SEGMENT INFORMATION:

3 Months Ended

Sep. 30, 2012

SEGMENT INFORMATION:

SEGMENT INFORMATION:

12.          SEGMENT INFORMATION:

As of September 30, 2012, the Company owned, franchised, or held ownership interests in approximately 10,000 worldwide locations. The Company’s locations consisted of 9,311 North American salons (located in the United States, Canada and Puerto Rico), 392 international salons (located primarily in the United Kingdom), and approximately 242 locations in which the Company maintains an ownership interest.

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.

Based on the way the Company manages its business, it has reported its North American salons and international salons as two separate reportable segments.

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

	For the Three Months Ended September 30, 2012(1)(2)
	Salons				Unallocated
	North America		International		Corporate			Consolidated
	(Dollars in thousands)
Revenues:
Service	$	369,680	$	23,736	$	—		$	393,416
Product	94,542		7,742		—			102,284
Royalties and fees	9,660		—		—			9,660
	473,882		31,478		—			505,360
Operating expenses:
Cost of service	220,231		12,297		—			232,528
Cost of product	49,076		4,056		—			53,132
Site operating expenses	49,596		2,751		—			52,347
General and administrative	31,691		2,518		21,663			55,872
Rent	72,722		8,402		375			81,499
Depreciation and amortization	16,588		1,032		3,089			20,709
Total operating expenses	439,904		31,056		25,127			496,087
Operating income (loss)	33,978		422		(25,127		)	9,273
Other income (expense):
Interest expense	—		—		(6,829		)	(6,829		)
Interest income and other, net (as restated)	—		—		34,612			34,612
Income (loss) from continuing operations before income taxes and equity in income of affiliated companies (as restated)	$	33,978	$	422	$	2,656		$	37,056

(1) As of September 30, 2012, the Hair Restoration Centers reportable segment was accounted for as a discontinued operation. All comparable periods will reflect Hair Restoration Centers as a discontinued operation. See further discussion at Note 3 in these Notes to the Condensed Consolidated Financial Statements.

(2) See Note 1 to the Condensed Consolidated Financial Statements for discussion of reclassifications of general and administrative, rent and depreciation and amortization between the Company’s Corporate and North America reportable segments.

	For the Three Months Ended September 30, 2011(1)(2)
	Salons				Unallocated
	North America		International		Corporate			Consolidated
	(Dollars in thousands)
Revenues:
Service	$	390,164	$	24,853	$	—		$	415,017
Product	98,137		8,636		—			106,773
Royalties and fees	9,556		—		—			9,556
	497,857		33,489					531,346
Operating expenses:
Cost of service	222,975		12,690		—			235,665
Cost of product	48,444		4,579		—			53,023
Site operating expenses	51,852		2,959		—			54,811
General and administrative	32,645		2,641		30,584			65,870
Rent	73,380		8,764		32			82,176
Depreciation and amortization	18,541		1,306		10,950			30,797
Total operating expenses	447,837		32,939		41,566			522,342
Operating income (loss)	50,020		550		(41,566		)	9,004
Other income (expense):
Interest expense	—		—		(7,360		)	(7,360		)
Interest income and other, net	—		—		1,317			1,317
Income (loss) from continuing operations before income taxes and equity in income of affiliated companies	$	50,020	$	550	$	(47,609	)	$	2,961

(1) As of September 30, 2012, the Hair Restoration Centers reportable segment was accounted for as a discontinued operation. All comparable periods will reflect Hair Restoration Centers as a discontinued operation. See further discussion at Note 3 in these Notes to the Condensed Consolidated Financial Statements

(2) See Note 1 to the Condensed Consolidated Financial Statements for discussion of reclassifications of general and administrative, rent and depreciation and amortization between the Company’s Corporate and North America reportable segments.