MINNEAPOLIS--(BUSINESS WIRE)--Regis Corporation (NYSE: RGS), a leader in the haircare industry, today reported results for the fourth quarter and full year ended June 30, 2022. Highlights from the year include:
- Fourth quarter and full year revenue of $66.1 million and $276.0 million, including royalty growth of 12.1% and 25.6%, respectively.
- System-wide same-store sales increase of 7.1% in the quarter and 14.8% in fiscal year 2022.
- Positive fourth quarter adjusted EBITDA, excluding salon sales, of $1.1 million, a $15.6 million improvement compared to a loss of $14.5 million during the fourth quarter 2021; Franchise EBITDA of $2.5 million, positive for the 3rd quarter in a row.
- Positive fiscal year adjusted EBITDA, excluding salon sales, of $0.5 million compared to a $60.2 million loss in fiscal year 2021.
- Efforts to renegotiate debt culminated in the successful amendment to our credit agreement and extension of the maturity date from March 2023 to August 2025.
- Sold proprietary salon management system, Opensalon® Pro, for up to $39.0 million in proceeds and partnered with salon technology leader, Zenoti, to provide a best-in-class technology solution to franchisees.
- Reduced loss-generating company-owned locations from 276 to 105, resulting in a $38.0 million year-over-year EBITDA improvement.
- Well-positioned with strategy in place to deliver strong EBITDA growth in fiscal year 2023.
- Earnings webcast scheduled for 9am CST on August 23, 2022 and will be accompanied by a slide presentation.
"When I stepped in as Interim CEO in December 2021, we identified refinancing our debt, providing the right technology solution to our franchisees, and continuing the wind down of our company-owned salons as our top priorities. I am pleased that in a short period of time, we successfully delivered on all three by renegotiating our credit agreement with our lender group, selling Opensalon Pro to our new point-of-sale technology partner, Zenoti, and winding down our company-owned salons from 276 to 105 locations," said Matt Doctor, Regis Chief Executive Officer. "In addition to these transformative efforts, our performance is continuing to improve with positive adjusted EBITDA, excluding salon sales, in Q4 and fiscal year 2022. With our fully-franchised business model and strategies in place that focus on stylist retention and recruiting, enhanced digital marketing, and a more robust salon management system, we are poised to deliver stronger results in fiscal 2023."
|
|
Three Months Ended June 30, |
|
Twelve Months Ended June 30, |
||||||||||||
(Dollars in thousands) |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Consolidated revenue |
|
$ |
66,069 |
|
|
$ |
97,614 |
|
|
$ |
275,967 |
|
|
$ |
411,651 |
|
System-wide revenue (1) |
|
|
316,838 |
|
|
|
293,981 |
|
|
|
1,228,464 |
|
|
|
1,086,024 |
|
|
|
|
|
|
|
|
|
|
||||||||
System-wide same-store sales comps |
|
|
7.1 |
% |
|
|
4.2 |
% |
|
|
14.8 |
% |
|
|
(25.8 |
) % |
Two-year system-wide same-store sales comps |
|
|
7.4 |
% |
|
|
(21.0 |
) % |
|
|
(13.7 |
) % |
|
|
(28.3 |
) % |
|
|
|
|
|
|
|
|
|
||||||||
Operating loss |
|
$ |
(1,315 |
) |
|
$ |
(22,844 |
) |
|
$ |
(28,898 |
) |
|
$ |
(94,677 |
) |
Loss from continuing operations |
|
|
(8,560 |
) |
|
|
(29,755 |
) |
|
|
(46,459 |
) |
|
|
(103,206 |
) |
Diluted loss per share from continuing operations |
|
|
(0.19 |
) |
|
|
(0.83 |
) |
|
|
(1.07 |
) |
|
|
(2.87 |
) |
Loss from discontinued operations |
|
|
(34,073 |
) |
|
|
(4,584 |
) |
|
|
(39,398 |
) |
|
|
(10,125 |
) |
Net loss |
|
|
(42,633 |
) |
|
|
(34,339 |
) |
|
|
(85,857 |
) |
|
|
(113,331 |
) |
Diluted net loss per share |
|
|
(0.93 |
) |
|
|
(0.95 |
) |
|
|
(1.97 |
) |
|
|
(3.15 |
) |
EBITDA (2) |
|
|
(34,384 |
) |
|
|
(27,140 |
) |
|
|
(64,160 |
) |
|
|
(70,824 |
) |
as a percent of revenue |
|
|
(52.0 |
) % |
|
|
(27.8 |
) % |
|
|
(23.2 |
) % |
|
|
(17.2 |
) % |
|
|
|
|
|
|
|
|
|
||||||||
As adjusted (2) |
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations, as adjusted |
|
$ |
(3,032 |
) |
|
$ |
(25,483 |
) |
|
$ |
(18,054 |
) |
|
$ |
(101,685 |
) |
Diluted loss per share from continuing operations, as adjusted |
|
|
(0.07 |
) |
|
|
(0.71 |
) |
|
|
(0.41 |
) |
|
|
(2.83 |
) |
Net loss, as adjusted |
|
|
(3,032 |
) |
|
|
(25,483 |
) |
|
|
(18,054 |
) |
|
|
(101,685 |
) |
Diluted net loss per share, as adjusted |
|
|
(0.07 |
) |
|
|
(0.71 |
) |
|
|
(0.41 |
) |
|
|
(2.83 |
) |
EBITDA, as adjusted |
|
|
959 |
|
|
|
(22,728 |
) |
|
|
(1,799 |
) |
|
|
(76,914 |
) |
as a percent of revenue |
|
|
1.5 |
% |
|
|
(23.3 |
) % |
|
|
(0.7 |
) % |
|
|
(18.7 |
) % |
EBITDA, as adjusted excluding loss on sale of salons |
|
|
1,104 |
|
|
|
(14,495 |
) |
|
|
535 |
|
|
|
(60,218 |
) |
as a percent of revenue |
|
|
1.7 |
% |
|
|
(14.8 |
) % |
|
|
0.2 |
% |
|
|
(14.6 |
) % |
_______________________________________________________________________________
(1) |
Represents total sales within the system. |
(2) |
See GAAP to non-GAAP reconciliations, within the attached section titled "Non-GAAP Reconciliations." |
Total revenue in the quarter of $66.1 million decreased $31.5 million, or 32.3% and full year revenue declined $135.7 million year-over-year. Both of these declines were driven primarily by exiting company-owned salons that generated significant revenue, but were loss generating. Partially offsetting the decline in revenue was an increase in royalty revenue due to higher franchise system sales.
Fourth quarter adjusted EBITDA of $1.0 million improved $23.7 million, versus an adjusted EBITDA loss of $22.7 million in the same period last year. On a full year basis, adjusted EBITDA loss of $1.8 million improved $75.1 million from fiscal 2021. The improvements were driven by an increase in royalty revenues; lower general and administrative expense; and the wind down of loss-generating company-owned salons during the last twelve months.
