EX-99 2 a06-3506_1ex99.htm EXHIBIT 99

EXHIBIT 99

 

REGIS CORPORATION:

Jack Nielsen — Director of Finance — Investor Relations

(952) 947-7000

 

For Immediate Release

 

REGIS REPORTS SECOND QUARTER 2006 RESULTS

-Quarterly EPS of $0.59 Impacted by Hurricanes-

 

        MINNEAPOLIS, January 25, 2006 — Regis Corporation (NYSE:RGS), the global leader in the $150 billion hair care industry, today reported financial results for its fiscal second quarter ended December 31, 2005.

 

Second Quarter Results

        Consolidated revenues increased 13 percent to a record $607 million compared to $537 million a year ago. Same-store sales increased 1.2 percent. Net income increased three percent to $27 million, or $0.59 per diluted share. Second quarter net income was reduced by approximately $1.8 million, or four cents per diluted share, due to the impact of hurricanes Katrina, Rita and Wilma and lower than expected retail product margins.

 

        Hurricane Wilma, which struck in October, combined with the greater than forecasted residual effects of hurricanes Katrina and Rita, resulted in Regis Corporation losing approximately 2,700 salon days and an estimated $2.5 million in revenue during the second quarter. As of December 31, 2005, 15 company-owned salons remained closed. In addition, the Company continued to provide disaster pay to affected employees in the region. In total, the effects of the three hurricanes reduced second quarter net income by approximately $0.9 million, or two cents per diluted share.

 

        Second quarter results were also impacted by lower than projected retail product margins. The Company experienced a significantly higher promotional environment during the month of December than was projected. As a result, retail product margins were approximately 100 basis points below plan. This reduction in retail product margins reduced second quarter net income by approximately $0.9 million, or two cents per diluted share.

 

        “Market conditions over the past 18 months have been challenging to us from an earnings growth perspective,” commented Paul D. Finkelstein, chairman and chief executive officer. “However, we continue to manage and grow the business with the focus of building long-term shareholder value, as evidenced by our pending merger with the Sally Beauty division of Alberto-Culver. The strength of our balance sheet and cash flow allows us to continue to beat our annual unit growth objective, which in turn strengthens our market position within the beauty industry. We are highly confident that we will achieve double-digit earnings growth once our same-store sales return to historical levels of two-to-four percent.”

 

        Regis Corporation ended the quarter with 11,211 worldwide locations, a net increase of 134 units during the quarter. The Company constructed 139 salons and franchisees built 76 salons. In addition, Regis acquired 14 salons (including 12 salon franchise buybacks) and also bought back

 

1


five franchised Hair Club for Men and Women facilities. The Company closed or relocated 83 corporate and franchise salons during the quarter.

 

Third Quarter 2006 Outlook

The following points pertain to the fiscal third quarter ending March 31, 2006:

•                  Earnings per diluted share are forecasted to grow to a range of $0.56 to $0.60, compared to $(0.37) a year ago. The year ago period included a $38.3 million, or $0.84 per diluted share, non-cash goodwill impairment charge, associated with the European franchise business.

•                  EBITDA, defined as earnings before interest, taxes, depreciation and amortization, is forecasted to increase approximately 23 percent to $79.8 million.

•                  Consolidated revenue is forecasted to grow approximately 10 percent to a range of $610 million to $615 million compared to $557 million a year ago.

•                  Consolidated same-store sales are forecasted to be flat to 1.0 percent due to the Easter holiday falling in the fourth quarter this year.

 

Updated Fiscal Year 2006 Outlook

The following points pertain to the fiscal year ending June 30, 2006:

•                  Earnings per diluted share are forecasted to grow to a range of $2.31 to $2.37, compared to $1.39 a year ago.

•                  EBITDA, defined as earnings before interest, taxes, depreciation and amortization, is forecasted to increase approximately 16 percent to $314 million.

•                  Consolidated revenue is forecasted to grow 10 percent to $2.4 billion compared to $2.2 billion a year ago.

•                  Consolidated same-store sales are forecasted to increase to a range of 0.75 to 1.25 percent.

 

        A conference call discussing second quarter results is scheduled for 10:00 a.m., Central Time. Interested parties are invited to listen by logging on to www.regiscorp.com.

