Regis (RGS) 8-K Financial statements and exhibits

Exhibit 99

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

REGIS CORPORATION REPORTS SECOND QUARTER EPS GROWTH OF 15 PERCENT
-Earnings per Diluted Share of $0.60 Tops Guidance by 4 Cents-
- -Company Raises 2004 EPS Guidance to a Range of $2.21 to $2.24-

     MINNEAPOLIS, January 21, 2004 — Regis Corporation (NYSE:RGS) the global leader in the $135 billion hair care industry, today reported record financial results for its fiscal second quarter ended December 31, 2003. Consolidated revenues for the second quarter increased 14 percent to a record $472 million, compared to $415 million during the second quarter last year. Consolidated same-store sales increased 2.4 percent, compared to a 1.1 percent increase during the same period last year. Second quarter earnings increased to $27.7 million, or $0.60 per diluted share, compared with $23.6 million, or $0.52 per diluted share, last year.

     As of December 31, 2003, Regis Corporation owned or franchised 9,775 salons compared to 9,313 salons as of December 31, 2002, a net increase of 462 salons. In the second quarter, the Company added a net total of 68 salons to its overall base by constructing and opening 92 new salons, acquiring 32 salons (including 18 franchise buybacks) and franchisees opening an additional 66 salons. Additionally, 104 company-owned and franchised salons were relocated or closed during the quarter.

     Paul D. Finkelstein, president and chief executive officer, commented, “Driven by strong retail product sales, second quarter same-store sales were nearly a full percentage point above plan. As a result, we are pleased to report that quarterly earnings per share exceeded the high-end of our previous guidance by four cents.” Mr. Finkelstein further commented, “Due to the stronger than expected second quarter results, we are raising our earnings guidance for fiscal 2004 to a range of $2.21 to $2.24 per diluted share compared to $1.92 per diluted share in fiscal 2003, a projected increase of 15 to 17 percent.”

     Mr. Finkelstein continued, “While significant growth opportunities exist for each of our salon concepts and markets, we continue to explore new initiatives. We consider expansion into Asia to be one such initiative and are currently identifying salon acquisition targets in Japan. Japan offers a highly developed market, with a fashion-conscious populace.” Mr. Finkelstein further commented, “Another potential growth initiative is beauty schools. After operating four Vidal Sassoon Beauty Academies for the past year, we grew attracted to this highly profitable business. Given our size, the ability to educate, hire and place highly skilled stylists into our various Regis salon concepts should provide our company yet another competitive advantage.”

Fiscal Year 2004 Outlook

The following points pertain to changes in our financial outlook for the fiscal year ending June 30, 2004:

(For our comprehensive financial outlook please visit the Investor Information section of our corporate website at www.regiscorp.com).

• Exclusive of future acquisitions, earnings are expected to increase 15 to 17 percent to a range of $2.21 to $2.24 per diluted share versus our previous guidance of $2.17 to $2.20.

• Exclusive of future acquisitions, consolidated revenue is forecasted to grow to $1.88 to $1.89 billion, an increase of 12 percent. Our previous guidance was for revenue growth of 11 to 12 percent to a range of $1.86 to $1.88 billion.

• Full year consolidated same-store sales are projected to increase 1.7 to 2.0 percent, which assumes same-store sales of 1.0 to 1.5 percent in the second half of fiscal 2004. Our previous fiscal year same-store sales guidance was for an increase of 1.0 to 1.5 percent.

• Product margins are expected to be in the high 48 to low 49 percent range of product revenue versus our previous guidance of product margins in the mid 48 percent range.

• We plan to build 450 to 475 new company-owned salons excluding salon closures and relocations. Previously, we had projected adding 525 to 575 new corporate salons.

• We anticipate spending up to $80 million to acquire 350 to 400 salons. Previously, we had forecasted spending $60 to $75 million.

• Capital expenditures, excluding acquisitions, are projected to be $75 to $80 million compared to our previous forecasted range of $85 to $90 million.

     Regis Corporation will broadcast its second quarter conference call live over the internet on Wednesday, January 21, 2004 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. On February 6, 2004 the Company will release its January revenue results, including same-store sales, before the market opens. On April 20, 2004, the Company will release its third quarter results and will provide an initial outlook for fiscal year 2005.

     Regis Corporation, a Fortune 1000 company, is the largest owner, operator and franchisor of hair and retail product salons in the world. As of December 31, 2003, the Company operated and franchised 9,775 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 51,000 employees worldwide. The Company’s common stock is traded on the NYSE under the symbol RGS. For additional information about the Company, including a reconciliation of non-GAAP financial information and our current financial outlook, please visit the Investor Information section of our corporate website at www.regiscorp.com.

