SEGMENT INFORMATION

12 Months Ended

Jun. 30, 2011

SEGMENT INFORMATION

SEGMENT INFORMATION

16. SEGMENT INFORMATION

        As of June 30, 2011, the Company owned, franchised or held ownership interests in approximately 12,700 worldwide locations. The Company's locations consisted of 9,419 North American salons (located in the U.S., Canada and Puerto Rico), 400 international salons, 96 hair restoration centers, and 2,786 locations in which the Company maintains an ownership interest through its investments in affiliates.

        The Company operates its North American salon operations through five primary concepts: Regis Salons, MasterCuts, SmartStyle, Supercuts and Promenade salons. The concepts offer similar products and services, concentrate on the mass market consumer marketplace and have consistent distribution channels. All of the company-owned and franchise salons within the North American salon concepts are located in high traffic, retail shopping locations that attract mass market consumers, and the individual salons display similar long-term economic characteristics. The salons share interdependencies and a common support base.

        The Company operates its International salon operations, primarily in the United Kingdom, through three primary concepts: Regis, Supercuts, and Sassoon salons. Consistent with the North American concepts, the international concepts offer similar products and services, concentrate on the mass market consumer marketplace and have consistent distribution channels. All of the international salon concepts are company-owned and are located in malls, leading department stores, and high-street locations. Individual salons display similar long-term economic characteristics. The salons share interdependencies and a common support base.

        The Company's company-owned and franchise hair restoration centers are located in the U.S. and Canada. The Company's hair restoration centers offer three hair restoration solutions; hair systems, hair transplants, and hair therapy, which are targeted at the mass market consumer. Hair restoration centers are located primarily in office and professional buildings within larger metropolitan areas.

        Based on the way the Company manages its business, it has reported its North American salons, International salons, and Hair Restoration Centers as three separate reportable segments.

        The accounting policies of the reportable operating segments are the same as those described in Note 1 to the Consolidated Financial Statements. Corporate assets detailed below are primarily comprised of property and equipment associated with the Company's headquarters and distribution centers, corporate cash, inventories located at corporate distribution centers, deferred income taxes, franchise receivables and other corporate assets. Intersegment sales and transfers are not significant. Summarized financial information concerning the Company's reportable operating segments is shown in the following table as of June 30, 2011, 2010, and 2009:

		For the Year Ended June 30, 2011
		Salons
						Hair Restoration Centers		Unallocated Corporate
		North America		International							Consolidated
		(Dollars in thousands)
Revenues:
	Service	$	1,588,690	$	106,734	$	67,550	$	—		$	1,762,974
	Product		403,962		43,503		75,729		—			523,194
	Royalties and fees		37,292		—		2,409		—			39,701
			2,029,944		150,237		145,688		—			2,325,869
Operating expenses:
	Cost of service		919,526		54,213		39,129		—			1,012,868
	Cost of product		201,560		23,631		24,788		—			249,979
	Site operating expenses		183,552		9,852		4,318		—			197,722
	General and administrative		122,281		12,630		37,038		167,908			339,857
	Rent		292,479		38,423		9,227		2,157			342,286
	Depreciation and amortization		69,763		4,750		12,958		17,638			105,109
	Goodwill impairment		74,100		—		—		—			74,100
	Lease termination costs		—		—		—		—			—
Total operating expenses			1,863,261		143,499		127,458		187,703			2,321,921
Operating income (loss)			166,683		6,738		18,230		(187,703	)		3,948
Other income (expense):
	Interest expense		—		—		—		(34,388	)		(34,388	)
	Interest income and other, net		—		—		—		4,811			4,811
Income (loss) from continuing operations before income taxes and equity in income (loss) of affiliated companies		$	166,683	$	6,738	$	18,230	$	(217,280	)	$	(25,629	)
Total assets		$	881,526	$	69,932	$	306,005	$	548,290		$	1,805,753
Long-lived assets			254,939		15,193		17,784		59,895			347,811
Capital expenditures			51,091		2,957		5,542		11,879			71,469
Purchases of salon assets			18,551		—		—		—			18,551

