Regis Corporation (NasdaqGM: RGS), a leader in the haircare
industry, today announced financial results for the second fiscal
quarter ended December 31, 2023. Matthew Doctor, Regis
Corporation’s President and Chief Executive Officer, commented: “In
the second quarter, we continued to stabilize and rebuild the
foundation of the Company. We were pleased to see bright spots
across all of our brands, as our top quartile salons collectively
demonstrated approximately 6% same-store-sales for the quarter with
positive traffic comps. We also reported a $4.1 million improvement
in operating income versus the same quarter last year, which
reflects our efforts to streamline the business. Despite our
progress, much work remains to position Regis, our franchisees and
our employees for sustainable, long-term growth. That includes
strengthening our operations, improving our support to our
franchisees, reducing costs where appropriate and increasing
franchisee sales and profitability. As the Board continues to
review strategic alternatives to assess the Company’s capital
structure, we are dedicated to maximizing value for all of our
stakeholders and retaining a leadership position in the global
beauty industry.”
Financial Highlights:
Second quarter fiscal 2024 compared to second quarter fiscal
2023:
- System-wide revenue of $292.4 million declined $11.0 million
from $303.4 million and system-wide same-store sales improved
1.9%;
- Operating income of $4.8 million improved $4.1 million from
$0.7 million in the 2023 second quarter;
- Franchise adjusted EBITDA of $6.4 million declined $1.1 million
from $7.5 million in the 2023 second quarter;
- Net loss from continuing operations of $1.0 million improved
$1.5 million from a net loss of $2.5 million in the 2023 second
quarter;
- Net income of $1.0 million improved $3.4 million from a net
loss of $2.4 million in the 2023 second quarter; and
- Adjusted EBITDA of $6.0 million declined $1.8 million from $7.8
million in the 2023 second quarter.
First half fiscal 2024 compared to first half fiscal
2023:
- System-wide revenue of $599.0 million declined $20.5 million
from $619.4 million and system-wide same-store sales improved
1.8%;
- Operating income of $12.2 million improved $9.0 million from
$3.2 million in the 2023 second quarter;
- Franchise adjusted EBITDA of $14.3 million improved $1.8
million from $12.5 million in the first half of 2023;
- Net income from continuing operations of $0.2 million improved
$4.6 million from a net loss of $4.4 million in the first half of
2023;
- Net income of $2.2 million improved $3.1 million from a net
loss of $0.9 million in the first half of 2023; and
- Adjusted EBITDA of $13.5 million improved $1.8 million from
$11.7 million in the first half of 2023.
Second Quarter Fiscal Year 2024
Consolidated Results
Three Months Ended December
31,
Six Months Ended December
31,
(Dollars in millions, except per share
data)
2023
2022
2023
2022
Consolidated revenue
$
51.1
$
60.0
$
104.4
$
121.8
System-wide revenue (1)
292.4
303.4
599.0
619.4
System-wide same-store sales comps
1.9
%
4.5
%
1.8
%
4.5
%
Operating income
$
4.8
$
0.7
$
12.2
$
3.2
(Loss) income from continuing
operations
(1.0
)
(2.5
)
0.2
(4.4
)
Diluted (loss) income per share from
continuing operations
(0.43
)
(1.10
)
0.08
(1.90
)
Income from discontinued operations
2.0
0.1
2.0
3.4
Net income (loss)
1.0
(2.4
)
2.2
(0.9
)
Diluted net income (loss) per share
0.43
(1.04
)
0.93
(0.41
)
Adjusted EBITDA (2)
6.0
7.8
13.5
11.7
_______________________________________________________________________________
(1)
Represents total sales within the
system.
(2)
See GAAP to non-GAAP reconciliations
within the attached section titled "Non-GAAP Reconciliations."
Consolidated Revenue
Total consolidated revenue of $51.1 million in the second
quarter 2024 and $104.4 million in the first half 2024, declined
$8.9 million and $17.4 million, respectively. The decline was
driven primarily by a reduction in non-margin franchise rental
income and the wind down of loss-generating company-owned salons
that generated significant revenue.
