|
☒
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Minnesota
|
|
41-0749934
|
||
(State or other jurisdiction of incorporation or organization)
|
|
(I.R.S. Employer Identification No.)
|
||
7201 Metro Boulevard
|
Edina
|
Minnesota
|
|
55439
|
(Address of principal executive offices)
|
|
(Zip Code)
|
Large Accelerated Filer
|
☒
|
Accelerated filer
|
☐
|
Non-accelerated filer (Do not check if a smaller reporting company)
|
☐
|
Smaller Reporting Company
|
☐
|
Emerging Growth Company
|
☐
|
Common Stock, $.05 par value
|
|
35,548,036
|
Class
|
|
Number of Shares
|
|
|
|||
|
|
|
|
|
|
||
|
|
|
|
|
|
Condensed Consolidated Balance Sheet as of September 30, 2019 and June 30, 2019
|
|
|
|
|
|
|
|
Condensed Consolidated Statement of Operations for the three months ended September 30, 2019 and 2018
|
|
|
|
|
|
|
|
Condensed Consolidated Statement of Comprehensive (Loss) Income for the three months ended September 30, 2019 and 2018
|
|
|
|
|
|
|
|
Condensed Consolidated Statement of Shareholders' Equity for the three months ended September 30, 2019 and September 30, 2018
|
|
|
|
|
|
|
|
Condensed Consolidated Statement of Cash Flows for the three months ended September 30, 2019 and 2018
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|||
|
|
|
|
|
|
|
|
September 30,
2019 |
|
June 30,
2019 |
||||
ASSETS
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
|
$
|
58,902
|
|
|
$
|
70,141
|
|
Receivables, net
|
|
28,724
|
|
|
30,143
|
|
||
Inventories
|
|
74,634
|
|
|
77,322
|
|
||
Other current assets
|
|
32,194
|
|
|
33,216
|
|
||
Total current assets
|
|
194,454
|
|
|
210,822
|
|
||
|
|
|
|
|
||||
Property and equipment, net
|
|
71,442
|
|
|
78,090
|
|
||
Goodwill
|
|
313,251
|
|
|
345,718
|
|
||
Other intangibles, net
|
|
8,416
|
|
|
8,761
|
|
||
Right of use asset (Note 10)
|
|
930,784
|
|
|
—
|
|
||
Other assets
|
|
33,094
|
|
|
34,170
|
|
||
Long term assets held for sale (Note 1)
|
|
5,276
|
|
|
5,276
|
|
||
Total assets
|
|
$
|
1,556,717
|
|
|
$
|
682,837
|
|
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Accounts payable
|
|
$
|
53,219
|
|
|
$
|
47,532
|
|
Accrued expenses
|
|
62,241
|
|
|
80,751
|
|
||
Short-term lease liability (Note 10)
|
|
161,407
|
|
|
—
|
|
||
Total current liabilities
|
|
276,867
|
|
|
128,283
|
|
||
|
|
|
|
|
||||
Long-term debt, net
|
|
90,000
|
|
|
90,000
|
|
||
Long-term lease liability (Note 10)
|
|
781,134
|
|
|
—
|
|
||
Long-term financing liabilities
|
|
28,719
|
|
|
28,910
|
|
||
Other noncurrent liabilities
|
|
96,258
|
|
|
111,399
|
|
||
Total liabilities
|
|
1,272,978
|
|
|
358,592
|
|
||
Commitments and contingencies (Note 7)
|
|
|
|
|
|
|
||
Shareholders’ equity:
|
|
|
|
|
|
|
||
Common stock, $0.05 par value; issued and outstanding 35,548,036 and 36,869,249 common shares at September 30, 2019 and June 30, 2019, respectively
|
|
1,777
|
|
|
1,843
|
|
||
Additional paid-in capital
|
|
20,880
|
|
|
47,152
|
|
||
Accumulated other comprehensive income
|
|
8,939
|
|
|
9,342
|
|
||
Retained earnings
|
|
252,143
|
|
|
265,908
|
|
||
Total shareholders’ equity
|
|
283,739
|
|
|
324,245
|
|
||
Total liabilities and shareholders’ equity
|
|
$
|
1,556,717
|
|
|
$
|
682,837
|
|
|
|
Three Months Ended September 30,
|
|
||||||
|
|
2019
|
|
2018
|
|
||||
Revenues:
|
|
|
|
|
|
||||
Service
|
|
$
|
141,941
|
|
|
$
|
207,848
|
|
|
Product
|
|
45,656
|
|
|
57,591
|
|
|
||
Royalties and fees
|
|
28,017
|
|
|
22,396
|
|
|
||
Franchise rental income (Note 10)
|
|
31,424
|
|
|
—
|
|
|
||
|
|
247,038
|
|
|
287,835
|
|
|
||
Operating expenses:
|
|
|
|
|
|
||||
Cost of service
|
|
90,482
|
|
|
121,497
|
|
|
||
Cost of product
|
|
26,327
|
|
|
32,181
|
|
|
||
Site operating expenses
|
|
32,942
|
|
|
36,821
|
|
|
||
General and administrative
|
|
40,625
|
|
|
47,727
|
|
|
||
Rent (Note 10)
|
|
24,264
|
|
|
35,978
|
|
|
||
Franchise rent expense (Note 10)
|
|
31,424
|
|
|
—
|
|
|
||
Depreciation and amortization
|
|
9,380
|
|
|
10,202
|
|
|
||
TBG restructuring (Note 3)
|
|
1,500
|
|
|
—
|
|
|
||
Total operating expenses
|
|
256,944
|
|
|
284,406
|
|
|
||
|
|
|
|
|
|
||||
Operating (loss) income
|
|
(9,906
|
)
|
|
3,429
|
|
|
||
|
|
|
|
|
|
||||
Other (expense) income:
|
|
|
|
|
|
||||
Interest expense
|
|
(1,439
|
)
|
|
(1,006
|
)
|
|
||
Loss on sale of salon assets to franchisees, net
|
|
(5,860
|
)
|
|
(3,960
|
)
|
|
||
Interest income and other, net
|
|
171
|
|
|
360
|
|
|
||
|
|
|
|
|
|
||||
Loss from continuing operations before income taxes
|
|
(17,034
|
)
|
|
(1,177
|
)
|
|
||
|
|
|
|
|
|
||||
Income tax benefit
|
|
2,856
|
|
|
714
|
|
|
||
|
|
|
|
|
|
||||
Loss from continuing operations
|
|
(14,178
|
)
|
|
(463
|
)
|
|
||
|
|
|
|
|
|
||||
Income (loss) from discontinued operations, net of income taxes (Note 3)
|
|
373
|
|
|
(264
|
)
|
|
||
|
|
|
|
|
|
||||
Net loss
|
|
$
|
(13,805
|
)
|
|
$
|
(727
|
)
|
|
|
|
|
|
|
|
||||
Net loss per share:
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
Basic and Diluted:
|
|
|
|
|
|
||||
Loss from continuing operations
|
|
$
|
(0.39
|
)
|
|
$
|
(0.01
|
)
|
|
Income (loss) from discontinued operations
|
|
0.01
|
|
|
(0.01
|
)
|
|
||
Net loss per share (1)
|
|
$
|
(0.38
|
)
|
|
$
|
(0.02
|
)
|
|
|
|
|
|
|
|
||||
|
|
|
|
|
|
||||
Weighted average common and common equivalent shares outstanding:
|
|
|
|
|
|
||||
Basic and Diluted
|
|
36,249
|
|
|
44,730
|
|
|
(1)
|
Total is a recalculation; line items calculated individually may not sum to total due to rounding.