		For the Year Ended June 30, 2010
		Salons
						Hair Restoration Centers		Unallocated Corporate
		North America		International							Consolidated
		(Dollars in thousands)
Revenues:
	Service	$	1,605,979	$	111,833	$	66,325	$	—		$	1,784,137
	Product		417,363		44,252		72,978		—			534,593
	Royalties and fees		37,221		—		2,483		—			39,704
			2,060,563		156,085		141,786		—			2,358,434
Operating expenses:
	Cost of service		920,905		57,657		37,158		—			1,015,720
	Cost of product		219,745		22,570		21,568		—			263,883
	Site operating expenses		183,881		10,152		5,305		—			199,338
	General and administrative		113,956		13,115		36,207		128,713			291,991
	Rent		294,263		38,681		9,013		2,141			344,098
	Depreciation and amortization		72,681		4,986		12,198		18,899			108,764
	Goodwill impairment		35,277		—		—		—			35,277
	Lease termination costs		—		2,145		—		—			2,145
Total operating expenses			1,840,708		149,306		121,449		149,753			2,261,216
Operating income (loss)			219,855		6,779		20,337		(149,753	)		97,218
Other income (expense):
	Interest expense		—		—		—		(54,414	)		(54,414	)
	Interest income and other, net		—		—		—		10,410			10,410
Income (loss) from continuing operations before income taxes and equity in income (loss) of affiliated companies		$	219,855	$	6,779	$	20,337	$	(193,757	)	$	53,214
Total assets		$	992,410	$	74,633	$	284,615	$	567,914		$	1,919,572
Long-lived assets			262,575		15,654		17,484		63,537			359,250
Capital expenditures			40,393		1,764		3,658		12,006			57,821
Purchases of salon assets			3,664		—		—		—			3,664

		For the Year Ended June 30, 2009(1)
		Salons
							Hair Restoration Centers		Unallocated Corporate
		North America		International								Consolidated
		(Dollars in thousands)
Revenues:
	Service	$	1,646,239	$	122,664		$	65,055	$	—		$	1,833,958
	Product		434,340		48,905			72,960		—			556,205
	Royalties and fees		37,119		—			2,505		—			39,624
			2,117,698		171,569			140,520		—			2,429,787
Operating expenses:
	Cost of service		944,782		64,326			35,611		—			1,044,719
	Cost of product		235,520		25,855			21,663		—			283,038
	Site operating expenses		173,457		11,762			5,237		—			190,456
	General and administrative		117,673		15,720			33,924		124,344			291,661
	Rent		292,253		44,492			8,887		2,160			347,792
	Depreciation and amortization		73,395		12,492			11,327		18,441			115,655
	Goodwill impairment		—		41,661			—		—			41,661
	Lease termination costs		4,990		742			—		—			5,732
Total operating expenses			1,842,070		217,050			116,649		144,945			2,320,714
Operating income (loss)			275,628		(45,481	)		23,871		(144,945	)		109,073
Other income (expense):
	Interest expense		—		—			—		(39,768	)		(39,768	)
	Interest income and other, net		—		—			—		9,461			9,461
Income (loss) from continuing operations before income taxes and equity in (loss) income of affiliated companies		$	275,628	$	(45,481	)	$	23,871	$	(175,252	)	$	78,766
Total assets		$	966,596	$	49,779		$	293,017	$	583,094		$	1,892,486
Long-lived assets			281,504		20,314			18,234		71,486			391,538
Capital expenditures			49,355		3,081			9,858		11,280			73,574
Purchases of salon assets			39,215		22			889		—			40,126

(1)

Beginning with the period ended December 31, 2008, the operations of Trade Secret concept within the North American reportable segment were accounted for as discontinued operations. All comparable periods will reflect Trade Secret as discontinued operations. See further discussion at Note 2 to the Consolidated Financial Statements.

        Total revenues and long-lived assets associated with business operations in the U.S. and all other countries in aggregate were as follows:

	Year Ended June 30,
	2011				2010				2009
	Total Revenues		Long-lived Assets		Total Revenues		Long-lived Assets		Total Revenues		Long-lived Assets
	(Dollars in thousands)
U.S.	$	2,007,042	$	314,406	$	2,055,059	$	327,753	$	2,121,531	$	355,330
Other countries		318,827		33,405		303,375		31,497		308,256		36,208
Total	$	2,325,869	$	347,811	$	2,358,434	$	359,250	$	2,429,787	$	391,538