Regis Corporation (Nasdaq GM: RGS), a leader in the haircare
industry, today announced financial results for the fourth fiscal
quarter and full year ended June 30, 2024.
Matthew Doctor, Regis Corporation's President and Chief
Executive Officer, commented: "I am very pleased with the
milestones achieved in fiscal 2024 that pave the way for a new day
at Regis. The strategic refinancing completed in June 2024 was an
outstanding result that puts Regis on solid financial footing and
creates flexibility we have not had in years. Our results and
continued growth in profitability is a testament to the hard work
and dedication of our franchisees and employees. I am excited that
for the first time since I have been CEO we are able to grow our
franchisees sales and profitability with our undivided focus, and
can start taking a longer-term view as opposed to the short-term
blocking and tackling that was required to get to this point. With
the Zenoti migration complete, and the right organization in place,
we are ready to execute on a focused set of priorities to
ultimately increase traffic to our salons through operational
excellence and drive growth and value creation for all
stakeholders."
Business Highlights and
Updates:
- Entered into a new senior secured credit facility with TCW
Asset Management Company LLC ("TCW"), a leading global asset
manager, and Midcap Financial Trust ("Midcap") in June 2024;
- A $105 million term loan replaced the Company's existing debt,
reducing outstanding indebtedness by more than $80 million and
saving approximately $7 million in cash interest annually. In
addition to the term loan, the Company has access to a $25 million
revolving credit facility;
- The new revolving credit facility and term loan will mature in
June 2029 vs. previous debt maturity of August 2025;
- Completed Zenoti point-of-sale migration in August 2024;
majority of earned migration proceeds to be received in the second
quarter fiscal 2025
Financial Highlights:
Fourth quarter fiscal 2024 compared to fourth quarter fiscal
2023:
- System-wide revenue of $293.7 million versus $311.8 million in
the fourth quarter fiscal 2023, a decline of $18.1 million; and
system-wide same-store sales decreased 1.3%;
- Operating income of $4.6 million versus $3.6 million in the
fourth quarter fiscal 2023; a $1.0 million improvement;
- Adjusted EBITDA of $7.4 million versus $5.2 million in the
fourth quarter fiscal 2023, a $2.2 million improvement;
- Franchise adjusted EBITDA of $6.1 million versus $5.5 million
in the fourth quarter fiscal 2023, a $0.6 million improvement;
- Net income of $91.2 million versus a net loss of $4.8 million
in the fourth quarter fiscal 2023, a $96.0 million improvement;
and
- Diluted earnings per share of $38.10 versus $2.07 loss per
diluted share in the fourth quarter fiscal 2023, a $40.17
improvement.
Full fiscal year 2024 compared to full fiscal year
2023:
- System-wide revenue of $1,179.5 million versus $1,230.5 million
in fiscal year 2023, a decline of $51.0 million; system-wide
same-store sales improved 0.7%;
- Operating income of $20.9 million versus $8.8 million in fiscal
year 2023, a $12.1 million improvement;
- Adjusted EBITDA of $25.9 million versus $21.0 million in fiscal
year 2023, a $4.9 million improvement;
- Franchise adjusted EBITDA of $26.3 million versus $22.8 million
in fiscal year 2023, a $3.5 million improvement;
- Net income of $91.1 million versus a net loss of $7.4 million
in fiscal year 2023, a $98.5 million improvement; and
- Diluted earnings per share of $38.34 income per diluted share
versus a $3.18 loss per diluted share in fiscal year 2023, a $41.52
improvement.