|
|
|
Three Months Ended September 30,
|
|
||||||
|
|
2019
|
|
2018
|
|
||||
Net loss
|
|
$
|
(13,805
|
)
|
|
$
|
(727
|
)
|
|
Foreign currency translation adjustments
|
|
(403
|
)
|
|
1,081
|
|
|
||
Comprehensive (loss) income
|
|
$
|
(14,208
|
)
|
|
$
|
354
|
|
|
|
|
Three Months Ended September 30, 2019
|
|||||||||||||||||||||
|
|
|
|
Additional
Paid-In Capital |
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings
|
|
Total
|
|||||||||||||
|
|
Common Stock
|
|
|
|
|
|||||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance, June 30, 2019
|
|
36,869,249
|
|
|
$
|
1,843
|
|
|
$
|
47,152
|
|
|
$
|
9,342
|
|
|
$
|
265,908
|
|
|
$
|
324,245
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(13,805
|
)
|
|
(13,805
|
)
|
|||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(403
|
)
|
|
—
|
|
|
(403
|
)
|
|||||
Stock repurchase program
|
|
(1,504,000
|
)
|
|
(75
|
)
|
|
(26,281
|
)
|
|
—
|
|
|
—
|
|
|
(26,356
|
)
|
|||||
Exercise of SARs
|
|
276
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
1,807
|
|
|
—
|
|
|
—
|
|
|
1,807
|
|
|||||
Net restricted stock activity
|
|
182,511
|
|
|
9
|
|
|
(1,798
|
)
|
|
—
|
|
|
—
|
|
|
(1,789
|
)
|
|||||
Minority interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
40
|
|
|
40
|
|
|||||
Balance, September 30, 2019
|
|
35,548,036
|
|
|
$
|
1,777
|
|
|
$
|
20,880
|
|
|
$
|
8,939
|
|
|
$
|
252,143
|
|
|
$
|
283,739
|
|
|
|
Three Months Ended September 30, 2018
|
|||||||||||||||||||||
|
|
|
|
Additional
Paid-In Capital |
|
Accumulated
Other
Comprehensive
Income
|
|
Retained
Earnings
|
|
Total
|
|||||||||||||
|
|
Common Stock
|
|
|
|
|
|||||||||||||||||
|
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance, June 30, 2018
|
|
45,258,571
|
|
|
$
|
2,263
|
|
|
$
|
194,436
|
|
|
$
|
9,656
|
|
|
$
|
280,083
|
|
|
$
|
486,438
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(727
|
)
|
|
(727
|
)
|
|||||
Foreign currency translation adjustments
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,081
|
|
|
—
|
|
|
1,081
|
|
|||||
Stock repurchase program
|
|
(1,093,679
|
)
|
|
(54
|
)
|
|
(19,283
|
)
|
|
—
|
|
|
—
|
|
|
(19,337
|
)
|
|||||
Exercise of SARs
|
|
5,783
|
|
|
—
|
|
|
(42
|
)
|
|
—
|
|
|
—
|
|
|
(42
|
)
|
|||||
Stock-based compensation
|
|
—
|
|
|
—
|
|
|
2,335
|
|
|
—
|
|
|
—
|
|
|
2,335
|
|
|||||
Net restricted stock activity
|
|
157,452
|
|
|
8
|
|
|
(1,463
|
)
|
|
—
|
|
|
—
|
|
|
(1,455
|
)
|
|||||
Minority interest
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
64
|
|
|
64
|
|
|||||
Balance, September 30, 2018
|
|
44,328,127
|
|
|
$
|
2,217
|
|
|
$
|
175,983
|
|
|
$
|
10,737
|
|
|
$
|
279,420
|
|
|
$
|
468,357
|
|
|
|
Three Months Ended September 30,
|
||||||
|
|
2019
|
|
2018
|
||||
Cash flows from operating activities:
|
|
|
|
|
|
|
||
Net loss
|
|
$
|
(13,805
|
)
|
|
$
|
(727
|
)
|
Adjustments to reconcile net loss to net cash used in operating activities:
|
|
|
|
|
|
|||
Non-cash adjustments related to discontinued operations
|
|
(470
|
)
|
|
(427
|
)
|
||
Depreciation and amortization
|
|
7,863
|
|
|
8,371
|
|
||
Deferred income taxes
|
|
(3,821
|
)
|
|
(875
|
)
|
||
Loss on sale of salon assets to franchisees, net
|
|
5,860
|
|
|
3,960
|
|
||
Salon asset impairments
|
|
1,517
|
|
|
1,831
|
|
||
Stock-based compensation
|
|
1,807
|
|
|
2,335
|
|
||
Amortization of debt discount and financing costs
|
|
69
|
|
|
69
|
|
||
Other items affecting earnings
|
|
(23
|
)
|
|
352
|
|
||
Changes in operating assets and liabilities, excluding the effects of asset sales (1)
|
|
(12,477
|
)
|
|
(32,053
|
)
|
||
Net cash used in operating activities
|
|
(13,480
|
)
|
|
(17,164
|
)
|
||
|
|
|
|
|
||||
Cash flows from investing activities:
|
|
|
|
|
|
|||
Capital expenditures
|
|
(4,899
|
)
|
|
(11,258
|
)
|
||
Proceeds from sale of salon assets to franchisees
|
|
37,945
|
|
|
12,422
|
|
||
Costs associated with sale of salon assets to franchisees
|
|
(1,019
|
)
|
|
—
|
|
||