Regis reported a fourth quarter 2022 net loss from continuing operations of $8.6 million, or $0.19 loss per diluted share, compared to a net loss from continuing operations of $29.8 million, or $0.83 loss per diluted share, in the fourth quarter of 2021. Excluding discrete items, the Company reported fourth quarter 2022 adjusted net loss from continuing operations of $3.0 million, or $0.07 loss per diluted share, compared to adjusted net loss from continuing operations of $25.5 million, or $0.71 per diluted share for the same period last year. On a full year basis, the Company reported an adjusted net loss from continuing operations of $18.1 million or $0.41 loss per diluted share compared to an adjusted net loss from continuing operations of $101.7 million or $2.83 loss per share for the same period last year. The year-over-year improvement in adjusted net loss from continuing operations was driven primarily by improved sales leading to an increase in royalty revenues; lower general and administrative expense; and the Company winding down loss-generating company-owned salons during the last twelve months.
The Company reported a fourth quarter 2022 net loss of $42.6 million, or $0.93 loss per diluted share, compared to a net loss of $34.3 million, or $0.95 per diluted share for the same period last year. On a full year basis, the Company reported a net loss of $85.9 million, or $1.97 loss per diluted share, compared to a net loss of $113.3 million, or $3.15 loss per share, in fiscal 2021. The net loss in the quarter and in the year was driven by the loss from discontinued operations of $34.1 and $39.4 million in the quarter and full year, respectively, which includes a $38.4 million non-cash goodwill derecognition charge. Additionally, the twelve months results include a non-cash goodwill impairment charge of $13.1 million. The net loss improved year-over-year in both periods due to higher royalty revenues and lower general and administrative expense.
Fourth Quarter Segment Results Franchise |
||||||||||||||||||||||||
|
|
Three Months Ended June 30, |
|
Increase (Decrease) |
|
Twelve Months Ended June 30, |
|
Increase (Decrease) |
||||||||||||||||
(Dollars in millions) (1) |
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Royalties |
|
$ |
17.2 |
|
|
$ |
15.4 |
|
|
$ |
1.8 |
|
|
$ |
65.8 |
|
|
$ |
52.4 |
|
|
$ |
13.4 |
|
Fees |
|
|
3.0 |
|
|
|
2.6 |
|
|
|
0.4 |
|
|
|
11.6 |
|
|
|
10.2 |
|
|
|
1.4 |
|
Product sales to franchisees |
|
|
3.3 |
|
|
|
15.6 |
|
|
|
(12.3 |
) |
|
|
15.1 |
|
|
|
56.7 |
|
|
|
(41.6 |
) |
Advertising fund contributions |
|
|
8.4 |
|
|
|
7.2 |
|
|
|
1.2 |
|
|
|
32.6 |
|
|
|
22.0 |
|
|
|
10.6 |
|
Franchise rental income |
|
|
30.6 |
|
|
|
31.5 |
|
|
|
(0.9 |
) |
|
|
130.8 |
|
|
|
127.4 |
|
|
|
3.4 |
|
Total Franchise revenue |
|
$ |
62.5 |
|
|
$ |
72.3 |
|
|
$ |
(9.8 |
) |
|
$ |
255.8 |
|
|
$ |
268.7 |
|
|
$ |
(12.9 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Franchise same-store sales comps |
|
|
7.2 |
% |
|
|
4.4 |
% |
|
|
|
|
15.0 |
% |
|
|
(24.5 |
) % |
|
|
||||
Franchise two-year same-store sales comps |
|
|
7.5 |
% |
|
|
(20.2 |
) % |
|
|
|
|
(13.4 |
) % |
|
|
(27.2 |
) % |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
EBITDA, as Adjusted |
|
$ |
2.5 |
|
|
$ |
(9.4 |
) |
|
$ |
11.9 |
|
|
$ |
7.7 |
|
|
$ |
(29.4 |
) |
|
$ |
37.1 |
|
as a percent of revenue |
|
|
4.1 |
% |
|
|
(13.0 |
) % |
|
|
|
|
3.0 |
% |
|
|
(10.9 |
) % |
|
|
||||
as a percent of adjusted revenue (2) |
|
|
10.8 |
% |
|
|
(28.1 |
) % |
|
|
|
|
8.4 |
% |
|
|
(24.7 |
) % |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Franchise salons |
|
|
5,395 |
|
|
|
5,563 |
|
|
|
(168 |
) |
|
|
|
|
|
|
||||||
as a percent of total Franchise and Company-owned salons |
|
|
98.1 |
% |
|
|
95.3 |
% |
|
|
|
|
|
|
|
|
||||||||
_______________________________________________________________________________
(1) |
Variances calculated on amounts shown in millions may result in rounding differences. |
(2) |
Adjusted revenue excludes non-margin revenue. See Non-GAAP reconciliation |
Fourth quarter Franchise revenue was $62.5 million, a $9.8 million, or 13.6% decrease, compared to the prior year quarter. Royalties were $17.2 million, a $1.8 million, or 11.7% increase, versus the same period last year. The increase in royalties is due to higher franchise system sales. Product sales to franchisees of $3.3 million decreased $12.3 million as a result of the transition out of the wholesale product business. Franchise adjusted EBITDA of $2.5 million improved $11.9 million year-over-year primarily due to an increase in royalty revenues and a decrease in general and administrative expense. Full year results followed the same trends.
Company-Owned Salons
|
|
Three Months Ended June 30, |
|
(Decrease) Increase |
|
Twelve Months Ended June 30, |
|
(Decrease) Increase |
||||||||||||||||
(Dollars in millions) (1) |
|
2022 |
|
2021 |
|
|
2022 |
|
2021 |
|
||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Company-owned salon revenue |
|
$ |
3.6 |
|
|
$ |
25.3 |
|
|
$ |
(21.7 |
) |
|
$ |
20.2 |
|
|
$ |
143.0 |
|
|
$ |
(122.8 |
) |
Company-owned same-store sales comps |
|
|
(0.8 |
) % |
|
|
(7.0 |
) % |
|
|
|
|
3.4 |
% |
|
|
(33.4 |
) % |
|
|
||||
Company-owned two-year same-store sales comps |
|
|
(27.1 |
) % |
|
|
(30.4 |
) % |
|
|
|
|
(32.1 |
) % |
|
|
(35.2 |
) % |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
EBITDA, as adjusted |
|
$ |
(1.6 |
) |
|
$ |
(13.3 |
) |
|
$ |
11.7 |
|
|
$ |
(9.5 |
) |
|
$ |
(47.5 |
) |
|
$ |
38.0 |
|
as a percent of revenue |
|
|
(44.4 |
) % |
|
|
(52.6 |
) % |
|
|
|
|
(47.0 |
) % |
|
|
(33.2 |
) % |
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Total Company-owned salons |
|
|
105 |
|
|
|
276 |
|
|
|
(171 |
) |
|
|
|
|
|
|
||||||
as a percent of total Franchise and Company-owned salons |
|
|
1.9 |
% |
|
|
4.7 |
% |
|
|
|
|
|
|
|
|
||||||||
_______________________________________________________________________________
(1) |
Variances calculated on amounts shown in millions may result in rounding differences. |
Fourth quarter revenue for the Company-owned salon segment decreased $21.7 million versus the prior year to $3.6 million and full year revenue declined $122.8 million. The year-over-year decline in revenue was expected and driven by 110 salons converted to the Company's franchise portfolio and the closure of 61 unprofitable salons over the past 12 months. Fourth quarter adjusted EBITDA loss improved $11.7 million, or 88.0%, and full year adjusted EBITDA loss improved $38.0 million, or 79.9%, versus the same period last year, driven primarily by current year closure of unprofitable salons and an inventory reserve charge in the prior year.