Operating Income
Regis reported second quarter 2024 operating income of $4.8
million, an improvement of $4.1 million compared to $0.7 million in
the second quarter 2023. The year-over-year improvement in
operating income was driven primarily by a decrease in depreciation
expense and the lapping of a $1.2 million inventory reserve charge
in the prior fiscal quarter.
Regis reported first half 2024 operating income of $12.2
million, an improvement of $9.0 million compared to $3.2 million in
the first half 2023. The year-over-year improvement in operating
income was driven primarily by our lower general and administrative
expense structure, lower depreciation expense and the lapping of a
$1.2 million inventory reserve charge in the prior fiscal year.
(Loss) Income from Continuing Operations
Regis reported second quarter 2024 net loss from continuing
operations of $1.0 million, or $0.43 diluted loss per share from
continuing operations, compared to a net loss from continuing
operations of $2.5 million, or $1.10 diluted loss per share from
continuing operations, in the second quarter 2023. Regis reported
first half 2024 net income from continuing operations of $0.2
million, or $0.08 diluted income per share from continuing
operations, compared to a net loss from continuing operations of
$4.4 million, or $1.90 diluted loss per share from continuing
operations, in the first half 2023. The year-over-year improvement
in both fiscal 2024 periods was driven primarily by an increase in
operating income partially offset by an increase in interest
expense.
Net Income (Loss)
The Company reported second quarter 2024 net income of $1.0
million, or $0.43 diluted income per share, compared to a net loss
of $2.4 million, or $1.04 loss per diluted share, for the same
period last year. The Company reported first half 2024 net income
of $2.2 million, or $0.93 diluted income per share, compared to a
net loss of $0.9 million, or $0.41 loss per diluted share, for the
first half 2023. The year-over-year improvement in net income in
both fiscal 2024 periods was driven primarily by an increase in
operating income partially offset by an increase in interest
expense.
Adjusted EBITDA
Second quarter adjusted EBITDA of $6.0 million declined $1.8
million, compared to adjusted EBITDA of $7.8 million in the same
period last year. The decline is primarily due to the Company
receiving a $1.1 million grant from the state of North Carolina
related to COVID-19 relief in the second quarter of fiscal year
2023.
First half adjusted EBITDA of $13.5 million improved $1.8
million, versus adjusted EBITDA of $11.7 million in the same period
last year. The improvement is primarily driven by our lower general
and administrative expense structure, partially offset by the
Company receiving a $1.1 million grant from the state of North
Carolina related to COVID-19 relief in the second quarter of fiscal
year 2023.
Second Quarter Fiscal Year 2024 Segment
Results
Franchise
Three Months Ended December
31,
(Decrease)
Six Months Ended December
31,
Increase (Decrease)
(Dollars in millions) (1)
2023
2022
2023
2022
Royalties
$
15.8
$
16.2
$
(0.4
)
$
32.3
$
33.3
$
(1.0
)
Fees
2.5
3.2
(0.7
)
5.1
5.8
(0.7
)
Product sales to franchisees
0.1
1.1
(1.0
)
0.5
1.6
(1.1
)
Advertising fund contributions
6.8
8.0
(1.2
)
14.0
16.2
(2.2
)
Franchise rental income
24.1
28.9
(4.8
)
48.8
59.2
(10.4
)
Total Franchise revenue
$
49.3
$
57.4
$
(8.1
)
$
100.7
$
116.1
$
(15.4
)
Franchise same-store sales comps
1.9
%
4.5
%
1.8
%
4.6
%
Franchise adjusted EBITDA
$
6.4
$
7.5
$
(1.1
)
$
14.3
$
12.5
$
1.8
as a percent of revenue
12.9
%
13.1
%
14.2
%
10.8
%
as a percent of adjusted revenue (2)
34.7
%
36.7
%
37.8
%
30.8
%
Total Franchise salons
4,651
5,196
(545
)
as a percent of total Franchise and
Company-owned salons
98.8
%
98.6
%
_______________________________________________________________________________
(1)
Variances calculated on amounts shown in
millions may result in rounding differences.
