Regis Corporation (NYSE: RGS), a leader in the haircare
industry, today announced financial results for the first fiscal
quarter ended September 30, 2022.
Financial Highlights:
First quarter 2023 compared to first quarter 2022:
- System-wide same-store sales increased 4.5% in the
quarter.
- Operating profit improved $7.4 million to $2.5 million, from an
operating loss of $4.9 million. The last time Regis reported
positive operating profit was September 30, 2018.
- Positive EBITDA of $6.6 million compared to a loss of $5.6
million; adjusted EBITDA was $3.8 million compared to a loss of
$5.0 million.
- Franchise EBITDA was $7.9 million compared to a loss of $5.0
million; adjusted Franchise EBITDA of $5.0 million compared to a
loss of $3.5 million, and was positive for the fourth quarter in a
row.
- Net income of $1.5 million improved $11.9 million from a loss
of $10.4 million; adjusted net loss of $1.1 million, a significant
improvement compared to a $9.3 million loss.
- Successfully renegotiated debt including amendment to our
credit agreement and extension of the maturity date from March 2023
to August 2025.
Matthew Doctor, Regis Corporation’s President and Chief
Executive Officer, commented: “We began the year positively
delivering growth in key operating metrics that demonstrate further
progress on our strategy. To this end, system-wide same stores
sales grew 4.5%, our adjusted EBITDA continued to increase, and we
saw a $7.4 million improvement in operating profit reflecting our
successful transformation to a franchise business. Our priorities
in the year ahead are to build upon the work we've done to improve
our operating platform and to provide our franchisees with the
tools required to profitably drive sales and productivity at the
salon level. The year will see us invest in marketing activities to
increase customer traffic and intensify our stylist recruitment and
education efforts. This, along with the continued discipline from
which we operate, is expected to allow us to deliver continuous
improvement in operating performance, improved liquidity, and
generate increased value for our stakeholders.”
First Quarter Fiscal Year 2023 Consolidated Results
Three Months Ended September
30,
(Dollars in millions)
2022
2021
Consolidated revenue
$
61.9
$
76.8
System-wide revenue (1)
316.0
316.3
System-wide same-store sales comps
4.5
%
23.2
%
Operating income (loss)
$
2.5
$
(4.9
)
Loss from continuing operations
(1.8
)
(9.3
)
Diluted loss per share from continuing
operations
(0.04
)
(0.25
)
Income (loss) from discontinued
operations
3.3
(1.1
)
Net income (loss)
1.5
(10.4
)
Diluted net income (loss) per share
0.03
(0.28
)
EBITDA (2)
6.6
(5.6
)
As adjusted (2)
Operating income (loss), as adjusted
$
3.3
$
(5.0
)
Loss from continuing operations, as
adjusted
(1.1
)
(9.3
)
Diluted loss per share from continuing
operations, as adjusted
(0.02
)
(0.25
)
Net loss, as adjusted
(1.1
)
(9.3
)
Diluted net loss per share, as
adjusted
(0.02
)
(0.25
)
EBITDA, as adjusted
3.8
(5.0
)
_______________________________________________________________________________
(1)
Represents total sales within the
system.
(2)
See GAAP to non-GAAP reconciliations,
within the attached section titled "Non-GAAP Reconciliations".
Revenue
Total revenue in the first quarter of $61.9 million decreased
$14.9 million, driven primarily by exiting company-owned salons
that generated significant revenue, but were loss generating and
exiting product sales. Partially offsetting the decline in revenue
was an increase in royalty revenue due to higher average royalty
rates.
Adjusted EBITDA
First quarter adjusted EBITDA of $3.8 million improved $8.8
million, versus an adjusted EBITDA loss of $5.0 million in the same
period last year. The improvement was driven by an increase in
average royalty revenues; lower general and administrative expense;
and the wind down of loss-generating company-owned salons during
the last twelve months.
Net Income from Continuing Operations
Regis reported a first quarter 2023 net loss from continuing
operations of $1.8 million, or $0.04 loss per diluted share,
compared to a net loss from continuing operations of $9.3 million,
or $0.25 loss per diluted share, in the first quarter 2022. The
year-over-year improvement in net loss from continuing operations
was driven primarily by an increase in average royalty revenues;
lower general and administrative expense; and the Company winding
down loss-generating company-owned salons during the last twelve
months.
