Regis Corporation (NasdaqGM: RGS), a leader in the haircare
industry, today announced financial results for the third fiscal
quarter ended March 31, 2024. Matthew Doctor, Regis Corporation’s
President and Chief Executive Officer, commented: “In the third
quarter, we continued to grow the year-over-year profitability of
the Company. We delivered another quarter of growth in
same-store-sales, operating income, and adjusted EBITDA. We are
continuing our efforts to drive sustainable, long-term growth
through our priorities that are focused on improving the customer
experience, implementing new technology, supporting the stylist
community, and managing our corporate expenses. In addition, the
Board continues to review strategic alternatives to assess the
Company's capital structure, and we remain dedicated to maximizing
value for all of our stakeholders.”
Financial Highlights:
Third quarter fiscal 2024 compared to third quarter fiscal
2023:
- System-wide revenue of $286.8 million declined $12.5 million
from $299.3 million and system-wide same-store sales improved
0.5%;
- Operating income of $4.1 million improved $2.1 million from
$2.0 million in the 2023 third quarter;
- Franchise adjusted EBITDA of $5.8 million improved $1.0 million
from $4.8 million in the 2023 third quarter;
- Net loss from continuing operations of $2.4 million increased
$0.2 million from a net loss of $2.2 million in the 2023 third
quarter;
- Net loss of $2.3 million increased $0.7 million from a net loss
of $1.6 million in the 2023 third quarter; and
- Adjusted EBITDA of $5.0 million improved $0.8 million from $4.2
million in the 2023 third quarter.
Fiscal year-to-date 2024 compared to year-to-date fiscal
2023:
- System-wide revenue of $885.4 million declined $33.3 million
from $918.7 million and system-wide same-store sales improved
1.4%;
- Operating income of $16.3 million improved $11.1 million from
$5.2 million in the 2023 fiscal year;
- Franchise adjusted EBITDA of $20.1 million improved $2.8
million from $17.3 million in the 2023 fiscal year;
- Net loss from continuing operations of $2.2 million improved
$4.3 million from a net loss of $6.5 million in the 2023 fiscal
year;
- Net loss of $0.1 million improved $2.5 million from a net loss
of $2.6 million in the 2023 fiscal year; and
- Adjusted EBITDA of $18.5 million improved $2.7 million from
$15.8 million in the 2023 fiscal year.
Third Quarter Fiscal Year 2024
Consolidated Results
Three Months Ended
March 31,
Nine Months Ended
March 31,
(Dollars in millions, except per share
data)
2024
2023
2024
2023
Consolidated revenue
$
49.2
$
55.8
$
153.6
$
177.6
System-wide revenue (1)
286.8
299.3
885.4
918.7
System-wide same-store sales comps
0.5
%
6.0
%
1.4
%
5.0
%
Operating income
$
4.1
$
2.0
$
16.3
$
5.2
Loss from continuing operations
(2.4
)
(2.2
)
(2.2
)
(6.5
)
Diluted loss per share from continuing
operations
(1.03
)
(0.93
)
(0.95
)
(2.83
)
Income from discontinued operations
0.1
0.5
2.1
4.0
Net loss
(2.3
)
(1.6
)
(0.1
)
(2.6
)
Diluted net loss per share
(1.00
)
(0.71
)
(0.06
)
(1.12
)
Adjusted EBITDA (2)
5.0
4.2
18.5
15.8
_______________________________________________________________________________
(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 $49.2 million in the third quarter
2024 and total revenue year-to-date 2024 of $153.6 million declined
$6.6 million and $24.0 million, respectively. The decline was
driven primarily by a reduction in non-margin franchise rental
income and advertising fund contributions and the wind down of
loss-generating company-owned salons that generated significant
revenue.
