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BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING 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: |
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: | 1. BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: The unaudited interim Condensed Consolidated Financial Statements of Regis Corporation (the Company) as of March 31, 2013 and for the three and nine months ended March 31, 2013 and 2012, reflect, in the opinion of management, all adjustments necessary to fairly state the consolidated financial position of the Company as of March 31, 2013 and the consolidated results of its operations and its cash flows for the interim periods. Adjustments consist only of normal recurring items, except for any discussed in the notes below. The results of operations and cash flows for any interim period are not necessarily indicative of results of operations and cash flows for the full year. The Condensed Consolidated Balance Sheet data for June 30, 2012 was derived from audited Consolidated Financial Statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP). The unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2012 and other documents filed or furnished with the Securities and Exchange Commission (SEC) during the current fiscal year. 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: 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: 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 |
Recent Accounting Standards Adopted by the Company: Comprehensive Income In June 2011, and as subsequently amended in December 2011, the FASB issued final guidance on the presentation of comprehensive income. Under this guidance, net income and comprehensive income may only be presented either as one continuous statement or in two separate, but consecutive statements. The Company retrospectively adopted this guidance in the first quarter of fiscal year 2013, with comprehensive income shown as a separate statement immediately following the Condensed Consolidated Statements of Operations. Reclassifications Out of Accumulated Other Comprehensive Income In February 2013, the FASB issued guidance on the reporting of reclassifications out of accumulated other comprehensive income. The updated accounting guidance requires an entity to provide information about the amounts reclassified out of accumulated comprehensive income by component. The Company adopted this guidance in the third quarter of fiscal year 2013 by disclosing the components reclassified out of accumulated comprehensive income on the Condensed Consolidated Statement of Comprehensive (Loss) Income. Accounting Standards Recently Issued But Not Yet Adopted by the Company: Testing Indefinite-Lived Intangible Assets for Impairment In July 2012, the FASB updated the accounting guidance related to annual and interim indefinite-lived intangible asset impairment testing. The updated accounting guidance allows entities to first assess qualitative factors before performing a quantitative assessment of the fair value of indefinite-lived intangible assets. If it is determined on the basis of qualitative factors that the fair value of indefinite-lived intangible assets is more likely than not less than the carrying amount, the existing quantitative impairment test is required. Otherwise, no further impairment testing is required. The updated guidance is effective for the Company beginning in the first quarter of fiscal year 2014 with early adoption permitted under certain circumstances. The Company does not expect the adoption of this update to have a material impact on the Company’s consolidated financial statements. Accounting for Cumulative Translation Adjustment upon Derecognition of Foreign Entities In March 2013, the FASB updated the accounting guidance related to the release of cumulative translation adjustments. The updated accounting guidance clarified when to release cumulative translation adjustments into net income. The updated guidance is effective for the Company beginning in the first quarter of fiscal year 2015 with early adoption permitted. The Company does not expect the adoption of this update to have a material impact on the Company’s consolidated financial statements.

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- Definition The entire disclosure for the general note to the financial statements for the reporting entity which may include, descriptions of the basis of presentation, business description, significant accounting policies, consolidations, reclassifications, new pronouncements not yet adopted and changes in accounting principles. + References No definition available. + Details
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