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Regis (RGS) - 2022 Q1 - Earnings Call Transcript
RGSRegis (RGS)2021-11-06 07:11
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Financial Data and Key Metrics Changes - In Q1 of fiscal 2022, the company reported consolidated revenues of 78million,representinga78 million, representing a 34 million increase from the prior year, attributed to recovery from the COVID-19 pandemic [24] - Same-store sales improved by 23% in Q1, although system-wide sales were down 17% compared to pre-COVID levels, an improvement from a 21% decline in Q4 [10][25] - The operating loss for the quarter was 6million,significantlyimprovedfroma6 million, significantly improved from a 32 million loss in the prior quarter [26] - Adjusted EBITDA loss was 6million,comparedtoalossof6 million, compared to a loss of 23 million in Q4 2021 [27] Business Line Data and Key Metrics Changes - The company incurred losses of approximately 3millionfromfranchiseproductsalesand3 million from franchise product sales and 1.6 million from company-owned salons, which are not part of the go-forward business [27] - The reorganization aimed at reducing costs is expected to yield annual savings of approximately 5million,effectivefromQ2[7][28]MarketDataandKeyMetricsChanges−ThereopeningofCanadiansalonsmarkedasignificantturningpoint,withnogovernment−mandatedclosuresimpactingoperations[32]−Themiddlepartofthecountryisperformingbetterthancoastalregions,butallareasareshowingimprovement[32]CompanyStrategyandDevelopmentDirection−Thecompanyisfocusedonstylistrecruitment,theadoptionoftheOpenSalonProtechnologyplatform,andstrengtheningthefranchiseebasetodrivegrowth[24][23]−Themanagementteamhasbeenrevampedtoincludeamixoftenuredleadersandexecutiveswithcomplementaryexpertise,positioningthecompanyforgrowthandsustainedprofitability[23]Management′sCommentsonOperatingEnvironmentandFutureOutlook−Managementemphasizedtheimportanceoflaborrecruitmentasatopprioritytoaddressstaffingshortagesimpactingrevenuegeneration[12]−Thecompanyisoptimisticaboutthereturnofbeautyschoolgraduatestopre−COVIDlevelsbyJune2022,indicatingatemporarylaborshortage[15][16]−Themanagementbelievesthecompanyiswell−positionedforgrowthandsustainedprofitabilityasitemergesfromthepandemic[33]OtherImportantInformation−Thecompanyraised5 million, effective from Q2 [7][28] Market Data and Key Metrics Changes - The reopening of Canadian salons marked a significant turning point, with no government-mandated closures impacting operations [32] - The middle part of the country is performing better than coastal regions, but all areas are showing improvement [32] Company Strategy and Development Direction - The company is focused on stylist recruitment, the adoption of the OpenSalon Pro technology platform, and strengthening the franchisee base to drive growth [24][23] - The management team has been revamped to include a mix of tenured leaders and executives with complementary expertise, positioning the company for growth and sustained profitability [23] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of labor recruitment as a top priority to address staffing shortages impacting revenue generation [12] - The company is optimistic about the return of beauty school graduates to pre-COVID levels by June 2022, indicating a temporary labor shortage [15][16] - The management believes the company is well-positioned for growth and sustained profitability as it emerges from the pandemic [33] Other Important Information - The company raised 37.2 million in unrestricted cash through its ATM program, enhancing its liquidity position [6][29] - The expected end-state run rate for G&A is projected to be between 65millionand65 million and 70 million annually [28] Q&A Session Summary Question: No questions were raised during the call - The call concluded without any questions from participants [34]