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(Mark One)
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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended June 30, 2015
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OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from to
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Minnesota
State or other jurisdiction of
incorporation or organization
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41-0749934
(I.R.S. Employer
Identification No.)
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7201 Metro Boulevard, Edina, Minnesota
(Address of principal executive offices)
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55439
(Zip Code)
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Title of each class
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Name of each exchange on which registered
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Common Stock, par value $0.05 per share
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New York Stock Exchange
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Preferred Share Purchase Rights
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New York Stock Exchange
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
(Do not check if a
smaller reporting company)
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Smaller reporting company
o
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Page(s)
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1.
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Earn the Hearts and Minds of Our Team
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2.
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Develop High Performing Leaders
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3.
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Drive Guest Loyalty through Experience
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4.
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Operational Excellence through Simplicity
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June 30,
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|||||||
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2015
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2014
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2013
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Company-owned salons:
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SmartStyle/Cost Cutters in Walmart stores
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2,639
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2,574
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2,490
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Supercuts
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1,092
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1,176
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1,210
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MasterCuts
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466
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505
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532
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Other Value
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1,711
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1,846
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1,990
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Regis
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761
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816
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862
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Total North American salons(1)
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6,669
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6,917
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7,084
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Total International salons(2)
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356
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360
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351
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Total, Company-owned salons
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7,025
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7,277
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7,435
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Franchised salons:
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SmartStyle/Cost Cutters in Walmart stores
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127
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126
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123
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Supercuts
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1,393
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1,213
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1,116
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Other Value
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804
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840
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843
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Total North American salons
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2,324
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2,179
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2,082
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Total International salons(2)
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—
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—
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—
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Total, Franchised salons
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2,324
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2,179
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2,082
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Ownership interest locations:
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Equity ownership interest locations
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207
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218
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246
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Grand Total, System-wide
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9,556
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9,674
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9,763
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Fiscal Years
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2015
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2014
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2013
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Company-owned salons:
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SmartStyle/Cost Cutters in Walmart stores
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68
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85
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51
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Supercuts
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7
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13
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45
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MasterCuts
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—
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1
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3
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Other Value
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1
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4
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39
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Regis
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—
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1
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3
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Total North American salons(1)
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76
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104
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141
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Total International salons(2)
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15
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23
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12
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Total, Company-owned salons
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91
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127
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153
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Franchised salons:
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SmartStyle/Cost Cutters in Walmart stores
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1
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3
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1
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Supercuts
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126
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94
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70
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Other Value
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13
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37
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47
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Total North American salons(1)
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140
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134
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118
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Total International salons(2)
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—
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—
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—
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Total, Franchised salons
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140
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134
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118
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Fiscal Years
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|||||||
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2015
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2014
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2013
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Company-owned salons:
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SmartStyle/Cost Cutters in Walmart stores
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(3
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)
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(1
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)
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(2
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)
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Supercuts
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(36
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)
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(44
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)
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(49
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)
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MasterCuts
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(39
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)
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(27
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)
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(40
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)
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Other Value
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(114
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)
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(126
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)
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(179
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)
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Regis
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(55
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)
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(47
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)
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(94
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)
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Total North American salons(1)
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(247
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)
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(245
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)
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(364
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)
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Total International salons(2)
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(19
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)
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(14
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)
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(59
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)
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Total, Company-owned salons
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(266
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)
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(259
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)
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(423
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)
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Franchised salons:
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SmartStyle/Cost Cutters in Walmart Stores
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—
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—
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—
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Supercuts
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(22
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)
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(19
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)
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(11
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Other Value
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(50
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)
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(44
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)
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(58
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)
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Total North American salons(1)
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(72
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)
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(63
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)
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(69
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)
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Total International salons(2)
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—
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—
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—
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Total, Franchised salons
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(72
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)
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(63
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)
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(69
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)
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Fiscal Years
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|||||||
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2015
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2014
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2013
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Company-owned salons:
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SmartStyle/Cost Cutters in Walmart stores
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—
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—
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—
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Supercuts
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(55
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)
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(3
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)
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(14
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)
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MasterCuts
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—
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(1
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)
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—
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Other Value
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(22
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)
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(22
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)
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(3
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)
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Regis
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—
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—
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—
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Total North American salons(1)
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(77
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)
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(26
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)
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(17
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)
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Total International salons(2)
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—
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—
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—
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Total, Company-owned salons
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(77
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)
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(26
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)
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(17
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)
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Franchised salons:
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SmartStyle/Cost Cutters in Walmart Stores
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—
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—
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—
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Supercuts
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76
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22
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17
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Other Value
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1
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4
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|
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—
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Total North American salons(1)
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77
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26
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17
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Total International salons(2)
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—
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—
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—
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Total, Franchised salons
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77
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26
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17
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(1)
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The North American Value operating segment is comprised primarily of the SmartStyle, Supercuts, MasterCuts and Other Value salon brands. The North American Premium operating segment is comprised primarily of the Regis salon brands.
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(2)
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Canadian and Puerto Rican salons are included in the North American salon totals.
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(3)
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During fiscal years
2015
,
2014
, and
2013
, the Company acquired
zero
,
two
, and
zero
salon locations, respectively, from franchisees. During fiscal years
2015
,
2014
, and
2013
, the Company sold
77
,
28
, and
17
salon locations, respectively, to franchisees.
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Name
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Age
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Position
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Daniel Hanrahan
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58
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President and Chief Executive Officer
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Steven Spiegel
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53
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Executive Vice President and Chief Financial Officer
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Eric Bakken
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48
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Executive Vice President, Chief Administrative Officer, Corporate Secretary and General Counsel
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Jim Lain
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51
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Executive Vice President and Chief Operating Officer
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Andrew Dulka
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41
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Senior Vice President and Chief Information Officer
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Annette Miller
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53
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Senior Vice President and Chief Merchandising Officer
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Heather Passe
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44
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Senior Vice President and Chief Marketing Officer
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Carmen Thiede
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48
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Senior Vice President and Chief Human Resources Officer
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Ken Warfield
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44
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Senior Vice President of Premium and Asset Protection
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Item 5.
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Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Repurchase of Equity Securities
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Fiscal Years
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||||||||||||||
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2015
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2014
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Fiscal Quarter
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High
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Low
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High
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Low
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||||||||
1
st
Quarter
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$
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17.51
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$
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13.50
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$
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17.97
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$
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14.50
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2
nd
Quarter
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17.76
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14.58
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16.15
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13.99
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||||
3
rd
Quarter
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17.41
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14.70
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14.64
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11.48
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||||
4
th
Quarter
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17.91
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15.76
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14.20
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12.62
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June 30,
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||||||||||||||||||||||
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2010
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2011
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2012
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2013
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2014
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2015
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||||||||||||
Regis
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$
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100.00
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$
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99.51
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$
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118.36
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$
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109.68
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$
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94.79
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$
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106.10
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S & P 500
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100.00
|
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130.69
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137.81
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166.20
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|
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207.10
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222.47
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||||||
S & P 400 Midcap
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100.00
|
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139.38
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136.14
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170.42
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213.43
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227.08
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||||||
Dow Jones Consumer Service Index
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100.00
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137.70
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156.01
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200.38
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244.94
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287.66
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||||||
Peer Group
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100.00
|
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180.20
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161.60
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|
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235.08
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281.80
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298.58
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Fiscal Years
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||||||||||
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2015
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2014
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|
2013
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||||||
Repurchased Shares
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3,054,387
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—
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|
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909,175
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|||
Average Price (per share)
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$15.64
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$
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—
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$16.32
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Price range (per share)
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$13.72 - $17.32
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$
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—
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$15.99 - $16.84
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||
Total
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$47.9 million
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$
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—
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$14.9 million
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Period
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Total Number of Shares Purchased
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Average Price Paid per Share
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Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
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Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (in thousands)
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||||||
4/1/15 - 4/30/15
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—
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$
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—
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9,841,708
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|
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$
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75,865
|
|
5/1/15 - 5/31/15
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489,252
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|
|
16.57
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10,330,960
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|
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67,760
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||
6/1/15 - 6/30/15
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417,391
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16.43
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10,748,351
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60,903
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||
Total
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906,643
|
|
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$
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16.50
|
|
|
10,748,351
|
|
|
$
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60,903
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|
|
|
Fiscal Years
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||||||||||||||||||
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2015
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2014
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2013
|
|
2012
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2011
|
||||||||||
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(Dollars in thousands, except per share data)
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||||||||||||||||||
Revenues
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$
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1,837,287
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$
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1,892,437
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$
|
2,018,713
|
|
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$
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2,122,227
|
|
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$
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2,180,181
|
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Operating income (loss)(a)
|
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3,531
|
|
|
(34,958
|
)
|
|
13,359
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|
|
(2,226
|
)
|
|
(14,990
|
)
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|||||
(Loss) income from continuing operations(a)
|
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(33,212
|
)
|
|
(139,874
|
)
|
|
5,478
|
|
|
(51,950
|
)
|
|
(21,503
|
)
|
|||||
(Loss) income from continuing operations per diluted share
|
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(0.60
|
)
|
|
(2.48
|
)
|
|
0.10
|
|
|
(0.91
|
)
|
|
(0.38
|
)
|
|||||
Dividends declared, per share
|
|
—
|
|
|
0.12
|
|
|
0.24
|
|
|
0.24
|
|
|
0.20
|
|
|
|
June 30,
|
||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
||||||||||
|
|
(Dollars in thousands)
|
||||||||||||||||||
Total assets, including discontinued operations
|
|
$
|
1,162,015
|
|
|
$
|
1,415,949
|
|
|
$
|
1,391,399
|
|
|
$
|
1,572,725
|
|
|
$
|
1,806,460
|
|
Long-term debt and capital lease obligations, including current portion
|
|
120,002
|
|
|
293,503
|
|
|
174,770
|
|
|
287,674
|
|
|
313,411
|
|
(a)
|
The following significant items affected operating income (loss) and (loss) income from continuing operations:
|
•
|
During fiscal year 2015, the Company recorded its share of a non-cash deferred tax asset valuation allowance recorded by EEG of
$6.9 million
, other than temporary impairment charges of its investment in EEG of
$4.7 million
,
$14.6 million
of fixed asset impairment charges and established a $2.1 million valuation allowance against its Canadian deferred tax assets.
|
•
|
During fiscal year 2014, the Company experienced significant disruption as result of foundational initiatives implemented at the end of fiscal year 2013 to turn around our business. As a result, the Company's financial performance during fiscal year 2014 was negatively impacted. During fiscal year 2014, the Company recorded a goodwill impairment charge of
$34.9 million
associated with Company's Regis salon concept, fixed asset impairment charges of
$18.3 million
, $15.9 million, net of tax for the Company's share of goodwill and fixed asset impairment charges recorded by EEG and established an $86.6 million valuation allowance against the U.S. and U.K. deferred tax assets.
|
•
|
During fiscal year 2013, the Company made significant investments in strategies to turn around our business and drive improved long-term sustainable growth and profitability. These included investing in stylist hours, rolling out a new POS system and salon workstations in our North American salons, restructuring our North American Value field organization and standardizing plan-o-grams and eliminating retail products. As a result, during fiscal year 2013, the Company recorded $7.4 million in restructuring charges and a $12.6 million inventory write-down. In addition, the Company recognized a net $33.8 million foreign currency translation gain in connection with the sale of Provalliance, recorded net other than temporary impairment charges of $17.9 million associated with the Company's investment in EEG and incurred a $10.6 million make-whole payment in connection with the prepayment of $89.3 million of senior term notes in June 2013.
|
•
|
During fiscal year 2012, the Company recorded a goodwill impairment charge of $67.7 million associated with the Company's Regis salon concept, incremental amortization expense of $16.2 million associated with an adjustment to the useful life of the Company's previously internally developed POS system, $14.4 million for senior management and other restructuring charges, $8.9 million for the Company's share of intangible and fixed asset impairments recorded by EEG and $36.6 million of other than temporary impairment charges associated with the Company's investments in affiliated companies.
|
•
|
During fiscal year 2011, the Company recorded a goodwill impairment charge of $74.1 million associated with the Company's former Promenade salon concept, a $31.2 million valuation reserve related to a note receivable with the purchaser of Trade Secret and $9.2 million of other than temporary impairment charges associated with the Company's investment in MY Style.
|
|
|
Fiscal Years
|
||||||
|
|
2014
|
|
2013
|
||||
|
|
(Dollars in thousands)
|
||||||
(Loss) income from continuing operations, as reported
|
|
$
|
(137,080
|
)
|
|
$
|
4,166
|
|
Revisions:
|
|
|
|
|
||||
Deferred rent, pre-tax (1)
|
|
(157
|
)
|
|
(471
|
)
|
||
Previous out of period items, pre-tax (2)
|
|
(811
|
)
|
|
2,154
|
|
||
Tax impact
|
|
(1,826
|
)
|
|
(371
|
)
|
||
Total revision impact
|
|
(2,794
|
)
|
|
1,312
|
|
||
|
|
|
|
|
||||
(Loss) income from continuing operations, as revised
|
|
$
|
(139,874
|
)
|
|
$
|
5,478
|
|
(1)
|
The Company recognizes rental expense on a straight-line basis at the time the leased space becomes available to the Company. During the fourth quarter of fiscal year
2015
, the Company determined its deferred rent balance was understated by
$5.3 million
. Accordingly, the Consolidated Financial Statements have been revised to correctly state its deferred rent balances and rent expense. The revisions resulted in an increase in net loss from continuing operations of
$0.2 million
for fiscal year
2014
and a decrease in net income from continuing operations of
$0.5 million
for fiscal year
2013
. Accrued expenses and other noncurrent liabilities increased
$1.0
and
$4.2 million
, respectively, at June 30,
2014
and retained earnings at June 30,
2014
decreased
$5.2 million
as a result of the cumulative adjustment for prior periods. This revision had no impact on cash provided by operations or net increase (decrease) in cash and cash equivalents for any year.
|
(2)
|
Also in the fourth quarter of fiscal year 2015, the Company revised certain prior year amounts in the Consolidated Balance Sheet and Statement of Operations to correctly recognize understatements of self-insurance accruals, interest expense, uncertain tax positions and cash and overstatements of inventory. The impact of these revisions resulted in an increase in net loss from continuing operations of
$0.8 million
for fiscal year 2014 and an increase in net income from continuing operations of
$2.2 million
for fiscal year 2013. Accrued expenses and other noncurrent liabilities increased
$0.8
and
$0.8 million
, respectively, at June 30, 2014 and retained earnings at June 30, 2014 decreased by
$1.6 million
as a result of the cumulative adjustment for prior periods. In addition, cash and cash equivalents at June 30, 2013 increased by
$0.6 million
due to the revisions.
|
|
|
Fiscal Years
|
||||||||||||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||
|
|
(Dollars in millions)
|
|
% of Total Revenues
|
|
Basis Point
Increase (Decrease)
|
||||||||||||||||||||||||
Service revenues
|
|
$
|
1,429.4
|
|
|
$
|
1,480.1
|
|
|
$
|
1,563.9
|
|
|
77.8
|
%
|
|
78.2
|
%
|
|
77.5
|
%
|
|
(40
|
)
|
|
70
|
|
|
—
|
|
Product revenues
|
|
363.2
|
|
|
371.5
|
|
|
415.7
|
|
|
19.8
|
|
|
19.6
|
|
|
20.6
|
|
|
20
|
|
|
(100
|
)
|
|
(10
|
)
|
|||
Franchise royalties and fees
|
|
44.6
|
|
|
40.9
|
|
|
39.1
|
|
|
2.4
|
|
|
2.2
|
|
|
1.9
|
|
|
20
|
|
|
30
|
|
|
10
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of service(1)
|
|
882.7
|
|
|
907.3
|
|
|
930.7
|
|
|
61.8
|
|
|
61.3
|
|
|
59.5
|
|
|
50
|
|
|
180
|
|
|
220
|
|
|||
Cost of product(2)
|
|
180.6
|
|
|
186.9
|
|
|
228.9
|
|
|
49.7
|
|
|
50.3
|
|
|
55.1
|
|
|
(60
|
)
|
|
(480
|
)
|
|
470
|
|
|||
Site operating expenses
|
|
192.4
|
|
|
203.5
|
|
|
202.1
|
|
|
10.5
|
|
|
10.8
|
|
|
10.0
|
|
|
(30
|
)
|
|
80
|
|
|
20
|
|
|||
General and administrative
|
|
186.1
|
|
|
172.8
|
|
|
226.7
|
|
|
10.1
|
|
|
9.1
|
|
|
11.2
|
|
|
100
|
|
|
(210
|
)
|
|
(60
|
)
|
|||
Rent
|
|
309.1
|
|
|
322.3
|
|
|
325.2
|
|
|
16.8
|
|
|
17.0
|
|
|
16.1
|
|
|
(20
|
)
|
|
90
|
|
|
50
|
|
|||
Depreciation and amortization
|
|
82.9
|
|
|
99.7
|
|
|
91.8
|
|
|
4.5
|
|
|
5.3
|
|
|
4.5
|
|
|
(80
|
)
|
|
80
|
|
|
(40
|
)
|
|||
Goodwill impairment
|
|
—
|
|
|
34.9
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
|
(180
|
)
|
|
180
|
|
|
(320
|
)
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest expense
|
|
10.2
|
|
|
22.3
|
|
|
36.9
|
|
|
0.6
|
|
|
1.2
|
|
|
1.8
|
|
|
(60
|
)
|
|
(60
|
)
|
|
50
|
|
|||
Interest income and other, net
|
|
1.7
|
|
|
2.0
|
|
|
35.4
|
|
|
0.1
|
|
|
0.1
|
|
|
1.8
|
|
|
—
|
|
|
(170
|
)
|
|
160
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Income tax (provision) benefit(3)
|
|
(14.6
|
)
|
|
(73.0
|
)
|
|
9.7
|
|
|
(293.4
|
)
|
|
(131.9
|
)
|
|
81.9
|
|
|
N/A
|
|
|
N/A
|
|
|
N/A
|
|
|||
Equity in loss of affiliated companies, net of income taxes
|
|
(13.6
|
)
|
|
(11.6
|
)
|
|
(16.0
|
)
|
|
(0.7
|
)
|
|
(0.6
|
)
|
|
(0.8
|
)
|
|
(10
|
)
|
|
20
|
|
|
70
|
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Loss) income from discontinued operations, net of income taxes
|
|
(0.6
|
)
|
|
1.4
|
|
|
25.0
|
|
|
—
|
|
|
0.1
|
|
|
1.2
|
|
|
(10
|
)
|
|
(110
|
)
|
|
410
|
|
(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) income from continuing operations before income taxes and equity in loss of affiliated companies
. The income tax (provision) benefit basis point change is noted as not applicable (N/A) as the discussion below is related to the effective income tax rate.
