8-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): April 26, 2006

REGIS CORPORATION(Exact name of registrant as specified in its charter)

Minnesota	1-12725	41-0749934
(State or other jurisdictionof incorporation)	(Commission File Number)	(IRS Employer Identification No)

7201 Metro Boulevard
Minneapolis, MN 55439
(Address of principal executive offices and zip code)

(952) 947-7000
(Registrant’s telephone number, including area code)

(Not applicable)
(Former name or former address, if changed from last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Regis Corporation
Current Report on Form 8-K

ITEM 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On April 26, 2006, Regis Corporation announced the financial results for its fiscal third quarter ended March 31, 2006. A copy of the News Release issued by Regis Corporation in connection with this Item 2.02 is attached as Exhibit 99 and incorporated by reference herein.

The information in this Form 8-K shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, regardless of any general incorporation language in such filing.

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(c) Exhibits.

EXHIBIT NUMBER
99	Regis Corporation News Release dated April 26, 2006

2

SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	REGIS CORPORATION
Dated: April 26, 2006		By:	/s/ Eric Bakken
			Name: Eric Bakken, Title: Secretary

EXHIBIT INDEX

EXHIBIT NUMBER
99	Regis Corporation News Release dated April 26, 2006

3

EX-99

Exhibit 99

REGIS CORPORATION:
Jack Nielsen – Director of Finance
(952) 806-1765

For Immediate Release

REGIS REPORTS THIRD QUARTER 2006 RESULTS
-Operationally, Third Quarter Earnings Meet Upper End of Revised Guidance-
-Third Quarter EPS of $0.40 Includes $0.08 per Share Charge Related to Merger Termination-
-Termination Fee to Significantly Benefit Fourth Quarter Earnings-

MINNEAPOLIS, April 26, 2006 — Regis Corporation (NYSE:RGS), the global leader in the $150 billion hair care industry, today reported financial results for its fiscal third quarter ended March 31, 2006.

“Operationally, third quarter earnings per diluted share met the high end of our revised guidance of $0.45 to $0.48 per diluted share,” commented Paul D. Finkelstein, chairman and chief executive officer. “However, in accordance with generally accepted accounting principles, we recognized $5.7 million, or $0.08 per diluted share, of transaction charges related to the terminated merger with Alberto-Culver’s Sally Beauty Company business unit. Conversely, our fourth quarter results will benefit from the merger termination fee paid to us by Alberto-Culver.”

Third Quarter Results

Consolidated revenues increased eight percent to a record $604 million compared to $557 million a year ago. Same-store sales decreased 0.4 percent. Net income increased to $18.6 million, or $0.40 per diluted share, compared to a loss of $16.6 million, or $0.37 per diluted share a year ago. This year, third quarter earnings included a $5.7 million pretax, or $0.08 per diluted share after tax, charge associated with the previously announced merger termination with Alberto-Culver. Last year, third quarter results included a $38.3 million, non-cash, goodwill impairment charge related to the Company’s European franchise operations.

Regis Corporation ended the quarter with 11,289 worldwide locations, a net increase of 78 units during the quarter. The Company constructed 146 salons and franchisees built 44 salons. In addition, Regis acquired 92 salons (including 83 franchise buybacks) and 18 beauty schools. The Company closed or relocated 139 corporate and franchise salons during the quarter.

Updated Fourth Quarter 2006 Outlook

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

•Operationally, our fourth quarter outlook remains unchanged. However, fourth quarter 2006 earnings will benefit from the receipt of the $50 million termination fee paid by Alberto-Culver to Regis Corporation. The net, after-tax benefit of the termination fee is expected to add up to $25 million, or $0.54 per diluted share, to fourth quarter 2006 earnings. As a result, earnings per diluted share are forecasted to be in a range of $1.12 to $1.16, compared to $0.64 a year ago

•EBITDA, defined as earnings before interest, taxes, depreciation and amortization, excluding the net proceeds of the break-up fee, is forecasted to increase approximately nine percent compared to the year ago period to $83 million