Proceeds from company-owned life insurance policies
|
|
—
|
|
|
24,617
|
|
||
Net cash provided by investing activities
|
|
32,027
|
|
|
25,781
|
|
||
|
|
|
|
|
||||
Cash flows from financing activities:
|
|
|
|
|
|
|||
Repurchase of common stock
|
|
(28,247
|
)
|
|
(19,337
|
)
|
||
Taxes paid for shares withheld
|
|
(1,808
|
)
|
|
(1,918
|
)
|
||
Sale and leaseback payments
|
|
(248
|
)
|
|
—
|
|
||
Net cash used in financing activities
|
|
(30,303
|
)
|
|
(21,255
|
)
|
||
|
|
|
|
|
||||
Effect of exchange rate changes on cash and cash equivalents
|
|
3
|
|
|
388
|
|
||
|
|
|
|
|
||||
Decrease in cash, cash equivalents, and restricted cash
|
|
(11,753
|
)
|
|
(12,250
|
)
|
||
|
|
|
|
|
||||
Cash, cash equivalents, and restricted cash:
|
|
|
|
|
|
|||
Beginning of period
|
|
92,379
|
|
|
148,774
|
|
||
End of period
|
|
$
|
80,626
|
|
|
$
|
136,524
|
|
1.
|
BASIS OF PRESENTATION OF UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
|
•
|
Changes in the company-owned salon strategy,
|
•
|
Salon closures or other restructuring,
|
•
|
Franchise expansion and sales opportunities,
|
•
|
Future market earnings multiples deterioration,
|
•
|
Our financial performance falls short of our projections due to internal operating factors,
|
•
|
Economic recession,
|
•
|
Reduced salon traffic,
|
•
|
Deterioration of industry trends,
|
•
|
Increased competition,
|
•
|
Inability to reduce general and administrative expenses as company-owned salon count potentially decreases,
|
•
|
Other factors causing our cash flow to deteriorate.
|
|
|
Three Months Ended September 30, 2019
|
|
Three Months Ended September 30, 2018
|
||||||||||||
|
|
Franchise
|
|
Company-owned
|
|
Franchise
|
|
Company-owned
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Revenue recognized at a point in time:
|
|
|
|
|
|
|
|
|
||||||||
Service
|
|
$
|
—
|
|
|
$
|
141,941
|
|
|
$
|
—
|
|
|
$
|
207,848
|
|
Product
|
|
13,105
|
|
|
32,551
|
|
|
15,629
|
|
|
41,962
|
|
||||
Total revenue recognized at a point in time
|
|
$
|
13,105
|
|
|
$
|
174,492
|
|
|
$
|
15,629
|
|
|
$
|
249,810
|
|
|
|
|
|
|
|
|
|
|
||||||||
Revenue recognized over time:
|
|
|
|
|
|
|
|
|
||||||||
Royalty and other franchise fees
|
|
$
|
17,592
|
|
|
$
|
—
|
|
|
$
|
14,420
|
|
|
$
|
—
|
|
Advertising fund fees
|
|
10,425
|
|
|
—
|
|
|
7,976
|
|
|
—
|
|
||||
Franchise rental income
|
|
31,424
|
|
|
—
|
|
|
|
|
|
||||||
Total revenue recognized over time
|
|
$
|
59,441
|
|
|
$
|
—
|
|
|
$
|
22,396
|
|
|
$
|
—
|
|
Total revenue
|
|
$
|
72,546
|
|
|
$
|
174,492
|
|
|
$
|
38,025
|
|
|
$
|
249,810
|
|
|
|
September 30,
2019 |
|
June 30,
2019 |
|
Balance Sheet Classification
|
||||
|
|
(dollars in thousands)
|
|
|
||||||
Receivables from contracts with customers, net
|
|
$
|
18,715
|
|
|
$
|
23,210
|
|
|
Accounts receivable, net
|
Broker fees
|
|
$
|
18,706
|
|
|
$
|
17,819
|
|
|
Other assets
|
|
|
|
|
|
|
|
||||
Deferred revenue:
|
|
|
|
|
|
|
||||
Current
|
|
|
|
|
|
|
||||
Gift card liability
|
|
$
|
2,686
|
|
|
$
|
3,050
|
|
|
Accrued expenses
|
Deferred franchise fees unopened salons
|
|
99
|
|
|
193
|
|
|
Accrued expenses
|
||
Deferred franchise fees open salons
|
|
4,748
|
|
|
4,164
|
|
|
Accrued expenses
|
||
Total current deferred revenue
|
|
$
|
7,533
|
|
|
$
|
7,407
|
|
|
|
Non-current
|
|
|
|
|
|
|
||||
Deferred franchise fees unopened salons
|
|
$
|
13,230
|
|
|
$
|
15,173
|
|
|
Other non-current liabilities
|
Deferred franchise fees open salons
|
|
28,546
|
|
|
24,194
|
|
|
Other non-current liabilities
|
||
Total non-current deferred revenue
|
|
$
|
41,776
|
|
|
$
|
39,367
|
|
|
|
Balance as of June 30, 2019
|
|
$
|
17,819
|
|
Additions
|
|
1,548
|
|
|
Amortization
|
|
(661
|
)
|
|
Write-offs
|
|
—
|
|
|
Balance as of September 30, 2019
|
|
$
|
18,706
|
|
Remainder of 2020
|
|
$
|
3,327
|
|
2021
|
|
4,498
|
|
|
2022
|
|
4,378
|
|
|
2023
|
|
4,202
|
|
|
2024
|
|
3,967
|
|
|
Thereafter
|
|
12,922
|
|
|
Total
|
|
$
|
33,294
|
|
3.
