Regis Reports Second Quarter 2013 Results |
Regis Corporation (NYSE: RGS), a leader in the haircare industry, whose
primary business is owning, operating and franchising hair salons, today
reported results for its fiscal second quarter ended December 31, 2012
versus the prior year as noted below. References made to discrete items
were formerly referred to as non-operational items in previous earnings
releases, and references made to financial measures, as adjusted, were
formerly referred to as operational measures in previous earnings
releases.
- Sales of $506.2 million, a decrease of 3.8 %. Same-store sales
declined 1.9%.
- GAAP net loss of $12.3 million. GAAP net loss including
discontinued operations per diluted share (Diluted EPS) of $0.22.
- Diluted EPS, as adjusted, of $0.03 compared to $0.27.
- Current year earnings were reduced by approximately $0.05
per share, representing increased labor costs, primarily
associated with increased stylist hours, impacts of Hurricane
Sandy and reduced equity in earnings of Empire Education Group,
partly offset by reductions in general & administrative expenses.
- Prior year earnings were increased by $0.10 per share,
representing equity in earnings of Provalliance (sold in the
current year first quarter) and tax benefits primarily from the
realization of employment tax credits.
- EBITDA, as adjusted, of $31.1 million compared to $43.7 million.
- Current year was reduced by approximately $8.9 million due
to increased labor costs, primarily associated with increased
stylist hours and impacts of Hurricane Sandy.
- Current year was improved by $6.1 million of reductions in
general and administrative expenses, as adjusted, representing an
80 basis point decline as a percentage of revenues.
- The current year quarter includes net discrete after-tax expense
of $14.0 million, primarily related to impairment of our investment in
Empire Education Group, partly offset by earnings from discontinued
operations. The prior year quarter includes $73.8 million of net
discrete after-tax expense.
- All periods presented reflect the reclassification of our Hair
Restoration segment to discontinued operations. During the current
quarter, the Hair Restoration segment generated earnings of $0.07 per
diluted share.
"Second quarter results reflect conscious decisions we've made to invest
in our business to drive traffic," said Dan Hanrahan, President and
Chief Executive Officer. "We made the decision to increase salon hours,
primarily in our SmartStyle salons located in Walmart and our Supercuts
salons. We knew this decision would impact gross margins, but we
believed increasing hours would help stem continued declines in guest
traffic. By adding hours, we are beginning to see improvements in guest
traffic, especially in our SmartStyle and Supercuts businesses. Service
traffic in SmartStyle was up over 4% for the quarter compared to the
same period last year, and for the first time in thirteen consecutive
quarters, SmartStyle posted positive same-store service sales. Overall,
same-store sales trends improved 120 basis points compared to the first
quarter of this fiscal year."
Mr. Hanrahan continued, "While this investment currently reduced gross
margins, we are continuing to focus on scheduling optimization, so that
in the back half of this year our margins will be less impacted by
increased hours. Scheduling optimization is in its early stages, and we
are working diligently to strike the proper balance between staffing and
guest traffic. Preliminary January findings indicate this gap may be
narrowing in a number of our Supercuts salons, giving me confidence we
can and will continue to improve during the remainder of our fiscal year.
"On a positive note, we continued to drive expense out of the business.
General and administrative expenses, as adjusted, were reduced by over
$6 million compared to the same quarter last year. While we expect our
general and administrative run rate to continue in the second half, we
continue to focus on areas of the business that can drive further cost
efficiencies."
Mr. Hanrahan concluded, "We are in the early stages on several
initiatives focused on creating an ideal guest experience that drives
loyalty and repeat business, developing, retaining and attracting the
best stylists and optimizing our brand portfolio. Changing the strategic
direction of any established business requires investment, execution and
time. After six months in this role, I remain extremely confident about
our ability to improve Regis' performance and the entire organization
shares my sense of urgency to achieve that goal."
| Comparable Profitability Measures (1) | |
| |
| Three Months Ended |
| Six Months Ended |
| Fiscal Years Ended | | | December 31, | | December 31, | | June 30, | | | 2012 |
| 2011 | | 2012 |
| 2011 | | 2012 |
| 2011 | | | (Dollars in Millions) | |
Revenue
| |
$
|
506.2
| | |
$
|
526.1
| | |
$
|
1,011.5
| | |
$
|
1,057.5
| | |
$
|
2,122.2
| | |
$
|
2,180.2
| | | | | | | | | | | | | | | | | | | |
|
Revenue growth (decline) %
| | |
(3.8
|
)
| | |
(2.3
|
)
| | |
(4.3
|
)
| | |
(2.1
|
)
| | |
(2.7
|
)
| | |
(1.6
|
)
| | | | | | | | | | | | | | | | | | |
|
Same-Store Sales %
| | |
(1.9
|
)
| | |
(3.3
|
)
| | |
(2.5
|
)
| | |
(3.4
|
)
| | |
(3.5
|
)
| | |
(1.9
|
)
|
Same-Store Average Ticket % Change
| | |
0.5
| | | |
(0.9
|
)
| | |
(0.2
|
)
| | |
(0.4
|
)
| | |
(0.6
|
)
| | |
1.0
| |
Same-Store Guest Count % Change
| | |
(2.4
|
)
| | |
(2.4
|
)
| | |
(2.3
|
)
| | |
(3.0
|
)
| | |
(2.9
|
)
| | |
(2.9
|
)
| | | | | | | | | | | | | | | | | | |
|
Gross Margin % (2)
| | |
41.7
| | | |
44.2
| | | |
42.1
| | | |
44.4
| | | |
44.2
| | | |
44.1
| |
Service Margin % (2)
| | |
39.7
| | | |
42.7
| | | |
40.3
| | | |
43.0
| | | |
42.7
| | | |
42.6
| |
Product Margin % (2)
| | |
49.1
| | | |
49.5
| | | |
48.6
| | | |
49.9
| | | |
49.6
| | | |
49.7
| | | | | | | | | | | | | | | | | | | |
|
Site operating expense as % of total revenues, U.S. GAAP reported
| | |
9.9
| | | |
9.8
| | | |
10.1
| | | |
10.0
| | | |
9.8
| | | |
9.7
| |
Site operating expense as % of total revenues, as adjusted
| | |
10.1
| | | |
9.8
| | | |
10.2
| | | |
10.0
| | | |
9.7
| | | |
9.7
| | | | | | | | | | | | | | | | | | | |
|
General and administrative as % of total revenues, U.S. GAAP reported
| | |
11.0
| | | |
11.9
| | | |
11.0
| | | |
12.2
| | | |
11.8
| | | |
13.1
| |
General and administrative as % of total revenues, as adjusted
| | |
10.8
| | | |
11.6
| | | |
11.0
| | | |
11.7
| | | |
11.0
| | | |
11.3
| | | | | | | | | | | | | | | | | | | |
|
Operating income (loss) as % of total revenues, U.S. GAAP reported
| | |
1.7
| | | |
2.3
| | | |
1.8
| | | |
2.0
| | | |
(0.1
|
)
| | |
(0.7
|
)
|
Operating income as % of total revenues, as adjusted
| | |
1.7
| | | |
3.8
| | | |
1.7
| | | |
3.8
| | | |
4.6
| | | |
4.5
| | | | | | | | | | | | | | | | | | | |
|
EBITDA
| | |
17.4
| | | |
(21.2
|
)
| | |
86.3
| | | |
26.5
| | | |
14.7
| | | |
101.3
| |
EBITDA, as adjusted
| | |
31.1
| | | |
43.7
| | | |
61.5
| | | |
87.6
| | | |
191.4
| | | |
195.3
| | | | | | | | | | | | | | | | | | | | | | | | | |
|
|
|
1)
|
|
As of September 30, 2012, the Company classified the results of
operations of the Hair Restoration Centers as discontinued
operations. Beginning with the first quarter ended September 30,
2012, the Company reclassified certain salon marketing and
advertising expenses that were previously within cost of service and
general and administrative expense to site operating expense. All
periods presented reflect the Hair Restoration segment operations as
discontinued operations and the reclassifications that were made
during the quarter ended September 30, 2012.
| | |
2)
| |
Excludes depreciation and amortization.
| | | | |
|
Second Quarter Results: Revenues. Revenues for the quarter declined $20.0 million, or
3.8%, compared to the prior year quarter.
Salon revenues during the quarter were $496.5 million, a decrease of
$20.4 million, or 3.9%, from the prior year quarter, mainly driven by
declines in North American salons. North American service revenues for
the quarter were $364.5 million, a decrease of $15.2 million, or 4.0%,
compared to the same period last year. Compared to the prior year
quarter, North American same-store service sales declined 1.5%,
comprised of a 2.2% decrease in guest counts and 0.7 % increase in
average ticket price. Management estimates that lost business from
Hurricane Sandy negatively impacted same-store service sales by
approximately 30 basis points. Net changes in store counts drove the
remaining 2.5% decrease compared to the prior year quarter.
Product revenues for the quarter were $108.2 million, a decrease of $4.7
million, or 4.1% versus the same period last year. Product same-store
sales declined 3.6%.
Royalties and fees for the quarter of $9.6 million increased $0.4
million, or 4.7%, versus the prior year quarter.
Gross Margin. Gross margin as a percent of service and product
revenues for the second quarter decreased 250 basis points to 41.7%
compared to the prior year quarter.
Service margin as a percent of service revenues for the quarter was
39.7%, a decline of 300 basis points compared the prior year quarter,
primarily related to increased salon labor costs in North American
salons. The increase in salon labor costs was due the Company's decision
to increase stylist hours to drive traffic. Hours increased at a faster
rate than same-store service sales. The Company is in the early stages
of implementing a scheduling optimization tool which will help align
changes to salon hours with changes in guest traffic. Product margin as
a percent of product revenues for the quarter was 49.1%, a decline of 40
basis points compared to the prior year quarter, in part, driven by
product donations for Hurricane Sandy relief efforts.
Site Operating Expenses. Site operating expenses for the quarter
of $49.9 million, or 9.9% of revenues, declined by $1.6 million or 3.1%
compared to the same quarter last year. Excluding the impact of discrete
items, site operating expenses, as adjusted, for the quarter of $51.0
million, or 10.1% of revenues, a decrease of $0.5 million, or 0.9%,
compared to the same quarter last year. The decrease in expense was
primarily driven by the fact that we were lapping a marketing event in
the prior year that was not repeated in the current year, partly offset
by increased communication and insurance costs.
General and Administrative. General and administrative expenses
for the quarter of $55.8 million, or 11.0% of revenues, decreased $6.8
million, or 90 basis points, compared to the same quarter last year.
Excluding the impact of discrete items, general and administrative
expenses, as adjusted, for the quarter decreased $6.1 million, or 9.9%,
compared to the same quarter last year, representing an 80 basis point
decline as a percent of revenues. This reduction was driven by cost
saving initiatives the Company put in place to simplify and become
efficient in supporting salon operations. We expect general and
administrative run rates to continue in the second half and we continue
to focus on simplification to drive further cost efficiencies.
Rent. Rent expense for the quarter was $80.6 million, or 15.9% of
revenues, representing an increase of 10 basis points over the same
quarter last year, primarily the result of negative leverage due to
decreases in same-store sales. Rent expense actually declined by $2.7
million, or 3.2%, compared to the same quarter last year, due to store
closures.
Depreciation and Amortization. Depreciation and amortization for
the quarter was $21.9 million, or 4.3% of revenues, compared to $28.4
million, or 5.4% of revenues in the prior quarter. Excluding the impact
of discrete items in the prior year quarter, depreciation and
amortization was essentially flat versus the prior year quarter.
Income Taxes. During the three months ended December 31, 2012,
the Company recognized tax expense of $1.1 million at an effective tax
rate, as adjusted, of 40.6%. The Company's tax rate, as adjusted, came
in higher than the rate of 21.6% for the prior year quarter primarily
due to the prior year rate benefiting from employment tax credits.
Equity in Affiliates. Loss from equity method investments and
affiliated companies was $17.7 million in the second quarter of fiscal
2013, which included a net discrete impairment charge of $17.9 million
related to Empire Education Group. Income from equity method investments
and affiliated companies, as adjusted, was $0.2 million, a decrease of
$4.9 million over the second quarter of fiscal 2012. The reduction in
earnings, as adjusted, is the result of the Company's sale of its
investment in Provalliance and reduced earnings at Empire Education
Group due to declining student enrollment.
EBITDA. EBITDA for the quarter of $17.4 million increased by
$38.6 million, or 181.7%, compared to the prior year quarter. Excluding
the impact of discrete items, EBITDA, as adjusted, for the quarter of
$31.1 million decreased by $12.6 million, or 28.9% compared to the prior
year quarter.