•Consolidated revenue is forecasted to grow up to nine percent to a range of $640 million to $645 million compared to $593 million a year ago

•Consolidated same-store sales are forecasted to be flat to an increase of 1.5 percent

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 $2.58 to $2.62, compared to $1.39 a year ago. Fiscal year 2006 earnings will benefit from the receipt of the $50 million termination fee paid by Alberto-Culver to Regis Corporation. Inclusive of the $5.7 million of transaction expenses recorded during the fiscal third quarter, the net, after-tax benefit of the termination fee is expected to add up to $21 million, or $0.45 per diluted share, to fiscal year 2006 earnings

•EBITDA, excluding the net proceeds of the break-up fee, is forecasted to increase approximately 11 percent compared to the year ago period to $301 million

•Consolidated revenue is forecasted to grow 11 percent to $2.44 billion compared to $2.19 billion a year ago

•Consolidated same-store sales are forecasted to increase to a range of 0.5 to 1.0 percent

Fiscal Year 2007 Outlook

“Consistent with previous practice, we are providing a comprehensive outlook for our upcoming fiscal year in conjunction with our third quarter press release,” commented Randy L. Pearce, executive vice president and chief financial officer. “We remind investors that our forecast excludes revenue and earnings from future acquisitions. Acquisitions remain a key component of our long-term growth strategy, however, uncertainty as to their size and timing prevent us from including them in our outlook. Also, in light of the current environment, we decided to scale back our new salon construction in fiscal year 2007. Capital in excess of our fiscal year 2007 acquisition and construction plans may be used for share repurchase.”

Mr. Pearce continued, “The mid-point of our initial outlook for fiscal year 2007 calls for earnings per diluted share to be $2.28, assuming a 1.5 percent same-store sales increase. Excluding the forecasted net benefit of the termination fee to be received in fiscal 2006, our initial outlook represents earnings per share growth of approximately six percent.”

This forecast excludes revenue and earnings from future acquisitions. The following points pertain to the fiscal year ending June 30, 2007:

•Earnings are forecasted to be in a range of  $2.22 to $2.34 per diluted share, assuming a share count of 46.7 million shares

•Consolidated revenue is forecasted to grow to $2.6 billion, an increase of nearly seven percent

•Consolidated same-store sales are projected to increase one-to-two percent

•Service margins are forecasted to increase to the mid-43 percent range of service revenue

•Product margins are forecasted to increase to the upper-48 percent range of product revenue

•Site operating expenses are forecasted to be in the mid-eight percent range of consolidated revenue

•General and administrative expenses are forecasted to be in the high 11 percent range of consolidated revenue

•Rent expense is forecasted to be in the mid-14 percent range of consolidated revenue

•Depreciation and amortization is forecasted to be in the mid-four percent range of consolidated revenue

•Operating income is forecasted to be in the mid-seven percent range of consolidated revenue

•Interest expense is forecasted to be $38 million

•Effective income tax rate is forecasted to be in the mid-36 percent range

•We plan to build 325 new corporate salons, down from an estimated 466 in fiscal year 2006, and we anticipate franchisees to build 275 franchised salons, excluding salon closures

•Capital expenditures, excluding acquisitions, are projected to be $90 million to $100 million, which includes approximately $40 million for salon maintenance

•Total debt as of June 30, 2007 is expected to be approximately $600 million, including acquisition expenditures, with debt-to-capitalization expected to be below 40 percent

Regis Corporation will host a conference call discussing third quarter results today at 10:00 a.m., Central Time. Interested parties are invited to listen by logging on to www.regiscorp.com or dialing 800-366-3908. A replay of the call will be available through April 28, 2006. The replay phone number is 800-405-2236, access code 11058000#.

Regis Corporation (NYSE:RGS) is the beauty industry’s global leader in salons, hair restoration centers and education. As of March 31, 2006, the Company owned or franchised 11,289 worldwide locations; which included 11,146 beauty salons, 90 hair restoration centers and 53 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. 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 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, acquire and integrate salons and beauty schools that support its growth objectives; 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.

