Regis Corporation Adopts Tax Benefits Preservation Plan
January 30 2024 - 6:30AM
Business Wire
Regis Corporation (NasdaqGM:RGS) (“Regis” or the “Company”),
today announced that its Board of Directors adopted a tax benefits
preservation plan (the “Plan”) designed to preserve the
availability of its net operating loss carryforwards (“NOLs”) and
certain other tax attributes under the Internal Revenue Code (the
“Code”).
As of September 30, 2023, Regis had approximately $646 million
of U.S. federal NOLs. These NOLs, the majority of which are not
subject to any expiration date, represent a valuable asset to the
company and are available to offset the Company’s current or future
taxable income.
Regis’ ability to use these NOLs (as well as certain other tax
attributes) would be substantially limited if Regis were to
experience an “ownership change” within the meaning of Section 382
of the Code. Generally, an “ownership change” occurs if the
percentage of the Regis’ common shares owned by one or more of its
“5-percent stockholders” (determined under Section 382 of the Code)
increases by more than 50% over a rolling three-year period. The
Plan is designed to protect shareholder value by mitigating the
likelihood of an “ownership change” that would result in
significant limitations on Regis’ ability to use its NOLs or
certain other tax attributes to offset current or future taxable
income.
The Plan is similar to those adopted by other public companies
with significant NOLs and other tax attributes that may be limited
by the application of Section 382 of the Code. The Plan is not
designed to prevent any action that the Board determines to be in
the best interests of Regis and its shareholders, and will help to
ensure that the Board remains in the best position to discharge its
fiduciary duties and protect these valuable assets.
The Plan provides, subject to certain exceptions, that if any
person or group acquires 4.95% or more of Regis’ outstanding common
shares, there would be a triggering event potentially resulting in
significant dilution in the voting power and economic ownership of
that person or group. As part of the Plan, the Board declared a
dividend of one preferred stock purchase right, which are referred
to as “rights,” for each outstanding common share. The dividend
will be payable to holders of record as of the close of business on
February 9, 2024. Any common shares issued after the record date
will be issued together with the rights. The rights will initially
trade with Regis’ common shares and will generally become
exercisable if a person or group, without the approval of the
Board, acquires 4.95% or more of Regis’s outstanding common shares.
Under the Plan, any person or group which currently owns 4.95% or
more of Regis’s outstanding common shares may continue to own its
common shares but may not acquire any additional shares without
triggering the Plan (except as otherwise specified in the Plan,
including the right to acquire up to 1% of additional common
shares). If the rights become exercisable, all holders of rights
(other than the triggering person or group) will be entitled to
purchase common shares at a 50% discount or Regis may exchange each
right held by such holders for one common share. Rights held by the
triggering person or group will become null and void and will not
be exercisable.
The Plan will continue in effect until January 29, 2025, unless
earlier terminated or the rights are earlier exchanged or redeemed
by the Board of Directors.
Additional information with respect to the Plan will be
contained in the Current Report on Form 8-K that the Company is
filing with the Securities and Exchange Commission (the
“SEC”). A copy of the Form 8-K can be
obtained at the SEC’s Internet website at www.sec.gov.
About Regis Corporation.
Regis Corporation (NasdaqGM: RGS) is a leader in the haircare
industry. As of September 30, 2023, the Company franchised or owned
4,811 locations. Regis’ franchised and corporate locations operate
under concepts such as Supercuts®, SmartStyle®, Cost Cutters®,
Roosters® and First Choice Haircutters®. For additional information
about the Company, including a reconciliation of certain non-GAAP
financial information and certain supplemental financial
information, please visit the Investor Relations section of the
corporate website at www.regiscorp.com.
Forward-Looking
Statements
This 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, including statements
with respect to the Company’s net operating losses, tax attributes
and impact of the Plan. 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, “will,” “may,”
“believe,” “project,” “forecast,” “expect,” “estimate,”
“anticipate,” “intend,” “looks forward to” 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 our ability to
comply with applicable national stock exchange listing
requirements, potential timing and outcomes of suspension and
delisting procedures and future trading or quotation of our common
stock, and other potential factors that could affect future
financial and operating results as set forth under Item 1A of our
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 Securities and
Exchange Commission on Forms 10-K, 10-Q and 8-K and Proxy
Statements on Schedule 14A.
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REGIS CORPORATION Kersten Zupfer
investorrelations@regiscorp.com
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