Net Income
The Company reported a first quarter 2023 net income of $1.5
million, or $0.03 per diluted share, compared to a net loss of
$10.4 million, or $0.28 loss per diluted share for the same period
last year. The net income in the quarter was driven by the gain
from discontinued operations of $3.3 million in the quarter. The
net income improved year-over-year due to the gain from
discontinued operations, higher average royalty revenues and lower
general and administrative expense.
First Quarter Fiscal Year 2023 Segment Results
Franchise
Three Months Ended September
30,
Increase (Decrease)
(Dollars in millions) (1)
2022
2021
Royalties
$
17.2
$
16.6
$
0.6
Fees
2.6
2.3
0.3
Product sales to franchisees
0.4
8.0
(7.6
)
Advertising fund contributions
8.3
8.1
0.2
Franchise rental income
30.3
33.8
(3.5
)
Total Franchise revenue
$
58.8
$
68.8
$
(10.0
)
Franchise same-store sales comps
4.6
%
23.7
%
EBITDA, as adjusted
$
5.0
$
(3.5
)
$
8.5
as a percent of revenue
8.5
%
(5.0
)%
as a percent of adjusted revenue (2)
24.7
%
(12.9
)%
Total Franchise salons
5,323
5,587
(264
)
as a percent of total Franchise and
Company-owned salons
98.2
%
96.9
%
_______________________________________________________________________________
(1)
Variances calculated on amounts shown in
millions may result in rounding differences.
(2)
Adjusted revenue excludes non-margin
revenue. See Non-GAAP reconciliation.
Franchise Revenue
First quarter Franchise revenue was $58.8 million, a $10.0
million, or 14.5% decrease compared to the prior year quarter.
Royalties were $17.2 million, a $0.6 million, or 3.6% increase,
versus the same period last year. The increase in royalties is due
to higher average royalty rates, partially offset by a decrease in
franchise salon count. Product sales to franchisees of $0.4 million
decreased $7.6 million, or 95.0%, as a result of the transition out
of the wholesale product business.
Adjusted EBITDA
Franchise adjusted EBITDA of $5.0 million improved $8.5 million
year-over-year primarily due to an increase in average royalty
revenues and a decrease in general and administrative expense.
Company-Owned Salons
Three Months Ended September
30,
(Decrease) Increase
(Dollars in millions) (1)
2022
2021
Total Company-owned salon revenue
$
3.1
$
8.0
$
(4.9
)
Company-owned same-store sales comps
(3.5
)%
6.5
%
EBITDA, as adjusted
$
(1.2
)
$
(1.6
)
$
0.4
as a percent of revenue
(38.7
)%
(19.4
)%
Total Company-owned salons
95
179
(84
)
as a percent of total Franchise and
Company-owned salons
1.8
%
3.1
%
_______________________________________________________________________________
(1)
Variances calculated on amounts shown in
millions may result in rounding differences.
Company-Owned Salon Revenue
First quarter revenue for the Company-owned salon segment
decreased $4.9 million, versus the prior year to $3.1 million. The
year-over-year decline in revenue was expected and driven by 30
salons converted to the Company's franchise portfolio over the past
12 months and the closure of 54 unprofitable salons over the past
12 months.
Company-Owned Salon Adjusted EBITDA
First quarter adjusted EBITDA loss improved $0.4 million, or
25.0%, driven primarily by closure of unprofitable salons.
Balance Sheet and Cash
Flow
The Company ended the first quarter with $9.5 million in cash
and cash equivalents, $180.6 million in outstanding borrowings and
total liquidity of $47.8 million. Net cash used in operating
activities totaled $5.1 million, an improvement of $7.2 million
from prior year. Cash used in operations includes the annual bonus
payment.
Non-GAAP reconciliations
For GAAP to non-GAAP reconciliations, please refer to the
attached section titled "Non-GAAP Reconciliations." A complete
reconciliation of reported earnings to adjusted earnings is
included in this press release and is available on the Company’s
website at www.regiscorp.com.
