Regis (RGS) 8-K Financial statements and exhibits

Exhibit 99

	CONTACT:
	Investors:	REGIS CORPORATION:
For Immediate Release		Paul D. Finkelstein — President, CEO Randy L. Pearce — Executive Vice President, CFO Kyle P. Didier — Vice President, Finance (952) 947-7000
	Media:	BERNS COMMUNICATIONS GROUP:
		Melissa Jaffin/Michael McMullan (212) 994-4660

REGIS CORPORATION REPORTS RECORD FIRST QUARTER RESULTS
-Net Income Increased 26.6 Percent to $25.0 Million, or $0.55 per Diluted Share-
- -Company Raises Fiscal Year 2004 EPS Guidance-

     MINNEAPOLIS, October 28, 2003 — Regis Corporation (NYSE:RGS) the global leader in the $135 billion hair care industry, today reported record financial results for its fiscal first quarter ended September 30, 2003. Consolidated revenues for the first quarter increased 15.4 percent to a record $460.7 million, compared to $399.2 million during the first quarter last year. Consolidated same-store sales increased 2.6 percent, compared to a 1.4 percent increase during the same period last year. First quarter earnings increased 26.6 percent to $25.0 million, or $0.55 per diluted share, compared with $19.7 million, or $0.44 per diluted share, last year.

     As of September 30, 2003, Regis Corporation owned, operated or franchised 9,707 salons compared to 9,138 salons as of September 30, 2002, a system-wide increase of 569 salons. During the first quarter, Regis Corporation opened 94 new salons, acquired 97 salons (95 of which were franchise buybacks), and franchisees opened an additional 73 salons. A total of 79 corporate and franchised salons were relocated or closed during the period.

     “We are delighted to report first quarter earnings growth exceeded our forecast primarily due to a better than expected quarterly same-store sales increase,” commented Paul D. Finkelstein, President and Chief Executive Officer. “Improvement in salon and franchise operating expenses contributed to a 30 basis point increase in operating margin.”

     Mr. Finkelstein further commented, “Due to our stronger than expected first quarter results, we are raising our earnings guidance for fiscal 2004 to a range of $2.17 to $2.20 per diluted share compared to $1.92 per diluted share in fiscal 2003. While October same-store sales are running ahead of plan, we continue to project same-store sales increases of 1.0 to 1.5 percent for the remainder of the fiscal year. Our earnings guidance may prove to be conservative should the recent strength in same-store sales continue.”

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Fiscal Year 2004 Outlook

The following points pertain to the fiscal year ending June 30, 2004:

• Exclusive of future acquisitions, earnings are expected to increase 13 to 15 percent to a range of $2.17 to $2.20 per diluted share.

• Exclusive of future acquisitions, consolidated revenue is forecasted to grow to $1.86 to $1.88 billion, an increase of 11 to 12 percent. Consolidated same-store sales are projected to increase 1.0 to 1.5 percent.

• Service margins are expected to be consistent with fiscal 2003 results and are projected to be in the range of mid-to-high 43 percent of service revenue.

• Product margins are expected to be in the mid 48 percent range of product revenue.

• Franchise direct costs are forecasted to improve to a range of 53 to 54 percent of total franchise revenue.

• Operating income is expected to be in the low-to-mid 9 percent range of consolidated revenue.

• Interest expense is projected to be $18 to $19 million.

• Our income tax rate is expected to be 36.0 to 36.5 percent for fiscal 2004.

     For more information about the Company, including our comprehensive Financial Outlook, please visit our website at www.regiscorp.com.

     Regis Corporation will broadcast its conference call live over the internet on Tuesday, October 28, 2003 at 11:00AM Eastern Time. Interested parties are invited to listen by logging on to www.regiscorp.com. An archive of the conference call will be available at this website shortly after the conclusion of the live broadcast. The Company will release its October revenue results, including same-store sales, on November 7, 2003, before the market opens.

     Regis Corporation, a Fortune 1000 company, is the largest owner, operator and franchisor of hair and retail product salons in the world. The Company operates and franchises 9,707 salons utilizing several concepts including: Supercuts, Jean Louis David, Vidal Sassoon, Regis Salons, MasterCuts, Trade Secret, SmartStyle and Cost Cutters. These salons are located in the United States, Canada, France, Italy, United Kingdom, Spain, Germany, Belgium, Switzerland, Poland, and Puerto Rico.

     Headquartered in Minneapolis, Minnesota, Regis Corporation has 49,000 employees worldwide. The Company’s common stock is traded on the NYSE under the symbol RGS.