(TABLES TO FOLLOW)

REGIS CORPORATION (NYSE:RGS)
CONSOLIDATED BALANCE SHEET (Unaudited)
as of March 31, 2006 and June 30, 2005
(Dollars in thousands, except per share amounts)

	March 31, 2006		June 30, 2005
ASSETS
Current assets:
Cash and cash equivalents	$	116,790	$	102,718
Receivables, net	59,694		47,752
Inventories	197,336		184,609
Deferred income taxes	18,102		17,229
Other current assets	30,569		28,341
Total current assets	422,491		380,649
Property and equipment, net	478,116		435,324
Goodwill	722,265		646,510
Other intangibles, net	216,578		208,800
Other assets	54,617		54,693
Total assets	$	1,894,067	$	1,725,976
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Long-term debt, current portion	$	33,163	$	19,747
Accounts payable	73,586		64,111
Accrued expenses	205,271		178,192
Total current liabilities	312,020		262,050
Long-term debt	563,712		549,029
Other noncurrent liabilities	179,808		160,185
Total liabilities	1,055,540		971,264
Commitments and contingencies
Shareholders’ equity:
Preferred stock, authorized 250,000 shares at March 31, 2006 and June 30, 2005
Common stock, $.05 par value; issued and outstanding 45,569,321 and 44,952,002 common shares at March 31, 2006 and June 30, 2005, respectively	2,279		2,248
Additional paid-in capital	249,749		229,871
Accumulated other comprehensive income	47,397		46,124
Retained earnings	539,102		476,469
Total shareholders’ equity	838,527		754,712
Total liabilities and shareholders’ equity	$	1,894,067	$	1,725,976

- more -

REGIS CORPORATION (NYSE:RGS)
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(Dollars in thousands, except per share amounts)

	Three Months Ended March 31,						Nine Months Ended March 31,
	2006			2005			2006			2005
Revenues:
Service	$	407,064		$	368,681		$	1,197,311		$	1,065,263
Product	177,907			168,684			539,767			477,052
Franchise royalties and fees	19,076			19,899			57,821			58,503
	604,047			557,264			1,794,899			1,600,818
Operating expenses:
Cost of service	231,869			211,907			680,666			608,097
Cost of product	93,549			87,116			277,944			249,092
Site operating expenses	49,874			46,267			149,702			134,319
General and administrative	70,839			68,827			216,081			190,633
Rent	87,176			78,578			255,057			226,203
Depreciation and amortization	28,061			24,904			81,216			65,464
Goodwill impairment	—			38,319			—			38,319
Terminated acquisition expenses	5,687			—			5,687			—
Total operating expenses	567,055			555,918			1,666,353			1,512,127
Operating income	36,992			1,346			128,546			88,691
Other income (expense):
Interest	(8,937		)	(7,027		)	(25,861		)	(16,802		)
Other, net	1,633			467			3,002			2,168
Income before income taxes	29,688			(5,214		)	105,687			74,057
Income taxes	(11,094		)	(11,336		)	(37,624		)	(38,931		)
Net income	$	18,594		$	(16,550	)	$	68,063		$	35,126
Net income per share:
Basic	$	0.41		$	(0.37	)	$	1.51		$	0.79
Diluted	$	0.40		$	(0.37	)	$	1.47		$	0.76
Weighted average common and common equivalent shares outstanding:
Basic	45,366			44,770			45,149			44,538
Diluted	46,602			44,770			46,460			46,393
Cash dividends declared per common share	$	0.04		$	0.04		$	0.12		$	0.12

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)