Fourth Quarter Fiscal Year 2024
Consolidated Results
Three Months Ended June
30,
Twelve Months Ended June
30,
(Dollars in millions, except per share
data)
2024
2023
2024
2023
Consolidated revenue
$
49.4
$
55.7
$
203.0
$
233.3
System-wide revenue (1)
293.7
311.8
1,179.5
1,230.5
System-wide same-store sales comps
(1.3
)%
2.5
%
0.7
%
4.4
%
Operating income
$
4.6
$
3.6
$
20.9
$
8.8
Income (loss) from continuing
operations
91.3
(4.8
)
89.1
(11.3
)
Diluted income (loss) per share from
continuing operations
38.14
(2.07
)
37.50
(4.88
)
(Loss) income from discontinued
operations
(0.1
)
—
2.0
4.0
Net income (loss)
91.2
(4.8
)
91.1
(7.4
)
Diluted net income (loss) per share
38.10
(2.07
)
38.34
(3.18
)
Adjusted EBITDA (2)
7.4
5.2
25.9
21.0
_______________________________________________________________________________
(1)
Represents total sales within the
system.
(2)
See GAAP to non-GAAP reconciliations
within the attached section titled "Non-GAAP Reconciliations."
Revenue
Total consolidated revenue of $49.4 million in the fourth
quarter and total revenue for fiscal year 2024 of $203.0 million,
declined $6.3 million, and $30.3 million, respectively. The
declines in both periods were driven primarily by a reduction in
non-margin franchise rental income and advertising contributions
and the wind down of loss generating salons, partially offset by
non-cash revenue resulting from a change in estimate to gift card
breakage.
Operating Income
Regis reported fourth quarter 2024 income from operations of
$4.6 million compared to $3.6 million in the fourth quarter 2023.
Regis reported fiscal year 2024 income from operations of $20.9
million compared to $8.8 million in fiscal year 2023. The
improvements in operating income in both periods were driven
primarily by lower rent expense, and non-cash revenue resulting
from a change in estimate to gift card breakage, partially offset
by lower royalties and fees. The year-over-year improvement is also
driven by the wind down of franchise product sales and lower
general and administrative expenses.
Income (Loss) from Continuing Operations
Regis reported fourth quarter 2024 net income from continuing
operations of $91.3 million, or $38.14 income per diluted share,
compared to a net loss from continuing operations of $4.8 million,
or $2.07 loss per diluted share, in the fourth quarter 2023. Regis
reported fiscal year 2024 net income from continuing operations of
$89.1 million, or $37.50 income per diluted share, compared to a
net loss from continuing operations of $11.3 million, or $4.88 loss
per diluted share, in 2023. The year-over-year improvement in net
income (loss) from continuing operations in both periods was driven
by the gain on extinguishment of long-term debt of $94.6 million
and improved operating income.
Net Income (Loss)
The Company reported fourth quarter 2024 net income of $91.2
million, or $38.10 income per diluted share, compared to a net loss
of $4.8 million, or $2.07 loss per diluted share for the same
period last year. The Company reported fiscal year 2024 net income
of $91.1 million, or $38.34 income per diluted share, compared to a
net loss of $7.4 million, or $3.18 loss per diluted share, in 2023.
The year-over-year improvement in net income (loss) in both periods
was driven by the gain on extinguishment of long-term debt and
improved operating income.
Adjusted EBITDA
Fourth quarter adjusted EBITDA of $7.4 million improved $2.2
million versus adjusted EBITDA of $5.2 million in the same period
last year. The improvements were driven by lower rent expense and
non-cash revenue resulting from a change in estimate to gift card
breakage, partially offset by lower franchise revenue.
Fiscal year adjusted EBITDA of $25.9 million improved $4.9
million, versus an adjusted EBITDA of $21.0 million in the same
period last year. The improvement was primarily due to lower rent
expense, lower general and administrative expenses, and non-cash
revenue resulting from a change in estimate to gift card breakage.
Fiscal year 2023 adjusted EBITDA also benefited from a $1.1 million
grant from the state of North Carolina related to COVID-19
relief.