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     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, and price sensitivity; changes in economic condition; changes in consumer tastes and fashion trends; 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; governmental initiatives such as minimum wage rates, taxes and possible franchise legislation; the ability of the Company to successfully identify and acquire salons that support its growth objectives; or other factors not listed above. The ability of the Company to meet its expected revenue growth 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 the Company’s Annual Report on Form 10-K for the year ended June 30, 2003 and included in Form S-3 Registration Statement filed with the Securities and Exchange Commission on January 31, 2003.

(TABLES TO FOLLOW)

REGIS CORPORATION (NYSE:RGS)
Divisional Salon Counts and Revenues

		September 30, 2003			June 30, 2003
SYSTEM -WIDE SALONS:
Company-owned Salons			5,708			5,563
Franchised Salons			3,999			4,054
	Total Salons		9,707			9,617
SALON LOCATION SUMMARY
DOMESTIC:
REGIS SALONS
	Open at beginning of period		1,096			1,016
	Constructed		11			53
	Acquired		3			73
	Relocations and conversions		(2	)		(14	)
	Closed or sold		(10	)		(32	)
	Net salon openings		2			80
	Open at end of period		1,098			1,096
MASTERCUTS
	Open at beginning of period		590			551
	Constructed		13			47
	Acquired		2			0
	Relocations and conversions		(3	)		(4	)
	Closed or sold		(6	)		(4	)
	Net salon openings		6			39
	Open at end of period		596			590
TRADE SECRET
Company-owned Salons:
	Open at beginning of period		517			490
	Constructed		7			34
	Acquired		4			10
	Relocations and conversions		(1	)		(4	)
	Closed or sold		(2	)		(13	)
	Net salon openings		8			27
	Open at end of period		525			517
Franchised Salons:
	Open at beginning of period		25			26
	Closed or sold		0			(1	)
	Net salon openings		0			(1	)
	Open at end of period		25			25

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		September 30, 2003			June 30, 2003
SMARTSTYLE/COST CUTTERS IN WAL-MART
Company-owned Salons:
	Open at beginning of period		1,033			861
	Constructed		38			168
	Acquired		39			14
	Relocations and conversions		0			(5	)
	Closed or sold		(2	)		(5	)
	Net salon openings		75			172
	Open at end of period		1,108			1,033
Franchised Salons:
	Open at beginning of period		230			210
	Constructed		11			33
	Relocations and conversions (1)		(39	)		(12	)
	Closed or sold		0			(1	)
	Net salon openings		(28	)		20
	Open at end of period		202			230
STRIP CENTERS
Company-owned Salons:
	Open at beginning of period		1,928			1,476
	Constructed		20			85
	Acquired		49			446
	Relocations and conversions		(6	)		(16	)
	Closed or sold		(12	)		(63	)
	Net salon openings		51			452
	Open at end of period		1,979			1,928
Franchised Salons:
	Open at beginning of period		2,172			1,988
	Constructed		41			147
	Acquired (3)		0			198
	Relocations and conversions (1)		(51	)		(82	)
	Closed or sold		(22	)		(79	)
	Net salon openings		(32	)		184
	Open at end of period		2,140			2,172

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		September 30, 2003			June 30, 2003
INTERNATIONAL (2):
Company-owned Salons:
	Open at beginning of period		399			382
	Constructed		5			10
	Acquired		0			17
	Closed or sold		(2	)		(10	)
	Net salon openings		3			17
	Open at end of period		402			399
Franchised Salons:
	Open at beginning of period		1,627			1,684
	Constructed		21			95
	Closed or sold		(16	)		(152	)
	Net salon openings		5			(57	)
	Open at end of period		1,632			1,627
Grand total, system-wide			9,707			9,617

(1)	Represents primarily the conversion of franchise operations to company-owned.
(2)	Canadian and Puerto Rican salons are included in the Regis Salons, Strip Center, MasterCuts and Trade Secret divisions and not included in the International salon totals.
(3)	Represents primarily the acquisition of franchise networks.

Relocations represent a transfer of location by the same salon concept.

Conversions represent the transfer of one salon concept to another concept.

		Three Months Ended
		September 30,
		2003		2002
		(Dollars in thousands)
Revenues by Concept:
	Regis Salons	$	119,185	$	104,691
	MasterCuts		43,546		42,706
	Trade Secret		58,941		49,830
	SmartStyle		68,447		52,497
	Strip Center (primarily Supercuts/Cost Cutters)		125,644		113,723
	International		44,958		35,776
		$	460,721	$	399,223

Included in the table above are franchise revenues of $26,046 and $25,854 for the three months ended September 30, 2003 and 2002, respectively.

