SEGMENT INFORMATION:

6 Months Ended

Dec. 31, 2011

SEGMENT INFORMATION:

SEGMENT INFORMATION:

11. SEGMENT INFORMATION:

As of December 31, 2011, the Company owned, franchised, or held ownership interests in approximately 12,800 worldwide locations. The Company’s locations consisted of 9,453 North American salons (located in the United States, Canada and Puerto Rico), 405 international salons, 97 hair restoration centers and approximately 2,820 locations in which the Company maintains an ownership interest.

The Company operates its North American salon operations through five primary concepts: Regis, 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 United States 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.

Financial information for the Company’s reporting segments is shown in the following tables:

Total Assets by Segment	December 31, 2011		June 30, 2011
	(Dollars in thousands)
North American salons	$	864,497	$	881,526
International salons	67,866		69,932
Hair restoration centers	230,956		306,005
Unallocated corporate	533,642		548,290
Consolidated	$	1,696,961	$	1,805,753

	For the Three Months Ended December 31, 2011
	Salons				Hair Restoration			Unallocated
	North America		International		Centers			Corporate			Consolidated
	(Dollars in thousands)
Revenues:
Service	$	379,694	$	24,331	$	17,274		$	—		$	421,299
Product	103,162		9,738		19,308			—			132,208
Royalties and fees	9,213		—		558			—			9,771
	492,069		34,069		37,140			—			563,278
Operating expenses:
Cost of service	218,547		13,122		10,672			—			242,341
Cost of product	51,753		5,254		6,462			—			63,469
Site operating expenses	44,466		2,359		1,600			—			48,425
General and administrative	28,584		2,956		8,060			35,466			75,066
Rent	73,686		9,060		2,224			503			85,473
Depreciation and amortization	17,692		1,112		3,249			9,642			31,695
Goodwill impairment	—		—		78,426			—			78,426
Total operating expenses	434,728		33,863		110,693			45,611			624,895
Operating income (loss)	57,341		206		(73,553		)	(45,611		)	(61,617		)
Other income (expense):
Interest expense	—		—		—			(7,203		)	(7,203		)
Interest income and other, net	—		—		—			2,659			2,659
Income (loss) before income taxes and equity in income of affiliated companies	$	57,341	$	206	$	(73,553	)	$	(50,155	)	$	(66,161	)

	For the Three Months Ended December 31, 2010
	Salons				Hair Restoration		Unallocated
	North America		International		Centers		Corporate			Consolidated
	(Dollars in thousands)
Revenues:
Service	$	388,656	$	25,634	$	16,649	$	—		$	430,939
Product	103,775		11,443		18,606		—			133,824
Royalties and fees	9,018		—		591		—			9,609
	501,449		37,077		35,846		—			574,372
Operating expenses:
Cost of service	226,739		13,314		9,652		—			249,705
Cost of product	51,622		6,266		6,038		—			63,926
Site operating expenses	46,739		2,593		1,265		—			50,597
General and administrative	32,485		3,259		8,276		31,828			75,848
Rent	73,454		8,903		2,314		564			85,235
Depreciation and amortization	17,423		1,161		3,169		4,444			26,197
Total operating expenses	448,462		35,496		30,714		36,836			551,508
Operating income (loss)	52,987		1,581		5,132		(36,836		)	22,864
Other income (expense):
Interest expense	—		—		—		(8,738		)	(8,738		)
Interest income and other, net	—		—		—		2,604			2,604
Income (loss) before income taxes and equity in income of affiliated companies	$	52,987	$	1,581	$	5,132	$	(42,970	)	$	16,730

	For the Six Months Ended December 31, 2011
	Salons				Hair Restoration			Unallocated
	North America		International		Centers			Corporate			Consolidated
	(Dollars in thousands)
Revenues:
Service	$	769,858	$	49,184	$	33,957		$	—		$	852,999
Product	201,299		18,374		39,452			—			259,125
Royalties and fees	18,769		—		1,134			—			19,903
	989,926		67,558		74,543			—			1,132,027
Operating expenses:
Cost of service	441,826		25,812		20,714			—			488,352
Cost of product	100,197		9,833		13,418			—			123,448
Site operating expenses	92,762		5,034		3,084			—			100,880
General and administrative	58,290		5,881		17,333			72,241			153,745
Rent	146,901		17,824		4,495			700			169,920
Depreciation and amortization	35,662		2,418		6,558			21,163			65,801
Goodwill impairment	—		—		78,426			—			78,426
Total operating expenses	875,638		66,802		144,028			94,104			1,180,572
Operating income (loss)	114,288		756		(69,485		)	(94,104		)	(48,545		)
Other income (expense):
Interest expense	—		—		—			(14,563		)	(14,563		)
Interest income and other, net	—		—		—			3,975			3,975
Income (loss) before income taxes and equity in income of affiliated companies	$	114,288	$	756	$	(69,485	)	$	(104,692	)	$	(59,133	)

	For the Six Months Ended December 31, 2010
	Salons				Hair Restoration		Unallocated
	North America		International		Centers		Corporate			Consolidated
	(Dollars in thousands)
Revenues:
Service	$	785,977	$	50,997	$	33,494	$	—		$	870,468
Product	203,895		21,138		37,396		—			262,429
Royalties and fees	18,510		—		1,210		—			19,720
	1,008,382		72,135		72,100		—			1,152,617
Operating expenses:
Cost of service	454,036		26,042		19,128		—			499,206
Cost of product	101,355		11,511		12,135		—			125,001
Site operating expenses	93,068		4,783		1,755		—			99,606
General and administrative	62,363		6,211		16,855		64,493			149,922
Rent	147,072		17,573		4,578		1,120			170,343
Depreciation and amortization	34,655		2,248		6,312		9,026			52,241
Total operating expenses	892,549		68,368		60,763		74,639			1,096,319
Operating income (loss)	115,833		3,767		11,337		(74,639		)	56,298
Other income (expense):
Interest expense	—		—		—		(17,661		)	(17,661		)
Interest income and other, net	—		—		—		3,381			3,381
Income (loss) before income taxes and equity in income of affiliated companies	$	115,833	$	3,767	$	11,337	$	(88,919	)	$	42,018