Quarterly Report (10-q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)



x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2014



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-12725

Regis Corporation

(Exact name of registrant as specified in its charter)



Minnesota		41-0749934
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7201 Metro Boulevard, Edina, Minnesota		55439
(Address of principal executive offices)		(Zip Code)

(952) 947-7777

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to be submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer x		Accelerated filer ¨

Non-accelerated filer ¨		Smaller reporting company ¨
(Do not check if a smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of common stock as of January 22, 2015:



Common Stock, $.05 par value		55,183,180
Class		Number of Shares

REGIS CORPORATION

INDEX



Part I.	Financial Information

	Item 1.	Financial Statements (Unaudited):

		Condensed Consolidated Balance Sheet as of December 31, 2014 and June 30, 2014	3

		Condensed Consolidated Statement of Operations for the three and six months ended December 31, 2014 and 2013	4

		Condensed Consolidated Statement of Comprehensive Loss for the three and six months ended December 31, 2014 and 2013	5

		Condensed Consolidated Statement of Cash Flows for the six months ended December 31, 2014 and 2013	6

		Notes to Condensed Consolidated Financial Statements	7

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	23

	Item 4.	Controls and Procedures	24

Part II.	Other Information		24

	Item 1.	Legal Proceedings	24

	Item 1A.	Risk Factors	24

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	24

	Item 5.	Other Information	25

	Item 6.	Exhibits	26

	Signatures		27

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

REGIS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)

(Dollars in thousands, except share data)



	December 31, 2014		June 30, 2014
ASSETS
Current assets:
Cash and cash equivalents	$	195,820	$	378,627
Receivables, net	27,253		25,808
Inventories	138,073		137,151
Other current assets	66,345		71,680
Total current assets	427,491		613,266

Property and equipment, net	241,493		266,538
Goodwill	421,632		425,264
Other intangibles, net	18,271		19,812
Investment in affiliates	17,326		28,611
Other assets	64,223		62,458

Total assets	$	1,190,436	$	1,415,949

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Long-term debt, current portion	$	9	$	173,501
Accounts payable	63,284		68,491
Accrued expenses	147,258		142,720
Total current liabilities	210,551		384,712

Long-term debt and capital lease obligations	120,000		120,002
Other noncurrent liabilities	195,168		190,454
Total liabilities	525,719		695,168
Commitments and contingencies (Note 6)
Shareholders’ equity:
Common stock, $0.05 par value; issued and outstanding 55,191,406 and 56,651,166 common shares at December 31, 2014 and June 30, 2014, respectively	2,760		2,833
Additional paid-in capital	318,850		337,837
Accumulated other comprehensive income	13,806		22,651
Retained earnings	329,301		357,460

Total shareholders’ equity	664,717		720,781

Total liabilities and shareholders’ equity	$	1,190,436	$	1,415,949

The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements.

REGIS CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)

For The Three and Six Months Ended December 31, 2014 and 2013

(Dollars and shares in thousands, except per share data amounts)



	Three Months Ended December 31,						Six Months Ended December 31,
	2014			2013			2014			2013
Revenues:
Service	$	350,322		$	360,959		$	715,064		$	732,686
Product	94,691			97,769			183,453			184,512
Royalties and fees	10,874			9,639			21,921			19,752
	455,887			468,367			920,438			936,950
Operating expenses:
Cost of service	219,219			223,413			442,906			448,428
Cost of product	48,830			50,461			93,807			94,485
Site operating expenses	46,875			50,204			98,527			101,045
General and administrative	46,667			40,205			91,852			84,638
Rent	76,928			79,164			154,397			158,174
Depreciation and amortization	19,583			24,641			41,771			48,472
Goodwill impairment	—			34,939			—			34,939
Total operating expenses	458,102			503,027			923,260			970,181

Operating loss	(2,215		)	(34,660		)	(2,822		)	(33,231		)

Other (expense) income:
Interest expense	(2,472		)	(5,166		)	(5,570		)	(9,657		)
Interest income and other, net	1,044			339			917			883

Loss before income taxes and equity in (loss) income of affiliated companies	(3,643		)	(39,487		)	(7,475		)	(42,005		)

Income taxes	(3,456		)	(72,338		)	(9,068		)	(71,955		)
Equity in (loss) income of affiliated companies, net of income taxes	(11,972		)	2,740			(11,580		)	4,739

Net loss	$	(19,071	)	$	(109,085	)	$	(28,123	)	$	(109,221	)

Net loss per share:
Basic and diluted	$	(0.35	)	$	(1.93	)	$	(0.51	)	$	(1.94	)

Weighted average common and common equivalent shares outstanding:
Basic and diluted	55,135			56,437			55,449			56,427

Cash dividends declared per common share	$	—		$	0.06		$	—		$	0.12

The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements.

REGIS CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE LOSS (Unaudited)

For The Three and Six Months Ended December 31, 2014 and 2013

(Dollars in thousands)



	Three Months Ended December 31,						Six Months Ended December 31,
	2014			2013			2014			2013
Net loss	$	(19,071	)	$	(109,085	)	$	(28,123	)	$	(109,221	)
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustments during the period	(4,223		)	(2,052		)	(8,845		)	983
Other comprehensive (loss) income	(4,223		)	(2,052		)	(8,845		)	983
Comprehensive loss	$	(23,294	)	$	(111,137	)	$	(36,968	)	$	(108,238	)

The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements.

REGIS CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

For The Six Months Ended December 31, 2014 and 2013

(Dollars in thousands)



	Six Months Ended December 31,
	2014			2013
Cash flows from operating activities:
Net loss	$	(28,123	)	$	(109,221	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	34,819			42,119
Equity in loss (income) of affiliated companies	11,580			(4,739		)
Deferred income taxes	6,542			67,741
Salon asset impairment	6,952			6,353
Gain on sale of salon assets	(529		)	—
Loss on write down of inventories	—			854
Goodwill impairment	—			34,939
Stock-based compensation	4,038			3,557
Amortization of debt discount and financing costs	1,001			3,933
Other non-cash items affecting earnings	716			136
Changes in operating assets and liabilities, excluding the effects of sales and acquisitions	633			3,557
Net cash provided by operating activities	37,629			49,229

Cash flows from investing activities:
Capital expenditures	(22,493		)	(23,913		)
Proceeds from sale of assets (Asset acquisitions, net of cash acquired), net	1,429			(7		)
Proceeds from loans and investments	—			5,056
Net cash used in investing activities	(21,064		)	(18,864		)

Cash flows from financing activities:
Proceeds from issuance of long-term debt, net of fees	—			118,058
Repayments of long-term debt and capital lease obligations	(173,745		)	(3,452		)
Repurchase of common stock	(22,890		)	—
Dividends paid	—			(6,793		)
Net cash (used in) provided by financing activities	(196,635		)	107,813

Effect of exchange rate changes on cash and cash equivalents	(2,737		)	752

(Decrease) increase in cash and cash equivalents	(182,807		)	138,930

Cash and cash equivalents:
Beginning of period	378,627			200,488
End of period	$	195,820		$	339,418

The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements.

REGIS CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)


1.	BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

The unaudited interim Condensed Consolidated Financial Statements of Regis Corporation (the Company) as of December 31, 2014 and for the three and six months ended December 31, 2014 and 2013, reflect, in the opinion of management, all adjustments necessary to fairly state the consolidated financial position of the Company as of December 31, 2014 and the consolidated results of its operations and its cash flows for the interim periods. Adjustments consist only of normal recurring items, except for any discussed in the notes below. The results of operations and cash flows for any interim period are not necessarily indicative of results of operations and cash flows for the full year.

The Condensed Consolidated Balance Sheet data for June 30, 2014 was derived from audited Consolidated Financial Statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP). The unaudited interim Condensed Consolidated Financial Statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2014 and other documents filed or furnished with the Securities and Exchange Commission (SEC) during the current fiscal year.

Stock-Based Employee Compensation:

During the three and six months ended December 31, 2014, the Company granted various equity awards including restricted stock units (RSUs), equity-based stock appreciation rights (SARs) and performance share units (PSUs). During the six months ended December 31, 2014, the dividend yield assumption was updated to 0%. Otherwise there were no significant changes to the assumptions used in calculating the fair value of SARs. All grants relate to stock incentive plans that have been approved by the shareholders of the Company.

A summary of equity awards granted is as follows:



	For the Periods Ended December 31, 2014
	Three Months	Six Months
Restricted stock units	48,225	301,508
Equity-based stock appreciation rights	13,869	450,334
Performance share units	6,097	199,337

Subsequent to December 31, 2014, the Company granted 176,263 RSUs and 363,970 SARs. These RSUs and SARs cliff vest on the fifth anniversary of the date of grant, with the SARs having an expiration date on the seventh anniversary of the date of grant. The expected volatility assumption was updated to 38%. Otherwise there were no significant changes to the assumptions used in calculating the fair value of the SARs.

Total compensation cost for stock-based payment arrangements totaled $2.3 and $1.7 million for the three months ended December 31, 2014 and 2013, respectively, and $4.0 and $3.6 million for the six months ended December 31, 2014 and 2013, respectively, recorded within general and administrative expense on the unaudited Condensed Consolidated Statement of Operations.

During fiscal year 2014, the Company granted 0.1 million PSUs with a performance metric based upon achieving a three-year cumulative adjusted earnings before interest, income taxes and depreciation and amortization balance. As of December 31, 2014, the Company does not expect any of these units to be earned and has not recorded any net expense associated with these awards. However, future compensation expense for the unvested awards could reach a maximum of $1.9 million if the maximum performance metric is earned.

Long-Lived Asset Impairment Assessments, Excluding Goodwill:

The Company assesses impairment of long-lived assets at the individual salon level, as this is the lowest level for which identifiable cash flows are largely independent of other groups of assets and liabilities, when events or changes in circumstances indicate the carrying value of the assets or the asset grouping may not be recoverable. Factors considered in deciding when to perform an impairment review include significant under-performance of an individual salon in relation to expectations, significant economic or geographic trends, and significant changes or planned changes in our use of the assets. Impairment is evaluated based on the sum of undiscounted estimated future cash flows expected to result from use of the long-lived assets. If the undiscounted estimated cash flows are less than the carrying value of the assets, the Company calculates an impairment charge based on the assets' estimated fair value. The fair value of the long-lived assets is estimated using a discounted cash flow model based on the best information available, including market data and salon level revenues and expenses. Long-lived asset impairment charges are recorded within depreciation and amortization in the Consolidated Statement of Operations for the three and six months ended December 31, 2014 and 2013.

Prior Period Adjustments:

During the three months ended December 31, 2014, the Company identified an error related to the understatement of self-insurance accruals in prior periods. Because this item was not material to the Company’s consolidated financial statements for any prior periods or the current quarter, the Company recorded a correcting cumulative adjustment during the three months ended December 31, 2014. The impact of this item on the Company’s Consolidated Statement of Operations increased site operating expense and net loss by $1.5 million, respectively.

Accounting Standards Recently Issued But Not Yet Adopted by the Company:

Revenue from Contracts with Customers

In May 2014, the FASB issued updated guidance for revenue recognition. The updated accounting guidance provides a comprehensive new revenue recognition model that requires a Company to recognize revenue to depict the exchange for goods or services to a customer at an amount that reflects the consideration it expects to receive for those goods or services. The guidance also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. This guidance will be effective in the first quarter of fiscal year 2018. This update permits the use of either the retrospective or simplified transition method. The Company does not expect the adoption of this update to have a material impact on the Company's consolidated financial statements and is evaluating the impact this guidance will have on its related disclosures.


