Business Transformation To A
Fully-Franchised Model Considered Complete; Refranchised,
Negotiated Lease Buyouts, Or Closed At Lease Term 550 Company-Owned
Salons During The Fourth Quarter And 1,356 During The Fiscal
Year
Nominal Sales Continue To Improve; Q4 2021
System-Wide Same-Store Sales Up 4.2% Compared To Q4 2020
Corporate Re-Organization And Zero-Based
Budgeting Process Finalized, Resulting In A Right-Sized G&A
Structure To Support Regis As A Franchisor
Continued Rollout Of Proprietary Technology
Platform Opensalon® Pro; Over 2,100 Salons, Representing 37% Of
U.S. Franchise Salons, Are Now Running Or Have Signed Contracts To
Install
Regis Corporation (NYSE: RGS):
Three Months Ended June
30,
Twelve Months Ended June
30,
(Dollars in thousands)
2021
2020
2021
2020
Consolidated revenue
$
99,130
$
60,143
$
415,113
$
669,729
System-wide revenue (1)
$
293,981
$
119,417
$
1,086,024
$
1,367,567
System-wide same-store sales comps
4.2
%
(20.2
)%
(25.8
)%
(4.4
)%
Two-year system-wide same-store sales
comps
(21.0
)%
N/A
(28.3
)%
N/A
Operating loss
$
(27,265
)
$
(68,567
)
$
(104,152
)
$
(145,338
)
Loss from continuing operations
$
(34,339
)
$
(73,654
)
$
(113,331
)
$
(172,194
)
Diluted loss per share from continuing
operations
$
(0.95
)
$
(2.05
)
$
(3.15
)
$
(4.79
)
EBITDA (2)
$
(26,677
)
$
(37,478
)
$
(69,210
)
$
(108,947
)
as a percent of revenue
(26.9
)%
(62.3
)%
(16.7
)%
(16.3
)%
As adjusted (2)
Net loss, as adjusted
$
(26,500
)
$
(36,211
)
$
(105,672
)
$
(21,714
)
Diluted loss per share, as adjusted
$
(0.74
)
$
(1.01
)
$
(2.94
)
$
(0.60
)
EBITDA, as adjusted (2)
$
(23,246
)
$
(33,845
)
$
(79,225
)
$
19,512
as a percent of revenue
(23.5
)%
(56.3
)%
(19.1
)%
2.9
%
_______________________________________________________________________________
(1)
Represents total sales within the
system.
(2)
See GAAP to non-GAAP reconciliations,
within the attached section titled "Non-GAAP Reconciliations."
Regis Corporation (NYSE: RGS), a leader in the haircare
industry, whose primary business is franchising technology-enabled
hair salons, today reported a fourth quarter 2021 net loss from
continuing operations of $34.3 million, or $0.95 loss per diluted
share as compared to net loss of $73.7 million or $2.05 loss per
diluted share in the fourth quarter of 2020. The Company's fourth
quarter 2021 reported results included $7.8 million of discrete
items. Excluding discrete items, the Company reported fourth
quarter 2021 adjusted net loss of $26.5 million, or $0.74 loss per
diluted share as compared to adjusted net loss of $36.2 million, or
$1.01 per diluted share for the same period last year. The
year-over-year improvement in adjusted net loss was driven
primarily by government-mandated salon closures in the prior year
due to COVID-19. The improvement in adjusted net loss was partially
offset by an increase in the loss from the sale of salons to
franchisees of $7.1 million year-over-year due to lower proceeds
per salon.
Total revenue in the quarter of $99.1 million increased $39.0
million, or 64.8%, year-over-year driven primarily by mandated
salon closures in the prior year due to the COVID-19 pandemic.
Fourth quarter adjusted EBITDA loss of $23.2 million decreased
$10.6 million, versus adjusted EBITDA loss of $33.8 million in the
same period last year. Excluding the $8.2 million adjusted loss and
$1.2 adjusted loss from the sale of company-owned salons during the
current and prior year quarter, respectively, adjusted EBITDA loss
of $15.0 million was $17.7 million favorable versus the same period
last year. This was driven primarily by government-mandated salon
closures in response to COVID-19 in the prior year.
On a full year basis, adjusted EBITDA loss of $79.2 million
increased $98.7 million versus adjusted EBITDA income of $19.5
million in the same period last year. Excluding the $16.7 million
loss and $49.7 million gain from the sale of company-owned salons
during the current and prior year, respectively, adjusted EBITDA
loss of $62.5 million was $32.4 million unfavorable versus the same
period last year and was driven primarily by the impact of COVID-19
on same-store sales in the current year and the elimination of
EBITDA that was generated in the prior year from the net 747
company-owned salons that were sold and converted to the Company’s
asset-light franchise portfolio over the past 12 months.
