Regis (US:RGS)2025-09-03 10:03Debt and Liquidity - As of June 30, 2025, the company's total debt, net, was $110.8 million, a significant increase from $99.5 million as of June 30, 2024, reflecting a cash interest rate of 9.14% for the term loan [207]. - The debt to capitalization ratio improved to 40.3% as of June 30, 2025, down from 67.0% in 2024 and 125.1% in 2023, primarily due to higher total shareholder's equity resulting from earnings during the 2025 period [209][210]. - The company entered into a new credit agreement in June 2024, which includes a $25.0 million revolving credit facility and a term loan of $105.0 million, maturing in June 2029 [208]. - As of June 30, 2025, the company had $19.0 million in unused available credit under the revolving credit facility and total liquidity of $25.9 million [208]. Shareholder Returns and Repurchases - The company has not declared a quarterly dividend payment since December 2013, indicating a focus on reinvestment rather than returning capital to shareholders [220]. - Cumulatively, 1.5 million shares have been repurchased for $595.4 million under the stock repurchase program, with $54.6 million remaining authorized for future repurchases [221]. Goodwill and Impairment - Goodwill for the franchise reporting unit was $173.2 million as of June 30, 2025, and $10.3 million for the company-owned segment related to the Alline Acquisition [224]. - The Company recognized long-lived asset impairment charges of $0.4 million, $0.8 million, and $0.1 million for fiscal years 2025, 2024, and 2023, respectively, related to right of use (ROU) assets [232]. - Poor salon performance in fiscal years 2025, 2024, and 2023 triggered impairment assessments under ASC 360 [229]. - The Company assessed qualitative factors to determine the likelihood of goodwill impairment, considering economic, market, and industry conditions [226]. Tax Positions and Valuation - The company has liabilities for uncertain tax positions but does not expect significant payments related to these obligations within the next fiscal year [215]. - The valuation allowance on deferred tax assets amounted to $60.5 million and $181.8 million at June 30, 2025, and 2024, respectively [236]. - The Company released $110.2 million of its valuation allowance associated with U.S. federal and state deferred tax assets due to sustained profitability and anticipated future earnings [240]. - The Company determined that it is more likely than not that a portion of Canadian deferred tax assets will be realizable, releasing $6.1 million of the Canadian valuation allowance [240]. Asset Valuation - The fair value of salon asset groups was estimated using market participant methods, considering appropriate discount rates and comparable property rents [231]. - The Company engaged third-party valuation consultants to assist in evaluating estimated fair value calculations for reporting units [228]. - The carrying value of each reporting unit is based on the assets and liabilities associated with its operations, including shared or corporate balances [227]. - The Company utilizes discounted cash flows and market multiples to estimate the fair values of reporting units [228]. Management and Leadership - The company has a comprehensive search underway for a permanent successor to the CEO, who is set to resign on June 30, 2025 [71].