2.	INVESTMENT IN AFFILIATES:

Empire Education Group, Inc. (EEG)

As of December 31, 2014, the Company's ownership interest in EEG was 54.6% and the carrying amount of the Company's investment in EEG was $16.8 million.

The Company utilized consolidation of variable interest entities guidance to determine whether or not its investment in EEG was a variable interest entity (VIE), and if so, whether the Company was the primary beneficiary of the VIE. The Company concluded that EEG was not a VIE based on the fact that EEG had sufficient equity at risk. The Company accounts for EEG as an equity investment under the voting interest model, as the Company has granted the other shareholder of EEG an irrevocable proxy to vote a certain number of the Company’s shares such that the other shareholder of EEG has voting control of 51.0% of EEG’s common stock, as well as the right to appoint four of the five members of EEG’s Board of Directors.

During the three and six months ended December 31, 2014, the Company recorded its share of a non-cash deferred tax asset valuation allowance recorded by EEG of $6.9 million. In addition, during the three and six months ended December 31, 2014, the Company recorded an other than temporary non-cash impairment charge of $4.7 million on its investment in EEG due to recent declines in enrollment, revenue and profitability. The Company did not receive a tax benefit on this impairment charge. Due to economic, regulatory and other factors, the Company may be required to record additional non-cash impairment charges related to its investment in EEG and such impairments could be material. The exposure to loss related to the Company’s involvement with EEG is the carrying value of the investment.

During the three months ended December 31, 2014 and 2013, the Company recorded $(7.3) and $0.7 million, respectively, of equity (losses) earnings related to its investment in EEG. During the six months ended December 31, 2014 and 2013, the Company recorded $(6.9) and $1.7 million, respectively, of equity (losses) earnings related to its investment in EEG.

MY Style

During the three and six months ended December 31, 2013, the Company recovered $2.1 million and $3.1 million, respectively, on its previously impaired investments in MY Style’s parent company, Yamano Holding Corporation ("Yamano"), which is reported in equity in (loss) income of affiliated companies on the unaudited Condensed Consolidated Statement of Operations. During fiscal year 2011, the Company had estimated the fair value of the Yamano Class A and Class B Preferred Stock to be negligible and recorded an other than temporary non-cash impairment. The Company reported gains associated with Yamano's redemption within equity in (loss) income of affiliated companies, net of income taxes, on the unaudited Condensed Consolidated Statement of Operations.


3.	EARNINGS PER SHARE:

The Company’s basic earnings per share is calculated as net loss divided by weighted average common shares outstanding, excluding unvested outstanding restricted stock awards, RSUs and PSUs. The Company’s diluted earnings per share is calculated as net loss divided by weighted average common shares and common share equivalents outstanding, which includes shares issued under the Company’s stock-based compensation plans. Stock-based awards with exercise prices greater than the average market value of the Company’s common stock are excluded from the computation of diluted earnings per share. The Company’s diluted earnings per share would also reflect the assumed conversion under the Company’s convertible debt, if the impact was dilutive, along with the exclusion of interest expense, net of taxes. The impact of the convertible debt is excluded from the computation of diluted earnings per share when interest expense per common share obtainable upon conversion is greater than basic earnings per share.

Net loss available to common shareholders and net loss for diluted earnings per share under the if-converted method were the same for all periods presented.

For the three months ended December 31, 2014 and 2013, 169,023 and 110,759, respectively, and for the six months ended December 31, 2014 and 2013, 124,625 and 117,546, respectively, of common stock equivalents of potentially dilutive common stock, were excluded from the diluted earnings per share calculation due to the net loss.

The computation of weighted average shares outstanding, assuming dilution, excluded 1,915,248 and 1,732,575 of stock-based awards during the three months ended December 31, 2014 and 2013, respectively, and 1,838,695 and 1,452,639 of stock-based awards during the six months ended December 31, 2014 and 2013, respectively, as they were not dilutive under the treasury stock method. The computation of weighted average shares outstanding, assuming dilution, also excluded 922,527 and 11,299,204 of shares from convertible debt as they were not dilutive for the six months ended December 31, 2014 and 2013, respectively, and 11,308,502 as they were not dilutive for the three months ended December 31, 2013.


4.	SHAREHOLDERS’ EQUITY:

Additional Paid-In Capital:

The $19.0 million decrease in additional paid-in capital during the six months ended December 31, 2014 was primarily due to $22.9 million of common stock repurchases, partly offset by $4.0 million of stock-based compensation.

During the three and six months ended December 31, 2014, the Company repurchased 81,811 shares for $1.4 million and 1,537,398 shares for $22.9 million, respectively, under a previously approved stock repurchase program. At December 31, 2014, $35.8 million remains outstanding under the approved stock repurchase program.


5.	INCOME TAXES:

During the three and six months ended December 31, 2014, the Company recognized tax expense of $3.5 and $9.1 million, respectively, with corresponding effective tax rates of (94.9)% and (121.3)%. During the three and six months ended December 31, 2013, the Company recognized tax expense of $72.3 and $72.0 million, respectively, with corresponding effective tax rates of (183.2)% and (171.3)%.

The recorded tax expense and effective tax rate for the three and six months ended December 31, 2014 were different than what would normally be expected primarily due to non-cash tax expense relating to tax benefits on certain indefinite-lived assets that the Company cannot recognize for reporting purposes and the valuation allowance associated with the U.S. and U.K. deferred tax assets.

The recorded tax expense and effective tax rate for the three and six months ended December 31, 2013 were higher than would be expected due primarily to the non-cash valuation allowance against the Company’s U.S. deferred tax assets and the recording of a non-cash goodwill impairment charge which was only partly deductible for tax purposes.

The Company’s U.S. federal income tax returns for the fiscal years 2010 and 2011 are currently under audit by the Internal Revenue Service (IRS). All earlier tax years are closed to examination. The Company has audit issues outstanding with the IRS for which the IRS has proposed additional adjustments. The Company believes its income tax positions and deductions will be sustained and intends to vigorously defend its position on these issues and accordingly has appealed to the IRS Appeals Division. Final resolution of these issues is not expected to have a material impact on the Company’s financial position. For state tax audits, the statute of limitations generally runs three to four years resulting in a number of returns being open for tax audits dating back to fiscal year 2010. The Company is currently under audit in a number of states in which the statute of limitations has been extended back for fiscal years 2007 and forward.


6.	COMMITMENTS AND CONTINGENCIES:

The Company is a defendant in various lawsuits and claims arising out of the normal course of business. Like certain other large retail employers, the Company has been faced with allegations of purported class-wide consumer and wage and hour violations. Litigation is inherently unpredictable and the outcome of these matters cannot presently be determined. Although the actions are being vigorously defended, the Company could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period.

In addition, the Company is a nominal defendant, and nine current and former directors and officers of the Company were named defendants, in a shareholder derivative action in Minnesota state court. The derivative shareholder action alleged that the individual defendants breached their fiduciary duties to the Company in connection with their approval of certain executive compensation arrangements and certain related party transactions. The Board of Directors appointed a Special Litigation Committee to investigate the claims and allegations made in the derivative action, and to decide on behalf of the Company whether the claims and allegations should be pursued. In April 2014, the Special Litigation Committee issued a report and concluded the claims and allegations should not be pursued, and in September 2014 the case was dismissed by court order. In a collateral proceeding, the plaintiff filed a motion for an award of fees in November 2014. The Company has opposed the motion and the motion is pending before the court.

The exposure to loss related to the Company’s discontinued Trade Secret salon concept is the guarantee of certain operating leases that have future minimum rents. The Company has determined the exposure to the risk of loss on the guarantee of the operating leases to be immaterial to the financial statements.

See Note 5 to the unaudited Condensed Consolidated Financial Statements for discussion regarding certain issues that have resulted from the IRS' audit of fiscal 2010 and 2011.


7.	GOODWILL AND OTHER INTANGIBLES:

The table below contains details related to the Company’s recorded goodwill:



	December 31, 2014							June 30, 2014
	Gross Carrying Value		Accumulated Impairment (1)			Net (2)		Gross Carrying Value		Accumulated Impairment (1)			Net (2)
	(Dollars in thousands)
Goodwill	$	675,293	$	(253,661	)	$	421,632	$	678,925	$	(253,661	)	$	425,264

_____________________________


(1)	The table below contains additional information regarding accumulated impairment losses:



Fiscal Year	Impairment Charge			Reporting Unit (3)
	(Dollars in thousands)
2009	$	(41,661	)	International
2010	(35,277		)	North American Premium
2011	(74,100		)	North American Value
2012	(67,684		)	North American Premium
2014	(34,939		)	North American Premium
Total	$	(253,661	)

_____________________________

(2) Remaining net goodwill relates to the Company’s North American Value reporting unit.

(3) See Note 10 to the unaudited Condensed Consolidated Financial Statements.

The table below presents other intangible assets:



	December 31, 2014							June 30, 2014
	Cost		Accumulated Amortization			Net		Cost		Accumulated Amortization			Net
	(Dollars in thousands)
Amortized intangible assets:
Brand assets and trade names	$	8,717	$	(3,488	)	$	5,229	$	9,203	$	(3,510	)	$	5,693
Franchise agreements	10,505		(7,014		)	3,491		11,063		(7,163		)	3,900
Lease intangibles	14,662		(7,631		)	7,031		14,775		(7,326		)	7,449
Other	4,831		(2,311		)	2,520		5,074		(2,304		)	2,770
	$	38,715	$	(20,444	)	$	18,271	$	40,115	$	(20,303	)	$	19,812


8.	FINANCING ARRANGEMENTS:

The Company’s long-term debt consisted of the following:



			Amounts outstanding
	Maturity Dates	Interest Rate	December 31, 2014			June 30, 2014
	(fiscal year)		(Dollars in thousands)
Convertible senior notes	2015	5.00%	$	—		$	172,246
Senior term notes	2018	5.75	120,000			120,000
Revolving credit facility	2018	—	—			—
Equipment and leasehold notes payable	2015 - 2016	4.90 - 8.75	9			1,257
			120,009			293,503
Less current portion			(9		)	(173,501		)
Long-term portion			$	120,000		$	120,002

Convertible Senior Notes

In July 2009, the Company issued $172.5 million aggregate principal amount of 5.0% convertible senior notes due July 2014. In July 2014, the Company settled the convertible senior notes with $172.5 million in cash. The notes were unsecured, senior obligations of the Company and interest was payable semi-annually in arrears on January 15 and July 15 of each year at a rate of 5.0% per year. For the six months ended December 31, 2014 and 2013, interest expense related to the 5.0% contractual interest coupon was $0.4 and $4.3 million, respectively, and interest expense related to the amortization of the debt discount was $0.3 and $2.8 million, respectively. For the three months ended December 31, 2013, interest expense related to the 5.0% contractual interest coupon and amortization of debt discount was $2.1 and $1.4 million, respectively.

Senior Term Notes

In November 2013, the Company issued $120.0 million aggregate principal amount of 5.75% senior notes due December 2017 (Senior Term Notes). Net proceeds from the issuance of the Senior Term Notes were $118.1 million. Interest on the Senior Term Notes is payable semi-annually in arrears on June 1 and December 1 of each year at a rate of 5.75% per year. The Senior Term Notes are unsecured and not guaranteed by any of the Company’s subsidiaries or any third parties.

Revolving Credit Facility

As of December 31, 2014 and June 30, 2014, the Company had no outstanding borrowings under this facility. Additionally, the Company had outstanding standby letters of credit under the facility of $2.1 and $2.2 million at December 31, 2014 and June 30, 2014, respectively, primarily related to the Company's self-insurance program. Unused available credit under the facility at December 31, 2014 and June 30, 2014 was $397.9 and $397.8 million, respectively.