Felipe Athayde, President and Chief Executive Officer,
commented, "While we are still feeling the effects of the pandemic,
Regis is well-positioned heading into fiscal year 2022 due to our
achievements during a time of unprecedented challenges in fiscal
year 2021. The Regis of today is an entirely different company when
compared to the beginning of fiscal year 2021, from our management
team to our technology platform and everything in between. We have
a new team, a brand-centric focus to drive sales, the right
business model for growth, and the right-sized organizational
structure and technology platform to support and drive that
growth."
Fourth Quarter Segment
Results
Franchise Salons
Three Months Ended June
30,
Increase (Decrease)
Twelve Months Ended June
30,
Increase (Decrease)
(Dollars in millions) (1)
2021
2020
2021
2020
Revenue
Product
$
15.6
$
7.2
$
8.4
$
56.7
$
50.4
$
6.3
Product sold to TBG locations
—
—
—
—
2.0
(2.0
)
Product
$
15.6
$
7.2
$
8.4
$
56.7
$
52.4
$
4.3
Royalties and fees
26.7
7.3
19.4
88.1
73.4
14.7
Franchise rental income
31.5
30.3
1.2
127.4
127.2
0.2
Total franchised salons revenue
$
73.8
$
44.8
$
29.0
$
272.1
$
253.0
$
19.1
Franchise same-store sales comps (2)
4.4
%
(20.4
)%
(24.5
)%
(4.4
)%
Franchise two-year same-store sales comps
(2)
(20.2
)%
N/A
(27.2
)%
N/A
EBITDA, as Adjusted
$
11.3
$
1.4
$
9.9
$
41.0
$
37.9
$
3.1
as a percent of revenue
15.3
%
3.1
%
15.1
%
15.0
%
as a percent of adjusted revenue (3)
32.1
%
9.7
%
33.4
%
34.3
%
Total Franchise Salons
5,563
5,209
354
as a percent of total Franchise and
Company-owned salons
95.3
%
76.1
%
_______________________________________________________________________________
(1)
Variances calculated on amounts shown in
millions may result in rounding differences.
(2)
TBG is excluded from same-store sales in
all periods
(3)
Adjusted revenue excludes non-margin
revenue. See Non-GAAP reconciliation
Fourth quarter Franchise revenue was $73.8 million, a $29.0
million, or 64.7% increase compared to the prior year quarter.
Royalties and fees were $26.7 million, a $19.4 million, or 265.8%
increase versus the same period last year. Product sales to
franchisees of $15.6 million increased $8.4 million. Both increases
were due to government-mandated salon closures in the prior year.
Franchise adjusted EBITDA of $11.3 million increased $9.9 million,
or 707.1% year-over-year primarily due to an increase in royalties
and a decrease in bad debt.
Company-Owned Salons
Three Months Ended June
30,
Increase (Decrease)
Twelve Months Ended June
30,
Increase (Decrease)
(Dollars in millions) (1)
2021
2020
2021
2020
Total Revenue
$
25.3
$
15.3
$
10.0
$
143.0
$
416.7
$
(273.7
)
Company-owned same-store sales comps
(7.0
)%
(18.9
)%
(33.4
)%
(4.4
)%
Company-owned two-year same-store sales
comps
(30.4
)%
N/A
(35.2
)%
N/A
EBITDA, as Adjusted
$
(13.3
)
$
(21.6
)
$
8.3
$
(47.5
)
$
(6.6
)
$
(40.9
)
as a percent of revenue
(52.6
)%
(141.2
)%
(33.2
)%
(1.6
)%
Total Company-owned Salons
276
1,632
(1,356
)
as a percent of total Franchise and
Company-owned salons
4.7
%
23.9
%
_______________________________________________________________________________
(1)
Variances calculated on amounts shown in
millions may result in rounding differences.
Fourth quarter revenue for the Company-owned salon segment
increased $10.0 million versus the prior year to $25.3 million. The
year-over-year increase in revenue was driven by the
government-mandated closure of salons during fiscal year 2020 due
to the COVID-19 pandemic.
Fourth quarter adjusted EBITDA loss of $13.3 million decreased
$8.4 million versus the same period last year driven primarily by
the government-mandated closure of salon in fiscal year 2020 due to
the COVID-19 pandemic.
Non-GAAP reconciliations
For GAAP to non-GAAP reconciliations, please refer to the
attached section titled "Non-GAAP Reconciliations". A complete
reconciliation of reported earnings to adjusted earnings is
included in this press release and is available on the Company’s
website at www.regiscorp.com.
Earnings Webcast
Regis Corporation will host a conference call via webcast
discussing fourth quarter results on August 26, 2021, at 9 a.m.,
Central time. Interested parties are invited to participate in the
live webcast by registering for the event at
www.regiscorp.com/investor-relations.html. A replay of the
presentation will be available on our website at
www.regiscorp.com/investor-relations.html.