Non-GAAP reconciliations
For GAAP to non-GAAP reconciliations, please refer to the attached section titled "Non-GAAP Reconciliations." A complete reconciliation of reported earnings to adjusted earnings is included in this press release and is available on the Company’s website at www.regiscorp.com.
Earnings Webcast
Regis Corporation will host a conference call via webcast to discuss fourth quarter and full year results on August 23, 2022 at 9 a.m., Central time. Interested parties are invited to participate in the live webcast by registering for the event at www.regiscorp.com/investor-relations.html. The webcast will include a slide presentation. A replay of the presentation will be available on our website at www.regiscorp.com/investor-relations.
About Regis Corporation
Regis Corporation (NYSE:RGS) is a leader in the beauty salon industry. As of June 30, 2022, the Company franchised, owned or held ownership interests in 5,576 worldwide locations. Regis’ franchised and corporate locations operate under concepts such as Supercuts®, SmartStyle®, Cost Cutters®, Roosters® and First Choice Haircutters®. Regis maintains an ownership interest in Empire Education Group in the U.S. For additional information about the Company, including a reconciliation of certain non-GAAP financial information and certain supplemental financial information, please visit the Investor Information section of the corporate website at www.regiscorp.com.
This press release contains or may contain “forward-looking statements” within the meaning of the federal securities laws, including statements concerning anticipated future events and expectations that are not historical facts. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements in this document reflect management’s best judgment at the time they are made, but all such statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those expressed in or implied by the statements herein. Such forward-looking statements are often identified herein by use of words including, but not limited to, “may,” “believe,” “project,” “forecast,” “expect,” “estimate,” “anticipate,” and “plan.” In addition, the following factors could affect the Company's actual results and cause such results to differ materially from those expressed in forward-looking statements. These uncertainties include a potential material adverse impact on our business and results of operations as a result of the COVID-19 pandemic, including any adverse impact from variants; consumer shopping trends and changes in manufacturer distribution channels; changes in regulatory and statutory laws including increases in minimum wages; laws and regulations could require us to modify current business practices and incur increased costs; changes in economic conditions; changes in consumer tastes, fashion trends and consumer spending patterns; compliance with New York Stock Exchange listing requirements; reliance on franchise royalties and overall success of our franchisees’ salons; the return of sales at franchise locations to pre-pandemic levels; new merchandising strategy that utilizes third-party preferred supplier arrangements; our franchisees' ability to attract, train and retain talented stylists and salon leaders; the success of our franchisees, which operate independently; our ability to manage cyber threats and protect the security of potentially sensitive information about our guests, franchisees, employees, vendors or Company information; the ability of the Company to maintain a satisfactory relationship with Walmart; marketing efforts to drive traffic to our franchisees' salons; the successful migration of our franchisees to the Zenoti salon technology platform; our ability to maintain and enhance the value of our brands; reliance on information technology systems; reliance on external vendors; the use of social media; failure to standardize operating processes across brands; exposure to uninsured or unidentified risks; the effectiveness of our enterprise risk management program; compliance with covenants in our financing arrangement, access to the existing revolving credit facility, and we may face an accelerated obligation to repay our indebtedness; our capital investments in technology may not achieve appropriate returns; premature termination of agreements with our franchisees; financial performance of Empire Education Group, Inc.; the continued ability of the Company to implement cost reduction initiatives and achieve expected cost savings; continued ability to compete in our business markets; reliance on our management team and other key personnel; the continued ability to maintain an effective system of internal controls over financial reporting; changes in tax exposure; the ability to use U.S. net operating loss carryforwards; potential litigation and other legal or regulatory proceedings could have an adverse effect on our business; or other factors not listed above. Additional information concerning potential factors that could affect future financial results is set forth under Item 1A of Form 10-K. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made in our subsequent annual and periodic reports filed or furnished with the SEC on Forms 10-K, 10-Q and 8-K and Proxy Statements on Schedule 14A.
REGIS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (Dollars in thousands, except per share data) |
||||||||
|
|
June 30, |
||||||
|
|
2022 |
|
2021 |
||||
|
|
|
|
|
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
17,041 |
|
|
$ |
19,191 |
|
Receivables, net |
|
|
14,531 |
|
|
|
26,270 |
|
Inventories |
|
|
3,109 |
|
|
|
20,639 |
|
Other current assets |
|
|
13,984 |
|
|
|
17,017 |
|
Current assets related to discontinued operations |
|
|
— |
|
|
|
3,542 |
|
Total current assets |
|
|
48,665 |
|
|
|
86,659 |
|
|
|
|
|
|
||||
Property and equipment, net |
|
|
12,835 |
|
|
|
16,906 |
|
Goodwill |
|
|
174,360 |
|
|
|
188,257 |
|
Other intangibles, net |
|
|
3,226 |
|
|
|
3,761 |
|
Right of use asset |
|
|
493,749 |
|
|
|
610,599 |
|
Other assets |
|
|
36,465 |
|
|
|
41,388 |
|
Non-current assets related to discontinued operations |
|
|
— |
|
|
|
48,813 |
|
Total assets |
|
$ |
769,300 |
|
|
$ |
996,383 |
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' (DEFICIT) EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable |
|
$ |
15,860 |
|
|
$ |
27,157 |
|
Accrued expenses |
|
|
33,784 |
|
|
|
51,242 |
|
Short-term lease liability |
|
|
103,196 |
|
|
|
116,348 |
|