(2)
Adjusted revenue excludes non-margin
revenue. See GAAP to non-GAAP reconciliations within the attached
section titled "Non-GAAP Reconciliations."
Franchise Revenue
Second quarter franchise revenue was $49.3 million, an $8.1
million, or 14.1% decrease compared to the prior year quarter.
First half franchise revenue was $100.7 million, a $15.4 million,
or 13.3% decline compared to the first half of the prior year.
Non-margin franchise rental income was the primary driver of the
decline in both periods due to fewer franchise salons in the
current year.
Royalties were $15.8 million and $32.3 million, a $0.4 million
and $1.0 million, or 2.5% and 3.0% decrease for the second quarter
and first half 2024, versus the same periods last year due to fewer
franchise salons.
Franchise Adjusted EBITDA
Second quarter franchise adjusted EBITDA of $6.4 million
declined $1.1 million year-over-year, primarily due to the decline
in royalties and fees.
First half franchise adjusted EBITDA of $14.3 million improved
$1.8 million year-over-year. The increase is due to lower general
and administrative expense, partially offset by lower royalties and
fees.
Company-Owned Salons
Three Months Ended December
31,
(Decrease)
Six Months Ended December
31,
(Decrease) Increase
(Dollars in millions) (1)
2023
2022
2023
2022
Total Company-owned salon revenue
$
1.8
$
2.6
$
(0.8
)
$
3.7
$
5.7
$
(2.0
)
Company-owned salon adjusted EBITDA
$
(0.3
)
$
0.3
$
(0.6
)
$
(0.8
)
$
(0.9
)
$
0.1
as a percent of revenue
(16.7
)%
11.5
%
(21.6
)%
(15.8
)%
Total Company-owned salons
58
75
(17
)
as a percent of total Franchise and
Company-owned salons
1.2
%
1.4
%
______________________________________________________________________
(1)
Variances calculated on amounts shown in
millions may result in rounding differences.
Company-Owned Salon Revenue
Second quarter revenue for the Company-owned salon segment
declined $0.8 million versus the prior year to $1.8 million. First
half revenue for the Company-owned salon segment declined $2.0
million versus the prior year to $3.7 million. The year-over-year
decline in revenue for both periods was expected and driven by the
closure of 17 loss generating company-owned salons over the past
twelve months.
Company-Owned Salon Adjusted EBITDA
Second quarter Company-owned salon adjusted EBITDA declined $0.6
million year-over-year, due primarily to the Company receiving a
$1.1 million grant from the state of North Carolina related to
COVID-19 relief in the second quarter of fiscal year 2023.
Excluding the $1.1 million grant, Company-owned salon adjusted
EBITDA improved $1.0 million year-over-year due to fewer loss
generating Company-owned salons.
First half company-owned salon adjusted EBITDA loss remained
consistent year-over-year. Excluding the $1.1 million grant from
the state of North Carolina in fiscal year 2023, adjusted EBITDA
improved due to the closure of 17 loss generating company-owned
salons over the past twelve months.
Balance Sheet and Cash
Flow
The Company ended the second quarter of fiscal year 2024 with
$7.2 million in cash and cash equivalents, $188.9 million in
outstanding borrowings and total liquidity of $38.1 million. Net
cash used in operating activities for the six months ended December
31, 2023 totaled $6.9 million, an improvement of $0.1 million from
the six months ended prior year.
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 second quarter results today, January 31, 2024, 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 (NasdaqGM:RGS) is a leader in the haircare
industry. As of December 31, 2023, the Company franchised or owned
4,709 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.