About Regis Corporation
Regis Corporation (NYSE:RGS) is a leader in the beauty salon
industry. As of June 30, 2021, the Company franchised, owned or
held ownership interests in 5,917 worldwide locations. Regis’
franchised and corporate locations operate under concepts such as
Supercuts®, SmartStyle®, Cost Cutters®, Roosters® and First Choice
Haircutters®. Regis maintains an ownership interest in Empire
Education Group in the U.S. For additional information about the
Company, including a reconciliation of certain non-GAAP financial
information and certain supplemental financial information, please
visit the Investor Information section of the corporate website at
www.regiscorp.com.
This press release contains or may contain “forward-looking
statements” within the meaning of the federal securities laws,
including statements concerning anticipated future events and
expectations that are not historical facts. These forward-looking
statements are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. The
forward-looking statements in this document reflect management’s
best judgment at the time they are made, but all such statements
are subject to numerous risks and uncertainties, which could cause
actual results to differ materially from those expressed in or
implied by the statements herein. Such forward-looking statements
are often identified herein by use of words including, but not
limited to, “may,” “believe,” “project,” “forecast,” “expect,”
“estimate,” “anticipate,” and “plan.” In addition, the following
factors could affect the Company's actual results and cause such
results to differ materially from those expressed in
forward-looking statements. These factors include a potential
material adverse impact on our business and results of operations
as a result of the uncertain duration and severity of the COVID-19
pandemic, including any adverse impact from the Delta variant; the
impact of the COVID-19 pandemic on our key suppliers; consumer
shopping trends and changes in manufacturer distribution channels;
changes in regulatory and statutory laws including increases in
minimum wages; laws and regulations could require us to modify
current business practices and incur increased costs; changes in
economic conditions; changes in consumer tastes and fashion trends;
the continued ability of the Company to implement its strategy,
priorities and initiatives including the re-engineering of our
corporate and field infrastructure; new merchandising strategy; our
and our franchisees' ability to attract, train and retain talented
stylists; financial performance of our franchisees; success of the
sale of salons to franchisees; the ability to operate or sell the
salons transferred back from TBG; our ability to manage cyber
threats and protect the security of potentially sensitive
information about our guests, employees, vendors or Company
information; the ability of the Company to maintain a satisfactory
relationship with Walmart; marketing efforts to drive traffic to
our franchisees' salons; our ability to maintain and enhance the
value of our brands; reliance on information technology systems;
reliance on external vendors; the use of social media; failure to
standardize operating processes across brands; exposure to
uninsured or unidentified risks; Opensalon® Pro may not yield the
intended results on timing and amounts; compliance with credit
facility covenants and access to the existing revolving credit
facility; ability to re-finance our existing credit facility or the
ability to re-finance at a similar rate; if our capital investments
in technology do not achieve appropriate returns; premature
termination of agreements with our franchisees; financial
performance of Empire Education Group; the continued ability of the
Company to implement cost reduction initiatives; continued ability
to compete in our business markets; reliance on our management team
and other key personnel; the continued ability to maintain an
effective system of internal controls over financial reporting;
changes in tax exposure; potential litigation and other legal or
regulatory proceedings could have an adverse effect on our business
or other factors not listed above. Additional information
concerning potential factors that could affect future financial
results is set forth under Item 1A of Form 10-K. We undertake no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise. However, your attention is directed to any further
disclosures made in our subsequent annual and periodic reports
filed or furnished with the SEC on Forms 10-K, 10-Q and 8-K and
Proxy Statements on Schedule 14A.
REGIS CORPORATION
CONDENSED CONSOLIDATED BALANCE
SHEET
(Dollars in thousands, except
per share data)
June 30,
2021
2020
ASSETS
Current assets:
Cash and cash equivalents
$
19,191
$
113,667
Receivables, net
27,372
31,030
Inventories
22,993
62,597
Other current assets
17,103
19,138
Total current assets
86,659
226,432
Property and equipment, net
23,113
57,176
Goodwill
229,582
227,457
Other intangibles, net
3,761
4,579
Right of use asset
611,880
786,216
Other assets
41,388
40,934
Total assets
$
996,383
$
1,342,794
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Accounts payable
$
27,157
$
50,918
Accrued expenses
54,857
48,825
Short-term lease liability