Current liabilities related to discontinued operations |
|
|
— |
|
|
|
3,738 |
|
Total current liabilities |
|
|
152,840 |
|
|
|
198,485 |
|
|
|
|
|
|
||||
Long-term debt, net |
|
|
179,994 |
|
|
|
186,911 |
|
Long-term lease liability |
|
|
408,445 |
|
|
|
517,626 |
|
Other non-current liabilities |
|
|
58,974 |
|
|
|
75,075 |
|
Non-current liabilities related to discontinued operations |
|
|
— |
|
|
|
1,240 |
|
Total liabilities |
|
|
800,253 |
|
|
|
979,337 |
|
Commitments and contingencies |
|
|
|
|
||||
Shareholders' (deficit) equity: |
|
|
|
|
||||
Common stock, $0.05 par value; issued and outstanding, 45,510,245 and 35,795,844 common shares at June 30, 2022 and 2021, respectively |
|
|
2,276 |
|
|
|
1,790 |
|
Additional paid-in capital |
|
|
62,562 |
|
|
|
25,102 |
|
Accumulated other comprehensive income |
|
|
9,455 |
|
|
|
9,543 |
|
Accumulated deficit |
|
|
(105,246 |
) |
|
|
(19,389 |
) |
Total shareholders' (deficit) equity |
|
|
(30,953 |
) |
|
|
17,046 |
|
Total liabilities and shareholders' (deficit) equity |
|
$ |
769,300 |
|
|
$ |
996,383 |
|
REGIS CORPORATION CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Dollars and shares in thousands, except per share data) |
||||||||||||||||
|
|
Three Months Ended June 30, |
|
Twelve Months Ended June 30, |
||||||||||||
|
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenues: |
|
|
|
|
|
|
|
|
||||||||
Royalties |
|
$ |
17,227 |
|
|
$ |
15,369 |
|
|
$ |
65,753 |
|
|
$ |
52,357 |
|
Fees |
|
|
2,954 |
|
|
|
2,561 |
|
|
|
11,587 |
|
|
|
10,215 |
|
Product sales to franchisees |
|
|
3,343 |
|
|
|
15,642 |
|
|
|
15,072 |
|
|
|
56,699 |
|
Advertising fund contributions |
|
|
8,360 |
|
|
|
7,218 |
|
|
|
32,573 |
|
|
|
22,023 |
|
Franchise rental income |
|
|
30,577 |
|
|
|
31,507 |
|
|
|
130,777 |
|
|
|
127,392 |
|
Company-owned salon revenue |
|
|
3,608 |
|
|
|
25,317 |
|
|
|
20,205 |
|
|
|
142,965 |
|
Total revenue |
|
|
66,069 |
|
|
|
97,614 |
|
|
|
275,967 |
|
|
|
411,651 |
|
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Cost of product sales to franchisees |
|
|
4,172 |
|
|
|
12,201 |
|
|
|
17,391 |
|
|
|
43,756 |
|
Inventory reserve (1) |
|
|
1,235 |
|
|
|
— |
|
|
|
7,655 |
|
|
|
— |
|
General and administrative |
|
|
14,566 |
|
|
|
23,597 |
|
|
|
65,274 |
|
|
|
96,427 |
|
Rent |
|
|
3,368 |
|
|
|
6,758 |
|
|
|
9,357 |
|
|
|
40,754 |
|
Advertising fund expense |
|
|
8,360 |
|
|
|
7,218 |
|
|
|
32,573 |
|
|
|
22,023 |
|
Franchise rent expense |
|
|
30,577 |
|
|
|
31,507 |
|
|
|
130,777 |
|
|
|
127,392 |
|
Company-owned salon expense (2) |
|
|
3,648 |
|
|
|
30,942 |
|
|
|
21,952 |
|
|
|
141,204 |
|
Depreciation and amortization |
|
|
1,458 |
|
|
|
5,030 |
|
|
|
6,224 |
|
|
|
21,749 |
|
Long-lived asset impairment |
|
|
— |
|
|
|
3,205 |
|
|
|
542 |
|
|
|
13,023 |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
13,120 |
|
|
|
— |
|
Total operating expenses |
|
|
67,384 |
|
|
|
120,458 |
|
|
|
304,865 |
|
|
|
506,328 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating loss |
|
|
(1,315 |
) |
|
|
(22,844 |
) |
|
|
(28,898 |
) |
|
|
(94,677 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Other (expense) income: |
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
|
(3,292 |
) |
|
|
(3,024 |
) |
|
|
(12,914 |
) |
|
|
(13,163 |
) |
Loss from sale of salon assets to franchisees |
|
|
(145 |
) |
|
|
(8,233 |
) |
|
|
(2,334 |
) |
|
|
(16,696 |
) |
Interest income and other, net |
|
|
(309 |
) |
|
|
286 |
|
|
|
(296 |
) |
|
|
15,902 |
|
|
|
|
|
|
|
|
|
|
||||||||
Loss from operations before income taxes |
|
|
(5,061 |
) |
|
|
(33,815 |
) |
|
|
(44,442 |
) |
|
|
(108,634 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Income tax (expense) benefit |
|
|
(3,499 |
) |
|
|
4,060 |
|
|
|
(2,017 |
) |
|
|
5,428 |
|
|
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations |
|
|
(8,560 |
) |
|
|
(29,755 |
) |
|
|
(46,459 |
) |
|
|
(103,206 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Loss from discontinued operations, net of income taxes |
|
|
(34,073 |
) |
|
|
(4,584 |
) |
|
|
(39,398 |
) |
|
|
(10,125 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Net loss |
|
$ |
(42,633 |
) |
|
$ |
(34,339 |
) |
|
$ |
(85,857 |
) |
|
$ |
(113,331 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Net loss per share: |
|
|
|
|
|
|
|
|
||||||||
Basic and diluted: |
|
|
|
|
|
|
|
|
||||||||
Loss from continuing operations |
|
$ |
(0.19 |
) |
|
$ |
(0.83 |
) |
|
$ |
(1.07 |
) |
|
$ |
(2.87 |
) |
Income from discontinued operations |
|
|
(0.74 |
) |
|
|
(0.13 |
) |
|
|
(0.90 |
) |
|
|
(0.28 |
) |
Net loss per share, basic and diluted (3) |
|
$ |
(0.93 |
) |
|
$ |
(0.95 |
) |
|
$ |
(1.97 |
) |
|
$ |
(3.15 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common and common equivalent shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic and diluted |
|
|
45,969 |
|
|
|
36,038 |
|
|
|
43,582 |
|
|
|
35,956 |
|
_______________________________________________________________________________
(1) |
Includes charges in the third and fourth quarter associated with liquidation of distribution center inventory. Excludes reserves for inventory at salons. |
(2) |
Includes cost of service and product sold to guests in our Company-owned salons. Excludes general and administrative expense, rent and depreciation and amortization related to Company-owned salons. |
(3) |
Total is a recalculation; line items calculated individually may not sum to total due to rounding. |
REGIS CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in thousands) |
||||||||
|
|
Twelve Months Ended June 30, |
||||||
|
|
2022 |
|
2021 |
||||
|
|
|
|
|
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net loss |
|
$ |
(85,857 |
) |
|
$ |
(113,331 |
) |
Adjustments to reconcile net loss to net cash used in operating activities |
|
|
|
|
||||
Loss from sale of OSP |
|
|
36,143 |
|
|
|
— |
|
Depreciation and amortization |
|
|
6,504 |
|
|
|
17,871 |
|
Long-lived asset impairment |
|
|
542 |
|
|
|
13,023 |
|
Deferred income taxes |
|
|
391 |
|
|
|
(3,388 |
) |
Inventory reserve |
|
|
10,478 |
|
|
|
12,068 |
|
Gain from disposal of distribution center assets |
|
|
— |
|
|
|
(14,997 |
) |
Loss from sale of salon assets to franchisees, net |
|
|
2,334 |
|
|
|
16,696 |
|
Goodwill impairment |
|
|
16,000 |
|
|
|
— |
|
Stock-based compensation |
|
|
1,334 |
|
|
|
3,254 |
|
Amortization of debt discount and financing costs |
|
|
1,839 |
|
|
|
1,839 |
|
Other non-cash items affecting earnings |
|
|
709 |
|
|
|
(351 |
) |
Changes in operating assets and liabilities (1): |