Discrete Items. Discrete expense for the current quarter netted
to $14.0 million on an after-tax basis, and consisted of the following
after-tax items:
-
After-tax non-cash impairment charge of $17.9 million related to the
Company's investment in Empire Education Group.
-
Senior management restructuring costs of $0.6 million after-tax
related to severance.
-
Self-insurance reserve benefit of $0.7 million after-tax primarily
related to an actuarial adjustment to prior years' workers'
compensation reserves.
-
Earnings from discontinued operations of $3.9 million after-tax
related to the Company's Hair Restoration segment.
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.
Regis Corporation will host a conference call discussing second quarter
results today, January 31, 2013, at 10 a.m., Central time. Interested
parties are invited to listen by logging on to www.regiscorp.com
or dialing 877-941-8609. A replay of the call will be available later
that day. The replay phone number is 800-406-7325, access code 4590684#.
About Regis Corporation Regis Corporation (NYSE:RGS) is the
beauty industry's global leader in beauty salons, hair restoration
centers and cosmetology education. As of December 31, 2012, the Company
owned, franchised or held ownership interests in approximately 10,000
worldwide locations. Regis' corporate and franchised locations operate
under concepts such as Supercuts, Sassoon Salon, Regis Salons,
MasterCuts, SmartStyle, Cost Cutters, Cool Cuts 4 Kids and Hair Club for
Men and Women. Regis maintains ownership interests in Empire Education
Group in the U.S. and the MY Style concepts in Japan. 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.
To join Regis Corporation's email alert list, click on this link: http://www.b2i.us/irpass.asp?BzID=913&to=ea&Nav=1&S=0&L=1 This press release 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. 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
factors include the impact of management and organizational changes; the
Company's dependence on same-store sales increases to increase revenue;
the impact on the Company of healthcare reform legislation; competition
within the personal hair care industry, which remains strong, both
domestically and internationally; price sensitivity; changes in economic
conditions; changes in consumer tastes and fashion trends; the ability
of the Company to implement its planned spending and cost reduction plan
and to continue to maintain compliance with financial covenants in its
credit agreements; the Company's reliance on management information
systems; successful deployment of point-of-sale and guest relationship
management systems; the ability of the Company to retain and attract
stylists; labor and benefit costs; legal claims; the continued ability
of the Company and its franchisees to obtain suitable locations and
financing for new salon development and to maintain satisfactory
relationships with landlords and other licensors with respect to
existing locations; governmental initiatives such as minimum wage rates,
taxes and possible franchise legislation; the ability of the Company to
optimize its brand portfolio and integrate salons that support its
growth objectives; the ability of the Company to maintain satisfactory
relationships with suppliers; financial performance of our joint
ventures; risk inherent to international developments (including
currency fluctuations); or other factors not listed above. Additional
information concerning potential factors that could affect future
financial results is set forth in the Company's Annual Report on
Form 10-K for the year ended June 30, 2012. 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 (NYSE: RGS) | CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) | as of December 31, 2012 and June 30, 2012 | (Dollars in thousands, except per share data) | |
| | | | December 31, 2012 |
| June 30, 2012 | ASSETS | | | | |
Current assets:
| | | | |
Cash and cash equivalents
| |
$
|
218,343
| |
$
|
111,943
|
Receivables, net
| | |
24,597
| | |
28,954
|
Inventories
| | |
153,864
| | |
142,276
|
Deferred income taxes
| | |
17,988
| | |
14,503
|
Income tax receivable
| | |
13,864
| | |
14,098
|
Other current assets
| | |
21,486
| | |
55,903
|
Current assets held for sale
| |
|
16,816
| |
|
17,000
|
Total current assets
| | |
466,958
| | |
384,677
| | | | |
|
Property and equipment, net
| | |
302,756
| | |
305,799
|
Goodwill
| | |
463,470
| | |
462,279
|
Other intangibles, net
| | |
22,893
| | |
23,395
|
Investment in and loans to affiliates
| | |
42,170
| | |
160,987
|
Other assets
| | |
62,697
| | |
59,488
|
Long-term assets held for sale
| |
|
179,959
| |
|
175,221
| | | | |
|
Total assets
| |
$
|
1,540,903
| |
$
|
1,571,846
| | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | |
Current liabilities:
| | | | |
Long-term debt, current portion
| |
$
|
28,950
| |
$
|
28,937
|
Accounts payable
| | |
59,277
| | |
47,890
|
Accrued expenses
| | |
140,322
| | |
157,026
|
Current liabilities related to assets held for sale
| |
|
16,538
| |
|
18,120
|
Total current liabilities
| | |
245,087
| | |
251,973
| | | | |
|
Long-term debt and capital lease obligations
| | |
240,033
| | |
258,737
|
Other noncurrent liabilities
| | |
160,257
| | |
143,972
|
Long-term liabilities related to assets held for sale
| |
|
28,781
| |
|
28,007
|
Total liabilities
| |
|
674,158
| |
|
682,689
| | | | |
|
Commitments and contingencies
| | | | | | | | |
|
Shareholders' equity:
| | | | |
Common stock, $0.05 par value; issued and outstanding 56,615,264 and
57,415,241 common shares at December 31, 2012 and June 30, 2012,
respectively
| | |
2,831
| | |
2,871
|
Additional paid-in capital
| | |
334,353
| | |
346,943
|
Accumulated other comprehensive income
| | |
26,109
| | |
55,114
|
Retained earnings
| |
|
503,452
| |
|
484,229
| | | | |
|
Total shareholders' equity
| |
|
866,745
| |
|
889,157
| | | | |
|
Total liabilities and shareholders' equity
| |
$
|
1,540,903
| |
$
|
1,571,846
| | | | | | |
|
REGIS CORPORATION (NYSE: RGS) | CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) | (Dollars in thousands, except per share data) | |
| | |
| | | | | Three Months Ended | | | Six Months Ended | | | | December 31, | | | December 31, | | | | 2012 | |
| 2011 | | | 2012 | |
| 2011 | |
Revenues:
| | | | | | | | | | | | |
Service
| |
$
|
388,286
| | |
$
|
404,025
| | |
$
|
781,702
| | |
$
|
819,042
| |
Product
| |
108,236
| | |
112,900
| | |
210,520
| | |
219,673
| |
Royalties and fees
| |
9,643
| | |
9,213
| | |
19,303
| | |
18,769
| | | |
506,165
| | |
526,138
| | |
1,011,525
| | |
1,057,484
| |
Operating expenses:
| | | | | | | | | | | | |
Cost of service
| |
234,265
| | |
231,392
| | |
466,793
| | |
467,057
| |
Cost of product
| |
55,064
| | |
57,007
| | |
108,196
| | |
110,030
| |
Site operating expenses
| |
49,872
| | |
51,466
| | |
102,219
| | |
106,277
| |
General and administrative
| |
55,795
| | |
62,642
| | |
111,667
| | |
128,512
| |
Rent
| |
80,555
| | |
83,249
| | |
162,054
| | |
165,425
| |
Depreciation and amortization
| |
21,891
| | |
28,446
| | |
42,600
| | |
59,243
| |
Total operating expenses
| |
497,442
| | |
514,202
| | |
993,529
| | |
1,036,544
| | | | | | | | | | | | | |
|
Operating income
| |
8,723
| | |
11,936
| | |
17,996
| | |
20,940
| | | | | | | | | | | | | |
|
Other income (expense):
| | | | | | | | | | | | |
Interest expense
| |
(6,649
|
)
| |
(7,203
|
)
| |
(13,478
|
)
| |
(14,563
|
)
|
Interest income and other, net
| |
601
| | |
2,651
| | |
35,213
| | |
3,969
| | | | | | | | | | | | | |
|
Income before income taxes and equity in (loss) income of affiliated
companies
| |
2,675
| | |
7,384
| | |
39,731
| | |
10,346
| | | | | | | | | | | | | |
|
Income taxes
| |
(1,085
|
)
| |
(543
|
)
| |
(4,071
|
)
| |
(1,752
|
)
|
Equity in (loss) income of affiliated companies, net of income taxes
| |
(17,709
|
)
| |
5,059
| | |
(17,132
|
)
| |
8,929
| | | | | | | | | | | | | |
|
(Loss) income from continuing operations
| |
(16,119
|
)
| |
11,900
| | |
18,528
| | |
17,523
| | | | | | | | | | | | | |
|
Income (loss) from discontinued operations, net of taxes
| |
3,853
| | |
(69,327
|
)
| |
7,630
| | |
(66,613
|
)
| | | | | | | | | | | | |
|
Net (loss) income
| |
$
|
(12,266
|
)
| |
$
|
(57,427
|
)
| |
$
|
26,158
| | |
$
|
(49,090
|
)
| | | | | | | | | | | | |
|
Net (loss) income per share:
| | | | | | | | | | | | |
Basic:
| | | | | | | | | | | | |
(Loss) income from continuing operations
| |
(0.28
|
)
| |
0.21
| | |
0.32
| | |
0.31
| |
Income (loss) from discontinued operations
| |
0.07
| | |
(1.22
|
)
| |
0.13
| | |
(1.17
|
)
|
Net (loss) income per share, basic(1)
| |
$
|
(0.22
|
)
| |
$
|
(1.01
|
)
| |
$
|
0.46
| | |
$
|
(0.86
|
)
|
Diluted:
| | | | | | | | | | | | |
(Loss) income from continuing operations
| |
(0.28
|
)
| |
0.20
| | |
0.32
| | |
0.31
| |
Income (loss) from discontinued operations
| |
0.07
| | |
(1.01
|
)
| |
0.13
| | |
(1.17
|
)
|
Net (loss) income per share, diluted(1)
| |
$
|
(0.22
|
)
| |
$
|
(0.81
|
)
| |
$
|
0.46
| | |
$
|
(0.86
|
)
| | | | | | | | | | | | |
|
Weighted average common and common equivalent shares outstanding:
| | | | | | | | | | | | |
Basic
| |
56,794
| | |
56,857
| | |
57,043
| | |
56,853
| |
Diluted
| |
56,794
| | |
68,417
| | |
57,125
| | |
57,159
| | | | | | | | | | | | | |
|
Cash dividends declared per common share
| |
$
|
0.06
| | |
$
|
0.06
| | |
$
|
0.12
| | |
$
|
0.12
| |
| | | | | | | | | | | | | | | | |
(1) Total is a recalculation; line items calculated individually may not
sum to total due to rounding.