The Company was in compliance with all covenants and requirements of its financing arrangements as of and during the three months ended December 31, 2014.


9.	FAIR VALUE MEASUREMENTS:

Fair value measurements are categorized into one of three levels based on the lowest level of significant input used: Level 1 (unadjusted quoted prices in active markets); Level 2 (observable market inputs available at the measurement date, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data).

Assets and Liabilities that are Measured at Fair Value on a Recurring Basis

As of December 31, 2014, the Company’s financial instruments included cash, cash equivalents, receivables, accounts payable and debt. The fair value of cash, cash equivalents, receivables and accounts payable approximated their carrying values as of December 31, 2014 and June 30, 2014. As of December 31, 2014 and June 30, 2014, the estimated fair value of the Company's debt was $118.6 million and $292.5 million, respectively, and the carrying value was $120.0 million and $293.5 million, respectively.

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

We measure certain assets, including the Company’s equity method investments, tangible fixed and other assets and goodwill, at fair value on a nonrecurring basis when they are deemed to be other than temporarily impaired. The fair values of the Company’s investments are determined based on valuation techniques using the best information available, and may include quoted market prices, market comparables, and discounted cash flow projections. During the three and six months ended December 31, 2014, the Company recorded $2.9 and $7.0 million of long-lived asset impairment charges. See Note 1 to the unaudited Condensed Consolidated Financial Statements. During the three and six months ended December 31, 2014, the Company's investment in EEG with a carrying value of $21.5 million was written down to its implied fair value of $16.8 million, resulting in a non-cash impairment charge of $4.7 million. See Note 2 to the unaudited Condensed Consolidated Financial Statements. There were no other assets measured at fair value on a nonrecurring basis during the three months ended December 31, 2014.


10.	SEGMENT INFORMATION:

Segment information is prepared on the same basis the chief operating decision maker reviews financial information for operational decision-making purposes.

As of December 31, 2014, the Company’s reportable operating segments consisted of the following salons:



	Company-owned	Franchised	Total
North American Value	6,001	2,246	8,247
North American Premium	777	—	777
International	364	—	364
Total	7,142	2,246	9,388

The North American Value operating segment is comprised primarily of SmartStyle, Supercuts, MasterCuts, Cost Cutters, and other regional trade names. The North American Premium operating segment is comprised primarily of the Regis salon concept and the International operating segment includes Supercuts, Regis and Sassoon salon concepts.

The Company's operating segment results were as follows:



	For the Three Months Ended December 31,						For the Six Months Ended December 31,
	2014			2013			2014			2013
	(Dollars in thousands)
Revenues:
North American Value	$	345,733		$	351,987		$	700,109		$	707,328
North American Premium	78,751			84,794			157,786			168,984
International	31,403			31,586			62,543			60,638
Revenues	$	455,887		$	468,367		$	920,438		$	936,950

Operating income (loss):
North American Value	$	26,396		$	26,790		$	55,683		$	56,841
North American Premium (1)	(2,514		)	(38,909		)	(7,058		)	(40,152		)
International	396			495			1,026			238
Total segment operating income (loss)	24,278			(11,624		)	49,651			16,927
Unallocated Corporate	(26,493		)	(23,036		)	(52,473		)	(50,158		)
Operating loss	$	(2,215	)	$	(34,660	)	$	(2,822	)	$	(33,231	)

_____________________________


(1)	The three and six months ended December 31, 2013, includes a non-cash goodwill impairment charge of $34.9 million.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. This MD&A should be read in conjunction with the MD&A included in our June 30, 2014 Annual Report on Form 10-K and other documents filed or furnished with the Securities and Exchange Commission (SEC) during the current fiscal year.

MANAGEMENT’S OVERVIEW

Regis Corporation (RGS) owns, franchises and operates beauty salons. Our long-term mission is to create guests for life. To successfully achieve our mission and build a winning organization, we must help our stylists have successful and satisfying careers, which will drive great guest experiences and in turn, guests for life. We are investing in a number of areas focused on providing an outstanding guest experience and helping our stylists have successful careers, including investments in people, training and technology.

Since fiscal year 2012, the Company has been evaluating its portfolio of assets, investments and businesses, with the strategic objective of simplifying our business model, focusing on our core business of operating beauty salons and improving our long-term profitability and maximizing shareholder value. The disposal or sale of any non-core assets may impact our operations by decreasing total revenues, operating expenses and income or loss from equity method investments.

As of December 31, 2014, we owned, franchised or held ownership interests in 9,603 worldwide locations. Our locations consisted of 9,388 system-wide North American and International salons, and 215 locations in which we maintain a non-controlling ownership interest less than 100 percent. Each of the Company’s salon concepts generally offer similar salon products and services and serve the mass market. As of December 31, 2014, we had approximately 47,000 corporate employees worldwide.

CRITICAL ACCOUNTING POLICIES

The interim unaudited Condensed Consolidated Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America. In preparing the interim unaudited Condensed Consolidated Financial Statements, we are required to make various judgments, estimates and assumptions that could have a significant impact on the results reported in the interim unaudited Condensed Consolidated Financial Statements. We base these estimates on historical experience and other assumptions believed to be reasonable under the circumstances. Estimates are considered to be critical if they meet both of the following criteria: (1) the estimate requires assumptions about material matters that are uncertain at the time the accounting estimates are made, and (2) other materially different estimates could have been reasonably made or material changes in the estimates are reasonably likely to occur from period to period. Changes in these estimates could have a material effect on our interim unaudited Condensed Consolidated Financial Statements.

Our significant accounting policies can be found in Note 1 to the Consolidated Financial Statements contained in Part II, Item 8 of the June 30, 2014 Annual Report on Form 10-K, as well as Note 1 to the unaudited Condensed Consolidated Financial Statements contained within this Quarterly Report on Form 10-Q. We believe the accounting policies related to investment in affiliates, the valuation of goodwill, the valuation and estimated useful lives of long-lived assets, estimates used in relation to tax liabilities and deferred taxes and legal contingencies are most critical to aid in fully understanding and evaluating our reported financial condition and results of operations. Discussion of each of these policies is contained under “Critical Accounting Policies” in Part II, Item 7 of our June 30, 2014 Annual Report on Form 10-K.

See Note 2 to the unaudited Condensed Consolidated Financial Statements for a discussion of potential impairment of a portion or all of the carrying value of our investment in EEG.

Recent Accounting Pronouncements

Recent accounting pronouncements are discussed in Note 1 to the unaudited Condensed Consolidated Financial Statements.

RESULTS OF OPERATIONS

Explanations are primarily for North American Value, unless otherwise noted.

Condensed Consolidated Results of Operations (Unaudited)

The following table sets forth, for the periods indicated, certain information derived from our unaudited Condensed Consolidated Statement of Operations. The percentages are computed as a percent of total consolidated revenues, except as otherwise indicated.



	For the Periods Ended December 31,
	Three Months														Six Months
	2014			2013			2014		2013		2014		2013		2014			2013			2014		2013		2014		2013
	($ in millions)						% of Total Revenues				Basis Point (Decrease) Increase				($ in millions)						% of Total Revenues				Basis Point (Decrease) Increase
Service revenues	$	350.3		$	361.0		76.8	%	77.1	%	(30	)	40		$	715.1		$	732.7		77.7	%	78.2	%	(50	)	90
Product revenues	94.7			97.8			20.8		20.9		(10	)	(50	)	183.5			184.5			19.9		19.7		20		(110	)
Franchise royalties and fees	10.9			9.6			2.4		2.0		40		10		21.9			19.8			2.4		2.1		30		20

Cost of service (1)	219.2			223.4			62.6		61.9		70		160		442.9			448.4			61.9		61.2		70		150
Cost of product (2)	48.8			50.5			51.6		51.6		—		70		93.8			94.5			51.1		51.2		(10	)	(20	)
Site operating expenses	46.9			50.2			10.3		10.7		(40	)	80		98.5			101.0			10.7		10.8		(10	)	70
General and administrative	46.7			40.2			10.2		8.6		160		(240	)	91.9			84.6			10.0		9.0		100		(200	)
Rent	76.9			79.2			16.9		16.9		—		100		154.4			158.2			16.8		16.9		(10	)	90
Depreciation and amortization	19.6			24.6			4.3		5.3		(100	)	100		41.8			48.5			4.5		5.2		(70	)	100
Goodwill impairment	—			34.9			—		7.5		(750	)	750		—			34.9			—		3.7		(370	)	370

Interest expense	2.5			5.2			0.5		1.1		(60	)	(20	)	5.6			9.7			0.6		1.0		(40	)	(30	)
Interest income and other, net	1.0			0.3			0.2		0.1		10		—		0.9			0.9			0.1		0.1		—		(340	)

Income taxes (3)	(3.5		)	(72.3		)	(94.9	)	(183.2	)	N/A		N/A		(9.1		)	(72.0		)	(121.3	)	(171.3	)	N/A		N/A
Equity in (loss) income of affiliated companies, net of income taxes	(12.0		)	2.7			(2.6	)	0.6		(320	)	410		(11.6		)	4.7			(1.3	)	0.5		(180	)	220

_____________________________


(1)	Computed as a percent of service revenues and excludes depreciation and amortization expense.


(2)	Computed as a percent of product revenues and excludes depreciation and amortization expense.


(3)	Computed as a percent of loss before income taxes and equity in (loss) income of affiliated companies. The income taxes basis point change is noted as not applicable (N/A) as the discussion within MD&A is related to the effective income tax rate.

Consolidated Revenues

Consolidated revenues primarily include revenues of company-owned salons, product and equipment sales to franchisees, and franchise royalties and fees. The following tables summarize revenues and same-store sales by concept as well as the reasons for the percentage change:



	For the Three Months Ended December 31,						For the Six Months Ended December 31,
	2014			2013			2014			2013
	(Dollars in thousands)
North American Value salons:
SmartStyle	$	122,677		$	118,783		$	246,149		$	236,259
Supercuts	84,049			84,250			170,769			169,569
MasterCuts	29,678			32,486			59,730			64,461
Other Value	109,329			116,468			223,461			237,039
Total North American Value salons	345,733			351,987			700,109			707,328
North American Premium salons	78,751			84,794			157,786			168,984
International salons	31,403			31,586			62,543			60,638
Consolidated revenues	$	455,887		$	468,367		$	920,438		$	936,950
Percent change from prior year	(2.7		)%	(7.5		)%	(1.8		)%	(7.4		)%
Salon same-store sales (decrease) increase (1)	(0.3		)%	(6.2		)%	0.2		%	(5.8		)%

_____________________________

(1)

Same-store sales are calculated on a daily basis as the total change in sales for 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 same-store sales are the sum of the same-store sales computed on a daily basis. Locations relocated within a one-mile radius are included in same-store sales as they are considered to have been open in the prior period. International same-store sales are calculated in local currencies to remove foreign currency fluctuations from the calculation.

