rgs-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended March 31, 2024
			OR
☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the transition period from to

Commission file number 1-12725

Regis Corporation

(Exact name of registrant as specified in its charter)

Minnesota

41-0749934

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

3701 Wayzata Boulevard,

Minneapolis

Minnesota

55416

(Address of principal executive offices)

(Zip Code)

(952) 947-7777

(Registrant's telephone number, including area code)

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

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading symbol

Name of exchange on which registered

Common Stock, $0.05 par value

RGS

The Nasdaq Stock Market LLC

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to be submit such files). Yes ☒ No ☐

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

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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

Indicate the number of shares outstanding of each of the issuer's classes of common stock as of April 26, 2024: 2,279,948

REGIS CORPORATION

INDEX


Part I.	Financial Information

	Item 1.	Financial Statements (Unaudited):

		Condensed Consolidated Balance Sheets as of March 31, 2024 and June 30, 2023	3

		Condensed Consolidated Statements of Operations for the Three and Nine Months Ended March 31, 2024 and 2023	4

		Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended March 31, 2024 and 2023	5

		Condensed Consolidated Statements of Shareholders' Deficit for the Three and Nine Months Ended March 31, 2024 and 2023	6

		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2024 and 2023	7

		Notes to Condensed Consolidated Financial Statements	8

	Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	22

	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	32

	Item 4.	Controls and Procedures	32

Part II.	Other Information		33

	Item 1.	Legal Proceedings	33

	Item 1A.	Risk Factors	33

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36

	Item 5.	Other Information	36



	Item 6.	Exhibits	37

	Signatures		38

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

REGIS CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

As of March 31, 2024 and June 30, 2023

(Dollars in thousands, except per share data)


	March 31, 2024		June 30, 2023

ASSETS
Current assets:
Cash and cash equivalents (Note 7)	$	5,886	$	9,508
Receivables, net	9,514		10,885
Inventories, net	720		1,681
Other current assets	11,656		15,164
Total current assets	27,776		37,238

Property and equipment, net	5,437		6,422
Goodwill (Note 1)	173,345		173,791
Other intangibles, net	2,518		2,783
Right of use asset (Note 8)	311,120		360,836
Other assets	23,511		26,307

Total assets	$	543,707	$	607,377

LIABILITIES AND SHAREHOLDERS' DEFICIT
Current liabilities:
Accounts payable	$	9,947	$	14,309
Accrued expenses	25,693		30,109

Short-term lease liability (Note 8)	73,485		81,917
Total current liabilities	109,125		126,335

Long-term debt, net (Note 9)	179,718		176,830
Long-term lease liability (Note 8)	249,317		291,901

Other non-current liabilities	41,369		49,041
Total liabilities	579,529		644,107
Commitments and contingencies (Note 6)
Shareholders' deficit:
Common stock, $0.05 par value; issued and outstanding, 2,279,948 and 2,277,828 common shares at March 31, 2024 and June 30, 2023, respectively (Note 1)	114		114
Additional paid-in capital (Note 1)	68,040		66,764
Accumulated other comprehensive income	8,796		9,023
Accumulated deficit	(112,772)		(112,631)
Total shareholders' deficit	(35,822)		(36,730)
Total liabilities and shareholders' deficit	$	543,707	$	607,377

_______________________________________________________________________________

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

REGIS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

For the Three and Nine Months Ended March 31, 2024 and 2023

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


	Three Months Ended March 31,				Nine Months Ended March 31,
	2024		2023		2024		2023

Revenues:
Royalties	$	15,687	$	16,036	$	48,035	$	49,374
Fees	2,617		2,510		7,740		8,301
Product sales to franchisees	—		644		451		2,194
Advertising fund contributions	5,773		7,787		19,807		24,003
Franchise rental income (Note 8)	23,780		26,629		72,534		85,845
Company-owned salon revenue	1,324		2,167		5,039		7,894
Total revenue	49,181		55,773		153,606		177,611
Operating expenses:
Cost of product sales to franchisees	19		1,045		436		2,825
Inventory reserve	—		—		—		1,228
General and administrative	11,247		13,099		33,748		39,207
Rent (Note 8)	1,766		2,077		4,257		5,920
Advertising fund expense	5,773		7,787		19,807		24,003
Franchise rent expense	23,780		26,629		72,534		85,845
Company-owned salon expense (1)	1,503		2,088		4,301		7,291
Depreciation and amortization	1,009		1,008		2,056		6,052
Long-lived asset impairment	—		36		170		36