|
TBG RESTRUCTURING AND DISCONTINUED OPERATIONS:
|
4.
|
EARNINGS PER SHARE:
|
5.
|
SHAREHOLDERS’ EQUITY:
|
6.
|
INCOME TAXES:
|
|
|
For the Three Months Ended September 30,
|
|
||||||
|
|
2019
|
|
2018
|
|
||||
|
|
(Dollars in thousands)
|
|||||||
Income tax benefit
|
|
$
|
2,856
|
|
|
$
|
714
|
|
|
Effective tax rate
|
|
16.8
|
%
|
|
60.7
|
%
|
|
7.
|
COMMITMENTS AND CONTINGENCIES:
|
|
September 30,
2019 |
|
June 30,
2019 |
||||
|
(Dollars in thousands)
|
||||||
Cash and cash equivalents
|
$
|
58,902
|
|
|
$
|
70,141
|
|
Restricted cash, included in other current assets (1)
|
21,724
|
|
|
22,238
|
|
||
Total cash, cash equivalents and restricted cash
|
$
|
80,626
|
|
|
$
|
92,379
|
|
(1)
|
Restricted cash within other current assets primarily relates to consolidated advertising cooperatives funds which can only be used to settle obligations of the respective cooperatives and contractual obligations to collateralize the Company's self-insurance programs.
|
|
|
Franchise
|
|
Company-owned
|
|
Consolidated
|
||||||
|
|
(Dollars in thousands)
|
||||||||||
Goodwill, net at June 30, 2019
|
|
$
|
227,928
|
|
|
$
|
117,790
|
|
|
$
|
345,718
|
|
Translation rate adjustments
|
|
(85
|
)
|
|
(299
|
)
|
|
(384
|
)
|
|||
Derecognition related to sale of salon assets to franchisees (1)
|
|
—
|
|
|
(32,083
|
)
|
|
(32,083
|
)
|
|||
Goodwill, net at September 30, 2019
|
|
$
|
227,843
|
|
|
$
|
85,408
|
|
|
$
|
313,251
|
|
(1)
|
Goodwill is derecognized for salons sold to franchisees with positive cash flows. The amount of goodwill derecognized is determined by a fraction (the numerator of which is the trailing-twelve months EBITDA of the salon being sold and the denominator of which is the estimated annualized EBITDA of the Company-owned reporting unit) that is applied to the total goodwill balance of the Company-owned reporting unit.
|
|
|
September 30, 2019
|
|
June 30, 2019
|
||||||||||||||||||||
|
|
Cost (1)
|
|
Accumulated
Amortization (1)
|
|
Net
|
|
Cost (1)
|
|
Accumulated
Amortization (1)
|
|
Net
|
||||||||||||
|
|
(Dollars in thousands)
|
||||||||||||||||||||||
Amortized intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Brand assets and trade names
|
|
$
|
6,856
|
|
|
$
|
(3,687
|
)
|
|
$
|
3,169
|
|
|
$
|
6,909
|
|
|
$
|
(3,659
|
)
|
|
$
|
3,250
|
|
Franchise agreements
|
|
9,721
|
|
|
(8,088
|
)
|
|
1,633
|
|
|
9,783
|
|
|
(8,057
|
)
|
|
1,726
|
|
||||||
Lease intangibles
|
|
13,480
|
|
|
(10,226
|
)
|
|
3,254
|
|
|
13,490
|
|
|
(10,065
|
)
|
|
3,425
|
|
||||||
Other
|
|
881
|
|
|
(521
|
)
|
|
360
|
|
|
883
|
|
|
(523
|
)
|
|
360
|
|
||||||
|
|
$
|
30,938
|
|
|
$
|
(22,522
|
)
|
|
$
|
8,416
|
|
|
$
|
31,065
|
|
|
$
|
(22,304
|
)
|
|
$
|
8,761
|
|
(1)
|
The change in the gross carrying value and accumulated amortization of other intangible assets is impacted by foreign currency.