|
|
|
Fiscal Years
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
(Dollars in thousands)
|
||||||||||
North American Value salons:
|
|
|
|
|
|
|
||||||
SmartStyle
|
|
$
|
500,562
|
|
|
$
|
487,722
|
|
|
$
|
509,537
|
|
Supercuts
|
|
343,299
|
|
|
343,372
|
|
|
343,464
|
|
|||
MasterCuts
|
|
117,246
|
|
|
127,758
|
|
|
146,506
|
|
|||
Other Value
|
|
442,312
|
|
|
471,231
|
|
|
516,074
|
|
|||
Total North American Value salons
|
|
1,403,419
|
|
|
1,430,083
|
|
|
1,515,581
|
|
|||
North American Premium salons
|
|
309,600
|
|
|
333,858
|
|
|
373,820
|
|
|||
International salons
|
|
124,268
|
|
|
128,496
|
|
|
129,312
|
|
|||
Consolidated revenues
|
|
$
|
1,837,287
|
|
|
$
|
1,892,437
|
|
|
$
|
2,018,713
|
|
Percent change from prior year
|
|
(2.9
|
)%
|
|
(6.3
|
)%
|
|
(4.9
|
)%
|
|||
Salon same-store sales decrease(1)
|
|
(0.3
|
)%
|
|
(4.8
|
)%
|
|
(2.4
|
)%
|
(1)
|
Same-store sales are calculated on a daily basis as the total change in sales for company-owned locations which were open on a specific day of the week during the current period and the corresponding prior period. Quarterly and fiscal year 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.
|
|
|
Fiscal Years
|
|||||||
Factor
|
|
2015
|
|
2014
|
|
2013
|
|||
Same-store sales
|
|
(0.3
|
)%
|
|
(4.8
|
)%
|
|
(2.4
|
)%
|
Closed salons
|
|
(2.7
|
)
|
|
(2.6
|
)
|
|
(3.3
|
)
|
New stores and conversions
|
|
0.6
|
|
|
0.8
|
|
|
1.3
|
|
Other
|
|
(0.5
|
)
|
|
0.3
|
|
|
(0.5
|
)
|
|
|
(2.9
|
)%
|
|
(6.3
|
)%
|
|
(4.9
|
)%
|
|
|
Fiscal Years
|
|||||||
|
|
2015
|
|
2014
|
|
2013
|
|||
SmartStyle
|
|
1.6
|
%
|
|
(5.4
|
)%
|
|
(1.1
|
)%
|
Supercuts
|
|
1.3
|
%
|
|
0.5
|
%
|
|
(0.7
|
)%
|
MasterCuts
|
|
(4.0
|
)%
|
|
(9.4
|
)%
|
|
(5.1
|
)%
|
Other Value
|
|
(0.7
|
)%
|
|
(5.4
|
)%
|
|
(2.8
|
)%
|
Total North American Value salons
|
|
0.3
|
%
|
|
(4.5
|
)%
|
|
(2.0
|
)%
|
North American Premium salons
|
|
(3.0
|
)%
|
|
(6.7
|
)%
|
|
(3.1
|
)%
|
International salons
|
|
0.6
|
%
|
|
(1.5
|
)%
|
|
(4.3
|
)%
|
Consolidated same-store sales
|
|
(0.3
|
)%
|
|
(4.8
|
)%
|
|
(2.4
|
)%
|
|
|
|
|
Interest rate %
|
|
|
|
|
||||||
|
|
|
|
Fiscal Years
|
|
June 30,
|
||||||||
|
|
Maturity Dates
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
|
|
(fiscal year)
|
|
|
|
|
|
(Dollars in thousands)
|
||||||
Convertible senior notes
|
|
2015
|
|
5.0%
|
|
5.0%
|
|
$
|
—
|
|
|
$
|
172,246
|
|
Senior term notes
|
|
2018
|
|
5.75
|
|
5.75
|
|
120,000
|
|
|
120,000
|
|
||
Revolving credit facility
|
|
2018
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
||
Equipment and leasehold notes payable
|
|
2015 - 2016
|
|
4.90 - 8.75
|
|
4.90 - 8.75
|
|
2
|
|
|
1,257
|
|
||
|
|
|
|
|
|
|
|
120,002
|
|
|
293,503
|
|
||
Less current portion
|
|
|
|
|
|
|
|
(2
|
)
|
|
(173,501
|
)
|
||
Long-term portion
|
|
|
|
|
|
|
|
$
|
120,000
|
|
|
$
|
120,002
|
|
As of June 30,
|
|
Debt to
Capitalization
|
|
Basis Point
Increase
(Decrease)(1)
|
||
2015
|
|
16.1
|
%
|
|
(1,300
|
)
|
2014
|
|
29.1
|
|
|
1,210
|
|
2013
|
|
17.0
|
|
|
(760
|
)
|
(1)
|
Represents the basis point change in debt to capitalization as compared to prior fiscal year-end (June 30).
|
|
|
|
|
Payments due by period
|
||||||||||||||||
Contractual Obligations
|
|
Total
|
|
Within
1 year
|
|
1 - 3 years
|
|
3 - 5 years
|
|
More than
5 years
|
||||||||||
|
|
|
|
(Dollars in thousands)
|
||||||||||||||||
On-balance sheet:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Debt obligations
|
|
$
|
120,000
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
120,000
|
|
|
$
|
—
|
|
Capital lease obligations
|
|
2
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Other long-term liabilities
|
|
15,308
|
|
|
2,652
|
|
|
3,889
|
|
|
1,690
|
|
|
7,077
|
|
|||||
Total on-balance sheet
|
|
135,310
|
|
|
2,654
|
|
|
3,889
|
|
|
121,690
|
|
|
7,077
|
|
|||||
Off-balance sheet(a):
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Operating lease obligations
|
|
937,509
|
|
|
294,540
|
|
|
404,968
|
|
|
183,777
|
|
|
54,224
|
|
|||||
Interest on long-term debt and capital lease obligations
|
|
24,246
|
|
|
6,900
|
|
|
13,800
|
|
|
3,546
|
|
|
—
|
|
|||||
Total off-balance sheet
|
|
961,755
|
|
|
301,440
|
|
|
418,768
|
|
|
187,323
|
|
|
54,224
|
|
|||||
Total
|
|
$
|
1,097,065
|
|
|
$
|
304,094
|
|
|
$
|
422,657
|
|
|
$
|
309,013
|
|
|
$
|
61,301
|
|
(a)
|
In accordance with accounting principles generally accepted in the United States of America, these obligations are not reflected in the Consolidated Balance Sheet.
|
|
|
Fiscal Years
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
(Dollars in thousands)
|
||||||||||
North American Value
|
|
$
|
9,612
|
|
|
$
|
11,714
|
|
|
$
|
5,031
|
|
North American Premium
|
|
4,804
|
|
|
5,014
|
|
|
3,042
|
|
|||
International
|
|
188
|
|
|
1,599
|
|
|
151
|
|
|||
Total
|
|
$
|
14,604
|
|
|
$
|
18,327
|
|
|
$
|
8,224
|
|
|
|
|
Index to Consolidated Financial Statements:
|
|
|
|
||
|
||
|
||
|
||
|
||
|
||
|
|
|
June 30,
|
||||||
|
|
2015
|
|
2014
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
212,279
|
|
|
$
|
378,627
|
|
Receivables, net
|
|
24,631
|
|
|
25,808
|
|
||
Inventories
|
|
128,610
|
|
|
137,151
|
|
||
Income tax receivable
|
|
993
|
|
|
6,461
|
|
||
Other current assets
|
|
61,769
|
|
|
65,219
|
|
||
Total current assets
|
|
428,282
|
|
|
613,266
|
|
||
Property and equipment, net
|
|
218,157
|
|
|
266,538
|
|
||
Goodwill
|
|
418,953
|
|
|
425,264
|
|
||
Other intangibles, net
|
|
17,069
|
|
|
19,812
|
|
||
Investment in affiliates
|
|
15,321
|
|
|
28,611
|
|
||
Other assets
|
|
64,233
|
|
|
62,458
|
|
||
Total assets
|
|
$
|
1,162,015
|
|
|
$
|
1,415,949
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Long-term debt and capital lease obligations, current
|
|
$
|
2
|
|
|
$
|
173,501
|
|
Accounts payable
|
|
63,302
|
|
|
68,491
|
|
||
Accrued expenses
|
|
153,362
|
|
|
144,544
|
|
||
Total current liabilities
|
|
216,666
|
|
|
386,536
|
|
||
Long-term debt
|
|
120,000
|
|
|
120,002
|
|
||
Other noncurrent liabilities
|
|
197,905
|
|
|
195,419
|
|
||
Total liabilities
|
|
534,571
|
|
|
701,957
|
|
||
Commitments and contingencies (Note 8)
|
|
|
|
|
||||
Shareholders' equity:
|
|
|
|
|
||||
Common stock, $0.05 par value; issued and outstanding, 53,664,366 and 56,651,166 common shares at June 30, 2015 and 2014, respectively
|
|
2,683
|
|
|
2,833
|
|
||
Additional paid-in capital
|
|
298,396
|
|
|
337,837
|
|
||
Accumulated other comprehensive income
|
|
9,506
|
|
|
22,651
|
|
||
Retained earnings
|
|
316,859
|
|
|
350,671
|
|
||
Total shareholders' equity
|
|
627,444
|
|
|
713,992
|
|
||
Total liabilities and shareholders' equity
|
|
$
|
1,162,015
|
|
|
$
|
1,415,949
|
|
|
|
Fiscal Years
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Revenues:
|
|
|
|
|
|
|
||||||
Service
|
|
$
|
1,429,408
|
|
|
$
|
1,480,103
|
|
|
$
|
1,563,890
|
|
Product
|
|
363,236
|
|
|
371,454
|
|
|
415,707
|
|
|||
Royalties and fees
|
|
44,643
|
|
|
40,880
|
|
|
39,116
|
|
|||
|
|
1,837,287
|
|
|
1,892,437
|
|
|
2,018,713
|
|
|||
Operating expenses:
|
|
|
|
|
|
|
||||||
Cost of service
|
|
882,717
|
|
|
907,294
|
|
|
930,687
|
|
|||
Cost of product
|
|
180,558
|
|
|
186,924
|
|
|
228,857
|
|
|||
Site operating expenses
|
|
192,442
|
|
|
203,450
|
|
|
202,128
|
|
|||
General and administrative
|
|
186,051
|
|
|
172,793
|
|
|
226,740
|
|
|||
Rent
|
|
309,125
|
|
|
322,262
|
|
|
325,187
|
|
|||
Depreciation and amortization
|
|
82,863
|
|
|
99,733
|
|
|
91,755
|
|
|||
Goodwill impairment
|
|
—
|
|
|
34,939
|
|
|
—
|
|
|||
Total operating expenses
|
|
1,833,756
|
|
|
1,927,395
|
|
|
2,005,354
|
|
|||
Operating income (loss)
|
|
3,531
|
|
|
(34,958
|
)
|
|
13,359
|
|
|||
Other (expense) income:
|
|
|
|
|
|
|
||||||
Interest expense
|
|
(10,206
|
)
|
|
(22,290
|
)
|
|
(36,944
|
)
|
|||
Interest income and other, net
|
|
1,697
|
|
|
1,952
|
|
|
35,366
|
|
|||
(Loss) income from continuing operations before income taxes and equity in loss of affiliated companies
|
|
(4,978
|
)
|
|
(55,296
|
)
|
|
11,781
|
|
|||
Income taxes
|
|
(14,605
|
)
|
|
(72,955
|
)
|
|
9,653
|
|
|||
Equity in loss of affiliated companies, net of income taxes
|
|
(13,629
|
)
|
|
(11,623
|
)
|
|
(15,956
|
)
|
|||
(Loss) income from continuing operations
|
|
(33,212
|
)
|
|
(139,874
|
)
|
|
5,478
|
|
|||
(Loss) income from discontinued operations, net of income taxes (Note 2)
|
|
(630
|
)
|
|
1,353
|
|
|
25,028
|
|
|||
Net (loss) income
|
|
$
|
(33,842
|
)
|
|
$
|
(138,521
|
)
|
|
$
|
30,506
|
|
Net (loss) income per share:
|
|
|
|
|
|
|
||||||
Basic and diluted:
|
|
|
|
|
|
|
||||||
(Loss) income from continuing operations
|
|
(0.60
|
)
|
|
(2.48
|
)
|
|
0.10
|
|
|||
(Loss) income from discontinued operations
|
|
(0.01
|
)
|
|
0.02
|
|
|
0.44
|
|
|||
Net (loss) income per share, basic and diluted (1)
|
|
$
|
(0.62
|
)
|
|
$
|
(2.45
|
)
|
|
$
|
0.54
|
|
Weighted average common and common equivalent shares outstanding:
|
|
|
|
|
|
|
||||||
Basic
|
|
54,992
|
|
|
56,482
|
|
|
56,704
|
|
|||
Diluted
|
|
54,992
|
|
|
56,482
|
|
|
56,846
|
|
|||
Cash dividends declared per common share
|
|
$
|
—
|
|
|
$
|
0.12
|
|
|
$
|
0.24
|
|
(1)
|
Total is a recalculation; line items calculated individually may not sum to total due to rounding.
|
|
|
Fiscal Years
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Net (loss) income
|
|
$
|
(33,842
|
)
|
|
$
|
(138,521
|
)
|
|
$
|
30,506
|
|
Other comprehensive (loss) income:
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments:
|
|
|
|
|
|
|
||||||
Foreign currency translation adjustments during the period
|
|
(13,515
|
)
|
|
1,930
|
|
|
(1,349
|
)
|
|||
Reclassification adjustments for gains included in net (loss) income(1)
|
|
—
|
|
|
—
|
|
|
(33,842
|
)
|
|||
Net current period foreign currency translation adjustments
|
|
(13,515
|
)
|
|
1,930
|
|
|
(35,191
|
)
|
|||
Recognition of deferred compensation and other, net of tax expense of $411 in fiscal year 2013(2)
|
|
370
|
|
|
165
|
|
|
656
|
|
|||
Change in fair market value of financial instruments designated as cash flow hedges, net of tax benefit of $12 in fiscal year 2013(2)
|
|
—
|
|
|
—
|
|
|
(23
|
)
|
|||
Other comprehensive (loss) income
|
|
(13,145
|
)
|
|
2,095
|
|
|
(34,558
|
)
|
|||
Comprehensive loss
|
|
$
|
(46,987
|
)
|
|
$
|
(136,426
|
)
|
|
$
|
(4,052
|
)
|
(1)
|
During fiscal year 2013, the Company recognized a
$33.8 million
foreign currency translation gain in connection with the sale of Provalliance and subsequent liquidation of all foreign entities with Euro denominated operations within interest income and other, net in the Consolidated Statement of Operations.
