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QUARTERLY FINANCIAL DATA (UNAUDITED) | 12 Months Ended
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Jun. 30, 2020
Quarterly Financial Information Disclosure [Abstract] |
QUARTERLY FINANCIAL DATA (UNAUDITED) | QUARTERLY FINANCIAL DATA (UNAUDITED) Summarized quarterly data for fiscal years 2020 and 2019 follows:
|  | Quarter Ended |  |  |  |  |  |  |  |
|  | September 30 |  | December 31 |  | March 31 (1) |  | June 30 (2) |  | Year Ended
|  | (Dollars in thousands, except per share amounts) |  |  |  |  |  |  |  |
2020 |  |  |  |  |  |  |  |  |  |
Revenues |  | $ | 247,038 |  |  | $ | 208,765 |  |  | $ | 153,783 |  |  | $ | 60,143 |  |  | $ | 669,729 |
Cost of service and product revenues, excluding depreciation and amortization |  | 116,809 |  |  | 94,616 |  |  | 76,496 |  |  | 19,056 |  |  | 306,977 |
Operating loss |  | (9,906) |  |  | (7,466) |  |  | (59,399) |  |  | (68,567) |  |  | (145,338) |
Loss from continuing operations |  | (14,178) |  |  | (16,520) |  |  | (67,842) |  |  | (73,654) |  |  | (172,194) |
Income from discontinued operations |  | 373 |  |  | 79 |  |  | 301 |  |  | 79 |  |  | 832 |
Net loss |  | (13,805) |  |  | (16,441) |  |  | (67,541) |  |  | (73,575) |  |  | (171,362) |
Loss from continuing operations per share, basic (4) |  | (0.39) |  |  | (0.46) |  |  | (1.89) |  |  | (2.05) |  |  | (4.79) |
Income from discontinued operations per share, basic (4) |  | 0.01 |  |  | — |  |  | 0.01 |  |  | — |  |  | 0.02 |
Net loss per share, basic (4) |  | (0.38) |  |  | (0.46) |  |  | (1.88) |  |  | (2.05) |  |  | (4.77) |
Loss from continuing operations per share, diluted (4) |  | (0.39) |  |  | (0.46) |  |  | (1.89) |  |  | (2.05) |  |  | (4.79) |
Income from discontinued operations per share, diluted (4) |  | 0.01 |  |  | — |  |  | 0.01 |  |  | — |  |  | 0.02 |
Net loss per share, diluted (4) |  | (0.38) |  |  | (0.46) |  |  | (1.88) |  |  | (2.05) |  |  | (4.77) |
|  | Quarter Ended |  |  |  |  |  |  |  |
|  | September 30 |  | December 31 |  | March 31 (3) |  | June 30 |  | Year Ended
|  | (Dollars in thousands, except per share amounts) |  |  |  |  |  |  |  |
2019 |  |  |  |  |  |  |  |  |  |
Revenues |  | $ | 287,835 |  |  | $ | 274,671 |  |  | $ | 258,343 |  |  | $ | 248,190 |  |  | $ | 1,069,039 |
Cost of service and product revenues, excluding depreciation and amortization |  | 153,678 |  |  | 151,281 |  |  | 142,799 |  |  | 133,885 |  |  | 581,643 |
Operating income (loss) |  | 3,429 |  |  | (1,551) |  |  | (22,162) |  |  | (1,835) |  |  | (22,119) |
(Loss) income from continuing operations |  | (463) |  |  | 417 |  |  | (14,811) |  |  | (5,265) |  |  | (20,122) |
(Loss) income from discontinued operations |  | (264) |  |  | 6,113 |  |  | 178 |  |  | (131) |  |  | 5,896 |
Net (loss) income |  | (727) |  |  | 6,530 |  |  | (14,633) |  |  | (5,396) |  |  | (14,226) |
(Loss) income from continuing operations per share, basic (4) |  | (0.01) |  |  | 0.01 |  |  | (0.37) |  |  | (0.14) |  |  | (0.48) |
(Loss) income from discontinued operations per share, basic (4) |  | (0.01) |  |  | 0.14 |  |  | — |  |  | — |  |  | 0.14 |
Net (loss) income per share, basic (4) |  | (0.02) |  |  | 0.15 |  |  | (0.36) |  |  | (0.14) |  |  | (0.34) |
(Loss) income from continuing operations per share, diluted (4) |  | (0.01) |  |  | 0.01 |  |  | (0.37) |  |  | (0.14) |  |  | (0.48) |
(Loss) income from discontinued operations per share, diluted (4) |  | (0.01) |  |  | 0.14 |  |  | — |  |  | — |  |  | 0.14 |
Net (loss) income per share, diluted (4) |  | (0.02) |  |  | 0.15 |  |  | (0.36) |  |  | (0.14) |  |  | (0.34) |