	Nine Months Ended March 31
	2006			2005
Cash flows from operating activities:
Net income	$	68,063		$	35,126
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	72,463			60,109
Amortization	8,753			5,355
Deferred income taxes	3,824			(2,237		)
Goodwill impairment	—			38,319
Terminated acquisition expenses	5,687			—
Tax benefit from employee stock plans	(3,644		)	—
Stock-based compensation	3,906			707
Other noncash items affecting earnings	282			71
Changes in operating assets and liabilities:
Receivables	(2,245		)	(4,011		)
Inventories	(11,142		)	(14,325		)
Other current assets	(6,469		)	581
Other assets	(953		)	(4,912		)
Accounts payable	6,971			11,792
Accrued expenses	19,203			29,637
Other noncurrent liabilities	13,818			15,209
Net cash provided by operating activities	178,517			171,421
Cash flows from investing activities:
Capital expenditures	(93,149		)	(70,874		)
Proceeds from sale of assets	640			705
Purchase of salon and school net assets, net of cash acquired	(87,456		)	(92,523		)
Purchase of hair restoration centers, net of cash acquired	(6,304		)	(211,028		)
Net cash used in investing activities	(186,269		)	(373,720		)
Cash flows from financing activities:
Borrowings on revolving credit facilities	2,152,230			2,504,190
Payments on revolving credit facilities	(2,119,980		)	(2,351,755		)
Proceeds from issuance of long-term debt	3,075			100,755
Repayments of long-term debt	(19,559		)	(18,763		)
Tax benefit from employee stock plans	3,644			—
Other, primarily increase (decrease) in negative book cash balances	(2,055		)	734
Dividends paid	(5,435		)	(5,346		)
Repurchase of common stock	—			(11,482		)
Proceeds from issuance of common stock	10,528			14,714
Net cash provided by financing activities	22,448			233,047
Effect of exchange rate changes on cash and cash equivalents	(624		)	4,049
Increase in cash and cash equivalents	14,072			34,797
Cash and cash equivalents:
Beginning of period	102,718			73,567
End of period	$	116,790		$	108,364

REGIS CORPORATION (NYSE:RGS)
Salon / School/ Hair Restoration Center Counts and Revenues

	March 31, 2006	June 30, 2005
SYSTEM-WIDE LOCATIONS:
Company-owned salons	7,407	6,977
Franchise salons	3,739	3,902
Beauty career schools	53	24
Company-owned hair restoration centers	48	41
Franchise hair restoration centers	42	49
	11,289	10,993

SALON LOCATION SUMMARY

NORTH AMERICAN SALONS:

	March 31, 2006		June 30, 2005
REGIS SALONS
Open at beginning of period	1,093		1,085
Salons constructed	27		39
Acquired	2		13
Less relocations	9		14
Salon openings	20		38
Conversions	—		(1	)
Salons closed	(35	)	(29	)
Total, Regis Salons	1,078		1,093
MASTERCUTS
Open at beginning of period	636		604
Salons constructed	24		47
Acquired	—		2
Less relocations	5		13
Salon openings	19		36
Conversions	(2	)	1
Salons closed	(4	)	(5	)
Total, MasterCuts	649		636

	March 31, 2006		June 30, 2005
TRADE SECRET
Company-owned salons:
Open at beginning of period	597		549
Salons constructed	26		56
Acquired	2		23
Franchise buybacks	5		—
Less relocations	3		17
Salon openings	30		62
Conversions	1		—
Salons closed	(7	)	(14	)
Total company-owned salons	621		597
Franchise salons:
Open at beginning of period	24		24
Salons constructed	—		—
Salon openings	—		—
Franchise buybacks	(5	)	—
Salons closed	—		—
Total franchise salons	19		24
Total, Trade Secret	640		621

	March 31, 2006		June 30, 2005
SMARTSTYLE/COST CUTTERS IN WAL-MART
Company-owned salons:
Open at beginning of period	1,497		1,263
Salons constructed	163		194
Acquired	—		—
Franchise buybacks	31		45
Less relocations	1		1
Salon openings	193		238
Conversions	1		—
Salons closed	(3	)	(4	)
Total company-owned salons	1,688		1,497
Franchise salons:
Open at beginning of period	184		201
Salons constructed	10		29
Acquired	—		—
Less relocations	—		—
Salon openings	10		29
Conversions	—		—
Franchise buybacks	(31	)	(45	)
Salons closed	—		(1	)
Total franchise salons	163		184
Total, SmartStyle/Cost Cutters in Wal-Mart	1,851		1,681