116,471
137,271
Total current liabilities
198,485
237,014
Long-term debt, net
186,911
177,500
Long-term lease liability
518,866
680,454
Long-term financing liabilities
—
27,981
Other non-current liabilities
75,075
94,142
Total liabilities
979,337
1,217,091
Commitments and contingencies
Shareholders' equity:
Common stock, $0.05 par value; issued and
outstanding, 35,795,844 and 35,625,716 common shares at June 30,
2021 and 2020, respectively
1,790
1,781
Additional paid-in capital
25,102
22,011
Accumulated other comprehensive income
9,543
7,449
Retained (deficit) earnings
(19,389
)
94,462
Total shareholders' equity
17,046
125,703
Total liabilities and shareholders'
equity
$
996,383
$
1,342,794
REGIS CORPORATION
CONDENSED CONSOLIDATED
STATEMENT OF OPERATIONS
(Dollars and shares in
thousands, except per share data)
Three Months Ended June
30,
Twelve Months Ended June
30,
2021
2020
2021
2020
Revenues:
Service
$
18,080
$
9,405
$
108,120
$
331,538
Product
22,879
13,070
91,544
137,586
Royalties and fees
26,664
7,340
88,057
73,402
Franchise rental income
31,507
30,328
127,392
127,203
Total revenue
99,130
60,143
415,113
669,729
Operating expenses:
Cost of service
12,703
9,615
79,144
222,279
Cost of product
24,327
9,441
79,167
84,698
Site operating expenses
14,507
8,611
51,463
71,543
General and administrative
28,014
25,766
105,433
130,953
Rent
6,802
12,958
40,930
76,382
Franchise rent expense
31,507
30,328
127,392
127,203
Depreciation and amortization
5,330
9,466
22,713
36,952
Long-lived asset impairment
3,205
22,560
13,023
22,560
TBG mall restructuring
—
(35
)
—
2,333
Goodwill impairment
—
—
—
40,164
Total operating expenses
126,395
128,710
519,265
815,067
Operating loss
(27,265
)
(68,567
)
(104,152
)
(145,338
)
Other (expense) income:
Interest expense
(3,187
)
(2,907
)
(13,813
)
(7,522
)
Loss from sale of salon assets to
franchisees
(8,233
)
(1,181
)
(16,696
)
(27,306
)
Interest income and other, net
286
165
15,902
3,353
Loss from continuing operations before
income taxes
(38,399
)
(72,490
)
(118,759
)
(176,813
)
Income tax benefit (expense)
4,060
(1,164
)
5,428
4,619
Loss from continuing operations
(34,339
)
(73,654
)
(113,331
)
(172,194
)
Income from discontinued operations, net
of income taxes
—
79
—
832
Net loss
$
(34,339
)
$
(73,575
)
$
(113,331
)
$
(171,362
)
Net loss per share:
Basic and diluted:
Loss from continuing operations
$
(0.95
)
$
(2.05
)
$
(3.15
)
$
(4.79
)
Income from discontinued operations
—
—
—
0.02
Net loss per share:, basic and diluted
(1)
$
(0.95
)
$
(2.05
)
$
(3.15
)
$
(4.77
)
Weighted average common and common
equivalent shares outstanding:
Basic and diluted
36,038
35,871
35,956
35,936
_______________________________________________________________________________
(1)
Total is a recalculation; line items
calculated individually may not sum to total due to rounding.
REGIS CORPORATION
CONSOLIDATED STATEMENT OF CASH
FLOWS
(Dollars in thousands)
Twelve Months Ended June
30,
2021
2020
Cash flows from operating activities:
Net loss
$
(113,331)
$
(171,362)
Adjustments to reconcile net loss used in
operating activities
Non-cash adjustments related to
discontinued operations
—
(1,098)
Depreciation and amortization
17,871
33,101
Salon asset impairment
—
3,851
Long-lived asset impairment
13,023
22,560
Deferred income taxes
(3,388)
(3,934)
Inventory reserve
12,068
—
Gain from disposal of distribution center
assets
(14,997)
—
Gain from sale of company headquarters,
net
—
(2,513)
Loss from sale of salon assets to
franchisees, net
16,696
27,306
Goodwill impairment
—
40,164
Stock-based compensation
3,254
3,275
Amortization of debt discount and
financing costs
1,839
398
Other non-cash items affecting
earnings
(351)
(539)
Changes in operating assets and
liabilities (1):
Receivables
(279)
(3,902)
Inventories
17,879
(2,255)
Income tax receivable
1,295
(1,804)
Other current assets
1,658
2,827
Other assets
(2,896)
(10,094)
Accounts payable
(21,669)
4,588
Accrued expenses
5,296
(27,622)
Net lease liabilities
(19,248)
276
Other non-current liabilities
(14,603)
368
Net cash used in operating activities:
(99,883)
(86,409)
Cash flows from investing activities:
Capital expenditures
(11,475)
(37,494)
Proceeds from sale of company
headquarters
—
8,996
Proceeds from sale of assets to
franchisees
8,437
91,616
Costs associated with sale of assets to
franchisees
(261)
(2,089)
Proceeds from company-owned life insurance
policies
1,200
—
Net cash (used in) provided by investing
activities:
(2,099)
61,029
Cash flows from financing activities:
Borrowings on revolving credit
facility
10,000
213,000
Repayments of revolving credit
facility
(589)
(125,500)
Repurchase of common stock
—
(28,246)
Minority interest buyout
(562)
—
Distribution center lease payments
(724)
(769)
Taxes paid for shares withheld
(348)
(2,320)
Net cash provided by financing
activities:
7,777
56,165
Effect of exchange rate changes on cash
and cash equivalents
477
(284)
(Decrease) increase in cash, cash
equivalents and restricted cash
(93,728)
30,501
Cash, cash equivalents and restricted
cash:
Beginning of year
122,880
92,379
End of year
$
29,152
$
122,880
_______________________________________________________________________________
(1)
Changes in operating assets and
liabilities exclude assets and liabilities sold or acquired.