REGIS CORPORATION (NYSE: RGS) | CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited) | (Dollars in thousands) | |
| | |
| | | | | Three Months Ended | | | Six Months Ended | | | | December 31, | | | December 31, | | | | 2012 | |
| 2011 | | | 2012 | |
| 2011 | |
Net (loss) income:
| |
$
|
(12,266
|
)
| |
$
|
(57,427
|
)
| |
$
|
26,158
| | |
$
|
(49,090
|
)
|
Other comprehensive loss, net of tax:
| | | | | | | | | | | | |
Foreign currency translation adjustments
| |
(2,178
|
)
| |
(2,089
|
)
| |
4,860
| | |
(22,642
|
)
|
Change in fair market value of financial instruments designated as
cash flow hedges
| |
-
| | |
(89
|
)
| |
(23
|
)
| |
357
| |
Reclassification associated with liquidation of foreign entities
| |
-
| | |
-
| | |
(33,842
|
)
| |
-
| |
Other comprehensive loss:
| |
(2,178
|
)
| |
(2,178
|
)
| |
(29,005
|
)
| |
(22,285
|
)
|
Comprehensive loss:
| |
$
|
(14,444
|
)
| |
$
|
(59,605
|
)
| |
$
|
(2,847
|
)
| |
$
|
(71,375
|
)
| | | | | | | | | | | | | | | | |
|
REGIS CORPORATION (NYSE: RGS) | SELECTED CASH FLOW DATA (Unaudited) | (Dollars in thousands) | |
| | | | | Six Months Ended | | | | December 31, | | | | 2012 | |
| 2011 | | | | | | | | | |
|
Net cash provided by operating activities
| |
$
|
58,969
| | |
$
|
61,947
| |
Net cash provided by (used in) investing activities
| |
88,006
| | |
(42,877
|
)
|
Net cash used in financing activities
| |
(43,071
|
)
| |
(28,942
|
)
|
Effect of exchange rate changes on cash and cash equivalents
| |
2,496
| | |
(3,292
|
)
|
Increase (decrease) in cash and cash equivalents
| |
106,400
| | |
(13,164
|
)
|
Cash and cash equivalents:
| | | | | | |
Beginning of year
| |
111,943
| | |
96,263
| |
End of year
| |
$
|
218,343
| | |
$
|
83,099
| | | | | | | | | |
|
REVENUES BY CONCEPT: |
| Three Months Ended | |
| Six Months Ended | | | | December 31, | | | December 31, | | (Dollars in thousands) | | 2012 | |
| 2011 | | | 2012 | |
| 2011 | |
North American salons:
| | | | | | | | | | | | |
Regis
| |
$
|
95,432
| | |
$
|
104,629
| | |
$
|
192,299
| | |
$
|
209,496
| |
MasterCuts
| |
37,604
| | |
40,293
| | |
75,535
| | |
80,751
| |
SmartStyle
| |
127,369
| | |
125,980
| | |
250,367
| | |
254,464
| |
Supercuts
| |
85,109
| | |
85,031
| | |
172,177
| | |
168,634
| |
Promenade
| |
127,888
| | |
136,136
| | |
256,906
| | |
276,581
| |
Total North American salons
| |
473,402
| | |
492,069
| | |
947,284
| | |
989,926
| | | | | | | | | | | | | |
|
International salons
| |
32,763
| | |
34,069
| | |
64,241
| | |
67,558
| |
Consolidated revenues
| |
$
|
506,165
| | |
$
|
526,138
| | |
$
|
1,011,525
| | |
$
|
1,057,484
| | | | | | | | | | | | | |
|
Percentage change from prior year
| |
(3.8
|
)%
| |
(2.3
|
)%
| |
(4.3
|
)%
| |
(2.1
|
)%
| | | | | | | | | | | | |
|
SAME-STORE SALES (1): |
| For the Three Months Ended | | | | December 31, 2012 | |
| December 31, 2011 | | | | | |
| | |
| | | | | |
| | |
| | | | | Service | | | Product | | | Total | | | Service | | | Product | | | Total | |
Regis Salons
| |
(2.9
|
)%
| |
(4.6
|
)%
| |
(3.2
|
)%
| |
(4.9
|
)%
| |
2.9
|
%
| |
(3.5
|
)%
|
MasterCuts
| |
(4.0
|
)
| |
(4.8
|
)
| |
(4.2
|
)
| |
(3.4
|
)
| |
3.1
| | |
(2.1
|
)
|
Supercuts
| |
0.5
| | |
(1.2
|
)
| |
0.3
| | |
(1.1
|
)
| |
(3.0
|
)
| |
(1.3
|
)
|
Promenade
| |
(2.6
|
)
| |
(5.6
|
)
| |
(2.9
|
)
| |
(2.8
|
)
| |
(2.8
|
)
| |
(2.8
|
)
|
SmartStyle
| |
0.8
| | |
(0.2
|
)
| |
0.5
| | |
(3.7
|
)
| |
(3.7
|
)
| |
(3.7
|
)
|
North America Same-Store Sales
| |
(1.5
|
)%
| |
(2.5
|
)%
| |
(1.7
|
)%
| |
(3.2
|
)%
| |
(1.5
|
)%
| |
(2.9
|
)%
| | | | | | | | | | | | | | | | | | |
|
International Same-Store Sales
| |
(2.5
|
)%
| |
(14.3
|
)%
| |
(6.6
|
)%
| |
(6.7
|
)%
| |
(16.1
|
)%
| |
(10.1
|
)%
| | | | | | | | | | | | | | | | | | |
|
Consolidated Same-Store Sales
| |
(1.5
|
)%
| |
(3.6
|
)%
| |
(1.9
|
)%
| |
(3.4
|
)%
| |
(3.0
|
)%
| |
(3.3
|
)%
| | | | | | | | | | | | | | | | | | |
|
(1)
|
|
Same-store sales are calculated on a daily basis as the total change
in sales for company-owned locations which were open on a specific
day of the week during the current period and the corresponding
prior period. Quarterly same-store sales are the sum of the
same-store sales computed on a daily basis. Locations relocated
within a one mile radius are included in same-store sales as they
are considered to have been open in the prior period. International
same-store sales are calculated in local currencies to remove
foreign currency fluctuations from the calculation.
| | |
|
SAME-STORE SALES (1): |
| For the Six Months Ended | | | | December 31, 2012 | |
| December 31, 2011 | | | | | |
| | |
| | | | | |
| | |
| | | | | Service | | | Product | | | Total | | | Service | | | Product | | | Total | |
Regis Salons
| |
(3.5
|
)%
| |
(3.1
|
)%
| |
(3.4
|
)%
| |
(4.7
|
)%
| |
2.3
|
%
| |
(3.5
|
)%
|
MasterCuts
| |
(4.5
|
)
| |
(3.3
|
)
| |
(4.2
|
)
| |
(3.9
|
)
| |
1.1
| | |
(2.9
|
)
|
Supercuts
| |
0.9
| | |
(0.9
|
)
| |
0.7
| | |
(0.5
|
)
| |
(3.7
|
)
| |
(0.9
|
)
|
Promenade
| |
(2.8
|
)
| |
(4.9
|
)
| |
(3.0
|
)
| |
(2.7
|
)
| |
(4.3
|
)
| |
(2.9
|
)
|
SmartStyle
| |
(1.9
|
)
| |
(1.8
|
)
| |
(1.9
|
)
| |
(3.6
|
)
| |
(4.0
|
)
| |
(3.8
|
)
|
North America Same-Store Sales
| |
(2.2
|
)%
| |
(2.6
|
)%
| |
(2.3
|
)%
| |
(3.1
|
)%
| |
(2.3
|
)%
| |
(3.0
|
)%
| | | | | | | | | | | | | | | | | | |
|
International Same-Store Sales
| |
(2.8
|
)%
| |
(11.8
|
)%
| |
(5.8
|
)%
| |
(6.6
|
)%
| |
(15.6
|
)%
| |
(9.8
|
)%
| | | | | | | | | | | | | | | | | | |
|
Consolidated Same-Store Sales
| |
(2.3
|
)%
| |
(3.4
|
)%
| |
(2.5
|
)%
| |
(3.3
|
)%
| |
(3.6
|
)%
| |
(3.4
|
)%
| | | | | | | | | | | | | | | | | | |
|
(1)
|
|
Same-store sales are calculated on a daily basis as the total change
in sales for company-owned locations which were open on a specific
day of the week during the current period and the corresponding
prior period. Quarterly same-store sales are the sum of the
same-store sales computed on a daily basis. Locations relocated
within a one mile radius are included in same-store sales as they
are considered to have been open in the prior period. International
same-store sales are calculated in local currencies to remove
foreign currency fluctuations from the calculation.
| | |
|
FINANCIAL INFORMATION BY SEGMENT:
Financial information concerning the Company's salon businesses is shown
in the following tables.
|
| For the Three Months Ended December 31, 2012 (Unaudited) | | | | Salons |
| Unallocated | |
| | | (Dollars in thousands) | | North America |
| International | | Corporate | | | Consolidated | |
Revenues:
| | | | | | | | | | |
Service
| |
$
|
364,486
| | |
23,800
| |
$
|
-
| | |
$
|
388,286
| |
Product
| | |
99,273
| | |
8,963
| | |
-
| | | |
108,236
| |
Royalties and fees
| |
|
9,643
| |
|
-
| |
|
-
| | |
|
9,643
| | | |
|
473,402
| |
|
32,763
| |
|
-
| | |
|
506,165
| |
Operating expenses:
| | | | | | | | | | |
Cost of service
| | |
221,562
| | |
12,703
| | |
-
| | | |
234,265
| |
Cost of product
| | |
50,176
| | |
4,888
| | |
-
| | | |
55,064
| |
Site operating expenses
| | |
47,417
| | |
2,455
| | |
-
| | | |
49,872
| |
General and administrative
| | |
30,129
| | |
2,499
| | |
23,167
| | | |
55,795
| |
Rent
| | |
71,778
| | |
8,420
| | |
357
| | | |
80,555
| |
Depreciation and amortization
| |
|
17,138
| |
|
1,565
| |
|
3,188
| | |
|
21,891
| |
Total operating expenses
| |
|
438,200
| |
|
32,530
| |
|
26,712
| | |
|
497,442
| | | | | | | | | | | |
|
Operating income (loss)
| | |
35,202
| | |
233
| | |
(26,712
|
)
| | |
8,723
| | | | | | | | | | | |
|
Other income (expense):
| | | | | | | | | | |
Interest expense
| | |
-
| | |
-
| | |
(6,649
|
)
| | |
(6,649
|
)
|
Interest income and other, net
| |
|
-
| |
|
-
| |
|
601
| | |
|
601
| |
Income (loss) from continuing operations before income taxes and
equity in loss of affiliated companies
| |
$
|
35,202
| |
$
|
233
| |
$
|
(32,760
|
)
| |
$
|
2,675
| | | | |
| | | For the Three Months Ended December 31, 2011 (Unaudited) | | | | Salons | | Unallocated | | | | | (Dollars in thousands) | | North America | | International | | Corporate | | | Consolidated | |
Revenues:
| | | | | | | | | | |
Service
| |
$
|
379,694
| |
$
|
24,331
| |
$
|
-
| | |
$
|
404,025
| |
Product
| | |
103,162
| | |
9,738
| | |
-
| | | |
112,900
| |
Royalties and fees
| |
|
9,213
| |
|
-
| |
|
-
| | |
|
9,213
| | | |
|
492,069
| |
|
34,069
| |
|
-
| | |
|
526,138
| |
Operating expenses:
| | | | | | | | | | |
Cost of service
| | |
218,270
| | |
13,122
| | |
-
| | | |
231,392
| |
Cost of product
| | |
51,753
| | |
5,254
| | |
-
| | | |
57,007
| |
Site operating expenses
| | |
48,758
| | |
2,708
| | |
-
| | | |
51,466
| |
General and administrative
| | |
30,085
| | |
2,607
| | |
29,950
| | | |
62,642
| |
Rent
| | |
73,833
| | |
9,060
| | |
356
| | | |
83,249
| |
Depreciation and amortization
| |
|
18,283
| |
|
1,112
| |
|
9,051
| | |
|
28,446
| |
Total operating expenses
| |
|
440,982
| |
|
33,863
| |
|
39,357
| | |
|
514,202
| | | | | | | | | | | |
|
Operating income (loss)
| | |
51,087
| | |
206
| | |
(39,357
|
)
| | |
11,936
| | | | | | | | | | | |
|
Other income (expense):
| | | | | | | | | | |
Interest expense
| | |
-
| | |
-
| | |
(7,203
|
)
| | |
(7,203
|
)
|
Interest income and other, net
| |
|
-
| |
|
-
| |
|
2,651
| | |
|
2,651
| |
Income (loss) from continuing operations before income taxes and
equity in income of affiliated companies
| |
$
|
51,087
| |
$
|
206
| |
$
|
(43,909
|
)
| |
$
|
7,384
| | | | | | | | | | | |
|
|
| For the Six Months Ended December 31, 2012 (Unaudited) | | | | Salons |
| Unallocated | |
| | | (Dollars in thousands) | | North America |
| International | | Corporate | | | Consolidated | |
Revenues:
| | | | | | | | | | |
Service
| |
$
|
734,166
| |
$
|
47,536
| |
$
|
-
| | |
$
|
781,702
| |
Product
| | |
193,815
| | |
16,705
| | |
-
| | | |
210,520
| |
Royalties and fees
| |
|
19,303
| |
|
-
| |
|
-
| | |
|
19,303
| | | |
|
947,284
| |
|
64,241
| |
|
-
| | |
|
1,011,525
| |
Operating expenses:
| | | | | | | | | | |
Cost of service
| | |
441,793
| | |
25,000
| | |
-
| | | |
466,793
| |
Cost of product
| | |
99,252
| | |
8,944
| | |
-
| | | |
108,196
| |
Site operating expenses
| | |
97,013
| | |
5,206
| | |
-
| | | |
102,219
| |
General and administrative
| | |
61,820
| | |
5,017
| | |
44,830
| | | |
111,667
| |
Rent
| | |
144,500
| | |
16,822
| | |
732
| | | |
162,054
| |
Depreciation and amortization
| |
|
33,726
| |
|
2,597
| |
|
6,277
| | |
|
42,600
| |
Total operating expenses
| |
|
878,104
| |
|
63,586
| |
|
51,839
| | |
|
993,529
| | | | | | | | | | | |
|
Operating income (loss)
| | |
69,180
| | |
655
| | |
(51,839
|
)
| | |
17,996
| | | | | | | | | | | |
|
Other income (expense):
| | | | | | | | | | |
Interest expense
| | |
-
| | |
-
| | |
(13,478
|
)
| | |
(13,478
|
)
|
Interest income and other, net
| |
|
-
| |
|
-
| |
|
35,213
| | |
|
35,213
| |
(Loss) income from continuing operations before income taxes and
equity in loss of affiliated companies
| |
$
|
69,180
| |
$
|
655
| |
$
|
(30,104
|
)
| |
$
|
39,731
| | | | |
| | | For the Six Months Ended December 31, 2011 (Unaudited) | | | | Salons | | Unallocated | | | | | (Dollars in thousands) | | North America | | International | | Corporate | | | Consolidated | |
Revenues:
| | | | | | | | | | |
Service
| |
$
|
769,858
| |
$
|
49,184
| |
$
|
-
| | |
$
|
819,042
| |
Product
| | |
201,299
| | |
18,374
| | |
-
| | | |
219,673
| |
Royalties and fees
| |
|
18,769
| |
|
-
| |
|
-
| | |
|
18,769
| | | |
|
989,926
| |
|
67,558
| |
|
-
| | |
|
1,057,484
| |
Operating expenses:
| | | | | | | | | | |
Cost of service
| | |
441,245
| | |
25,812
| | |
-
| | | |
467,057
| |
Cost of product
| | |
100,197
| | |
9,833
| | |
-
| | | |
110,030
| |
Site operating expenses
| | |
100,610
| | |
5,667
| | |
-
| | | |
106,277
| |
General and administrative
| | |
62,730
| | |
5,248
| | |
60,534
| | | |
128,512
| |
Rent
| | |
147,213
| | |
17,824
| | |
388
| | | |
165,425
| |
Depreciation and amortization
| |
|
36,824
| |
|
2,418
| |
|
20,001
| | |
|
59,243
| |
Total operating expenses
| |
|
888,819
| |
|
66,802
| |
|
80,923
| | |
|
1,036,544
| | | | | | | | | | | |
|
Operating income (loss)
| | |
101,107
| | |
756
| | |
(80,923
|
)
| | |
20,940
| | | | | | | | | | | |
|
Other income (expense):
| | | | | | | | | | |
Interest expense
| | |
-
| | |
-
| | |
(14,563
|
)
| | |
(14,563
|
)
|
Interest income and other, net
| |
|
-
| |
|
-
| |
|
3,969
| | |
|
3,969
| |
Income (loss) from continuing operations before income taxes and
equity in income of affiliated companies
| |
$
|
101,107
| |
$
|
756
| |
$
|
(91,517
|
)
| |
$
|
10,346
| | | | | | | | | | | |
|
Non-GAAP Reconciliations References made to discrete items
were formerly referred to as non-operational items in previous earnings
releases, and references made to financial measures, as adjusted, were
formerly referred to as operational measures in previous earnings
releases.
