting comparability. These unallocated items are not defined terms within U.S. GAAP. They are based on how management views the business, makes financial, operating and planning decisions and evaluates the Company's ongoing performance and are not attributable to either segment. Unallocated fees include distribution center wind down fees, inventory reserve, one-time professional fees and settlements, severance expense, the benefit from lease liability decreases in excess of previously impaired ROUA, lease termination fees, asset retirement obligation costs and goodwill and long-lived asset impairment charges. Figures for prior reporting periods have been restated to conform to the current period.

	Three Months Ended March 31,				Nine Months Ended March 31,
	2023		2022		2023		2022
	(Dollars in thousands)
Revenues:
Franchise	$	53,606	$	60,261	$	169,717	$	193,300
Company-owned	2,167		3,549		7,894		16,597
Total revenue	55,773		63,810		177,611		209,897
Segment adjusted EBITDA:
Franchise	4,815		2,936		17,338		5,190
Company-owned	(631)		(3,265)		(1,496)		(7,950)
Total	4,184		(329)		15,842		(2,760)
Unallocated expenses	(755)		(7,155)		(3,384)		(8,572)
Depreciation and amortization	(1,008)		(1,622)		(6,052)		(4,766)
Long-lived asset impairment	(36)		(327)		(36)		(542)
Goodwill impairment	—		(13,120)		—		(13,120)
Interest expense	(4,787)		(3,224)		(13,123)		(9,621)
Income tax benefit	241		1,270		213		1,482
Income (loss) from discontinued operations	518		(3,411)		3,958		(5,325)
Total net loss	$	(1,643)	$	(27,918)	$	(2,582)	$	(43,224)