 

        Regis Corporation (RGS) is the beauty industry’s global leader in salons, hair restoration centers and education. As of December 31, 2005, the Company owned or franchised 11,211 worldwide locations; which included 11,086 beauty salons, 90 hair restoration centers and 35 beauty schools operating under concepts such as Supercuts, Jean Louis David, Vidal Sassoon, Regis Salons, MasterCuts, Trade Secret, SmartStyle, Cost Cutters and Hair Club for Men and Women. These and other concepts are located in the US and in ten other countries throughout North America and Europe. For additional information about the Company, including management’s current financial outlook and a reconciliation of non-GAAP financial information, please visit the Investor Information section of the corporate website at www.regiscorp.com.

 

         This press release contains “forward-looking statements” within the meaning of the federal securities laws, including statements concerning anticipated future events and expectations that are not historical facts. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward—looking statements in this document reflect management’s best judgment at the time they are made, but all such statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those expressed in or implied by the statements herein. Such forward-looking statements are often identified herein by use of words including, but not limited to, “may,” “believe,” “project,” “forecast,” “expect,” “estimate,” “anticipate” and “plan.” In addition, the following factors could affect the Company’s actual results and cause such results to differ materially from those expressed in forward-

 

 


 

looking statements. These factors include competition within the personal hair care industry, which remains strong, both domestically and internationally, and price sensitivity; changes in economic condition; changes in consumer tastes and fashion trends; labor and benefit costs; legal claims; risk inherent to international development (including currency fluctuations); the continued ability of the Company and its franchisees to obtain suitable locations for new salon development; governmental initiatives such as minimum wage rates, taxes and possible franchise legislation; the ability of the Company to successfully identify and acquire salons and beauty schools that support its growth objectives; the ability of the Company to complete the merger with Sally Beauty Company; the ability to integrate the acquired business; the ability of the company to maintain satisfactory relationships with suppliers; or other factors not listed above. The ability of the Company to meet its expected revenue growth is dependent on salon and beauty school acquisitions, new salon construction and same-store sales increases, all of which are affected by many of the aforementioned risks. 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, 2005 and included in Form S-3 Registration Statement filed with the Securities and Exchange Commission on June 8, 2005. 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.

 

ADDITIONAL INFORMATION AND WHERE TO FIND IT

Regis Corporation and Alberto-Culver Company have entered into an agreement for the merger of Regis Corporation and the Sally Beauty business unit of Alberto-Culver Company and, in connection with this proposed transaction, will prepare and distribute a joint proxy statement/prospectus to the shareholders of Regis Corporation and the stockholders of Alberto-Culver Company.  INVESTORS ARE URGED TO CAREFULLY READ THE JOINT PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Investors will be able to get the joint proxy statement/prospectus and all relevant documents filed by Regis Corporation with the SEC free of charge at the SEC’s website www.sec.gov or from Regis Corporation Investor Relations at 7201 Metro Boulevard, Minneapolis, MN 55439, (952) 947-7777 or investorrelations@regiscorp.com.

 

PARTICIPANTS IN THE SOLICITATION

The respective directors, executive officers and other members of management and employees of Regis Corporation and Alberto-Culver Company may deemed to be participants in the solicitation of proxies from their respective shareholders in favor of the merger and the related transactions. Information concerning persons who may be considered participants in the solicitation of Regis Corporation’s and Alberto-Culver Company’s stockholders under the rules of the SEC is set forth in public filings filed by Regis Corporation and Alberto-Culver Company with the SEC and will be set forth in the Joint Proxy Statement/Prospectus when it is filed with the SEC.

Information concerning Regis Corporation’s participants in the solicitation is contained in Regis Corporation’s Proxy Statement on Schedule 14A, filed with the SEC on September 26, 2005.  Information concerning Alberto-Culver Company’s participants in the solicitation is contained in Alberto-Culver Company’s Proxy Statement on Schedule 14A, filed with the SEC on December 13, 2005.