Earnings Webcast
Regis Corporation will host a conference call via webcast
discussing first quarter results today, November 1, 2022, at 7:30
a.m. Central time. Interested parties are invited to participate in
the live webcast by registering for the event at
www.regiscorp.com/investor-relations.html. The webcast will include
a slide presentation. A replay of the presentation will be
available on our website at the same web address.
About Regis Corporation
Regis Corporation (NYSE:RGS) is a leader in the haircare
industry. As of September 30, 2022, the Company franchised, owned
or held ownership interests in 5,494 locations worldwide. Regis’
franchised and corporate locations operate under concepts such as
Supercuts®, SmartStyle®, Cost Cutters®, Roosters® and First Choice
Haircutters®. Regis maintains an ownership interest in Empire
Education Group in the U.S. For additional information about the
Company, including a reconciliation of certain non-GAAP financial
information and certain supplemental financial information, please
visit the Investor Information section of the corporate website at
www.regiscorp.com.
This press release contains or may contain “forward-looking
statements” within the meaning of the federal securities laws,
including statements concerning anticipated future events and
expectations that are not historical facts. These forward-looking
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. The
forward-looking statements in this document reflect management’s
best judgment at the time they are made, but all such statements
are subject to numerous risks and uncertainties, which could cause
actual results to differ materially from those expressed in or
implied by the statements herein. Such forward-looking statements
are often identified herein by use of words including, but not
limited to, “may,” “believe,” “project,” “forecast,” “expect,”
“estimate,” “anticipate,” and “plan.” In addition, the following
factors could affect the Company's actual results and cause such
results to differ materially from those expressed in
forward-looking statements. These factors include a potential
material adverse impact on our business and results of operations
as a result of the COVID-19 pandemic, including any adverse impact
from variants; consumer shopping trends and changes in manufacturer
distribution channels; changes in regulatory and statutory laws
including increases in minimum wages; laws and regulations could
require us to modify current business practices and incur increased
costs; changes in economic conditions; changes in consumer tastes,
fashion trends and consumer spending patterns; compliance with New
York Stock Exchange listing requirements; reliance on franchise
royalties and overall success of our franchisees’ salons; the
return of sales at franchise locations to pre-pandemic levels; new
merchandising strategy that utilizes third-party preferred supplier
arrangements; our franchisees' ability to attract, train and retain
talented stylists and salon leaders; the success of our
franchisees, which operate independently; our ability to manage
cyber threats and protect the security of potentially sensitive
information about our guests, franchisees, employees, vendors or
Company information; the ability of the Company to maintain a
satisfactory relationship with Walmart; marketing efforts to drive
traffic to our franchisees' salons; the successful migration of our
franchisees to the Zenoti salon technology platform; our ability to
maintain and enhance the value of our brands; reliance on
information technology systems; reliance on external vendors; the
use of social media; failure to standardize operating processes
across brands; exposure to uninsured or unidentified risks; the
effectiveness of our enterprise risk management program; compliance
with covenants in our financing arrangement, access to the existing
revolving credit facility, and we may face an accelerated
obligation to repay our indebtedness; our capital investments in
technology may not achieve appropriate returns; premature
termination of agreements with our franchisees; financial
performance of Empire Education Group, Inc.; the continued ability
of the Company to implement cost reduction initiatives and achieve
expected cost savings; continued ability to compete in our business
markets; reliance on our management team and other key personnel;
the continued ability to maintain an effective system of internal
controls over financial reporting; changes in tax exposure; the
ability to use U.S. net operating loss carryforwards; potential
litigation and other legal or regulatory proceedings could have an
adverse effect on our business; or other factors not listed above.
Additional information concerning potential factors that could
affect future financial results is set forth under Item 1A on Form
10-K. We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. However, your attention is directed to
any further disclosures made in our subsequent annual and periodic
reports filed or furnished with the SEC on Forms 10-K, 10-Q and 8-K
and Proxy Statements on Schedule 14A.