|
(2)
|
During fiscal year 2014, the Company recorded a valuation allowance against the majority of its deferred tax assets. Any subsequent other comprehensive (loss) income adjustments were not tax effected.
|
|
|
Common Stock
|
|
Additional
Paid-In Capital |
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings
|
|
Total
|
|||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance, June 30, 2012
|
|
57,415,241
|
|
|
$
|
2,871
|
|
|
$
|
346,943
|
|
|
$
|
55,114
|
|
|
$
|
478,922
|
|
|
$
|
883,850
|
|
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30,506
|
|
|
30,506
|
|
|||||
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
(35,191
|
)
|
|
|
|
|
(35,191
|
)
|
|||||
Stock repurchase program
|
|
(909,175
|
)
|
|
(45
|
)
|
|
(14,823
|
)
|
|
|
|
|
|
(14,868
|
)
|
|||||||
Proceeds from exercise of SARs & stock options
|
|
3,051
|
|
|
—
|
|
|
41
|
|
|
|
|
|
|
|
|
41
|
|
|||||
Stock-based compensation
|
|
|
|
|
|
|
|
5,881
|
|
|
|
|
|
|
|
|
5,881
|
|
|||||
Shares issued through franchise stock incentive program
|
|
19,583
|
|
|
1
|
|
|
356
|
|
|
|
|
|
|
|
|
357
|
|
|||||
Recognition of deferred compensation and other, net of taxes (Note 10)
|
|
|
|
|
|
|
|
|
|
|
633
|
|
|
|
|
|
633
|
|
|||||
Net restricted stock activity
|
|
102,226
|
|
|
5
|
|
|
(2,728
|
)
|
|
|
|
|
|
|
|
(2,723
|
)
|
|||||
Vested stock option expirations
|
|
|
|
|
|
|
|
(1,404
|
)
|
|
|
|
|
|
|
|
(1,404
|
)
|
|||||
Minority interest (Note 1)
|
|
|
|
|
|
|
|
|
|
45
|
|
|
45
|
|
|||||||||
Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(13,708
|
)
|
|
(13,708
|
)
|
|||||
Balance, June 30, 2013
|
|
56,630,926
|
|
|
2,832
|
|
|
334,266
|
|
|
20,556
|
|
|
495,765
|
|
|
853,419
|
|
|||||
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(138,521
|
)
|
|
(138,521
|
)
|
|||||
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
1,930
|
|
|
|
|
|
1,930
|
|
|||||
Proceeds from exercise of SARs & stock options
|
|
11
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
|||||
Stock-based compensation
|
|
|
|
|
|
|
|
6,400
|
|
|
|
|
|
|
|
|
6,400
|
|
|||||
Shares issued through franchise stock incentive program
|
|
20,095
|
|
|
1
|
|
|
289
|
|
|
|
|
|
|
|
|
290
|
|
|||||
Recognition of deferred compensation and other, net of taxes (Note 10)
|
|
|
|
|
|
|
|
|
|
|
165
|
|
|
|
|
|
165
|
|
|||||
Net restricted stock activity
|
|
134
|
|
|
—
|
|
|
(2,603
|
)
|
|
|
|
|
|
|
|
(2,603
|
)
|
|||||
Vested stock option expirations
|
|
|
|
|
|
|
|
(515
|
)
|
|
|
|
|
|
|
|
(515
|
)
|
|||||
Minority interest (Note 1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
220
|
|
|
220
|
|
|||||
Dividends
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,793
|
)
|
|
(6,793
|
)
|
|||||
Balance, June 30, 2014
|
|
56,651,166
|
|
|
2,833
|
|
|
337,837
|
|
|
22,651
|
|
|
350,671
|
|
|
713,992
|
|
|||||
Net loss
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(33,842
|
)
|
|
(33,842
|
)
|
|||||
Foreign currency translation adjustments
|
|
|
|
|
|
|
|
|
|
|
(13,515
|
)
|
|
|
|
|
(13,515
|
)
|
|||||
Stock repurchase program
|
|
(3,054,387
|
)
|
|
(153
|
)
|
|
(47,735
|
)
|
|
|
|
|
|
(47,888
|
)
|
|||||||
Proceeds from exercise of SARs & stock options
|
|
623
|
|
|
—
|
|
|
—
|
|
|
|
|
|
|
|
|
—
|
|
|||||
Stock-based compensation
|
|
|
|
|
|
|
|
8,647
|
|
|
|
|
|
|
|
|
8,647
|
|
|||||
Shares issued through franchise stock incentive program
|
|
27,276
|
|
|
1
|
|
|
460
|
|
|
|
|
|
|
461
|
|
|||||||
Recognition of deferred compensation (Note 10)
|
|
|
|
|
|
|
|
|
|
|
370
|
|
|
|
|
|
370
|
|
|||||
Net restricted stock activity
|
|
39,688
|
|
|
2
|
|
|
(813
|
)
|
|
|
|
|
|
|
|
(811
|
)
|
|||||
Minority interest (Note 1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30
|
|
|
30
|
|
|||||
Balance, June 30, 2015
|
|
53,664,366
|
|
|
$
|
2,683
|
|
|
$
|
298,396
|
|
|
$
|
9,506
|
|
|
$
|
316,859
|
|
|
$
|
627,444
|
|
|
|
Fiscal Years
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||||||
Net (loss) income
|
|
$
|
(33,842
|
)
|
|
$
|
(138,521
|
)
|
|
$
|
30,506
|
|
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
|
|
|
|
|
|
|
||||||
Depreciation and amortization
|
|
68,259
|
|
|
81,406
|
|
|
84,018
|
|
|||
Equity in loss of affiliated companies
|
|
13,629
|
|
|
11,623
|
|
|
15,328
|
|
|||
Dividends received from affiliated companies
|
|
—
|
|
|
—
|
|
|
1,095
|
|
|||
Deferred income taxes
|
|
11,154
|
|
|
70,635
|
|
|
10,901
|
|
|||
Gain from sale of salon assets
|
|
(1,210
|
)
|
|
—
|
|
|
—
|
|
|||
Accumulated other comprehensive income reclassification adjustments (Note 5)
|
|
—
|
|
|
—
|
|
|
(33,842
|
)
|
|||
Gain from sale of discontinued operations
|
|
—
|
|
|
—
|
|
|
(17,827
|
)
|
|||
Loss on write down of inventories
|
|
—
|
|
|
854
|
|
|
12,557
|
|
|||
Goodwill impairment
|
|
—
|
|
|
34,939
|
|
|
—
|
|
|||
Salon asset impairments
|
|
14,604
|
|
|
18,327
|
|
|
8,224
|
|
|||
Stock-based compensation
|
|
8,647
|
|
|
6,400
|
|
|
5,881
|
|
|||
Amortization of debt discount and financing costs
|
|
1,722
|
|
|
8,152
|
|
|
7,346
|
|
|||
Other non-cash items affecting earnings
|
|
257
|
|
|
224
|
|
|
61
|
|
|||
Changes in operating assets and liabilities(1):
|
|
|
|
|
|
|
||||||
Receivables
|
|
446
|
|
|
5,681
|
|
|
(4,332
|
)
|
|||
Inventories
|
|
6,197
|
|
|
2,275
|
|
|
(10,465
|
)
|
|||
Income tax receivable
|
|
5,298
|
|
|
26,884
|
|
|
(23,421
|
)
|
|||
Other current assets
|
|
3,049
|
|
|
(5,979
|
)
|
|
(7,724
|
)
|
|||
Other assets
|
|
(4,480
|
)
|
|
(88
|
)
|
|
239
|
|
|||
Accounts payable
|
|
(3,261
|
)
|
|
1,907
|
|
|
18,436
|
|
|||
Accrued expenses
|
|
8,249
|
|
|
3,955
|
|
|
(27,162
|
)
|
|||
Other noncurrent liabilities
|
|
(4,756
|
)
|
|
(11,919
|
)
|
|
(23
|
)
|
|||
Net cash provided by operating activities
|
|
93,962
|
|
|
116,755
|
|
|
69,796
|
|
|||
Cash flows from investing activities:
|
|
|
|
|
|
|
||||||
Capital expenditures
|
|
(38,257
|
)
|
|
(49,439
|
)
|
|
(105,857
|
)
|
|||
Proceeds from sale of assets
|
|
2,986
|
|
|
14
|
|
|
163,916
|
|
|||
Asset acquisitions, net of cash acquired
|
|
—
|
|
|
(15
|
)
|
|
—
|
|
|||
Proceeds from loans and investments
|
|
—
|
|
|
5,056
|
|
|
131,581
|
|
|||
Change in restricted cash
|
|
(312
|
)
|
|
—
|
|
|
(24,500
|
)
|
|||
Net cash (used in) provided by investing activities
|
|
(35,583
|
)
|
|
(44,384
|
)
|
|
165,140
|
|
|||
Cash flows from financing activities:
|
|
|
|
|
|
|
||||||
Borrowings on revolving credit facilities
|
|
—
|
|
|
—
|
|
|
5,200
|
|
|||
Payments on revolving credit facilities
|
|
—
|
|
|
—
|
|
|
(5,200
|
)
|
|||
Proceeds from issuance of long-term debt, net of fees
|
|
—
|
|
|
118,058
|
|
|
—
|
|
|||
Repayments of long-term debt and capital lease obligations
|
|
(173,751
|
)
|
|
(7,059
|
)
|
|
(118,223
|
)
|
|||
Repurchase of common stock
|
|
(47,888
|
)
|
|
—
|
|
|
(14,868
|
)
|
|||
Dividends paid
|
|
—
|
|
|
(6,793
|
)
|
|
(13,708
|
)
|
|||
Net cash (used in) provided by financing activities
|
|
(221,639
|
)
|
|
104,206
|
|
|
(146,799
|
)
|
|||
Effect of exchange rate changes on cash and cash equivalents
|
|
(3,088
|
)
|
|
914
|
|
|
1,056
|
|
|||
(Decrease) increase in cash and cash equivalents
|
|
(166,348
|
)
|
|
177,491
|
|
|
89,193
|
|
|||
Cash and cash equivalents:
|
|
|
|
|
|
|
||||||
Beginning of year
|
|
378,627
|
|
|
201,136
|
|
|
111,943
|
|
|||
End of year
|
|
$
|
212,279
|
|
|
$
|
378,627
|
|
|
$
|
201,136
|
|
(1)
|
Changes in operating assets and liabilities exclude assets and liabilities sold.
|
|
|
Fiscal Years
|
||||||
|
|
2014
|
|
2013
|
||||
|
|
(Dollars in thousands)
|
||||||
(Loss) income from continuing operations, as reported
|
|
$
|
(137,080
|
)
|
|
$
|
4,166
|
|
Revisions:
|
|
|
|
|
||||
Deferred rent, pre-tax (1)
|
|
(157
|
)
|
|
(471
|
)
|
||
Previous out of period items, pre-tax (2)
|
|
(811
|
)
|
|
2,154
|
|
||
Tax impact
|
|
(1,826
|
)
|
|
(371
|
)
|
||
Total revision impact
|
|
(2,794
|
)
|
|
1,312
|
|
||
|
|
|
|
|
||||
(Loss) income from continuing operations, as revised
|
|
$
|
(139,874
|
)
|
|
$
|
5,478
|
|
(1)
|
The Company recognizes rental expense on a straight-line basis at the time the leased space becomes available to the Company. During the fourth quarter of fiscal year
2015
, the Company determined its deferred rent balance was understated by
$5.3 million
. Accordingly, the Consolidated Financial Statements have been revised to correctly state its deferred rent balances and rent expense. The revisions resulted in an increase in net loss from continuing operations of
$0.2 million
for fiscal year
2014
and a decrease in net income from continuing operations of
$0.5 million
for fiscal year
2013
. Accrued expenses and other noncurrent liabilities increased
$1.0
and
$4.2 million
, respectively, at June 30,
2014
and retained earnings at June 30,
2014
decreased
$5.2 million
as a result of the cumulative adjustment for prior periods. This revision had no impact on cash provided by operations or net increase (decrease) in cash and cash equivalents for any year.
|
(2)
|
Also in the fourth quarter of fiscal year 2015, the Company revised certain prior year amounts in the Consolidated Balance Sheet and Statement of Operations to correctly recognize understatements of self-insurance accruals, interest expense, uncertain tax positions and cash and overstatements of inventory. The impact of these revisions resulted in an increase in net loss from continuing operations of
$0.8 million
for fiscal year 2014 and an increase in net income from
|
|
|
REGIS CORPORATION
|
|||||||||||
|
|
CONSOLIDATED BALANCE SHEET
|
|||||||||||
|
|
(Dollars in thousands)
|
|||||||||||
|
|
June 30,
|
|||||||||||
|
|
2014
|
|
||||||||||
|
|
As Previously Reported
|
|
Revision
|
|
As Revised
|
|
||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
||||||
Accrued expenses
|
|
$
|
142,720
|
|
|
$
|
1,824
|
|
|
$
|
144,544
|
|
|
Total current liabilities
|
|
384,712
|
|
|
1,824
|
|
|
386,536
|
|
|
|||
Other noncurrent liabilities
|
|
190,454
|
|
|
4,965
|
|
|
195,419
|
|
|
|||
Total liabilities
|
|
695,168
|
|
|
6,789
|
|
|
701,957
|
|
|
|||
Retained earnings
|
|
357,460
|
|
|
(6,789
|
)
|
|
350,671
|
|
|
|||
Total shareholders' equity
|
|
720,781
|
|
|
(6,789
|
)
|
|
713,992
|
|
|
|||
Total liabilities and shareholders' equity
|
|
$
|
1,415,949
|
|
|
$
|
—
|
|
|
$
|
1,415,949
|
|
|
|
|
REGIS CORPORATION
|
||||||||||||||||||||||
|
|
CONSOLIDATED STATEMENT OF OPERATIONS
|
||||||||||||||||||||||
|
|
(Dollars in thousands, except per share data)
|
||||||||||||||||||||||
|
|
Fiscal Years
|
||||||||||||||||||||||
|
|
2014
|
|
2013
|
||||||||||||||||||||
|
|
As Previously Reported
|
|
Revision
|
|
As Revised
|
|
As Previously Reported
|
|
Revision
|
|
As Revised
|
||||||||||||
Cost of product
|
|
$
|
187,204
|
|
|
$
|
(280
|
)
|
|
$
|
186,924
|
|
|
$
|
228,577
|
|
|
$
|
280
|
|
|
$
|
228,857
|
|
Site operating expenses
|
|
202,359
|
|
|
1,091
|
|
|
203,450
|
|
|
203,912
|
|
|
(1,784
|
)
|
|
202,128
|
|
||||||
Rent
|
|
322,105
|
|
|
157
|
|
|
322,262
|
|
|
324,716
|
|
|
471
|
|
|
325,187
|
|
||||||
Interest expense
|
|
(22,290
|
)
|
|
—
|
|
|
(22,290
|
)
|
|
(37,594
|
)
|
|
650
|
|
|
(36,944
|
)
|
||||||
(Loss) income from continuing operations before income taxes and equity in loss of affiliated companies
|
|
(54,328
|
)
|
|
(968
|
)
|
|
(55,296
|
)
|
|
10,098
|
|
|
1,683
|
|
|
11,781
|
|
||||||
Income taxes
|
|
(71,129
|
)
|
|
(1,826
|
)
|
|
(72,955
|
)
|
|
10,024
|
|
|
(371
|
)
|
|
9,653
|
|
||||||
(Loss) income from continuing operations
|
|
(137,080
|
)
|
|
(2,794
|
)
|
|
(139,874
|
)
|
|
4,166
|
|
|
1,312
|
|
|
5,478
|
|
||||||
Net (loss) income
|
|
$
|
(135,727
|
)
|
|
$
|
(2,794
|
)
|
|
$
|
(138,521
|
)
|
|
$
|
29,194
|
|
|
$
|
1,312
|
|
|
$
|
30,506
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(Loss) income per share from continuing operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic and diluted earnings per share(1)
|
|
$
|
(2.43
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(2.48
|
)
|
|
$
|
0.07
|
|
|
$
|
0.02
|
|
|
$
|
0.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net (loss) income per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Basic and diluted earnings per share(1)
|
|
$
|
(2.40
|
)
|
|
$
|
(0.05
|
)
|
|
$
|
(2.45
|
)
|
|
$
|
0.51
|
|
|
$
|
0.02
|
|
|
$
|
0.54
|
|
(1)
|
Total is a recalculation; line items calculated individually may not sum to total due to rounding.