Decreases in consolidated revenues were driven by the following:



	For the Three Months Ended December 31,				For the Six Months Ended December 31,
Factor	2014		2013		2014		2013
Same-store sales	(0.3	)%	(6.2	)%	0.2	%	(5.8	)%
Closed salons	(2.7	)	(2.7	)	(2.5	)	(2.9	)
New stores and conversions	0.6		0.7		0.7		0.8
Other	(0.3	)	0.7		(0.2	)	0.5
	(2.7	)%	(7.5	)%	(1.8	)%	(7.4	)%

Same-store sales by concept are detailed in the table below:



	For the Three Months Ended December 31,				For the Six Months Ended December 31,
	2014		2013		2014		2013
SmartStyle	2.2	%	(7.9	)%	2.9	%	(6.7	)%
Supercuts	0.3		(1.6	)	1.2		(1.7	)
MasterCuts	(4.1	)	(10.3	)	(3.2	)	(11.1	)
Other Value	(0.3	)	(7.0	)	(0.3	)	(6.0	)
North American Value same-store sales	0.4		(6.5	)	0.9		(5.9	)
North American Premium same-store sales	(3.2	)	(6.4	)	(2.8	)	(6.8	)
International same-store sales	0.9		(1.1	)	0.3		(1.3	)
Consolidated same-store sales	(0.3	)%	(6.2	)%	0.2	%	(5.8	)%

The same-store sales (decrease) increase of (0.3)% and 0.2% during the three and six months ended December 31, 2014, respectively, were due to decreases of 1.7% and 1.4% in guest visits and increases of 1.4% and 1.6%, respectively, in average ticket. The Company constructed (net of relocations) and closed 105 and 298 company-owned salons, respectively, during the twelve months ended December 31, 2014 and sold (net of buybacks) 53 company-owned salons to franchisees during the same period.

The same-store sales decrease of 6.2% and 5.8% during the three and six months ended December 31, 2013, respectively, were due to decreases of 7.4% and 7.3%, respectively, in guest visits, partly offset by increases of 1.2% and 1.5%, respectively, in average ticket. The Company constructed (net of relocations) and closed 124 and 319 company-owned salons, respectively, during the twelve months ended December 31, 2013 and sold (net of buybacks) 18 company-owned salons to franchisees during the same period.

Consolidated revenues are primarily comprised of service and product revenues, as well as franchise royalties and fees. Fluctuations in these three major revenue categories, operating expenses and other income and expense were as follows:

Service Revenues

Decreases of $10.6 and $17.6 million in service revenues during the three and six months ended December 31, 2014, respectively, were primarily due to the closure of 298 company-owned salons and sale (net of buybacks) of 53 company-owned salons to franchisees during the twelve months ended December 31, 2014. Also contributing to the decreases were same-store service sales decreases of 0.2% and 0.1%, respectively, during the three and six months ended December 31, 2014. Decreases in same-store service sales were primarily the result of 0.9% and 0.7% decreases in same-store guest visits, respectively, partly offset by 0.7% and 0.6% increases in average ticket, respectively, during the three and six months ended December 31, 2014. Partly offsetting these decreases were revenues from the construction (net of relocations) of 105 salons during the twelve months ended December 31, 2014.

Decreases of $27.3 and $49.0 million in service revenues during the three and six months ended December 31, 2013, respectively, were primarily due to same-store service sales decreases of 5.5% and 4.3%, respectively. Decreases in same-store service sales were primarily the result of 6.6% and 6.2% decreases in same-store guest visits, respectively, partly offset by 1.1% and 1.9% increases in average ticket, respectively, during the three and six months ended December 31, 2013. The closure of 319 company-owned salons and sale (net of buybacks) of 18 company-owned salons to franchisees during the twelve months ended December 31, 2013, partly offset by the construction (net of relocations) of 124 salons during the same period, drove the remaining declines in service sales compared to the prior year.

Product Revenues

Decreases of $3.1 and $1.1 million in product revenues during the three and six months ended December 31, 2014, respectively, were primarily due to the closure of 298 company-owned salons and sale (net of buybacks) of 53 company-owned salons to franchisees during the twelve months ended December 31, 2014. Also impacting these decreases were same-store product sales (decrease) increase of (0.6)% and 1.3%, respectively during the three and six months ended December 31, 2014. The same-store product sales results were primarily due to 1.8% and 2.9% increases in same-store guest visits, respectively, and 2.4% and 1.6% decreases in average ticket, during the three and six months ended December 31, 2014, respectively. Partly offsetting the decreases were revenues from the construction (net of relocations) of 105 salons during the twelve months ended December 31, 2014.

Decreases of $10.5 and $26.0 million in product revenues during the three and six months ended December 31, 2013, respectively, were primarily due to same-store product sales decreases of 9.2% and 11.9%, respectively. Decreases in same-store product sales were primarily the result of 12.8% and 15.1% decreases in same-store guest visits, respectively, partly offset by 3.6% and 3.2% increases in average ticket, respectively. The closure of 319 company-owned salons and sale (net of buybacks) of 18 company-owned salons to franchisees during the twelve months ended December 31, 2013, partly offset by the construction (net of relocations) of 124 salons during the same period, drove the remaining declines in product sales compared to the prior year.

Royalties and Fees

Total franchised locations open at December 31, 2014 were 2,246 as compared to 2,123 at December 31, 2013. Increases of $1.2 and $2.2 million in royalties and fees for the three and six months ended December 31, 2014, respectively compared to the prior year period were primarily due to the increased number of franchised locations and same-store sales increases at franchised locations.

Total franchised locations open at December 31, 2013 were 2,123 as compared to 2,039 at December 31, 2012. Royalties and fees for the three months ended December 31, 2013 were flat to the comparable prior period. The increase of $0.4 million in royalties and fees for the six months ended December 31, 2013 compared to the prior year period was partly due to the increase in franchised locations.

Cost of Service

The 70 basis point increases in cost of service as a percent of service revenues during the three and six months ended December 31, 2014, respectively, were primarily the result of higher field incentives as the Company anniversaries an incentive-lite year, state minimum wage increases, higher payroll taxes and the lapping of certain one-time benefits related to payroll taxes, partly offset by improved stylist productivity. Partly offsetting the basis point increase for the three and six months ended December 31, 2014 was a decrease in health care costs due to lower participation levels compared to the prior year.

The 160 and 150 basis point increases in cost of service as a percent of service revenues during the three and six months ended December 31, 2013, respectively, were primarily due to the change in expense categorization driven by the fourth quarter of fiscal year 2013 field reorganization. Effective in the first quarter of fiscal year 2014, district and senior leaders labor costs were reported within cost of service rather than general and administrative expense. The change in expense categorization accounted for 140 basis points of the increases for the three and six months ended December 31, 2013. The remaining increases of 20 and 10 basis points for the three and six months ended December 31, 2013, respectively, were primarily the result of negative leverage from stylist hours caused by same-store service sales declines and increased health care costs, partly offset by cost reductions due to the field reorganization, reduced labor costs associated with lower levels of bonuses and a full commission coupon event in the prior year that was not repeated.

Cost of Product

Cost of product as a percent of product revenues during the three months ended December 31, 2014 was flat to the comparable period, as the rate impact of higher promotional activity in the period was offset by lapping certain one-time costs associated with salon closures. The 10 basis point decrease in cost of product as a percent of product revenues during the six months ended December 31, 2014 was primarily due to lapping a $0.9 million inventory write-down associated with standardizing plan-o-grams in the comparable prior period, Partly offset by increased promotional activity and higher freight costs in the current period.

The 70 basis point increase in cost of product as a percent of product revenues during the three months ended December 31, 2013 was primarily due to an increase in retail promotions, partly offset by a vendor volume rebate and reduced sales commissions and bonuses due to lower sales. The 20 basis point decrease in cost of product as a percent of product revenues during the six months ended December 31, 2013 was primarily due to reduced sales commissions and bonuses from lower sales, partly offset by an increase in retail promotions and a $0.9 million inventory write-down associated with standardizing plan-o-grams.

Site Operating Expenses

The decreases of $3.3 and $2.5 million or 40 and 10 basis points in site operating expenses as a percentage of consolidated revenues during the three and six months ended December 31, 2014, respectively, were primarily a result of the timing of marketing expenses, a favorable net adjustment to self-insurance reserves and lower freight costs.

The 80 and 70 basis point increases in site operating expenses as a percent of consolidated revenues during the three and six months ended December 31, 2013 were primarily due to the change in expense categorization driven by the field reorganization and negative leverage caused by same-store sales declines. Effective in the first quarter of fiscal year 2014, field leaders' travel costs were reported within site operating expenses rather than general administrative expenses. The change in expense categorization accounted for 40 and 50 basis points of the increases in site operating for the three and six months ended December 31, 2013, respectively. Site operating expenses increased (decreased) $0.3 and $(1.2) million for the three and six months ended December 31, 2013, respectively. After considering the prior year change in expense categorization, site operating expense decreased $2.0 and $5.9 million during the three and six months ended December 31, 2013, respectively, primarily as a result of cost savings initiatives to lower utilities and repairs and maintenance expenses, lower travel expense due to the field reorganization, and reduced freight and self-insurance expenses, partly offset by increased salon connectivity costs to support the Company’s new POS system and salon workstations.

General and Administrative (G&A)

The increases of $6.5 and $7.2 million or 160 and 100 basis points in G&A as a percent of consolidated revenues during the three and six months ended December 31, 2014, were primarily driven by the lapping of a favorable deferred compensation adjustment within our Unallocated Corporate segment and the reversal of incentive compensation accruals in the prior comparable periods, partly offset by the lapping of legal and professional fees associated with the Company's ongoing review of non-core assets. Also contributing the increases were higher incentive compensation levels as the Company anniversaries against an incentive-lite year and planned strategic investments in Asset Protection and Human Resource initiatives, partly offset by cost savings.

G&A decreased $15.6 million, or 240 basis points as a percent of consolidated revenues during the three months ended December 31, 2013 and $27.0 million, or 200 basis points as a percent of consolidated revenues during the six months ended December 31, 2013. These improvements were primarily due to the change in expense categorization driven by the field reorganization. Effective in the first quarter of fiscal year 2014, district and senior district leaders' labor costs were reported in cost of service rather than G&A expenses and their travel costs were reported in site operating expenses rather than G&A expenses. The change in expense categorization accounted for $7.8 and $15.7 million of the decreases for the three and six months ended December 31, 2013, respectively. The remaining decreases of $7.8 and $11.3 million during the three and six months ended December 31, 2013, respectively, were primarily due to reduced levels of incentive compensation in our North American Value and Unallocated Corporate segments, cost savings initiatives and savings from the field reorganization and a favorable deferred compensation adjustment within our Unallocated Corporate segment, partly offset by legal and professional fees associated with the Company's ongoing review of non-core assets.

Rent

Rent expense decreased $2.2 and $3.8 million during the three and six months ended December 31, 2014, respectively, due to salon closures, primarily within our North American Premium and Value segments. Rent expense as a percent of consolidated revenues during the three months ended December 31, 2014 was flat to the prior comparable period as negative leverage due to same-store sales declines was offset by the closure of unprofitable locations. The 10 basis point decrease in rent expense as a percent of consolidated revenues for the six months ended December 31, 2014 was primarily due to the closure of unprofitable locations. The 100 and 90 basis point increases in rent expense as a percent of consolidated revenues for the three and six months ended December 31, 2013, respectively, were due to negative leverage caused by same-store sales declines, partly offset by store closures.

Depreciation and Amortization (D&A)

The decreases of $5.1 and $6.7 million or 100 and 70 basis points in D&A as a percent of consolidated revenues during the three and six months ended December 31, 2014, respectively, were primarily due to lower fixed asset balances and store closures during the three and six months ended December 31, 2014. In addition, prior comparable periods included accelerated depreciation expense associated with a leased building in conjunction with the Company’s headquarters consolidation recorded in our Unallocated Corporate segment and higher depreciation expense related to the Company's POS and salon workstations that were installed in the fourth quarter of fiscal year 2013.