|
|
|
|
||||
Receivables |
|
|
11,896 |
|
|
|
(279 |
) |
Inventories |
|
|
7,886 |
|
|
|
17,879 |
|
Income tax receivable |
|
|
1,118 |
|
|
|
1,295 |
|
Other current assets |
|
|
2,118 |
|
|
|
1,658 |
|
Other assets |
|
|
2,703 |
|
|
|
(2,896 |
) |
Accounts payable |
|
|
(10,966 |
) |
|
|
(21,669 |
) |
Accrued expenses |
|
|
(21,983 |
) |
|
|
5,296 |
|
Net lease liabilities |
|
|
(5,960 |
) |
|
|
(19,248 |
) |
Other non-current liabilities |
|
|
(15,867 |
) |
|
|
(14,603 |
) |
Net cash used in operating activities: |
|
|
(38,638 |
) |
|
|
(99,883 |
) |
Cash flows from investing activities: |
|
|
|
|
||||
Capital expenditures |
|
|
(5,316 |
) |
|
|
(11,475 |
) |
Proceeds from sale of OSP |
|
|
13,000 |
|
|
|
— |
|
Proceeds from sale of assets to franchisees |
|
|
— |
|
|
|
8,437 |
|
Costs associated with sale of assets to franchisees |
|
|
— |
|
|
|
(261 |
) |
Proceeds from company-owned life insurance policies |
|
|
— |
|
|
|
1,200 |
|
Net cash provided by (used in) investing activities: |
|
|
7,684 |
|
|
|
(2,099 |
) |
Cash flows from financing activities: |
|
|
|
|
||||
Borrowings on revolving credit facility |
|
|
10,000 |
|
|
|
10,000 |
|
Repayments of revolving credit facility |
|
|
(16,916 |
) |
|
|
(589 |
) |
Proceeds from issuance of common stock, net of offering costs |
|
|
37,185 |
|
|
|
— |
|
Taxes paid for shares withheld |
|
|
(845 |
) |
|
|
(348 |
) |
Minority interest buyout |
|
|
— |
|
|
|
(562 |
) |
Distribution center lease payments |
|
|
— |
|
|
|
(724 |
) |
Net cash provided by financing activities: |
|
|
29,424 |
|
|
|
7,777 |
|
Effect of exchange rate changes on cash and cash equivalents |
|
|
(158 |
) |
|
|
477 |
|
Decrease in cash, cash equivalents and restricted cash |
|
|
(1,688 |
) |
|
|
(93,728 |
) |
Cash, cash equivalents and restricted cash: |
|
|
|
|
||||
Beginning of year |
|
|
29,152 |
|
|
|
122,880 |
|
End of year |
|
$ |
27,464 |
|
|
$ |
29,152 |
|
_______________________________________________________________________________
(1) |
Changes in operating assets and liabilities exclude assets and liabilities sold or acquired. |
SYSTEM-WIDE SAME-STORE SALES (1): |
||||||||||||||||||
|
|
Three Months Ended |
||||||||||||||||
|
|
June 30, 2022 |
|
June 30, 2021 |
||||||||||||||
|
|
Service |
|
Retail |
|
Total |
|
Service |
|
Retail |
|
Total |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
SmartStyle |
|
1.5 |
% |
|
(17.9 |
) % |
|
(2.7 |
) % |
|
2.4 |
% |
|
(14.0 |
) % |
|
(1.7 |
) % |
Supercuts |
|
14.4 |
|
|
(11.8 |
) |
|
13.0 |
|
|
12.4 |
|
|
(10.1 |
) |
|
10.9 |
|
Portfolio Brands |
|
6.5 |
|
|
(5.5 |
) |
|
5.3 |
|
|
(0.5 |
) |
|
(14.7 |
) |
|
(2.2 |
) |
Total |
|
9.6 |
% |
|
(13.4 |
) % |
|
7.1 |
% |
|
6.8 |
% |
|
(13.2 |
) % |
|
4.2 |
% |
|
|
Twelve Months Ended |
||||||||||||||||
|
|
June 30, 2022 |
|
June 30, 2021 |
||||||||||||||
|
|
Service |
|
Retail |
|
Total |
|
Service |
|
Retail |
|
Total |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
SmartStyle |
|
10.7 |
% |
|
(10.5 |
) % |
|
5.7 |
% |
|
(26.1 |
) % |
|
(28.5 |
) % |
|
(26.7 |
) % |
Supercuts |
|
23.8 |
|
|
(5.6 |
) |
|
22.1 |
|
|
(25.9 |
) |
|
(23.5 |
) |
|
(25.8 |
) |
Portfolio Brands |
|
13.0 |
|
|
(3.4 |
) |
|
11.2 |
|
|
(25.3 |
) |
|
(20.6 |
) |
|
(24.8 |
) |
Total |
|
17.8 |
% |
|
(7.5 |
) % |
|
14.8 |
% |
|
(25.8 |
) % |
|
(25.5 |
) % |
|
(25.8 |
) % |
_______________________________________________________________________________
(1) |
System-wide same-store sales in fiscal years 2022 and 2021 are calculated as the total change in sales for system-wide franchise and company-owned locations that were open on a specific day of the week during the current period and the corresponding prior period. Quarterly and year-to-date system-wide same-store sales are the sum of the system-wide same-store sales computed on a daily basis. Franchise salons that do not report daily sales are excluded from same-store sales. System-wide same-store sales are calculated in local currencies to remove foreign currency fluctuations from the calculation. |
REGIS CORPORATION System-Wide Location Counts |
||||||
|
|
June 30, |
||||
|
|
2022 |
|
2021 |
||
|
|
|
|
|
||
FRANCHISE SALONS: |
|
|
|
|
||
Supercuts |
|
2,264 |
|
|
2,386 |
|
SmartStyle/Cost Cutters in Walmart stores |
|
1,646 |
|
|
1,666 |
|
Portfolio Brands |
|
1,344 |
|
|
1,357 |
|
Total North American salons |
|
5,254 |
|
|
5,409 |
|
Total International salons (1) |
|
141 |
|
|
154 |
|
Total Franchise salons |
|
5,395 |
|
|
5,563 |
|
as a percent of total Franchise and Company-owned salons |
|
98.1 |
% |
|
95.3 |
% |
|
|
|
|
|
||
COMPANY-OWNED SALONS: |
|
|
|
|
||
Supercuts |
|
18 |
|
|
35 |
|
SmartStyle/Cost Cutters in Walmart stores |
|
49 |
|
|
91 |
|
Portfolio Brands |
|
38 |
|
|
150 |
|
Total Company-owned salons |
|
105 |
|
|
276 |
|
as a percent of total Franchise and Company-owned salons |
|
1.9 |
% |
|
4.7 |
% |
|
|
|
|
|
||
OWNERSHIP INTEREST LOCATIONS: |
|
|
|
|
||
Equity ownership interest locations |
|
76 |
|
|
78 |
|
|
|
|
|
|
||
Grand Total, System-wide |
|
5,576 |
|
|
5,917 |
|
_______________________________________________________________________________
(1) |
Canadian and Puerto Rican salons are included in the North American salon totals. |
Non-GAAP Reconciliations:
We believe our presentation of non-GAAP operating income (loss), net loss, net loss 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 from the same perspective as management and the Board of Directors. These non-GAAP financial measures provide investors an enhanced understanding of our operations, facilitate investors' analyses and comparisons of our current and past results of operations and provide insight into the prospects of our future performance. We also believe the non-GAAP measures are useful to investors because they provide supplemental information that research analysts frequently use to analyze financial performance.
The method we use to produce non-GAAP results is not in accordance with U.S. GAAP and may differ from methods used by other companies. These non-GAAP results should not be regarded as a substitute for corresponding U.S. GAAP measures, but instead should be utilized as a supplemental measure of operating performance in evaluating our business. Non-GAAP measures do have limitations as they do not reflect certain items that may have a material impact upon our reported financial results. As such, these non-GAAP measures should be viewed in conjunction with our financial statements prepared in accordance with U.S. GAAP.