|
|
|
REGIS CORPORATION
|
||||||||||||||||||||||
|
|
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
|
||||||||||||||||||||||
|
|
(Dollars in thousands)
|
||||||||||||||||||||||
|
|
Fiscal Years
|
||||||||||||||||||||||
|
|
2014
|
|
2013
|
||||||||||||||||||||
|
|
As Previously Reported
|
|
Revision
|
|
As Revised
|
|
As Previously Reported
|
|
Revision
|
|
As Revised
|
||||||||||||
Net (loss) income
|
|
$
|
(135,727
|
)
|
|
$
|
(2,794
|
)
|
|
$
|
(138,521
|
)
|
|
$
|
29,194
|
|
|
$
|
1,312
|
|
|
$
|
30,506
|
|
Comprehensive loss
|
|
$
|
(133,632
|
)
|
|
$
|
(2,794
|
)
|
|
$
|
(136,426
|
)
|
|
$
|
(5,364
|
)
|
|
$
|
1,312
|
|
|
$
|
(4,052
|
)
|
|
|
REGIS CORPORATION
|
||||||||||||||||||||||
|
|
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
|
||||||||||||||||||||||
|
|
(Dollars in thousands)
|
||||||||||||||||||||||
|
|
Fiscal Years
|
||||||||||||||||||||||
|
|
Retained Earnings
|
|
Total
|
||||||||||||||||||||
|
|
As Previously Reported
|
|
Revision
|
|
As Revised
|
|
As Previously Reported
|
|
Revision
|
|
As Revised
|
||||||||||||
Balance, June 30, 2012
|
|
$
|
484,229
|
|
|
$
|
(5,307
|
)
|
|
$
|
478,922
|
|
|
$
|
889,157
|
|
|
$
|
(5,307
|
)
|
|
$
|
883,850
|
|
Net income
|
|
29,194
|
|
|
1,312
|
|
|
30,506
|
|
|
29,194
|
|
|
1,312
|
|
|
30,506
|
|
||||||
Balance, June 30, 2013
|
|
499,760
|
|
|
(3,995
|
)
|
|
495,765
|
|
|
857,414
|
|
|
(3,995
|
)
|
|
853,419
|
|
||||||
Net loss
|
|
(135,727
|
)
|
|
(2,794
|
)
|
|
(138,521
|
)
|
|
(135,727
|
)
|
|
(2,794
|
)
|
|
(138,521
|
)
|
||||||
Balance, June 30, 2014
|
|
$
|
357,460
|
|
|
$
|
(6,789
|
)
|
|
$
|
350,671
|
|
|
$
|
720,781
|
|
|
$
|
(6,789
|
)
|
|
$
|
713,992
|
|
|
|
REGIS CORPORATION
|
||||||||||||||||||||||
|
|
CONSOLIDATED STATEMENT OF CASH FLOWS
|
||||||||||||||||||||||
|
|
(Dollars in thousands)
|
||||||||||||||||||||||
|
|
Fiscal Years
|
||||||||||||||||||||||
|
|
2014
|
|
2013
|
||||||||||||||||||||
|
|
As Previously Reported
|
|
Revision
|
|
As Revised
|
|
As Previously Reported
|
|
Revision
|
|
As Revised
|
||||||||||||
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net (loss) income
|
|
$
|
(135,727
|
)
|
|
$
|
(2,794
|
)
|
|
$
|
(138,521
|
)
|
|
$
|
29,194
|
|
|
$
|
1,312
|
|
|
$
|
30,506
|
|
Deferred income taxes
|
|
68,781
|
|
|
1,854
|
|
|
70,635
|
|
|
10,322
|
|
|
579
|
|
|
10,901
|
|
||||||
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Inventories
|
|
2,555
|
|
|
(280
|
)
|
|
2,275
|
|
|
(10,745
|
)
|
|
280
|
|
|
(10,465
|
)
|
||||||
Other current assets
|
|
(6,503
|
)
|
|
524
|
|
|
(5,979
|
)
|
|
(8,064
|
)
|
|
340
|
|
|
(7,724
|
)
|
||||||
Other assets
|
|
(103
|
)
|
|
15
|
|
|
(88
|
)
|
|
239
|
|
|
—
|
|
|
239
|
|
||||||
Accounts payable
|
|
1,907
|
|
|
—
|
|
|
1,907
|
|
|
19,086
|
|
|
(650
|
)
|
|
18,436
|
|
||||||
Accrued expenses
|
|
3,505
|
|
|
450
|
|
|
3,955
|
|
|
(26,431
|
)
|
|
(731
|
)
|
|
(27,162
|
)
|
||||||
Other noncurrent liabilities
|
|
(11,502
|
)
|
|
(417
|
)
|
|
(11,919
|
)
|
|
459
|
|
|
(482
|
)
|
|
(23
|
)
|
||||||
Net cash provided by operating activities
|
|
117,403
|
|
|
(648
|
)
|
|
116,755
|
|
|
69,148
|
|
|
648
|
|
|
69,796
|
|
||||||
Cash: Beginning of Year
|
|
200,488
|
|
|
648
|
|
|
201,136
|
|
|
111,943
|
|
|
—
|
|
|
111,943
|
|
||||||
Cash: End of Year
|
|
378,627
|
|
|
—
|
|
|
378,627
|
|
|
200,488
|
|
|
648
|
|
|
201,136
|
|
|
|
Fiscal Years
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
(Dollars in thousands)
|
||||||||||
North American Value
|
|
$
|
9,612
|
|
|
$
|
11,714
|
|
|
$
|
5,031
|
|
North American Premium
|
|
4,804
|
|
|
5,014
|
|
|
3,042
|
|
|||
International
|
|
188
|
|
|
1,599
|
|
|
151
|
|
|||
Total
|
|
$
|
14,604
|
|
|
$
|
18,327
|
|
|
$
|
8,224
|
|
|
Fiscal Year
|
||
|
2013
|
||
|
(Dollars in thousands)
|
||
Revenues
|
$
|
115,734
|
|
|
|
||
Income from discontinued operations, before income taxes
|
$
|
28,643
|
|
Income tax provision on discontinued operations
|
(4,242
|
)
|
|
Equity in income of affiliated companies, net of tax
|
627
|
|
|
Income from discontinued operations, net of income taxes
|
$
|
25,028
|
|
|
|
June 30,
|
||||||
|
|
2015
|
|
2014(1)
|
||||
|
|
(Dollars in thousands)
|
||||||
Other current assets:
|
|
|
|
|
||||
Prepaids
|
|
$
|
33,184
|
|
|
$
|
36,951
|
|
Restricted cash
|
|
27,811
|
|
|
27,500
|
|
||
Other
|
|
774
|
|
|
768
|
|
||
|
|
$
|
61,769
|
|
|
$
|
65,219
|
|
Property and equipment:
|
|
|
|
|
||||
Land
|
|
$
|
3,864
|
|
|
$
|
3,864
|
|
Buildings and improvements
|
|
48,563
|
|
|
48,108
|
|
||
Equipment, furniture and leasehold improvements
|
|
748,737
|
|
|
797,757
|
|
||
Internal use software
|
|
97,740
|
|
|
122,826
|
|
||
Equipment, furniture and leasehold improvements under capital leases
|
|
73,492
|
|
|
77,223
|
|
||
|
|
972,396
|
|
|
1,049,778
|
|
||
Less accumulated depreciation and amortization
|
|
(689,128
|
)
|
|
(718,959
|
)
|
||
Less amortization of equipment, furniture and leasehold improvements under capital leases
|
|
(65,111
|
)
|
|
(64,281
|
)
|
||
|
|
$
|
218,157
|
|
|
$
|
266,538
|
|
Accrued expenses:
|
|
|
|
|
||||
Payroll and payroll related costs
|
|
$
|
79,778
|
|
|
$
|
69,319
|
|
Insurance
|
|
21,145
|
|
|
19,493
|
|
||
Other
|
|
52,439
|
|
|
55,732
|
|
||
|
|
$
|
153,362
|
|
|
$
|
144,544
|
|
Other noncurrent liabilities:
|
|
|
|
|
||||
Deferred income taxes
|
|
$
|
91,197
|
|
|
$
|
83,201
|
|
Deferred rent
|
|
39,417
|
|
|
41,121
|
|
||
Insurance
|
|
29,910
|
|
|
33,530
|
|
||
Deferred benefits
|
|
20,710
|
|
|
25,965
|
|
||
Other
|
|
16,671
|
|
|
11,602
|
|
||
|
|
$
|
197,905
|
|
|
$
|
195,419
|
|
(1)
|
Prior year amounts for fiscal year 2014 have been revised. See Note 1 to the Consolidated Financial Statements.
|
|
|
June 30,
|
||||||||||||||||||||||||||
|
|
2015
|
|
2014
|
||||||||||||||||||||||||
|
|
Weighted Average Amortization Periods (1)
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
|
Weighted Average Amortization Periods (1)
|
|
Cost
|
|
Accumulated
Amortization
|
|
Net
|
||||||||||||
|
|
(In years)
|
|
(Dollars in thousands)
|
|
(In years)
|
|
(Dollars in thousands)
|
||||||||||||||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Brand assets and trade names
|
|
32
|
|
$
|
8,415
|
|
|
$
|
(3,551
|
)
|
|
$
|
4,864
|
|
|
32
|
|
$
|
9,203
|
|
|
$
|
(3,510
|
)
|
|
$
|
5,693
|
|
Franchise agreements
|
|
19
|
|
10,093
|
|
|
(6,934
|
)
|
|
3,159
|
|
|
19
|
|
11,063
|
|
|
(7,163
|
)
|
|
3,900
|
|
||||||
Lease intangibles
|
|
20
|
|
14,601
|
|
|
(7,960
|
)
|
|
6,641
|
|
|
20
|
|
14,775
|
|
|
(7,326
|
)
|
|
7,449
|
|
||||||
Other
|
|
20
|
|
6,115
|
|
|
(3,710
|
)
|
|
2,405
|
|
|
20
|
|
5,074
|
|
|
(2,304
|
)
|
|
2,770
|
|
||||||
|
|
22
|
|
$
|
39,224
|
|
|
$
|
(22,155
|
)
|
|
$
|
17,069
|
|
|
22
|
|
$
|
40,115
|
|
|
$
|
(20,303
|
)
|
|
$
|
19,812
|
|
(1)
|
All intangible assets have been assigned an estimated finite useful life and are amortized on a straight-line basis over the number of years that approximate their expected period of benefit (ranging from
one
to
40 years
).
|
Fiscal Year
|
(Dollars in
thousands)
|
||
2016
|
$
|
1,558
|
|
2017
|
1,507
|
|
|
2018
|
1,495
|
|
|
2019
|
1,495
|
|
|
2020
|
1,495
|
|
|
Thereafter
|
9,519
|
|
|
Total
|
$
|
17,069
|
|
|
|
Fiscal Years
|
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
|
||||||
|
|
(Dollars in thousands)
|
|
||||||||||
Cash paid (received) for:
|
|
|
|
|
|
|
|
||||||
Interest
|
|
$
|
12,336
|
|
|
$
|
21,173
|
|
|
$
|
38,990
|
|
(1)
|
Income taxes, net
|
|
(1,371
|
)
|
|
(16,266
|
)
|
|
1,088
|
|
|
(1)
|
Includes
$10.6 million
of cash paid for make-whole associated with prepayment of senior notes.
|
|
|
June 30,
|
||||||||||||||||||||||
|
|
2015
|
|
2014
|
||||||||||||||||||||
|
|
Gross
Carrying
Value (3)
|
|
Accumulated
Impairment (1)
|
|
Net
|
|
Gross
Carrying Value (3) |
|
Accumulated
Impairment (1)
|
|
Net
|
||||||||||||
|
|
(Dollars in thousands)
|
||||||||||||||||||||||
Goodwill
|
|
$
|
672,614
|
|
|
$
|
(253,661
|
)
|
|
$
|
418,953
|
|
|
$
|
678,925
|
|
|
$
|
(253,661
|
)
|
|
$
|
425,264
|
|
(1)
|
The table below contains additional information regarding accumulated impairment losses:
|
Fiscal Year
|
|
Impairment Charge
|
|
Reporting Unit (2)
|
||
|
|
(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)
|
See Notes 1 and 14 to the Consolidated Financial Statements.
|
(3)
|
The change in the gross carrying value of goodwill relates to foreign currency.
|
|
|
North American Value
|
|
North American Premium
|
|
Consolidated
|
||||||
|
|
(Dollars in thousands)
|
||||||||||
Goodwill, net at June 30, 2013
|
|
$
|
425,932
|
|
|
$
|
34,953
|
|
|
$
|
460,885
|
|
Goodwill impairment
|
|
—
|
|
|
(34,939
|
)
|
|
(34,939
|
)
|
|||
Goodwill acquired
|
|
130
|
|
|
—
|
|
|
130
|
|
|||
Translation rate adjustments
|
|
(798
|
)
|
|
(14
|
)
|
|
(812
|
)
|
|||
Goodwill, net at June 30, 2014
|
|
425,264
|
|
|
—
|
|
|
425,264
|
|
|||
Translation rate adjustments
|
|
(6,311
|
)
|
|
—
|
|
|
(6,311
|
)
|
|||
Goodwill, net at June 30, 2015
|
|
$
|
418,953
|
|
|
$
|
—
|
|
|
$
|
418,953
|
|
|
|
Greater Than 50 Percent Owned (1)
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
(Dollars in thousands)
|
||||||||||
Summarized Balance Sheet Information:
|
|
|
|
|
|
|
||||||
Current assets
|
|
$
|
46,438
|
|
|
$
|
54,774
|
|
|
$
|
35,900
|
|
Noncurrent assets
|
|
44,921
|
|
|
57,803
|
|
|
91,847
|
|
|||
Current liabilities
|
|
18,782
|
|
|
24,797
|
|
|
25,317
|
|
|||
Noncurrent liabilities
|
|
34,770
|
|
|
33,004
|
|
|
21,560
|
|
|||
Summarized Statement of Operations Information:
|
|
|
|
|
|
|
||||||
Gross revenue
|
|
$
|
154,997
|
|
|
$
|
166,540
|
|
|
$
|
170,964
|
|
Gross profit
|
|
38,557
|
|
|
52,440
|
|
|
58,457
|
|
|||
Operating (loss) income
|
|
(4,264
|
)
|
|
(33,526
|
)
|
|
4,981
|
|
|||
Net (loss) income
|
|
(16,738
|
)
|
|
(26,699
|
)
|
|
2,359
|
|
(1)
|
Represents the summarized financial information of EEG. As EEG is a significant subsidiary for the fiscal year 2015 financial statements, the separate financial statements of EEG are included subsequent to the Company's financial statements. Gross profit includes depreciation and amortization expense of
$4.1
,
$5.8
, and
$7.4 million
for fiscal years 2015, 2014 and 2013, respectively.
|
|
|
|
|
Interest rate %
|
|
|
|
|
||||||
|
|
|
|
Fiscal Years
|
|
June 30,
|
||||||||
|
|
Maturity Dates
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||
|
|
(fiscal year)
|
|
|
|
|
|
(Dollars in thousands)
|
||||||
Convertible senior notes
|
|
2015
|
|
5.00%
|
|
5.00%
|
|
$
|
—
|
|
|
$
|
172,246
|
|
Senior term notes
|
|
2018
|
|
5.75
|
|
5.75
|
|
120,000
|
|
|
120,000
|
|
||
Revolving credit facility
|
|
2018
|
|
—
|
|
—
|
|
—
|
|
|
—
|
|
||
Equipment and leasehold notes payable
|
|
2015 - 2016
|
|
4.90 - 8.75
|
|
4.90 - 8.75
|
|
2
|
|
|
1,257
|
|
||
|
|
|
|
|
|
|
|
120,002
|
|
|
293,503
|
|
||
Less current portion
|
|
|
|
|
|
|
|
(2
|
)
|
|
(173,501
|
)
|
||
Long-term portion
|
|
|
|
|
|
|
|
$
|
120,000
|
|
|
$
|
120,002
|
|
Fiscal year
|
(Dollars in thousands)
|
||
2016
|
$
|
2
|
|
2017
|
—
|
|
|
2018
|
120,000
|
|
|
2019
|
—
|
|
|
2020
|
—
|
|
|
Thereafter
|
—
|
|
|
|
$
|
120,002
|
|
|
|
Fiscal Years
|
||||||
|
|
2015
|
|
2014
|
||||
|
|
(Dollars in thousands)
|
||||||
Interest cost related to contractual interest coupon—5.0%
|
|
$
|
358
|
|
|
$
|
8,625
|
|
Interest cost related to amortization of the discount
|
|
254
|
|
|
5,792
|
|
||
Total interest cost
|
|
$
|
612
|
|
|
$
|
14,417
|
|
|
|
Fiscal Years
|
||||||||||
|
|
2015
|
|
2014(1)
|
|
2013(1)
|
||||||
|
|
(Dollars in thousands)
|
||||||||||
Minimum rent
|
|
$
|
236,137
|
|
|
$
|
246,844
|
|
|
$
|
247,258
|
|
Percentage rent based on sales
|
|
8,238
|
|
|
7,164
|
|
|
7,566
|
|
|||
Real estate taxes and other expenses
|
|
64,750
|
|
|
68,254
|
|
|
70,363
|
|
|||
|
|
$
|
309,125
|
|
|
$
|
322,262
|
|
|
$
|
325,187
|
|
(1)
|
Fiscal years 2014 and 2013 have been revised. See Note 1 to the Consolidated Financial Statements.