Operating Income
Regis reported third quarter 2024 operating income of $4.1
million, an improvement of $2.1 million compared to $2.0 million in
the third quarter 2023. Regis reported year-to-date 2024 operating
income of $16.3 million, an improvement of $11.1 million compared
to $5.2 million in 2023. The year-over-year improvement in
operating income for the third quarter 2024 was driven primarily by
a decrease in general and administrative expense and the lapping of
negative margin franchise product sales in the prior fiscal quarter
as part of the wind down of that business. The year-over-year
improvement in year-to-date 2024 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 from Continuing Operations
Regis reported third quarter 2024 net loss from continuing
operations of $2.4 million, or $1.03 diluted loss per share from
continuing operations, compared to a net loss from continuing
operations of $2.2 million, or $0.93 diluted loss per share from
continuing operations, in the third quarter 2023. Regis reported
year-to-date 2024 net loss from continuing operations of $2.2
million, or $0.95 diluted loss per share from continuing
operations, compared to a net loss from continuing operations of
$6.5 million, or $2.83 diluted loss per share from continuing
operations, in 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 Loss
The Company reported third quarter 2024 net loss of $2.3
million, or $1.00 diluted loss per share, compared to a net loss of
$1.6 million, or $0.71 loss per diluted share, for the same period
last year. The year-over-year decline in the quarter was driven
primarily by lower income from discontinued operations and higher
interest, partially offset by an increase in operating income. The
Company reported year-to-date 2024 net loss of $0.1 million, or
$0.06 diluted loss per share, compared to a net loss of $2.6
million, or $1.12 loss per diluted share, for 2023. The improvement
is due to higher operating income, offset by less proceeds from
discontinued operations and higher interest.
Adjusted EBITDA
Third quarter adjusted EBITDA of $5.0 million improved $0.8
million, compared to adjusted EBITDA of $4.2 million in the same
period last year. Year-to-date adjusted EBITDA of $18.5 million
improved $2.7 million, versus adjusted EBITDA of $15.8 million in
the same period last year. The improvement is primarily driven by
our lower general and administrative expense structure.
Third Quarter Fiscal Year 2024 Segment
Results
Franchise
Three Months Ended
March 31,
Increase
(Decrease)
Nine Months Ended
March 31,
(Decrease)
(Dollars in millions) (1)
2024
2023
2024
2023
Royalties
$
15.7
$
16.0
$
(0.3
)
$
48.0
$
49.4
$
(1.4
)
Fees
2.6
2.5
0.1
7.7
8.3
(0.6
)
Product sales to franchisees
—
0.6
(0.6
)
0.5
2.2
(1.7
)
Advertising fund contributions
5.8
7.8
(2.0
)
19.8
24.0
(4.2
)
Franchise rental income
23.8
26.6
(2.8
)
72.5
85.8
(13.3
)
Total Franchise revenue
$
47.9
$
53.6
$
(5.7
)
$
148.6
$
169.7
$
(21.1
)
Franchise same-store sales comps
0.5
%
6.0
%
1.3
%
5.1
%
Franchise adjusted EBITDA
$
5.8
$
4.8
$
1.0
$
20.1
$
17.3
$
2.8
as a percent of revenue
12.2
%
9.0
%
13.6
%
10.2
%
as a percent of adjusted revenue (2)
31.8
%
25.1
%
35.8
%
29.0
%
Total Franchise salons
4,537
5,057
(520
)
as a percent of total Franchise and
Company-owned salons
99.6
%
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
Third quarter franchise revenue was $47.9 million, a $5.7
million, or 10.6% decrease compared to the prior year quarter.
Year-to-date franchise revenue was $148.6 million, a $21.1 million,
or 12.4% decline compared to 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 and franchisees
renewing their own leases.
Royalties were $15.7 million and $48.0 million, a $0.3 million
and $1.4 million, or 1.9% and 2.8% decrease for the third quarter
and year-to-date 2024, versus the same periods last year due to
fewer franchise salons.