The 100 basis point increases in D&A as a percent of consolidated revenues during the three and six months ended December 31, 2013, were primarily due to increased fixed asset impairment charges recorded in our North American Premium segment, depreciation expense related to the Company’s POS and salon workstations installed in the fourth quarter of fiscal year 2013, accelerated depreciation expense associated with a leased building in conjunction with the Company’s headquarters consolidation recorded in our Unallocated Corporate segment and negative leverage caused by same-store sales declines.

Goodwill Impairment

The Company recorded a goodwill impairment charge of $34.9 million related to the Regis salon concept reporting unit during the three and six months ended December 31, 2013. The Company redefined its operating segments during the second quarter of fiscal year 2014 and its performance trends were down. Accordingly, the Company was required to perform this goodwill assessment. As a result of this non-cash charge, the Company has no further goodwill on its balance sheet associated with the Regis salon concept (North American Premium).

Interest Expense

The decreases of $2.7 and $4.1 million or 60 and 40 basis points in interest expense as a percent of consolidated revenues for the three and six months ended December 31, 2014, respectively, were primarily due to the settlement of the $172.5 million convertible senior notes in July 2014, partly offset by interest on the $120.0 million Senior Term Notes issued in November 2013.

The decreases of $1.5 and $3.8 million or 20 and 30 basis points as a percent of consolidated revenue in interest expense for the three and six months ended December 31, 2013, respectively, was primarily due to decreased average debt levels as compared to the prior year comparable period.

Interest Income and Other, net

The $0.7 million or 10 basis point increase in interest income and other, net as a percent of consolidated revenues during the three months ended December 31, 2014 was comprised of gains on salon assets sold and interest income. Interest income and other, net as a percent of consolidated revenues during the six months ended December 31, 2014 was flat to the comparable prior period.

Interest income and other, net as a percent of consolidated revenues during the three months ended December 31, 2013 was flat to the comparable prior period. The $34.3 million or 340 basis point decrease in interest income and other, net as a percent of consolidated revenues during the six months ended December 31, 2013, was primarily due to the recognition of a $33.8 million foreign currency translation gain in connection with the sale of Provalliance during the six months ended December 31, 2012.

Income Taxes

The tax expense and effective tax rate for the three and six months ended December 31, 2014 were different than what would normally be expected primarily due to $2.5 and $6.6 million, respectively, of non-cash tax expense for tax benefits on certain indefinite-lived assets that the Company cannot recognize for reporting purposes. The total tax expense expected for the year is approximately $9.0 million related to this matter; however, there will be variation from quarter to quarter as a result of how the effective tax rate is computed on an interim basis. This non-cash tax expense (benefit) will continue as long as the Company has a valuation allowance against most of its deferred tax assets. The Company is currently paying taxes in Canada, Texas and for certain states in which it has profitable entities.

The recorded tax expense and effective tax rate for the three and six months ended December 31, 2013 were higher than would be expected due primarily to the $83.1 million non-cash charge to establish a valuation allowance against the Company’s United States deferred tax assets and a $34.9 million non-cash goodwill impairment charge which was only partly deductible for tax purposes.

See Note 5 to the unaudited Condensed Consolidated Financial Statements.

Equity in (Loss) Income of Affiliated Companies, Net of Income Taxes

The equity in loss of affiliated companies of $12.0 and $11.6 million during the three and six months ended December 31, 2014, respectively, was primarily the result of the Company's portion of the non-cash deferred tax asset valuation allowance that was recorded by EEG and the Company's other than temporary non-cash impairment charge during the three and six months ended December 31, 2014. See Note 2 to the unaudited Condensed Consolidated Financial Statements.

The equity in income of affiliated companies of $2.7 and $4.7 million during the three and six months ended December 31, 2013, respectively, was primarily due to the recovery of $2.1 and $3.1 million, respectively, on previously impaired investments in Yamano and the Company’s share of EEG’s net income.

LIQUIDITY AND CAPITAL RESOURCES

Sources of Liquidity

Funds generated by operating activities, available cash and cash equivalents, and our borrowing agreements are our most significant sources of liquidity. We believe these sources of liquidity will be sufficient to sustain operations and to finance strategic initiatives. However, in the event our liquidity is insufficient, we may be required to limit or delay our strategic initiatives. There can be no assurance we will continue to generate cash flows at or above current levels.

As of December 31, 2014, cash and cash equivalents were $195.8 million, with $163.2, $16.9 and $15.7 million within the United States, Canada, and Europe, respectively.

We have a $400.0 million five-year senior unsecured revolving credit facility with a syndicate of banks that expires in June 2018. As of December 31, 2014, the Company had no outstanding borrowings under the facility, outstanding standby letters of credit of $2.1 million and unused available credit of $397.9 million.

Our ability to access our revolving credit facility is subject to our compliance with the terms and conditions of such facility including a maximum leverage ratio, a minimum fixed charge ratio and other covenants and requirements. At December 31, 2014, we were in compliance with all covenants and other requirements of our credit agreement and senior notes.

Uses of Cash

The Company has a capital allocation policy that focuses on three key principles. These principles focus on preserving a strong balance sheet and enhancing operating flexibility, preventing unnecessary dilution so the benefits of future value accrue to shareholders and deploying capital to the highest and best use by optimizing the tradeoff between risk and after-tax returns.

During the six months ended December 31, 2014, the Company settled the $172.5 million convertible notes at par value with cash and repurchased approximately 1.5 million shares for $22.9 million.

Cash Flows

Cash Flows from Operating Activities

During the six months ended December 31, 2014, cash provided by operating activities of $37.6 million decreased by $11.6 million compared to the prior comparable period, primarily as a result of a decrease in revenues and operating income during the six months ended December 31, 2014 and a decrease in cash provided by working capital.

During the six months ended December 31, 2013, cash provided by operating activities of $49.2 million decreased by $9.7 million compared to the prior comparable period, primarily as a result of the decrease in revenues and operating income and a $3.6 million increase in working capital.

Cash Flows from Investing Activities

During the six months ended December 31, 2014, cash used in investing activities of $21.1 million was primarily for capital expenditures of $22.5 million, partly offset by cash proceeds from sale of salon assets of $1.4 million.

During the six months ended December 31, 2013, cash used in investing activities of $18.9 million was primarily for capital expenditures of $23.9 million, partly offset by cash provided from the recovery of $3.1 million on the Company’s previously impaired investments in Yamano and the receipt of $2.0 million for the final working capital adjustment on the sale of Hair Club.

Cash Flows from Financing Activities

During the six months ended December 31, 2014 and 2013, cash (used in) provided by financing activities of $(196.6) and $107.8 million, respectively, were primarily for net (repayments) borrowings of long-term debt of $(173.7) and $114.6 million, respectively. In addition, during the six months ended December 31, 2014, the Company repurchased $22.9 million of common stock. During the six months ended December 31, 2013, the Company paid $6.8 million for dividends.

Financing Arrangements

See Note 8 of the Notes to the unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for the quarter ended December 31, 2014 and Note 7 of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2014, for additional information regarding our financing arrangements.

Debt to Capitalization Ratio

Our debt to capitalization ratio, calculated as total debt as a percentage of total debt and shareholders’ equity at fiscal quarter end, were as follows:



As of	Debt to Capitalization		Basis Point (Decrease) Increase (1)
December 31, 2014	15.3	%	(1,360	)
June 30, 2014	28.9	%	1,200

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(1) Represents the basis point change in debt to capitalization as compared to prior fiscal year end (June 30).

The 1,360 basis point decrease in the debt to capitalization ratio as of December 31, 2014 compared to June 30, 2014, is primarily due to the $173.7 million repayment of long-term debt, which included $172.5 million for the repayment of the convertible notes, partly offset by the repurchase of 1.5 million shares of common stock for $22.9 million during the six months ended December 31, 2014.

The 1,200 basis point increase in the debt to capitalization ratio as of June 30, 2014 compared to June 30, 2013 was primarily due to the issuance of the $120.0 million Senior Term Notes, the $34.9 million non-cash goodwill impairment charge for the Regis salon concept, the $84.4 million non-cash valuation allowance established against the United States and United Kingdom deferred tax assets and the $12.6 million (net of tax) charge recorded by the Company for its share of the non-cash goodwill impairment charge recorded by EEG.

Dividends

We paid dividends of $0.12 per share during the six months ended December 31, 2013. The Board of Directors elected to discontinue declaring regular quarterly dividends in December 2013.

Share Repurchase Program

In May 2000, the Company’s Board of Directors approved a stock repurchase program. To date, a total of $300.0 million has been authorized to be expended for the repurchase of the Company’s stock. All repurchased shares become authorized but unissued shares of the Company. This repurchase program has no stated expiration date. During the three and six months ended December 31, 2014, the Company repurchased 81,811 shares for $1.4 million and 1,537,398 shares for $22.9 million, respectively. At December 31, 2014, $35.8 million remained outstanding under the approved stock repurchase program.

SAFE HARBOR PROVISIONS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This Quarterly Report on Form 10-Q, as well as information included in, or incorporated by reference from, future filings by the Company with the Securities and Exchange Commission and information contained in written material, press releases and oral statements issued by or on behalf of the Company 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 factors include the impact of significant initiatives, changes in our management and organizational structure and our ability to attract and retain our executive management team; the success of our stylists and our ability to attract, train and retain talented stylists; negative same-store sales; our ability to protect the security of sensitive information about our guests, employees, vendors or Company information; changes in regulatory and statutory laws; the effect of changes to healthcare laws; financial performance of our investment with EEG, Inc.; the Company's reliance on management information systems; the continued ability of the Company to implement cost reduction initiatives; reliance on external vendors; changes in distribution channels of manufacturers; compliance with debt covenants; financial performance of our franchisees; competition within the personal hair care industry; changes in economic conditions; failure to standardize operating processes across brands; the ability of the Company to maintain satisfactory relationships with certain companies and suppliers; changes in interest rates and foreign currency exchange rates; changes in consumer tastes and fashion trends; or other factors not listed above. Additional information concerning potential factors that could affect future financial results is set forth in the Company’s Annual Report on Form 10-K for the year ended June 30, 2014. 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.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

There has been no material change to the factors discussed within Part II, Item 7A in the Company’s June 30, 2014 Annual Report on Form 10-K.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such information is accumulated and communicated to management, including the chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

With the participation of management, the Company’s chief executive officer and chief financial officer evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-5(e) and 15d-15(e) promulgated under the Exchange Act) as of the end of the period. Our management, including our chief executive officer and chief financial officer, concluded that our disclosure controls and procedures were effective as of December 31, 2014.

Changes in Internal Controls over Financial Reporting

Based on management’s most recent evaluation of the Company’s internal control over financial reporting, management determined that there were no changes in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting that occurred during the Company’s most recent fiscal quarter.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings

In addition, the Company was a nominal defendant, and nine current and former directors and officers of the Company were named defendants, in a shareholder derivative action in Minnesota state court. The derivative shareholder action alleged that the individual defendants breached their fiduciary duties to the Company in connection with their approval of certain executive compensation arrangements and certain related party transactions. The Board of Directors appointed a Special Litigation Committee to investigate the claims and allegations made in the derivative action, and to decide on behalf of the Company whether the claims and allegations should be pursued. In April 2014, the Special Litigation Committee issued a report and concluded the claims and allegations should not be pursued, and in September 2014 the case was dismissed by court order. In a collateral proceeding, the plaintiff filed a motion for an award of fees in November 2014. The Company has opposed the motion and the motion is pending before the court.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2014.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

In May 2000, the Company’s Board of Directors approved a stock repurchase program. To date, a total of $300.0 million has been authorized to be expended for the repurchase of the Company’s stock. All repurchased shares become authorized but unissued shares of the Company. This repurchase program has no stated expiration date. The timing and amounts of any repurchases depend on many factors, including the market price of our common stock and overall market conditions. During the three and six months ended December 31, 2014, the Company repurchased 81,811 shares for $1.4 million and 1,537,398 shares for $22.9 million, respectively. As of December 31, 2014, a total accumulated 9.2 million shares have been repurchased for $264.2 million. At December 31, 2014, $35.8 million remained outstanding under the approved stock repurchase program.