|
Fiscal Year
|
|
Corporate
leases
|
|
Franchisee
leases
|
||||
|
|
(Dollars in thousands)
|
||||||
2016
|
|
$
|
235,404
|
|
|
$
|
58,789
|
|
2017
|
|
184,069
|
|
|
49,575
|
|
||
2018
|
|
131,968
|
|
|
39,132
|
|
||
2019
|
|
88,495
|
|
|
28,747
|
|
||
2020
|
|
50,403
|
|
|
16,132
|
|
||
Thereafter
|
|
39,159
|
|
|
15,065
|
|
||
Total minimum lease payments
|
|
$
|
729,498
|
|
|
$
|
207,440
|
|
|
|
Fiscal Years
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
(Dollars in thousands)
|
||||||||||
(Loss) income before income taxes:
|
|
|
|
|
|
|
||||||
U.S.
|
|
$
|
(6,630
|
)
|
|
$
|
(52,815
|
)
|
|
$
|
(23,526
|
)
|
International
|
|
1,652
|
|
|
(2,481
|
)
|
|
35,307
|
|
|||
|
|
$
|
(4,978
|
)
|
|
$
|
(55,296
|
)
|
|
$
|
11,781
|
|
|
|
Fiscal Years
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
(Dollars in thousands)
|
||||||||||
Current:
|
|
|
|
|
|
|
||||||
U.S.
|
|
$
|
1,670
|
|
|
$
|
1,430
|
|
|
$
|
(21,264
|
)
|
International
|
|
1,781
|
|
|
890
|
|
|
710
|
|
|||
Deferred:
|
|
|
|
|
|
|
||||||
U.S.
|
|
9,439
|
|
|
69,854
|
|
|
10,996
|
|
|||
International
|
|
1,715
|
|
|
781
|
|
|
(95
|
)
|
|||
|
|
$
|
14,605
|
|
|
$
|
72,955
|
|
|
$
|
(9,653
|
)
|
|
|
June 30,
|
||||||
|
|
2015
|
|
2014
|
||||
|
|
(Dollars in thousands)
|
||||||
Deferred tax assets:
|
|
|
|
|
||||
Deferred rent
|
|
$
|
14,561
|
|
|
$
|
14,507
|
|
Payroll and payroll related costs
|
|
27,646
|
|
|
24,857
|
|
||
Net operating loss carryforwards
|
|
17,946
|
|
|
16,977
|
|
||
Tax credit carryforwards
|
|
25,296
|
|
|
20,134
|
|
||
Inventories
|
|
2,684
|
|
|
2,926
|
|
||
Accrued advertising
|
|
4,853
|
|
|
2,707
|
|
||
Insurance
|
|
6,779
|
|
|
6,801
|
|
||
Other
|
|
6,329
|
|
|
6,323
|
|
||
Subtotal
|
|
$
|
106,094
|
|
|
$
|
95,232
|
|
Valuation allowance
|
|
(103,240
|
)
|
|
(86,119
|
)
|
||
Total deferred tax assets
|
|
$
|
2,854
|
|
|
$
|
9,113
|
|
Deferred tax liabilities:
|
|
|
|
|
||||
Fixed assets
|
|
$
|
(2,372
|
)
|
|
$
|
(8,086
|
)
|
Goodwill and intangibles
|
|
(87,383
|
)
|
|
(77,650
|
)
|
||
Other
|
|
(6,309
|
)
|
|
(5,690
|
)
|
||
Total deferred tax liabilities
|
|
$
|
(96,064
|
)
|
|
$
|
(91,426
|
)
|
Net deferred tax liability
|
|
$
|
(93,210
|
)
|
|
$
|
(82,313
|
)
|
|
|
Fiscal Years
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
(Dollars in thousands)
|
||||||||||
Balance at beginning of period
|
|
$
|
1,468
|
|
|
$
|
10,015
|
|
|
$
|
4,381
|
|
(Reductions)/additions based on tax positions related to the current year
|
|
37
|
|
|
(2,114
|
)
|
|
44
|
|
|||
(Reductions)/additions based on tax positions of prior years
|
|
352
|
|
|
(505
|
)
|
|
7,132
|
|
|||
Reductions on tax positions related to the expiration of the statute of limitations
|
|
(361
|
)
|
|
(994
|
)
|
|
(1,403
|
)
|
|||
Settlements
|
|
—
|
|
|
(4,934
|
)
|
|
(139
|
)
|
|||
Balance at end of period
|
|
$
|
1,496
|
|
|
$
|
1,468
|
|
|
$
|
10,015
|
|
|
|
June 30,
|
||||||
|
|
2015
|
|
2014
|
||||
|
|
(Dollars in thousands)
|
||||||
Current portion (included in Accrued liabilities)
|
|
$
|
2,845
|
|
|
$
|
2,913
|
|
Long-term portion (included in Other noncurrent liabilities)
|
|
5,853
|
|
|
7,677
|
|
||
|
|
$
|
8,698
|
|
|
$
|
10,590
|
|
|
|
Fiscal Years
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
(Dollars in thousands)
|
||||||||||
Executive Plan (including profit sharing)
|
|
$
|
224
|
|
|
$
|
203
|
|
|
$
|
311
|
|
ESPP
|
|
325
|
|
|
347
|
|
|
441
|
|
|||
Deferred compensation contracts
|
|
1,195
|
|
|
1,641
|
|
|
2,370
|
|
|
|
Fiscal Years
|
|||||||
|
|
2015
|
|
2014
|
|
2013
|
|||
|
|
(Shares in thousands)
|
|||||||
Weighted average shares for basic earnings per share
|
|
54,992
|
|
|
56,482
|
|
|
56,704
|
|
Effect of dilutive securities:
|
|
|
|
|
|
|
|||
Dilutive effect of stock-based compensation(1)
|
|
—
|
|
|
—
|
|
|
142
|
|
Weighted average shares for diluted earnings per share
|
|
54,992
|
|
|
56,482
|
|
|
56,846
|
|
(1)
|
For fiscal year
2015
and
2014
,
251,763
and
119,750
common stock equivalents of potentially dilutive common stock were not included in the diluted earnings per share calculation due to the net loss from continuing operations.
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Stock options & SARs
|
|
$
|
6.16
|
|
|
$
|
6.00
|
|
|
$
|
6.63
|
|
RSAs & RSUs
|
|
15.95
|
|
|
15.50
|
|
|
17.40
|
|
|||
PSUs
|
|
15.15
|
|
|
15.73
|
|
|
18.33
|
|
|
|
2015
|
|
2014
|
|
2013
|
Risk-free interest rate
|
|
1.53 - 1.84%
|
|
1.67 - 1.96%
|
|
0.66 - 0.87%
|
Expected term (in years)
|
|
6.00
|
|
6.00
|
|
6.00
|
Expected volatility
|
|
38.00 - 44.00%
|
|
44.00%
|
|
44.00 - 47.00%
|
Expected dividend yield
|
|
0%
|
|
1.52 - 1.61%
|
|
1.33 - 1.46%
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
SARs & stock options
|
|
$
|
2,652
|
|
|
$
|
2,145
|
|
|
$
|
1,986
|
|
RSAs, RSUs, & PSUs
|
|
5,995
|
|
|
4,255
|
|
|
3,895
|
|
|||
Total stock-based compensation expense within General and Administrative expense
|
|
8,647
|
|
|
6,400
|
|
|
5,881
|
|
|||
Less: Income tax benefit(1)
|
|
—
|
|
|
—
|
|
|
(2,235
|
)
|
|||
Total stock-based compensation expense, net of tax
|
|
$
|
8,647
|
|
|
$
|
6,400
|
|
|
$
|
3,646
|
|
(1)
|
During fiscal year 2014, the Company recorded a valuation allowance against the majority of its deferred tax assets. Any subsequent stock-based compensation expense was not tax effected.
|
|
|
Shares
(in thousands)
|
|
Weighted
Average
Exercise Price
|
|
Weighted-
Average
Remaining
Contractual Life
|
|
Aggregate
Intrinsic Value
(in thousands)
|
|||||||
|
|
SARs
|
|
Stock
Options
|
|
|
|
||||||||
Outstanding balance at June 30, 2014
|
|
1,140
|
|
|
252
|
|
|
$
|
20.80
|
|
|
|
|
|
|
Granted
|
|
814
|
|
|
—
|
|
|
15.99
|
|
|
|
|
|
|
|
Forfeited/Expired
|
|
(189
|
)
|
|
(73
|
)
|
|
24.26
|
|
|
|
|
|
|
|
Exercised
|
|
(10
|
)
|
|
—
|
|
|
15.66
|
|
|
|
|
|
|
|
Outstanding balance at June 30, 2015
|
|
1,755
|
|
|
179
|
|
|
$
|
19.16
|
|
|
6.9
|
|
287
|
|
Exercisable at June 30, 2015
|
|
609
|
|
|
179
|
|
|
$
|
21.62
|
|
|
5.5
|
|
19
|
|
Unvested awards, net of estimated forfeitures
|
|
1,069
|
|
|
—
|
|
|
$
|
17.59
|
|
|
7.9
|
|
245
|
|
|
|
Shares/Units
(in thousands)
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Aggregate Intrinsic
Value
(in thousands)
|
||||||||
|
|
RSAs
|
|
RSUs
|
|
|
||||||||
Outstanding balance at June 30, 2014
|
|
186
|
|
|
512
|
|
|
$
|
16.34
|
|
|
|
|
|
Granted
|
|
—
|
|
|
478
|
|
|
15.95
|
|
|
|
|
||
Forfeited
|
|
(19
|
)
|
|
(72
|
)
|
|
15.42
|
|
|
|
|
||
Vested
|
|
(34
|
)
|
|
(109
|
)
|
|
16.32
|
|
|
|
|
||
Outstanding balance at June 30, 2015
|
|
133
|
|
|
809
|
|
|
$
|
15.86
|
|
|
$
|
14,830
|
|
Vested at June 30, 2015
|
|
—
|
|
|
129
|
|
|
$
|
16.10
|
|
|
$
|
2,029
|
|
Unvested awards, net of estimated forfeitures
|
|
132
|
|
|
639
|
|
|
$
|
16.31
|
|
|
$
|
12,149
|
|
|
|
Shares/Units
(in thousands)
|
|
Weighted
Average
Grant Date
Fair Value
|
|
Aggregate Intrinsic
Value
(in thousands)(1)
|
|||||
|
|
PSUs
|
|
|
|||||||
Outstanding balance at June 30, 2014
|
|
307
|
|
|
$
|
15.73
|
|
|
|
|
|
Granted
|
|
199
|
|
|
15.15
|
|
|
|
|
||
Forfeited
|
|
(207
|
)
|
|
14.09
|
|
|
|
|
||
Vested
|
|
—
|
|
|
—
|
|
|
|
|
||
Outstanding balance at June 30, 2015
|
|
299
|
|
|
$
|
15.28
|
|
|
$
|
5,020
|
|
Vested at June 30, 2015
|
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Unvested awards, net of estimated forfeitures
|
|
179
|
|
|
$
|
15.15
|
|
|
$
|
4,656
|
|
(1)
|
Includes actual or expected payout rates as set forth in the performance criteria.
|
|
|
June 30,
|
|||||||||
|
|
2015
|
|
2014
|
|
2013
|
|||||
|
|
(Dollars in thousands)
|
|||||||||
Foreign currency translation
|
|
$
|
8,849
|
|
|
$
|
22,364
|
|
|
20,434
|
|
Unrealized gain on deferred compensation contracts
|
|
657
|
|
|
287
|
|
|
122
|
|
||
Accumulated other comprehensive income
|
|
$
|
9,506
|
|
|
$
|
22,651
|
|
|
20,556
|
|
|
|
Fiscal Years
|
||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
(Dollars in thousands)
|
||||||||||
Revenues(1):
|
|
|
|
|
|
|
||||||
North American Value salons
|
|
$
|
1,403,419
|
|
|
$
|
1,430,083
|
|
|
$
|
1,515,581
|
|
North American Premium salons
|
|
309,600
|
|
|
333,858
|
|
|
373,820
|
|
|||
International salons
|
|
124,268
|
|
|
128,496
|
|
|
129,312
|
|
|||
|
|
$
|
1,837,287
|
|
|
$
|
1,892,437
|
|
|
$
|
2,018,713
|
|
Depreciation and amortization expense(1):
|
|
|
|
|
|
|
||||||
North American Value salons
|
|
$
|
56,832
|
|
|
$
|
66,038
|
|
|
$
|
56,364
|
|
North American Premium salons
|
|
13,094
|
|
|
15,859
|
|
|
15,893
|
|
|||
International salons
|
|
3,148
|
|
|
5,227
|
|
|
5,222
|
|
|||
Total segment depreciation and amortization expense
|
|
73,074
|
|
|
87,124
|
|
|
77,479
|
|
|||
Unallocated Corporate
|
|
9,789
|
|
|
12,609
|
|
|
14,276
|
|
|||
|
|
$
|
82,863
|
|
|
$
|
99,733
|
|
|
$
|
91,755
|
|
Operating income (loss)(1)(2):
|
|
|
|
|
|
|
||||||
North American Value salons
|
|
$
|
122,597
|
|
|
$
|
117,832
|
|
|
$
|
142,260
|
|
North American Premium salons(3)
|
|
(14,238
|
)
|
|
(46,419
|
)
|
|
(13,694
|
)
|
|||
International salons
|
|
313
|
|
|
(3,076
|
)
|
|
(1,660
|
)
|
|||
Total segment operating income
|
|
108,672
|
|
|
68,337
|
|
|
126,906
|
|
|||
Unallocated Corporate(2)
|
|
(105,141
|
)
|
|
(103,295
|
)
|
|
(113,547
|
)
|
|||
Operating income (loss)(1)(2)
|
|
$
|
3,531
|
|
|
$
|
(34,958
|
)
|
|
$
|
13,359
|
|
Interest expense
|
|
(10,206
|
)
|
|
(22,290
|
)
|
|
(36,944
|
)
|
|||
Interest income and other, net
|
|
1,697
|
|
|
1,952
|
|
|
35,366
|
|
|||
Loss from continuing operations before income taxes and equity in loss of affiliated companies(2)
|
|
$
|
(4,978
|
)
|
|
$
|
(55,296
|
)
|
|
$
|
11,781
|
|
(1)
|
See Note 2 to the Consolidated Financial Statements for discussion of the classification of the results of operations of Hair Club as discontinued operations.
|
(2)
|
Amounts for fiscal years 2014 and 2013 have been revised. See Note 1 to the Consolidated Financial Statements.
|
(3)
|
Included in the North American Premium salons segment's operating loss for fiscal year
2014
is a goodwill impairment charge of
34.9 million
.
|
|
|
June 30,
|
||||||||||||||||||||||
|
|
2015
|
|
2014
|
|
2013
|
||||||||||||||||||
|
|
Total
Revenues
|
|
Property and
Equipment, Net
|
|
Total
Revenues
|
|
Property and
Equipment, Net
|
|
Total
Revenues
|
|
Property and
Equipment, Net
|
||||||||||||
|
|
(Dollars in thousands)
|
||||||||||||||||||||||
U.S.