Fourth Quarter Fiscal Year 2024 Segment
Results
Franchise
Three Months Ended June
30,
Increase (Decrease)
Twelve Months Ended June
30,
Increase (Decrease)
(Dollars in millions) (1)
2024
2023
2024
2023
Royalties
$
16.1
$
16.6
$
(0.5
)
$
64.1
$
66.0
$
(1.9
)
Fees
2.4
3.0
(0.6
)
10.2
11.3
(1.1
)
Product sales to franchisees
—
0.6
(0.6
)
0.5
2.8
(2.3
)
Advertising fund contributions
5.9
7.7
(1.8
)
25.7
31.7
(6.0
)
Franchise rental income
22.7
25.6
(2.9
)
95.3
111.4
(16.1
)
Total franchise revenue
$
47.1
$
53.5
$
(6.4
)
$
195.7
$
223.2
$
(27.5
)
Franchise same-store sales comps
(1.4
)%
2.4
%
0.6
%
4.4
%
Franchise adjusted EBITDA
$
6.1
$
5.5
$
0.6
$
26.3
$
22.8
$
3.5
as a percent of revenue
13.0
%
10.2
%
13.4
%
10.2
%
as a percent of adjusted revenue (2)
33.0
%
27.1
%
35.1
%
28.5
%
Total franchise salons
4,391
4,795
(404
)
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
Fourth quarter franchise revenue was $47.1 million, a $6.4
million, or 12.0% decrease compared to the prior year quarter.
Non-margin franchise rental income decreased $2.9 million due to
fewer salons in the current year. Royalties were $16.1 million, a
$0.5 million, or 3.0% decrease, versus the same period last year
due to the decline in salon count. Product sales to franchisees
decreased $0.6 million, as a result of the transition out of the
wholesale product business. Franchise fees decreased $0.6 million
compared to the prior year quarter, primarily due to a decrease in
terminated development agreements.
Fiscal year 2024 franchise revenue was $195.7 million, a $27.5
million, or 12.3% decrease compared to the prior year primarily due
to a decline in non-margin franchise rental income as a result of a
lower franchise salon count.
Franchise Adjusted EBITDA
Fourth quarter franchise adjusted EBITDA of $6.1 million
improved $0.6 million from the same period last year. The
improvement was primarily due to lower rent expense.
Fiscal year 2024 franchise adjusted EBITDA of $26.3 million
improved $3.5 million year-over-year. The improvement was primarily
due to lower rent expense and lower general and administrative
expenses.
Company-Owned Salons
Three Months Ended June
30,
Increase (Decrease)
Twelve Months Ended June
30,
Increase (Decrease)
(Dollars in millions) (1)
2024
2023
2024
2023
Total company-owned salon revenue
$
2.3
$
2.2
$
0.1
$
7.3
$
10.1
$
(2.8
)
Company-owned same-store sales comps
2.4
%
8.7
%
3.5
%
4.9
%
Company-owned salon adjusted EBITDA
$
1.3
$
(0.3
)
$
1.6
$
(0.3
)
$
(1.8
)
$
1.5
as a percent of revenue
56.5
%
(13.6
)%
(4.1
)%
(17.8
)%
Total Company-owned salons
17
68
(51
)
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
Fourth quarter revenue for the company-owned salon segment
improved $0.1 million versus the prior year to $2.3 million. The
year-over-year improvement in revenue was primarily driven by
non-cash revenue resulting from a change in estimate related to
gift card breakage, partially offset by company-owned salon
closures.
Fiscal year 2024 revenue for the company-owned salon segment
declined $2.8 million versus the prior year to $7.3 million due to
company-owned salon closures, partially offset by non-cash revenue
resulting from a change in estimate related to gift card
breakage.
Company-Owned Salon Adjusted EBITDA
Fourth quarter company-owned salon adjusted EBITDA improved $1.6
million year-over-year primarily due to a change in estimate
related to gift card breakage and the closure of unprofitable
salons.
Fiscal year 2024 company-owned salon adjusted EBITDA loss
improved $1.5 million year-over-year driven primarily by the
closure of unprofitable salons; and non-cash revenue resulting from
a change in estimate related to gift card breakage, partially
offset by a $1.1 million grant from the state of North Carolina
related to COVID-19 relief in fiscal year 2023.