SYSTEM-WIDE SAME-STORE SALES
(1):
Three Months Ended
June 30, 2021
June 30, 2020
Service
Retail
Total
Service
Retail
Total
SmartStyle
2.4
%
(14.0
)%
(1.7
)%
(17.9
)%
(17.1
)%
(17.7
)%
Supercuts
12.4
(10.1
)
10.9
(23.1
)
(12.6
)
(22.5
)
Portfolio Brands
(0.5
)
(14.7
)
(2.2
)
(16.2
)
(13.3
)
(15.9
)
Total
6.8
%
(13.2
)%
4.2
%
(20.9
)%
(14.6
)%
(20.2
)%
Twelve Months Ended
June 30, 2021
June 30, 2020
Service
Retail
Total
Service
Retail
Total
SmartStyle
(26.1
)%
(28.5
)%
(26.7
)%
(3.6
)%
(10.1
)%
(5.5
)%
Supercuts
(25.9
)
(23.5
)
(25.8
)
(3.8
)
(10.7
)
(4.2
)
Portfolio Brands
(25.3
)
(20.6
)
(24.8
)
(3.3
)
(7.2
)
(3.7
)
Total
(25.8
)%
(25.5
)%
(25.8
)%
(3.6
)%
(9.4
)%
(4.4
)%
_______________________________________________________________________________
(1)
System-wide same-store sales in fiscal
year 2021 are calculated as the change in sales for locations that
were open on a specific day of the week during the current period
and the corresponding prior period. System-wide same-store sales in
fiscal year 2020 are calculated as the total change in sales for
system-wide franchise and company-owned locations that were open
for more than one year that were open on a specific day of the week
during the current period and the corresponding prior period. For
both years, quarterly and year-to-date system-wide same-store sales
are the sum of the system-wide same-store sales computed on a daily
basis. Franchise salons that do not report daily sales are excluded
from same-store sales. System-wide same-store sales are calculated
in local currencies to remove foreign currency fluctuations from
the calculation.
REGIS CORPORATION
System-Wide Location
Counts
June 30,
2021
2020
FRANCHISE SALONS:
SmartStyle/Cost Cutters in Walmart
Stores
1,666
1,317
Supercuts
2,386
2,508
Portfolio Brands (1)
1,357
1,217
Total North American Salons
5,409
5,042
Total International Salons (2)
154
167
Total Franchise Salons
5,563
5,209
as a percent of total Franchise and
Company-owned salons
95.3
%
76.1
%
COMPANY-OWNED SALONS:
SmartStyle/Cost Cutters in Walmart
Stores
91
751
Supercuts
35
210
Portfolio Brands (1)
107
505
Mall-based (3)
43
166
Total Company-owned Salons
276
1,632
as a percent of total Franchise and
Company-owned salons
4.7
%
23.9
%
OWNERSHIP INTEREST LOCATIONS:
Equity ownership interest locations
78
82
Grand Total, System-wide
5,917
6,923
_______________________________________________________________________________
(1)
Portfolio Brands was previously referred
to as Signature Style.
(2)
Canadian and Puerto Rican salons are
included in the North American salon totals.
(3)
The mall-based salons were acquired from
TBG on December 31, 2019. They are included in continuing
operations under the Company-owned operating segment beginning
January 1, 2020.
Non-GAAP Reconciliations:
We believe our presentation of non-GAAP operating loss, net
(loss), net (loss) per diluted share, and other non-GAAP financial
measures provides meaningful insight into our ongoing operating
performance and an alternative perspective of our results of
operations. Presentation of the non-GAAP measures allows investors
to review our core ongoing operating performance from the same
perspective as management and the Board of Directors. These
non-GAAP financial measures provide investors an enhanced
understanding of our operations, facilitate investors’ analyses and
comparisons of our current and past results of operations and
provide insight into the prospects of our future performance. We
also believe the non-GAAP measures are useful to investors because
they provide supplemental information that research analysts
frequently use to analyze financial performance.
The method we use to produce non-GAAP results is not in
accordance with U.S. GAAP and may differ from methods used by other
companies. These non-GAAP results should not be regarded as a
substitute for corresponding U.S. GAAP measures, but instead should
be utilized as a supplemental measure of operating performance in
evaluating our business. Non-GAAP measures do have limitations as
they do not reflect certain items that may have a material impact
upon our reported financial results. As such, these non-GAAP
measures should be viewed in conjunction with our financial
statements prepared in accordance with U.S. GAAP.
Non-GAAP reconciling items for the three and twelve months
ended June 30, 2021 and 2020:
The following information is provided to give qualitative and
quantitative information related to items impacting comparability.
Items impacting comparability are not defined terms within U.S.