|
|
$
|
1,585,672
|
|
|
$
|
198,471
|
|
|
$
|
1,626,794
|
|
|
$
|
240,460
|
|
|
$
|
1,737,517
|
|
|
$
|
285,111
|
|
Other countries
|
|
251,615
|
|
|
19,686
|
|
|
265,643
|
|
|
26,078
|
|
|
281,196
|
|
|
28,349
|
|
||||||
Total
|
|
$
|
1,837,287
|
|
|
$
|
218,157
|
|
|
$
|
1,892,437
|
|
|
$
|
266,538
|
|
|
$
|
2,018,713
|
|
|
$
|
313,460
|
|
|
|
Quarter Ended
|
|
|
||||||||||||||||
|
|
September 30(a)
|
|
December 31(a)
|
|
March 31(a)
|
|
June 30
|
|
Year Ended(a)
|
||||||||||
|
|
(Dollars in thousands, except per share amounts)
|
||||||||||||||||||
2015
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
464,551
|
|
|
$
|
455,887
|
|
|
$
|
453,960
|
|
|
$
|
462,889
|
|
|
$
|
1,837,287
|
|
Cost of service and product revenues, excluding depreciation and amortization
|
|
268,664
|
|
|
268,049
|
|
|
261,947
|
|
|
264,615
|
|
|
1,063,275
|
|
|||||
Operating (loss) income
|
|
(754
|
)
|
|
(671
|
)
|
|
5,402
|
|
|
(446
|
)
|
|
3,531
|
|
|||||
Loss from continuing operations(c)
|
|
(9,843
|
)
|
|
(16,663
|
)
|
|
(4,763
|
)
|
|
(1,943
|
)
|
|
(33,212
|
)
|
|||||
Loss from discontinued operations(d)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(630
|
)
|
|
(630
|
)
|
|||||
Net loss(c)(d)
|
|
(9,843
|
)
|
|
(16,663
|
)
|
|
(4,763
|
)
|
|
(2,573
|
)
|
|
(33,842
|
)
|
|||||
Loss from continuing operations per share, basic and diluted(e)
|
|
(0.18
|
)
|
|
(0.30
|
)
|
|
(0.09
|
)
|
|
(0.04
|
)
|
|
(0.60
|
)
|
|||||
Loss from discontinued operations per share, basic and diluted
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(0.01
|
)
|
|
(0.01
|
)
|
|||||
Net loss per basic and diluted share(e)
|
|
(0.18
|
)
|
|
(0.30
|
)
|
|
(0.09
|
)
|
|
(0.05
|
)
|
|
(0.62
|
)
|
|
|
Quarter Ended
|
|
|
||||||||||||||||
|
|
September 30(a)
|
|
December 31(a)
|
|
March 31(a)
|
|
June 30(a)
|
|
Year Ended(a)
|
||||||||||
|
|
(Dollars in thousands, except per share amounts)
|
||||||||||||||||||
2014
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
|
$
|
468,583
|
|
|
$
|
468,367
|
|
|
$
|
471,561
|
|
|
$
|
483,926
|
|
|
$
|
1,892,437
|
|
Cost of service and product revenues, excluding depreciation and amortization
|
|
268,759
|
|
|
273,874
|
|
|
272,490
|
|
|
279,095
|
|
|
1,094,218
|
|
|||||
Operating income (loss)(b)
|
|
35
|
|
|
(34,233
|
)
|
|
(3,218
|
)
|
|
2,458
|
|
|
(34,958
|
)
|
|||||
Loss from continuing operations(b)(c)
|
|
(1,153
|
)
|
|
(110,889
|
)
|
|
(10,090
|
)
|
|
(17,742
|
)
|
|
(139,874
|
)
|
|||||
Income from discontinued operations(d)
|
|
—
|
|
|
—
|
|
|
609
|
|
|
744
|
|
|
1,353
|
|
|||||
Net loss(b)(c)(d)
|
|
(1,153
|
)
|
|
(110,889
|
)
|
|
(9,481
|
)
|
|
(16,998
|
)
|
|
(138,521
|
)
|
|||||
Loss from continuing operations per share, basic and diluted(e)
|
|
(0.02
|
)
|
|
(1.96
|
)
|
|
(0.18
|
)
|
|
(0.31
|
)
|
|
(2.48
|
)
|
|||||
Income from discontinued operations per share, basic and diluted
|
|
—
|
|
|
—
|
|
|
0.01
|
|
|
0.01
|
|
|
0.02
|
|
|||||
Net loss per basic and diluted share(e)
|
|
(0.02
|
)
|
|
(1.96
|
)
|
|
(0.17
|
)
|
|
(0.30
|
)
|
|
(2.45
|
)
|
|||||
Dividends declared per share
|
|
0.06
|
|
|
0.06
|
|
|
—
|
|
|
—
|
|
|
0.12
|
|
(a)
|
Amounts for fiscal years 2015 and 2014 have been revised from what was previously filed. As a result of this revision, net loss as previously presented for the three months ended September 30, 2014, December 31, 2014 and March 31, 2015 increased (decreased) by
$0.8
,
$(2.4)
and
$1.1 million
, respectively. Net loss as previously presented for the three months ended September 30, 2013, December 31, 2013, March 31, 2014 and June 30, 2014 increased by
$1.0
,
$1.8
,
$0
and
$0 million
, respectively. The Company plans to reflect the revised amounts in its quarterly Condensed Consolidated Financial Statements for fiscal 2015 in future filings containing such information. See Note 1 to the Consolidated Financial Statements.
|
(b)
|
During the second quarter of fiscal year 2014, the Company recorded a goodwill impairment charge of
$34.9 million
and a
$4.7 million
non-cash salon asset impairment charge. During the third quarter of fiscal 2014, the Company recorded non-cash salon impairment of
$8.9 million
.
|
(c)
|
During the second quarter of fiscal year 2015, the Company recorded a
$4.7 million
other than temporary impairment charge and
$6.9 million
of its share of the of a deferred tax valuation allowance on its investment in EEG. During the fourth quarter of fiscal year 2014, the Company recorded a
$12.6 million
charge representing its share of goodwill impairment charges recorded by EEG. During the second quarter of fiscal year 2014, the Company recorded an
$86.6 million
non-cash charge to establish a valuation allowance against the Company’s U.S. and U.K. deferred tax assets.
|
(d)
|
During the fourth quarter of fiscal year 2015, the Company recorded expenses of
$0.6 million
in discontinued operations related to legal fees related to Trade Secret. During fiscal year 2014, the Company recorded tax benefits of
$1.4 million
in discontinued operations related to the release of tax reserves associated with the disposition of Trade Secret.
|
(e)
|
Total is an annual recalculation; line items calculated quarterly may not sum to total.
|
•
|
Enhance rigor around identification and review of key lease terms and dates,
|
•
|
Implement additional monitoring controls to ensure compliance with accounting guidance,
|
•
|
Evaluate accounting software to enhance the use of systematic processes, including current software in use by the Company and other lease accounting software alternatives, and
|
•
|
Review and enhance, as appropriate, organizational structure including training and supervision of individuals responsible for lease accounting.
|
(b)
|
(1). All financial statements:
|
(c)
|
Exhibits:
|
3(a)
|
|
Election of the Company to become governed by Minnesota Statutes Chapter 302A and Restated Articles of Incorporation of the Company, dated March 11, 1983; Articles of Amendment to Restated Articles of Incorporation, dated October 29, 1984; Articles of Amendment to Restated Articles of Incorporation, dated August 14, 1987; Articles of Amendment to Restated Articles of Incorporation, dated October 21, 1987; Articles of Amendment to Restated Articles of Incorporation, dated November 20, 1996; Articles of Amendment to Restated Articles of Incorporation, dated July 25, 2000; Articles of Amendment to Restated Articles of Incorporation, dated October 22, 2013. (Incorporated by reference to Exhibit 3(a) of the Company's Report on 10-K/A filed on September 26, 2014.)
|
|
|
|
3(b)
|
|
By-Laws of the Company. (Incorporated by reference to Exhibit 3.1 of the Company's Report on Form 8-K filed on October 31, 2006.)
|
|
|
|
3(c)
|
|
Certificate of the Voting Powers, Designations, Preferences and Relative Participating, Optional and Other Special Rights and Qualifications, Limitations or Restrictions of Series A Junior Participating Preferred Stock of the Company. (Attached as Exhibit A to the Rights Agreement dated December 26, 2006, and incorporated by reference to Exhibit 2 of the Company's Registration Statement on Form 8-A12B filed on December 26, 2006.)
|
|
|
|
4(a)
|
|
Shareholder Rights Agreement, dated December 23, 1996, between the Company and Norwest Bank Minnesota, N.A. as Rights Agent. (Incorporated by reference to Exhibit 4 of the Company's Report on Form 8-A12G filed on February 4, 1997.)
|
|
|
|
4(b)
|
|
Rights Agreement, dated December 26, 2006, between the Company and Wells Fargo Bank, N.A., as Rights Agent, and Form of Right Certificate attached as Exhibit B to the Rights Agreement. (Incorporated by reference to Exhibits 1 and 3 of the Company's Registration Statement on Form 8-A12B, filed on December 26, 2006.)
|
|
|
|
4(c)
|
|
Amendment No. 1, dated as of October 29, 2008, to Rights Agreement, dated December 26, 2006, between Regis Corporation and Wells Fargo Bank, N.A. (Incorporated by reference to Exhibit 4 to the Company’s Form 8-A12B/A filed on October 29, 2008.)
|
|
|
|
4(d)
|
|
Amendment No. 2, dated as of June 13, 2013, to Rights Agreement, dated December 26, 2006, between Regis Corporation and Wells Fargo Bank, N.A. (Incorporated by reference to Exhibit 4 to the Company's Registration Statement on Form 8-A12B/A filed on June 19, 2013.)
|
|
|
|
4(e)
|
|
Form of Stock Certificate. (Incorporated by reference to Exhibit 4.1 of the Company's Registration Statement on Form S-1 (Reg. No. 40142).)
|
|
|
|
4(f)
|
|
Indenture dated November 27, 2013 by and between the Company and Wells Fargo Bank, N.A, as Trustee. (Incorporated by reference to Exhibit 10.4 of the Company's Report on Form 8-K filed December 4, 2013.)
|
|
|
|
10(a)*
|
|
Short Term Incentive Compensation Plan, effective August 19, 2014. (Incorporated by reference to Appendix A of the Company's Proxy Statement on Definitive Form 14A filed on September 10, 2014, for the year ended June 30, 2014.)
|
|
|
|
10(b)*
|
|
Regis Corporation Executive Retirement Savings Plan Adoption Agreement and Trust Agreement, dated November 15, 2008 between the Company and Fidelity Management Trust Company (The CORPORATE Plan for Retirement EXECUTIVE PLAN basic plan document is incorporated by reference to Exhibit 10(c) to the Company's Report on Form 10-K filed on August 29, 2007, for the year ended June 30, 2007). (Incorporated by reference to Exhibit 10(a) of the Company's Report on Form 10-Q filed February 9, 2009.)
|
10(c)*
|
|
Employment Agreement, dated August 31, 2012, between the Company and Daniel J. Hanrahan. (Incorporated by reference to Exhibit 10(a) of the Company's Report on Form 10-Q filed November 9, 2012.)
|
|
|
|
10(d)*
|
|
Amendment to Employment Agreement, dated January 13, 2015, between the Company and Daniel J. Hanrahan. (Incorporated by reference to Exhibit 10(b) of the Company's Report on Form 10-Q filed January 29, 2015.)
|
|
|
|
10(e)*
|
|
Employment Agreement, dated November 28, 2012, between the Company and Steven M. Spiegel. (Incorporated by reference to Exhibit 10(a) of the Company's Report on Form 10-Q filed February 4, 2013.)
|
|
|
|
10(f)*
|
|
Form of Amended and Restated Senior Officer Employment and Deferred Compensation Agreement, dated August 31, 2012, between the Company and certain senior executive officers. (Incorporated by reference to Exhibit 10(b) of the Company's Report on Form 10-Q filed November 9, 2012.)
|
|
|
|
10(g)*
|
|
Employment Agreement, dated November 11, 2013, between the Company and Jim B. Lain. (Incorporated by reference to Exhibit 10(c) of the Company's Report on Form 10-Q filed February 3, 2014.)
|
|
|
|
10(h)*
|
|
Employment Agreement, dated October 21, 2013, between the Company and Carmen Thiede. (Incorporated by reference to Exhibit 10(b) of the Company's Report on Form 10-Q filed February 3, 2014.)
|
|
|
|
10(i)*
|
|
Employment Agreement, dated December 15, 2014, between the Company and Annette Miller. (Incorporated by reference to Exhibit 10(a) of the Company's Report on Form 10-Q filed January 29, 2015.)
|
|
|
|
10(j)*
|
|
Amended and Restated Employment Agreement, effective February 1, 2015, between the Company and Ken Warfield. (Incorporated by reference to Exhibit 10(a) of the Company's Report on Form 10-Q filed April 30, 2015.)
|
|
|
|
10(k)*
|
|
Amended and Restated Employment Agreement, dated May 1, 2015, between the Company and Andrew Dulka.
|
|
|
|
10(l)*
|
|
Amended and Restated 2004 Long Term Incentive Plan, as amended and restated effective October 22, 2013. (Incorporated by reference to Exhibit 10.1 of the Company's Report on Form 8-K filed on October 11, 2013.)
|
|
|
|
10(m)*
|
|
Amendment to the Amended and Restated 2004 Long Term Incentive Plan, effective August 29, 2014. (Incorporated by reference to Exhibit 10(b) of the Company's Report on Form 10-Q filed November 4, 2014.)
|
|
|
|
10(n)
|
|
Sixth Amended and Restated Credit Agreement, dated June 11, 2013, among the Company, and various financial institutions party thereto, JPMorgan Chase Bank, N.A., as Administrative Agent, Swing Line Lender, and Issuer, Bank of America, as Syndication Agent, and The Bank of Tokyo-Mitsubishi UFJ, Ltd., U.S. Bank National Association, and Wells Fargo Bank, N.A., as Documentation Agents. (Incorporated by reference to Exhibit 10.1 of the Company's Report on Form 8-K filed June 14, 2013.)
|
|
|
|
10(o)
|
|
Purchase Agreement dated November 27, 2013 by and between the Company and an Initial Purchaser. (Incorporated by reference to Exhibit 10.1 of the Company's Report on Form 8-K filed December 4, 2013.)
|
|
|
|
10(p)
|
|
Purchase Agreement dated November 27, 2013 by and between the Company and an Initial Purchaser. (Incorporated by reference to Exhibit 10.2 of the Company's Report on Form 8-K filed December 4, 2013.)
|
|
|
|
10(q)
|
|
Purchase Agreement dated November 27, 2013 by and between the Company and an Initial Purchaser. (Incorporated by reference to Exhibit 10.3 of the Company's Report on Form 8-K filed December 4, 2013.)
|
|
|
|
21
|
|
List of Subsidiaries of Regis Corporation
|
|
|
|
23.1
|
|
Consent of PricewaterhouseCoopers LLP
|
|
|
|
23.2
|
|
Consent of Baker Tilly Virchow Krause, LLP
|
|
|
|
31.1
|
|
Chief Executive Officer of the Company: Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
31.2
|
|
Executive Vice President and Chief Financial Officer of the Company: Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
|
|
32
|
|
Chief Executive Officer and Chief Financial Officer of the Company: Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
|
|
|
101.INS
|
|
XBRL Instance Document
|
|
|
|
101.SCH
|
|
XBRL Taxonomy Extension Schema
|
|
|
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
|
|
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
|
|
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
|
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
(*)
|
Management contract, compensatory plan or arrangement required to be filed as an exhibit to the Company's Report on Form 10-K.