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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 onForm 10-K for the year ended June 30, 2003 and included inForm 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
For the 6-Month Period Ending December 31, 2003

		December 31, 2003			June 30, 2003
SYSTEM -WIDE SALONS:
Company-owned Salons			5,780			5,563
Franchised Salons			3,995			4,054
	Total Salons		9,775			9,617
SALON LOCATION SUMMARY
DOMESTIC:
REGIS SALONS
	Open at beginning of period		1,096			1,016
	Constructed		19			53
	Acquired		4			73
	Relocations and conversions		(5	)		(14	)
	Closed		(20	)		(32	)
	Net salon openings		(2	)		80
	Open at end of period		1,094			1,096
MASTERCUTS
	Open at beginning of period		590			551
	Constructed		17			47
	Acquired		3			0
	Relocations and conversions		(3	)		(4	)
	Closed		(7	)		(4	)
	Net salon openings		10			39
	Open at end of period		600			590
TRADE SECRET
Company-owned Salons:
	Open at beginning of period		517			490
	Constructed		13			34
	Acquired		12			10
	Relocations and conversions		0			(4	)
	Closed		(3	)		(13	)
	Net salon openings		22			27
	Open at end of period		539			517
Franchised Salons:
	Open at beginning of period		25			26
	Constructed		1			0
	Closed or sold		(1	)		(1	)
	Net salon openings		0			(1	)
	Open at end of period		25			25

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		December 31, 2003			June 30, 2003
SMARTSTYLE/COST CUTTERS IN WAL-MART
Company-owned Salons:
	Open at beginning of period		1,033			861
	Constructed		63			168
	Acquired (1)		49			14
	Relocations and conversions		0			(5	)
	Closed or sold		(4	)		(5	)
	Net salon openings		108			172
	Open at end of period		1,141			1,033
Franchised Salons:
	Open at beginning of period		230			210
	Constructed		18			33
	Relocations and conversions (1)		(49	)		(12	)
	Closed or sold		(1	)		(1	)
	Net salon openings		(32	)		20
	Open at end of period		198			230
STRIP CENTERS
Company-owned Salons:
	Open at beginning of period		1,928			1,476
	Constructed		58			85
	Acquired		55			446
	Relocations and conversions		(10	)		(16	)
	Closed or sold		(29	)		(63	)
	Net salon openings		74			452
	Open at end of period		2,002			1,928
Franchised Salons:
	Open at beginning of period		2,172			1,988
	Constructed		78			147
	Acquired (3)		0			198
	Relocations and conversions (1)		(61	)		(82	)
	Closed or sold		(45	)		(79	)
	Net salon openings		(28	)		184
	Open at end of period		2,144			2,172

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		December 31, 2003			June 30, 2003
INTERNATIONAL (2)
Company-owned Salons:
	Open at beginning of period		399			382
	Constructed		16			10
	Acquired		6			17
	Closed		(17	)		(10	)
	Net salon openings		5			17
	Open at end of period		404			399
Franchised Salons:
	Open at beginning of period		1,627			1,684
	Constructed		42			95
	Closed or sold		(41	)		(152	)
	Net salon openings		1			(57	)
	Open at end of period		1,628			1,627
Grand total, system-wide			9,775			9,617
TOTAL SYSTEM-WIDE SALONS
Company-owned Salons:
	Open at beginning of period		5,563			4,776
	Constructed		186			397
	Acquired		129			560
	Relocations and conversions (1)		(18	)		(43	)
	Closed		(80	)		(127	)
	Net salon openings		217			787
	Open at end of period		5,780			5,563
Franchised Salons:
	Open at beginning of period		4,054			3,908
	Constructed		139			275
	Acquired		0			198
	Relocations and conversions (1)		(110	)		(94	)
	Closed or sold		(88	)		(233	)
	Net salon openings		(59	)		146
	Open at end of period		3,995			4,054
Grand total, system-wide			9,775			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.

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		Three Months Ended				Six Months Ended
		December 31,				December 31,
		2003		2002		2003		2002
				(Dollars in thousands)
Revenues by Concept:
	Regis Salons	$	119,906	$	106,139	$	239,091	$	210,830
	MasterCuts		43,671		42,225		87,217		84,931
	Trade Secret		65,051		55,486		123,992		105,316
	SmartStyle		69,964		54,774		138,411		107,271
	Strip Center		123,521		115,911		249,165		229,634
	International		50,339		40,224		95,297		76,000
		$	472,452	$	414,759	$	933,173	$	813,982

Included in the table above are franchise revenues of $26,620 and $26,131 for the three months ended December 31, 2003 and 2002, respectively, and $52,666 and $51,985 for the six months ended December 31, 2003 and 2002, respectively.