 


(TABLES TO FOLLOW)

 

REGIS CORPORATION (NYSE:RGS)

CONSOLIDATED BALANCE SHEET (Unaudited)

as of December 31, 2005 and June 30, 2005

(Dollars in thousands, except per share amounts)

 

 

 

December 31,

 

June 30,

 

 

 

2005

 

2005

 

ASSETS

 

 

 

 

 

Current assets:

 

 

 

 

 

Cash and cash equivalents

 

$

136,142

 

$

102,718

 

Receivables, net

 

49,759

 

47,752

 

Inventories

 

201,338

 

184,609

 

Deferred income taxes

 

16,465

 

17,229

 

Other current assets

 

31,896

 

28,341

 

Total current assets

 

435,600

 

380,649

 

 

 

 

 

 

 

Property and equipment, net

 

460,802

 

435,324

 

Goodwill

 

678,927

 

646,510

 

Other intangibles, net

 

209,649

 

208,800

 

Other assets

 

55,054

 

54,693

 

 

 

 

 

 

 

Total assets

 

$

1,840,032

 

$

1,725,976

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

 

 

 

 

 

Current liabilities:

 

 

 

 

 

Long-term debt, current portion

 

$

33,778

 

$

19,747

 

Accounts payable

 

79,441

 

64,111

 

Accrued expenses

 

202,124

 

178,192

 

Total current liabilities

 

315,343

 

262,050

 

 

 

 

 

 

 

Long-term debt

 

545,097

 

549,029

 

Other noncurrent liabilities

 

166,248

 

160,185

 

Total liabilities

 

1,026,688

 

971,264

 

 

 

 

 

 

 

Shareholders’ equity:

 

 

 

 

 

Preferred stock, authorized 250,000 shares at
December 31, 2005 and June 30, 2005

 

 

 

 

 

Common stock, $.05 par value; issued and outstanding, 45,354,403 and 44,952,002 common shares at December 31, 2005 and June 30, 2005, respectively

 

2,268

 

2,248

 

Additional paid-in capital

 

243,506

 

229,871

 

Accumulated other comprehensive income

 

45,246

 

46,124

 

Retained earnings

 

522,324

 

476,469

 

 

 

 

 

 

 

Total shareholders’ equity

 

813,344

 

754,712

 

 

 

 

 

 

 

Total liabilities and shareholders’ equity

 

$

1,840,032

 

$

1,725,976

 

 


REGIS CORPORATION (NYSE:RGS)

CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

(Dollars in thousands, except per share amounts)

 

 

 

Three Months Ended
December 31,

 

Six Months Ended
December 31,

 

 

 

 

 

 

 

2005

 

2004

 

2005

 

2004

 

Revenues:

 

 

 

 

 

 

 

 

 

Service

 

$

399,278

 

$

357,147

 

$

790,247

 

$

696,582

 

Product

 

188,108

 

160,249

 

361,860

 

308,368

 

Royalties and fees

 

19,237

 

19,936

 

38,745

 

38,604

 

 

 

606,623

 

537,332

 

1,190,852

 

1,043,554

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

Cost of service

 

226,938

 

203,604

 

448,797

 

396,190

 

Cost of product

 

95,859

 

84,392

 

184,395

 

161,976

 

Site operating expenses

 

50,112

 

44,751

 

99,828

 

88,052

 

General and administrative

 

71,175

 

64,105

 

145,242

 

121,806

 

Rent

 

85,046

 

75,117

 

167,881

 

147,625

 

Depreciation and amortization

 

27,259

 

20,765

 

53,155

 

40,560

 

Total operating expenses

 

556,389

 

492,734

 

1,099,298

 

956,209

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

50,234

 

44,598

 

91,554

 

87,345

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

Interest

 

(8,660

)

(5,467

)

(16,924

)

(9,775

)

Other, net

 

570

 

1,024

 

1,369

 

1,701

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

42,144

 

40,155

 

75,999

 

79,271

 

 

 

 

 

 

 

 

 

 

 

Income taxes

 

(14,834

)

(13,671

)

(26,530

)

(27,595

)

 

 

 

 

 

 

 

 

 

 

Net income

 

$

 27,310

 

$

 26,484

 

$

 49,469

 

$

 51,676

 

 

 

 

 

 

 

 

 

 

 

Net income per share:

 

 

 

 

 

 

 

 

 

Basic

 

$

0.61

 

$

0.59

 

$

1.10

 

$

1.16

 

Diluted

 

$

0.59

 

$

0.57

 

$

1.07

 

$

1.11

 

 

 

 

 

 

 

 

 

 

 

Weighted average common and common equivalent shares outstanding:

 

 

 

 

 

 

 

 

 

Basic

 

45,154

 

44,534

 

45,059

 

44,423

 

Diluted

 

46,411

 

46,468

 

46,366

 

46,359

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per common share

 

$

0.04

 

$

0.04

 

$

0.08

 

$

0.08

 

 

 

A historical model of Regis Corporation’s quarterly results in this format is available in the Investor Information section of the corporate website at www.regiscorp.com. Click on “Financial Reports.”