Franchise Adjusted EBITDA
Third quarter franchise adjusted EBITDA of $5.8 million improved
$1.0 million and year-to-date franchise adjusted EBITDA of $20.1
million improved $2.8 million year-over-year, primarily due to
lower general and administrative expense, partially offset by lower
royalties and fees.
Company-Owned Salons
Three Months Ended
March 31,
(Decrease)
Nine Months Ended
March 31,
(Decrease)
(Dollars in millions) (1)
2024
2023
2024
2023
Total Company-owned salon revenue
$
1.3
$
2.2
$
(0.9
)
$
5.0
$
7.9
$
(2.9
)
Company-owned salon adjusted EBITDA
$
(0.8
)
$
(0.6
)
$
(0.2
)
$
(1.6
)
$
(1.5
)
$
(0.1
)
as a percent of revenue
(61.5
)%
(27.3
)%
(32.0
)%
(19.0
)%
Total Company-owned salons
20
70
(50
)
as a percent of total Franchise and
Company-owned salons
0.4
%
1.4
%
______________________________________________________________________
(1)
Variances calculated on amounts
shown in millions may result in rounding differences.
Company-Owned Salon Revenue
Third quarter revenue for the Company-owned salon segment
declined $0.9 million versus the prior year to $1.3 million.
Year-to-date revenue for the Company-owned salon segment declined
$2.9 million versus the prior year to $5.0 million. The
year-over-year decline in revenue for both periods was expected and
driven by the closure of 40 loss generating company-owned salons
over the past twelve months.
Company-Owned Salon Adjusted EBITDA
Third quarter Company-owned salon adjusted EBITDA declined $0.2
million year-over-year, due primarily to inventory write-offs
related to salon closures.
Year-to-date company-owned salon adjusted EBITDA loss declined
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 40 loss generating company-owned salons over the
past twelve months.
Balance Sheet and Cash
Flow
The Company ended the third quarter of fiscal year 2024 with
$5.9 million in cash and cash equivalents, $187.8 million in
outstanding borrowings and total liquidity of $36.7 million. Net
cash used in operating activities for the nine months ended March
31, 2024 totaled $7.1 million, an improvement of $1.3 million from
the nine months ended prior year due to lower operating costs.
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 third quarter results today, May 1, 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 March 31, 2024, the Company franchised or owned
4,557 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)
March 31, 2024
June 30, 2023
ASSETS
Current assets:
Cash and cash equivalents
$
5,886
$
9,508
Receivables, net
9,514
10,885
Inventories, net
720
1,681
Other current assets
11,656
15,164
Total current assets
27,776
37,238
Property and equipment, net
5,437
6,422
Goodwill
173,345
173,791
Other intangibles, net
2,518
2,783
Right of use asset
311,120
360,836
Other assets
23,511
26,307
Total assets
$
543,707
$
607,377
LIABILITIES AND SHAREHOLDERS'
DEFICIT
Current liabilities:
Accounts payable
$
9,947
$
14,309
Accrued expenses
25,693
30,109
Short-term lease liability
73,485
81,917
Total current liabilities
109,125
126,335
Long-term debt, net
179,718
176,830
Long-term lease liability
249,317
291,901
Other non-current liabilities
41,369
49,041
Total liabilities
579,529
644,107
Commitments and contingencies
Shareholders' deficit:
Common stock, $0.05 par value; issued and
outstanding 2,279,948 and 2,277,828 common shares at March 31, 2024
