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REVENUE RECOGNITION: (Tables) | 3 Months Ended
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Sep. 30, 2018
Revenue from Contract with Customer [Abstract] |
Disaggregation of revenue | The following table disaggregates revenue by timing of revenue recognition and is reconciled to reportable segment revenues as follows:
|  | Three Months Ended September 30, 2018 |  | Three Months Ended September 30, 2017
|  | Company-owned |  | Franchise |  | Company-owned |  | Franchise
|  | (in thousands)
Revenue recognized at a point in time: |  |  |  |  |  |  |  |
Service |  | $ | 207,848 |  |  | $ | — |  |  | $ | 235,630 |  |  | $ | — |
Product |  | 41,962 |  |  | 15,629 |  |  | 53,236 |  |  | 7,722 |
Total revenue recognized at a point in time |  | $ | 249,810 |  |  | $ | 15,629 |  |  | $ | 288,866 |  |  | $ | 7,722 |
Revenue recognized over time: |  |  |  |  |  |  |  |
Royalty and other franchise fees |  | $ | — |  |  | $ | 14,420 |  |  | $ | — |  |  | $ | 12,150 |
Advertising fund fees |  | — |  |  | 7,976 |  |  | — |  |  | 6,726 |
Total revenue recognized over time |  | $ | — |  |  | $ | 22,396 |  |  | $ | — |  |  | $ | 18,876 |
Total revenue |  | $ | 249,810 |  |  | $ | 38,025 |  |  | $ | 288,866 |  |  | $ | 26,598 |
Schedule of receivables, broker fees and deferred revenue | Information about receivables, broker fees and deferred revenue subject to the amended revenue recognition guidance is as follows:
|  | September 30, 2018 |  | June 30, 2018 |  | Balance Sheet Classification
|  | (in thousands) |  |
Receivables from contracts with customers, net |  | $ | 23,004 |  |  | $ | 21,504 |  |  | Accounts receivable, net
Broker fees |  | $ | 14,657 |  |  | $ | 14,002 |  |  | Other assets
Deferred revenue: |  |  |  |  |  |
Current |  |  |  |  |  |
Gift card liability |  | $ | 2,974 |  |  | $ | 3,320 |  |  | Accrued expenses
Deferred franchise fees unopened salons |  | 1,714 |  |  | 2,306 |  |  | Accrued expenses
Deferred franchise fees open salons |  | 3,221 |  |  | 3,030 |  |  | Accrued expenses
Total current deferred revenue |  | $ | 7,909 |  |  | $ | 8,656 |  |  |
Non-current |  |  |  |  |  |
Deferred franchise fees unopened salons |  | $ | 12,062 |  |  | $ | 11,161 |  |  | Other non-current liabilities
Deferred franchise fees open salons |  | 19,134 |  |  | 18,346 |  |  | Other non-current liabilities
Total non-current deferred revenue |  | $ | 31,196 |  |  | $ | 29,507 |  |  |
Broker fees | The following table is a rollforward of the broker fee balance for the periods indicated (in thousands):
Balance as of June 30, 2018 |  | $ | 14,002 |
Additions |  | 1,285 |
Amortization |  | (628 | )
Write-offs |  | (2 | )
Balance as of September 30, 2018 |  | $ | 14,657 |
Estimated revenue expected to be recognized | Estimated revenue expected to the recognized in the future related to deferred franchise fees for open salons as of September 30, 2018 is as follows (in thousands):
Remainder of 2019 | $ | 2,391 |
2020 |  | 3,133 |
2021 |  | 3,044 |
2022 |  | 2,924 |
2023 |  | 2,748 |
Thereafter |  | 8,115 |
Total |  | $ | 22,355 |
Schedules of impact of revenue recognition policy | The amended revenue recognition guidance impacted the Company's previously reported financial statements as follows: CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) June 30, 2018 (Dollars in thousands)
|  |  |  | Adjustments for new revenue recognition guidance |  |
|  | Previously |  | Franchise |  | Advertising |  | Gift Card |  |  |  |
|  | Reported |  | Fees |  | Funds |  | Breakage |  | Taxes |  | Adjusted
ASSETS |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Cash and cash equivalents |  | $ | 110,399 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 110,399 |
Receivables, net |  | 52,430 |  |  |  |  |  |  |  |  |  |  | 52,430 |
Inventories |  | 79,363 |  |  |  |  |  |  |  |  |  |  | 79,363 |
Other current assets |  | 47,867 |  |  |  |  |  |  |  |  |  |  |  | 47,867 |
Total current assets |  | 290,059 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 290,059 |
Property and equipment, net |  | 105,860 |  |  |  |  |  |  |  |  |  |  | 105,860 |
Goodwill |  | 412,643 |  |  |  |  |  |  |  |  |  |  | 412,643 |
Other intangibles, net |  | 10,557 |  |  |  |  |  |  |  |  |  |  | 10,557 |
Other assets |  | 37,616 |  |  |  |  |  |  |  |  |  |  | 37,616 |
Total assets |  | $ | 856,735 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 856,735 |
LIABILITIES AND SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |  |  |  |  |  |
Current liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |
Accounts payable |  | $ | 57,738 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 57,738 |
