Exhibit 99
CONTACT: |
| REGIS CORPORATION: | ||
|
| Mark Fosland — Vice President, Finance | ||
|
| 952-806-1707 | ||
|
| Alex Forliti — Director, Finance-Investor Relations | ||
|
| 952-806-1767 | ||
For Immediate Release
REGIS REPORTS FIRST QUARTER 2008 RESULTS
-EPS of $0.46 meets mid-point of previously issued guidance-
-Annual earnings guidance reaffirmed-
MINNEAPOLIS, October 22, 2007 — Regis Corporation (NYSE:RGS), the global leader in the $170 billion hair care industry, today reported financial results for its fiscal first quarter ending September 30, 2007. Net income for the quarter was $20.6 million, or $0.46 per diluted share, which came in at the mid-point of the Company’s previously issued guidance of $0.43 to $0.49 per share.
On October 10, 2007, the Company reported revenues for the first quarter ended September 30, 2007 increased four percent to $668 million versus $639 million in first quarter of fiscal 2007. Consolidated same-store sales increased 0.9 percent for the quarter, including an increase in service same-store sales of 2.3 percent, versus an overall decrease of 0.3 percent during the comparable quarter a year ago.
“We are very encouraged by our first quarter same-store service sales increase of 2.3 percent. Over the last nine months, we have seen many positive signs that the long hair fashion cycle is turning and if these trends continue, we would expect our same-store service sales to return to historical levels,” commented Paul D. Finkelstein, Chairman and Chief Executive Officer.
During the quarter, Regis added a net total of 81 locations. The Company constructed 85 locations and franchisees built an additional 57 units. In addition, Regis acquired 91 corporate salons (including 59 franchise buybacks) and 42 franchised salons. The Company closed or relocated 84 corporate and franchise locations during the quarter. In addition, the Company merged its 51 accredited beauty schools with Empire Education Group on August 1, 2007.
Second Quarter Fiscal 2008 Outlook
The following outlook pertains to the second quarter ending December 31, 2007:
| • | Consolidated revenue is forecasted to grow five to seven percent to a range of $690 million to $700 million compared to $657 million a year ago. (Note: The deconsolidation of the beauty schools reduces revenue growth by 2 percent in the quarter.) |
| • | Consolidated same-store sales are forecasted to be in a range of 0.5 to 2.5 percent. |
| • | The effective income tax rate is expected to be approximately 36 percent, which reflects the adoption of FIN 48. |
| • | Earnings per diluted share are forecasted to be in the range of $0.51 to $0.57. |
Fiscal Year 2008 Updated Outlook
The following points pertain to the fiscal year ending June 30, 2008:
| • | Consolidated revenue is forecasted to grow four to six percent to approximately $2.75 billion. (Note: The deconsolidation of the beauty schools reduces revenue growth by 2 percent in Fiscal 2008.) |
| • | Consolidated same-store sales are forecasted to be in a range of 0.5 to 2.5 percent. |
| • | Effective income tax rate is expected to be approximately 34 percent. |
| • | Consistent with previously issued guidance, earnings per diluted share are forecasted to be in a range of $2.01 to $2.27. |
Regis Corporation will host a conference call discussing second quarter results today, October 22, 2007 at 10:00 a.m., Central Time. Interested parties are invited to listen by logging on to www.regiscorp.com or dialing 800-218-4007. A replay of the call will be available later that day. The replay phone number is 800-405-2236, access code 11097199#.
About Regis Corporation
Regis Corporation (NYSE:RGS) is the beauty industry’s global leader in beauty salons, hair restoration centers and cosmetology education. As of September 30, 2007, the Company owned, franchised or held ownership interests in over 12,500 worldwide locations. Regis’ corporate and franchised locations operate under concepts such as Supercuts, Jean Louis David, Vidal Sassoon, Regis Salons, MasterCuts, Trade Secret, SmartStyle, Cost Cutters and Hair Club for Men and Women. In addition, Regis maintains ownership interests in Empire Education Group and various other salon concepts such as Cool Cuts 4 Kids, and the Beauty Takashi and Beauty Plaza concepts in Japan. System-wide, these and other concepts are located in the U.S. and in eleven other countries in North America, Europe and Asia. Regis also maintains a 50 percent ownership interest in Intelligent Nutrients, a joint venture that provides a wide variety of certified organic products for health and beauty. For additional information about the company, including management’s current financial outlook and a reconciliation of non-GAAP 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; 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 for new salon development; 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; 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 in the Company’s Annual Report on Form 10-K for the year ended June 30, 2007. 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.