|
|
REGIS CORPORATION
|
|
|
By
|
/s/ DANIEL J. HANRAHAN
|
|
|
Daniel J. Hanrahan,
President and Chief Executive Officer
(Principal Executive Officer)
|
|
|
|
|
By
|
/s/ STEVEN M. SPIEGEL
|
|
|
Steven M. Spiegel,
Executive Vice President,
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
|
By
|
/s/ KERSTEN D. ZUPFER
|
|
|
Kersten D. Zupfer,
Vice President, Controller and Chief Accounting Officer
(Principal Accounting Officer)
|
|
DATE: August 28, 2015
|
/s/ STEPHEN E. WATSON
|
|
|
Stephen E. Watson,
Chairman of the Board of Directors
|
|
Date: August 28, 2015
|
|
|
|
/s/ DANIEL J. HANRAHAN
|
|
|
Daniel J. Hanrahan,
Director
|
|
Date: August 28, 2015
|
|
|
|
/s/ DANIEL G. BELTZMAN
|
|
|
Daniel G. Beltzman,
Director
|
|
Date: August 28, 2015
|
|
|
|
/s/ JAMES P. FOGARTY
|
|
|
James P. Fogarty,
Director
|
|
Date: August 28, 2015
|
|
|
|
/s/ MICHAEL J. MERRIMAN
|
|
|
Michael J. Merriman,
Director
|
|
Date: August 28, 2015
|
|
|
|
/s/ DAVID P. WILLIAMS
|
|
|
David P. Williams,
Director
|
|
Date: August 28, 2015
|
|
|
|
/s/ DAVID J. GRISSEN
|
|
|
David J. Grissen,
Director
|
|
Date: August 28, 2015
|
|
|
|
/s/ MARK LIGHT
|
|
|
Mark Light,
Director
|
|
Date: August 28, 2015
|
|
|
|
|
Page
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
Consolidated Financial Statements
|
|
|
|
|
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
2015
|
|
2014
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Assets
|
|
|
|
|
Liabilities and Shareholders' Equity
|
|
|
|
||||||||||||||
|
|
|
|
|
|
|
|
|
||||||||||||||
Current Assets
|
|
|
|
|
Current liabilities
|
|
|
|
||||||||||||||
|
Cash and cash equivalents
|
$
|
34,151,811
|
|
|
$
|
37,891,769
|
|
|
|
Current maturities, capital lease obligation
|
|
|
|
||||||||
|
Restricted cash, trust liabilities
|
449,243
|
|
|
104,079
|
|
|
|
|
and long term debt
|
$
|
458,722
|
|
|
$
|
465,312
|
|
|||||
|
Accounts receivable:
|
|
|
|
|
|
Accounts payable, trade
|
2,389,701
|
|
|
2,977,521
|
|
||||||||||
|
|
Students (net of allowance of $8,664,840 and
|
|
|
|
|
|
Accounts payable, accrued
|
3,431,053
|
|
|
3,452,460
|
|
|||||||||
|
|
$6,710,886 in 2015 and 2014, respectively)
|
6,367,681
|
|
|
3,238,576
|
|
|
|
Accrued payroll
|
1,535,836
|
|
|
2,726,493
|
|
|||||||
|
|
Other
|
80,833
|
|
|
94,329
|
|
|
|
Accrued expenses
|
1,284,163
|
|
|
1,361,940
|
|
|||||||
|
|
Affiliates, unsecured
|
45,859
|
|
|
17,165
|
|
|
|
Trust liabilities
|
199,181
|
|
|
104,079
|
|
|||||||
|
Inventories
|
2,632,618
|
|
|
3,971,048
|
|
|
|
Unearned tuition
|
9,483,511
|
|
|
13,708,876
|
|
||||||||
|
Prepaid expenses
|
1,278,926
|
|
|
2,457,756
|
|
|
|
|
|
|
|
||||||||||
|
Prepaid corporate income taxes
|
1,431,345
|
|
|
3,863,741
|
|
|
|
|
|
Total current liabilities
|
18,782,167
|
|
|
24,796,681
|
|
||||||
|
Deferred tax asset, net
|
—
|
|
|
3,135,326
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
Capital Lease Obligation
|
7,031,094
|
|
|
7,268,653
|
|
|||||||||
|
|
|
Total current assets
|
46,438,316
|
|
|
54,773,789
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
Long-Term Debt
|
20,642,677
|
|
|
21,278,840
|
|
|||||||||
Property and Equipment, Net
|
34,907,422
|
|
|
36,528,003
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
Deferred Rent
|
6,878,714
|
|
|
4,238,890
|
|
||||||||||||
Other Assets
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Intangibles, not subject to amortization
|
8,704,186
|
|
|
8,704,186
|
|
|
Deferred Compensation
|
217,768
|
|
|
217,768
|
|
|||||||||
|
Intangibles, net
|
157,641
|
|
|
234,355
|
|
|
|
|
|
|
|
|
|
||||||||
|
Prepublication costs (net of accumulated amortization
|
|
|
|
|
|
|
|
Total liabilities
|
53,552,420
|
|
|
57,800,832
|
|
||||||||
|
|
of $85,522 and $24,408 in 2015 and 2014, respectively)
|
231,120
|
|
|
279,134
|
|
|
Commitments and Contingencies (Notes 11, 14)
|
|
|
|
||||||||||
|
Notes receivable, employees, secured
|
215,701
|
|
|
269,754
|
|
|
|
|
|
|
|||||||||||
|
Deposits and other assets
|
704,756
|
|
|
744,082
|
|
|
Shareholders' Equity
|
|
|
|
|||||||||||
|
Deferred tax asset, net
|
—
|
|
|
11,043,038
|
|
|
|
Preferred stock:
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
Series A, 8% cumulative, redeemable, $0.001
|
|
|
|
|||||||||
|
|
|
Total other assets
|
10,013,404
|
|
|
21,274,549
|
|
|
|
|
|
par value, 150 shares authorized, none
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
issued and outstanding
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
Series B, 8% cumulative, redeemable, $0.001
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
par value, 114 shares authorized, none
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
issued and outstanding
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
Common stock, $0.001 par value; 10,000 shares
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
authorized, 897.938 and 899.938 shares
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
Issued and outstanding in 2015 and 2014,
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
respectively
|
1
|
|
|
1
|
|
||||||
|
|
|
|
|
|
|
|
|
Additional paid-in capital
|
66,400,281
|
|
|
66,595,868
|
|
||||||||
|
|
|
|
|
|
|
|
|
Accumulated deficit
|
(28,593,560
|
)
|
|
(11,820,360
|
)
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
Total shareholders' equity
|
37,806,722
|
|
|
54,775,509
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
Total
|
$
|
91,359,142
|
|
|
$
|
112,576,341
|
|
|
|
|
|
Total
|
$
|
91,359,142
|
|
|
$
|
112,576,341
|
|
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Revenue
|
|
|
|
|
|
||||||||
|
Educational services
|
$
|
132,946,719
|
|
|
$
|
146,462,085
|
|
|
$
|
150,474,847
|
|
|
|
Products
|
22,050,047
|
|
|
20,078,121
|
|
|
20,489,289
|
|
||||
|
|
|
|
|
|
|
|
||||||
|
|
Total revenue
|
154,996,766
|
|
|
166,540,206
|
|
|
170,964,136
|
|
|||
|
|
|
|
|
|
|
|
||||||
Operating Expenses
|
|
|
|
|
|
||||||||
|
Cost of educational services
|
97,804,550
|
|
|
95,493,987
|
|
|
91,750,973
|
|
||||
|
Cost of product sales
|
14,545,443
|
|
|
12,815,299
|
|
|
13,337,935
|
|
||||
|
General, selling, and administrative
|
38,269,157
|
|
|
42,850,496
|
|
|
43,816,472
|
|
||||
|
Depreciation and amortization
|
5,352,592
|
|
|
7,385,895
|
|
|
9,327,185
|
|
||||
|
Other operating expenses
|
2,902,235
|
|
|
3,052,561
|
|
|
4,126,347
|
|
||||
|
Loss (gain) on disposal and sale of assets
|
167,942
|
|
|
14,026
|
|
|
(256,898
|
)
|
||||
|
Impairment loss
|
218,950
|
|
|
38,454,344
|
|
|
3,881,298
|
|
||||
|
|
|
|
|
|
|
|
||||||
|
|
Total operating expenses
|
159,260,869
|
|
|
200,066,608
|
|
|
165,983,312
|
|
|||
|
|
|
|
|
|
|
|
||||||
(Loss) Income from Operations
|
(4,264,103
|
)
|
|
(33,526,402
|
)
|
|
4,980,824
|
|
|||||
|
|
|
|
|
|
||||||||
Other Income (Expense)
|
|
|
|
|
|
||||||||
|
Interest expense
|
(655,523
|
)
|
|
(661,863
|
)
|
|
(670,607
|
)
|
||||
|
Interest income
|
73,156
|
|
|
38,702
|
|
|
11,960
|
|
||||
|
Miscellaneous income
|
733,594
|
|
|
185,167
|
|
|
704,531
|
|
||||
|
|
|
|
|
|
|
|
||||||
|
|
Total other income (expense), net
|
151,227
|
|
|
(437,994
|
)
|
|
45,884
|
|
|||
|
|
|
|
|
|
|
|
||||||
(Loss) Income Before Provision (Benefit) for Income Taxes
|
(4,112,876
|
)
|
|
(33,964,396
|
)
|
|
5,026,708
|
|
|||||
|
|
|
|
|
|
||||||||
Provision (Benefit) for Income Taxes
|
12,625,065
|
|
|
(7,265,186
|
)
|
|
2,667,765
|
|
|||||
|
|
|
|
|
|
|
|
||||||
|
|
Net (Loss) Income
|
$
|
(16,737,941
|
)
|
|
$
|
(26,699,210
|
)
|
|
$
|
2,358,943
|
|
|
|
|
|
|
Additional
|
|
Retained Earnings
|
|
|
|||||||||
|
Common Stock
|
|
Paid-in
|
|
(Accumulated
|
|
|
|||||||||||
|
Shares
|
|
Amount
|
|
Capital
|
|
Deficit)
|
|
Total
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, June 30, 2012
|
889.938
|
|
|
$
|
1
|
|
|
$
|
65,614,530
|
|
|
$
|
12,519,907
|
|
|
$
|
78,134,438
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net Loss
|
|
|
—
|
|
|
—
|
|
|
2,358,943
|
|
|
2,358,943
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Compensation Costs from Stock Options
|
|
|
—
|
|
|
375,541
|
|
|
—
|
|
|
375,541
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, June 30, 2013
|
889.938
|
|
|
1
|
|
|
65,990,071
|
|
|
14,878,850
|
|
|
80,868,922
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Net Loss
|
|
|
—
|
|
|
—
|
|
|
(26,699,210
|
)
|
|
(26,699,210
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Stock Option Exercise
|
10
|
|
|
—
|
|
|
234,020
|
|
|
—
|
|
|
234,020
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Compensation Costs from Stock Options
|
|
|
—
|
|
|
371,777
|
|
|
—
|
|
|
371,777
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, June 30, 2014
|
899.938
|
|
|
1
|
|
|
66,595,868
|
|
|
(11,820,360
|
)
|
|
54,775,509
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Net Loss
|
|
|
—
|
|
|
—
|
|
|
(16,737,941
|
)
|
|
(16,737,941
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Repurchase & Cancellation of Shares
|
(2
|
)
|
|
—
|
|
|
(46,804
|
)
|
|
(35,259
|
)
|
|
(82,063
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Cancellation of Non-Qualified Stock Option
|
|
|
—
|
|
|
(179,764
|
)
|
|
—
|
|
|
(179,764
|
)
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Compensation Costs from Stock Options
|
|
|
—
|
|
|
30,981
|
|
|
—
|
|
|
30,981
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|||||||||
Balance, June 30, 2015
|
897.938
|
|
|
1
|
|
|
66,400,281
|
|
|
(28,593,560
|
)
|
|
37,806,722
|
|
|
|
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Cash Flows from Operating Activities
|
|
|
|
|
|
||||||||||
|
Net (loss) income
|
$
|
(16,737,941
|
)
|
|
$
|
(26,699,210
|
)
|
|
$
|
2,358,943
|
|
|||
|
Adjustments to reconcile net (loss) income to net cash
|
|
|
|
|
|
|||||||||
|
provided by operating activities:
|
|
|
|
|
|
|||||||||
|
|
Depreciation
|
5,214,764
|
|
|
7,269,278
|
|
|
8,925,160
|
|
|||||
|
|
Amortization of intangibles
|
76,714
|
|
|
92,210
|
|
|
145,686
|
|
|||||
|
|
Amortization of prepublication costs
|
61,114
|
|
|
24,408
|
|
|
286,261
|
|
|||||
|
|
Impairment loss
|
218,950
|
|
|
38,454,344
|
|
|
3,881,298
|
|
|||||
|
|
Compensation cost from stock options
|
30,981
|
|
|
371,777
|
|
|
375,541
|
|
|||||
|
|
Loss (gain) on disposal and sale of equipment
|
167,942
|
|
|
14,026
|
|
|
(256,898
|
)
|
|||||
|
|
Changes in assets and liabilities:
|
|
|
|
|
|
||||||||
|
|
|
|
Accounts receivable, student
|
(5,083,059
|
)
|
|
(178,954
|
)
|
|
345,548
|
|
|||
|
|
|
|
Deferred income taxes
|
13,998,601
|
|
|
(6,772,707
|
)
|
|
62,005
|
|
|||
|
|
|
|
Provision for uncollectible accounts
|
1,953,954
|
|
|
(1,114,546
|
)
|
|
(558,967
|
)
|
|||
|
|
|
|
Inventories
|
1,338,430
|
|
|
(1,776,362
|
)
|
|
867,656
|
|
|||
|
|
|
|
Prepaid expenses and other assets
|
3,635,353
|
|
|
(1,472,144
|
)
|
|
(193,142
|
)
|
|||
|
|
|
|
Restricted cash
|
(250,062
|
)
|
|
|
|
—
|
|
||||
|
|
|
|
Notes receivable, employee, secured
|
(1,156
|
)
|
|
(35,734
|
)
|
|
—
|
|
|||
|
|
|
|
Accounts payable and accrued expenses
|
(1,904,515
|
)
|
|
760,895
|
|
|
(423,604
|
)
|
|||
|
|
|
|
Unearned tuition
|
(4,225,365
|
)
|
|
(1,249,956
|
)
|
|
(382,903
|
)
|
|||
|
|
|
|
Deferred rent
|
2,639,824
|
|
|
(5,857
|
)
|
|
200,851
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
Total adjustments
|
17,872,470
|
|
|
34,380,678
|
|
|
13,274,492
|
|
||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
Net cash provided by operating activities
|
1,134,529
|
|
|
7,681,468
|
|
|
15,633,435
|
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Cash Flows from Investing Activities
|
|
|
|
|
|
||||||||||
|
Purchases of property and equipment
|
(4,223,078
|
)
|
|
(4,336,333
|
)
|
|
(8,503,783
|
)
|
||||||
|
Proceeds from disposal and sale of equipment
|
242,003
|
|
|
54,626
|
|
|
401,049
|
|
||||||
|
Investment in prepublication costs
|
(13,100
|
)
|
|
(254,010
|
)
|
|
(49,532
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
Net cash used in investing activities
|
(3,994,175
|
)
|
|
(4,535,717
|
)
|
|
(8,152,266
|
)
|
||||
|
|
|
|
|
|
||||||||||
Cash Flows from Financing Activities
|
|
|
|
|
|
||||||||||
|
Net (repayment) proceeds of long-term debt
|
(636,163
|
)
|
|
11,653,536
|
|
|
(27,232,983
|
)
|
||||||
|
Repayment of capital lease obligation
|
(244,149
|
)
|
|
(225,701
|
)
|
|
(208,648
|
)
|
||||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
Net cash (used in) provided by financing activities
|
(880,312
|
)
|
|
11,427,835
|
|
|
(27,441,631
|
)
|
||||
|
|
|
|
|
|
|
|
|
|
||||||
Net (Decrease) Increase in Cash and Cash Equivalents
|
(3,739,958
|
)
|
|
14,573,586
|
|
|
(19,960,462
|
)
|
|||||||
|
|
|
|
|
|
||||||||||
Cash and Cash Equivalents, Beginning
|
37,891,769
|
|
|
23,318,183
|
|
|
43,278,645
|
|
|||||||
|
|
|
|
|
|
||||||||||
Cash and Cash Equivalents, End
|
$
|
34,151,811
|
|
|
$
|
37,891,769
|
|
|
$
|
23,318,183
|
|
||||
|
|
|
|
|
|
||||||||||
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
||||||||||
|
Interest paid, net of capitalized interest
|
$
|
648,105
|
|
|
$
|
667,278
|
|
|
$
|
655,464
|
|
|||
|
|
|
|
|
|
|
|||||||||
|
Income taxes paid, net of refunds
|
$
|
(3,736,501
|
)
|
|
$
|
81,264
|
|
|
$
|
3,711,969
|
|
|
|
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
|
|
|
|
||||||
Supplemental Disclosure of Non-Cash Operating and Financing Activities
|
|
|
|
|
|
||||||||||
|
Shareholders note receivable exchanged for common stock
|
$
|
—
|
|
|
$
|
234,020
|
|
|
$
|
—
|
|
|||
|
|
|
|
|
|
|
|||||||||
|
Additional paid-in capital - repurchase and cancellation of shares
|
$
|
101,757
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|||
|
|
|
|
|
|
|
|
||||||||
|
Retained earnings - repurchase and cancellation of shares
|
$
|
35,259
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|||
|
|
|
|
|
|
|
|
||||||||
|
Notes receivable, employee, secured - repurchase and cancellation of shares
|
$
|
(110,163
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|||
|
|
|
|
|
|
|
|
||||||||
|
Accrued expenses - repurchase and cancellation of shares
|
$
|
(26,853
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
|||
|
|
|
|
|
|
|
|
||||||||
|
Additional paid-in capital - non-qualifying stock option cancellation after vesting
|
$
|
179,764
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|||
|
|
|
|
|
|
|
|
|
|
||||||
|
Deferred tax asset - non-qualifying stock option cancelled after vesting
|
$
|
(179,764
|
)
|
|
$
|
—
|
|
|
$
|
—
|
|
1.
|
Nature of Operations and Summary of Significant Accounting Policies
|
1.
|
Nature of Operations and Summary of Significant Accounting Policies (Continued)
|
1.
|
Nature of Operations and Summary of Significant Accounting Policies (Continued)
|
1.
|
Nature of Operations and Summary of Significant Accounting Policies (Continued)
|
1.
|
Nature of Operations and Summary of Significant Accounting Policies (Continued)
|
2.
|
Restricted Cash
|
|
2015
|
|
2014
|
||||
Certificate of deposit
|
$
|
250,062
|
|
|
$
|
—
|
|
Title IV program funds
|
2,180
|
|
|
225
|
|
||
State agencies student funds
|
16,090
|
|
|
12,092
|
|
||
Third party scholarship funds
|
113,000
|
|
|
—
|
|
||
Charitable contribution pledges
|
67,774
|
|
|
91,693
|
|
||
Other
|
137
|
|
|
69
|
|
||
Total restricted cash
|
$
|
449,243
|
|
|
$
|
104,079
|
|
3.