|
|
|
|
|
||||
|
For the three months ended
|
||||||
|
September 30,
|
||||||
|
2019
|
|
2018
|
||||
|
(dollars in thousands)
|
||||||
Minimum rent
|
$
|
19,561
|
|
|
$
|
29,915
|
|
Percentage rent based on sales
|
1,298
|
|
|
1,052
|
|
||
Real estate taxes and other expenses
|
3,405
|
|
|
5,011
|
|
||
|
$
|
24,264
|
|
|
$
|
35,978
|
|
Fiscal Year
|
Leases for Franchise Salons
|
|
Leases for Company-Owned Salons
|
|
Corporate Leases
|
|
Total Operating Leases Payments
|
|
Sublease Income To Be Received From Franchisees
|
|
Net Rent Commitments
|
||||||||||||
Remainder of 2020
|
$
|
56,059
|
|
|
$
|
91,328
|
|
|
$
|
1,368
|
|
|
$
|
148,755
|
|
|
$
|
(56,059
|
)
|
|
$
|
92,696
|
|
2021
|
67,285
|
|
|
111,002
|
|
|
1,294
|
|
|
179,581
|
|
|
(67,285
|
)
|
|
112,296
|
|
||||||
2022
|
59,388
|
|
|
99,345
|
|
|
172
|
|
|
158,905
|
|
|
(59,388
|
)
|
|
99,517
|
|
||||||
2023
|
53,293
|
|
|
88,686
|
|
|
177
|
|
|
142,156
|
|
|
(53,293
|
)
|
|
88,863
|
|
||||||
2024
|
48,224
|
|
|
79,070
|
|
|
183
|
|
|
127,477
|
|
|
(48,224
|
)
|
|
79,253
|
|
||||||
Thereafter
|
125,524
|
|
|
194,746
|
|
|
821
|
|
|
321,091
|
|
|
(125,524
|
)
|
|
195,567
|
|
||||||
Total future obligations
|
$
|
409,773
|
|
|
$
|
664,177
|
|
|
$
|
4,015
|
|
|
$
|
1,077,965
|
|
|
$
|
(409,773
|
)
|
|
$
|
668,192
|
|
Less amount representing interest
|
31,329
|
|
|
103,420
|
|
|
675
|
|
|
135,424
|
|
|
|
|
|
||||||||
Present value of lease liabilities
|
378,444
|
|
|
560,757
|
|
|
3,340
|
|
|
942,541
|
|
|
|
|
|
||||||||
Less: current lease liabilities
|
68,725
|
|
|
91,414
|
|
|
1,268
|
|
|
161,407
|
|
|
|
|
|
||||||||
Long-term lease liabilities
|
$
|
309,719
|
|
|
$
|
469,343
|
|
|
$
|
2,072
|
|
|
$
|
781,134
|
|
|
|
|
|
|
|
Maturity Date
|
|
Interest Rate
|
|
September 30,
2019 |
|
June 30,
2019 |
||||
|
|
(Fiscal Year)
|
|
|
|
(Dollars in thousands)
|
||||||
Revolving credit facility
|
|
2023
|
|
3.69%
|
|
$
|
90,000
|
|
|
$
|
90,000
|
|
|
|
Maturity Date
|
|
Interest Rate
|
|
September 30,
2019 |
|
June 30,
2019 |
||||
|
|
(Fiscal Year)
|
|
|
|
(Dollars in thousands)
|
||||||
Financial liability- Salt Lake City Distribution Center
|
|
2034
|
|
3.30%
|
|
$
|
17,187
|
|
|
$
|
17,354
|
|
Financial liability- Chattanooga Distribution Center
|
|
2034
|
|
3.70%
|
|
11,532
|
|
|
11,556
|
|
||
Long-term financing liability
|
|
|
|
|
|
$
|
28,719
|
|
|
$
|
28,910
|
|
Fiscal Year
|
Salt Lake City
|
|
Chattanooga
|
||||
Remainder of 2020
|
$
|
818
|
|
|
$
|
604
|
|
2021
|
1,157
|
|
|
817
|
|
||
2022
|
1,171
|
|
|
829
|
|
||
2023
|
1,186
|
|
|
842
|
|
||
2024
|
1,200
|
|
|
854
|
|
||
Thereafter
|
11,952
|
|
|
9,282
|
|
||
Total
|
$
|
17,484
|
|
|
$
|
13,228
|
|
|
|
For the Three Months Ended September 30,
|
|
||||||
|
|
2019
|
|
2018
|
|
||||
|
|
(Dollars in thousands)
|
|||||||
Long-lived assets
|
|
$
|
1,517
|
|
|
$
|
1,831
|
|
|
(1)
|
Canadian and Puerto Rican salons are included in the North American salon totals.
|
(2)
|
As of September 30, 2019, the Company-owned operating segment is comprised primarily of SmartStyle®, Supercuts®, Cost Cutters®, and other regional trade names and the Franchise operating segment is comprised primarily of Supercuts®, SmartStyle®, Cost Cutters®, First Choice Haircutters®, Roosters® and Magicuts® concepts.
|
|
|
For the Three Months Ended September 30, 2019
|
||||||||||||||
|
|
Franchise
|
|
Company - owned
|
|
Corporate
|
|
Consolidated
|
||||||||
|
|
(Dollars in thousands)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Service
|
|
$
|
—
|
|
|
$
|
141,941
|
|
|
$
|
—
|
|
|
$
|
141,941
|
|
Product
|
|
13,105
|
|
|
32,551
|
|
|
—
|
|
|
45,656
|
|
||||
Royalties and fees
|
|
28,017
|
|
|
—
|
|
|
—
|
|
|
28,017
|
|
||||
Franchise rental income
|
|
31,424
|
|
|
—
|
|
|
—
|
|
|
31,424
|
|
||||
|
|
72,546
|
|
|
174,492
|
|
|
—
|
|
|
247,038
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of service
|
|
—
|
|
|
90,482
|
|
|
—
|
|
|
90,482
|
|
||||
Cost of product
|
|
10,280
|
|
|
16,047
|
|
|
—
|
|
|
26,327
|
|
||||
Site operating expenses
|
|
10,426
|
|
|
22,516
|
|
|
—
|
|
|
32,942
|
|
||||
General and administrative
|
|
8,357
|
|
|
10,150
|
|
|
22,118
|
|
|
40,625
|
|
||||
Rent
