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BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Policies) | 9 Months Ended
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Mar. 31, 2013
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: |
Reclassifications | Reclassifications: Beginning in the first quarter of fiscal year 2013, salon marketing and advertising expenses that were presented within cost of service and general and administrative operating expense line items in prior filings were reclassified to site operating expenses within the Condensed Consolidated Statement of Operations. The reclassifications were made to better present how management of the Company views the respective salon marketing and advertising expenses. The prior period amounts have been reclassified to conform to the current year presentation. These reclassifications had no impact on operating income or net income. The table below presents the impact of the reclassifications to the three and nine months ended March 31, 2012:
|  | For the Three Months Ended, March 31, 2012 |
|  | Prior Presentation(1) |  | Reclassification |  | As Presented |
|  | (Dollars in thousands) |
Cost of service |  | $ | 239,524 |  | $ | (111 | ) | $ | 239,413 |
Site operating expenses |  | 47,148 |  | 3,635 |  | 50,783 |
General and administrative |  | 63,780 |  | (3,524 | ) | 60,256 |
|  | For the Nine Months Ended, March 31, 2012 |
|  | Prior Presentation(1) |  | Reclassification |  | As Presented |
|  | (Dollars in thousands) |
Cost of service |  | $ | 707,162 |  | $ | (692 | ) | $ | 706,470 |
Site operating expenses |  | 144,944 |  | 12,116 |  | 157,060 |
General and administrative |  | 200,192 |  | (11,424 | ) | 188,768 |
(1) Prior presentation amounts exclude amounts related to discontinued operations. See Note 2 to the Condensed Consolidated Statement of Operations. In addition, expenses associated with our distribution centers were reclassified from unallocated corporate costs to our North America reportable segment. The reclassifications were made to better present how management of the Company views the respective distribution centers’ expenses. This reclassification had no impact on our Condensed Consolidated Statement of Operations. The prior period amounts have been reclassified to conform to the current year presentation. The table below presents the impact of the reclassification of expenses between the Company’s unallocated corporate and North America reportable segment:
|  | For the Three Months Ended, March 31, 2012 |
|  | North America |  | Unallocated Corporate |
|  | Prior Presentation |  | Reclassification |  | As Presented(2) |  | Prior Presentation(1) |  | Reclassification |  | As Presented(2) |
|  | (Dollars in thousands) |  | (Dollars in thousands) |
Operating Income (Loss) |  | $ | 61,753 |  | $ | (6,131 | ) | $ | 55,622 |  | $ | (39,405 | ) | $ | 6,131 |  | $ | (33,274 | )
|  | For the Nine Months Ended, March 31, 2012 |
|  | North America |  | Unallocated Corporate |
|  | Prior Presentation |  | Reclassification |  | As Presented(2) |  | Prior Presentation(1) |  | Reclassification |  | As Presented(2) |
|  | (Dollars in thousands) |  | (Dollars in thousands) |
Operating Income (Loss) |  | $ | 176,041 |  | $ | (19,312 | ) | $ | 156,729 |  | $ | (133,509 | ) | $ | 19,312 |  | $ | (114,197 | )
(1) Prior presentation amounts exclude amounts related to discontinued operations. See Note 2 to the Condensed Consolidated Statement of Operations. (2) See Note 11 to the Condensed Consolidated Statement of Operations for presentation of segment information.
Stock-Based Employee Compensation | Stock-Based Employee Compensation: During the nine months ended March 31, 2013, the Company granted 118,062 restricted stock awards (RSAs), 231,820 restricted stock units (RSUs), 596,157 equity-based stock appreciation rights (SARs), and 199,041 performance share units (PSUs). The Company did not have significant grants for the three months ended March 31, 2013. All grants relate to stock incentive plans that have been approved by the shareholders of the Company. Total compensation cost for stock-based payment arrangements totaled $1.4 million for each of the three months ended March 31, 2013 and 2012, and $4.7 and $6.1 million for the nine months ended March 31, 2013 and 2012, respectively, recorded within general and administrative expense on the Condensed Consolidated Statement of Operations.
Goodwill | Goodwill: For the fiscal year 2012 annual impairment testing of goodwill, the estimated fair value of the Promenade salon concept and Hair Restoration Centers reporting units exceeded their carrying values by approximately 14.0 and 12.0 percent, respectively. The respective fair values of the Company’s remaining reporting units exceeded their carrying values by greater than 20.0 percent. While the Company has determined that the estimated fair value of Promenade is appropriate based on the historical level of revenue growth, operating income and cash flows, it is reasonably likely that Promenade may experience additional impairment in future periods. The term “reasonably likely” refers to an occurrence that is more than remote but less than probable in the judgment of the Company. Because some of the inherent assumptions and estimates used in determining the fair value of each reporting unit are outside the control of management, changes in these underlying assumptions can adversely impact fair value. Potential impairment of a portion or all of the carrying value of goodwill for the Promenade salon concept is dependent on many factors and cannot be predicted with certainty. See Note 2 to the Condensed Consolidated Financial Statements for details on the completion of the sale of Hair Restoration Centers subsequent to March 31, 2013. As of March 31, 2013, the Company’s estimated fair value, as determined by the sum of our reporting units’ fair value, reconciled to within a reasonable range of our market capitalization which included an assumed control premium. The Company concluded that there were no triggering events requiring the Company to perform an interim goodwill impairment test between the previous annual impairment test and March 31, 2013. A summary of the Company’s goodwill balance as of March 31, 2013 and June 30, 2012 by reporting unit is as follows:
Reporting Unit |  | As of March 31, 2013 |  | As of June 30, 2012 |
|  | (Dollars in thousands ) |
Regis |  | $ | 34,994 |  | $ | 34,992 |
MasterCuts |  | 4,652 |  | 4,652 |
SmartStyle |  | 49,483 |  | 49,476 |
Supercuts |  | 129,621 |  | 129,621 |
Promenade |  | 243,583 |  | 243,538 |
Total |  | $ | 462,333 |  | $ | 462,279 |

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- Definition Disclosure of accounting policy for stock option and stock incentive plans. This disclosure may include (1) the types of stock option or incentive plans sponsored by the entity (2) the groups that participate in (or are covered by) each plan (3) significant plan provisions and (4) how stock compensation is measured, and the methodologies and significant assumptions used to determine that measurement. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2228939 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Emerging Issues Task Force (EITF) -Number 06-11 -Paragraph 7 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6367646&loc=d3e18780-107790 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 123R -Paragraph A240 -Subparagraph a -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -Subparagraph (b),(f) -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 + Details
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