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REVENUE RECOGNITION: (Tables) | 6 Months Ended
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Dec. 31, 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 December 31, 2018 |  | Three Months Ended December 31, 2017
|  | Company-owned |  | Franchise |  | Company-owned |  | Franchise
|  | (in thousands)
Revenue recognized at a point in time: |  |  |  |  |  |  |  |
Service |  | $ | 190,419 |  |  | $ | — |  |  | $ | 223,278 |  |  | $ | — |
Product |  | 43,831 |  |  | 17,818 |  |  | 56,764 |  |  | 15,068 |
Total revenue recognized at a point in time |  | $ | 234,250 |  |  | $ | 17,818 |  |  | $ | 280,042 |  |  | $ | 15,068 |
Revenue recognized over time: |  |  |  |  |  |  |  |
Royalty and other franchise fees |  | $ | — |  |  | $ | 14,736 |  |  | $ | — |  |  | $ | 12,260 |
Advertising fund fees |  | — |  |  | 7,867 |  |  | — |  |  | 6,479 |
Total revenue recognized over time |  | $ | — |  |  | $ | 22,603 |  |  | $ | — |  |  | $ | 18,739 |
Total revenue |  | $ | 234,250 |  |  | $ | 40,421 |  |  | $ | 280,042 |  |  | $ | 33,807 |
|  | Six Months Ended December 31, 2018 |  | Six Months Ended December 31, 2017
|  | Company-owned |  | Franchise |  | Company-owned |  | Franchise
|  | (in thousands)
Revenue recognized at a point in time: |  |  |  |  |  |  |  |
Service |  | $ | 398,267 |  |  | $ | — |  |  | $ | 458,908 |  |  | $ | — |
Product |  | 85,793 |  |  | 33,447 |  |  | 110,000 |  |  | 22,790 |
Total revenue recognized at a point in time |  | $ | 484,060 |  |  | $ | 33,447 |  |  | $ | 568,908 |  |  | $ | 22,790 |
Revenue recognized over time: |  |  |  |  |  |  |  |
Royalty and other franchise fees |  | $ | — |  |  | $ | 29,156 |  |  | $ | — |  |  | $ | 24,410 |
Advertising fund fees |  | — |  |  | 15,843 |  |  | — |  |  | 13,205 |
Total revenue recognized over time |  | $ | — |  |  | $ | 44,999 |  |  | $ | — |  |  | $ | 37,615 |
Total revenue |  | $ | 484,060 |  |  | $ | 78,446 |  |  | $ | 568,908 |  |  | $ | 60,405 |
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:
|  | December 31, 2018 |  | June 30, 2018 |  | Balance Sheet Classification
|  | (in thousands) |  |
Receivables from contracts with customers, net |  | $ | 17,861 |  |  | $ | 21,504 |  |  | Accounts receivable, net
Broker fees |  | $ | 15,584 |  |  | $ | 14,002 |  |  | Other assets
Deferred revenue: |  |  |  |  |  |
Current |  |  |  |  |  |
Gift card liability |  | $ | 4,613 |  |  | $ | 3,320 |  |  | Accrued expenses
Deferred franchise fees unopened salons |  | 172 |  |  | 2,306 |  |  | Accrued expenses
Deferred franchise fees open salons |  | 3,428 |  |  | 3,030 |  |  | Accrued expenses
Total current deferred revenue |  | $ | 8,213 |  |  | $ | 8,656 |  |  |
Non-current |  |  |  |  |  |
Deferred franchise fees unopened salons |  | $ | 13,472 |  |  | $ | 11,161 |  |  | Other non-current liabilities
Deferred franchise fees open salons |  | 20,112 |  |  | 18,346 |  |  | Other non-current liabilities
Total non-current deferred revenue |  | $ | 33,584 |  |  | $ | 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 |  | 2,752 |
Amortization |  | (1,158 | )
Write-offs |  | (12 | )
Balance as of December 31, 2018 |  | $ | 15,584 |
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 December 31, 2018 is as follows (in thousands):
Remainder of 2019 | $ | 1,643 |
2020 |  | 3,326 |
2021 |  | 3,238 |
2022 |  | 3,118 |
2023 |  | 2,941 |
Thereafter |  | 9,274 |
Total |  | $ | 23,540 |
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: |  |  |  |  | 0 |  |  |  |  |  |  |  |  |