|
|
190
|
|
|
23,789
|
|
|
285
|
|
|
24,264
|
|
||||
Franchise rent expense
|
|
31,424
|
|
|
—
|
|
|
—
|
|
|
31,424
|
|
||||
Depreciation and amortization
|
|
160
|
|
|
6,107
|
|
|
3,113
|
|
|
9,380
|
|
||||
TBG restructuring (Note 3)
|
|
1,500
|
|
|
—
|
|
|
—
|
|
|
1,500
|
|
||||
Total operating expenses
|
|
62,337
|
|
|
169,091
|
|
|
25,516
|
|
|
256,944
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
|
10,209
|
|
|
5,401
|
|
|
(25,516
|
)
|
|
(9,906
|
)
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other (expense) income:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
—
|
|
|
—
|
|
|
(1,439
|
)
|
|
(1,439
|
)
|
||||
Loss on sale of salon assets to franchisees, net
|
|
—
|
|
|
—
|
|
|
(5,860
|
)
|
|
(5,860
|
)
|
||||
Interest income and other, net
|
|
—
|
|
|
—
|
|
|
171
|
|
|
171
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations before income taxes
|
|
$
|
10,209
|
|
|
$
|
5,401
|
|
|
$
|
(32,644
|
)
|
|
$
|
(17,034
|
)
|
|
|
For the Three Months Ended September 30, 2018
|
||||||||||||||
|
|
Franchise
|
|
Company-owned
|
|
Corporate
|
|
Consolidated
|
||||||||
|
|
(Dollars in thousands)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
|
||||||||
Service
|
|
$
|
—
|
|
|
$
|
207,848
|
|
|
$
|
—
|
|
|
$
|
207,848
|
|
Product
|
|
15,629
|
|
|
41,962
|
|
|
—
|
|
|
57,591
|
|
||||
Royalties and fees
|
|
22,396
|
|
|
—
|
|
|
—
|
|
|
22,396
|
|
||||
|
|
38,025
|
|
|
249,810
|
|
|
—
|
|
|
287,835
|
|
||||
Operating expenses:
|
|
|
|
|
|
|
|
|
||||||||
Cost of service
|
|
—
|
|
|
121,497
|
|
|
—
|
|
|
121,497
|
|
||||
Cost of product
|
|
12,413
|
|
|
19,768
|
|
|
—
|
|
|
32,181
|
|
||||
Site operating expenses
|
|
7,976
|
|
|
28,845
|
|
|
—
|
|
|
36,821
|
|
||||
General and administrative
|
|
7,664
|
|
|
16,381
|
|
|
23,682
|
|
|
47,727
|
|
||||
Rent
|
|
94
|
|
|
35,686
|
|
|
198
|
|
|
35,978
|
|
||||
Depreciation and amortization
|
|
158
|
|
|
8,057
|
|
|
1,987
|
|
|
10,202
|
|
||||
Total operating expenses
|
|
28,305
|
|
|
230,234
|
|
|
25,867
|
|
|
284,406
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss)
|
|
9,720
|
|
|
19,576
|
|
|
(25,867
|
)
|
|
3,429
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Other (expense) income:
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
|
—
|
|
|
—
|
|
|
(1,006
|
)
|
|
(1,006
|
)
|
||||
Loss on sale of salon assets to franchisees, net
|
|
—
|
|
|
—
|
|
|
(3,960
|
)
|
|
(3,960
|
)
|
||||
Interest income and other, net
|
|
—
|
|
|
—
|
|
|
360
|
|
|
360
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from continuing operations before income taxes
|
|
$
|
9,720
|
|
|
$
|
19,576
|
|
|
$
|
(30,473
|
)
|
|
$
|
(1,177
|
)
|
|
Three Months Ended
September 30, |
|
Increase
|
||||||||
(Dollars in thousands)
|
2019
|
|
2018
|
|
|||||||
|
|
|
|
|
|
||||||
Salons sold to franchisees
|
545
|
|
|
124
|
|
|
421
|
|
|||
Cash proceeds received in quarter
|
$
|
37,945
|
|
|
$
|
12,422
|
|
|
$
|
25,523
|
|
|
|
|
|
|
|
||||||
Gain on sale of venditions, excluding goodwill derecognition
|
26,223
|
|
|
7,132
|
|
|
19,091
|
|
|||
Non-cash goodwill derecognition
|
(32,083
|
)
|
|
(11,092
|
)
|
|
20,991
|
|
|||
Loss on sale of salon assets to franchisees, net
|
$
|
(5,860
|
)
|
|
$
|
(3,960
|
)
|
|
$
|
(1,900
|
)
|
|
Three Months Ended
September 30, |
||||
|
2019
|
|
2018
|
||
SmartStyle
|
(2.2
|
)%
|
|
1.0
|
%
|
Supercuts
|
0.2
|
|
|
0.8
|
|
Signature Style
|
(1.7
|
)
|
|
0.6
|
|
|
|
|
|
||
Consolidated system-wide same store sales
|
(1.1
|
)%
|
|
0.8
|
%
|
(1)
|
System-wide same-store sales are calculated as the total change in sales for system-wide company-owned and franchise locations for more than one year that were open on a specific day of the week during the current period and the corresponding prior period. Quarterly and year-to-date system-wide same-store sales are the sum of the system-wide same-store sales computed on a daily basis. Franchise salons that do not report daily sales are excluded from same-store sales. 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. System-wide same-store sales are calculated in local currencies to remove foreign currency fluctuations from the calculation.