Non-GAAP reconciling items for the three and twelve months ended June 30, 2022 and 2021:
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 the items to consider as "items impacting comparability" based on how management views our business, makes financial, operating and planning decisions and evaluates the Company’s ongoing performance. The following items have been excluded from our non-GAAP results:
- Inventory reserve
- CEO transition
- Distribution center wind down fees ("Distribution center fees")
- Professional fees and settlements
- Severance
- Benefit from lease liability decrease in excess of previously impaired ROUA ("Lease liability benefit")
- Lease termination fees
- Real estate fees
- Asset retirement obligation
- Long-lived asset impairment
- Goodwill impairment
- Gain on distribution centers
- Non-recurring, non-operating income
- Deferred tax asset
- Discontinued operations
REGIS CORPORATION Reconciliation Of Selected U.S. GAAP To Non-GAAP Financial Measures (Dollars in thousands, except per share data) |
||||||||||||||||||
Reconciliation of U.S. GAAP operating loss and U.S. GAAP net loss to equivalent non-GAAP measures |
||||||||||||||||||
|
|
|
|
Three Months Ended
|
|
Twelve Months Ended
|
||||||||||||
|
|
U.S. GAAP financial line item |
|
2022 |
|
2021 |
|
2022 |
|
2021 |
||||||||
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. GAAP revenue |
|
|
|
$ |
66,069 |
|
|
$ |
97,614 |
|
|
$ |
275,967 |
|
|
$ |
411,651 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. GAAP operating loss |
|
|
|
$ |
(1,315 |
) |
|
$ |
(22,844 |
) |
|
$ |
(28,898 |
) |
|
$ |
(94,677 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP operating expense adjustments (1) |
|
|
|
|
|
|
|
|
|
|
||||||||
Inventory reserve |
|
Inventory reserve |
|
|
1,235 |
|
|
|
— |
|
|
|
7,655 |
|
|
|
— |
|
CEO transition |
|
General and administrative |
|
|
— |
|
|
|
— |
|
|
|
(466 |
) |
|
|
(694 |
) |
Distribution center fees |
|
General and administrative |
|
|
— |
|
|
|
— |
|
|
|
285 |
|
|
|
— |
|
Professional fees and settlements |
|
General and administrative |
|
|
280 |
|
|
|
— |
|
|
|
2,140 |
|
|
|
826 |
|
Severance |
|
General and administrative |
|
|
59 |
|
|
|
1,606 |
|
|
|
2,074 |
|
|
|
4,545 |
|
Lease liability benefit |
|
Rent |
|
|
(336 |
) |
|
|
(8,727 |
) |
|
|
(3,620 |
) |
|
|
(20,022 |
) |
Lease termination fees |
|
Rent |
|
|
32 |
|
|
|
7,020 |
|
|
|
1,835 |
|
|
|
13,544 |
|
Real estate fees |
|
Rent |
|
|
— |
|
|
|
49 |
|
|
|
40 |
|
|
|
583 |
|
Asset retirement obligation |
|
Depreciation and amortization |
|
|
139 |
|
|
|
1,280 |
|
|
|
1,041 |
|
|
|
4,726 |
|
Long-lived asset impairment |
|
Long-lived asset impairment |
|
|
— |
|
|
|
3,205 |
|
|
|
542 |
|
|
|
13,023 |
|
Goodwill impairment |
|
Goodwill impairment |
|
|
— |
|
|
|
— |
|
|
|
13,120 |
|
|
|
— |
|
Total non-GAAP operating expense adjustments |
|
|
|
|
1,409 |
|
|
|
4,433 |
|
|
|
24,646 |
|
|
|
16,531 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP operating income (loss) (1) |
|
|
|
$ |
94 |
|
|
$ |
(18,411 |
) |
|
$ |
(4,252 |
) |
|
$ |
(78,146 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||
U.S. GAAP net loss |
|
|
|
$ |
(42,633 |
) |
|
$ |
(34,339 |
) |
|
$ |
(85,857 |
) |
|
$ |
(113,331 |
) |
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP net loss adjustments: |
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP operating expense adjustments |
|
|
|
|
1,409 |
|
|
|
4,433 |
|
|
|
24,646 |
|
|
|
16,531 |
|
Gain on distribution centers |
|
Interest income and other, net |
|
|
— |
|
|
|
(120 |
) |
|
|
— |
|
|
|
(14,997 |
) |
Non-recurring, non-operating income |
|
Interest income and other, net |
|
|
— |
|
|
|
— |
|
|
|
(100 |
) |
|
|
— |
|
Income tax impact on Non-GAAP adjustments (2) |
|
Income taxes |
|
|
4,119 |
|
|
|
(41 |
) |
|
|
3,859 |
|
|
|
(13 |
) |
Discontinued operations, net of tax |
|
Loss from discontinued operations, net of tax |
|
|
34,073 |
|
|
|
4,584 |
|
|
|
39,398 |
|
|
|
10,125 |
|
Total non-GAAP net loss adjustments |
|
|
|
|
39,601 |
|
|
|
8,856 |
|
|
|
67,803 |
|
|
|
11,646 |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Non-GAAP net loss |
|
|
|
$ |
(3,032 |
) |
|
$ |
(25,483 |
) |
|
$ |
(18,054 |
) |
|
$ |
(101,685 |
) |
_______________________________________________________________________________
(1) |
Adjusted operating margins for the three months ended June 30, 2022 and 2021, were 0.1% and (18.9)%, respectively, and were (1.5)% and (19.0)% for the twelve months ended June 30, 2022 and 2021, respectively, and are calculated as non-GAAP operating income (loss) divided by non-GAAP revenue for each respective period. |
(2) |
Based on projected statutory effective tax rate analyses, the non-GAAP tax benefit (provision) was calculated to be approximately 0% and 1% for the three months ended June 30, 2022 and 2021, respectively and approximately 1% for the twelve months ended June 30, 2022 and 2021, for all non-GAAP operating expense adjustments. |
REGIS CORPORATION Reconciliation Of Selected U.S. GAAP To Non-GAAP Financial Measures (Dollars in thousands, except per share data) |
||||||||||||||||
Reconciliation of U.S. GAAP net loss per diluted share to non-GAAP net loss per diluted share |
||||||||||||||||
|
Three Months Ended
|
|
Twelve Months Ended
|
|||||||||||||
|
2022 |
|
2021 |
|
2022 |
|
2021 |
|||||||||
|
|
|
|
|
|
|
|
|
||||||||
U.S. GAAP net loss per diluted share |
|
$ |
(0.927 |
) |
|
$ |
(0.953 |
) |
|
$ |
(1.970 |
) |
|
$ |
(3.152 |
) |
Inventory reserve (1) |
|
|
0.027 |
|
|
|
— |
|
|
|
0.174 |
|
|
|
— |
|
CEO transition (1) |
|
|
— |
|
|
|
— |
|
|
|
(0.011 |
) |
|