The following table shows the stock repurchase activity by the Company or any “affiliated purchaser” of the Company, as defined in Rule 10b-18(a)(3) under the Exchange Act, by month for the three months ended December 31, 2014:



Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (in thousands)

10/1/14 - 10/31/14	—	—		9,149,551	37,199
11/1/14 - 11/30/14	81,811	16.61		9,231,362	35,840
12/1/14 - 12/31/14	—	—		9,231,362	35,840
Total	81,811	$	16.61	9,231,362	$	35,840

Item 5. Other Information

Item 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

On January 27, 2015, the Board of Directors of the Company appointed Kersten D. Zupfer as the Company’s Chief Accounting Officer.

Ms. Zupfer, 39, was promoted to Vice President and Corporate Controller in December 2014. She previously served as the Company’s Associate Vice President, Assistant Corporate Controller since September 2013 and prior to that as the Company’s Director of Finance since February 2007. Before joining the Company, she was Director of Financial Reporting at Digital Angel Corporation from 2002 to 2007 and an auditor at Arthur Andersen from 1996 to 2002.

The Company has entered into an employment agreement with Ms. Zupfer on its standard form of employment agreement with its vice presidents, which mirrors the form of employment agreement with the Company’s executive officers (other than the CEO), except that the vice president agreement does not provide for an enhanced severance calculation if a termination without cause or termination for good reason occurs in connection with a change in control. The terms of the executive officer employment agreements are described in the Company’s proxy statement for its 2014 annual meeting of shareholders.

Item 6. Exhibits



Exhibit 10(a)(*)		Employment Agreement, dated December 15, 2014, between the Company and Annette Miller.

Exhibit 10(b)(*)		Amendment to Employment Agreement, dated January 13, 2015, between the Company and Dan Hanrahan.

Exhibit 31.1		President and Executive Officer of Regis Corporation: Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 31.2		Executive Vice President and Chief Financial Officer of Regis Corporation: Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

Exhibit 32		Chief Executive Officer and Chief Financial Officer of Regis Corporation: Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Exhibit 101		The following financial information from Regis Corporation's Quarterly Report on Form 10-Q for the quarterly period ended December 31, 2014, formatted in Extensible Business Reporting Language (XBRL) and filed electronically herewith: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Earnings; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) the Notes to the Consolidated Financial Statements.

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(*)	Management contract, compensatory plan or arrangement required to be filed as an exhibit to the Company’s Report on Form 10-Q.

SIGNATURES

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



	REGIS CORPORATION

Date: January 29, 2015	By:	/s/ Steven M. Spiegel
		Steven M. Spiegel
		Executive Vice President and Chief Financial Officer
		(Signing on behalf of the registrant and as Principal Financial Officer)




Date: January 29, 2015	By:	/s/ Kersten D. Zupfer
		Kersten D. Zupfer
		Vice President, Controller and Chief Accounting Officer
		(Principal Accounting Officer)

Exhibit No. 10(a)(*)

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement) is made by and between Regis Corporation, a Minnesota corporation (the “Corporation”), and Annette Miller (the “Employee”) as of the 15th day of December, 2014 (the “Effective Date”).

WHEREAS, in connection with the Employee’s employment with the Corporation, the Employee will have access to confidential, proprietary and trade secret information of the Corporation and its affiliates and relating to the business of the Corporation and its affiliates, which confidential, proprietary and trade secret information the Corporation and its affiliates desire to protect from disclosure and unfair competition.

WHEREAS, the Employee specifically acknowledges that executing this Agreement makes the Employee eligible for employment and incentive compensation and severance opportunities for which the Employee would not be eligible if the Employee did not enter into this Agreement with the Corporation.

NOW, THEREFORE, in consideration of the mutual agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Corporation and the Employee hereby agree as follows:

1. EMPLOYMENT COMMENCEMENT DATE; PERIOD OF EMPLOYMENT.

(a) Period of Employment. The Corporation agrees to employ the Employee, and the Employee agrees to serve the Corporation, upon the terms and conditions hereinafter set forth. The employment of the Employee by the Corporation pursuant to this Agreement shall be for a period beginning on the Effective Date and continuing until the Employee’s employment is terminated as provided in Section 5 herein (the “Employment Period”).

2. DUTIES. During the Employment Period, the Employee agrees to serve the Corporation faithfully and to the best of the Employee’s ability under the direction of the Chief Executive Officer and the Board of Directors of the Corporation (the “Board”), devoting the Employee’s entire business time, energy and skill to such employment, and to perform from time to time such services and act in such office or capacity as the President and the Board shall request. The Employee shall follow applicable policies and procedures adopted by the Corporation from time to time, including without limitation policies relating to business ethics, conflicts of interest, non-discrimination, and confidentiality and protection of trade secrets.

3. OFFICE FACILITIES. During the Employment Period under this Agreement, the Employee shall have the Employee’s office where the Corporation’s principal executive offices are located from time to time, which currently are at 7201 Metro Boulevard, Edina, Minnesota.

4. COMPENSATION, BENEFITS AND EXPENSE REIMBURSEMENTS. As compensation for the Employee’s services performed as an officer and employee of the Corporation, the Corporation shall pay or provide to the Employee the following compensation, benefits and expense reimbursements during the Employment Period:

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(a) Base Salary. The Corporation shall pay the Employee a base salary (the “Base Salary”), initially at the rate of $360,000 per annum, payable monthly, semi-monthly or weekly according to the Corporation’s general practice for its officers. Such Base Salary may be modified by the Chief Executive Officer or the Compensation Committee of the Board of Directors (or, if the Employee is an “Executive Officer” under regulations of the Securities and Exchange Commission, then only by the Compensation Committee of the Board of Directors) in their sole discretion. Following any such modification, any then-current Base Salary shall be the “Base Salary” for purposes of this Agreement.

(b) Bonus. The Corporation shall grant the Employee an award under the Regis Corporation Short Term Incentive Plan (“Short Term Plan”) for the fiscal year ending June 30, 2015, with a guaranteed payout equal to $87,750, which is 45% of the Employee’s initial Base Salary, prorated to the portion of the year from the Effective Date to the fiscal year end (the “FY15 Bonus Award”). For each successive year thereafter during the Employment Period, to the extent the Employee meets the eligibility requirements, the Employee shall be eligible for an annual performance bonus (the “Bonus”) as determined under the provisions of the then-applicable Regis Corporation Short Term Incentive Plan (“Short Term Plan”), as amended from time to time, any successor to such plan, or such other annual incentive compensation program developed for the Corporation’s officers, with performance goals and other terms consistent with other officers of the Corporation. The FY15 Bonus Award and any other Bonus shall be paid at the same time as bonuses are paid to other officers of the Corporation under the then-applicable Short Term Plan.

(c) Equity Incentive Awards. To the extent the Employee meets the eligibility requirements, the Employee shall be eligible for an annual grant of equity pursuant to the Regis Corporation 2004 Long-Term Incentive Plan, as amended from time to time, any successor to such plan, or such other long-term incentive compensation program developed for the Corporation’s officers (the “Long Term Plan”), with the type of equity award, performance goals and other terms consistent with other Senior Vice Presidents of the Corporation. Any annual Equity Incentive Award shall be paid at the same time as annual equity awards are made to other officers of the Corporation under the then-applicable Long Term Plan, and shall be subject to the Employee’s execution of an applicable award agreement approved by the Corporation and the terms and conditions of the Long Term Plan.

(d) Special Sign-On Equity Award. On the Effective Date, the Employee shall receive an equity award under, and in accordance with the terms and provisions of each of (i) the Regis Corporation 2004 Long Term Incentive Plan (“Long Term Plan”) and (ii) the Corporation’s equity award agreements with its executive officers for its fiscal 2015 awards granted on August 29, 2014 (the “FY2015 Equity Award”). For the FY2015 Equity Award, the Employee will be awarded equity with a projected total value of $250,000 comprised of the following: (i) twenty percent (20% or approximately $50,000) in an award of restricted stock units vesting ratably over a three (3) year period, (ii) forty percent (40% or approximately $100,000) in a performance share award that will cliff vest on the three (3) year anniversary subject to attainment of performance goals during the Corporation’s 2015 fiscal year, as determined by the Committee, and (iii) forty percent (40% or approximately $100,000) in an award of stock appreciation rights vesting ratably over a three (3) year

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period. To determine the number of shares for each type of award, the projected total value will be multiplied by the applicable percentage, and then, in the case of the restricted stock units and performance shares, divided by the fair market value of a share of the Corporation’s stock on the date of grant and, in the case of the stock appreciation rights, divided by the Black-Scholes value of a share of the Corporation’s stock on the date of grant. The above-described award is subject to the Employee’s execution of applicable award agreements approved by the Committee and terms and conditions of the Long Term Plan.

(e) Health, Welfare and Retirement Plans; Vacation. To the extent the Employee meets the eligibility requirements for such arrangements, plans or programs, the Employee shall be entitled to:

(i) participate in such retirement, health (medical, hospital and/or dental) insurance, life insurance, disability insurance, flexible benefits arrangements and accident insurance plans and programs as are maintained in effect from time to time by the Corporation for its headquarters employees;

(ii) participate in other non-duplicative benefit programs which the Corporation may from time to time offer generally to officers of the Corporation; and

(iii) take vacations and be entitled to sick leave in accordance with the Corporation’s policy for officers of the Corporation.

For the sake of clarity, the Corporation may modify its health, welfare, retirement and other benefit plans and vacation and sick leave policies from time to time and the Employee’s rights under these plans are subject to change in the event of any such modifications, provided that he will receive the benefits generally provided to other officers of the Corporation. In addition, the Employee acknowledges that the Corporation has frozen its Employee Retirement Savings Plan effective June 30, 2012 and, the Employee will have no right to participate in that plan.

(f) Other Benefits and Perquisites. The Employee shall be offered any additional employee benefits and perquisites the Corporation offers to other Senior Vice Presidents of the Corporation (to the extent the Employee otherwise satisfies the eligibility criteria for such benefits), including receipt of an annual perquisite account of $32,000.

(g) Expenses. During the Employment Period, the Employee shall be reimbursed for reasonable business expenses incurred in connection with the performance of the Employee’s duties hereunder consistent with the Corporation’s policy regarding reimbursement of such expenses, including submission of appropriate receipts. With respect to any benefits or payments received or owed to the Employee hereunder, the Employee shall cooperate in good faith with the Corporation to structure such benefits or payments in the most tax-efficient manner to the Corporation.

5. TERMINATION OF EMPLOYMENT. The employment of the Employee by the Corporation pursuant to this Agreement may be terminated by the Corporation or the Employee at any time as follows:

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(a) Death. In the event of the Employee’s death, such employment shall terminate on the date of death.

(b) Permanent Disability. In the event of the Employee’s physical or mental disability or health impairment which prevents the effective performance by the Employee of the Employee’s duties hereunder on a full time basis, with such termination to occur (i) with respect to disability, on or after the time which the Employee becomes entitled to disability compensation benefits under the Corporation’s long term disability insurance policy or program as then in effect or (ii) with respect to health impairment, after Employee has been unable to substantially perform the Employee’s services hereunder for six consecutive months. Any dispute as to the Employee’s physical or mental disability or health impairment shall be settled by the opinion of an impartial physician selected by the parties or their representatives or, in the event of failure to make a joint selection after request therefor by either party to the other, a physician selected by the Corporation, with the fees and expenses of any such physician to be borne by the Corporation.