Balance Sheet and Cash
Flow
The Company ended fiscal year 2024 with $10.1 million in cash
and cash equivalents. On June 24, 2024, the Company refinanced its
credit facility, reducing its indebtedness by more than $80
million, resulting in $115.3 million in outstanding borrowings
($105.0 million term loan and $10.2 million revolver draw) and
total liquidity of $19.9 million at June 30, 2024. The Company
utilized its U.S. federal and state net operating losses to offset
the entire tax liability related to this transaction. Net cash used
in operating activities for the fiscal year totaled $2.0 million,
an improvement of $5.8 million from the prior year. Cash use
improved due primarily to lower general and administrative expense,
partially offset by a decrease in franchise revenue.
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 fourth quarter and fiscal year 2024 results today,
August 28, 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 June 30, 2024, the Company franchised or owned
4,408 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 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 uncertainties 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 including increases in minimum wages; changes in general
economic environment; changes in consumer tastes, hair product
innovation, fashion trends and consumer spending patterns;
compliance with Nasdaq 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; 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; premature termination of
agreements with our franchisees; 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 of our Tax Preservation Plan to protect the future
availability of the Company's tax assets; potential litigation and
other legal or regulatory proceedings; or other factors not listed
above. Additional information concerning potential factors that
could affect future financial results is set forth under Item 1A of
this 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
(Dollars in thousands, except
per share data)
June 30,
2024
2023
ASSETS
Current assets:
Cash and cash equivalents
$
10,066
$
9,508
Receivables, net
9,434
10,885
Other current assets
22,550
16,845
Total current assets
42,050
37,238
Property and equipment, net
3,664
6,422
Goodwill
173,146
173,791
Other intangibles, net
2,427
2,783
Right of use asset
287,912
360,836
Other assets
21,297
26,307
Total assets
$
530,496
$
607,377
LIABILITIES AND SHAREHOLDERS' EQUITY
(DEFICIT)
Current liabilities:
Accounts payable
$
12,747
$
14,309
Accrued expenses
21,644
30,109
Short-term lease liability
69,127
81,917
Total current liabilities
103,518
126,335
Long-term debt, net
99,545
176,830
Long-term lease liability
230,607
291,901
Other non-current liabilities
40,039
49,041
Total liabilities
473,709
644,107
Commitments and contingencies
Shareholders' equity (deficit):
Common stock, $0.05 par value; issued and
outstanding, 2,279,948 and 2,277,828 common shares as of June 30,
2024 and 2023, respectively
114
114
Additional paid-in capital
69,660
66,764
Accumulated other comprehensive income
8,584
9,023
Accumulated deficit
(21,571
)
(112,631
)
Total shareholders' equity (deficit)
56,787
(36,730
)
Total liabilities and shareholders' equity
(deficit)
$
530,496
$
607,377
REGIS CORPORATION
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Dollars and shares in
thousands, except per share data)
Three Months Ended June
30,
Twelve Months Ended June
30,
2024
2023
2024
2023
Revenues:
Royalties
$
16,063
$
16,607
$
64,098
$
65,981
Fees
2,449
2,965
10,189
11,266
Product sales to franchisees
—
608
451
2,802
Advertising fund contributions
5,856
7,744
25,663
31,747
Franchise rental income
22,724
25,596
95,258
111,441
Company-owned salon revenue
2,284
2,195
7,323
10,089
Total revenue
49,376
55,715
202,982
233,326