We believe our presentation of non-GAAP operating income, net income,
net income per diluted share, and other non-GAAP financial measures
provides meaningful insight into our ongoing operating performance and
an alternative perspective of our results of operations. Presentation of
the non-GAAP measures allows investors to review our core ongoing
operating performance business from the same perspective as management
and Board of Directors. These non-GAAP financial measures provide
investors an enhanced understanding of our operations, facilitate
investors' analysis and comparisons of our current and past results of
operations and provide insight into the prospects of our future
performance. We also believe that the non-GAAP measures are useful to
investors because they provide supplemental information that research
analysts frequently use to analyze financial performance.
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 the
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 in that 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 both our financial statements prepared in accordance
with U.S. GAAP and the reconciliation of the selected U.S. GAAP to
non-GAAP financial measures, which are located in the Investor
Information section of the corporate website at www.regiscorp.com.
Non-GAAP reconciling items for the three and six months ended
December 31, 2012 and 2011:
The following information is provided to give qualitative and
quantitative information related to items impacting comparability. 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
which 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.
Self-insurance reserves adjustments – We have excluded the
self-insurance reserves adjustments associated with our prior year
reserves from our non-GAAP results. During the three and six months
ended December 31, 2012, we recorded a benefit of $1.1 million.
Senior management restructure charges – We have excluded expense
associated with senior management restructuring charges from our
non-GAAP results. During the three and six months ended December 31,
2012 we incurred expense of $1.0 million associated with senior
management restructuring. During the three and six months ended December
31, 2011 we incurred expense of $0.7 and $2.3 million, respectively,
associated with senior management restructuring.
Pure Beauty note receivable recovery – We have excluded the bad
debt recovery associated with the outstanding note receivable with Pure
Beauty from our non-GAAP results. During the six months ended December
31, 2012, we recorded $0.3 million for the recovery of bad debt
previously recorded on the outstanding note receivable with Pure Beauty.
Proxy fees – We have excluded the advisory fees and other costs
associated with the fiscal year 2011 contested proxy from our non-GAAP
results. During the three and six months ended December 31, 2011, we
incurred $1.1 and $2.2 million, respectively, of advisory fees and other
costs associated with the fiscal year 2011 contested proxy.
Point-of-sale system accelerated depreciation – We have excluded
the accelerated depreciation we recorded related to our point-of-sale
system from our non-GAAP results. During the three and six months ended
December 31, 2011, we recorded $6.3 and $15.0 million, respectively, in
accelerated depreciation related to our point-of-sale system.
Legal settlements – We have excluded income associated with legal
settlements from our non-GAAP results. During the three and six months
ended December 31, 2011 we recorded income of $1.1 million associated
with a legal settlement.
Recognition in earnings of amounts within accumulated other
comprehensive income – We have excluded the recognition in earnings
of amounts previously classified within accumulated other comprehensive
income (AOCI) that were associated with the liquidation of foreign
entities denominated in the Euro. The Company completed the sale of its
investment in Provalliance during the three months ended September 30,
2012 and subsequently liquidated all foreign entities with Euro
denominated operations. During the six months ended December 31, 2012,
amounts previously classified within AOCI that were recognized in
earnings were foreign currency translation rate gain adjustments of
$43.4 million, a cumulative tax-effected net loss of $7.9 million
associated with a cross-currency swap that was settled in fiscal year
2007 that hedged the Company's European operations, and a $1.7 million
net loss from cash repatriation with the Company's European operations.
Tax provision adjustments – The non-GAAP tax provision
adjustments are due to the change in non-GAAP taxable income as compared
to U.S. GAAP taxable income or loss, resulting from the non-GAAP
reconciling items addressed herein. The non-GAAP tax provision
adjustments are made to reflect the year-to-date non-GAAP tax rate for
each period.
Empire Education Group ("EEG") impairment– We have excluded the
impairment recorded on our investment in EEG from our non-GAAP results.
The Company recorded an other than temporary impairment charge of
approximately $17.9 million during the three and six months ended
December 31, 2012 as a result of a decrease in the fair value of the
Company's investment in EEG.
Provalliance impairment and equity put liability adjustment– We
have excluded the $2.7 million other than temporary impairment recorded
on our investment in Provalliance, partially offset by the $0.6 million
gain recorded for the reduction in the fair value of the equity put
option associated with our investment in Provalliance during the six
months ended December 31, 2012 from our non-GAAP results.
Hair Restoration Centers discontinued operations – We have
excluded the operations of our Hair Restoration Centers operations and
professional fees associated with the disposition of our Hair
Restoration Centers from our non-GAAP results. On July 13, 2012, the
Company entered into an agreement to sell its Hair Restoration Centers
operations. The Company recorded income from discontinued operations,
net of taxes of approximately $3.9 and $7.6 million during the three and
six months ended December 31, 2012, respectively. The Company recorded
loss from discontinued operations, net of taxes of approximately $69.3
and $66.6 million during the three and six months ended December 31,
2011, respectively.
Weighted average shares adjustments – The non-GAAP weighted
average shares adjustments are due to the change in non-GAAP net income
as compared to the U.S. GAAP net income or loss, resulting from the
non-GAAP reconciling items addressed herein. Non-GAAP net income per
share reflects the weighted average shares associated with non-GAAP net
income, which may included the dilutive effect of common stock and
convertible share equivalents.
REGIS CORPORATION | Reconciliation of selected U.S. GAAP to non-GAAP financial
measures | (In thousands, except per share data) | (unaudited) |
| Reconciliation of U.S. GAAP operating income and net (loss)
income to equivalent non-GAAP measures | |
| |
| Three Months Ended | |
| Six Months Ended | | | | | | December 31, | | | December 31, | | | | U.S. GAAP financial line item | | 2012 | |
| 2011 |
| | 2012 | |
| 2011 | | U.S. GAAP revenue | | | | $ | 506,165 | | | $ | 526,138 | | $ | 1,011,525 | | | $ | 1,057,484 | | | | | | | | | | | | | | | |
| U.S. GAAP operating income | | | | $ | 8,723 | | | $ | 11,936 | | | $ | 17,996 | | | $ | 20,940 | | | | | | | | | | | | | | | |
|
Non-GAAP operating expense adjustments:
| | | | | | | | | | | | | | |
Self-insurance reserves adjustments
| |
Site operating expense
| |
(1,127
|
)
| |
-
| | |
(1,127
|
)
| |
-
| |
Senior management restructure
| |
General and administrative
| |
992
| | |
696
| | |
992
| | |
2,349
| |
Self-insurance reserves adjustments
| |
General and administrative
| |
5
| | |
-
| | |
5
| | |
-
| |
Pure Beauty note receivable recovery
| |
General and administrative
| |
-
| | |
-
| | |
(333
|
)
| |
-
| |
Proxy fees
| |
General and administrative
| |
-
| | |
1,096
| | |
-
| | |
2,225
| |
Point-of-sale accelerated depreciation
| |
Depreciation and amortization
| |
-
| | |
6,338
| | |
-
| | |
15,037
| |
Total non-GAAP operating expense adjustments
| | | |
(130
|
)
| |
8,130
| | |
(463
|
)
| |
19,611
| | Non-GAAP operating income (1) | | | | $ | 8,593 | | | $ | 20,066 | | | $ | 17,533 | | | $ | 40,551 | | | | | | | | | | | | | | | |
| U.S. GAAP net (loss) income | | | | $ | (12,266 | ) | | $ | (57,427 | ) | | $ | 26,158 | | | $ | (49,090 | ) | | | | | | | | | | | | | | |
|
Non-GAAP net (loss) income adjustments:
| | | | | | | | | | | | | | |
Non-GAAP operating expense adjustments
| | | |
(130
|
)
| |
8,130
| | |
(463
|
)
| |
19,611
| |
Legal settlement
| |
Interest income and other, net
| |
-
| | |
(1,098
|
)
| |
-
| | |
(1,098
|
)
|
AOCI adjustments
| |
Interest income and other, net
| |
-
| | |
-
| | |
(33,842
|
)
| |
-
| |
Tax provision adjustments (2)
| |
Income taxes
| |
51
| | |
(2,568
|
)
| |
1,862
| | |
(6,800
|
)
|
Empire Education Group impairment
| |
Equity in (loss) income of affiliated companies, net of tax
| |
17,899
| | |
-
| | |
17,899
| | |
-
| |
Provalliance impairment and equity put liability adjustment
| |
Equity in (loss) income of affiliated companies, net of taxes
| |
-
| | |
-
| | |
2,048
| | |
-
| |
Hair Restoration Center discontinued operations
| |
Income (loss) from discontinued operations, net of taxes
| |
(3,853
|
)
| |
69,327
| | |
(7,630
|
)
| |
66,613
| |
Total non-GAAP net income adjustments
| | | | 13,967 | | | 73,791 | | | (20,126 | ) | | 78,326 | | Non-GAAP net income | | | | $ | 1,701 | | | $ | 16,364 | | | $ | 6,032 | | | $ | 29,236 | | | | | | | | | | | | | | | | | | | |
|
Notes:
|
| (1) |
|
Adjusted operating margins for the three and six months ended
December 31, 2012, was 1.7%, and is calculated as non-GAAP operating
income divided by U.S. GAAP revenue for each respective period.