(c) Cause. The Corporation, by giving written notice of termination to the Employee, may terminate such employment hereunder for Cause.

(d) Without Cause. The Corporation may terminate such employment without Cause (which shall be for any reason not covered by preceding Sections 5(a) through (c)), with such termination to be effective upon the date specified by the Corporation in a written notice delivered to the Employee.

(e) By the Employee For Good Reason. The Employee may terminate such employment for an applicable Good Reason, subject to the process described in the Good Reason definition in Section 7.

(f) By the Employee Without Good Reason. The Employee may terminate such employment for any reason other than Good Reason upon thirty (30) days advance notice to the Corporation.

(g) Notice of Termination. Any termination of the Employee’s employment by the Corporation or by the Employee (other than termination based on the Employee’s death) shall be communicated by a written Notice of Termination to the other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee’s employment under the provision so indicated. For purposes of this Agreement, no purported termination shall be effective without the delivery of such Notice of Termination.

(h) Date of Termination. The date upon which the Employee’s termination of employment with the Corporation occurs is the “Date of Termination.” For purposes of Sections 6(b) and 6(c) of this Agreement only, with respect to the timing of any payments thereunder, the Date of Termination shall mean the date on which a “separation from service” has occurred for purposes of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”), and Treas. Reg. Section 1.409A-1(h).

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6. PAYMENTS UPON TERMINATION.

(a) Death or Disability. If the Employee’s employment is terminated by reason of the Employee’s death or permanent disability, he (or the legal representative of the Employee’s estate in the event of the Employee’s death) shall be entitled to the following:

(i) Accrued Compensation. All compensation due the Employee under this Agreement and under each plan or program of the Corporation in which he may be participating at the time shall cease to accrue as of the date of such termination, except (A) as specifically provided in this Agreement or (B) in the case of any such plan or program, if and to the extent otherwise provided in the terms of such plan or program or by applicable law. All such compensation accrued as of the date of such termination but not previously paid shall be paid to the Employee at the time such payment otherwise would be due.

(ii) Accrued Obligations. In addition, the Employee shall be entitled to payment of all accrued vacation pay.

(b) Termination Without Cause or for Good Reason Prior to a Change in Control or More Than Twenty-Four Months After a Change in Control. If, prior to a Change in Control or more than twenty-four (24) months after a Change in Control, the Employee’s employment pursuant to this Agreement is terminated by the Corporation without Cause or the Employee terminates her employment for Good Reason, then the Employee shall be entitled to and shall receive the following:

(i) Accrued Compensation. All compensation due the Employee under this Agreement and under each plan or program of the Corporation in which she may be participating at the time shall cease to accrue as of the date of such termination, except (A) as specifically provided in this Agreement or (B) in the case of any such plan or program, if and to the extent otherwise provided in the terms of such plan or program or by applicable law. All such compensation accrued as of the date of such termination but not previously paid shall be paid to the Employee at the time such payment otherwise would be due.

(ii) Accrued Obligations. In addition, the Employee shall be entitled to payment of all accrued vacation pay.

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payable at the same time as bonuses are paid to other then-current officers of the Corporation under the then-applicable Short Term Plan for the fiscal year in which the Date of Termination occurs, plus (2) an amount equal to one times the Employee’s Base Salary as of the Date of Termination, payable in substantially equal installments in accordance with the Corporation’s normal payroll policies commencing on the Date of Termination and continuing for twelve (12) consecutive months; provided, however, that any Severance Payment installments payable under this Section 6(b)(iii) that otherwise would be paid during the first sixty (60) days after the Date of Termination will be delayed and included in the first installment paid to the Employee on the first payroll date that is more than sixty (60) days after the Date of Termination, and provided further that if the Employee is considered a “specified employee” (as defined in Treasury Regulation Section 1.409A-1(i)) as of the Date of Termination, then no payments of deferred compensation payable due to Employee’s separation from service for purposes of section 409A of the Code shall be made under this Agreement until the Corporation’s first regular payroll date that is after the first day of the seventh (7^th) month following the Date of Termination and included with the installment payable on such payroll date, if any, without adjustment for interest or earnings during the period of delay. Furthermore, any Severance Payment owed to the Employee under subsections (A) or (B) above will be reduced by the amount of any compensation earned by the Employee for any consulting or employment services provided on a substantially full-time basis during the period of time Employee receives Severance Payment installments under subsection (A) or (B) above, to the extent such compensation is payable by an entity unrelated to the Corporation.

(iv) Benefits Continuation. Subject to the Employee signing and not revoking a release of claims in a form prescribed by the Corporation and the Employee remaining in strict compliance with the terms of this Agreement and any other written agreements between the Corporation and the Employee, the Corporation will pay the employer portion of the Employee’s COBRA premiums for health and dental insurance coverage under the Corporation’s group health and dental insurance plans for the same period of time the Employee remains eligible to receive the Severance Payment installments under Section 6(b)(iii) (up to a maximum of twelve (12) months), provided the Employee timely elects COBRA coverage. Notwithstanding the foregoing, the Corporation will discontinue COBRA premium payments if, and at such time as, the Employee (A) is eligible to be covered under the health and/or dental insurance policy of a new employer, (B) ceases to participate, for whatever reason, in the Corporation’s group insurance plans, or (C) ceases to be eligible to receive the Severance Payment installments under Section 6(b)(iii).

(c) Termination Without Cause or for Good Reason Within Twenty-Four Months After a Change in Control. If a Change in Control occurs during the Employment Period and if within twenty-four (24) months after the Change in Control the Employee’s employment pursuant to this Agreement is terminated by the Corporation without Cause or the Employee terminates her employment for Good Reason, then the Employee shall be entitled to and shall receive the following:

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(ii) Accrued Obligations. In addition, the Employee shall be entitled to payment of all accrued vacation pay.

(iii) Severance Payment. Subject to the Employee signing and not revoking a release of claims in a form prescribed by the Corporation and the Employee remaining in strict compliance with the terms of this Agreement and any other written agreements between the Corporation and the Employee, the Employee shall be entitled to receive the following amount as severance pay, subject to such amount being reduced as provided below (referred to in this Section 6(c)(iii) as the “Severance Payment”): (A) an amount equal to two times the Employee’s Base Salary as of the Date of Termination, plus (B) an amount equal to two times the Employee’s target Bonus for the fiscal year in which the Date of Termination occurs. The Severance Payment described in subsections (A) and (B) above shall be added together and will be paid in substantially equal installments in accordance with the Corporation’s normal payroll policies based on a 24-month payment schedule commencing on the Date of Termination. Notwithstanding the forgoing, any installments that otherwise would be payable on the regular payroll dates between the Date of Termination and first day of the seventh (7th) month following the Date of Termination shall be delayed until the Corporation’s first regular payroll date that is after the first day of the seventh (7th) month following the Date of Termination and included with the installment payable on such payroll date, if any, without adjustment for interest or earnings during the period of delay. Furthermore, any Severance Payment owed to the Employee will be reduced by the amount of any compensation earned by the Employee for any consulting or employment services provided on a substantially full-time basis for the period to which the corresponding Severance Payment relates.

(iv) Benefits Continuation. Subject to the Employee signing and not revoking a release of claims in a form prescribed by the Corporation and the Employee remaining in strict compliance with the terms of this Agreement and any other written agreements between the Corporation and the Employee, the Corporation will pay the employer portion of the Employee’s COBRA premiums for health and dental insurance coverage under the Corporation’s group health and dental insurance plans for the same period of time the Employee remains eligible to receive the Severance Payment installments under Section 6(c)(iii) (up to a maximum of eighteen (18) months), provided the Employee timely elects COBRA coverage. Notwithstanding the foregoing, the Corporation will discontinue COBRA premium payments if, and at such time as, the Employee (A) is eligible to be covered under

-7-

the health and/or dental insurance policy of a new employer, (B) ceases to participate, for whatever reason, in the Corporation’s group insurance plans, or (C) ceases to be eligible to receive the Severance Payment installments under Section 6(b)(iii).

(d) Termination for Cause or Without Good Reason. If the Employee’s employment pursuant to this Agreement is terminated pursuant to subsection (c) of Section 5 hereof, or the Employee terminates this Agreement without Good Reason, then the Employee shall be entitled to and shall receive:

(ii) Accrued Obligations. In addition, the Employee shall be entitled to payment of all accrued vacation pay.

7. DEFINITIONS. Certain terms are defined where they first appear in this Agreement and are underlined for ease of reference. In addition, the following definitions shall apply for purposes of this Agreement.

“Cause” shall mean (a) acts during the Employment Period (i) resulting in a felony conviction under any Federal or state statute, or (ii) willful non-performance by the Employee of the Employee’s material employment duties required by this Agreement (other than by reason of the Employee’s physical or mental incapacity) after reasonable notice to the Employee and reasonable opportunity (not less than thirty (30) days) to cease such non-performance, or (b) the Employee willfully engaging in fraud or gross misconduct which is detrimental to the financial interests of the Corporation.

“Change in Control” shall have the same meaning ascribed to that term in the Long-Term Plan.

“Good Reason” shall mean the occurrence during the Employment Period, without the express written consent of the Employee, of any of the following:

(a)any material diminution in the nature of the Employee's authority, duties or responsibilities, or any removal of the Employee from, or any failure to reelect the Employee to, any such positions, except in connection with a termination of the employment of the Employee for Cause, permanent disability, or as a result of the Employee’s death or a termination of employment by the Employee other than for Good Reason;

(b)a material reduction by the Corporation in the Employee's Base Salary then in effect (other than any such reduction that is part of an across-the-board reduction of base salaries for all officers provided the percentage reduction in the Employee’s Base Salary is commensurate with the percentage reduction in the base salaries for all other officers);

-8-

(c) failure by the Corporation to continue in effect (without substitution of a substantially equivalent plan or a plan of substantially equivalent value) any compensation plan, bonus or incentive plan, stock purchase plan, stock option plan, life insurance plan, health plan, disability plan or other benefit plan or arrangement in which the Employee is then participating;

(d) any material breach by the Corporation of any provisions of this Agreement;

(e) the requirement by the Corporation that the Employee's principal place of employment be relocated more than thirty (30) miles from the Corporation’s address for notice in Section 11(i); or

(f) the Corporation's failure to obtain a satisfactory agreement from any successor to assume and agree to perform Corporation's obligations under this Agreement;

provided that the Employee notifies the Corporation of such condition set forth in clause (a), (b), (c), (d), (e) or (f) within ninety (90) days of its initial existence and the Corporation fails to remedy such condition within thirty (30) days of receiving such notice.

8. CONFIDENTIAL INFORMATION. The Employee shall not at any time during the Employment Period or thereafter disclose to others or use any trade secrets or any other confidential information belonging to the Corporation or any of its subsidiaries, including, without limitation, plans, programs and non-public information relating to customers of the Corporation or its subsidiaries, except as may be required to perform the Employee’s duties hereunder. The provisions of this Section 8 shall survive the termination of the Employee’s employment and consulting with the Corporation, provided that after the termination of the Employee’s employment with the Corporation, the restrictions contained in this Section 8 shall not apply to any such trade secret or confidential information which becomes generally known in the trade.