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,” “will,” “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 changes in consumer shopping trends and changes in
manufacturer distribution channels; laws and regulations could
require us to modify current business practices and incur increased
costs; our potential responsibility for Empire Education Group,
Inc.'s liabilities; changes in general economic environment;
changes in consumer tastes, hair product innovation, fashion trends
and consumer spending patterns; compliance with listing
requirements; reliance on franchise royalties and overall success
of our franchisees’ salons; our salons' dependence on a third-party
supplier agreement for merchandise; our franchisees' ability to
attract, train and retain talented stylists and salon leaders; the
success of our franchisees, which operate independently; data
security and privacy compliance and 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; the effectiveness of our enterprise risk
management program; ability to generate sufficient cash flow to
satisfy our debt service obligations; compliance with covenants in
our financing arrangement, access to the existing revolving credit
facility, and acceleration of our obligation to repay our
indebtedness; the completion and/or results of the strategic
alternatives review; limited resources to invest in our business;
premature termination of agreements with our franchisees; financial
performance of Empire Education Group, Inc.; our ability to close
the sale of our ownership stake in 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 control 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; future goodwill impairment 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
SHEETS (Unaudited)
(Dollars in thousands, except
per share data)
December 31,
2023
June 30, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
7,153
$
9,508
Receivables, net
12,012
10,885
Inventories, net
1,217
1,681
Other current assets
15,034
15,164
Total current assets
35,416
37,238
Property and equipment, net
5,889
6,422
Goodwill
173,780
173,791
Other intangibles, net
2,635
2,783
Right of use asset
331,183
360,836
Other assets
24,814
26,307
Total assets
$
573,717
$
607,377
LIABILITIES AND SHAREHOLDERS'
DEFICIT
Current liabilities:
Accounts payable
$
12,047
$
14,309
Accrued expenses
25,923
30,109
Short-term lease liability
76,895
81,917
Total current liabilities
114,865
126,335
Long-term debt, net
181,663
176,830
Long-term lease liability
266,483
291,901
Other non-current liabilities
44,296
49,041
Total liabilities
607,307
644,107
Commitments and contingencies
Shareholders' deficit:
Common stock, $0.05 par value; issued and
outstanding 2,279,450 and 2,277,828 common shares at December 31,
2023 and June 30, 2023, respectively
114
114
Additional paid-in capital
67,710
66,764
Accumulated other comprehensive income
9,026
9,023
Accumulated deficit
(110,440
)
(112,631
)
Total shareholders' deficit
(33,590
)
(36,730
)
Total liabilities and shareholders'
deficit
$
573,717
$
607,377
REGIS CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited)
For the Three and Six Months
Ended December 31, 2023 and 2022
(Dollars and shares in
thousands, except per share data)
Three Months Ended December
31,
Six Months Ended December
31,
2023
2022
2023
2022
Revenues:
Royalties
$
15,820
$
16,158
$
32,348
$
33,338
Fees
2,492
3,238
5,123
5,791
Product sales to franchisees
67
1,107
451
1,550
Advertising fund contributions
6,808
7,965
14,034
16,216
Franchise rental income
24,087
28,886
48,754
59,216
Company-owned salon revenue
1,779
2,613
3,715
5,727
Total revenue
51,053
59,967
104,425
121,838
Operating expenses:
Cost of product sales to franchisees
58
1,310
417
1,780
Inventory reserve
—
1,228
—
1,228
General and administrative
11,772
11,747
22,501
26,108
Rent
1,394
2,090
2,491
3,843
Advertising fund expense
6,808
7,965
14,034
16,216
Franchise rent expense
24,087
28,886
48,754
59,216
Company-owned salon expense (1)
1,308
2,218
2,798
5,203
Depreciation and amortization
677
3,793
1,047
5,044
Long-lived asset impairment
170
—
170
—
Total operating expenses
46,274
59,237
92,212
118,638
Operating income
4,779
730
12,213
