Regis (RGS) - 2025 Q2 - Quarterly Report

Company Operations - As of December 31, 2024, Regis Corporation operated 4,248 locations, including 3,925 franchised salons and 323 company-owned salons[92]. - A net 152 franchise salons closed in the six months ended December 31, 2024, in addition to the 314 salons acquired as part of the Alline acquisition[97]. Financial Performance - System-wide revenue for the three months ended December 31, 2024, was $274.1 million, a decrease of 6.3% compared to$ 292.4 million in the same period of 2023[98]. - Total system-wide same-store sales decreased by 1.6% for the three months ended December 31, 2024, compared to an increase of 1.9% in the same period of 2023[98]. - Franchise revenue decreased by $6.0 million, or 12.2%, during the three months ended December 31, 2024, primarily due to a decrease in franchise salon count and negative same-store sales[124]. - Franchise same-store sales declined by 1.5% for the three months ended December 31, 2024, compared to an increase of 1.9% in the same period of 2023[122]. - Company-owned salon revenue increased by$ 1.7 million, or 95.6%, during the three months ended December 31, 2024, primarily due to the acquisition of Alline[107]. - Company-owned salon revenue increased by $1.7 million, or 94.4%, during the three months ended December 31, 2024, primarily driven by the Alline acquisition[129]. - Cash provided by operating activities was$ 0.8 million during the six months ended December 31, 2024, compared to a cash use of $6.9 million in the same period of 2023[140]. Revenue and Expenses - Royalties decreased by$ 1.0 million, or 6.3%, during the three months ended December 31, 2024, primarily due to a decrease in franchise salon count[103]. - Franchise rental income decreased by $4.1 million, or 17.0%, during the three months ended December 31, 2024, due to a decrease in franchise salon count[106]. - Advertising fund contributions decreased by$ 1.3 million, or 19.1%, during the three months ended December 31, 2024, primarily due to lower contribution rates[105]. - Fees increased by $0.4 million, or 16.1%, during the three months ended December 31, 2024, primarily due to terminated franchise fees related to Alline salons[104]. - General and administrative expenses decreased by$ 0.6 million, or 5.1%, for the three months ended December 31, 2024, primarily due to lower headcount[108]. - Rent expense increased by $0.8 million, or 57.4%, during the three months ended December 31, 2024, primarily due to the lapping of prior year franchisee rent benefits[109]. - Interest expense decreased by$ 1.3 million, or 21.3%, for the three months ended December 31, 2024, primarily due to less debt outstanding compared to the same period in 2023[116]. Assets and Liabilities - The franchise reporting unit had goodwill of $172.4 million as of December 31, 2024, compared to$ 173.1 million as of June 30, 2024[95]. - The Company recorded long-lived asset impairment charges of $0.4 million during the six months ended December 31, 2024, compared to$ 0.2 million in the same period of 2023[115]. - As of December 31, 2024, cash and cash equivalents were $10.2 million, with$ 9.4 million in the United States and $0.8 million in Canada[134]. - The debt to capitalization ratio was 65.5% as of December 31, 2024, down from 67.0% as of June 30, 2024[144]. Stock Repurchase Program - The Board has authorized a total of$ 650.0 million for the stock repurchase program since May 2000, with $595.4 million spent to repurchase approximately 1.5 million shares by December 31, 2024[145]. - As of December 31, 2024, there is$ 54.6 million remaining under the approved stock repurchase program, but the Company does not anticipate repurchasing shares in the foreseeable future[145]. Risks and Uncertainties - The Company faces numerous risks and uncertainties that could materially affect future results, including changes in consumer shopping trends and economic conditions[147]. - Market risks include exposure to changes in interest rates and foreign currency exchange rates, with no material changes reported since the last annual report[149].