9. NON-COMPETITION.

(a) Non-competition. For a period of twenty-four (24) months immediately following the Employee’s termination of employment hereunder (the “Non-Competition Period”), the Employee shall not enter into endeavors that are competitive with the business or operations of the Corporation in the beauty industry, and shall not own an interest in, manage, operate, join, control, lend money or render financial or other assistance to or participate in or be connected with, as an officer, employee, director, partner, member, stockholder (except for passive investments of not more than a one percent (1%) interest in the securities of a publicly held corporation regularly traded on a national securities exchange or in an over-the-counter securities market), consultant, independent contractor, or otherwise, any individual, partnership, firm, corporation or other business organization or entity that engages in a business which competes with the Corporation.

(b) Non-solicitation. During the Non-Competition Period, the Employee shall not (i) hire or attempt to hire any employee of the Corporation, assist in such hiring by any person or encourage any employee to terminate the Employee’s relationship with the Corporation; or (ii) solicit, induce, or influence any proprietor, franchisee, partner, stockholder, lender, director, officer, employee, joint venturer, investor, consultant, agent, lessor, supplier, customer or any other person or entity which has a business relationship

-9-

with the Corporation or its affiliates at any time during the Non-Competition Period, to discontinue or reduce or modify the extent of such relationship with the Corporation or any of its subsidiaries.

10. ACKNOWLEDGMENT; REMEDIES; LITIGATION EXPENSES.

(a) Acknowledgment. The Employee has carefully read and considered the provisions of Sections 8 and 9 hereof and agrees that the restrictions set forth in such sections are fair and reasonable and are reasonably required for the protection of the interests of the Corporation, its officers, directors, shareholders, and other employees, for the protection of the business of the Corporation, and to ensure that the Employee devotes the Employee’s entire professional time, energy, and skills to the business of the Corporation. The Employee acknowledges that he is qualified to engage in businesses other than that described in Section 9. It is the belief of the parties, therefore, that the best protection that can be given to the Corporation that does not in any way infringe upon the rights of the Employee to engage in any unrelated businesses is to provide for the restrictions described in Section 9. In view of the substantial harm which would result from a breach by the Employee of Sections 8 or 9, the parties agree that the restrictions contained therein shall be enforced to the maximum extent permitted by law as more particularly set forth in Section 10(b) below. In the event that any of said restrictions shall be held unenforceable by any court of competent jurisdiction, the parties hereto agree that it is their desire that such court shall substitute a reasonable judicially enforceable limitation in place of any limitation deemed unenforceable and that as so modified, the covenant shall be as fully enforceable as if it had been set forth herein by the parties.

(b) Remedies. If the Employee violates any of the restrictive covenants set forth in Sections 8 or 9 above, and such violation continues after the Employee is notified in writing by the Corporation that he is in violation of the restrictive covenant, then (i) the Corporation shall have no further obligation to pay any portion of any Severance Payment and all such future payments shall be forfeited, and (ii) the Employee shall immediately return to the Corporation any Severance Payment previously paid to the Employee. The Employee acknowledges that any breach or threatened breach of Sections 8 or 9 would damage the Corporation irreparably and, consequently, the Corporation, in addition to any other remedies available to it, shall be entitled to preliminary and permanent injunction, without having to post any bond or other security.

(c) Attorneys Fees. The Corporation shall be entitled to receive from the Employee reimbursement for reasonable attorneys' fees and expenses incurred by the Corporation in successfully enforcing these provisions to final judgment and the Employee shall be entitled to receive from the Corporation reasonable attorney's fees and expenses incurred by the Employee in the event the Corporation is found to be not entitled to enforcement of these provisions.

11. MISCELLANEOUS.

(a) Successors and Assigns. This Agreement shall inure to the benefit of and shall be binding upon the successors and assigns of the Corporation, including any party with which the Corporation may merge or consolidate or to which it may transfer

-10-

substantially all of its assets. As used in this Agreement, the term “successor” shall include any person, firm, corporation or other business entity which at any time, whether by merger, purchase or otherwise, acquires all or substantially all of the capital stock or assets of the Corporation.

(b) Non-assignability and Non-transferability. The rights and obligations of the Employee under this Agreement are expressly declared and agreed to be personal, nonassignable and nontransferable during the Employee’s life.

(c) Limitation of Waiver. The waiver by either party hereto of its rights with respect to a breach of any provision of this Agreement by the other shall not operate or be construed as a waiver of any rights with respect to any subsequent breach.

(d) Complete Agreement. This Agreement is the entire agreement of the parties with respect to the subject matter hereof, and supersedes and replaces any and all prior agreements among the Corporation and the Employee with respect to the matters covered herein.

(e) Amendments. No modification, amendment, addition, alteration or waiver of any of the terms, covenants or conditions hereof shall be effective unless made in writing and duly executed by the Corporation and the Employee.

(f) Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together will constitute but one and the same agreement.

(g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota, without regard to the conflicts of law principles thereof.

(h) Severability. If any provision of this Agreement is determined to be invalid or unenforceable under any applicable statute or rule of law, it is to that extent to be deemed omitted and it shall not affect the validity or enforceability of any other provision.

(i) Notices. Any notice required or permitted to be given under this Agreement shall be in writing, and shall be deemed given when sent by registered or certified mail, postage prepaid, addressed as follows:

If to the Employee: Annette Miller

_______________________________

If to the Corporation:    Regis Corporation
    7201 Metro Boulevard
    Edina, Minnesota 55439
    Attn: General Counsel

or mailed to such other person and/or address as the party to be notified may hereafter have designated by notice given to the other party in a similar manner.

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(j) Tax Withholding. The Corporation may withhold from any amounts payable under this Agreement such federal, state and local income and employment taxes as the Corporation shall determine are required or authorized to be withheld pursuant to any applicable law or regulation.

(k) Section 409A. This Agreement is intended to provide for payments that satisfy, or are exempt from, the requirements of Sections 409A(a)((2), (3) and (4) of the Code, including current and future guidance and regulations interpreting such provisions, and should be interpreted accordingly. Except for any tax amounts withheld by the Corporation from the payments or other consideration hereunder and any employment taxes required to be paid by the Corporation, the Employee shall be responsible for payment of any and all taxes owed in connection with the consideration provided for in this Agreement.

(l) Mandatory Arbitration. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by binding arbitration in the manner set forth in this Section 11(l). Either party may submit any claim arising under or in connection with this Agreement for binding arbitration before an arbitrator in Hennepin County, Minnesota, in accordance with the commercial arbitration rules of the American Arbitration Association, as then in effect, or pursuant to such other form of alternative dispute resolution as the parties may agree (collectively, the “arbitration”). The arbitrator’s sole authority shall be to interpret and apply the provisions of this Agreement; the arbitrator shall not change, add to, or subtract from, any of its provisions. The arbitrator shall have the power to compel attendance of witnesses at the hearing. Any court having competent jurisdiction may enter a judgment based upon such arbitration. The arbitrator shall be appointed by mutual agreement of the Corporation and the claimant pursuant to the applicable commercial arbitration rules. The arbitrator shall be a professional person with a national reputation for expertise in employee benefit matters and who is unrelated to the claimant and any employees of the Corporation. All decisions of the arbitrator shall be final and binding on the claimant and the Corporation.

[signature page follows]

-12-

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the date first set forth above.



	REGIS CORPORATION

	By:	/s/ Eric Bakken
		Its: EVP

		/s/ Annette Miller
		Annette Miller

-13-

Exhibit No. 10(b)(*)

AMENDMENT TO

EMPLOYMENT AGREEMENT

THIS AMENDMENT (this “Amendment”), effective January 13, 2015, is made to that certain Employment Agreement dated August 31, 2012 by and between Regis Corporation, a Minnesota corporation (the “Corporation”), and Daniel Hanrahan (the “Executive”) (the “Employment Agreement”).

In consideration of the mutual agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Corporation and the Executive hereby agree as follows:

1. SEVERANCE PAYMENT. Section 6(b)(iii) of the Employment Agreement is amended and restated in its entirety to read:

(iii) Severance Payment. Subject to the Executive signing and not revoking a release of claims in a form prescribed by the Corporation and the Executive remaining in strict compliance with the terms of this Agreement and any other written agreements between the Corporation and the Executive, the Executive shall be entitled to receive the following amount as severance pay, subject to such amount being reduced as provided below (referred to in this Section 6(b)(iii) as the “Severance Payment”): (I) an amount equal to two times the Executive’s Base Salary as of the Date of Termination, payable in substantially equal installments in accordance with the Corporation’s normal payroll policies commencing on the Date of Termination and continuing for twenty-four (24) consecutive months, plus (II) an amount equal to the Bonus the Executive would have otherwise been paid for the fiscal year in which the Date of Termination occurs had the Executive remained employed by the Corporation through the payment date of any such Bonus, payable at the same time as bonuses are paid to other then-current senior executive officers of the Corporation under the then-applicable Short Term Plan for the fiscal year in which the Date of Termination occurs.

provided, however, that any Severance Payment installments payable under this Section 6(b)(iii) that otherwise would be paid during the first sixty (60) days after the Date of Termination will be delayed and included in the first installment paid to the Employee on the first payroll date that is more than sixty (60) days after the Date of Termination, and provided further that if the Employee is considered a “specified employee” (as defined in Treasury Regulation Section 1.409A-1(i)) as of the Date of Termination, then no payments of deferred compensation payable due to Employee’s separation from service for purposes of section 409A of the Code shall be made under this Agreement until the Corporation’s first regular payroll date that is after the first day of the seventh (7th) month following the Date of Termination and included with the installment payable on such payroll date, if any, without adjustment for interest or earnings during the period of delay. Furthermore, any Severance Payment owed to the Employee under subsections (I) or (II) above will be reduced by the amount of any compensation earned by the Employee for any consulting or employment services provided on a substantially full-time basis during the period of time

Employee receives Severance Payment installments under subsection (I) or (II) above, to the extent such compensation is payable by an entity unrelated to the Corporation.

2. NO OTHER CHANGES. Except as set forth herein, the Employment Agreement remains in full force and effect.

[signature page follows]

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment to Employment Agreement, effective as of the date first set forth above.



	REGIS CORPORATION

	By:	/s/ Eric Bakken
		Its: EVP

		/s/ Daniel Hanrahan
		Daniel Hanrahan

Exhibit No. 31.1

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Daniel J. Hanrahan, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Regis Corporation;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;


4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and


5.	The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s Board of Directors:


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.



January 29, 2015

/s/ Daniel J. Hanrahan
Daniel J. Hanrahan, President and Chief Executive Officer

Exhibit No. 31.2

CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Steven M. Spiegel, certify that:


1.	I have reviewed this quarterly report on Form 10-Q of Regis Corporation;


2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;


3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;


4.	The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:


(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;


(c)	Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and


(d)	Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and


5.	The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s Board of Directors:


(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and


(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.



January 29, 2015

/s/ Steven M. Spiegel
Steven M. Spiegel, Executive Vice President and Chief Financial Officer

Exhibit No. 32

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Regis Corporation (the Registrant) on Form 10-Q for the fiscal quarter ending December 31, 2014 filed with the Securities and Exchange Commission on the date hereof, Daniel J. Hanrahan, President and Chief Executive Officer of the Registrant, and Steven M. Spiegel, Executive Vice President and Chief Financial Officer of the Registrant, each hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:


(1)	The Quarterly Report on Form 10-Q complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and


(2)	The information contained in the Quarter Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Registrant.



January 29, 2015

/s/ Daniel J. Hanrahan
Daniel J. Hanrahan, President and Chief Executive Officer

January 29, 2015

/s/ Steven M. Spiegel
Steven M. Spiegel, Executive Vice President and Chief Financial Officer

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