GAAP. Therefore, our non-GAAP financial information may not be
comparable to similarly titled measures reported by other
companies. We determine the items to consider as “items impacting
comparability” based on how management views our business, makes
financial, operating and planning decisions and evaluates the
Company’s ongoing performance. The following items have been
excluded from our non-GAAP results:
- Employee litigation reserve
- Marketing impairment
- CEO transition
- Professional fees
- Severance expense
- Corporate office transition
- Benefit from lease liability decrease in excess of previously
impaired ROUA ("Lease liability benefit")
- Lease termination fees
- Real estate fees
- Asset retirement obligation
- Long-lived asset impairment
- TBG restructuring
- Goodwill impairment
- Gain on distribution centers
- Goodwill derecognition
- TBG discontinued operations
REGIS CORPORATION
Reconciliation Of Selected
U.S. GAAP To Non-GAAP Financial Measures
(Dollars in thousands, except
per share data)
Reconciliation of U.S. GAAP
operating loss and net loss to equivalent non-GAAP measures
Three Months Ended June
30,
Twelve Months Ended June
30,
U.S. GAAP financial line
item
2021
2020
2021
2020
U.S. GAAP revenue
$
99,130
$
60,143
$
415,113
$
669,729
U.S. GAAP operating loss
$
(27,265
)
$
(68,567
)
$
(104,152
)
$
(145,338
)
Non-GAAP operating expense adjustments
(1)
Employee litigation reserve
Site operating expenses
—
—
—
(600
)
Marketing impairment
Site operating expenses
—
1,653
—
1,653
CEO transition
General and administrative
—
—
(694
)
—
Professional fees
General and administrative
3,603
460
7,026
681
Severance
General and administrative
1,606
1,534
4,545
9,588
Corporate office transition
Rent
—
100
—
1,019
Lease liability benefit
Rent
(8,727
)
—
(20,022
)
—
Lease termination fees
Rent
7,020
—
13,544
—
Real estate fees
Rent
49
—
583
—
Asset retirement obligation
Depreciation and amortization
1,280
—
4,726
—
Long-lived asset impairment
Long-lived asset impairment
3,205
22,560
13,023
22,560
TBG restructuring
TBG restructuring
—
(35
)
—
2,333
Goodwill impairment
Goodwill impairment
—
—
—
40,164
Total non-GAAP operating expense
adjustments
8,036
26,272
22,731
77,398
Non-GAAP operating loss (1)
$
(19,229
)
$
(42,295
)
$
(81,421
)
$
(67,940
)
U.S. GAAP net loss
$
(34,339
)
$
(73,575
)
$
(113,331
)
$
(171,362
)
Non-GAAP net loss adjustments:
Non-GAAP operating expense adjustments
8,036
26,272
22,731
77,398
Corporate office transition
Interest income and other,
net
—
—
—
(2,513
)
Gain on distribution centers
Interest income and other,
net
(120
)
—
(14,997
)
—
Goodwill derecognition
Interest income and other,
net
—
—
—
76,966
Income tax impact on Non-GAAP adjustments
(2)
Income taxes
(77
)
11,171
(75
)
(1,371
)
TBG discontinued operations, net of income
tax
Loss from discontinued
operations, net of tax
—
(79
)
—
(832
)
Total non-GAAP net loss adjustments
7,839
37,364
7,659
149,648
Non-GAAP net loss
$
(26,500
)
$
(36,211
)
$
(105,672
)
$
(21,714
)
_______________________________________________________________________________
(1)
Adjusted operating margins for the three
months ended June 30, 2021 and 2020, were (19.4)% and (70.3)%,
respectively, and were (19.6)% and (10.1)% for the twelve months
ended June 30, 2021 and 2020, respectively, and are calculated as
non-GAAP operating loss divided by non-GAAP revenue for each
respective period.
(2)
Based on projected statutory effective tax
rate analyses, the non-GAAP tax provision was calculated to be
approximately 1% and 22% for the three and twelve months ended June
30, 2021 and 2020, respectively, for all non-GAAP operating expense
adjustments.
