Regis (US:RGS)2024-05-01 10:07Company Operations - As of March 31, 2024, Regis Corporation operated 4,557 locations, including 4,537 franchised salons and 20 company-owned salons[67]. Financial Performance - System-wide revenue for the three months ended March 31, 2024, was $286.8 million, a decrease of 4.2% from $299.3 million in the same period of 2023[74]. - Total system-wide same-store sales increased by 0.5% for the three months ended March 31, 2024, compared to a 6.0% increase in the same period of 2023[74]. - Franchise revenue decreased by $5.7 million and $21.1 million during the three and nine months ended March 31, 2024, respectively, primarily due to a decrease in franchise salon count[104]. Revenue and Expenses - Royalties decreased by $0.3 million (2.2%) and $1.4 million (2.7%) during the three and nine months ended March 31, 2024, primarily due to a decrease in franchise salon count[81]. - Product sales to franchisees decreased by $0.6 million (100.0%) and $1.7 million (79.4%) for the three and nine months ended March 31, 2024, due to the shift to a third-party distribution model[83]. - Advertising fund contributions decreased by $2.0 million (25.9%) and $4.2 million (17.5%) during the three and nine months ended March 31, 2024, primarily due to a decrease in franchise salon count[84]. - Franchise rental income decreased by $2.8 million (10.7%) and $13.3 million (15.5%) during the three and nine months ended March 31, 2024, due to a decrease in franchise salon count[85]. - Company-owned salon revenue decreased by $0.9 million (38.9%) and $2.9 million (36.2%) during the three and nine months ended March 31, 2024, due to a decrease in company-owned salon count[86]. - General and administrative expenses decreased by $1.9 million (14.1%) and $5.5 million (13.9%) for the three and nine months ended March 31, 2024, respectively, primarily due to lower headcount[89]. - Rent expense decreased by $0.3 million (15.0%) and $1.6 million (28.1%) during the three and nine months ended March 31, 2024, respectively, due to a reduction in company-owned salon count[90]. Strategic Initiatives - The Board initiated a strategic review on November 1, 2023, to assess the Company's capital structure with no set timetable for completion[69]. - A Tax Benefits Preservation Plan was adopted on January 28, 2024, to protect the Company's ability to use its net operating loss carryforwards[70]. Cash Flow and Capital Structure - As of March 31, 2024, cash and cash equivalents were $5.9 million, with $5.0 million in the United States and $0.9 million in Canada[114]. - Cash used in operating activities was $7.1 million for the nine months ended March 31, 2024, an improvement from $8.5 million in the prior year, primarily due to a lower cost structure[119]. - Cash provided by investing activities was $1.6 million during the nine months ended March 31, 2024, primarily due to $2.0 million of OSP sales proceeds[120]. - Cash used in financing activities was $1.1 million during the nine months ended March 31, 2024, primarily due to fees associated with a strategic review[121]. - The debt to capitalization ratio as of March 31, 2024, was 123.6%, a decrease from 125.1% on June 30, 2023[123][124]. - The company did not issue any shares under the $50.0 million prospectus supplement during the nine months ended March 31, 2024, and the Share Issuance Program expired on February 10, 2024[125]. - As of March 31, 2024, approximately 1.5 million shares have been repurchased for $595.4 million, with $54.6 million remaining under the stock repurchase program[126]. - The company does not anticipate repurchasing shares of common stock for the foreseeable future[126]. Market Risks - The company is exposed to market risk from changes in interest rates and foreign currency exchange rates, with no material changes reported since June 30, 2023[129].