REGIS CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEET (Unaudited)
(Dollars in thousands, except
share data)
September 30,
2022
June 30, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
9,505
$
17,041
Receivables, net
12,999
14,531
Inventories, net
5,127
3,109
Other current assets
15,730
13,984
Total current assets
43,361
48,665
Property and equipment, net
12,070
12,835
Goodwill
173,057
174,360
Other intangibles, net
2,975
3,226
Right of use asset
461,579
493,749
Other assets
28,976
36,465
Total assets
$
722,018
$
769,300
LIABILITIES AND SHAREHOLDERS'
DEFICIT
Current liabilities:
Accounts payable
$
16,080
$
15,860
Accrued expenses
28,980
33,784
Short-term lease liability
98,270
103,196
Total current liabilities
143,330
152,840
Long-term debt, net
171,879
179,994
Long-term lease liability
379,915
408,445
Other non-current liabilities
56,754
58,974
Total liabilities
751,878
800,253
Commitments and contingencies
Shareholders' deficit:
Common stock, $0.05 par value; issued and
outstanding 45,536,525 and 45,510,245 common shares at September
30, 2022 and June 30, 2022, respectively
2,277
2,276
Additional paid-in capital
63,044
62,562
Accumulated other comprehensive income
8,597
9,455
Accumulated deficit
(103,778
)
(105,246
)
Total shareholders' deficit
(29,860
)
(30,953
)
Total liabilities and shareholders'
deficit
$
722,018
$
769,300
REGIS CORPORATION
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS (Unaudited)
For The Three Months Ended
September 30, 2022 And 2021
(Dollars and shares in
thousands, except per share data)
Three Months Ended September
30,
2022
2021
Revenues:
Royalties
$
17,180
$
16,602
Fees
2,553
2,327
Product sales to franchisees
443
8,008
Advertising fund contributions
8,251
8,114
Franchise rental income
30,330
33,762
Company-owned salon revenue
3,114
8,005
Total revenue
61,871
76,818
Operating expenses:
Cost of product sales to franchisees
470
7,648
General and administrative
14,361
20,784
Rent
1,753
1,747
Advertising fund expense
8,251
8,114
Franchise rent expense
30,330
33,762
Company-owned salon expense (1)
2,985
7,945
Depreciation and amortization
1,251
1,539
Long-lived asset impairment
—
163
Total operating expenses
59,401
81,702
Operating income (loss)
2,470
(4,884
)
Other expense:
Interest expense
(3,817
)
(3,127
)
Loss from sale of salon assets to
franchisees, net
—
(1,080
)
Other, net
(463
)
(239
)
Loss from operations before income
taxes
(1,810
)
(9,330
)
Income tax (expense) benefit
(28
)
48
Loss from continuing operations
(1,838
)
(9,282
)
Income (loss) from discontinued
operations
3,306
(1,096
)
Net income (loss)
$
1,468
$
(10,378
)
Net income (loss) per share:
Basic and diluted:
Loss from continuing operations
$
(0.04
)
$
(0.25
)
Income (loss) from discontinued
operations
0.07
(0.03
)
Net income (loss) per share, basic and
diluted (2)
$
0.03
$
(0.28
)
Weighted average common and common
equivalent shares outstanding:
Basic and diluted
46,054
36,850
_______________________________________________________________________________
(1)
Includes cost of service and product sold
to guests in our Company-owned salons. Excludes general and
administrative expense, rent and depreciation and amortization
related to Company-owned salons.
(2)
Total is a recalculation; line items
calculated individually may not sum to total due to rounding.