Operating expenses:
Cost of product sales to franchisees
—
715
436
3,540
Inventory reserve
—
—
—
1,228
General and administrative
11,639
11,544
45,387
50,751
Rent
1,268
3,276
5,525
9,196
Advertising fund expense
5,856
7,744
25,663
31,747
Franchise rent expense
22,724
25,596
95,258
111,441
Company-owned salon expense (1)
779
1,536
5,080
8,827
Depreciation and amortization
1,888
1,664
3,945
7,716
Long-lived asset impairment
629
65
798
101
Total operating expenses
44,783
52,140
182,092
224,547
Operating income
4,593
3,575
20,890
8,779
Other (expense) income:
Interest expense
(6,864
)
(9,018
)
(25,393
)
(22,141
)
Gain on extinguishment of long-term debt,
net
94,611
—
94,611
—
Other, net
27
198
(172
)
1,364
Income (loss) from operations before
income taxes
92,367
(5,245
)
89,936
(11,998
)
Income tax (expense) benefit
(1,070
)
442
(869
)
655
Income (loss) from continuing
operations
91,297
(4,803
)
89,067
(11,343
)
(Loss) income from discontinued
operations, net of income taxes
(96
)
—
1,993
3,958
Net income (loss)
$
91,201
$
(4,803
)
$
91,060
$
(7,385
)
Net income (loss) per share:
Basic:
Income (loss) from continuing
operations
$
38.98
$
(2.07
)
$
38.08
$
(4.88
)
Income (loss) from discontinued
operations
(0.04
)
$
—
0.85
1.70
Net income (loss) per share, basic (2)
$
38.94
$
(2.07
)
$
38.93
$
(3.18
)
Diluted:
Income (loss) from continuing
operations
$
38.14
$
(2.07
)
$
37.50
$
(4.88
)
Income (loss) from discontinued
operations
(0.04
)
$
—
0.84
1.70
Net income (loss) per share, diluted
(2)
$
38.10
$
(2.07
)
$
38.34
$
(3.18
)
Weighted average common and common
equivalent shares outstanding:
Basic
2,342
2,323
2,339
2,312
Diluted
2,394
2,323
2,375
2,312
_______________________________________________________________________________
(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
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(Dollars in thousands)
Twelve Months Ended June
30,
2024
2023
Cash flows from operating activities:
Net income (loss)
$
91,060
$
(7,385
)
Adjustments to reconcile net income (loss)
to net cash used in operating activities
Gain from sale of OSP
(2,000
)
(4,562
)
Depreciation and amortization
3,403
7,189
Long-lived asset impairment
798
101
Deferred income taxes
519
(8
)
Inventory reserve
—
1,228
Non-cash interest
3,418
3,790
Gain on extinguishment of long-term debt,
net
(94,611
)
—
Stock-based compensation
1,558
2,316
Amortization of debt discount and
financing costs
2,987
2,891
Other non-cash items affecting
earnings
432
155
Changes in operating assets and
liabilities (1):
Receivables
848
943
Income tax receivable
1,230
(577
)
Other current assets
385
668
Other assets
5,829
6,818
Accounts payable
(1,604
)
(497
)
Accrued expenses
(4,812
)
(6,151
)
Net lease liabilities
(1,942
)
(4,991
)
Other non-current liabilities
(9,538
)
(9,817
)
Net cash used in operating activities:
(2,040
)
(7,889
)
Cash flows from investing activities:
Capital expenditures
(376
)
(481
)
Net proceeds from sale of OSP
2,000
4,500
Net cash provided by investing
activities:
1,624
4,019
Cash flows from financing activities:
Proceeds from issuance of long-term
debt
105,000
—
Borrowings on revolving credit
facility
14,238
13,357
Debt refinancing fees
(14,360
)
(4,383
)
Repayments of long-term debt
(96,499
)
(11,083
)
Taxes paid for shares withheld
(16
)
(36
)
Net cash provided by (used in) financing
activities:
8,363
(2,145
)
Effect of exchange rate changes on cash
and cash equivalents
(31
)
(53
)
Increase (decrease) in cash, cash
equivalents and restricted cash
7,916
(6,068
)
Cash, cash equivalents and restricted
cash:
Beginning of year
21,396
27,464
End of year
$
29,312
$
21,396
_______________________________________________________________________________
(1)
Changes in operating assets and
liabilities exclude assets and liabilities sold or acquired.