_______________________________________________________________________________ (1)During the third quarter of fiscal year 2020, the Company recorded a $40.2 million goodwill impairment charge related to the Company-owned reporting unit (see revision explanation below). (2)During the fourth quarter of fiscal year 2020, government-mandated salon closures in response to the COVID-19 pandemic significantly reduced operating income. Additionally, the economic disruption caused by COVID-19 triggered a $22.6 million long-lived asset impairment charge. (3)During the third quarter of fiscal year 2019, the Company recorded a $20.7 million restructuring charge related to TBG mall locations. The reserve was a non-cash charge to reserve for notes and receivables due from TBG. (4)Total is an annual recalculation; line items calculated quarterly may not sum to total. Line items may not sum due to rounding. Revision of Second and Third Quarter 2020 Unaudited Results: During the fourth quarter of 2020, the Company identified an error in the calculation of the goodwill derecognition associated with the sale of salons to franchisees in the second quarter and third quarter. In the second quarter, goodwill derecognition was understated by $6.7 million, resulting in the loss from the sale of salons to franchisees and net loss being understated and goodwill being overstated by $6.7 million. During the third quarter, goodwill derecognition was overstated by $2.35 million. As of March 31, 2020, the Company fully impaired its remaining Company-owned goodwill with the amount of goodwill impairment being overstated by $4.4 million in the third quarter. The Company assessed the applicable guidance issued by the Securities and Exchange Commission (SEC) and the Financial Accounting Standards Board (FASB) and concluded these misstatements were not material, individually or in the aggregate, to the Company’s Unaudited Condensed Consolidated Financial Statements for the aforementioned interim periods. However, to facilitate comparisons among periods, the company has decided to revise its previously issued second and third quarter unaudited condensed consolidated financial information.
|  | Three months ended December 31, 2019 |  |  |  |
|  | As Previously Reported |  | Adjustments (1) |  | As Revised
|  | (Dollars in thousands, except per share amounts) |  |  |  |
Loss from sale of salon assets to franchisees, net (a) |  | $ | (5,692) |  |  | $ | (6,715) |  |  | $ | (12,407) |
Interest income and other, net (b) |  | 4,346 |  |  | (1,477) |  |  | 2,869 |
Loss from continuing operations before income taxes |  | (10,276) |  |  | (8,192) |  |  | (18,468) |
Income tax benefit |  | 795 |  |  | 1,153 |  |  | 1,948 |
Net loss |  | (9,402) |  |  | (7,039) |  |  | (16,441) |
Net loss per share |  | (0.26) |  |  | (0.20) |  |  | (0.46) |
Comprehensive loss |  | (8,861) |  |  | (7,039) |  |  | (15,900) |
Goodwill as of December 31, 2019 |  | 293,019 |  |  | (6,715) |  |  | 286,304 |
Other assets as of December 31, 2019 |  | 38,144 |  |  | 1,477 |  |  | 36,667 |
Other non-current liabilities as of December 31, 2019 |  | 95,979 |  |  | (1,153) |  |  | 94,826 |
|  | Three months ended March 31, 2020 |  |  |  |
|  | As Previously Reported |  | Adjustments (2) |  | As Revised
|  | (Dollars in thousands, except per share amounts) |  |  |  |
Rent expense (d) |  | $ | 19,243 |  |  | $ | (578) |  |  | $ | 18,665 |
Goodwill impairment (c) |  | 44,529 |  |  | (4,365) |  |  | 40,164 |
Operating loss |  | (64,342) |  |  | 4,943 |  |  | (59,399) |
Loss from sale of salon assets to franchisees, net |  | (10,208) |  |  | 2,350 |  |  | (7,858) |
Interest income and other, net |  | (1,329) |  |  | 1,477 |  |  | 148 |
Loss from continuing operations before income taxes |  | (77,591) |  |  | 8,770 |  |  | (68,821) |
Income tax benefit |  | 2,253 |  |  | (1,274) |  |  | 979 |
Net loss |  | (75,037) |  |  | 7,496 |  |  | (67,541) |
Net loss per share |  | (2.10) |  |  | 0.22 |  |  | (1.88) |
Comprehensive loss |  | (77,519) |  |  | 7,496 |  |  | (70,023) |
Short term lease liability as of March 31, 2020 |  | 149,482 |  |  | (578) |  |  | 148,904 |
Other non-current liabilities as of March 31, 2020 |  | 92,698 |  |  | 121 |  |  | 92,819 |
|  | Six months ended December 31, 2019 |  |  |  |
|  | As Previously Reported |  | Adjustments (1) |  | As Revised
|  | (Dollars in thousands, except per share amounts) |  |  |  |
Loss from sale of salon assets to franchisees, net |  | $ | (11,552) |  |  | $ | (6,715) |  |  | $ | (18,267) |
Interest income and other, net |  | 4,517 |  |  | (1,477) |  |  | 3,040 |