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REGIS CORPORATION (NYSE:RGS)
CONSOLIDATED BALANCE SHEET (Unaudited)
as of December 31, 2003 and June 30, 2003
(Dollars in thousands, except par value)

			December 31,		June 30,
ASSETS			2003		2003
Current assets:
Cash			$	87,663	$	59,680
Receivables, net				35,427		31,947
Inventories				154,384		156,827
Deferred income taxes				17,620		18,469
Other current assets				12,998		12,737
	Total current assets			308,092		279,660
Property and equipment, net				364,421		356,725
Goodwill				408,627		372,618
Other intangibles, net				67,641		64,498
Other assets				39,616		39,454
		Total assets	$	1,188,397	$	1,112,955
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Long-term debt, current portion			$	18,066	$	21,123
Accounts payable				53,453		56,175
Accrued expenses				130,424		121,767
	Total current liabilities			201,943		199,065
Long-term debt				263,955		280,634
Other noncurrent liabilities				82,924		70,452
Shareholders’ equity:
Common stock, $.05 par value; issued and outstanding, 44,116,319 and 43,527,244 common shares at December 31 and June 30, 2003, respectively				2,206		2,176
Additional paid-in capital				220,493		207,650
Accumulated other comprehensive income				41,686		27,789
Retained earnings				375,190		325,189
	Total shareholders’ equity			639,575		562,804
		Total liabilities and shareholders’ equity	$	1,188,397	$	1,112,955

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REGIS CORPORATION (NYSE:RGS)
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(Dollars in thousands, except per share amounts)

					Three Months Ended						Six Months Ended
					December 31,						December 31,
					2003			2002			2003			2002
Revenues:
	Company-owned salons:
		Service			$	306,630		$	270,688		$	609,582		$	533,764
		Product				139,202			117,940			270,925			228,233
						445,832			388,628			880,507			761,997
	Franchise revenues:
		Royalties and fees				18,380			17,280			36,489			34,398
		Product sales				8,240			8,851			16,177			17,587
						26,620			26,131			52,666			51,985
				Total Revenue		472,452			414,759			933,173			813,982
Operating expenses:
	Company-owned salons:
		Cost of service				171,577			152,683			341,982			300,311
		Cost of product				70,671			56,603			139,002			113,275
		Direct salon				39,154			34,385			77,701			69,790
		Rent				64,759			56,920			127,818			110,702
		Depreciation				15,293			13,017			29,891			25,756
						361,454			313,608			716,394			619,834
Franchise direct costs, including product and equipment						15,178			15,423			28,849			29,209
Corporate and franchise support costs						45,357			39,299			91,108			79,215
Depreciation and amortization						3,380			3,194			6,408			6,141
			Total operating expenses			425,369			371,524			842,759			734,399
			Operating income			47,083			43,235			90,414			79,583
Other income (expense):
	Interest					(3,851	)		(5,379	)		(8,219	)		(10,524	)
	Other, net					331			349			671			675
			Income before income taxes			43,563			38,205			82,866			69,734
Income taxes						(15,901	)		(14,632	)		(30,246	)		(26,444	)
				Net income	$	27,662		$	23,573		$	52,620		$	43,290
Net income per share:
		Basic			$	.63		$	.55		$	1.20		$	1.00
		Diluted			$	.60		$	.52		$	1.15		$	.96
Weighted average common and common equivalent shares outstanding:
		Basic				43,893			43,236			43,795			43,266
		Diluted				45,973			45,332			45,835			45,267

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REGIS CORPORATION (NYSE:RGS)
CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
(Dollars in thousands)

				Six Months Ended December 31,
				2003			2002
Cash flows from operating activities:
	Net income			$	52,620		$	43,290
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation			34,888			30,308
		Amortization			1,724			1,867
		Deferred income taxes			5,901			703
		Other			179			329
		Changes in operating assets and liabilities*:
			Receivables		(2,408	)		(5,887	)
			Inventories		4,883			(21,604	)
			Other current assets		268			2,622
			Other assets		(2,870	)		(6,855	)
			Accounts payable		881			3,459
			Accrued expenses		14,057			14,629
			Other noncurrent liabilities		5,826			6,274
		Net cash provided by operating activities			115,949			69,135
Cash flows from investing activities:
	Capital expenditures				(34,404	)		(32,930	)
	Proceeds from sale of assets				95			586
	Business and salon acquisitions, net of cash acquired				(33,611	)		(55,362	)
		Net cash used in investing activities			(67,920	)		(87,706	)
Cash flows from financing activities:
	Borrowings on revolving credit facilities				385,175			431,000
	Payments on revolving credit facilities				(396,150	)		(419,000	)
	Proceeds from issuance of long-term debt				11,860			0
	Repayments of long-term debt				(20,110	)		(6,220	)
	Other, primarily decrease in negative book cash balances				(8,838	)		(2,837	)
	Dividends paid				(2,631	)		(2,605	)
	Repurchase of common stock				(3,373	)		(10,234	)
	Proceeds from issuance of common stock				10,390			2,444
		Net cash used in financing activities			(23,677	)		(7,452	)
Effect of exchange rate changes on cash					3,631			1,047
Increase (decrease) in cash					27,983			(24,976	)
Cash:
	Beginning of period				59,680			87,103
	End of period			$	87,663		$	62,127

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

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