3,200
Other (expense) income:
Interest expense
(6,188
)
(4,519
)
(12,376
)
(8,336
)
Other, net
299
1,248
99
785
Loss from operations before income
taxes
(1,110
)
(2,541
)
(64
)
(4,351
)
Income tax benefit (expense)
107
—
255
(28
)
(Loss) income from continuing
operations
(1,003
)
(2,541
)
191
(4,379
)
Income from discontinued operations
2,000
134
2,000
3,440
Net income (loss)
$
997
$
(2,407
)
$
2,191
$
(939
)
Net income (loss) per share:
Basic:
(Loss) income from continuing
operations
$
(0.43
)
$
(1.10
)
$
0.08
$
(1.90
)
Income from discontinued operations
0.85
0.06
0.86
1.49
Net income (loss) per share, basic (2)
$
0.43
$
(1.04
)
$
0.94
$
(0.41
)
Diluted:
(Loss) income from continuing
operations
$
(0.43
)
$
(1.10
)
(0.43
)
(1.90
)
Income from discontinued operations
0.85
0.06
0.85
1.49
Net income (loss) per share, diluted
(2)
$
0.43
$
(1.04
)
$
0.93
$
(0.41
)
Weighted average common and common
equivalent shares outstanding:
Basic
2,341
2,307
2,336
2,305
Diluted
2,341
2,307
2,367
2,305
_______________________________________________________________________________
(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
STATEMENTS OF CASH FLOWS (Unaudited)
For the Six Months Ended
December 31, 2023 and 2022
(Dollars in thousands)
Six Months Ended December
31,
2023
2022
Cash flows from operating activities:
Net income (loss)
$
2,191
$
(939
)
Adjustments to reconcile net income (loss)
to cash used in operating activities:
Gain from sale of OSP
(2,000
)
(4,034
)
Depreciation and amortization
1,005
4,647
Long-lived asset impairment
170
—
Deferred income taxes
(29
)
28
Inventory reserve
—
1,228
Non-cash interest
1,290
—
Stock-based compensation
890
1,111
Amortization of debt discount and
financing costs
1,493
1,391
Other non-cash items affecting
earnings
(29
)
376
Changes in operating assets and
liabilities, excluding the effects of asset sales
(11,834
)
(10,722
)
Net cash used in operating activities
(6,853
)
(6,914
)
Cash flows from investing activities:
Capital expenditures
(323
)
(361
)
Proceeds from sale of OSP, net of fees
—
4,000
Net cash (used in) provided by investing
activities
(323
)
3,639
Cash flows from financing activities:
Borrowings on credit facility
4,000
11,357
Repayments of long-term debt
(455
)
(8,535
)
Debt refinancing fees
(1,216
)
(4,383
)
Taxes paid for shares withheld
(13
)
(35
)
Net cash provided by (used in) financing
activities
2,316
(1,596
)
Effect of exchange rate changes on cash
and cash equivalents
46
(135
)
Decrease in cash, cash equivalents, and
restricted cash
(4,814
)
(5,006
)
Cash, cash equivalents and restricted
cash:
Beginning of period
21,396
27,464
End of period
$
16,582
$
22,458
REGIS CORPORATION
Same-Store Sales
SYSTEM-WIDE SAME-STORE SALES
(1):
Three Months Ended
December 31, 2023
December 31, 2022
Service
Retail
Total
Service
Retail
Total
Supercuts
3.0
%
(5.7
)%
2.6
%
8.0
%
(7.3
)%
7.2
%
SmartStyle
(0.5
)
(10.8
)
(2.4
)
(0.7
)
(11.3
)
(2.9
)
Portfolio Brands
4.2
(1.5
)
3.7
7.3
(5.1
)
6.0
Total
2.7
%
(6.7
)%
1.9
%
6.0
%
(8.6
)%
4.5
%
Six Months Ended
December 31, 2023
December 31, 2022
Service
Retail
Total
Service
Retail
Total
Supercuts
2.8
%
(5.2
)%
2.4
%
8.8
%
(7.7
)%
8.0
%
SmartStyle
(0.7
)
(9.0
)
(2.2
)
0.2
(15.1
)
(3.1
)
Portfolio Brands
4.2
(1.5
)
3.7
6.2
(7.6
)
4.8
Total
2.5
%
(5.8
)%
1.8
%
6.3
%
(11.3
)%
4.5
%
_______________________________________________________________________________
(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
December 31,
2023
June 30, 2023
FRANCHISE SALONS:
Supercuts
2,022
2,082
SmartStyle/Cost Cutters in Walmart
Stores
1,351
1,388
Portfolio Brands
1,178
1,223
Total North American salons
4,551
4,693
Total International salons (1)
100
102
Total Franchise salons
4,651
4,795
as a percent of total Franchise and
Company-owned salons
98.8
%
98.6
%
COMPANY-OWNED SALONS:
Supercuts
6
7
SmartStyle/Cost Cutters in Walmart
Stores
44
48
Portfolio Brands
8
13
Total Company-owned salons
58
68
as a percent of total Franchise and
Company-owned salons
1.2
%
1.4
%
Grand Total, System-wide
4,709
4,863
___________________________________________________________________
(1)
Canadian and Puerto Rican salons are
included in the North American salon totals.