REGIS CORPORATION
Reconciliation Of Selected
U.S. GAAP To Non-GAAP Financial Measures
(Dollars in thousands, except
per share data)
Reconciliation of U.S. GAAP
net loss per diluted share to non-GAAP net loss per diluted
share
Three Months Ended June
30,
Twelve Months Ended June
30,
2021
2020
2021
2020
U.S. GAAP net loss per diluted
share
$
(0.953
)
$
(2.051
)
$
(3.152
)
$
(4.769
)
Employee litigation reserve (1)
—
—
—
(0.013
)
Marketing impairment (1)
—
0.036
—
0.036
CEO transition (1)
—
—
(0.019
)
—
Professional fees (1)
0.100
0.010
0.192
0.015
Severance (1)
0.044
0.034
0.125
0.208
Corporate office transition (1)
—
—
—
(0.033
)
Lease liability benefit (1)
(0.240
)
—
(0.550
)
—
Lease termination fees (1)
0.193
—
0.373
—
Real estate fees (1)
0.001
—
0.016
—
Asset retirement obligation (1)
0.035
—
0.130
—
Long-lived asset impairment (1)
0.088
0.492
0.359
0.490
TBG restructuring (1)
—
(0.001
)
—
0.050
Goodwill impairment (1)
—
—
—
0.872
Goodwill derecognition (1)
—
—
—
1.671
Gain on distribution centers (1)
(0.003
)
—
(0.413
)
—
TBG discontinued operations, net of
tax
—
(0.002
)
—
(0.023
)
CARES Act
—
—
—
0.408
Tax asset valuation
—
0.473
—
0.484
Impact of change in weighted average
shares (3)
—
—
—
—
Non-GAAP net loss per diluted share (2)
(3)
$
(0.735
)
$
(1.009
)
$
(2.939
)
$
(0.604
)
U.S. GAAP Weighted average share - basic
and diluted
36,038
35,871
35,956
35,936
Non-GAAP Weighted average shares - diluted
(2)
36,038
35,871
35,956
35,936
_______________________________________________________________________________
(1)
Based on projected statutory effective tax
rate analyses, the non-GAAP tax provision was calculated to be
approximately 1% for the three and twelve months ended June 30,
2021, and 22% for the three and twelve months ended June 30, 2020,
for all non-GAAP operating expense adjustments.
(2)
Total is a recalculation; line items
calculated individually may not sum to total due to rounding.
(3)
Non-GAAP net loss per share reflects the
weighted average shares associated with non-GAAP net loss, which
includes the dilutive effect of common stock equivalents. The
impact of the adjustments described above result in the impact of
the common stock equivalents to be dilutive to the non-GAAP net
loss per share. For the three months and twelve months ended June
30, 2021 and 2020, the impact of the adjustments described above
resulted in a non-GAAP net loss, therefore, the impact of the
common stock equivalents is not dilutive.
REGIS CORPORATION
Reconciliation Of Reported
U.S. GAAP Net Income (Loss) To Adjusted EBITDA, A Non-GAAP
Financial Measure
(Dollars in thousands)
(Unaudited)
Adjusted EBITDA
EBITDA represents U.S. GAAP net income
(loss) for the respective period excluding interest expense, income
taxes and depreciation and amortization expense. The Company
defines adjusted EBITDA, as EBITDA excluding identified items
impacting comparability for each respective period. For the three
and twelve months ended June 30, 2021 and 2020, the items impacting
comparability consisted of the items identified in the non-GAAP
reconciling items for the respective periods. The impacts of the
income tax provision adjustments associated with the above items
are already included in the U.S. GAAP reported net income (loss) to
EBITDA reconciliation, therefore there is no adjustment needed for
the reconciliation from EBITDA to adjusted EBITDA.
Three Months Ended June 30,
2021
Franchise
Company-owned
Corporate
Consolidated (1)
Consolidated reported net income
(loss), as reported (U.S. GAAP)
$
11,917
$
(19,292
)
$
(26,964
)
$
(34,339
)
Interest expense, as reported
—
—
3,187
3,187
Income taxes, as reported
—
—
(4,060
)
(4,060
)
Depreciation and amortization, as
reported
153
3,651
1,526
5,330
Long-lived asset impairment, as
reported
—
3,205
—
3,205
EBITDA (as defined above)
$
12,070
$
(12,436
)
$
(26,311
)
$
(26,677
)
Professional fees
—
—
3,603
3,603
Severance
—
—
1,606
1,606
Lease liability benefit
(716
)
(8,011
)
—
(8,727
)
Lease termination fees
(103
)
7,123
—
7,020
Real estate fees
21
28
—
49
Gain on distribution centers
—
—
(120
)
(120
)
Adjusted EBITDA, non-GAAP financial
measure
$
11,272
$
(13,296
)
$
(21,222
)
$
(23,246
)
Three Months Ended June 30,
2020
Franchise
Company-owned
Corporate
Consolidated (1)
Consolidated reported net loss, as
reported (U.S. GAAP)
$
(531
)
$
(49,763
)
$
(23,281
)
$
(73,575
)
Interest expense, as reported
—
—
2,907
2,907
Income taxes, as reported
—
—
1,164
1,164
Depreciation and amortization, as
reported
260
7,269
1,937
9,466
Long-lived asset impairment, as
reported
1,712
20,848
—
22,560
EBITDA (as defined above)
$
1,441
$
(21,646
)
$
(17,273
)
$
(37,478
)
Professional fees
—
—
460
460
Severance
—
—
1,534
1,534
Corporate office transition
—
—
100
100
TBG restructuring
(35
)
—
—
(35
)
Marketing impairment
—
—
1,653
1,653
TBG discontinued operations, net of
tax
—
—
(79
)
(79
)
Adjusted EBITDA, non-GAAP financial
measure
$
1,406
$
(21,646
)
$
(13,605
)
$
(33,845
)
_______________________________________________________________________________
(1)
Consolidated EBITDA margins for the three
months ended June 30, 2021, and 2020, were (26.9)% and (62.3)%,
respectively, and are calculated as EBITDA (as defined above)
divided by U.S. GAAP revenue for each respective period.