REGIS CORPORATION
CONDENSED CONSOLIDATED
STATEMENT OF CASH FLOWS (Unaudited)
For The Three Months Ended
September 30, 2022 And 2021
(Dollars in thousands)
Three Months Ended September
30,
2022
2021
Cash flows from operating activities:
Net income (loss)
$
1,468
$
(10,378
)
Adjustments to reconcile net income (loss)
to cash used in operating activities:
Gain from sale of OSP
(3,927
)
—
Depreciation and amortization
1,035
1,574
Long-lived asset impairment
—
163
Deferred income taxes
28
(258
)
Loss from sale of salon assets to
franchisees, net
—
1,080
Stock-based compensation
531
1,678
Amortization of debt discount and
financing costs
648
460
Other non-cash items affecting
earnings
481
232
Changes in operating assets and
liabilities, excluding the effects of asset sales
(5,321
)
(6,805
)
Net cash used in operating activities
(5,057
)
(12,254
)
Cash flows from investing activities:
Capital expenditures
(184
)
(1,524
)
Net proceeds from sale of OSP
3,500
—
Net cash provided by (used in) investing
activities
3,316
(1,524
)
Cash flows from financing activities:
Borrowings on credit facility
6,357
10,000
Repayments of long-term debt
(5,801
)
(1,106
)
Debt refinancing fees
(4,341
)
—
Proceeds from issuance of common stock,
net of offering costs
—
32,193
Taxes paid for shares withheld
(13
)
(255
)
Net cash (used in) provided by financing
activities
(3,798
)
40,832
Effect of exchange rate changes on cash
and cash equivalents
(166
)
(148
)
(Decrease) increase in cash, cash
equivalents, and restricted cash
(5,705
)
26,906
Cash, cash equivalents and restricted
cash:
Beginning of period
27,464
29,152
End of period
$
21,759
$
56,058
REGIS CORPORATION
Same-Store Sales
SYSTEM-WIDE SAME-STORE SALES
(1):
Three Months Ended
September 30, 2022
September 30, 2021
Service
Retail
Total
Service
Retail
Total
Supercuts
9.7
%
(8.0
)%
8.9
%
32.6
%
(1.5
)%
30.5
%
SmartStyle
1.0
(18.7
)
(3.2
)
22.6
0.2
17.0
Portfolio Brands
5.1
(10.1
)
3.6
20.9
0.9
18.5
Total
6.6
%
(13.8
)%
4.5
%
26.7
%
—
%
23.2
%
_______________________________________________________________________________
(1)
System-wide same-store sales are
calculated as the total change in sales for system-wide franchise
and company-owned locations that were open on a specific day of the
week during the current period and the corresponding prior period.
Quarterly system-wide same-store sales are the sum of the
system-wide same-store sales computed on a daily basis. Franchise
salons that do not report daily sales are excluded from same-store
sales. System-wide same-store sales are calculated in local
currencies to remove foreign currency fluctuations from the
calculation.
REGIS CORPORATION
System-Wide Location
Counts
September 30,
2022
June 30, 2022
FRANCHISE SALONS:
Supercuts
2,233
2,264
SmartStyle/Cost Cutters in Walmart
Stores
1,625
1,646
Portfolio Brands
1,325
1,344
Total North American salons
5,183
5,254
Total International Salons (1)
140
141
Total Franchise Salons
5,323
5,395
as a percent of total Franchise and
Company-owned salons
98.2
%
98.1
%
COMPANY-OWNED SALONS:
Supercuts
15
18
SmartStyle/Cost Cutters in Walmart
Stores
49
49
Portfolio Brands
31
38
Total Company-owned salons
95
105
as a percent of total Franchise and
Company-owned salons
1.8
%
1.9
%
OWNERSHIP INTEREST LOCATIONS:
Equity ownership interest locations
76
76
Grand Total, System-wide
5,494
5,576
_______________________________________________________________________________
(1)
Canadian and Puerto Rican salons are
included in the North American salon totals.
Non-GAAP Reconciliations:
We believe our presentation of non-GAAP operating income (loss),
net loss, net loss per diluted share, and other non-GAAP financial
measures provides meaningful insight into our ongoing operating
performance and an alternative perspective of our results of
operations. Presentation of the non-GAAP measures allows investors
to review our core ongoing operating performance from the same
perspective as management and the Board of Directors. These
non-GAAP financial measures provide investors an enhanced
understanding of our operations, facilitate investors’ analyses and
comparisons of our current and past results of operations and
provide insight into the prospects of our future performance. We
also believe the non-GAAP measures are useful to investors because
they provide supplemental information that research analysts
frequently use to analyze financial performance.
The method we use to produce non-GAAP results is not in
accordance with U.S. GAAP and may differ from methods used by other
companies. These non-GAAP results should not be regarded as a
substitute for corresponding U.S. GAAP measures, but instead should
be utilized as a supplemental measure of operating performance in
evaluating our business. Non-GAAP measures do have limitations as
they do not reflect certain items that may have a material impact
upon our reported financial results. As such, these non-GAAP
measures should be viewed in conjunction with our financial
statements prepared in accordance with U.S. GAAP.
