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Regis Reports Third Quarter 2021 Improved Traffic Trends and Continued Progress in Key Initiatives

MINNEAPOLIS , May 05 /Businesswire/ - Regis Corporation (NYSE: RGS):

 

 

Three Months Ended March 31,

 

Nine Months Ended March 31,

(Dollars in thousands)

 

2021

 

2020

 

2021

 

2020

 

 

 

 

 

 

 

 

 

Consolidated Revenue

 

$

100,267

 

 

$

153,783

 

 

$

315,983

 

 

$

609,586

 

System-wide Revenue (1)

 

$

269,951

 

 

$

371,122

 

 

$

791,577

 

 

$

1,249,152

 

 

 

 

 

 

 

 

 

 

System-wide Same-Store Sales Comps

 

 

(20.7

)%

 

 

(5.4

)%

 

 

(28.7

)%

 

 

(2.7

)%

Franchise Same-Store Sales Comps

 

 

(19.3

)%

 

 

(4.1

)%

 

 

(27.6

)%

 

 

(1.8

)%

Company-owned Same-Store Sales Comps

 

 

(28.8

)%

 

 

(7.9

)%

 

 

(33.8

)%

 

 

(3.9

)%

 

 

 

 

 

 

 

 

 

Operating Loss

 

$

(18,541

)

 

$

(59,399

)

 

$

(76,886

)

 

$

(76,771

)

Loss From Continuing Operations

 

$

(10,847

)

 

$

(67,842

)

 

$

(78,991

)

 

$

(98,540

)

Diluted Loss per Share From Continuing Operations

 

$

(0.30

)

 

$

(1.89

)

 

$

(2.20

)

 

$

(2.74

)

EBITDA (2)

 

$

(3,564

)

 

$

(56,449

)

 

$

(42,532

)

 

$

(71,469

)

as a percent of revenue

 

 

(3.6

)%

 

 

(36.7

)%

 

 

(13.5

)%

 

 

(11.7

)%

 

 

 

 

 

 

 

 

 

As Adjusted (2)

 

 

 

 

 

 

 

 

Net (Loss) Income, as Adjusted

 

$

(25,340

)

 

$

(4,024

)

 

$

(79,172

)

 

$

14,499

 

Diluted (Loss) Income per Share, as Adjusted

 

$

(0.70

)

 

$

(0.11

)

 

$

(2.20

)

 

$

0.39

 

EBITDA, as Adjusted (2)

 

$

(19,812

)

 

$

6,559

 

 

$

(55,981

)

 

$

53,358

 

as a percent of revenue

 

 

(19.8

)%

 

 

4.3

%

 

 

(17.7

)%

 

 

8.8

%

(1)

Represents total sales within the system.

(2)

See GAAP to non-GAAP reconciliations, within the attached section titled "Non-GAAP Reconciliations".

Regis Corporation (NYSE: RGS), a leader in the haircare industry, whose primary business is franchising, owning and operating technology-enabled hair salons, today reported a third quarter 2021 net loss from continuing operations of $10.8 million, or $0.30 loss per diluted share as compared to a net loss from continuing operations of $67.8 million, or $1.89 loss per diluted share in the third quarter of 2020. The Company’s third quarter 2021 reported results included $14.5 million of discrete items. Excluding discrete items, the Company reported third quarter 2021 adjusted net loss of $25.3 million, or $0.70 loss per diluted share as compared to adjusted net loss of $4.0 million, or $0.11 earnings per diluted share, for the same period last year. The year-over-year decrease in adjusted net income was driven primarily by the decrease in the gain from the sale of salons to franchisees of $14.2 million due to lower proceeds per salon in the current year. The elimination of adjusted net income that had been generated in the prior year period from the 519 company-owned salons that were sold and converted to the Company’s asset-light franchise portfolio over the past twelve months also contributed to the decline, but this was partially offset by significant reductions in general and administrative expense and marketing. Additionally, the Company estimates it lost approximately $23.7 million in revenue this quarter compared to $20.7 million in the prior year due to government-mandated salon closures and lower traffic due to the COVID-19 pandemic.

Total revenue in the quarter of $100.3 million decreased $53.5 million, or 34.8%, year-over-year driven primarily by the conversion of a net 519 company-owned salons to the Company's asset-light franchise portfolio over the past 12 months and due to the impact of the COVID-19 pandemic.

Third quarter adjusted EBITDA loss of $19.8 million decreased $26.4 million, versus adjusted EBITDA of $6.6 million in the same period last year. Excluding the $4.6 million adjusted loss and $9.6 million adjusted gain from the sale of company-owned salons during the current and prior year quarter, respectively, adjusted EBITDA loss of $15.2 million was $12.2 million unfavorable versus the same period last year. This was driven primarily by the elimination of adjusted EBITDA that had been generated in the prior year period from the 519 company-owned salons that were sold and converted to the Company’s asset-light franchise portfolio over the past twelve months and lower system-wide same-store sales due to the COVID-19 pandemic, partially offset by significant reductions in general and administrative expense and marketing spend.

Felipe Athayde, President and Chief Executive Officer, commented, "We are proud of the progress we have made against our key initiatives that will put us in the best position to optimize our brands and support our franchisees. While there is still much work to be done, we are putting in the hard work, not cutting corners, and taking the necessary steps to lay the right foundation for the future of Regis."

Third Quarter Segment Results

Franchise Salons

 

 

Three Months Ended

March 31,

 

Increase

(Decrease)

 

Nine Months Ended March 31,

 

Increase

(Decrease)

 

 

 

 

 

 

 

 

 

 

 

(Dollars in millions) (1)

 

2021

 

2020

 

 

2021

 

2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

 

13.1

 

 

 

15.3

 

 

 

(2.2

)

 

 

41.1

 

 

 

45.3

 

 

 

(4.2

)

Royalties and fees

 

 

23.5

 

 

 

8.7

 

 

 

14.8

 

 

 

61.4

 

 

 

66.1

 

 

 

(4.7

)

Franchise rental income

 

 

31.3

 

 

 

31.8

 

 

 

(0.5

)

 

 

95.9

 

 

 

96.9

 

 

 

(1.0

)

Total Franchise salons revenue

 

$

67.9

 

 

$

55.8

 

 

$

12.1

 

 

$

198.3

 

 

$

Women, Other Retail, Men, Specialty, Bridal, Fashion, Cosmetics, Consumer, Retail, United States, North America, Minnesota, Webcast, Conference Call, Earnings,
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