Consolidated adjusted EBITDA margin for the three months ended June
30, 2021, and 2020 were (23.5)% and (56.3)%, respectively, and are
calculated as consolidated adjusted EBITDA (as defined above)
divided by consolidated adjusted revenue for each respective
period.
Twelve Months Ended June 30,
2021
Franchise
Company-owned
Corporate
Consolidated (1)
Consolidated reported net income
(loss), as reported (U.S. GAAP)
$
40,652
$
(70,032
)
$
(83,951
)
$
(113,331
)
Interest expense, as reported
—
—
13,813
13,813
Income taxes, as reported
—
—
(5,428
)
(5,428
)
Depreciation and amortization, as
reported
1,049
14,730
6,934
22,713
Long-lived asset impairment, as
reported
726
12,297
—
13,023
EBITDA (as defined above)
$
42,427
$
(43,005
)
$
(68,632
)
$
(69,210
)
CEO transition
—
—
(694
)
(694
)
Professional fees
—
—
7,026
7,026
Severance
—
—
4,545
4,545
Lease liability benefit
(1,322
)
(18,700
)
—
(20,022
)
Lease termination fees
(103
)
13,647
—
13,544
Real estate fees
22
561
—
583
Gain on distribution centers
—
—
(14,997
)
(14,997
)
Adjusted EBITDA, non-GAAP financial
measure
$
41,024
$
(47,497
)
$
(72,752
)
$
(79,225
)
Twelve Months Ended June 30,
2020
Franchise
Company-owned
Corporate
Consolidated (1)
Consolidated reported net income
(loss), as reported (U.S. GAAP)
$
32,886
$
(96,128
)
$
(108,120
)
$
(171,362
)
Interest expense, as reported
—
—
7,522
7,522
Income taxes, as reported
—
—
(4,619
)
(4,619
)
Depreciation and amortization, as
reported
922
29,113
6,917
36,952
Long-lived asset impairment, as
reported
1,712
20,848
—
22,560
EBITDA (as defined above)
$
35,520
$
(46,167
)
$
(98,300
)
$
(108,947
)
Employee litigation reserve
—
(600
)
—
(600
)
Marketing impairment
—
—
1,653
1,653
Professional fees
—
—
681
681
Severance
—
—
9,588
9,588
Corporate office transition
—
—
(1,494
)
(1,494
)
TBG restructuring
2,333
—
—
2,333
Goodwill impairment, as reported
—
40,164
—
40,164
Goodwill derecognition
—
—
76,966
76,966
TBG discontinued operations, net of
tax
—
—
(832
)
(832
)
Adjusted EBITDA, non-GAAP financial
measure
$
37,853
$
(6,603
)
$
(11,738
)
$
19,512
_______________________________________________________________________________
(1)
Consolidated EBITDA margins for the twelve
months ended June 30, 2021, and 2020, were (16.7)% and (16.3)%,
respectively, and are calculated as EBITDA (as defined above)
divided by U.S. GAAP revenue for each respective period.
Consolidated adjusted EBITDA margin for the twelve months ended
June 30, 2021, and 2020, were (19.1)% and 2.9%, respectively, and
are calculated as consolidated adjusted EBITDA (as defined above)
divided by consolidated adjusted revenue for each respective
period.
REGIS CORPORATION
Reconciliation Of Reported
Franchise EBITDA As A Percent Of U.S. GAAP Revenue
To EBITDA As A Percent Of
Adjusted Revenue
(Dollars in thousands)
(Unaudited)
Three Months Ended June
30,
2021
2020
As Adjusted EBITDA
$
11,272
$
1,406
U.S. GAAP revenue
73,813
44,802
As Adjusted EBITDA as a % of U.S. GAAP
revenue
15.3
%
3.1
%
Non-margin revenue adjustments:
Franchise rental income
(31,507
)
(30,328
)
Ad fund revenue
(7,218
)
—
Adjusted revenue
$
35,088
$
14,474
As Adjusted EBITDA as a percent of
adjusted revenue (1)
32.1
%
9.7
%
Twelve Months Ended June
30,
2021
2020
As Adjusted EBITDA
$
41,024
$
37,853
U.S. GAAP revenue
272,148
253,026
As Adjusted EBITDA as a % of U.S. GAAP
revenue
15.1
%
15.0
%
Non-margin revenue adjustments:
Franchise rental income
(127,392
)
(127,203
)
Ad fund revenue
(22,023
)
(13,341
)
TBG product sales
—
(2,010
)
Adjusted revenue
$
122,733
$
110,472
As Adjusted EBITDA as a percent of
adjusted revenue (1)
33.4
%
34.3
%
_______________________________________________________________________________
(1)
Total is a recalculation; line items
calculated individually may not sum to total due to rounding.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210825005828/en/
REGIS CORPORATION: Kersten Zupfer
investorrelations@regiscorp.com
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