Adjusted operating margins for the three and six months ended
December 31, 2011, was 3.8%, and is calculated as non-GAAP operating
income divided by U.S. GAAP revenue for each respective period.
| | |
| | | (2) | |
Based on a projected statutory effective tax rate analysis, the
non-GAAP tax provision was calculated to be approximately 39% for
the three and six months ended December 31, 2012 for all non-GAAP
operating expense adjustments, except the AOCI adjustments during
the six months ended December 31, 2012. The AOCI adjustments are
primarily non-taxable. Based on a year-to-date tax rate analysis,
the non-GAAP tax provision was calculated to be approximately 37%
for the three and six months ended December 31, 2011 for all
non-GAAP operating expense adjustments.
| | | | |
|
REGIS CORPORATION | Reconciliation of selected U.S. GAAP to non-GAAP financial
measures | (In thousands, except per share data) | (unaudited) |
| Reconciliation of U.S. GAAP net (loss) income per diluted share
to non-GAAP net income per diluted share | |
| Three Months Ended | |
| Six Months Ended | | | | December 31, | | | December 31, | | | | 2012 | |
| 2011 | | | 2012 | |
| 2011 | | U.S. GAAP net (loss) income per diluted share (1) | | $ | (0.216 | ) | | $ | (0.809 |
)
| | $ | 0.458 | | | $ | (0.859 | ) |
Self-insurance reserves adjustments (2)
| |
(0.012
|
)
| |
-
| | |
(0.012
|
)
| |
-
| |
Senior management restructure (2)
| |
0.011
| | |
0.006
| | |
0.011
| | |
0.022
| |
Pure Beauty note receivable recovery (2)
| |
-
| | |
-
| | |
(0.004
|
)
| |
-
| |
Proxy fees (2)
| |
-
| | |
0.010
| | |
-
| | |
0.021
| |
Point-of-sale accelerated depreciation (2)
| |
-
| | |
0.059
| | |
-
| | |
0.139
| |
Legal settlement (2)
| |
-
| | |
(0.010
|
)
| |
-
| | |
(0.010
|
)
|
AOCI adjustments (2)
| |
-
| | |
-
| | |
(0.563
|
)
| |
-
| |
Empire Education Group impairment (2)
| |
0.315
| | |
-
| | |
0.313
| | |
-
| |
Provalliance impairment and equity put liability adjustment (2)
| |
-
| | |
-
| | |
0.036
| | |
-
| |
Hair Restoration Center discontinued operations
| |
(0.068
|
)
| |
1.013
| | |
(0.134
|
)
| |
0.975
| |
Dilutive effect under if-converted method (3) (4)
| |
-
| | |
-
| | |
-
| | |
0.200
| | Non-GAAP net income per diluted share (3) (4) (5) | | $ | 0.030 | | | $ | 0.270 | | | $ | 0.106 | | | $ | 0.488 | | | | | | | | | | | | | |
|
U.S. GAAP Weighted average shares - basic
| | 56,794 | | | 56,857 | | | 57,043 | | | 56,853 | |
U.S. GAAP Weighted average shares - diluted
| | 56,794 | | | 68,417 | | | 57,125 | | | 57,159 | |
Non-GAAP Weighted average shares - diluted (3)
| | 56,893 | | | 68,417 | | | 57,125 | | | 68,354 | | | | | | | | | | | | | |
|
Notes:
|
| (1) |
|
For the three months ended December 31, 2011 U.S. GAAP net loss per
diluted share is calculated under the if-converted method. Under the
if-converted method for the three months ended December 31, 2011,
$2.1 million of after tax interest expense on the convertible debt
is added to net loss to determine the net loss for diluted earnings
per share.
| | |
| | | (2) | |
Based on a projected statutory effective tax rate analysis, the
non-GAAP tax provision was calculated to be approximately 39% for
the three and six months ended December 31, 2012 for all non-GAAP
operating expense adjustments, except the AOCI adjustments during
the six months ended December 31, 2012. The AOCI adjustments are
primarily non-taxable. Based on a year-to-date tax rate analysis,
the non-GAAP tax provision was calculated to be approximately 37%
for the three and six months ended December 31, 2011 for all
non-GAAP operating expense adjustments.
| | |
| | | (3) | |
Non-GAAP net income per share reflects the weighted average shares
associated with non-GAAP net income, which includes the dilutive
effect of common stock and convertible share equivalents. The
earnings per share impact of the adjustments for the three months
ended December 31, 2012 included common stock equivalents of 0.1
million of additional shares. The earnings per share impact of the
adjustments for the six months ended December 31, 2011 included
convertible share equivalents of 11.2 million of additional shares
under the if-converted method. The impact of the adjustments
described above result in the effect of the common stock
equivalents and convertible share equivalents to be dilutive to
the non-GAAP net income per share.
| | |
| | | (4) | |
For the six months ended December 31, 2011 non-GAAP net income per
diluted share, has been calculated under the if-converted method.
For the six months ended December 31, 2011, $4.1 million of after
tax interest on the convertible debt is added to the non-GAAP net
income to determine the non-GAAP net income per diluted earnings per
share.
| | |
| | | (5) | |
Total is a recalculation; line items calculated individually may not
sum to total due to rounding.
| | | | |
|
REGIS CORPORATION | Summary of Pre-Tax, Income Taxes, and Net Income Impact for Q2
FY13 Discrete Items | |
| | |
| | |
| | | | | Pre-Tax | | | Income Taxes | | | Net Income | | | | | | | | | | |
|
Self-insurance reserves adjustments
| |
$
|
(1,122
|
)
| |
$
|
438
| | |
$
|
(684
|
)
|
Senior management restructure
| |
992
| | |
(387
|
)
| |
605
| |
Empire Education Group impairment
| |
17,899
| | |
-
| | |
17,899
| |
Hair Restoration Center discontinued operations
| |
(6,379
|
)
| |
2,526
| | |
(3,853
|
)
|
Total
| |
$
|
11,390
| | |
$
|
2,577
| | |
$
|
13,967
| | | | | | | | | | | | | |
|
REGIS CORPORATION Reconciliation of reported U.S. GAAP
net (loss) income to Adjusted EBITDA, a non-GAAP financial measure ($
In thousands) (unaudited) Adjusted EBITDA EBITDA represents U.S. GAAP net (loss)
income for the respective period excluding interest expense, income
taxes and depreciation and amortization expense. The Company defines
adjusted EBITDA, as EBITDA excluding equity in (loss) income of
affiliated companies, and identified items impacting comparability for
each respective period. For the three and six months ended December 31,
2012, the items impacting comparability consisted of $1.1 and $1.1
million, respectively, of pre-tax benefit associated with our
self-insurance adjustments for prior year reserves, $1.0 and $1.0
million, respectively, of pre-tax expense associated with senior
management restructuring and $3.9 and $7.6 million, respectively, of
after-tax income from discontinued operations. For the six months ended
December 31, 2012 the items impacting comparability consisted of $0.3
million of income associated with the recovery of bad debt on the Pure
Beauty note receivable, $33.8 million of net pre-tax income associated
with the recognition in earnings of amounts previously classified within
AOCI that were related to the liquidation of foreign entities
denominated in the Euro. The impact of the income tax provision
adjustments associated with the above items are already included in the
U.S. GAAP reported net (loss) income to EBITDA reconciliation, therefore
there is no adjustment needed for the reconciliation from EBITDA to
operational EBITDA. The impact of the net $17.9 and $2.0 million
impairments of Empire Education Group and Provalliance, respectively, is
already included by excluding the impact of the Company's equity in
(loss) income of affiliated companies, net of taxes, as reported. For
the three and six months ended December 31, 2011, the items impacting
comparability consisted $0.7 and $2.3 million, respectively, of pre-tax
expense associated with senior management restructuring, $1.1 and $2.2
million, respectively, of pre-tax expense associated with the fiscal
year 2011 contested proxy, $1.1 million, for both periods, of income
associated with legal settlements and $69.3 and $66.6 million of
after-tax loss from discontinued operations. The impact of the $6.3 and
$15.0 million, respectively, accelerated depreciation expense associated
with the point-of-sale system and income tax provision adjustments
associated with the above items are already included in the U.S. GAAP
reported net (loss) income to EBITDA reconciliation, therefore there are
no adjustments needed for the reconciliation from EBITDA to adjusted
EBITDA.
|
| Three Months Ended | |
| Six Months Ended | | | | December 31, | | | December 31, | | | | 2012 | |
| 2011 | | | 2012 | |
| 2011 | | | | (Dollars in thousands) | | Consolidated reported net (loss) income, as reported (U.S. GAAP) | | $ | (12,266 | ) | | $ | (57,427 | ) | | $ | 26,158 | | | $ | (49,090 | ) |
Interest expense, as reported
| |
6,649
| | |
7,203
| | |
13,478
| | |
14,563
| |
Income taxes, as reported
| |
1,085
| | |
543
| | |
4,071
| | |
1,752
| |
Depreciation and amortization, as reported
| |
21,891
| | |
28,446
| | |
42,600
| | |
59,243
| |
EBITDA (as defined above)
| | $ | 17,359 |
|
| $ | (21,235 | ) | | $ | 86,307 |
|
| $ | 26,468 | | | | | | | | | | | | | |
|
Equity in loss (income) of affiliated companies, net of income
taxes, as reported
| |
17,709
| | |
(5,059
|
)
| |
17,132
| | |
(8,929
|
)
|
Self-insurance reserves adjustments
| |
(1,122
|
)
| |
-
| | |
(1,122
|
)
| |
-
| |
Senior management restructuring
| |
992
| | |
696
| | |
992
| | |
2,349
| |
Pure Beauty note receivable recovery
| |
-
| | |
-
| | |
(333
|
)
| |
-
| |
Proxy fees
| |
-
| | |
1,096
| | |
-
| | |
2,225
| |
Legal settlement
| |
-
| | |
(1,098
|
)
| |
-
| | |
(1,098
|
)
|
AOCI adjustments
| |
-
| | |
-
| | |
(33,842
|
)
| |
-
| |
(Income) loss from discontinued operations, net of taxes, as reported
| |
(3,853
|
)
| |
69,327
| | |
(7,630
|
)
| |
66,613
| | Adjusted EBITDA, non-GAAP financial measure | | $ | 31,085 | | | $ | 43,727 | | | $ | 61,504 | | | $ | 87,628 | | | | | | | | | | | | | | | | | |
|
REGIS CORPORATION CONSOLIDATED | Reconciliation of selected U.S. GAAP to non-GAAP financial
measures | ($ In thousands) | (unaudited) | |
| | | | | As Reported | | | | Three Months Ended December
31, 2012 |
| % of Revenues (2) | | | | | | |
|
Total revenues (1)
| |
$
|
506,165
| |
100.0
| | | | |
| | |
| | | | As Reported | | Discrete Adjustments (3) | | | Non-GAAP | | | Three Months Ended December
31, 2012 | | % of Revenues (2) | | | | Three Months Ended December
31, 2012 |
| % of Revenues (2) |
Cost of service (4)
| |
234,265
| |
60.3
| |
-
| | | | | |
Cost of product (5)
| |
55,064
| |
50.9
| |
-
| | | | | |
Site operating expenses
| |
49,872
| |
9.9
| |
1,127
| | |
50,999
| |
10.1
|
General and administrative
| |
55,795
| |
11.0
| |
(997
|
)
| |
54,798
| |
10.8
|
Rent
| |
80,555
| |
15.9
| |
-
| | | | | |
Depreciation and amortization
| |
21,891
| |
4.3
| |
-
| | |
| |
|
Total operating expenses
| |
$
|
497,442
| |
98.3
| |
$
|
130
| | |
$
|
497,572
| |
98.3
| | | | | | | | | | | |
|
Operating income
| |
$
|
8,723
| |
1.7
| |
$
|
(130
|
)
| |
$
|
8,593
| |
1.7
|
| | | | | | | | | | | | | | |
|
|
(1)
|
|
The three months ended December 31, 2012 did not include any
non-operational adjustments to U.S. GAAP revenues.
| | |
(2)
| |
Computed as a percent of total U.S. GAAP revenues.
| | |
(3)
| |
The three months ended December 31, 2012 included $1.1 million
benefit associated with our self-insurance adjustments for prior
year reserves and $1.0 million of pre-tax expense associated with
senior management restructuring.
| | |
(4)
| |
Computed as a percent of service revenues and excludes depreciation
and amortization expense.
| | |
(5)
| |
Computed as a percent of product revenues and excludes depreciation
and amortization expense.
| | | | |
|
|
| As Reported |
| | | | Three Months Ended December
31, 2011 |
| % of Revenues (2) | | | | | | | | |
|
Total revenues (1)
| |
$
|
526,138
| |
100.0
| | | | | | |
| | |
| | | | As Reported | | | Discrete Adjustments (3) | | | Non-GAAP | | | Three Months Ended December
31, 2011 | | % of Revenues (2) | | | | | Three Months Ended December
31, 2011 |
| % of Revenues (2) |
Cost of service (4)
| |
231,392
| |
57.3
| | |
-
| | | | | |
Cost of product (5)
| |
57,007
| |
50.5
| | |
-
| | | | | |
Site operating expenses
| |
51,466
| |
9.8
| | |
-
| | | | | |
General and administrative
| |
62,642
| |
11.9
| | |
(1,792
|
)
| |
60,850
| |
11.6
|
Rent
| |
83,249
| |
15.8
| | |
-
| | | | | |
Depreciation and amortization
| |
28,446
| |
5.4
| | |
(6,338
|
)
| |
22,108
| |
4.2
|
Total operating expenses
| |
$
|
514,202
| |
97.7
| | |
$
|
(8,130
|
)
| |
$
|
506,072
| |
96.2
| | | | | | | | | | | | |
|
Operating income
| |
$
|
11,936
| |
2.3
| | |
$
|
8,130
| | |
$
|
20,066
| |
3.8
|
| | | | | | | | | | | | | | | |
|
|
(1)
|
|
The three months ended December 31, 2011 did not include any
non-operational adjustments to U.S. GAAP revenues.