and June 30, 2023, respectively
114
114
Additional paid-in capital
68,040
66,764
Accumulated other comprehensive income
8,796
9,023
Accumulated deficit
(112,772
)
(112,631
)
Total shareholders' deficit
(35,822
)
(36,730
)
Total liabilities and shareholders'
deficit
$
543,707
$
607,377
REGIS CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS (Unaudited)
For the Three and Nine Months
Ended March 31, 2024 and 2023
(Dollars and shares in
thousands, except per share data)
Three Months Ended
March 31,
Nine Months Ended
March 31,
2024
2023
2024
2023
Revenues:
Royalties
$
15,687
$
16,036
$
48,035
$
49,374
Fees
2,617
2,510
7,740
8,301
Product sales to franchisees
—
644
451
2,194
Advertising fund contributions
5,773
7,787
19,807
24,003
Franchise rental income
23,780
26,629
72,534
85,845
Company-owned salon revenue
1,324
2,167
5,039
7,894
Total revenue
49,181
55,773
153,606
177,611
Operating expenses:
Cost of product sales to franchisees
19
1,045
436
2,825
Inventory reserve
—
—
—
1,228
General and administrative
11,247
13,099
33,748
39,207
Rent
1,766
2,077
4,257
5,920
Advertising fund expense
5,773
7,787
19,807
24,003
Franchise rent expense
23,780
26,629
72,534
85,845
Company-owned salon expense (1)
1,503
2,088
4,301
7,291
Depreciation and amortization
1,009
1,008
2,056
6,052
Long-lived asset impairment
—
36
170
36
Total operating expenses
45,097
53,769
137,309
172,407
Operating income
4,084
2,004
16,297
5,204
Other (expense) income:
Interest expense
(6,153
)
(4,787
)
(18,529
)
(13,123
)
Other, net
(298
)
381
(199
)
1,166
Loss from operations before income
taxes
(2,367
)
(2,402
)
(2,431
)
(6,753
)
Income tax (expense) benefit
(54
)
241
201
213
Loss from continuing operations
(2,421
)
(2,161
)
(2,230
)
(6,540
)
Income from discontinued operations
89
518
2,089
3,958
Net loss
$
(2,332
)
$
(1,643
)
$
(141
)
$
(2,582
)
Net loss per share:
Basic and diluted:
Loss from continuing operations
$
(1.03
)
$
(0.93
)
$
(0.95
)
$
(2.83
)
Income from discontinued operations
0.04
0.22
0.89
1.71
Net loss per share (2)
$
(1.00
)
$
(0.71
)
$
(0.06
)
$
(1.12
)
Weighted average common and common
equivalent shares outstanding:
Basic and diluted
2,342
2,315
2,338
2,308
_______________________________________________________________________________
(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 Nine Months Ended
March 31, 2024 and 2023
(Dollars in thousands)
Nine Months Ended
March 31,
2024
2023
Cash flows from operating activities:
Net loss
$
(141
)
$
(2,582
)
Adjustments to reconcile net loss to cash
used in operating activities:
Gain from sale of OSP
(2,000
)
(4,552
)
Depreciation and amortization
1,576
5,502
Long-lived asset impairment
170
36
Deferred income taxes
(50
)
(49
)
Inventory reserve
—
1,228
Non-cash interest
1,956
51
Stock-based compensation
1,201
1,668
Amortization of debt discount and
financing costs
2,240
2,144
Other non-cash items affecting
earnings
216
365
Changes in operating assets and
liabilities, excluding the effects of asset sales
(12,298
)
(12,276
)
Net cash used in operating activities
(7,130
)
(8,465
)
Cash flows from investing activities:
Capital expenditures
(372
)
(339
)
Proceeds from sale of OSP, net of fees
2,000
4,500
Net cash provided by investing
activities
1,628
4,161
Cash flows from financing activities:
Borrowings on credit facility
4,000
11,357
Repayments of long-term debt
(2,499
)
(9,491
)
Debt refinancing fees