	March 31, 2006		June 30, 2005
STRIP CENTERS
Company-owned salons:
Open at beginning of period	2,728		2,310
Salons constructed	143		167
Acquired	7		248
Franchise buybacks	100		94
Less relocations	17		21
Salon openings	233		488
Conversions	(2	)	(3	)
Salons closed	(35	)	(67	)
Total company-owned salons	2,924		2,728
Franchise salons:
Open at beginning of period	2,102		2,105
Salons constructed	101		154
Acquired (2)	—		7
Less relocations	13		13
Salon openings	88		148
Conversions	2		6
Franchise buybacks	(100	)	(94	)
Salons closed	(94	)	(63	)
Total franchise salons	1,998		2,102
Total, Strip Centers	4,922		4,830

	March 31, 2006		June 30, 2005
INTERNATIONAL SALONS (1)
Company-owned salons:
Open at beginning of period	426		416
Salons constructed	26		22
Acquired	6		19
Franchise buybacks	1		—
Salon openings	33		41
Conversions	(2	)	(3	)
Salons closed	(10	)	(28	)
Total company-owned salons	447		426
Franchise salons:
Open at beginning of period	1,592		1,594
Salons constructed	66		102
Acquired (2)	—		—
Salon openings	66		102
Conversions	2		—
Franchise buybacks	(1	)	—
Salons closed	(100	)	(104	)
Total franchise salons	1,559		1,592
Total international salons	2,006		2,018

TOTAL SYSTEM-WIDE SALONS	March 31, 2006		June 30, 2005
Company-owned salons:
Open at beginning of period	6,977		6,227
Salons constructed	409		525
Acquired	17		305
Franchise buybacks	137		139
Less relocations	35		66
Salon openings	528		903
Conversions	(4	)	(6	)
Salons closed	(94	)	(147	)
Total company-owned salons	7,407		6,977
Franchise salons:
Open at beginning of period	3,902		3,924
Salons constructed	177		285
Acquired (2)	—		7
Less relocations	13		13
Salon openings	164		279
Conversions	4		6
Franchise buybacks	(137	)	(139	)
Salons closed	(194	)	(168	)
Total franchise salons	3,739		3,902
Total Salons	11,146		10,879

	March 31, 2006	June 30, 2005
Beauty schools:
Open at beginning of period	24	11
Salons constructed	1	—
Acquired	29	13
Less relocations	1	—
Total beauty schools	53	24

	March 31, 2006		June 30, 2005
Company-owned hair restoration centers:
Open at beginning of period	41		—
Constructed	1		—
Acquired	1		42
Franchise buybacks	7		(1	)
Less relocations	1		—
Site openings	8		41
Sites Closed	(1	)	—
Total company-owned hair restoration centers	48		41
Franchise hair restoration centers:
Open at beginning of period	49		—
Acquired	—		49
Franchise buybacks	(7	)	—
Total franchise hair restoration centers	42		49
Total hair restoration centers	90		90
Grand total, system-wide	11,289		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 March 31,
	Three Months						Nine Months
(Dollars in thousands)	2006			2005			2006			2005
North American salons:
Regis	$	120,183		$	118,461		$	360,977		$	353,788
MasterCuts	43,663			43,220			131,608			129,742
Trade Secret (1)	61,665			59,667			199,857			190,259
SmartStyle	106,703			91,011			306,718			257,694
Strip Center (1)	173,821			155,551			511,991			450,173
Total North American Salons	506,025			467,910			1,511,151			1,381,656
International salons (1)	51,846			54,257			156,413			161,592
Beauty schools	18,133			10,158			46,362			24,246
Hair restoration centers (1)	28,043			24,939			80,973			33,324
Consolidated revenues	$	604,047		$	557,264		$	1,794,899		$	1,600,818
Percent change from prior year	8.4		%	15.8		%	12.1		%	13.2		%