|
|
For the Three Months Ended September 30,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
||||||||
|
($ in millions)
|
|
% of Total
Revenues (1) |
|
Basis Point
(Decrease) Increase |
||||||||||||||
Service revenues
|
$
|
141.9
|
|
|
$
|
207.8
|
|
|
57.5
|
%
|
|
72.2
|
%
|
|
(1,470
|
)
|
|
(250
|
)
|
Product revenues
|
45.7
|
|
|
57.6
|
|
|
18.5
|
|
|
20.0
|
|
|
(150
|
)
|
|
70
|
|
||
Royalties and fees
|
28.0
|
|
|
22.4
|
|
|
11.3
|
|
|
7.8
|
|
|
350
|
|
|
180
|
|
||
Franchise rental income
|
31.4
|
|
|
—
|
|
|
12.7
|
|
|
—
|
|
|
1,270
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Cost of service (2)
|
90.5
|
|
|
121.5
|
|
|
63.7
|
|
|
58.5
|
|
|
520
|
|
|
(80
|
)
|
||
Cost of product (2)
|
26.3
|
|
|
32.2
|
|
|
57.7
|
|
|
55.9
|
|
|
180
|
|
|
640
|
|
||
Site operating expenses
|
32.9
|
|
|
36.8
|
|
|
13.3
|
|
|
12.8
|
|
|
50
|
|
|
10
|
|
||
General and administrative
|
40.6
|
|
|
47.7
|
|
|
16.4
|
|
|
16.6
|
|
|
(20
|
)
|
|
550
|
|
||
Rent
|
24.3
|
|
|
36.0
|
|
|
9.8
|
|
|
12.5
|
|
|
(270
|
)
|
|
(90
|
)
|
||
Franchise rent expense
|
31.4
|
|
|
—
|
|
|
12.7
|
|
|
—
|
|
|
1,270
|
|
|
—
|
|
||
Depreciation and amortization
|
9.4
|
|
|
10.2
|
|
|
3.8
|
|
|
3.5
|
|
|
30
|
|
|
(40
|
)
|
||
TBG restructuring
|
1.5
|
|
|
—
|
|
|
0.6
|
|
|
—
|
|
|
60
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Operating loss (income)
|
(9.9
|
)
|
|
3.4
|
|
|
(4.0
|
)
|
|
1.2
|
|
|
(520
|
)
|
|
(370
|
)
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Interest expense
|
(1.4
|
)
|
|
(1.0
|
)
|
|
(0.6
|
)
|
|
(0.3
|
)
|
|
(30
|
)
|
|
40
|
|
||
Loss on sale of salon assets to franchisees, net
|
(5.9
|
)
|
|
(4.0
|
)
|
|
(2.4
|
)
|
|
(1.4
|
)
|
|
(100
|
)
|
|
(140
|
)
|
||
Interest income and other, net
|
0.2
|
|
|
0.4
|
|
|
0.1
|
|
|
0.1
|
|
|
—
|
|
|
—
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income tax benefit (3)
|
2.9
|
|
|
0.7
|
|
|
16.8
|
|
|
25.7
|
|
|
N/A
|
|
|
N/A
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) from discontinued operations, net of income taxes
|
0.4
|
|
|
(0.3
|
)
|
|
0.2
|
|
|
(0.1
|
)
|
|
30
|
|
|
1,060
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Cost of service is computed as a percent of service revenues. Cost of product is computed as a percent of product revenues.
|
(2)
|
Excludes depreciation and amortization expense.
|
(3)
|
Computed as a percent of loss from continuing operations before income taxes. The income taxes basis point change is noted as not applicable (N/A) as the discussion within MD&A is related to the effective income tax rate.
|
|
|
Three Months Ended
September 30, |
||||||
|
|
2019
|
|
2018
|
||||
|
|
(Dollars in thousands)
|
||||||
Franchise salons:
|
|
|
|
|
||||
Product
|
|
$
|
13,105
|
|
|
$
|
15,629
|
|
Royalties and fees
|
|
28,017
|
|
|
22,396
|
|
||
Franchise rental income
|
|
31,424
|
|
|
—
|
|
||
Total Franchise salons
|
|
$
|
72,546
|
|
|
$
|
38,025
|
|
Franchise salon same-store sales (decrease) increase (1)
|
|
(0.1
|
)%
|
|
1.2
|
%
|
||
|
|
|
|
|
||||
Company-owned salons:
|
|
|
|
|
|
|
||
SmartStyle
|
|
$
|
85,531
|
|
|
$
|
95,963
|
|
Supercuts
|
|
24,353
|
|
|
67,279
|
|
||
Signature Style
|
|
64,608
|
|
|
86,568
|
|
||
Total Company-owned salons
|
|
$
|
174,492
|
|
|
$
|
249,810
|
|
Company-owned salon same-store sales (decrease) increase (2)
|
|
(2.0
|
)%
|
|
0.5
|
%
|
||
|
|
|
|
|
||||
Consolidated revenues
|
|
$
|
247,038
|
|
|
$
|
287,835
|
|
Percent change from prior year
|
|
(14.2
|
)%
|
|
(8.8
|
)%
|
(1)
|
Franchise same-store sales are calculated as the total change in sales for salons that have been a franchise location for more than one year that were open on a specific day of the week during the current period and the corresponding prior period. Quarterly and year-to-date franchise same-store sales are the sum of the franchise same-store sales computed on a daily basis. Franchise salons that do not report daily sales are excluded from same-store sales. 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. Franchise same-store sales are calculated in local currencies to remove foreign currency fluctuations from the calculation.
|
(2)
|
Company-owned same-store sales are calculated as the total change in sales for company-owned locations that were open on a specific day of the week during the current period and the corresponding prior period. Quarterly and year-to-date company-owned same-store sales are the sum of the company-owned 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. Company-owned same-store sales are calculated in local currencies to remove foreign currency fluctuations from the calculation.
|
|
For the Three Months Ended September 30,
|
||||||||||
|
2019
|
|
2018
|
|
2019
|
||||||
|
(Dollars in millions)
|
|
Increase/(Decrease)
|
||||||||
Revenue
|
|
|
|
|
|
||||||
Product
|
$
|
11.8
|
|
|
$
|
10.1
|
|
|
$
|
1.7
|
|
Product sold to TBG
|
1.3
|
|
|
5.5
|
|
|
(4.2
|
)
|
|||
Total product
|
$
|
13.1
|
|
|
$
|
15.6
|
|
|
$
|
(2.5
|
)
|
Royalties and fees (1)
|
28.0
|
|
|
22.4
|
|
|
5.6
|
|
|||
Franchise rental income
|
31.4
|
|
|
—
|
|
|
31.4
|
|
|||
Total franchise salons revenue (2)
|
$
|
72.5
|
|
|
$
|
38.0
|
|
|
$
|
34.5
|
|
|
|
|
|
|
|
||||||
Franchise same-store sales (3)
|
(0.1
|
)%
|
|
1.2
|
%
|
|
(1.3
|
)%
|
|||
|
|
|
|
|
|
||||||
Operating income
|
$
|
10.2
|
|
|
$
|
9.1
|
|
|
$
|
1.1
|
|
Operating income from TBG
|
—
|
|
|
0.6
|
|
|
(0.6
|
)
|
|||
Total operating income (2)
|
$
|
10.2
|
|
|
$
|
9.7
|
|
|
$
|
0.5
|
|
(1)
|
Total includes $0.5 million of royalties related to TBG during the three months ended September 30, 2018.