Total operating expenses	45,097		53,769		137,309		172,407

Operating income	4,084		2,004		16,297		5,204

Other (expense) income:
Interest expense	(6,153)		(4,787)		(18,529)		(13,123)

Other, net	(298)		381		(199)		1,166

Loss from operations before income taxes	(2,367)		(2,402)		(2,431)		(6,753)

Income tax (expense) benefit	(54)		241		201		213

Loss from continuing operations	(2,421)		(2,161)		(2,230)		(6,540)

Income from discontinued operations (Note 3)	89		518		2,089		3,958

Net loss	$	(2,332)	$	(1,643)	$	(141)	$	(2,582)

Net loss per share:
Basic and diluted:
Loss from continuing operations	$	(1.03)	$	(0.93)	$	(0.95)	$	(2.83)
Income from discontinued operations	0.04		0.22		0.89		1.71
Net loss per share (2)	$	(1.00)	$	(0.71)	$	(0.06)	$	(1.12)









Weighted average common and common equivalent shares outstanding:
Basic and diluted	2,342		2,315		2,338		2,308

_______________________________________________________________________________

(1)Includes cost of service and product sold to guests in our Company-owned salons. Excludes general and administrative expense, rent and depreciation and amortization related to Company-owned salons.

(2)Total is a recalculation; line items calculated individually may not sum to total due to rounding.

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

REGIS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited)

For the Three and Nine Months Ended March 31, 2024 and 2023

(Dollars in thousands)


	Three Months Ended March 31,				Nine Months Ended March 31,
	2024		2023		2024		2023

Net loss	$	(2,332)	$	(1,643)	$	(141)	$	(2,582)
Foreign currency translation adjustments	(230)		29		(227)		(697)
Comprehensive loss	$	(2,562)	$	(1,614)	$	(368)	$	(3,279)

_______________________________________________________________________________

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

REGIS CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' DEFICIT (Unaudited)

For the Three and Nine Months Ended March 31, 2024 and 2023

(Dollars in thousands)


	Three Months Ended March 31, 2024
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total
	Shares	Amount

Balance, December 31, 2023	2,279,450	$	114	$	67,710	$	9,026	$	(110,440)	$	(33,590)
Net loss	—	—		—		—		(2,332)		(2,332)
Foreign currency translation	—	—		—		(230)		—		(230)


Stock-based compensation	—	—		333		—		—		333
Net restricted stock activity	498	—		(3)		—		—		(3)

Balance, March 31, 2024	2,279,948	$	114	$	68,040	$	8,796	$	(112,772)	$	(35,822)

	Three Months Ended March 31, 2023
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total
	Shares	Amount

Balance, December 31, 2022	2,277,645	$	114	$	65,707	$	8,729	$	(106,185)	$	(31,635)
Net loss	—	—		—		—		(1,643)		(1,643)
Foreign currency translation	—	—		—		29		—		29


Stock-based compensation	—	—		502		—		—		502
Net restricted stock activity	106	—		—		—		—		—

Balance, March 31, 2023	2,277,751	$	114	$	66,209	$	8,758	$	(107,828)	$	(32,747)

	Nine Months Ended March 31, 2024
	Common Stock			Additional Paid-In Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total
	Shares	Amount

Balance, June 30, 2023	2,277,828	$	114	$	66,764	$	9,023	$	(112,631)	$	(36,730)
Net loss	—	—		—		—		(141)		(141)
Foreign currency translation	—	—		—		(227)		—		(227)


Stock-based compensation	—	—		1,292		—		—		1,292
Net restricted stock activity	2,120	—		(16)		—		—		(16)

Balance, March 31, 2024	2,279,948	$	114	$	68,040	$	8,796	$	(112,772)	$	(35,822)

	Nine Months Ended March 31, 2023
	Common Stock

SEC Form 10-Q filed by Regis Corporation