(2,552
)
(4,383
)
Taxes paid for shares withheld
(16
)
(35
)
Net cash used in financing activities
(1,067
)
(2,552
)
Effect of exchange rate changes on cash
and cash equivalents
(11
)
(103
)
Decrease in cash, cash equivalents, and
restricted cash
(6,580
)
(6,959
)
Cash, cash equivalents and restricted
cash:
Beginning of period
21,396
27,464
End of period
$
14,816
$
20,505
REGIS CORPORATION
Same-Store Sales
SYSTEM-WIDE SAME-STORE SALES
(1):
Three Months Ended
March 31, 2024
March 31, 2023
Service
Retail
Total
Service
Retail
Total
Supercuts
2.1
%
(10.7
)%
1.6
%
8.1
%
(2.6
)%
7.6
%
SmartStyle
(2.2
)
(13.4
)
(4.2
)
1.9
(10.3
)
(0.5
)
Portfolio Brands
2.9
(8.9
)
1.9
9.4
2.3
8.8
Total
1.5
%
(11.4
)%
0.5
%
7.2
%
(5.1
)%
6.0
%
Nine Months Ended
March 31, 2024
March 31, 2023
Service
Retail
Total
Service
Retail
Total
Supercuts
2.6
%
(7.0
)%
2.2
%
8.6
%
(6.1
)%
7.9
%
SmartStyle
(1.2
)
(10.4
)
(2.9
)
0.7
(13.6
)
(2.2
)
Portfolio Brands
3.8
(4.5
)
3.0
7.2
(4.7
)
6.1
Total
2.2
%
(7.8
)%
1.4
%
6.6
%
(9.4
)%
5.0
%
_______________________________________________________________________________
(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
March 31, 2024
June 30, 2023
FRANCHISE SALONS:
Supercuts
1,976
2,082
SmartStyle/Cost Cutters in Walmart
Stores
1,322
1,388
Portfolio Brands
1,141
1,223
Total North American salons
4,439
4,693
Total International salons (1)
98
102
Total Franchise salons
4,537
4,795
as a percent of total Franchise and
Company-owned salons
99.6
%
98.6
%
COMPANY-OWNED SALONS:
Supercuts
4
7
SmartStyle/Cost Cutters in Walmart
Stores
8
48
Portfolio Brands
8
13
Total Company-owned salons
20
68
as a percent of total Franchise and
Company-owned salons
0.4
%
1.4
%
Grand Total, System-wide
4,557
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
March 31,
Nine Months Ended
March 31,
2024
2023
2024
2023
Consolidated reported net loss, as
reported (U.S. GAAP)
$
(2,332
)
$
(1,643
)
$
(141
)
$
(2,582
)
Interest expense, as reported
6,153
4,787
18,529
13,123
Income taxes, as reported
54
(241
)
(201
)
(213
)
Depreciation and amortization, as
reported
1,009
1,008
2,056
6,052
Long-lived asset impairment, as
reported
—
36
170
36
EBITDA
$
4,884
$
3,947
$
20,413
$
16,416
Inventory reserve
—
—
—
1,228
Professional fees and legal
settlements
33
—
62
1,248
Severance
230
786
230
852
Lease liability benefit
(59
)
(297
)
(281
)
(1,515
)
Lease termination fees
43
266
205
1,571
Discontinued operations
(89
)
(518
)
(2,089
)
(3,958
)
Adjusted EBITDA, non-GAAP financial
measure
$
5,042
$
4,184
$
18,540
$
15,842
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
March 31,
Nine Months Ended
March 31,
2024
2023
2024
2023
Franchise adjusted EBITDA
$
5,815
$
4,815
$
20,146
$
17,338
GAAP Franchise revenue
47,857
53,606
148,567
169,717
Franchise adjusted EBITDA as a percent of
GAAP Franchise revenue
12.2
%
9.0
%
13.6
%
10.2
%
Non-margin revenue adjustments:
Franchise rental income
$
(23,780
)
$
(26,629
)
$
(72,534
)
$
(85,845
)
Advertising fund contributions
(5,773
)
(7,787
)
(19,807
)
(24,003
)
Adjusted Franchise revenue
$
18,304
$
19,190
$
56,226
$
59,869
Franchise adjusted EBITDA as a percent of
adjusted Franchise revenue
31.8
%
25.1
%
35.8
%
29.0
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240501356014/en/
REGIS CORPORATION: Kersten Zupfer
investorrelations@regiscorp.com
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