 


REGIS CORPORATION (NYSE:RGS)

CONSOLIDATED STATEMENT OF CASH FLOWS

(Dollars in thousands)

 

 

 

Six Months Ended December 31,

 

 

 

2005

 

2004

 

Cash flows from operating activities:

 

 

 

 

 

Net income

 

$

49,469

 

$

51,676

 

 

Adjustments to reconcile net income to net cash
provided by operating activities:

 

 

 

 

 

 

Depreciation

 

47,376

 

38,137

 

 

Amortization

 

5,779

 

2,423

 

 

Deferred income taxes

 

82

 

5,800

 

 

Tax benefit from employee stock plans

 

(3,353

)

—

 

 

Stock-based compensation

 

2,904

 

591

 

 

Other non-cash items affecting earnings

 

277

 

1,131

 

 

 

 

 

 

 

 

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

Receivables

 

70

 

(1,265

)

 

Inventories

 

(16,022

)

(8,407

)

 

Other current assets

 

(3,549

)

1,546

 

 

Other assets

 

(1,201

)

(6,836

)

 

Accounts payable

 

11,921

 

7,221

 

 

Accrued expenses

 

24,584

 

14,736

 

 

Other noncurrent liabilities

 

7,243

 

8,147

 

 

Net cash provided by operating activities

 

125,580

 

114,900

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

Capital expenditures

 

(60,415

)

(46,709

)

 

Proceeds from sale of assets

 

227

 

602

 

 

Purchase of salon and school net assets, net of cash acquired

 

(41,425

)

(244,743

)

 

Net cash used in investing activities

 

(101,613

)

(290,850

)

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

Borrowings on revolving credit facilities

 

1,195,305

 

890,315

 

 

Payments on revolving credit facilities

 

(1,178,705

)

(760,633

)

 

Proceeds from issuance of long-term debt

 

—

 

100,000

 

 

Repayments of long-term debt

 

(14,145

)

(17,226

)

 

Tax benefit from employee stock plans

 

3,353

 

—

 

 

Other, primarily increase in negative book cash balances

 

1,011

 

2,672

 

 

Dividends paid

 

(3,616

)

(3,555

)

 

Repurchase of common stock

 

—

 

(442

)

 

Proceeds from issuance of common stock

 

7,108

 

6,425

 

 

Net cash provided by financing activities

 

10,311

 

217,556

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

(854

)

3,160

 

 

 

 

 

 

 

 

 

Increase in cash and cash equivalents

 

33,424

 

44,766

 

 

 

 

 

 

 

 

 

Cash and cash equivalents:

 

 

 

 

 

 

Beginning of period

 

102,718

 

73,567

 

 

End of period

 

$

136,142

 

$

118,333

 

 

 


REGIS CORPORATION (NYSE:RGS)

Salon / School/ Hair Restoration Center Counts and Revenues

 

 

 

December 31,
2005

 

June 30,
2005

 

SYSTEM-WIDE LOCATIONS:

 

 

 

 

 

Company-owned salons

 

7,217

 

6,977

 

Franchise salons

 

3,869

 

3,902

 

Beauty career schools

 

35

 

24

 

Company-owned hair restoration centers

 

46

 

41

 

Franchise hair restoration centers

 

44

 

49

 

 

 

11,211

 

10,993

 

 

SALON LOCATION SUMMARY

 

NORTH AMERICAN SALONS:

 

 

 

December 31,
2005

 

June 30,
2005

 

REGIS SALONS

 

 

 

 

 

Open at beginning of period

 

1,093

 

1,085

 

Salons constructed

 

20

 

39

 

Acquired

 

1

 

13

 

Less relocations

 

7

 

14

 

Salon openings

 

14

 

38

 

Conversions

 

—

 

(1

)

Salons closed

 

(20

)

(29

)

Total, Regis Salons

 

1,087

 

1,093

 

 

 

 

 

 

 

MASTERCUTS

 

 

 

 

 

Open at beginning of period

 

636

 

604

 

Salons constructed

 

18

 

47

 

Acquired

 

—

 

2

 

Less relocations

 

3

 

13

 

Salon openings

 

15

 

36

 

Conversions

 