| | |
(2)
| |
Computed as a percent of total U.S. GAAP revenues.
| | |
(3)
| |
The three months ended December 31, 2011 included $0.7 million
pre-tax expense related to senior management restructuring, $1.1
million pre-tax expense related to our fiscal year 2011 contested
proxy, and $6.3 million pre-tax expense for the accelerated
depreciation related to our point-of-sale system.
| | |
(4)
| |
Computed as a percent of service revenues and excludes depreciation
and amortization expense.
| | |
(5)
| |
Computed as a percent of product revenues and excludes depreciation
and amortization expense.
| | | | |
|
REGIS CORPORATION CONSOLIDATED | Reconciliation of selected U.S. GAAP to non-GAAP financial
measures | ($ In thousands) | (unaudited) | |
| | | | | As Reported | | | | Six Months Ended December
31, 2012 |
| % of Revenues (2) | | | | | | |
|
Total revenues (1)
| |
$
|
1,011,525
| |
100.0
| | | | |
| | | | | | As Reported | | Discrete Adjustments (3) | | Non-GAAP | | | Six Months Ended December
31, 2012 | | % of Revenues (2) | | | Six Months Ended December
31, 2012 |
| % of Revenues (2) |
Cost of service (4)
| |
466,793
| |
59.7
| |
-
| | | | |
Cost of product (5)
| |
108,196
| |
51.4
| |
-
| | | | |
Site operating expenses
| |
102,219
| |
10.1
| |
1,127
| |
103,346
| |
10.2
|
General and administrative
| |
111,667
| |
11.0
| |
(664
|
)
|
111,003
| |
11.0
|
Rent
| |
162,054
| |
16.0
| |
-
| | | | |
Depreciation and amortization
| |
42,600
| |
4.2
| |
-
| |
| |
|
Total operating expenses
| |
$
|
993,529
| |
98.2
| |
$
|
463
| |
$
|
993,992
| |
98.3
| | | | | | | | | | |
|
Operating income
| |
$
|
17,996
| |
1.8
| |
$
|
(463
|
)
|
$
|
17,533
| |
1.7
|
| | | | | | | | | | | | | |
|
|
(1)
|
|
The six months ended December 31, 2012 did not include any
non-operational adjustments to U.S. GAAP revenues.
| | |
(2)
| |
Computed as a percent of total U.S. GAAP revenues.
| | |
(3)
| |
The six months ended December 31, 2012 included $1.1 million benefit
associated with our self-insurance adjustments for prior year
reserves, $1.0 million of pre-tax expense associated with senior
management restructuring, and $0.3 million benefit for the recovery
of bad debt on the Pure Beauty note receivable.
| | |
(4)
| |
Computed as a percent of service revenues and excludes depreciation
and amortization expense.
| | |
(5)
| |
Computed as a percent of product revenues and excludes depreciation
and amortization expense.
| | | | |
|
|
| As Reported | | | | Six Months Ended December
31, 2011 |
| % of Revenues (2) | | | | | | |
|
Total revenues (1)
| |
$
|
1,057,484
| |
100.0
| | | | |
| | |
| | | | As Reported | | Discrete Adjustments (3) | | | Non-GAAP | | | Six Months Ended December
31, 2011 | | % of Revenues (2) | | | | Six Months Ended December
31, 2011 |
| % of Revenues (2) |
Cost of service (4)
| |
467,057
| |
57.0
| |
-
| | | | | |
Cost of product (5)
| |
110,030
| |
50.1
| |
-
| | | | | |
Site operating expenses
| |
106,277
| |
10.0
| |
-
| | | | | |
General and administrative
| |
128,512
| |
12.2
| |
(4,574
|
)
| |
123,938
| |
11.7
|
Rent
| |
165,425
| |
15.6
| |
-
| | | | | |
Depreciation and amortization
| |
59,243
| |
5.6
| |
(15,037
|
)
| |
44,206
| |
4.2
|
Total operating expenses
| |
$
|
1,036,544
| |
98.0
| |
$
|
(19,611
|
)
| |
$
|
1,016,933
| |
96.2
| | | | | | | | | | | |
|
Operating income
| |
$
|
20,940
| |
2.0
| |
$
|
19,611
| | |
$
|
40,551
| |
3.8
|
| | | | | | | | | | | | | | |
|
|
(1)
|
|
The six months ended December 31, 2011 did not include any
non-operational adjustments to U.S. GAAP revenues.
| | |
(2)
| |
Computed as a percent of total U.S. GAAP revenues.
| | |
(3)
| |
The six months ended December 31, 2011 included $2.3 million pre-tax
expense related to senior management restructuring, $2.2 million
pre-tax expense related to our fiscal year 2011 contested proxy, and
$15.0 million pre-tax expense for the accelerated depreciation
related to our point-of-sale system.
| | |
(4)
| |
Computed as a percent of service revenues and excludes depreciation
and amortization expense.
| | |
(5)
| |
Computed as a percent of product revenues and excludes depreciation
and amortization expense.
| | | | |
|
REGIS CORPORATION'S NORTH AMERICA REPORTABLE SEGMENT | Reconciliation of selected U.S. GAAP to non-GAAP financial
measures | ($ In thousands) | (unaudited) | |
| | | | | As Reported | | | | Three Months Ended December
31, 2012 |
| % of Revenues (2) | | | | | | |
|
Total revenues (1)
| |
$
|
473,402
| |
100.0
| | | | |
| | |
| | | | As Reported | | Discrete Adjustments (3) | | | Non-GAAP | | | Three Months Ended December
31, 2012 | | % of Revenues (2) | | | | Three Months Ended December
31, 2012 |
| % of Revenues (2) |
Cost of service (4)
| |
221,562
| |
60.8
| |
-
| | | | | |
Cost of product (5)
| |
50,176
| |
50.5
| |
-
| | | | | |
Site operating expenses
| |
47,417
| |
10.0
| |
1,127
| | |
48,544
| |
10.3
|
General and administrative
| |
30,129
| |
6.4
| |
(2
|
)
| |
30,127
| |
6.4
|
Rent
| |
71,778
| |
15.2
| |
-
| | | | | |
Depreciation and amortization
| |
17,138
| |
3.6
| |
-
| | |
| |
|
Total operating expenses
| |
$
|
438,200
| |
92.6
| |
$
|
1,125
| | |
$
|
439,325
| |
92.8
| | | | | | | | | | | |
|
Operating income
| |
$
|
35,202
| |
7.4
| |
$
|
(1,125
|
)
| |
$
|
34,077
| |
7.2
|
| | | | | | | | | | | | | | |
|
|
(1)
|
|
The three months ended December 31, 2012 did not include any
non-operational adjustments to U.S. GAAP revenues.
| | |
(2)
| |
Computed as a percent of total U.S. GAAP revenues for the North
America salons reportable segment.
| | |
(3)
| |
The three months ended December 31, 2012, included a $1.1 million
benefit associated with our self-insurance adjustments for prior
year reserves.
| | |
(4)
| |
Computed as a percent of service revenues and excludes depreciation
and amortization expense.
| | |
(5)
| |
Computed as a percent of product revenues and excludes depreciation
and amortization expense.
| | | | |
|
|
| As Reported | | | | Three Months Ended December
31, 2011 |
| % of Revenues (2) | | | | | | |
|
Total revenues (1)
| |
$
|
492,069
| |
100.0
| | | | |
| | |
| | | | As Reported | | Discrete Adjustments (3) | | | Non-GAAP | | | Three Months Ended December
31, 2011 | | % of Revenues (2) | | | | Three Months Ended December
31, 2011 |
| % of Revenues (2) |
Cost of service (4)
| |
218,270
| |
57.5
| |
-
| | | | | |
Cost of product (5)
| |
51,753
| |
50.2
| |
-
| | | | | |
Site operating expenses
| |
48,758
| |
9.9
| |
-
| | | | | |
General and administrative
| |
30,085
| |
6.1
| |
-
| | | | | |
Rent
| |
73,833
| |
15.0
| |
-
| | | | | |
Depreciation and amortization
| |
18,283
| |
3.7
| |
(828
|
)
| |
17,455
| |
3.5
|
Total operating expenses
| |
$
|
440,982
| |
89.6
| |
$
|
(828
|
)
| |
$
|
440,154
| |
89.4
| | | | | | | | | | | |
|
Operating income
| |
$
|
51,087
| |
10.4
| |
$
|
828
| | |
$
|
51,915
| |
10.6
|
| | | | | | | | | | | | | | |
|
|
(1)
|
|
The three months ended December 31, 2011 did not include any
non-operational adjustments to U.S. GAAP revenues.
| | |
(2)
| |
Computed as a percent of total U.S. GAAP revenues for the North
America salons reportable segment.
| | |
(3)
| |
The three months ended December 31, 2011 included $0.8 million
pre-tax expense for the accelerated depreciation related to our
point-of-sale system.
| | |
(4)
| |
Computed as a percent of service revenues and excludes depreciation
and amortization expense.
| | |
(5)
| |
Computed as a percent of product revenues and excludes depreciation
and amortization expense.
| | | | |
|
REGIS CORPORATION'S INTERNATIONAL REPORTABLE SEGMENT | Reconciliation of selected U.S. GAAP to non-GAAP financial
measures | ($ In thousands) | (unaudited) | |
| | | | | As Reported | | | | Three Months Ended December
31, 2011 |
| % of Revenues (2) | | | | | | |
|
Total revenues (1)
| |
$
|
34,069
| |
100.0
| | | | |
| | |
| | | | As Reported | | Discrete Adjustments (3) | | | Non-GAAP | | | Three Months Ended December
31, 2011 | | % of Revenues (2) | | | | Three Months Ended December
31, 2011 |
| % of Revenues (2) |
Cost of service (4)
| |
13,122
| |
53.9
| |
-
| | | | | |
Cost of product (5)
| |
5,254
| |
54.0
| |
-
| | | | | |
Site operating expenses
| |
2,708
| |
7.9
| |
-
| | | | | |
General and administrative
| |
2,607
| |
7.7
| |
-
| | | | | |
Rent
| |
9,060
| |
26.6
| |
-
| | | | | |
Depreciation and amortization
| |
1,112
| |
3.3
| |
(95
|
)
| |
1,017
| |
3.0
|
Total operating expenses
| |
$
|
33,863
| |
99.4
| |
$
|
(95
|
)
| |
$
|
33,768
| |
99.1
| | | | | | | | | | | |
|
Operating income
| |
$
|
206
| |
0.6
| |
$
|
95
| | |
$
|
301
| |
0.9
|
| | | | | | | | | | | | | | |
|
|
(1)
|
|
The three months ended December 31, 2011 did not include any
non-operational adjustments to U.S. GAAP revenues.
| | |
(2)
| |
Computed as a percent of total U.S. GAAP revenues for the
International salons reportable segment.
| | |
(3)
| |
The three months ended December 31, 2011 included $0.1 million
pre-tax expense for the accelerated depreciation related to our
point-of-sale system.
| | |
(4)
| |
Computed as a percent of service revenues and excludes depreciation
and amortization expense.
| | |
(5)
| |
Computed as a percent of product revenues and excludes depreciation
and amortization expense.
| | | | |
|
REGIS CORPORATION'S UNALLOCATED CORPORATE REPORTABLE SEGMENT | Reconciliation of selected U.S. GAAP to non-GAAP financial
measures | ($ In thousands) | (unaudited) | |
| | | | | As Reported | | | | Three Months Ended December
31, 2012 | |
| % of Revenues (2) | | | | | | | |
|
Total revenues (1)
| |
$
|
-
| | |
-
| | | | | |
| | |
| | | | | As Reported | | | Discrete Adjustments (3) | | | Non-GAAP | | | | Three Months Ended December
31, 2012 | | | % of Revenues (2) | | | | | Three Months Ended December
31, 2012 | |
| % of Revenues (2) | |
Cost of service (4)
| |
-
| | |
-
| | |
-
| | | | | | | |
Cost of product (5)
| |
-
| | |
-
| | |
-
| | | | | | | |
Site operating expenses
| |
-
| | |
-
| | |
-
| | | | | | | |
General and administrative
| |
23,167
| | |
4.6
| | |
(995
|
)
| |
22,172
| | |
4.4
| |
Rent
| |
357
| | |
0.1
| | |
-
| | | | | | | |
Depreciation and amortization
| |
3,188
| | |
0.6
| | |
-
| | |
| | |
| |
Total operating expenses
| |
$
|
26,712
| | |
5.3
| | |
$
|
(995
|
)
| |
$
|
25,717
| | |
5.1
| | | | | | | | | | | | | | | | |
|
Operating loss
| |
$
|
(26,712
|
)
| |
(5.3
|
)
| |
$
|
995
| | |
$
|
(25,717
|
)
| |
(5.1
|
)
|
| | | | | | | | | | | | | | | | | | |
|
|
(1)
|
|
The three months ended December 31, 2012 did not include any
non-operational adjustments to U.S. GAAP revenues.