(TABLES TO FOLLOW)
REGIS CORPORATION (NYSE: RGS)
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
as of September 30, 2007 and June 30, 2007
(In thousands, except share data)
|
| September 30, 2007 |
| June 30, 2007 |
| ||
ASSETS |
|
|
|
|
| ||
Current assets: |
|
|
|
|
| ||
Cash and cash equivalents |
| $ | 145,229 |
| $ | 184,785 |
|
Receivables, net |
| 48,492 |
| 67,773 |
| ||
Inventories |
| 213,860 |
| 196,582 |
| ||
Deferred income taxes |
| 10,607 |
| 18,775 |
| ||
Other current assets |
| 69,020 |
| 57,149 |
| ||
Total current assets |
| 487,208 |
| 525,064 |
| ||
|
|
|
|
|
| ||
Property and equipment, net |
| 485,086 |
| 494,085 |
| ||
Goodwill |
| 814,869 |
| 812,383 |
| ||
Other intangibles, net |
| 188,206 |
| 213,452 |
| ||
Investment in affiliates |
| 95,174 |
| 20,213 |
| ||
Other assets |
| 95,214 |
| 66,917 |
| ||
|
|
|
|
|
| ||
Total assets |
| $ | 2,165,757 |
| $ | 2,132,114 |
|
|
|
|
|
|
| ||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
| ||
Current liabilities: |
|
|
|
|
| ||
Long-term debt, current portion |
| $ | 188,863 |
| $ | 223,352 |
|
Accounts payable |
| 81,271 |
| 74,532 |
| ||
Accrued expenses |
| 211,900 |
| 240,748 |
| ||
Total current liabilities |
| 482,034 |
| 538,632 |
| ||
|
|
|
|
|
| ||
Long-term debt |
| 529,807 |
| 485,879 |
| ||
Other noncurrent liabilities |
| 213,444 |
| 194,295 |
| ||
Total liabilities |
| 1,225,285 |
| 1,218,806 |
| ||
|
|
|
|
|
| ||
Shareholders’ equity: |
|
|
|
|
| ||
Common stock, $0.05 par value; issued and outstanding 44,175,959 and 44,164,645 common shares at September 30, 2007 and June 30, 2007, respectively |
| 2,209 |
| 2,209 |
| ||
Additional paid-in capital |
| 180,170 |
| 178,029 |
| ||
Accumulated other comprehensive income |
| 88,732 |
| 78,278 |
| ||
Retained earnings |
| 669,361 |
| 654,792 |
| ||
|
|
|
|
|
| ||
Total shareholders’ equity |
| 940,472 |
| 913,308 |
| ||
|
|
|
|
|
| ||
Total liabilities and shareholders’ equity |
| $ | 2,165,757 |
| $ | 2,132,114 |
|
-more-
REGIS CORPORATION (NYSE: RGS)
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share data)
|
| Three Months Ended |
| ||||
|
| 2007 |
| 2006 |
| ||
Revenues: |
|
|
|
|
| ||
Service |
| $ | 459,718 |
| $ | 434,552 |
|
Product |
| 186,782 |
| 184,925 |
| ||
Royalties and fees |
| 21,025 |
| 19,766 |
| ||
|
| 667,525 |
| 639,243 |
| ||
|
|
|
|
|
| ||
Operating expenses: |
|
|
|
|
| ||
Cost of service |
| 263,060 |
| 245,525 |
| ||
Cost of product |
| 94,077 |
| 94,229 |
| ||
Site operating expenses |
| 53,685 |
| 55,806 |
| ||
General and administrative |
| 86,352 |
| 77,953 |
| ||
Rent |
| 97,763 |
| 92,172 |
| ||
Depreciation and amortization |
| 31,582 |
| 29,542 |
| ||
Total operating expenses |
| 626,519 |
| 595,227 |
| ||
|
|
|
|
|
| ||
Operating income |
| 41,006 |
| 44,016 |
| ||
|
|
|
|
|
| ||
Other income (expense): |
|
|
|
|
| ||
Interest |
| (10,578 | ) | (9,838 | ) | ||
Other, net |
| 2,155 |
| 811 |
| ||
|
|
|
|
|
| ||
Income before income taxes and equity in income (loss) of affiliated companies |
| 32,583 |
| 34,989 |
| ||
|
|
|
|
|
| ||
Income taxes |
| (11,650 | ) | (11,896 | ) | ||
Equity in income (loss) of affiliated companies, net of income taxes |
| (334 | ) | — |
| ||
|
|
|
|
|
| ||
Net income |
| $ | 20,599 |
| $ | 23,093 |
|
|
|
|
|
|
| ||
Net income per share: |
|
|
|
|
| ||
Basic |
| $ | 0.47 |
| $ | 0.51 |
|
Diluted |
| $ | 0.46 |
| $ | 0.50 |
|
|
|
|
|
|
| ||
Weighted average common and common equivalent shares outstanding: |
|
|
|
|
| ||
Basic |
| 43,906 |
| 45,044 |
| ||
Diluted |
| 44,579 |
| 46,132 |
| ||
|
|
|
|
|
| ||
Cash dividends declared per common share |
| $ | 0.04 |
| $ | 0.04 |
|
-more-
REGIS CORPORATION (NYSE: RGS)
SELECTED CASH FLOW DATA