(2

)

1

 

Salons closed

 

(4

)

(5

)

Total, MasterCuts

 

645

 

636

 

 

 


 

 

December 31,
2005

 

June 30,
2005

 

TRADE SECRET

 

 

 

 

 

Company-owned salons:

 

 

 

 

 

Open at beginning of period

 

597

 

549

 

Salons constructed

 

22

 

56

 

Acquired

 

1

 

23

 

Franchise buybacks

 

—

 

—

 

Less relocations

 

2

 

17

 

Salon openings

 

21

 

62

 

Conversions

 

1

 

—

 

Salons closed

 

(3

)

(14

)

Total company-owned salons

 

616

 

597

 

 

 

 

 

 

 

Franchise salons:

 

 

 

 

 

Open at beginning of period

 

24

 

24

 

Salons constructed

 

—

 

—

 

Salon openings

 

—

 

—

 

Franchise buybacks

 

—

 

—

 

Salons closed

 

—

 

—

 

Total franchise salons

 

24

 

24

 

 

 

 

 

 

 

Total, Trade Secret

 

640

 

621

 

 

 

 

December 31, 2005

 

June 30,
2005

 

SMARTSTYLE/COST CUTTERS IN WAL-MART

 

 

 

 

 

Company-owned salons:

 

 

 

 

 

Open at beginning of period

 

1,497

 

1,263

 

Salons constructed

 

91

 

194

 

Acquired

 

—

 

—

 

Franchise buybacks

 

31

 

45

 

Less relocations

 

1

 

1

 

Salon openings

 

121

 

238

 

Conversions

 

—

 

—

 

Salons closed

 

(3

)

(4

)

Total company-owned salons

 

1,615

 

1,497

 

 

 

 

 

 

 

Franchise salons:

 

 

 

 

 

Open at beginning of period

 

184

 

201

 

Salons constructed

 

7

 

29

 

Acquired

 

—

 

—

 

Less relocations

 

—

 

—

 

Salon openings

 

7

 

29

 

Conversions

 

—

 

—

 

Franchise buybacks

 

(31

)

(45

)

Salons closed

 

—

 

(1

)

Total franchise salons

 

160

 

184

 

 

 

 

 

 

 

Total, SmartStyle/Cost Cutters in Wal-Mart

 

1,775

 

1,681

 

 


 

 

 

December 31,
2005

 

June 30,
2005

 

STRIP CENTERS

 

 

 

 

 

Company-owned salons:

 

 

 

 

 

Open at beginning of period

 

2,728

 

2,310

 

Salons constructed

 

93

 

167

 

Acquired

 

1

 

248

 

Franchise buybacks

 

22

 

94

 

Less relocations

 

11

 

21

 

Salon openings

 

105

 

488

 

Conversions

 

(1

)

(3

)

Salons closed

 

(24

)

(67

)

Total company-owned salons

 

2,808

 

2,728

 

 

 

 

 

 

 

Franchise salons:

 

 

 

 

 

Open at beginning of period

 

2,102

 

2,105

 

Salons constructed

 

75

 

154

 

Acquired (2)

 

—

 

7

 

Less relocations

 

10

 

13

 

Salon openings

 

65

 

148

 

Conversions

 

 

 

6

 

Franchise buybacks

 

(20

)

(94

)

Salons closed

 

(73

)

(63

)

Total franchise salons

 

2,074

 

2,102

 

 

 

 

 

 

 

Total, Strip Centers

 

4,882

 

4,830

 

 

 

 

December 31,
2005

 

June 30,
2005

 

INTERNATIONAL SALONS (1)

 

 

 

 

 

Company-owned salons:

 

 

 

 

 

Open at beginning of period

 

426

 

416

 

Salons constructed

 

19

 

22

 

Acquired

 

5

 

19

 

Franchise buybacks

 

1

 

—

 

Salon openings

 

25

 

41

 

Conversions

 

—

 

(3

)

Salons closed

 

(5

)

(28

)

Total company-owned salons

 

446

 

426

 

 

 

 

 

 

 

Franchise salons:

 

 

 

 

 

Open at beginning of period

 

1,592

 

1,594

 

Salons constructed

 

51

 

102

 

Acquired (2)

 

—

 

—

 

Salon openings

 

51

 

102

 

Franchise buybacks

 

(1

)

—

 

Salons closed

 

(31

)