SYSTEM-WIDE SAME-STORE SALES
(1):
Three Months Ended
June 30, 2024
June 30, 2023
Service
Retail
Total
Service
Retail
Total
Supercuts
0.4
%
(10.7
)%
—
%
4.5
%
(2.4
)%
4.2
%
SmartStyle
(3.5
)
(15.2
)
(5.5
)
(1.9
)
(9.7
)
(3.4
)
Portfolio Brands
(0.1
)
(12.6
)
(0.8
)
4.2
(0.4
)
3.8
Total
(0.4
)%
(13.3
)%
(1.3
)%
3.2
%
(5.3
)%
2.5
%
Twelve Months Ended
June 30, 2024
June 30, 2023
Service
Retail
Total
Service
Retail
Total
Supercuts
2.0
%
(8.0
)%
1.6
%
7.5
%
(5.2
)%
6.9
%
SmartStyle
(1.8
)
(11.5
)
(3.5
)
0.1
(12.8
)
(2.5
)
Portfolio Brands
2.8
(6.4
)
2.0
6.4
(3.7
)
5.5
Total
1.5
%
(9.1
)%
0.7
%
5.7
%
(8.5
)%
4.4
%
_______________________________________________________________________________
(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 and year-to-date 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
June 30,
2024
2023
FRANCHISE SALONS:
Supercuts
1,946
2,082
SmartStyle/Cost Cutters in Walmart
stores
1,232
1,388
Portfolio Brands
1,117
1,223
Total North American salons
4,295
4,693
Total International salons (1)
96
102
Total Franchise salons
4,391
4,795
as a percent of total franchise and
company-owned salons
99.6
%
98.6
%
COMPANY-OWNED SALONS:
Supercuts
3
7
SmartStyle/Cost Cutters in Walmart
stores
8
48
Portfolio Brands
6
13
Total Company-owned salons
17
68
as a percent of total Franchise and
Company-owned salons
0.4
%
1.4
%
Total franchise and company-owned
salons
4,408
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 operating income
excluding certain non-cash charges, 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 reconciliation of U.S. GAAP operating income to non-GAAP
operating income excluding certain non-cash charges is included in
the release.
The following items have been excluded from our non-GAAP
adjusted EBITDA results: discontinued operations, inventory
reserve, one-time professional fees and settlements, severance
expense, the benefit from lease liability decreases in excess of
previously impaired right of use asset, lease termination fees,
asset retirement obligation costs, and the benefit from the
Company's debt refinancing.
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 (Loss) to Adjusted EBITDA
(Dollars in thousands)
(Unaudited)
Three Months Ended June
30,
Twelve Months Ended June
30,
2024
2023
2024
2023
Consolidated reported net income (loss),
as reported (U.S. GAAP)
$
91,201
$
(4,803
)
$
91,060
$
(7,385
)
Interest expense, as reported
6,864
9,018
25,393
22,141
Income taxes, as reported
1,070
(442
)
869
(655
)
Depreciation and amortization, as
reported
1,888
1,664
3,945
7,716
Long-lived asset impairment, as
reported
629
65
798
101
EBITDA
$
101,652
$
5,502
$
122,065
$
21,918
Inventory reserve
—
—
—
1,228
Professional fees and legal
settlements
6
—
68
1,248
Severance
—
(132
)
230
720
Lease liability benefit
(45
)
(258
)
(326
)
(1,773
)
Lease termination fees
297
56
501
1,627
Gain on extinguishment of long-term debt,
net
(94,611
)
—
(94,611
)
—
Discontinued operations
96
—
(1,993
)
(3,958
)
Adjusted EBITDA, non-GAAP financial
measure
$
7,395
$
5,168
$
25,934
$
21,010
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 June
30,
Twelve Months Ended June
30,
2024
2023
2024
2023
Franchise adjusted EBITDA
$
6,111
$
5,460
$
26,257
$
22,799
GAAP franchise revenue
47,092
53,520
195,659
223,237
Franchise adjusted EBITDA as a percent of
GAAP franchise revenue
13.0
%
10.2
%
13.4
%
10.2
%
Non-margin revenue adjustments:
Franchise rental income
$
(22,724
)
$
(25,596
)
$
(95,258
)
$
(111,441
)
Advertising fund contributions
(5,856
)
(7,744
)
(25,663
)
(31,747
)
Adjusted franchise revenue
$
18,512
$
20,180
$
74,738
$
80,049
Franchise adjusted EBITDA as a percent of
adjusted franchise revenue
33.0
%
27.1
%
35.1
%
28.5
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240828028762/en/
REGIS CORPORATION: Kersten Zupfer
investorrelations@regiscorp.com
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