Non-GAAP reconciling items for the three months ended
September 30, 2022 and 2021:
The following information is provided to give qualitative and
quantitative information related to items impacting comparability.
Items impacting comparability are not defined terms within U.S.
GAAP. Therefore, our non-GAAP financial information may not be
comparable to similarly titled measures reported by other
companies. We determine the items to consider as "items impacting
comparability" based on how management views our business, makes
financial, operating and planning decisions and evaluates the
Company's ongoing performance. The following items have been
excluded from our non-GAAP results:
- Distribution center wind down fees ("Distribution center
fees")
- Professional fees and settlements
- Severance
- Benefit from lease liability decrease in excess of previously
impaired ROUA ("Lease liability benefit")
- Lease termination fees
- Real estate fees
- Asset retirement obligation
- Long-lived asset impairment
- Discontinued operations
REGIS CORPORATION
Reconciliation Of Selected
U.S. GAAP To Non-GAAP Financial Measures
(Dollars in thousands, except
per share data)
(Unaudited)
Reconciliation of U.S. GAAP
operating income (loss) and U.S. GAAP net income (loss) to
equivalent non-GAAP measures
Three Months Ended September
30,
U.S. GAAP financial line
item
2022
2021
U.S. GAAP revenue
$
61,871
$
76,818
U.S. GAAP operating income
(loss)
$
2,470
$
(4,884
)
Non-GAAP operating expense adjustments
(1)
Distribution center fees
General and administrative
—
229
Professional fees and settlements
General and administrative
708
128
Severance
General and administrative
2
176
Lease liability benefit
Rent
(602
)
(2,431
)
Lease termination fees
Rent
458
1,340
Real estate fees
Rent
—
40
Asset retirement obligation
Depreciation and amortization
216
287
Long-lived asset impairment
Long-lived asset impairment
—
163
Total non-GAAP operating expense
adjustments
782
(68
)
Non-GAAP operating income (loss)
(1)
$
3,252
$
(4,952
)
U.S. GAAP net income (loss)
$
1,468
$
(10,378
)
Non-GAAP net loss adjustments:
Non-GAAP operating expense adjustments
782
(68
)
Income tax impact on Non-GAAP adjustments
(2)
Income taxes
—
1
Discontinued operations
(Income) loss from discontinued
operations
(3,306
)
1,096
Total non-GAAP net loss adjustments
(2,524
)
1,029
Non-GAAP net loss
$
(1,056
)
$
(9,349
)
_______________________________________________________________________________
(1)
Adjusted operating margins for the three
months ended September 30, 2022 and 2021 were 5.3% and (6.4)%,
respectively, and are calculated as non-GAAP operating income
(loss) divided by U.S. GAAP revenue for each respective period.
(2)
Based on projected statutory effective tax
rate analyses, the non-GAAP tax provision was calculated to be
approximately 0% and 1%, respectively, for the three months ended
September 30, 2022 and 2021 for all non-GAAP operating expense
adjustments.
REGIS CORPORATION
Reconciliation Of Selected
U.S. GAAP To Non-GAAP Financial Measures
(Dollars in thousands, except
per share data)
(Unaudited)
Reconciliation of U.S. GAAP
net income (loss) per diluted share to non-GAAP net loss per
diluted share
Three Months Ended September
30,
2022
2021
U.S. GAAP net income (loss) per diluted
share
$
0.032
$
(0.282
)
Distribution center fees (1)
—
0.006
Professional fees and settlements (1)
0.015
0.003
Severance (1)
—
0.005
Lease liability benefit (1)
(0.013
)
(0.065
)
Lease termination fees (1)
0.010
0.036
Real estate fees (1)
—
0.001
Asset retirement obligation (1)
0.005
0.008
Long-lived asset impairment (1)
—
0.004
Discontinued operations
(0.072
)
0.030
Non-GAAP net loss per diluted share
(2)
$
(0.023
)
$
(0.254
)
_______________________________________________________________________________
(1)
Based on projected statutory effective tax
rate analyses, the non-GAAP tax provision was calculated to be
approximately 0% for the three months ended September 30, 2022 and
1% for the three months ended September 30, 2021 for all non-GAAP
operating expense adjustments.