| | |
(2)
| |
Computed as a percent of consolidated total revenues.
| | |
(3)
| |
The three months ended December 31, 2012 included $1.0 million
pre-tax expense related to senior management restructuring.
| | |
(4)
| |
Computed as a percent of service revenues and excludes depreciation
and amortization expense.
| | |
(5)
| |
Computed as a percent of product revenues and excludes depreciation
and amortization expense.
| | | | |
|
|
| As Reported | | | | Three Months Ended December
31, 2011 | |
| % of Revenues (2) | | | | | | | |
|
Total revenues (1)
| |
$
|
-
| | |
-
| | | | | | | |
| | | | |
| | |
| | | | | As Reported | | | Discrete Adjustments (3) | | | Non-GAAP | | | | Three Months Ended December
31, 2011 | | | % of Revenues (2) | | | | | Three Months Ended December
31, 2011 | |
| % of Revenues (2) | |
Cost of service (4)
| |
-
| | |
-
| | |
-
| | | | | | | |
Cost of product (5)
| |
-
| | |
-
| | |
-
| | | | | | | |
Site operating expenses
| |
-
| | |
-
| | |
-
| | | | | | | |
General and administrative
| |
29,950
| | |
5.7
| | |
(1,792
|
)
| |
28,158
| | |
5.4
| |
Rent
| |
356
| | |
0.1
| | |
-
| | | | | | | |
Depreciation and amortization
| |
9,051
| | |
1.7
| | |
(5,415
|
)
| |
3,636
| | |
0.7
| |
Total operating expenses
| |
$
|
39,357
| | |
7.5
| | |
$
|
(7,207
|
)
| |
$
|
32,150
| | |
6.1
| | | | | | | | | | | | | | | | |
|
Operating loss
| |
$
|
(39,357
|
)
| |
(7.5
|
)
| |
$
|
7,207
| | |
$
|
(32,150
|
)
| |
(6.1
|
)
|
| | | | | | | | | | | | | | | | | | |
|
|
(1)
|
|
The three months ended December 31, 2011 did not include any
non-operational adjustments to U.S. GAAP revenues.
| | |
(2)
| |
Computed as a percent of consolidated total revenues.
| | |
(3)
| |
The three months ended December 31, 2011 included $0.7 million
pre-tax expense related to senior management restructuring, $1.1
million pre-tax expense related to our fiscal year 2011 contested
proxy and $5.4 million pre-tax expense for the accelerated
depreciation related to our point-of-sale system.
| | |
(4)
| |
Computed as a percent of service revenues and excludes depreciation
and amortization expense.
| | |
(5)
| |
Computed as a percent of product revenues and excludes depreciation
and amortization expense.
| | | | |
|
REGIS CORPORATION'S EQUITY IN INCOME OF AFFILIATED COMPANIES,
NET OF TAXES | Reconciliation of selected U.S. GAAP to non-GAAP financial
measures | ($ In thousands) | (unaudited) | |
| | | | Three Months Ended | | | December 31, 2012 | |
| December 31, 2011 | | |
(Dollars in thousands)
| Equity in (loss) income of affiliated companies, net of income
taxes, as reported (U.S. GAAP) | |
$
| (17,709 | ) | |
$
| 5,059 |
Empire Education Group ("EEG") impairment adjustment(1)
| |
17,899
| | |
-
| Adjusted equity in income of affiliated companies, net of income
taxes, non-GAAP | |
$
|
190
| | |
$
|
5,059
|
| | | | | | | |
|
|
(1)
|
|
The Company recorded an other than temporary impairment charge of
approximately $17.9 million during the three months ended December
31, 2012 as a result of the decrease in the fair value of the
Company's investment in EEG.
| | | | |
|
REGIS CORPORATION'S SAME-STORE SALES | Reconciliation of selected U.S. GAAP to non-GAAP financial
measures | (unaudited) | |
| | |
| | | | | Three Months Ended | | | Six Months Ended | | | | December 31, | | | December 31, | | | | 2012 | |
| 2011 | | | 2012 | |
| 2011 | | Revenue decline, as reported (U.S. GAAP) | | (3.8 | ) % | | (2.3 | ) % | | (4.3 | ) % | | (2.1 | ) % |
Effect of acquisitions
| |
-
| | |
(0.8
|
)
| |
(0.1
|
)
| |
(1.0
|
)
|
Effect of new stores and conversions
| |
(1.2
|
)
| |
(1.3
|
)
| |
(1.4
|
)
| |
(1.1
|
)
|
Effect of franchise revenues
| |
(0.1
|
)
| |
-
| | |
(0.1
|
)
| |
-
| |
Effect of foreign currency
| |
(0.1
|
)
| |
(0.1
|
)
| |
0.1
| | |
(0.4
|
)
|
Effect of closed salons
| |
3.4
| | |
2.2
| | |
3.2
| | |
2.0
| |
Other
| |
(0.1
|
)
| |
(1.0
|
)
| |
0.1
| | |
(0.8
|
)
| Same-store sales, non-GAAP | | (1.9 | ) % | | (3.3 | ) % | | (2.5 | )% | | (3.4 | )% | | | | | | | | | | | | |
|
Non-GAAP reconciling items for the twelve months ended June 30, 2012
and 2011:
The following information is provided to give qualitative and
quantitative information related to items impacting comparability. 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
which 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.
Self-insurance reserves adjustments – We have excluded the
self-insurance reserves adjustments associated with our prior year
reserves from our non-GAAP results. During the twelve months ended June
30, 2012, we incurred expense of $0.9 million. During the twelve months
ended June 30, 2011, we incurred expense of $1.2 million.
Sales and use tax audit accrual adjustment – We have excluded a
sales and use tax audit accrual adjustment from our non-GAAP results.
During the twelve months ended June 30, 2011, we recorded a benefit of
$1.7 million.
Senior management restructure and severance charges – We have
excluded expense associated with senior management restructuring and
other related severance charges from our non-GAAP results. During the
twelve months ended June 30, 2012 and 2011, we incurred expense of $9.8
and $4.3 million, respectively, associated with senior management
restructuring and other severance charges.
Professional fees – We have excluded expenses associated with our
fiscal year 2011 contested proxy from our non-GAAP results. During the
twelve months ended June 30, 2012, we incurred $2.4 million of expense
for advisory fees and other costs associated with the fiscal year 2011
contested proxy.
Field restructure and other – We have excluded expenses
associated with other one-time field restructuring charges from our
non-GAAP results. During the twelve months ended June 30, 2012, we
incurred expense of $2.8 million associated with our field restructuring.
Deferred compensation – We have excluded expense associated with
amending our deferred compensation plan from our non-GAAP results.
During the twelve months ended June 30, 2012, we incurred expense of
$1.8 million associated with amending our deferred compensation plan
such that the benefits are based on years of service and the employees'
compensation as of June 30, 2012.
Pure Beauty note receivable (recovery) reserve – We have excluded
the bad debt recovery and valuation reserve associated with the
outstanding note receivable with Pure Beauty from our non-GAAP results.
During the twelve months ended June 30, 2012, we recorded $0.8 million
for the recovery of bad debt previously recorded on the outstanding note
receivable with Pure Beauty. We recorded valuation reserves of $31.2
million during the twelve months ended June 30, 2011.
Legal settlements – We have excluded income and expense
associated with legal settlements from our non-GAAP results. During the
twelve months ended June 30, 2012 we recorded income of $1.1 million
associated with a legal settlement. During the twelve months ended June
30, 2011, we incurred expense of $2.4 million associated with a legal
settlement.
Strategic alternative costs – We have excluded the fees
associated with our exploration of strategic alternatives during fiscal
year 2011 from our non-GAAP results. During the twelve months ended June
30, 2011, we incurred $1.3 million of expense related to the exploration
of strategic alternatives.
Point-of-sale system accelerated depreciation – We have excluded
the accelerated depreciation we recorded related to our point-of-sale
system from our non-GAAP results. During the twelve months ended June
30, 2012, we recorded $16.1 million in accelerated depreciation related
to our point-of-sale system.
Goodwill impairment – We have excluded the goodwill impairment
charges we recorded related our Regis salon concept and our Promenade
salon concept from our non-GAAP results. The Company recorded goodwill
impairment charges of $67.7 million related to our Regis salon concept
during the twelve months ended June 30, 2012. The Company recorded a
goodwill impairment charge of $74.1 million related to our Promenade
salon concept during the twelve months ended June 30, 2011.
Tax provision adjustments – The non-GAAP tax provision
adjustments are due to the change in non-GAAP taxable income as compared
to U.S. GAAP taxable income or loss, resulting from the non-GAAP
reconciling items addressed herein. The non-GAAP tax provision
adjustments are made to reflect the year-to-date non-GAAP tax rate for
each period.
Empire Education Group ("EEG") impairment and non-operational charges
recorded by EEG– We have excluded the impairment recorded on our
investment in EEG and non-operational charges recorded by EEG from our
non-GAAP results. The Company recorded an other than temporary
impairment charge of approximately $19.4 million during the twelve
months ended June 30, 2012 as a result of a decrease in the fair value
of the Company's investment in EEG. In addition, the Company recorded an
additional $8.7 million of expense primarily related to non-operational
charges recorded by EEG for intangible asset impairments.
Provalliance impairment, equity put liability, and non-operational
charges recorded by Provalliance – We have excluded the impairment
recorded on our investment in Provalliance, partially offset by the gain
recorded for the reduction in the fair value of the equity put option
associated with our Provalliance equity method investment and
non-operational charges recorded by Provalliance from our non-GAAP
results. The Company recorded an other than temporary impairment charge
of approximately $37.4 million during the twelve months ended June 30,
2012, as a result of the Company entering into an agreement to sell its
46.7 percent interest in Provalliance for EUR 80 million. As a result of
the expected sale, the Company recorded a gain of approximately $20.2
million during the twelve months ended June 30, 2012 for the decrease in
the fair value of the equity put option associated with the
Provalliance. In addition, the Company recorded an additional $0.8
million of expense primarily related to non-operational charges recorded
by Provalliance. The Company recorded a gain of approximately $3.6
million during the twelve months ended June 30, 2011 for the settlement
of a portion of an equity put option associated with our Provalliance
equity method investment from our non-GAAP results.
MY Style impairment – We have excluded the impairment recorded
for our investment in MY Style from our non-GAAP results. Due to the
natural disasters in Japan that occurred in March 2011, we recorded an
other than temporary impairment for our investment in MY Style of $9.2
million during the twelve months ended June 30, 2011.
Discontinued Operations – We have excluded the operations of our
Hair Restoration Centers operations and a tax benefit for the release of
income tax reserves related to our previous ownership in Trade Secret,
Inc. operations from our non-GAAP results. The Company recorded (loss)
income of approximately ($62.4) and $12.0 million during the twelve
months ended June 30, 2012 and 2011, respectively.