|
Property and Equipment, Net
|
|
|
2015
|
|
2014
|
||||
Land
|
$
|
900,000
|
|
|
$
|
950,000
|
|
|
Building
|
200,000
|
|
|
415,000
|
|
|||
Capital lease asset (Note 5)
|
8,200,000
|
|
|
8,200,000
|
|
|||
Leasehold improvements
|
42,964,878
|
|
|
43,997,366
|
|
|||
Furniture, fixtures, and equipment
|
24,832,102
|
|
|
26,558,285
|
|
|||
Automotive equipment
|
275,235
|
|
|
349,809
|
|
|||
Audio-video equipment
|
2,377,130
|
|
|
2,563,610
|
|
|||
Signs
|
1,519,957
|
|
|
1,655,237
|
|
|||
Construction in progress
|
577,327
|
|
|
1,263,836
|
|
|||
|
|
|
|
|
||||
|
Total cost
|
81,846,629
|
|
|
85,953,143
|
|
||
|
|
|
|
|
||||
Less accumulated depreciation and
|
|
|
|
|||||
amortization
|
46,939,207
|
|
|
49,425,140
|
|
|||
|
|
|
|
|||||
Property and equipment, net
|
$
|
34,907,422
|
|
|
$
|
36,528,003
|
|
4.
|
Intangible Assets
|
4.
|
Intangible Assets (Continued)
|
|
|
2015
|
||||||||||
|
|
Cost
|
|
Accumulated Amortization
|
|
Net
Carrying Amount
|
||||||
|
|
|
|
|
|
|
|
|
|
|||
Copyrights and trade names
|
$
|
2,623,883
|
|
|
$
|
2,601,200
|
|
|
$
|
22,683
|
|
|
Below market rate leases
|
1,100,614
|
|
|
978,181
|
|
|
122,433
|
|
||||
Business covenants
|
730,100
|
|
|
717,575
|
|
|
12,525
|
|
||||
Customer lists
|
50,000
|
|
|
50,000
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
|
|
|||
|
Total
|
$
|
4,504,597
|
|
|
$
|
4,346,956
|
|
|
$
|
157,641
|
|
|
|
2014
|
||||||||||
|
|
Cost
|
|
Accumulated Amortization
|
|
Net
Carrying Amount
|
||||||
|
|
|
|
|
|
|
||||||
Copyrights and trade names
|
$
|
2,763,883
|
|
|
$
|
2,738,358
|
|
|
$
|
25,525
|
|
|
Below market rate leases
|
1,372,503
|
|
|
1,206,218
|
|
|
166,285
|
|
||||
Business covenants
|
730,100
|
|
|
687,555
|
|
|
42,545
|
|
||||
Customer lists
|
50,000
|
|
|
50,000
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
||||||
|
Total
|
$
|
4,916,486
|
|
|
$
|
4,682,131
|
|
|
$
|
234,355
|
|
Years ending June 30:
|
|
||||
|
|
|
|
||
|
2016
|
$
|
46,901
|
|
|
|
2017
|
26,154
|
|
||
|
2018
|
15,596
|
|
||
|
2019
|
15,595
|
|
||
|
2020
|
12,289
|
|
||
|
|
Total
|
$
|
116,535
|
|
5.
|
Capital Lease Obligation
|
Years ending June 30:
|
|
|
|||
|
2016
|
$
|
891,522
|
|
|
|
2017
|
891,522
|
|
||
|
2018
|
891,522
|
|
||
|
2019
|
891,522
|
|
||
|
2020
|
891,522
|
|
||
|
Thereafter
|
8,915,224
|
|
||
|
|
|
|
|
|
|
|
Total future minimum lease payments
|
13,372,834
|
|
|
|
|
|
|
|
|
|
Less amounts representing interest
|
6,104,181
|
|
||
|
|
|
|
|
|
|
|
Present value of minimum lease payments
|
7,268,653
|
|
|
|
|
|
|
|
|
|
Less current portion
|
237,559
|
|
||
|
|
|
|
|
|
|
|
Long-term obligation
|
$
|
7,031,094
|
|
6.
|
Long-Term Debt
|
7.
|
Deferred Compensation
|
8.
|
Income Taxes
|
|
2015
|
|
2014
|
|
2013
|
||||||
|
|
|
|
|
|
||||||
U.S.
|
$
|
(4,112,876
|
)
|
|
$
|
(33,964,396
|
)
|
|
$
|
5,026,708
|
|
8.
|
Income Taxes (Continued)
|
|
|
|
2015
|
|
2014
|
|
2013
|
||||||
Current
|
|
|
|
|
|
||||||||
|
Federal
|
$
|
(1,570,540
|
)
|
|
$
|
(157,680
|
)
|
|
$
|
2,054,682
|
|
|
|
State
|
197,006
|
|
|
(334,799
|
)
|
|
551,078
|
|
||||
Deferred
|
|
|
|
|
|
||||||||
|
Federal
|
10,264,661
|
|
|
(5,698,153
|
)
|
|
106,827
|
|
||||
|
State
|
3,733,938
|
|
|
(1,074,554
|
)
|
|
(44,822
|
)
|
||||
|
|
|
|
|
|
|
|
||||||
|
|
Total
|
$
|
12,625,065
|
|
|
$
|
(7,265,186
|
)
|
|
$
|
2,667,765
|
|
|
|
|
Fiscal Year 2015
|
||
Balance, June 20, 2014
|
$
|
—
|
|
||
Establishment of valuation allowance on deferred tax assets
|
12,564,735
|
|
|||
Changes to deferred tax asset valuation allowance
|
126,461
|
|
|||
Balance, June 30, 2015
|
$
|
12,691,196
|
|
|
|
|
2015
|
|
2014
|
||||
|
|
|
|
|
|
||||
Current assets
|
|
$
|
3,752,805
|
|
|
$
|
3,135,326
|
|
|
Less: valuation allowance
|
|
(3,752,805
|
)
|
|
—
|
|
|||
|
Net current deferred income taxes
|
—
|
|
|
3,135,326
|
|
|||
|
|
|
|
|
|
||||
Noncurrent assets
|
|
8,938,391
|
|
|
11,043,038
|
|
|||
Less: valuation allowance
|
|
(8,938,391
|
)
|
|
—
|
|
|||
|
Net noncurrent deferred income taxes
|
|
$
|
—
|
|
|
$
|
11,043,038
|
|
8.
|
Income Taxes (Continued)
|
|
2015
|
|
2014
|
|
2013
|
|||
|
|
|
|
|
|
|||
Statutory U.S. federal income tax rate
|
(34.0
|
)%
|
|
(34.0
|
)%
|
|
34.0
|
%
|
State and local income taxes
|
6.6
|
%
|
|
(2.4
|
)%
|
|
10.8
|
%
|
Nondeductible goodwill
|
—
|
|
|
15.7
|
%
|
|
—
|
|
Deferred tax valuation allowance
|
308.6
|
%
|
|
—
|
|
|
—
|
|
Business Interruption insurance proceeds
|
—
|
|
|
—
|
|
|
5.8
|
%
|
Estimate to actual rate true up
|
19.6
|
%
|
|
—
|
|
|
—
|
|
Other
|
6.2
|
%
|
|
(0.7
|
)%
|
|
2.5
|
%
|
Effective income tax rate
|
307.0
|
%
|
|
(21.4
|
)%
|
|
53.1
|
%
|
|
2015
|
|
2014
|
|||||
Deferred tax assets:
|
|
|
|
|||||
Deferred rent
|
$
|
2,681,882
|
|
|
$
|
1,681,362
|
|
|
Payroll and payroll related costs
|
860,321
|
|
|
1,063,691
|
|
|||
Allowance for doubtful accounts
|
3,377,935
|
|
|
2,668,017
|
|
|||
State deferred bonus depreciation
|
722,034
|
|
|
876,271
|
|
|||
Depreciation and amortization
|
1,422,115
|
|
|
4,507,000
|
|
|||
Capital lease
|
2,858,920
|
|
|
3,005,350
|
|
|||
Other
|
767,989
|
|
|
376,673
|
|
|||
Less: valuation allowance
|
(12,691,196
|
)
|
|
—
|
|
|||
Total deferred income taxes assets
|
$
|
—
|
|
|
$
|
14,178,364
|
|
8.
|
Income Taxes (Continued)
|
10.
|
Stock Transactions
|
10.
|
Stock Transactions (Continued)
|
11.
|
Commitments
|
13.
|
Related Party Transactions
|
14.
|
Contingencies
|
15.
|
Concentrations of Credit Risk
|
16.
|
Stock Options
|
|
Number of
Shares
|
Exercise
Price
(per share)
|
Remaining
Contractual
Life (per
share)
|
||||
Outstanding, June 30, 2014
|
50
|
|
$
|
129,400
|
|
4.00
|
|
Less: Options cancelled after vesting, September 26, 2014
|
10
|
|
$
|
129,400
|
|
0.00
|
|
Total Outstanding, June 30, 2015
|
40
|
|
$
|
129,400
|
|
3.00
|
|
Weighted Average fair value of options granted:
|
|
|
$55,929
|
Option Price Range (Fair Value):
|
|
|
$45,233 - $109,408
|
|
|
|
|
2015
|
|
2014
|
||||||||||||
|
|
|
|
Carrying
Value
|
|
Fair Value
|
|
Carrying
Amount
|
|
Fair Value
|
||||||||
Assets:
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash, cash
|
|
|
|
|
|
|
|
|
|||||||||
|
|
equivalents, and restricted cash
|
|
$
|
34,604,054
|
|
|
$
|
34,604,054
|
|
|
$
|
37,995,848
|
|
|
$
|
37,995,848
|
|
|
Accounts
|
|
|
|
|
|
|
|
|
|||||||||
|
|
receivable, net
|
|
6,448,514
|
|
|
6,448,514
|
|
|
3,332,905
|
|
|
3,332,905
|
|
||||
|
Accounts
|
|
|
|
|
|
|
|
|
|||||||||
|
|
receivable, affiliates
|
|
45,859
|
|
|
N/A
|
|
|
17,165
|
|
|
N/A
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
|
||||||||||
|
Long Term
|
|
|
|
|
|
|
|
|
|||||||||
|
|
Debt, other
|
|
20,863,840
|
|
|
20,863,840
|
|
|
21,500,003
|
|
|
21,500,003
|
|
||||
|
Accounts
|
|
|
|
|
|
|
|
|
|||||||||
|
|
payable, trade
|
|
2,389,701
|
|
|
2,389,701
|
|
|
2,977,521
|
|
|
2,977,521
|
|
||||
|
Deferred rent
|
|
2,634,351
|
|
|
2,634,351
|
|
|
N/A
|
|
|
N/A
|
|
▪
|
Cash, cash equivalents, and restricted cash; accounts receivable, net; and accounts payable, trade - the carrying amounts approximate fair value because of the short-term maturity of these instruments and they are considered level 2 inputs under Fair Value Measurements.
|
▪
|
Accounts receivable, affiliate; accounts payable, affiliates; and long-term debt, affiliate - estimating the fair value of these instruments is not practicable because the terms of these transactions would not necessarily be duplicated in the market.
|
▪
|
Long-term debt, other - the carrying amounts of long-term debt, other approximate fair value based on borrowing rates available to the Company for debt with similar terms and they are considered level 2 inputs under Fair Value Measurements.
|
▪
|
Deferred rent - the values are the component of Deferred Rent liability which represents the carrying value and estimated fair value of the future rent liabilities associated with school closings in advance of lease terminations. These values have been determined via discounted cash flow models and are classified as level 3 Fair Value Measurements.
|
Description
|
Value
|
|
Level 3
|
|
Impairment
|
||||||
Long-lived assets
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
218,950
|
|
Deferred rent
(2)
|
$
|
2,634,351
|
|
|
$
|
2,634,351
|
|
|
N/A
|
|
Description
|
Value
|
|
Level 3
|
|
Impairment
|
||||||
Goodwill
(1)
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
28,582,562
|
|
Intangibles, not subject to amortization
(2)
|
$
|
8,704,186
|
|
|
$
|
8,704,186
|
|
|
$
|
273,274
|
|
Long-lived assets
(3)
|
$
|
139,763
|
|
|
$
|
139,763
|
|
|
$
|
9,598,508
|
|
|
|
Exhibit 10(k)*
|
|
|
|
|
By:
/s/ Eric Bakken
|
|
|
|
|
|
Its:
EVP
|
|
|
|
|
|
/s/ Andrew Dulka
|
|
|
Andrew Dulka
|
|
Company Name
|
|
Country or State of
Incorporation/Formation |
The Barbers, Hairstyling for Men & Women, Inc.
|
|
Minnesota
|
WCH, Inc.*
|
|
Minnesota
|
We Care Hair Realty, Inc.*
|
|
Delaware
|
Roosters MGC International LLC
|
|
Michigan
|
Supercuts, Inc.
|
|
Delaware
|
Supercuts Corporate Shops, Inc.
|
|
Delaware
|
Tulsa’s Best Haircut LLC
|
|
Oklahoma
|
RPC Acquisition Corp.
|
|
Minnesota
|
RPC Corporate Shops, Inc.
|
|
Minnesota
|
Regis Corp.
|
|
Minnesota
|
Regis Insurance Group, Inc.
|
|
Vermont
|
Regis, Inc.
|
|
Minnesota
|
First Choice Haircutters International Corp.
|
|
Delaware
|
Cutco Acquisition Corp.
|
|
Minnesota
|
Great Expectations Precision Haircutters of Evans Towne Center, Inc.
|
|
Minnesota
|
Great Expectations Precision Haircutters of Northlake Mall, Inc.
|
|
Minnesota
|
Regis International Ltd.
|
|
Minnesota
|
N.A.H.C. Acquisition LLC*
|
|
Minnesota
|
EEG, Inc.
|
|
Delaware
|
Salon Management Corporation
|
|
California
|
Salon Management Corporation of New York*
|
|
New York
|
Regis Netherlands, Inc
|
|
Minnesota
|
Roger Merger Subco LLC
|
|
Delaware
|
RGS International SNC
|
|
Luxemburg
|
Regis International Holdings SARL
|
|
Luxemburg
|
Regis Holdings (Canada), Ltd
|
|
Nova Scotia
|
First Choice Haircutters, Ltd
|
|
Nova Scotia
|
Magicuts, Ltd
|
|
Nova Scotia
|
RHS UK Holdings Ltd*
|
|
United Kingdom
|
Haircare Ltd*
|
|
United Kingdom
|
Haircare Gmbh
|
|
Germany
|
York Ave Beauty Salons
|
|
Canada
|
Sagestyle Ltd*
|
|
United Kingdom
|
Haircare UK Ltd*
|
|
United Kingdom
|
Regis UK Limited
|
|
United Kingdom
|
4 Inactive Subsidiaries*
|
|
United Kingdom
|
Blinkers Group, Ltd*
|
|
United Kingdom
|
Blinkers Property, Ltd*
|
|
United Kingdom
|
HCUK Hair, Ltd*
|
|
United Kingdom
|
My Style Co., Ltd
|
|
Japan
|
Mark Anthony, Inc.
|
|
North Carolina
|
|
|
|
*Inactive Entities
|
|
|
|
|
|
/s/ PRICEWATERHOUSECOOPERS LLP
|
|
|
|
|
|
PricewaterhouseCoopers LLP
|
|
|
Minneapolis, Minnesota
|
|
|
August 28, 2015
|
|
|
|
|
|
/s/ BAKER TILLY VIRCHOW KRAUSE, LLP
|
|
|
|
|
|
Baker Tilly Virchow Krause, LLP
|
|
|
Wilkes-Barre, Pennsylvania
|
|
|
August 28, 2015
|
|
|
1.
|
I have reviewed this annual report on Form 10-K 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.
|
August 28, 2015
|
|
|
|
/s/ Daniel J. Hanrahan
|
|
Daniel J. Hanrahan, President and Chief Executive Officer
|
|
1.
|
I have reviewed this annual report on Form 10-K 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.
|
August 28, 2015
|
|
|
|
/s/ Steven M. Spiegel
|
|
Steven M. Spiegel, Executive Vice President and Chief Financial Officer
|
|
(1)
|
The Annual Report on Form 10-K 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 Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
August 28, 2015
|
|
|
|
/s/ Daniel J. Hanrahan
|
|
Daniel J. Hanrahan, President and Chief Executive Officer
|
|
|
|
August 28, 2015
|
|
|
|
/s/ Steven M. Spiegel
|
|
Steven M. Spiegel, Executive Vice President and Chief Financial Officer
|
|