Regis Corporation Reports Continued Profitability for the Third Fiscal Quarter 2024
Regis (NasdaqGM: RGS) reported continued profitability in the third fiscal quarter of 2024 with a focus on driving growth through customer experience, new technology, and managing expenses. The company's financial highlights included system-wide revenue decline, same-store sales improvement, and increased operating income and adjusted EBITDA compared to the previous year. Regis remains committed to maximizing value for stakeholders through strategic alternatives and capital structure assessment.
Continued focus on driving growth through improving customer experience, implementing new technology, and managing expenses.
Increased operating income and adjusted EBITDA in the third quarter of fiscal year 2024 compared to the previous year.
System-wide same-store sales improved by 0.5% in the third quarter of 2024.
The company is dedicated to maximizing value for stakeholders through strategic alternatives and capital structure assessment.
System-wide revenue declined by $12.5 million in the third quarter of fiscal year 2024 compared to the previous year.
Net loss from continuing operations increased by $0.2 million in the third quarter of 2024 compared to the previous year.
Operating income declined by $2.1 million in the third quarter of 2024 compared to the previous year.
Franchise revenue and company-owned salon revenue experienced declines in the third quarter of fiscal year 2024.
Insights
Regis Corporation's reported figures offer a mixed financial landscape. The company has experienced a decrease in system-wide revenue, both for the quarter and year-to-date, which is a point of concern. However, focusing on operating income and adjusted EBITDA reveals an interesting narrative of corporate efficiency, as these have shown improvements despite the revenue decline. This suggests that the company's restructuring efforts and cost management strategies are yielding some positive results. For investors, the improved profitability metrics might indicate that the company is moving in the right direction, while the decline in revenue signals potential challenges in market demand or competitive dynamics.
From the balance sheet perspective, the liquidity position is acceptable, though not robust, with $5.9 million in cash and cash equivalents against $187.8 million in outstanding borrowings. The reduction in net loss is encouraging, yet the continuous presence of net losses could signal underlying issues that have not been fully addressed. The cash flow improvement is a positive sign as it suggests better working capital management. Overall, for a retail investor, these results are a signal to monitor the company's future revenue performance closely while considering the current progress in profitability enhancements.
The modest increase in system-wide same-store sales shows that Regis Corporation is maintaining a degree of customer loyalty and experiencing slight organic growth, which is important in the highly competitive haircare industry. However, the decrease in total franchise revenue, including a drop in royalties and fees, suggests that the franchise segment is contracting. For investors, the franchise model dynamics are critical, as it's a lever for expansion and stable royalty income. The reduction in franchise salon count could be seen as either a strategic culling of underperforming units or a more concerning sign of franchisee dissatisfaction or market contraction.
The company's focus on improving customer experience and adopting new technology aligns with industry trends towards personalization and convenience, which may help to attract and retain customers in the long run. The transition towards fewer company-owned salons corresponds with a broader industry shift towards franchising, which can offer better scalability and less operational burden. However, the extent to which these strategies will translate into financial success remains to be seen and investors should watch for these initiatives to translate into tangible financial improvements.
Regis Corporation's strategic alternatives review indicates that the board is exploring options to optimize the capital structure, potentially including divestitures, acquisitions, or financial restructuring. This could have significant implications for shareholder value and investment risk profiles. For long-term investors, this is an indication that the company is proactively seeking solutions to enhance value and might be preparing for significant corporate changes. However, it also introduces uncertainty, as the outcome of such strategic reviews can have wide-ranging effects, from positive transformations to disruptive reorganizations.
The reported wind down of loss-generating company-owned salons appears to be part of a broader strategy to reduce direct operational exposure and shift towards a leaner, franchise-focused model, which could improve margins over time. The challenge for Regis will be to ensure that this does not lead to a loss of control over brand standards and customer experience. Investors should consider both the short-term impacts on revenue and the potential for a more capital-efficient and profitable business model in the long term.
Financial Highlights:
Third quarter fiscal 2024 compared to third quarter fiscal 2023:
-
System-wide revenue of
$286.8 million $12.5 million $299.3 million 0.5% ; -
Operating income of
$4.1 million $2.1 million $2.0 million -
Franchise adjusted EBITDA of
$5.8 million $1.0 million $4.8 million -
Net loss from continuing operations of
$2.4 million $0.2 million $2.2 million -
Net loss of
$2.3 million $0.7 million $1.6 million -
Adjusted EBITDA of
$5.0 million $0.8 million $4.2 million
Fiscal year-to-date 2024 compared to year-to-date fiscal 2023:
-
System-wide revenue of
$885.4 million $33.3 million $918.7 million 1.4% ; -
Operating income of
$16.3 million $11.1 million $5.2 million -
Franchise adjusted EBITDA of
$20.1 million $2.8 million $17.3 million -
Net loss from continuing operations of
$2.2 million $4.3 million $6.5 million -
Net loss of
$0.1 million $2.5 million $2.6 million -
Adjusted EBITDA of
$18.5 million $2.7 million $15.8 million
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
Operating Income
Regis reported third quarter 2024 operating income of
Loss from Continuing Operations
Regis reported third quarter 2024 net loss from continuing operations of
Net Loss
The Company reported third quarter 2024 net loss of
Adjusted EBITDA
Third quarter adjusted EBITDA of
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
Royalties were
Franchise Adjusted EBITDA
Third quarter franchise adjusted EBITDA of
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
Company-Owned Salon Adjusted EBITDA
Third quarter Company-owned salon adjusted EBITDA declined
Year-to-date company-owned salon adjusted EBITDA loss declined year-over-year. Excluding the
Balance Sheet and Cash Flow
The Company ended the third quarter of fiscal year 2024 with
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
REGIS CORPORATION |
||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
||||||||
(Dollars in thousands, except per share data) |
||||||||
|
||||||||
|
|
March 31,
|
|
June 30,
|
||||
|
|
|
|
|
||||
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, |
|
|
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,
|
|
June 30,
|
||
|
|
|
|
|
||
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
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
REGIS CORPORATION |
||||||||||||||||
Reconciliation of |
||||||||||||||||
(Dollars in thousands) |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
||||||||||||||||
|
|
Three Months Ended March 31, |
|
Nine Months Ended March 31, |
||||||||||||
|
|
|
2024 |
|
|
|
2023 |
|
|
|
2024 |
|
|
|
2023 |
|
|
|
|
|
|
|
|
|
|
||||||||
Consolidated reported net loss, as reported ( |
|
$ |
(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
Source: Regis Corporation
FAQ
What is the stock symbol for Regis ?
What were the key financial highlights for Regis in the third fiscal quarter of 2024?
How did Regis focus on driving sustainable, long-term growth?
What is Regis 's strategy to maximize value for stakeholders?
What was the net loss from continuing operations for Regis in the third quarter of 2024?