Accrued expenses |  | 97,630 |  |  | 3,030 |  |  |  |  | 56 |  |  |  |  | 100,716 |
Total current liabilities |  | 155,368 |  |  | 3,030 |  |  | — |  |  | 56 |  |  | — |  |  | 158,454 |
Long-term debt |  | 90,000 |  |  |  |  |  |  |  |  |  |  | 90,000 |
Other noncurrent liabilities |  | 107,875 |  |  | 18,346 |  |  |  |  |  |  | (4,378 | ) |  | 121,843 |
Total liabilities |  | 353,243 |  |  | 21,376 |  |  | — |  |  | 56 |  |  | (4,378 | ) |  | 370,297 |
Commitments and contingencies (Note 7) |  |  |  |  |  |  |  |  |  |  |  |  |  |
Shareholders’ equity: |  |  |  |  |  |  |  |  |  |  |  |  |
Common stock |  | 2,263 |  |  |  |  |  |  |  |  |  |  | 2,263 |
Additional paid-in capital |  | 194,436 |  |  |  |  |  |  |  |  |  |  | 194,436 |
Accumulated other comprehensive income |  | 9,568 |  |  | 88 |  |  |  |  |  |  |  |  |  |  | 9,656 |
Retained earnings |  | 297,225 |  |  | (21,464 | ) |  |  |  | (56 | ) |  | 4,378 |  |  | 280,083 |
Total shareholders’ equity |  | 503,492 |  |  | (21,376 | ) |  | — |  |  | (56 | ) |  | 4,378 |  |  | 486,438 |
Total liabilities and shareholders’ equity |  | $ | 856,735 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 856,735 |
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) For The Three Months Ended September 30, 2017 (Dollars and shares in thousands, except per share data amounts)
|  |  |  | Adjustments for new revenue recognition guidance |  |
|  | Previously |  | Franchise |  | Advertising |  | Gift Card |  |  |  |
|  | Reported |  | Fees |  | Funds |  | Breakage |  | Taxes |  | Adjusted
Revenues: |  |  |  |  |  |  |  |  |  |  |  |
Service |  | $ | 235,559 |  |  | $ | — |  |  | $ | — |  |  | $ | 71 |  |  | $ | — |  |  | $ | 235,630 |
Product |  | 60,940 |  |  |  |  |  |  | 18 |  |  |  |  | 60,958 |
Royalties and fees |  | 13,374 |  |  | (1,224 | ) |  | 6,726 |  |  |  |  |  |  | 18,876 |
|  | 309,873 |  |  | (1,224 | ) |  | 6,726 |  |  | 89 |  |  | — |  |  | 315,464 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |
Cost of service |  | 139,836 |  |  |  |  |  |  |  |  |  |  | 139,836 |
Cost of product |  | 30,162 |  |  |  |  |  |  |  |  |  |  | 30,162 |
Site operating expenses |  | 33,303 |  |  |  |  | 6,726 |  |  |  |  |  |  | 40,029 |
General and administrative |  | 35,166 |  |  |  |  |  |  |  |  |  |  | 35,166 |
Rent |  | 42,416 |  |  |  |  |  |  |  |  |  |  | 42,416 |
Depreciation and amortization |  | 12,255 |  |  |  |  |  |  |  |  |  |  | 12,255 |
Total operating expenses |  | 293,138 |  |  | — |  |  | 6,726 |  |  | — |  |  | — |  |  | 299,864 |
Operating income |  | 16,735 |  |  | (1,224 | ) |  | — |  |  | 89 |  |  | — |  |  | 15,600 |
Other (expense) income: |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  | (2,138 | ) |  |  |  |  |  |  |  |  |  | (2,138 | )
Gain from sale of salon assets to franchisees, net |  | 122 |  |  |  |  |  |  |  |  |  |  | 122 |
Interest income and other, net |  | 905 |  |  |  |  |  |  | (485 | ) |  |  |  | 420 |
Income from continuing operations before income taxes |  | 15,624 |  |  | (1,224 | ) |  | — |  |  | (396 | ) |  | — |  |  | 14,004 |
Income tax expense |  | (4,832 | ) |  |  |  |  |  |  |  | (727 | ) |  | (5,559 | )
Income from continuing operations |  | 10,792 |  |  | (1,224 | ) |  | — |  |  | (396 | ) |  | (727 | ) |  | 8,445 |
Loss from discontinued operations, net of taxes |  | (33,767 | ) |  |  |  |  |  |  |  |  |  | (33,767 | )
Net loss |  | $ | (22,975 | ) |  | $ | (1,224 | ) |  | $ | — |  |  | $ | (396 | ) |  | $ | (727 | ) |  | $ | (25,322 | )
Net loss per share: |  |  |  |  |  |  |  |  |  |  |  |
Basic: |  |  |  |  |  |  |  |  |  |  |  |
Income from continuing operations |  | $ | 0.23 |  |  |  |  |  |  |  |  |  |  |  | $ | 0.18 |
Loss from discontinued operations |  | (0.72 | ) |  |  |  |  |  |  |  |  |  |  | (0.72 | )
Net loss per share, basic (1) |  | $ | (0.49 | ) |  |  |  |  |  |  |  |  |  |  | $ | (0.54 | )
Diluted: |  |  |  |  |  |  |  |  |  |  |  |
Income from continuing operations |  | $ | 0.23 |  |  |  |  |  |  |  |  |  |  | $ | 0.18 |
Loss from discontinued operations |  | (0.72 | ) |  |  |  |  |  |  |  |  |  | (0.72 | )
Net loss per share, diluted (1) |  | $ | (0.49 | ) |  |  |  |  |  |  |  |  |  | $ | (0.54 | )
Weighted average common and common equivalent shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | 46,677 |  |  |  |  |  |  |  |  |  |  | 46,677 |
Diluted |  | 46,900 |  |  |  |  |  |  |  |  |  |  | 46,900 |
_____________________________________________________________________________ (1)Total is a recalculation; line items calculated individually may not sum to total due to rounding

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