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 December 31, 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 |  | $ | 223,214 |  |  | $ | — |  |  | $ | — |  |  | $ | 64 |  |  | $ | — |  |  | $ | 223,278 |
Product |  | 71,816 |  |  | — |  |  | — |  |  | 16 |  |  | — |  |  | 71,832 |
Royalties and fees |  | 13,485 |  |  | (1,225 | ) |  | 6,479 |  |  | — |  |  | — |  |  | 18,739 |
|  | 308,515 |  |  | (1,225 | ) |  | 6,479 |  |  | 80 |  |  | — |  |  | 313,849 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |
Cost of service |  | 134,850 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 134,850 |
Cost of product |  | 39,864 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 39,864 |
Site operating expenses |  | 32,119 |  |  | — |  |  | 6,479 |  |  | — |  |  | — |  |  | 38,598 |
General and administrative |  | 48,592 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 48,592 |
Rent |  | 65,473 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 65,473 |
Depreciation and amortization |  | 24,951 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 24,951 |
Total operating expenses |  | 345,849 |  |  | — |  |  | 6,479 |  |  | — |  |  | — |  |  | 352,328 |
Operating income |  | (37,334 | ) |  | (1,225 | ) |  | — |  |  | 80 |  |  | — |  |  | (38,479 | )
Other (expense) income: |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  | (2,169 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (2,169 | )
Gain from sale of salon assets to franchisees, net |  | (104 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (104 | )
Interest income and other, net |  | 2,466 |  |  | — |  |  | — |  |  | (447 | ) |  | — |  |  | 2,019 |
Income from continuing operations before income taxes |  | (37,141 | ) |  | (1,225 | ) |  | — |  |  | (367 | ) |  | — |  |  | (38,733 | )
Income tax expense |  | 76,462 |  |  | — |  |  | — |  |  | — |  |  | 4,363 |  |  | 80,825 |
Income from continuing operations |  | 39,321 |  |  | (1,225 | ) |  | — |  |  | (367 | ) |  | 4,363 |  |  | 42,092 |
Loss from discontinued operations, net of taxes |  | (6,601 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (6,601 | )
Net loss |  | $ | 32,720 |  |  | $ | (1,225 | ) |  | $ | — |  |  | $ | (367 | ) |  | $ | 4,363 |  |  | $ | 35,491 |
Net loss per share: |  |  |  |  |  |  |  |  |  |  |  |
Basic: |  |  |  |  |  |  |  |  |  |  |  |
Income from continuing operations |  | $ | 0.84 |  |  | $ | (0.03 | ) |  | $ | 0.00 |  |  | $ | (0.01 | ) |  | $ | 0.09 |  |  | $ | 0.90 |
Loss from discontinued operations |  | (0.14 | ) |  | 0.00 |  |  | 0.00 |  |  | 0.00 |  |  | 0.00 |  |  | (0.14 | )
Net loss per share, basic (1) |  | $ | 0.70 |  |  | $ | (0.03 | ) |  | $ | 0.00 |  |  | $ | (0.01 | ) |  | $ | 0.09 |  |  | $ | 0.76 |
Diluted: |  |  |  |  |  |  |  |  |  |  |  |  |
Income from continuing operations |  | $ | 0.83 |  |  | $ | (0.03 | ) |  | $ | 0.00 |  |  | $ | (0.01 | ) |  | $ | 0.09 |  |  | $ | 0.89 |
Loss from discontinued operations |  | (0.14 | ) |  | 0.00 |  |  | 0.00 |  |  | 0.00 |  |  | 0.00 |  |  | (0.14 | )
Net loss per share, diluted (1) |  | $ | 0.69 |  |  | $ | (0.03 | ) |  | $ | 0.00 |  |  | $ | (0.01 | ) |  | $ | 0.09 |  |  | $ | 0.75 |
Weighted average common and common equivalent shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | 46,821 |  |  | 46,821 |  |  | 46,821 |  |  | 46,821 |  |  | 46,821 |  |  | 46,821 |
Diluted |  | 47,314 |  |  | 47,314 |  |  | 47,314 |  |  | 47,314 |  |  | 47,314 |  |  | 47,314 |
_____________________________________________________________________________ (1)Total is a recalculation; line items calculated individually may not sum to total due to rounding. CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) For The Six Months Ended December 31, 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 |  | $ | 458,773 |  |  | $ | — |  |  | $ | — |  |  | $ | 135 |  |  | $ | — |  |  | $ | 458,908 |
Product |  | 132,756 |  |  | — |  |  | — |  |  | 34 |  |  | — |  |  | 132,790 |