(104

)

Total franchise salons

 

1,611

 

1,592

 

 

 

 

 

 

 

Total international salons

 

2,057

 

2,018

 

 


 

 

 

December 31,
2005

 

June 30,
2005

 

TOTAL SYSTEM-WIDE SALONS

 

 

 

 

 

Company-owned salons:

 

 

 

 

 

Open at beginning of period

 

6,977

 

6,227

 

Salons constructed

 

263

 

525

 

Acquired

 

8

 

305

 

Franchise buybacks

 

54

 

139

 

Less relocations

 

24

 

66

 

Salon openings

 

301

 

903

 

Conversions

 

(2

)

(6

)

Salons closed

 

(59

)

(147

)

Total company-owned salons

 

7,217

 

6,977

 

 

 

 

 

 

 

Franchise salons:

 

 

 

 

 

Open at beginning of period

 

3,902

 

3,924

 

Salons constructed

 

133

 

285

 

Acquired (2)

 

—

 

7

 

Less relocations

 

10

 

13

 

Salon openings

 

123

 

279

 

Conversions

 

—

 

6

 

Franchise buybacks

 

(52

)

(139

)

Salons closed

 

(104

)

(168

)

Total franchise salons

 

3,869

 

3,902

 

 

 

 

 

 

 

Total Salons

 

11,086

 

10,879

 

 

 

 

 

 

 

 

 

December 31,
 2005

 

June 30,
2005

 

Beauty schools:

 

 

 

 

 

Open at beginning of period

 

24

 

11

 

Salons constructed

 

1

 

—

 

Acquired

 

11

 

13

 

Less relocations

 

(1

)

—

 

Total beauty schools

 

35

 

24

 

 

 

 

December 31,
 2005

 

June 30,
2005

 

Company-owned hair restoration centers:

 

 

 

 

 

Open at beginning of period

 

41

 

—

 

Acquired

 

—

 

42

 

Sites closed

 

—

 

(1

)

Franchise buybacks

 

5

 

 

 

Total company-owned hair restoration centers

 

46

 

41

 

 

 

 

 

 

 

Franchise hair restoration centers:

 

 

 

 

 

Open at beginning of period

 

49

 

—

 

Acquired

 

—

 

49

 

Franchise buybacks

 

(5

)

—

 

Total franchise hair restoration centers

 

44

 

49

 

 

 

 

 

 

 

Total hair restoration centers

 

90

 

90

 

 

 

 

 

 

 

Grand total, system-wide

 

11,211

 

10,993

 

 


(1) Canadian and Puerto Rican salons are included in the Regis Salons, Strip Center, MasterCuts and Trade Secret concepts and not included in the International salon totals.

(2) Represents primarily the acquisition of franchise networks.

 

Relocations represent a transfer of location by the same salon concept.

Conversions represent the transfer of one salon concept to another concept.

 

NOTE 1. REVENUES BY CONCEPT:

 

 

 

For the Periods Ended December 31,

 

 

 

Three Months

 

Six Months

 

(Dollars in thousands)

 

2005

 

2004

 

2005

 

2004

 

North American salons:

 

 

 

 

 

 

 

 

 

Regis

 

$

121,665

 

$

118,867

 

$

240,795

 

$

235,325

 

MasterCuts

 

44,441

 

44,003

 

87,945

 

86,522

 

Trade Secret *

 

73,711

 

69,132

 

138,202

 

130,593

 

SmartStyle

 

102,150

 

84,400

 

200,014

 

166,683

 

Strip Center *

 

169,616

 

148,916

 

338,170

 

294,623

 

Total North American Salons

 

511,583

 

465,318

 

1,005,126

 

913,746

 

 

 

 

 

 

 

 

 

 

 

International salons *

 

53,086

 

55,597

 

104,567

 

107,335

 

Beauty schools

 

15,007

 

8,032

 

28,229

 

14,088

 

Hair restoration centers *

 

26,947

 

8,385

 

52,930

 

8,385

 

Consolidated revenues

 

$

606,623

 

$

537,332

 

$

1,190,852

 

$

1,043,554

 

Percent change from prior year

 

12.9

%

13.7

%

14.1

%

11.8

%

* Includes aggregate franchise royalties and fees of $19.2 and $19.9 million for the three months ended December 31, 2005 and 2004, respectively, and $38.7 and $38.6 million for the six months ended December 31, 2005 and 2004, respectively.  North American salon franchise royalties and fees represented 51.1 and 49.8 percent of total franchise revenues in the three months ended December 31, 2005 and 2004, respectively, and 50.8 and 52.2 percent of total franchise revenues in the six months ended December 31, 2005 and 2004.