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REGIS CORPORATION (NYSE:RGS)
Consolidated Balance Sheet
as of September 30 and June 30, 2003
(Dollars in thousands, except par value)

				(Unaudited)
				September 30,		June 30,
				2003		2003
ASSETS
Current assets:
	Cash			$	66,566	$	59,680
	Receivables, net				33,315		31,947
	Inventories				158,491		156,827
	Deferred income taxes				17,722		18,469
	Other current assets				10,860		12,737
		Total current assets			286,954		279,660
Property and equipment, net					360,539		356,725
Goodwill					395,861		372,618
Other intangibles, net					64,409		64,498
Other assets					40,039		39,454
			Total assets	$	1,147,802	$	1,112,955
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
	Long-term debt, current portion			$	17,116	$	21,123
	Accounts payable				59,201		56,175
	Accrued expenses				121,306		121,767
		Total current liabilities			197,623		199,065
Long-term debt					285,927		280,634
Other noncurrent liabilities					75,371		70,452
Shareholders’ equity:
	Common stock, $.05 par value; issued and outstanding, 43,634,707 and 43,527,244 common shares at September 30 and June 30, 2003, respectively				2,182		2,176
	Additional paid-in capital				208,960		207,650
	Accumulated other comprehensive income				28,886		27,789
	Retained earnings				348,853		325,189
		Total shareholders’ equity			588,881		562,804
			Total liabilities and shareholders’ equity	$	1,147,802	$	1,112,955

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REGIS CORPORATION (NYSE:RGS)
Consolidated Statement of Operations
(Dollars in thousands, except per share amounts)

					(Unaudited)
					Three Months Ended September 30,
					2003			2002
Revenues:
	Company-owned salons:
		Service			$	302,952		$	263,076
		Product				131,723			110,293
						434,675			373,369
	Franchise revenues:
		Royalties and fees				18,109			17,118
		Product sales				7,937			8,736
						26,046			25,854
						460,721			399,223
Operating expenses:
	Company-owned salons:
		Cost of service				170,405			147,628
		Cost of product				68,331			56,672
		Direct salon				38,547			35,405
		Rent				63,059			53,782
		Depreciation				14,598			12,739
						354,940			306,226
	Franchise direct costs, including product and equipment					13,671			13,786
	Corporate and franchise support costs					45,751			39,916
	Depreciation and amortization					3,028			2,947
			Total operating expenses			417,390			362,875
			Operating income			43,331			36,348
Other income (expense):
	Interest					(4,368	)		(5,145	)
	Other, net					340			326
			Income before income taxes			39,303			31,529
Income taxes						(14,345	)		(11,812	)
				Net income	$	24,958		$	19,717
Net income per share:
			Basic		$	.57		$	.46
			Diluted		$	.55		$	.44
Weighted average common and common equivalent shares outstanding:
			Basic			43,637			43,163
			Diluted			45,596			45,020

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REGIS CORPORATION (NYSE:RGS)
Consolidated Statement of Cash Flows
(Dollars in thousands)

				(Unaudited)
				Three Months Ended September 30,
				2003			2002
Cash flows from operating activities:
	Net income			$	24,958		$	19,717
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation			16,924			14,898
		Amortization			891			895
		Deferred income taxes			2,267			222
		Other			(273	)		(242	)
		Changes in operating assets and liabilities*:
			Receivables		(1,411	)		(2,801	)
			Inventories		(1,114	)		(10,915	)
			Other current assets		1,951			4,606
			Other assets		(1,988	)		(2,391	)
			Accounts payable		4,002			7,918
			Accrued expenses		3,310			(6,282	)
			Other noncurrent liabilities		3,368			3,598
		Net cash provided by operating activities			52,885			29,223
Cash flows from investing activities:
	Capital expenditures				(15,980	)		(16,071	)
	Proceeds from sale of assets				217			527
	Business and salon acquisitions, net of cash acquired				(25,360	)		(33,981	)
		Net cash used in investing activities			(41,123	)		(49,525	)
Cash flows from financing activities:
	Borrowings on revolving credit facilities				223,515			112,400
	Payments on revolving credit facilities				(207,815	)		(106,400	)
	Repayments of long-term debt				(15,171	)		(1,401	)
	Other, primarily (decrease) increase in negative book cash balances				(4,813	)		(124	)
	Dividends paid				(1,309	)		(1,301	)
	Repurchase of common stock				(2,990	)		(4,376	)
	Proceeds from issuance of common stock				2,978			817
		Net cash used in financing activities			(5,605	)		(385	)
Effect of exchange rate changes on cash					729			(73	)
Increase (decrease) in cash					6,886			(20,760	)
Cash:
	Beginning of period				59,680			87,103
	End of period			$	66,566		$	66,343

* Changes in operating assets and liabilities do not reflect assets and liabilities assumed through acquisitions.

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