SEGMENT INFORMATION:

9 Months Ended

Mar. 31, 2012

SEGMENT INFORMATION:

SEGMENT INFORMATION:

11.          SEGMENT INFORMATION:

As of March 31, 2012, the Company owned, franchised, or held ownership interests in approximately 12,700 worldwide locations. The Company’s locations consisted of 9,380 North American salons (located in the United States, Canada and Puerto Rico), 402 international salons, 98 hair restoration centers and approximately 2,780 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:

	For the Three Months Ended March 31, 2012
	Salons				Hair Restoration		Unallocated
	North America		International		Centers		Corporate			Consolidated
	(Dollars in thousands)
Revenues:
Service	$	390,202	$	22,771	$	17,229	$	—		$	430,202
Product	103,335		9,818		19,864		—			133,017
Royalties and fees	9,775		—		590		—			10,365
	503,312		32,589		37,683		—			573,584
Operating expenses:
Cost of service	227,702		11,822		10,855		—			250,379
Cost of product	51,520		5,344		6,966		—			63,830
Site operating expenses	45,314		1,834		1,687		—			48,835
General and administrative	27,188		2,980		9,992		34,103			74,263
Rent	73,087		8,604		2,198		479			84,368
Depreciation and amortization	16,748		1,403		3,244		5,314			26,709
Total operating expenses	441,559		31,987		34,942		39,896			548,384
Operating income (loss)	61,753		602		2,741		(39,896		)	25,200
Other income (expense):
Interest expense	—		—		—		(6,790		)	(6,790		)
Interest income and other, net	—		—		—		123			123
Income (loss) from continuing operations before income taxes and equity in loss of affiliated companies	$	61,753	$	602	$	2,741	$	(46,563	)	$	18,533

	For the Three Months Ended March 31, 2011
	Salons					Hair Restoration		Unallocated
	North America			International		Centers		Corporate			Consolidated
	(Dollars in thousands)
Revenues:
Service	$	398,731		$	24,550	$	16,828	$	—		$	440,109
Product	101,907			10,985		18,458		—			131,350
Royalties and fees	9,201			—		607		—			9,808
	509,839			35,535		35,893		—			581,267
Operating expenses:
Cost of service	233,404			12,153		9,817		—			255,374
Cost of product	51,209			5,885		5,974		—			63,068
Site operating expenses	46,932			2,244		1,346		—			50,522
General and administrative	30,771			2,915		10,507		42,197			86,390
Rent	72,577			9,006		2,297		511			84,391
Depreciation and amortization	18,347			1,069		3,195		4,315			26,926
Goodwill impairment	74,100			—		—		—			74,100
Total operating expenses	527,340			33,272		33,136		47,023			640,771
Operating (loss) income	(17,501		)	2,263		2,757		(47,023		)	(59,504		)
Other income (expense):
Interest expense	—			—		—		(8,337		)	(8,337		)
Interest income and other, net	—			—		—		(651		)	(651		)
(Loss) income from continuing operations before income taxes and equity in loss of affiliated companies	$	(17,501	)	$	2,263	$	2,757	$	(56,011	)	$	(68,492	)

	For the Nine Months Ended March 31, 2012
	Salons				Hair Restoration			Unallocated
	North America		International		Centers			Corporate			Consolidated
	(Dollars in thousands)
Revenues:
Service	$	1,160,060	$	71,955	$	51,186		$	—		$	1,283,201
Product	304,634		28,192		59,316			—			392,142
Royalties and fees	28,544		—		1,724			—			30,268
	1,493,238		100,147		112,226			—			1,705,611
Operating expenses:
Cost of service	669,528		37,634		31,569			—			738,731
Cost of product	151,717		15,177		20,384			—			187,278
Site operating expenses	138,076		6,868		4,771			—			149,715
General and administrative	85,478		8,861		27,325			106,344			228,008
Rent	219,988		26,428		6,693			1,179			254,288
Depreciation and amortization	52,410		3,821		9,802			26,477			92,510
Goodwill impairment	—		—		78,426			—			78,426
Total operating expenses	1,317,197		98,789		178,970			134,000			1,728,956
Operating income (loss)	176,041		1,358		(66,744		)	(134,000		)	(23,345		)
Other income (expense):
Interest expense	—		—		—			(21,353		)	(21,353		)
Interest income and other, net	—		—		—			4,098			4,098
Income (loss) from continuing operations before income taxes and equity in (loss) income of affiliated companies	$	176,041	$	1,358	$	(66,744	)	$	(151,255	)	$	(40,600	)

	For the Nine Months Ended March 31, 2011
	Salons				Hair Restoration		Unallocated
	North America		International		Centers		Corporate			Consolidated
	(Dollars in thousands)
Revenues:
Service	$	1,184,708	$	75,547	$	50,322	$	—		$	1,310,577
Product	305,802		32,123		55,854		—			393,779
Royalties and fees	27,711		—		1,817		—			29,528
	1,518,221		107,670		107,993		—			1,733,884
Operating expenses:
Cost of service	687,440		38,195		28,945		—			754,580
Cost of product	152,564		17,396		18,109		—			188,069
Site operating expenses	140,000		7,027		3,101		—			150,128
General and administrative	93,134		9,126		27,362		106,690			236,312
Rent	219,649		26,579		6,875		1,631			254,734
Depreciation and amortization	53,002		3,317		9,507		13,341			79,167
Goodwill impairment	74,100		—		—		—			74,100
Total operating expenses	1,419,889		101,640		93,899		121,662			1,737,090
Operating income (loss)	98,332		6,030		14,094		(121,662		)	(3,206		)
Other income (expense):
Interest expense	—		—		—		(25,998		)	(25,998		)
Interest income and other, net	—		—		—		2,730			2,730
Income (loss) from continuing operations before income taxes and equity in (loss) income of affiliated companies	$	98,332	$	6,030	$	14,094	$	(144,930	)	$	(26,474	)