Loss from continuing operations before income taxes |  | (27,310) |  |  | (8,192) |  |  | (35,502) |
Income tax benefit |  | 3,651 |  |  | 1,153 |  |  | 4,804 |
Net loss |  | (23,207) |  |  | (7,039) |  |  | (30,246) |
Net loss per share |  | (0.64) |  |  | (0.20) |  |  | (0.84) |
Comprehensive loss |  | (23,069) |  |  | (7,039) |  |  | (30,108) |
|  | Nine months ended March 31, 2020 |  |  |  |
|  | As Previously Reported |  | Adjustments (2) |  | As Revised
|  | (Dollars in thousands, except per share amounts) |  |  |  |
Rent expense |  | $ | 64,002 |  |  | $ | (578) |  |  | $ | 63,424 |
Goodwill impairment |  | 44,529 |  |  | (4,365) |  |  | 40,164 |
Operating loss |  | (81,714) |  |  | 4,943 |  |  | (76,771) |
Loss from sale of salon assets to franchisees, net |  | (21,760) |  |  | (4,365) |  |  | (26,125) |
Interest income and other, net |  | 3,188 |  |  | — |  |  | 3,188 |
Loss from continuing operations before income taxes |  | (104,901) |  |  | 578 |  |  | (104,323) |
Income tax benefit |  | 5,904 |  |  | (121) |  |  | 5,783 |
Net loss |  | (98,244) |  |  | 457 |  |  | (97,787) |
Net loss per share |  | (2.73) |  |  | 0.01 |  |  | (2.72) |
Comprehensive loss |  | (100,588) |  |  | 457 |  |  | (100,131) |
_______________________________________________________________________________ (1) The Company revised the amounts originally reported for the second quarter of fiscal year 2020 for the following items: (a) Recorded an additional $6.7 million loss from the sale of salons to franchisees, net that should have been recorded in the second quarter. The error in the Company's goodwill derecognition estimation calculation was identified in the fourth quarter. The goodwill derecognition was understated which understated the loss of the sale of salons to franchisees, net. The error impacted the three and six months ended December 31, 2019. (b) Recorded a reduction to the gain on the sale of a building, included in interest income and other, net related to the sale of the Company's headquarters which occurred in the second quarter. Previously, the Company identified this error during the third quarter and recorded and disclosed the correction in the third quarter as an out-of-period adjustment. The correction applies to the three and six months ended December 31, 2019. (2) The Company revised the amounts originally reported for the third quarter of fiscal year 2020 for the following items: (c) During the third quarter goodwill derecognition was overstated by $2.4 million. As of March 31, 2020 the Company impaired its remaining Company-owned goodwill, with the amount of goodwill impairment being overstated by $4.4 million. As the second quarter error which understated goodwill derecognition was not identified until the fourth quarter, goodwill impairment and loss from the sale of salons to franchisees, net were misstated in the third quarter. The Company recorded a $4.4 million decrease to goodwill impairment and a $2.4 million decrease to loss from the sale of salon assets to franchisees, net to correct the error. Net loss for the nine months ended March 31, 2020 was not misstated. However, goodwill impairment and the loss from the sales of salons to franchisees, net were misstated in the nine months ended March 31, 2020 with goodwill impairment overstated by $4.4 million and loss from the sale of salons to franchisees, net understated by $4.4 million. (d) Adjusted third quarter rent expense to include a $0.6 million benefit to rent expense that related to leases signed in the third quarter, but not identified until the fourth quarter. The net loss for the three and nine months were both impacted by the misstatement.

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- Definition The entire disclosure for quarterly financial data. Includes, but is not limited to, tabular presentation of financial information for fiscal quarters, effect of year-end adjustments, and an explanation of matters or transactions that affect comparability of the information. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 270 -URI http://asc.fasb.org/topic&trid=2126967 + Details
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