REGIS CORPORATION CONSOLIDATED | Reconciliation of selected U.S. GAAP to non-GAAP financial
measures | ($ In thousands) | (unaudited) | |
| | |
| | |
| | | | | As Reported | | | | | | Adjusted | | | | Twelve Months Ended June
30, 2012 | | | Hair Restoration Centers Adjustment (2) | | | Twelve Months Ended June
30, 2012
| | | | | | | | | | |
|
Total revenues (1)
| |
$
|
2,273,779
| | |
(151,552
|
)
| |
$
|
2,122,227
| | | | | | | | | | | |
| | |
| | | | As Reported | | | | | | | | | | | | Non-GAAP | | | Twelve Months Ended June
30, 2012 | | | Hair Restoration Centers Adjustment (2) | | | Reclassifications (2) | | | Discrete Adjustments (3) | | | Twelve Months Ended June 30, 2012 |
| % of Revenues (4) |
Cost of service (5)
| |
985,154
| | |
(42,693
|
)
| |
(790
|
)
| |
-
| | | | | |
Cost of product (6)
| |
249,655
| | |
(28,020
|
)
| |
-
| | |
-
| | | | | |
Site operating expenses
| |
198,725
| | |
(6,479
|
)
| |
14,785
| | |
(840
|
)
| |
206,191
| |
9.7
|
General and administrative
| |
302,572
| | |
(38,943
|
)(7)
| |
(13,995
|
)
| |
(16,055
|
)
| |
233,579
| |
11.0
|
Rent
| |
340,805
| | |
(9,036
|
)
| |
-
| | |
-
| | | | | |
Depreciation and amortization
| |
118,071
| | |
(13,101
|
)
| |
-
| | |
(16,149
|
)
| |
88,821
| |
4.2
|
Goodwill impairment
| |
146,110
| | |
(78,426
|
)
| |
-
| | |
(67,684
|
)
| |
-
| |
-
|
Total operating expenses
| |
$
|
2,341,092
| | |
(216,698
|
)
| |
-
| | |
(100,728
|
)
| |
$
|
2,023,666
| |
95.4
| | | | | | | | | | | | | | | | |
|
Operating (loss) income
| |
$
|
(67,313
|
)
| |
65,146
| | |
-
| | |
100,728
| | |
$
|
98,561
| |
4.6
|
| | | | | | | | | | | | | | | | | | |
|
|
(1)
|
|
The twelve months ended June 30, 2012 did not include any discrete
adjustments to U.S. GAAP revenues.
| | |
(2)
| |
As of September 30, 2012, the Company classified the results of
operations of the Hair Restoration Centers as discontinued
operations. Beginning with the first quarter ended September 30,
2012, the Company reclassified certain salon marketing and
advertising expenses that were previously within cost of service and
general and administrative expense to site operating expense. All
periods presented reflect the Hair Restoration Centers operations as
discontinued operations and the reclassifications that were made
during the quarter ended September 30, 2012.
| | |
(3)
| |
The twelve months ended June 30, 2012, included $0.9 million of
pre-tax expense related to self-insurance reserves adjustments,
$9.8 million of pre-tax expense related to senior management
restructuring, $2.8 million of pre-tax expense associated with
field restructuring, $2.4 of pre-tax expense for professional fees
related our fiscal year 2011 contested proxy, $1.8 million of
pre-tax expense associated with amending our deferred compensation
plan, $0.8 million pre-tax benefit for the recovery of bad debt
previously recorded on the outstanding note receivable with Pure
Beauty, $16.1 million pre-tax expense of accelerated depreciation
related to our point-of-sale system, and a goodwill impairment
charge of $67.7 million pre-tax related to our Regis salon concept.
| | |
(4)
| |
Computed as a percent of total adjusted revenues.
| | |
(5)
| |
Computed as a percent of service revenues and excludes depreciation
and amortization expense.
| | |
(6)
| |
Computed as a percent of product revenues and excludes depreciation
and amortization expense.
| | |
(7)
| |
$2.5 million of professional fees related to the sale of the Hair
Restoration Centers and were previously included within our
Unallocated Corporate Segment have been included in the Hair
Restoration Centers Adjustment.
| | | | |
|
REGIS CORPORATION CONSOLIDATED | Reconciliation of selected U.S. GAAP to non-GAAP financial
measures | ($ In thousands) | (unaudited) | |
| |
| | |
| | | | | As Reported | | | | | Adjusted | | | | Twelve Months Ended June
30, 2011 | | Hair Restoration Centers Adjustment (2) | | | Twelve Months Ended June
30, 2011 | | | | | | | | | |
|
Total revenues (1)
| |
$
|
2,325,869
| |
(145,688
|
)
| |
$
|
2,180,181
| | | | | | | | | | |
| | |
| | | | As Reported | | | | | | | | | | | Non-GAAP | | | Twelve Months Ended June
30, 2011 | | Hair Restoration Centers Adjustment (2) | | | Reclassifications (2) | | | Discrete Adjustments (3) | | | Twelve Months Ended June 30, 2011 |
| % of Revenues (4) |
Cost of service (5)
| |
1,012,868
| |
(39,129
|
)
| |
(845
|
)
| |
-
| | | | | |
Cost of product (6)
| |
249,979
| |
(24,788
|
)
| |
-
| | |
-
| | | | | |
Site operating expenses
| |
197,722
| |
(4,318
|
)
| |
17,819
| | |
564
| | |
211,787
| |
9.7
|
General and administrative
| |
339,857
| |
(37,038
|
)
| |
(16,974
|
)
| |
(39,212
|
)
| |
246,633
| |
11.3
|
Rent
| |
342,286
| |
(9,227
|
)
| |
-
| | |
-
| | | | | |
Depreciation and amortization
| |
105,109
| |
(12,958
|
)
| |
-
| | |
-
| | | | | |
Goodwill impairment
| |
74,100
| |
-
| | |
-
| | |
(74,100
|
)
| |
-
| |
-
|
Total operating expenses
| |
$
|
2,321,921
| |
(127,458
|
)
| |
-
| | |
(112,748
|
)
| |
$
|
2,081,715
| |
95.5
| | | | | | | | | | | | | | | |
|
Operating income
| |
$
|
3,948
| |
(18,230
|
)
| |
-
| | |
112,748
| | |
$
|
98,466
| |
4.5
|
| | | | | | | | | | | | | | | | | |
|
|
(1)
|
|
The twelve months ended June 30, 2011 did not include any discrete
adjustments to U.S. GAAP revenues.
| | |
(2)
| |
As of September 30, 2012, the Company classified the results of
operations of the Hair Restoration Centers as discontinued
operations. Beginning with the first quarter ended September 30,
2012, the Company reclassified certain salon marketing and
advertising expenses that were previously within cost of service and
general and administrative expense to site operating expense. All
periods presented reflect the Hair Restoration Centers operations as
discontinued operations and the reclassifications that were made
during the quarter ended September 30, 2012.
| | |
(3)
| |
The twelve months ended June 30, 2011, included $1.2 million of
pre-tax expense related to self-insurance reserves adjustments, $1.7
million pre-tax benefit related to sales and use tax audit accrual
adjustment, $31.2 million pre-tax valuation reserve for the note
outstanding with Pure Beauty, $4.3 million of pre-tax expense
related to senior management restructuring, $2.4 million of pre-tax
expense associated with a legal settlement, $1.3 of pre-tax expense
related to our exploration of strategic alternatives during fiscal
year 2011, and a goodwill impairment charge of $74.1 million pre-tax
related to our Promenade salon concept.
| | |
(4)
| |
Computed as a percent of total adjusted revenues.
| | |
(5)
| |
Computed as a percent of service revenues and excludes depreciation
and amortization expense.
| | |
(6)
| |
Computed as a percent of product revenues and excludes depreciation
and amortization expense.
| | | | |
|
REGIS CORPORATION Reconciliation of reported U.S. GAAP
net loss to Adjusted EBITDA, a non-GAAP financial measure ($
In thousands) (unaudited) Adjusted EBITDA EBITDA represents U.S. GAAP net loss for the
respective period excluding interest expense, income taxes and
depreciation and amortization expense. The Company defines adjusted
EBITDA, as EBITDA excluding equity in (loss) income of affiliated
companies, and identified items impacting comparability for each
respective period. For the twelve months ended June 30, 2012, the items
impacting comparability consisted of $9.8 million of pre-tax expense
associated with senior management restructuring and severance charges,
$2.4 million of pre-tax professional fees expense associated our fiscal
year 2011 contested proxy, $2.8 million of pre-tax expense associated
our field restructuring, $1.8 million pre-tax expense associated with
amending our deferred compensation contracts, $0.9 million of pre-tax
expense associated with prior year's self-insurance reserves
adjustments, $67.7 million goodwill impairment charges related to our
Regis salon concept, $0.8 million of income associated with the recovery
of bad debt on the Pure Beauty note receivable, $1.1 million of income
associated with a legal settlement, and $62.4 million after-tax loss for
discontinued operations. The impact of the income tax provision
adjustments associated with the above items and the $16.1 million of
accelerated depreciation related to our point-of-sale system are already
included in the U.S. GAAP reported net loss income to EBITDA
reconciliation, therefore there is no adjustment needed for the
reconciliation from EBITDA to operational EBITDA. The impact of the
$28.2 million impairment and non-operational charges recorded by EEG and
the net $17.9 million Provalliance impairment is already included by
excluding the impact of the Company's equity in (loss) income of
affiliated companies, net of taxes, as reported. For the twelve months
ended June 30, 2011, the items impacting comparability consisted $4.3
million of pre-tax expense associated with senior management
restructuring and severance charges, $1.2 million of million of pre-tax
expense associated with prior year's self-insurance reserves
adjustments, $31.2 million of pre-tax expense associated with the Pure
Beauty note receivable reserve, $2.4 million of pre-tax expense
associated with a legal settlement, $74.1 million goodwill impairment
charge related to our Promenade salon concept, $1.7 million benefit for
a sales and use tax audit accrual adjustment, $1.3 million of expense
associated with our exploration of strategic alternative and $12.0
million after-tax income for discontinued operations. The impact of the
income tax provision adjustments associated with the above items is
already included in the U.S. GAAP reported net loss income to EBITDA
reconciliation, therefore there is no adjustment needed for the
reconciliation from EBITDA to operational EBITDA. The impact of the $9.2
million MY Style impairment and $3.6 million gain for the settlement of
a portion of the Provalliance equity put is already included by
excluding the impact of the Company's equity in (loss) income of
affiliated companies, net of taxes, as reported.
|
| Twelve Months Ended | | | | June 30, 2012 | |
| June 30, 2011 | | | |
(Dollars in thousands)
| | Consolidated reported net loss, as reported (U.S. GAAP) | | $ | (114,093 | ) | | $ | (8,905 | ) |
Interest expense, as reported
| |
28,245
| | |
34,388
| |
Income taxes, as reported
| |
(5,279
|
)
| |
(9,496
|
)
|
Depreciation and amortization, as reported
| |
118,071
| | |
105,109
| |
EBITDA (as defined above)
| |
$
|
26,944
| | |
$
|
121,096
| | | | | | | |
|
Hair Restoration Centers Adjustments (1):
| | | | | | |
Interest expense
| |
-
| | |
(14
|
)
|
Income taxes
| |
849
| | |
(6,837
|
)
|
Depreciation and amortization
| |
(13,101
|
)
| |
(12,958
|
)
|
EBITDA (Hair Restoration Centers operations presented as
discontinued operations)
| |
$
|
14,692
| | |
$
|
101,287
| | | | | | | |
|
Equity in loss (income) of affiliated companies, net of income taxes
(2)
| |
30,858
| | |
(6,661
|
)
|
Senior management restructuring and severance charges
| |
9,810
| | |
4,299
| |
Professional fees
| |
2,413
| | |
-
| |
Field restructure and other
| |
2,807
| | |
-
| |
Deferred compensation
| |
1,808
| | |
-
| |
Self-insurance reserve adjustments
| |
862
| | |
1,185
| |
Pure Beauty note receivable (recovery) reserve
| |
(805
|
)
| |
31,227
| |
Legal settlements
| |
(1,098
|
)
| |
2,433
| |
Goodwill impairment (1)
| |
67,684
| | |
74,100
| |
Sales and use tax audit accrual adjustment
| |
-
| | |
(1,748
|
)
|
Strategic alternative costs
| |
-
| | |
1,253
| |
Loss (income) from discontinued operations, net of taxes (1)
| |
62,351
| | |
(12,034
|
)
| Adjusted EBITDA, non-GAAP financial measure | | $ | 191,382 | | | $ | 195,341 | |
| | | | | | | | |
|
|
(1)
|
|
As of September 30, 2012, the Company classified the results of
operations of the Hair Restoration Centers as discontinued
operations. All periods presented reflect the Hair Restoration
Centers operations as discontinued operations.
| | |
(2)
| |
The Company's 50.0 percent interest in Hair Club for Men, Ltd. is
included in the sale of the Hair Restoration Centers and is included
in the presentation of discontinued operations.
| | | | |
|
REGIS CORPORATION'S SAME-STORE SALES | Reconciliation of selected U.S. GAAP to non-GAAP financial
measures | (unaudited) | |
| | | | | Twelve Months Ended | | | | June 30, | | | | 2012 | |
| 2011 | | Revenue decline, as reported (U.S. GAAP) | | (2.7 | ) % | | (1.6 | ) % |
Effect of acquisitions
| |
(0.7
|
)
| |
(1.1
|
)
|
Effect of new stores and conversions
| |
(1.3
|
)
| |
(0.6
|
)
|
Effect of franchise revenues
| |
-
| | |
-
| |
Effect of foreign currency
| |
-
| | |
(0.5
|
)
|
Effect of closed salons
| |
2.3
| | |
1.6
| |
Other
| |
(1.1
|
)
| |
0.3
| | Same-store sales, non-GAAP | | (3.5 | )% | | (1.9 | )% | | | | | | |
|
Regis Corporation Mark Fosland – SVP, Finance and Investor
Relations, 952-806-1707 or Andy Larew – Director,
Finance-Investor Relations, 952-806-1425
|
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