Regis Reports First Quarter 2010 Results

-First Quarter Operational Earnings of $0.30 per Share-

• Press Release
• Source: Regis Corporation
• On 6:00 am EDT, Thursday October 29, 2009

MINNEAPOLIS--(BUSINESS WIRE)--Regis Corporation (NYSE:RGS - News), the global leader in the $170 billion hair care industry, today reported financial results for its first fiscal quarter ended September 30, 2009. First quarter reported earnings of $0.14 per diluted share included three non-operational items which, as discussed immediately below, reduced reported earnings per diluted share by $0.16 on a net overall basis. Absent these non-operational items, the Company’s first quarter operational earnings were $0.30 per diluted share.

Related Quotes

Symbol	Price	Change
RGS	16.03	+0.06

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The Company previously announced on August 20, 2009, that it would incur non-operational charges in the first quarter related to the pre-payment of debt and the undertaking of a store closing initiative in the U.K. The total pre-tax expense for these two non-operational items was $21.6 million. In addition, the Company recorded within discontinued operations after-tax income of $3.2 million primarily related to additional tax benefit from the sale of the Trade Secret business. The reconciliation of reported earnings to operational earnings is included in today’s press release, and a more comprehensive reconciliation is available on the Company’s website at www.regiscorp.com.

On October 8, 2009, the Company reported first quarter consolidated total same-store sales declined 4.5 percent. Reported revenues for the first quarter ended September 30, 2009 decreased 1.3 percent to $606 million compared to $614 million in the first quarter of fiscal 2009.

“First quarter same-store sales were slightly ahead of plan but remained challenging due to overall macro level economic conditions which have impacted our customer visitation patterns. However, we are very pleased with our first quarter operating results due to our continued focus on expense control. In fact, if you adjust last year’s results for the impact of our recent equity and convertible note issuance, our operational earnings per share in the quarter were flat compared to last year,” commented Paul D. Finkelstein, Chairman and Chief Executive Officer. “Additionally, our operational earnings included $0.03 per share related to the pending settlement of two legal claims. Although the cost of these settlements is appropriately included in our operational earnings of $0.30 per share, one could certainly add these back when looking at our first quarter operating performance.”

Mr. Finkelstein concluded, “Our first quarter results demonstrate the strength of our business model. We are in the quintessential replenishment business offering an affordable necessity, and even in these tough economic times our operations are extremely profitable. With greater consumer frugality, our focus on value based concepts is the appropriate strategy. We continue to be bullish about the long range prospects of our Company.”

Regis Corporation will host a conference call discussing first quarter results today, October 29, 2009 at 3 p.m., Central time. Interested parties are invited to listen by logging on to www.regiscorp.com or dialing 877-941-2333. A replay of the call will be available later that day. The replay phone number is 800-406-7325, access code 4162580#.

About Regis Corporation

Regis Corporation (NYSE:RGS - News) is the beauty industry’s global leader in beauty salons, hair restoration centers and cosmetology education. As of September 30, 2009, the Company owned, franchised or held ownership interests in 12,900 worldwide locations. Regis’ corporate and franchised locations operate under concepts such as Supercuts, Sassoon Salon, Regis Salons, MasterCuts, SmartStyle, Cost Cutters, Cool Cuts 4 Kids and Hair Club for Men and Women. In addition, Regis maintains an ownership interest in Provalliance, which operates salons primarily in Europe, under the brands of Jean Louis David, Franck Provost and Saint Algue. Regis also maintains ownership interests in Empire Education Group in the U.S. and the MY Style concepts in Japan. System-wide, these and other concepts are located in the U.S. and in over 30 other countries in North America, South America, Europe, Africa and Asia. Regis also maintains a 49 percent ownership interest in Intelligent Nutrients, a business that provides a wide variety of certified organic products for health and beauty. For additional information about the company, including a reconciliation of non-GAAP financial information and certain supplemental financial information, please visit the Investor Information section of the corporate website at www.regiscorp.com. To join Regis Corporation’s email alert list, click on this link: http://www.b2i.us/irpass.asp?BzID=913&to=ea&Nav=1&S=0&L=1

This press release contains “forward-looking statements” within the meaning of the federal securities laws, including statements concerning anticipated future events and expectations that are not historical facts. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward–looking statements in this document reflect management’s best judgment at the time they are made, but all such statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those expressed in or implied by the statements herein. Such forward-looking statements are often identified herein by use of words including, but not limited to, “may,” “believe,” “project,” ”forecast,” “expect,” “estimate,” “anticipate” and “plan.” In addition, the following factors could affect the Company’s actual results and cause such results to differ materially from those expressed in forward-looking statements. These factors include competition within the personal hair care industry, which remains strong, both domestically and internationally; price sensitivity; changes in economic conditions, and in particular, continued weakness in the U.S. and global economies; changes in consumer tastes and fashion trends; the ability of the Company to implement its planned spending and cost reduction plan and to continue to maintain compliance with the financial covenants in its credit agreements; labor and benefit costs; legal claims; risk inherent to international development (including currency fluctuations); the continued ability of the Company and its franchisees to obtain suitable locations and financing for new salon development and to maintain satisfactory relationships with landlords and other licensors with respect to existing locations; governmental initiatives such as minimum wage rates, taxes and possible franchise legislation; the ability of the Company to successfully identify, acquire and integrate salons that support its growth objectives; the ability of the Company to maintain satisfactory relationships with suppliers; the ability of the Company to consummate the planned closure of salons and the related realization of the anticipated costs, benefits and time frame; or other factors not listed above. The ability of the Company to meet its expected revenue target is dependent on salon acquisitions, new salon construction and same-store sales increases, all of which are affected by many of the aforementioned risks. Additional information concerning potential factors that could affect future financial results is set forth in the Company’s Annual Report on Form 10-K for the year ended June 30, 2009. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made in our subsequent annual and periodic reports filed or furnished with the SEC on Forms 10-K, 10-Q and 8-K and Proxy Statements on Schedule 14A.

(1) Premier Salons Beauty, Inc. (Premier) purchased Trade Secret, Inc. from Regis Corporation on February 16, 2009. The agreement included a provision that Regis Corporation will supply product to Premier at cost for a transition period of approximately six months following the date of the sale, with possible extension to not more than eleven months.

(2) Total is a recalculation; line items calculated individually do not sum to total.

FINANCIAL INFORMATION BY SEGMENT:

Financial information concerning the Company’s salon, school and hair restoration businesses is shown in the following tables.

(1) Beginning with the period ended December 31, 2008, the operations of the Trade Secret concept within the North American reportable segment were accounted for as a discontinued operation. All comparable periods reflect Trade Secret as a discontinued operation.

REGIS CORPORATION (NYSE: RGS - News)

NON-GAAP FINANCIAL MEASURES (Unaudited)

The Company’s press release announcing results of operations for the three month period ended September 30, 2009 includes references to the following “non-GAAP financial measures” as defined by Regulation G of the Securities and Exchange Commission:

• First quarter reported earnings of $0.14 per diluted share included three non-operational items, which on a net overall basis reduced reported earnings per diluted share by $0.16. Absent these non-operational items, the Company’s first quarter operational earnings were $0.30 per diluted share.
• The total pre-tax expense for these two non-operational items was $21.6 million. In addition, the Company recorded within discontinued operations after-tax income of $3.2 million primarily related to additional tax benefit from the sale of the Trade Secret business.

Regis Corporation:
Mark Fosland, 952-806-1707
Vice President, Finance
or
Alex Forliti, 952-806-1767
Director, Finance-Investor Relations