Regis (RGS)2022-08-23 20:50Financial Data and Key Metrics Changes - The company reported a total revenue of 32 million year-over-year, primarily due to 98% of salons being franchised compared to 95% in the prior year and the transition away from the product distribution business [23][24] - Same-store sales growth was 7% in Q4 2022 compared to the same quarter in 2021, with an adjusted EBITDA of 23 million in the prior year [23][24] - For the full fiscal year, adjusted EBITDA improved by 2 million from a loss of 3 million in Q4 2022, a 9 million in the prior year quarter [24] - The company-owned segment recorded an adjusted EBITDA loss of approximately 12 million improvement from the same period last year [24][25] - The company ended the year with 105 corporate-owned salons, down from 276 at the start of the year, contributing to a significant reduction in losses [10][12] Market Data and Key Metrics Changes - The company experienced a positive trend in profitability, with same-store sales growth of 14.8% for the full year compared to fiscal 2021 [11] - The transition to a franchised model has impacted revenue, with a decline attributed to the exit from the product distribution business [23][24] Company Strategy and Development Direction - The company is focused on three top priorities: refinancing debt, providing technology solutions to franchisees, and winding down legacy businesses [5][6] - The sale of the proprietary point-of-sale software, Opensalon Pro, to Zenoti is seen as a strategic move to focus on core hair care franchising rather than technology [8][9] - The company aims to enhance stylist recruitment and retention through increased investment in education and marketing initiatives [15][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering consistent positive EBITDA results going forward, citing the company's strong position [13][22] - Challenges remain in stylist retention, customer traffic, and technology, which management acknowledges as critical elements for future growth [13][14] - The company plans to enhance its marketing efforts to drive customer traffic and improve retention [18][19] Other Important Information - The company successfully renegotiated its credit agreement, extending the maturity date to August 2025 and converting existing debt to a term loan [7][30] - The company reported a loss of 39 million in discontinued operations, primarily due to a non-cash goodwill derecognition [27] Q&A Session Summary Question: Can you discuss the 7% comp in the period regarding volume versus value? - Management indicated that the 7% growth was driven by price increases, with expectations for a mix of price and traffic initiatives moving forward [33][34] Question: What is the performance difference between Smart Style and other business lines? - Management noted that Smart Style is lagging behind other brands but highlighted initiatives for reimaging and marketing to improve its performance [35][36] Question: Can you clarify the outstanding lease obligations on the balance sheet? - Management provided details on lease obligations, indicating 7 million associated with APCO salons and the remainder related to corporate and franchise leases [37][38]