|
(0.019 |
) |
Distribution center fees (1) |
|
|
— |
|
|
|
— |
|
|
|
0.006 |
|
|
|
— |
|
Professional fees and settlements (1) |
|
|
0.006 |
|
|
|
— |
|
|
|
0.049 |
|
|
|
0.022 |
|
Severance (1) |
|
|
0.001 |
|
|
|
0.044 |
|
|
|
0.047 |
|
|
|
0.125 |
|
Lease liability benefit (1) |
|
|
(0.007 |
) |
|
|
(0.240 |
) |
|
|
(0.082 |
) |
|
|
(0.550 |
) |
Lease termination fees (1) |
|
|
0.001 |
|
|
|
0.193 |
|
|
|
0.042 |
|
|
|
0.373 |
|
Real estate fees (1) |
|
|
— |
|
|
|
0.001 |
|
|
|
0.001 |
|
|
|
0.016 |
|
Asset retirement obligation (1) |
|
|
0.003 |
|
|
|
0.035 |
|
|
|
0.024 |
|
|
|
0.130 |
|
Long-lived asset impairment (1) |
|
|
— |
|
|
|
0.088 |
|
|
|
0.012 |
|
|
|
0.359 |
|
Goodwill impairment (1) |
|
|
— |
|
|
|
— |
|
|
|
0.297 |
|
|
|
— |
|
Gain on distribution centers (1) |
|
|
— |
|
|
|
(0.003 |
) |
|
|
— |
|
|
|
(0.413 |
) |
Non-recurring, non-operating income (1) |
|
|
— |
|
|
|
— |
|
|
|
(0.002 |
) |
|
|
— |
|
Discontinued operations, net of tax |
|
|
0.740 |
|
|
|
0.127 |
|
|
|
0.904 |
|
|
|
0.282 |
|
Deferred tax asset |
|
|
0.090 |
|
|
|
— |
|
|
|
0.095 |
|
|
|
— |
|
Non-GAAP net loss per diluted share (2) |
|
$ |
(0.066 |
) |
|
$ |
(0.707 |
) |
|
$ |
(0.414 |
) |
|
$ |
(2.828 |
) |
|
|
|
|
|
|
|
|
|
||||||||
U.S. GAAP Weighted average shares - basic and diluted |
|
|
45,969 |
|
|
|
36,038 |
|
|
|
43,582 |
|
|
|
35,956 |
|
Non-GAAP Weighted average shares - diluted |
|
|
45,969 |
|
|
|
36,038 |
|
|
|
43,582 |
|
|
|
35,956 |
|
_______________________________________________________________________________
(1) |
Based on projected statutory effective tax rate analyses, the non-GAAP tax benefit (provision) was calculated to be approximately 0% and 1% for the three months ended June 30, 2022 and 2021, respectively, and approximately 1% for the twelve months ended June 30, 2022 and 2021, for all non-GAAP operating expense adjustments. |
(2) |
Total is a recalculation; line items calculated individually may not sum to total due to rounding. |
REGIS CORPORATION
Reconciliation Of Reported U.S. GAAP Net Loss To Adjusted EBITDA, A Non-GAAP Financial Measure
(Dollars 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 identified items impacting comparability for each respective period. For the three and twelve months ended June 30, 2022 and 2021, the items impacting comparability consisted of the items identified in the non-GAAP reconciling items for the respective periods. The impacts of the income tax benefit (provision) adjustments associated with the above items are already included in the U.S. GAAP reported net loss to EBITDA reconciliation, therefore there is no adjustment needed for the reconciliation from EBITDA to adjusted EBITDA.
|
|
Three Months Ended June 30, 2022 |
||||||||||
|
|
Franchise |
|
Company-owned |
|
Consolidated (1)(2) |
||||||
|
|
|
|
|
|
|
||||||
Consolidated reported net loss, as reported (U.S. GAAP) |
|
$ |
(39,879 |
) |
|
$ |
(1,519 |
) |
|
$ |
(42,633 |
) |
Interest expense, as reported |
|
|
3,292 |
|
|
|
— |
|
|
|
3,292 |
|
Income taxes, as reported |
|
|
3,499 |
|
|
|
— |
|
|
|
3,499 |
|
Depreciation and amortization, as reported |
|
|
1,275 |
|
|
|
183 |
|
|
|
1,458 |
|
EBITDA (as defined above) |
|
$ |
(31,813 |
) |
|
$ |
(1,336 |
) |
|
$ |
(34,384 |
) |
|
|
|
|
|
|
|
||||||
Inventory reserve, as reported (2) |
|
|
— |
|
|
|
— |
|
|
|
1,235 |
|
Professional fees and settlements |
|
|
280 |
|
|
|
— |
|
|
|
280 |
|
Severance |
|
|
56 |
|
|
|
3 |
|
|
|
59 |
|
Lease liability benefit |
|
|
(130 |
) |
|
|
(206 |
) |
|
|
(336 |
) |
Lease termination fees |
|
|
72 |
|
|
|
(40 |
) |
|
|
32 |
|
Discontinued operations, net of tax |
|
|
34,073 |
|
|
|
— |
|
|
|
34,073 |
|
Adjusted EBITDA, non-GAAP financial measure |
|
$ |
2,538 |
|
|
$ |
(1,579 |
) |
|
$ |
959 |
|
|
|
Three Months Ended June 30, 2021 |
||||||||||
|
|
Franchise |
|
Company-owned |
|
Consolidated (1) |
||||||
|
|
|
|
|
|
|
||||||
Consolidated reported net loss, as reported (U.S. GAAP) |
|
$ |
(15,047 |
) |
|
$ |
(19,292 |
) |
|
$ |
(34,339 |
) |
Interest expense, as reported |
|
|
3,024 |
|
|
|
— |
|
|
|
3,024 |
|
Income taxes, as reported |
|
|
(4,060 |
) |
|
|
— |
|
|
|
(4,060 |
) |
Depreciation and amortization, as reported |
|
|
1,379 |
|
|
|
3,651 |
|
|
|
5,030 |
|
Long-lived asset impairment, as reported |
|
|
— |
|
|
|
3,205 |
|
|
|
3,205 |
|
EBITDA (as defined above) |
|
$ |
(14,704 |
) |
|
$ |
(12,436 |
) |
|
$ |
(27,140 |
) |
|
|
|
|
|
|
|
||||||
Severance |
|
|
1,606 |
|
|
|
— |
|
|
|
1,606 |
|
Lease liability benefit |
|
|
(716 |
) |
|
|
(8,011 |
) |
|
|
(8,727 |
) |
Lease termination fees |
|
|
(103 |
) |
|
|
7,123 |
|
|
|
7,020 |
|
Real estate fees |
|
|
21 |
|
|
|
28 |
|
|
|
49 |
|
Gain on distribution centers |
|
|
(120 |
) |
|
|
— |
|
|
|
(120 |
) |
Discontinued operations, net of tax |
|
|
4,584 |
|
|
|
— |
|
|
|
4,584 |
|
Adjusted EBITDA, non-GAAP financial measure |
|
$ |
(9,432 |
) |
|
$ |
(13,296 |
) |
|
$ |
(22,728 |
) |
_______________________________________________________________________________
(1) |
Consolidated EBITDA margins for the three months ended June 30, 2022, and 2021, were (52.0)% and (27.8)%, respectively, and are calculated as EBITDA (as defined above) divided by U.S. GAAP revenue for each respective period. Consolidated adjusted EBITDA margin for the three months ended June 30, 2022, and 2021 were 1.5% and (23.3)%, respectively, and are calculated as consolidated adjusted EBITDA (as defined above) divided by consolidated adjusted revenue for each respective period. |
(2) |