(2)
Total is a recalculation; line items
calculated individually may not sum to total due to rounding.
REGIS CORPORATION
Reconciliation Of Reported
U.S. GAAP Net Income (Loss) To Adjusted EBITDA, A Non-GAAP
Financial Measure
(Dollars in thousands)
(Unaudited)
Adjusted EBITDA
EBITDA represents U.S. GAAP net income
(loss) for the respective period excluding interest expense, income
taxes and depreciation and amortization expense. The Company
defines adjusted EBITDA, as EBITDA excluding identified items
impacting comparability for each respective period. For the three
months ended September 30, 2022 and 2021, the items impacting
comparability consisted of the items identified in the non-GAAP
reconciling items for the respective periods. The impacts of the
income tax provision adjustments associated with the above items
are already included in the U.S. GAAP reported net income (loss) to
EBITDA reconciliation, therefore there is no adjustment needed for
the reconciliation from EBITDA to adjusted EBITDA.
Three Months Ended September
30, 2022
Franchise
Company-owned
Consolidated (1)
Consolidated reported net income
(loss), as reported (U.S. GAAP)
$
3,063
$
(1,595
)
$
1,468
Interest expense, as reported
3,817
—
3,817
Income taxes, as reported
28
—
28
Depreciation and amortization, as
reported
950
301
1,251
EBITDA (as defined above)
$
7,858
$
(1,294
)
$
6,564
Professional fees and settlements
708
—
708
Severance
(46
)
48
2
Lease liability benefit
(305
)
(297
)
(602
)
Lease termination fees
84
374
458
Discontinued operations
(3,306
)
—
(3,306
)
Adjusted EBITDA, non-GAAP financial
measure
$
4,993
$
(1,169
)
$
3,824
Three Months Ended September
30, 2021
Franchise
Company-owned
Consolidated (1)
Consolidated reported net loss, as
reported (U.S. GAAP)
$
(9,357
)
$
(1,021
)
$
(10,378
)
Interest expense, as reported
3,127
—
3,127
Income taxes, as reported
(48
)
—
(48
)
Depreciation and amortization, as
reported
1,293
246
1,539
Long-lived asset impairment, as
reported
—
163
163
EBITDA (as defined above)
$
(4,985
)
$
(612
)
$
(5,597
)
Distribution center fees
229
—
229
Professional fees and settlements
128
—
128
Severance
176
—
176
Lease liability benefit
(86
)
(2,345
)
(2,431
)
Lease termination fees
(21
)
1,361
1,340
Real estate fees
—
40
40
Discontinued operations
1,096
—
1,096
Adjusted EBITDA, non-GAAP financial
measure
$
(3,463
)
$
(1,556
)
$
(5,019
)
_______________________________________________________________________________
(1)
Consolidated EBITDA margins for the three
months ended September 30, 2022 and 2021 were 10.6% and (7.3)%,
respectively, and are calculated as EBITDA (as defined above)
divided by U.S. GAAP revenue for each respective period.
Consolidated adjusted EBITDA margins for the three months ended
September 30, 2022 and 2021 were 6.2% and (6.5)%, respectively, and
are calculated as adjusted EBITDA (as defined above) divided by
U.S. GAAP revenue for each respective period.
REGIS CORPORATION
Reconciliation Of Reported
Franchise EBITDA As A Percent Of U.S. GAAP Revenue
To EBITDA As A Percent Of
Adjusted Revenue
(Dollars in thousands)
(Unaudited)
Three Months Ended September
30,
2022
2021
As Adjusted EBITDA
$
4,993
$
(3,463
)
U.S. GAAP revenue
58,757
68,813
As Adjusted EBITDA as a % of U.S. GAAP
revenue (1)
8.5
%
(5.0
)%
Non-margin revenue adjustments:
Franchise rental income
$
(30,330
)
$
(33,762
)
Advertising fund contributions
(8,251
)
(8,114
)
Adjusted revenue
20,176
26,937
As Adjusted EBITDA as a percent of
adjusted revenue (1)
24.7
%
(12.9
)%
_______________________________________________________________________________
(1)
Total is a recalculation; line items
calculated individually may not sum to total due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221101005287/en/
Kersten Zupfer investorrelations@regiscorp.com
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