|
(2)
|
Total is a recalculation; line items calculated individually may not sum to total due to rounding.
|
(3)
|
Franchise same-store sales are calculated as the total change in sales for salons that have been a franchise location for more than one year that were open on a specific day of the week during the current period and the corresponding prior period. Quarterly and year-to-date franchise same-store sales are the sum of the franchise same-store sales computed on a daily basis. Franchise salons that do not report daily sales are excluded from same-store sales. 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. Franchise same-store sales are calculated in local currencies to remove foreign currency fluctuations from the calculation. TBG is not included in either period same-store sales.
|
|
For the Three Months Ended September 30,
|
|||||||||
|
2019
|
|
2018
|
|
(Decrease) Increase
|
|||||
|
(Dollars in millions)
|
|
|
|||||||
Total revenue
|
$
|
174.5
|
|
|
$
|
249.8
|
|
|
(30.2
|
)%
|
Company-owned same-store sales
|
(2.0
|
)%
|
|
0.5
|
%
|
|
|
|||
|
|
|
|
|
|
|||||
Operating income
|
$
|
5.4
|
|
|
$
|
19.6
|
|
|
(72.4
|
)%
|
|
|
For The Three Months Ended September 30,
|
||||
|
|
2019
|
|
2018
|
||
SmartStyle
|
|
(1.2
|
)%
|
|
1.1
|
%
|
Supercuts
|
|
(3.9
|
)
|
|
0.2
|
|
Signature Style
|
|
(2.4
|
)
|
|
0.2
|
|
|
|
|
|
|
||
Total
|
|
(2.0
|
)%
|
|
0.5
|
%
|
As of
|
|
Debt to
Capitalization (1)
|
|
Basis Point Increase (Decrease) (2)
|
||
September 30, 2019
|
|
29.5
|
%
|
|
270
|
|
June 30, 2019
|
|
26.8
|
%
|
|
1,120
|
|
(1)
|
Debt includes long-term debt and financing liabilities. It excludes the long-term lease liability as that liability is off-set by the right of use asset and does not impact the Company's debt covenants.
|
Period
|
|
Total Number of Shares Purchased
|
|
Average Price Paid per Share
|
|
Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs
|
|
Approximate Dollar Value of Shares that May Yet Be Purchased under the Plans or Programs (in thousands)
|
||||||
|
|
|
|
|
|
|
|
|
|
|
||||
7/1/19 - 7/31/19
|
|
908,200
|
|
|
$
|
17.71
|
|
|
29,378,857
|
|
|
$
|
64,818
|
|
8/1/19 - 8/31/19
|
|
—
|
|
|
—
|
|
|
29,378,857
|
|
|
64,818
|
|
||
9/1/19 - 9/30/19
|
|
595,800
|
|
|
17.19
|
|
|
29,974,657
|
|
|
54,573
|
|
||
Total
|
|
1,504,000
|
|
|
$
|
17.50
|
|
|
29,974,657
|
|
|
$
|
54,573
|
|
|
||
|
|
|
|
President and Chief Executive Officer of Regis Corporation: Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer of Regis Corporation: Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
Chief Executive Officer and Chief Financial Officer of Regis Corporation: Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
Exhibit 101
|
|
The following financial information from Regis Corporation's Quarterly Report on Form 10-Q for the quarterly and year-to-date periods ended September 30, 2019, formatted in Inline Xtensible Business Reporting Language (iXBRL) and filed electronically herewith: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Earnings; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iv) the Condensed Consolidated Statements of Cash Flows; and (v) the Notes to the Consolidated Financial Statements.
|
|
|
|
Exhibit 104
|
|
The cover page from Regis Corporation's Quarterly Report on Form 10-Q for the quarterly and year-to-date periods ended September 30, 2019, formatted in iXBRL (included as Exhibit 101).
|
|
REGIS CORPORATION
|
|
|
|
|
Date: October 29, 2019
|
By:
|
/s/ Andrew H. Lacko
|
|
|
Andrew H. Lacko
|
|
|
Executive Vice President and Chief Financial Officer
|
|
|
(Signing on behalf of the registrant and as Principal Financial Officer)
|
|
|
|
|
|
|
Date: October 29, 2019
|
By:
|
/s/ Kersten D. Zupfer
|
|
|
Kersten D. Zupfer
|
|
|
Senior Vice President and Chief Accounting Officer
|
|
|
(Principal Accounting Officer)
|
|
|
|
Applicable Portion of the RSUs
|
a number of RSUs equal to the product obtained by multiplying (i) the total number RSUs by (ii) a fraction, the numerator of which is the number of days elapsed from the Grant Date through the date of Participant’s Termination of Employment and the denominator of which is the number of days between the Grant Date and the third anniversary of the Grant Date
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Regis Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s Board of Directors or persons performing the equivalent functions:
|
(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.
|
October 29, 2019
|
|
|
|
|
|
/s/ Hugh E. Sawyer
|
|
|
Hugh E. Sawyer, President and Chief Executive Officer
|
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Regis Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;
|
4.
|
The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and
|
5.
|
The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s Board of Directors or persons performing the equivalent functions:
|
(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.
|
October 29, 2019
|
|
|
|
|
|
/s/ Andrew H. Lacko
|
|
|
Andrew H. Lacko, Executive Vice President and Chief Financial Officer
|
|
|
(1)
|
The Quarterly Report on Form 10-Q complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Quarter Report on Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
|
October 29, 2019
|
|
|
|
|
|
/s/ Hugh E. Sawyer
|
|
|
Hugh E. Sawyer, President and Chief Executive Officer
|
|
|
|
|
|
October 29, 2019
|
|
|
|
|
|
/s/ Andrew H. Lacko
|
|
|
Andrew H. Lacko, Executive Vice President and Chief Financial Officer
|
|
|