Non-GAAP Reconciliations:
This press release includes a presentation of adjusted EBITDA
and adjusted Franchise revenue, which are non-GAAP measures. The
non-GAAP measures are financial measures that do not reflect United
States Generally Accepted Accounting Principles (GAAP). We believe
our presentation of the non-GAAP measures provides meaningful
insight into our ongoing operating performance and a supplemental
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.
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
adjusted EBITDA results: discontinued operations, one-time
professional fees and legal settlements, severance expense, excess
inventory impairment charges, the benefit from lease liability
decreases in excess of previously impaired right of use asset,
lease termination fees and asset retirement obligation costs.
We present adjusted revenue to provide a meaningful Franchise
adjusted EBITDA margin, which removes non-margin revenue from total
revenue to arrive at an adjusted margin. Margin is a common metric
used by investors, however, the majority of our revenue is offset
by equal expense, so it does not contribute to our margin. We
remove the non-margin revenue from this metric in order to show a
meaningful margin rate.
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.
REGIS CORPORATION
Reconciliation of U.S. GAAP
Net Income to Adjusted EBITDA
(Dollars in thousands)
(Unaudited)
Three Months Ended December
31,
Six Months Ended December
31,
2023
2022
2023
2022
Consolidated reported net income, as
reported (U.S. GAAP)
$
997
$
(2,407
)
$
2,191
$
(939
)
Interest expense, as reported
6,188
4,519
12,376
8,336
Income taxes, as reported
(107
)
—
(255
)
28
Depreciation and amortization, as
reported
677
3,793
1,047
5,044
Long-lived asset impairment, as
reported
170
—
170
—
EBITDA
$
7,925
$
5,905
$
15,529
$
12,469
Inventory reserve
—
1,228
—
1,228
Professional fees and legal
settlements
29
540
29
1,248
Severance
—
63
—
66
Lease liability benefit
(95
)
(615
)
(223
)
(1,217
)
Lease termination fees
174
848
161
1,306
Discontinued operations
(2,000
)
(134
)
(2,000
)
(3,440
)
Adjusted EBITDA, non-GAAP financial
measure
$
6,033
$
7,835
$
13,496
$
11,660
REGIS CORPORATION
Reconciliation of Reported
Franchise Adjusted EBITDA as a Percent of GAAP Franchise
Revenue
to Franchise Adjusted EBITDA
as a Percent of Adjusted Franchise Revenue
(Dollars in thousands)
(Unaudited)
Three Months Ended December
31,
Six Months Ended December
31,
2023
2022
2023
2022
Franchise adjusted EBITDA
$
6,371
$
7,532
$
14,331
$
12,523
GAAP Franchise revenue
49,274
57,354
100,710
116,111
Franchise adjusted EBITDA as a percent of
GAAP Franchise revenue
12.9
%
13.1
%
14.2
%
10.8
%
Non-margin revenue adjustments:
Franchise rental income
$
(24,087
)
$
(28,886
)
$
(48,754
)
$
(59,216
)
Advertising fund contributions
(6,808
)
(7,965
)
(14,034
)
(16,216
)
Adjusted Franchise revenue
$
18,379
$
20,503
$
37,922
$
40,679
Franchise adjusted EBITDA as a percent of
adjusted Franchise revenue
34.7
%
36.7
%
37.8
%
30.8
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240131446207/en/
REGIS CORPORATION: Kersten Zupfer
investorrelations@regiscorp.com
Regis (NYSE:RGS)
Historical Stock Chart
From Dec 2024 to Jan 2025
Regis (NYSE:RGS)
Historical Stock Chart
From Jan 2024 to Jan 2025