(1) Includes aggregate franchise royalties and fees of $19.1 and $19.9 million for the three months ended March 31, 2006 and 2005, respectively, and $57.8 and $58.5 million for the nine months ended March 31, 2006 and 2005, respectively. North American salon franchise royalties and fees represented 50.1 and 49.2 percent of total franchise revenues in the three months ended March 31, 2006 and 2005, respectively, and 50.5 and 51.2 percent of total franchise revenues in the nine months ended March 31, 2006 and 2005.

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.”

NOTE 3. TERMINATED ACQUISITION EXPENSES:

As a result of the termination of the Merger Agreement, the Company recognized in the third quarter, $5.7 million in acquisition related expenses previously capitalized.

	For the Three Months Ended March 31, 2006
	Salons				Beauty		Hair Restoration		Unallocated
(Dollars in thousands)	North America		International		Schools		Centers		Corporate			Consolidated
Revenues:
Service	$	348,125	$	30,253	$	16,591	$	12,095	$	—		$	407,064
Product	148,351		13,350		1,542		14,664		—			177,907
Franchise royalties and fees	9,549		8,243		—		1,284		—			19,076
	506,025		51,846		18,133		28,043		—			604,047
Operating expenses:
Cost of service	201,395		16,395		7,131		6,948		—			231,869
Cost of product	80,018		7,784		1,413		4,334		—			93,549
Site operating expenses	43,599		2,433		2,677		1,165		—			49,874
General and administrative	26,888		9,713		2,136		6,052		26,050			70,839
Rent	73,391		9,987		1,905		1,624		269			87,176
Depreciation and amortization	19,504		1,930		682		2,381		3,564			28,061
Goodwill impairment	—		—		—		—		—			—
Terminated acquisition expenses	—		—		—		—		5,687			5,687
Total operating expenses	444,795		48,242		15,944		22,504		35,570			567,055
Operating income (loss)	61,230		3,604		2,189		5,539		(35,570		)	36,992
Other income (expense):
Interest	—		—		—		—		(8,937		)	(8,937		)
Other, net	—		—		—		—		1,633			1,633
Income (loss) before income taxes	$	61,230	$	3,604	$	2,189	$	5,539	$	(42,874	)	$	29,688

	For the Three Months Ended March 31, 2005
	Salons					Beauty		Hair Restoration		Unallocated
(Dollars in thousands)	North America		International			Schools		Centers		Corporate			Consolidated
Revenues:
Service	$	319,176	$	32,383		$	9,486	$	7,636	$	—		$	368,681
Product	138,936		12,903			672		16,173		—			168,684
Franchise royalties and fees	9,798		8,971			—		1,130		—			19,899
	467,910		54,257			10,158		24,939		—			557,264
Operating expenses:
Cost of service	185,724		17,963			3,396		4,824		—			211,907
Cost of product	73,663		8,225			491		4,737		—			87,116
Site operating expenses	41,539		2,380			912		1,436		—			46,267
General and administrative	25,176		10,851			1,484		5,019		26,297			68,827
Rent	66,267		10,085			761		1,298		167			78,578
Depreciation and amortization	17,608		2,072			360		2,172		2,692			24,904
Goodwill impairment	—		38,319			—		—		—			38,319
Terminated acquisition expenses	—		—			—		—		—			—
Total operating expenses	409,977		89,895			7,404		19,486		29,156			555,918
Operating income	57,933		(35,638		)	2,754		5,453		(29,156		)	1,346
Other income (expense):
Interest	—		—			—		—		(7,027		)	(7,027		)
Other, net	—		—			—		—		467			467
Income before income taxes	$	57,933	$	(35,638	)	$	2,754	$	5,453	$	(35,716	)	$	(5,214	)

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