 

NOTE 2. FINANCIAL INFORMATION BY SEGMENT:

 

Financial information concerning the Company’s salon, school and hair restoration businesses is shown in the following tables. A historical model of Regis Corporation’s quarterly results in this format is available in the Investor Information section of the corporate website at www.regiscorp.com.  Click on “Financial Reports.”


 

 

 

For the Three Months Ended December 31, 2005

 

 

 

Salons

 

 

 

Hair

 

 

 

 

 

(Dollars in thousands)

 

North
America

 

International

 

Beauty
Schools

 

Restoration
Centers

 

Unallocated
Corporate

 

Consolidated

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Service

 

$

342,343

 

$

31,590

 

$

13,955

 

$

11,390

 

$

—

 

$

399,278

 

Product

 

159,413

 

13,332

 

1,052

 

14,311

 

—

 

188,108

 

Franchise royalties and fees

 

9,827

 

8,164

 

—

 

1,246

 

—

 

19,237

 

 

 

511,583

 

53,086

 

15,007

 

26,947

 

—

 

606,623

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of service

 

198,748

 

16,687

 

4,931

 

6,572

 

—

 

226,938

 

Cost of product

 

82,455

 

8,250

 

781

 

4,373

 

—

 

95,859

 

Site operating expenses

 

44,603

 

2,591

 

1,835

 

1,083

 

—

 

50,112

 

General and administrative

 

24,504

 

10,125

 

1,767

 

5,638

 

29,141

 

71,175

 

Rent

 

71,772

 

9,835

 

1,544

 

1,463

 

432

 

85,046

 

Depreciation and amortization

 

19,002

 

1,980

 

652

 

2,286

 

3,339

 

27,259

 

Total operating expenses

 

441,084

 

49,468

 

11,510

 

21,415

 

32,912

 

556,389

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

70,499

 

3,618

 

3,497

 

5,532

 

(32,912

)

50,234

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

—

 

—

 

—

 

—

 

(8,660

)

(8,660

)

Other, net

 

—

 

—

 

—

 

—

 

570

 

570

 

Income (loss) before income taxes

 

$

70,499

 

$

3,618

 

$

3,497

 

$

5,532

 

$

(41,002

)

$

42,144

 

 

 

 

For the Three Months Ended December 31, 2004

 

 

 

Salons

 

 

 

Hair

 

 

 

 

 

(Dollars in thousands)

 

North America

 

International

 

Beauty
Schools

 

Restoration
Centers

 

Unallocated
Corporate

 

Consolidated

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

Service

 

$

309,545

 

$

33,745

 

$

7,597

 

$

6,260

 

$

—

 

$

357,147

 

Product

 

145,854

 

12,463

 

435

 

1,497

 

—

 

160,249

 

Franchise royalties and fees

 

9,919

 

9,389

 

—

 

628

 

—

 

19,936

 

 

 

465,318

 

55,597

 

8,032

 

8,385

 

—

 

537,332

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of service

 

180,850

 

18,095

 

2,143

 

2,516

 

—

 

203,604

 

Cost of product

 

75,425

 

7,816

 

363

 

788

 

—

 

84,392

 

Site operating expenses

 

41,085

 

2,389

 

797

 

480

 

—

 

44,751

 

General and administrative

 

24,992

 

10,714

 

1,471

 

1,818

 

25,110

 

64,105

 

Rent

 

64,591

 

9,304

 

617

 

510

 

95

 

75,117

 

Depreciation and amortization

 

15,563

 

1,661

 

233

 

708

 

2,600

 

20,765

 

Total operating expenses

 

402,506

 

49,979

 

5,624

 

6,820

 

27,805

 

492,734

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

62,812

 

5,618

 

2,408

 

1,565

 

(27,805

)

44,598

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest

 

—

 

—

 

—

 

—

 

(5,467

)

(5,467

)

Other, net

 

—

 

—

 

—

 

—

 

1,024

 

1,024

 

Income before income taxes

 

$

62,812

 

$

5,618

 

$

2,408

 

$

1,565

 

$

(32,248

)

$

40,155