Royalties and fees |  | 26,859 |  |  | (2,449 | ) |  | 13,205 |  |  | — |  |  | — |  |  | 37,615 |
|  | 618,388 |  |  | (2,449 | ) |  | 13,205 |  |  | 169 |  |  | — |  |  | 629,313 |
Operating expenses: |  |  |  |  |  |  |  |  |  |  |  |
Cost of service |  | 274,686 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 274,686 |
Cost of product |  | 70,026 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 70,026 |
Site operating expenses |  | 65,422 |  |  | — |  |  | 13,205 |  |  | — |  |  | — |  |  | 78,627 |
General and administrative |  | 83,758 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 83,758 |
Rent |  | 107,889 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 107,889 |
Depreciation and amortization |  | 37,206 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 37,206 |
Total operating expenses |  | 638,987 |  |  | — |  |  | 13,205 |  |  | — |  |  | — |  |  | 652,192 |
Operating income |  | (20,599 | ) |  | (2,449 | ) |  | — |  |  | 169 |  |  | — |  |  | (22,879 | )
Other (expense) income: |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  | (4,307 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (4,307 | )
Gain from sale of salon assets to franchisees, net |  | 18 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 18 |
Interest income and other, net |  | 3,371 |  |  | — |  |  | — |  |  | (932 | ) |  | — |  |  | 2,439 |
Income from continuing operations before income taxes |  | (21,517 | ) |  | (2,449 | ) |  | — |  |  | (763 | ) |  | — |  |  | (24,729 | )
Income tax expense |  | 71,630 |  |  | — |  |  | — |  |  | — |  |  | 3,636 |  |  | 75,266 |
Income from continuing operations |  | 50,113 |  |  | (2,449 | ) |  | — |  |  | (763 | ) |  | 3,636 |  |  | 50,537 |
Loss from discontinued operations, net of taxes |  | (40,368 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (40,368 | )
Net loss |  | $ | 9,745 |  |  | $ | (2,449 | ) |  | $ | — |  |  | $ | (763 | ) |  | $ | 3,636 |  |  | $ | 10,169 |
Net loss per share: |  |  |  |  |  |  |  |  |  |  |  |
Basic: |  |  |  |  |  |  |  |  |  |  |  |
Income from continuing operations |  | $ | 1.07 |  |  | $ | (0.05 | ) |  | $ | 0.00 |  |  | $ | (0.02 | ) |  | $ | 0.08 |  |  | $ | 1.08 |
Loss from discontinued operations |  | (0.86 | ) |  | 0.00 |  |  | 0.00 |  |  | 0.00 |  |  | 0.00 |  |  | (0.86 | )
Net loss per share, basic (1) |  | $ | 0.21 |  |  | $ | (0.05 | ) |  | $ | 0.00 |  |  | $ | (0.02 | ) |  | $ | 0.08 |  |  | $ | 0.22 |
Diluted: |  |  |  |  |  |  |  |  |  |  |  |
Income from continuing operations |  | $ | 1.07 |  |  | $ | (0.05 | ) |  | $ | 0.00 |  |  | $ | (0.02 | ) |  | $ | 0.08 |  |  | $ | 1.07 |
Loss from discontinued operations |  | (0.86 | ) |  | 0.00 |  |  | 0.00 |  |  | 0.00 |  |  | 0.00 |  |  | (0.86 | )
Net loss per share, diluted (1) |  | $ | 0.21 |  |  | $ | (0.05 | ) |  | $ | 0.00 |  |  | $ | (0.02 | ) |  | $ | 0.08 |  |  | $ | 0.22 |
Weighted average common and common equivalent shares outstanding: |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | 46,719 |  |  | 46,719 |  |  | 46,719 |  |  | 46,719 |  |  | 46,719 |  |  | 46,719 |
Diluted |  | 47,053 |  |  | 47,053 |  |  | 47,053 |  |  | 47,053 |  |  | 47,053 |  |  | 47,053 |
_____________________________________________________________________________ (1)Total is a recalculation; line items calculated individually may not sum to total due to rounding.

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