This charge, primarily related to reserving for personal protective equipment acquired as a result of the COVID-19 pandemic, relates to the wind down of our distribution centers and is reviewed separately from the segment results by the chief operating decision maker. Consolidated results will not cross foot as the inventory reserve is not part of the Company's segments. |
|
|
Twelve Months Ended June 30, 2022 |
||||||||||
|
|
Franchise |
|
Company-owned |
|
Consolidated (1)(2) |
||||||
|
|
|
|
|
|
|
||||||
Consolidated reported net loss, as reported (U.S. GAAP) |
|
$ |
(68,735 |
) |
|
$ |
(9,467 |
) |
|
$ |
(85,857 |
) |
Interest expense, as reported |
|
|
12,914 |
|
|
|
— |
|
|
|
12,914 |
|
Income taxes, as reported |
|
|
2,017 |
|
|
|
— |
|
|
|
2,017 |
|
Depreciation and amortization, as reported |
|
|
4,913 |
|
|
|
1,311 |
|
|
|
6,224 |
|
Long-lived asset impairment, as reported |
|
|
450 |
|
|
|
92 |
|
|
|
542 |
|
EBITDA (as defined above) |
|
$ |
(48,441 |
) |
|
$ |
(8,064 |
) |
|
$ |
(64,160 |
) |
|
|
|
|
|
|
|
||||||
Inventory reserve, as reported (2) |
|
|
— |
|
|
|
— |
|
|
|
7,655 |
|
CEO transition |
|
|
(466 |
) |
|
|
— |
|
|
|
(466 |
) |
Distribution center fees |
|
|
285 |
|
|
|
— |
|
|
|
285 |
|
Professional fees and settlements |
|
|
2,140 |
|
|
|
— |
|
|
|
2,140 |
|
Severance |
|
|
2,000 |
|
|
|
74 |
|
|
|
2,074 |
|
Lease liability benefit |
|
|
(378 |
) |
|
|
(3,242 |
) |
|
|
(3,620 |
) |
Lease termination fees |
|
|
172 |
|
|
|
1,663 |
|
|
|
1,835 |
|
Real estate fees |
|
|
— |
|
|
|
40 |
|
|
|
40 |
|
Goodwill impairment, as reported |
|
|
13,120 |
|
|
|
— |
|
|
|
13,120 |
|
Non-recurring, non-operating income |
|
|
(100 |
) |
|
|
— |
|
|
|
(100 |
) |
Discontinued operations, net of tax |
|
|
39,398 |
|
— |
|
— |
|
|
|
39,398 |
|
Adjusted EBITDA, non-GAAP financial measure |
|
$ |
7,730 |
|
|
$ |
(9,529 |
) |
|
$ |
(1,799 |
) |
|
|
Twelve Months Ended June 30, 2021 |
||||||||||
|
|
Franchise |
|
Company-owned |
|
Consolidated (1) |
||||||
|
|
|
|
|
|
|
||||||
Consolidated reported net loss, as reported (U.S. GAAP) |
|
$ |
(43,299 |
) |
|
$ |
(70,032 |
) |
|
$ |
(113,331 |
) |
Interest expense, as reported |
|
|
13,163 |
|
|
|
— |
|
|
|
13,163 |
|
Income taxes, as reported |
|
|
(5,428 |
) |
|
|
— |
|
|
|
(5,428 |
) |
Depreciation and amortization, as reported |
|
|
7,019 |
|
|
|
14,730 |
|
|
|
21,749 |
|
Long-lived asset impairment, as reported |
|
|
726 |
|
|
|
12,297 |
|
|
|
13,023 |
|
EBITDA (as defined above) |
|
$ |
(27,819 |
) |
|
$ |
(43,005 |
) |
|
$ |
(70,824 |
) |
|
|
|
|
|
|
|
||||||
CEO transition |
|
|
(694 |
) |
|
|
— |
|
|
|
(694 |
) |
Professional fees and settlements |
|
|
826 |
|
|
|
— |
|
|
|
826 |
|
Severance |
|
|
4,545 |
|
|
|
— |
|
|
|
4,545 |
|
Lease liability benefit |
|
|
(1,322 |
) |
|
|
(18,700 |
) |
|
|
(20,022 |
) |
Lease termination fees |
|
|
(103 |
) |
|
|
13,647 |
|
|
|
13,544 |
|
Real estate fees |
|
|
22 |
|
|
|
561 |
|
|
|
583 |
|
Gain on distribution centers |
|
|
(14,997 |
) |
|
|
— |
|
|
|
(14,997 |
) |
Discontinued operations, net of tax |
|
|
10,125 |
|
|
|
— |
|
|
|
10,125 |
|
Adjusted EBITDA, non-GAAP financial measure |
|
$ |
(29,417 |
) |
|
$ |
(47,497 |
) |
|
$ |
(76,914 |
) |
_______________________________________________________________________________
(1) |
Consolidated EBITDA margins for the twelve months ended June 30, 2022, and 2021, were (23.2)% and (17.2)%, respectively, and are calculated as EBITDA (as defined above) divided by U.S. GAAP revenue for each respective period. Consolidated adjusted EBITDA margin for the twelve months ended June 30, 2022, and 2021, were (0.7)% and (18.7)%, respectively, and are calculated as consolidated adjusted EBITDA (as defined above) divided by consolidated adjusted revenue for each respective period. |
(2) |
This charge, primarily related to reserving for personal protective equipment acquired as a result of the COVID-19 pandemic, relates to the wind down of our distribution centers and is reviewed separately from the segment results by the chief operating decision maker. Consolidated results will not cross foot as the inventory reserve is not part of the Company's segments. |
REGIS CORPORATION Reconciliation Of Reported Franchise EBITDA As A Percent Of U.S. GAAP Revenue To EBITDA As A Percent Of Adjusted Revenue (Dollars in thousands) (Unaudited) |
||||||||
|
Three Months Ended June 30, |
|||||||
|
|
2022 |
|
2021 |
||||
|
|
|
|
|
||||
As Adjusted EBITDA |
|
$ |
2,538 |
|
|
$ |
(9,432 |
) |
U.S. GAAP revenue |
|
|
62,461 |
|
|
|
72,297 |
|
As Adjusted EBITDA as a % of U.S. GAAP revenue |
|
|
4.1 |
% |
|
|
(13.0 |
) % |
Non-margin revenue adjustments: |
|
|
|
|
||||
Franchise rental income |
|
$ |
(30,577 |
) |
|
$ |
(31,507 |
) |
Advertising fund contributions |
|
|
(8,360 |
) |
|
|
(7,218 |
) |
Adjusted revenue |
|
$ |
23,524 |
|
|
$ |
33,572 |
|
As Adjusted EBITDA as a percent of adjusted revenue (1) |
|
|
10.8 |
% |
|
|
(28.1 |
) % |
|
Twelve Months Ended June 30, |
|||||||
|
|
2022 |
|
2021 |
||||
|
|
|
|
|
||||
As Adjusted EBITDA |
|
$ |
7,730 |
|
|
$ |
(29,417 |
) |
U.S. GAAP revenue |
|
|
255,762 |
|
|
|
268,686 |
|
As Adjusted EBITDA as a % of U.S. GAAP revenue |
|
|
3.0 |
% |
|
|
(10.9 |
) % |
Non-margin revenue adjustments: |
|
|
|
|
||||
Franchise rental income |
|
$ |
(130,777 |
) |
|
$ |
(127,392 |
) |
Advertising fund contributions |
|
|
(32,573 |
) |
|
|
(22,023 |
) |
Adjusted revenue |
|
$ |
92,412 |
|
|
$ |
119,271 |
|
As Adjusted EBITDA as a percent of adjusted revenue (1) |
|
|
8.4 |
% |
|
|
(24.7 |
) % |
_______________________________________________________________________________
(1) |
Total is a recalculation; line items calculated individually may not sum to total due to rounding. |