(In thousands)
|
| Three Months Ended |
| ||||
|
| 2007 |
| 2006 |
| ||
|
|
|
|
|
| ||
Net cash provided by operating activities |
| $ | 24,574 |
| $ | 31,570 |
|
Net cash used in investing activities |
| (79,608 | ) | (62,725 | ) | ||
Net cash provided by financing activities |
| 10,198 |
| 41,655 |
| ||
Effect of exchange rate changes on cash and cash equivalents |
| 5,280 |
| 963 |
| ||
(Decrease) increase in cash and cash equivalents |
| (39,556 | ) | 11,463 |
| ||
|
|
|
|
|
| ||
Cash and cash equivalents: |
|
|
|
|
| ||
Beginning of year |
| 184,785 |
| 135,397 |
| ||
End of year |
| $ | 145,229 |
| $ | 146,860 |
|
-more-
REGIS CORPORATION (NYSE: RGS)
Salon / School / Hair Restoration Center Counts and Revenues
SYSTEM-WIDE LOCATIONS: |
| September 30, 2007 |
| June 30, 2007 |
|
|
|
|
|
|
|
Company-owned salons |
| 8,265 |
| 8,139 |
|
Franchise salons |
| 3,753 |
| 3,742 |
|
Beauty career schools |
| — |
| 56 |
|
Company-owned hair restoration centers |
| 50 |
| 49 |
|
Franchise hair restoration centers |
| 40 |
| 41 |
|
Ownership interest locations |
| 476 |
| 389 |
|
Total, system-wide |
| 12,584 |
| 12,416 |
|
SALON LOCATION SUMMARY
NORTH AMERICAN SALONS: |
| September 30, 2007 |
| June 30, 2007 |
|
REGIS SALONS |
|
|
|
|
|
Open at beginning of period |
| 1,099 |
| 1,079 |
|
Salons constructed |
| 5 |
| 17 |
|
Acquired |
| — |
| 49 |
|
Less relocations |
| (5 | ) | (14 | ) |
Salon openings |
| — |
| 52 |
|
Conversions |
| 1 |
| (1 | ) |
Salons closed |
| (5 | ) | (31 | ) |
Total, Regis Salons |
| 1,095 |
| 1,099 |
|
MASTERCUTS |
|
|
|
|
|
Open at beginning of period |
| 629 |
| 642 |
|
Salons constructed |
| 3 |
| 15 |
|
Acquired |
| — |
| — |
|
Less relocations |
| (2 | ) | (12 | ) |
Salon openings |
| 1 |
| 3 |
|
Conversions |
| — |
| — |
|
Salons closed |
| (3 | ) | (16 | ) |
Total, MasterCuts Salons |
| 627 |
| 629 |
|
TRADE SECRET |
|
|
|
|
|
Company-owned salons: |
|
|
|
|
|
Open at beginning of period |
| 613 |
| 615 |
|
Salons constructed |
| 4 |
| 20 |
|
Acquired |
| 2 |
| 3 |
|
Franchise buybacks |
| 3 |
| — |
|
Less relocations |
| (3 | ) | (11 | ) |
Salon openings |
| 6 |
| 12 |
|
Conversions |
| — |
| 1 |
|
Salons closed |
| (5 | ) | (15 | ) |
Total company-owned salons |
| 614 |
| 613 |
|
- more -
|
| September 30, 2007 |
| June 30, 2007 |
|
|
|
|
|
|
|
Franchise salons: |
|
|
|
|
|
Open at beginning of period |
| 19 |
| 19 |
|
Salons constructed |
| 1 |
| — |
|
Acquired |
| 42 |
| — |
|
Less relocations |
| (1 | ) | — |
|
Salon openings |
| 42 |
| — |
|
Franchise buybacks |
| (3 | ) | — |
|
Salons closed |
| — |
| — |
|
Total franchise salons |
| 58 |
| 19 |
|
|
|
|
|
|
|
Total, Trade Secret Salons |
| 672 |
| 632 |
|
SMARTSTYLE/COST CUTTERS IN WAL-MART |
|
|
|
|
|
Company-owned salons: |
|
|
|
|
|
Open at beginning of period |
| 2,000 |
| 1,739 |
|
Salons constructed |
| 46 |
| 242 |
|
Acquired |
| — |
| — |
|
Franchise buybacks |
| 12 |
| 21 |
|
Less relocations |
| (1 | ) | (2 | ) |
Salon openings |
| 57 |
| 261 |
|
Conversions |
| — |
| — |
|
Salons closed |
| — |
| — |
|
Total company-owned salons |
| 2,057 |
| 2,000 |
|
Franchise salons: |
|
|
|
|
|
Open at beginning of period |
| 151 |
| 164 |
|
Salons constructed |
| 1 |
| 8 |
|
Acquired |
| — |
| — |
|
Less relocations |
| — |
| — |
|
Salon openings |
| 1 |
| 8 |
|
Conversions |
| — |
| — |
|
Franchise buybacks |
| (12 | ) | (21 | ) |
Salons closed |
| — |
| — |
|
Total franchise salons |
| 140 |
| 151 |
|
|
|
|
|
|
|
Total, SmartStyle/Cost Cutters in Wal-Mart Salons |
| 2,197 |
| 2,151 |
|
|
| September 30, 2007 |
| June 30, 2007 |
|
STRIP CENTERS |
|
|
|
|
|
Company-owned salons: |
|
|
|
|
|
Open at beginning of period |
| 3,317 |
| 3,031 |
|
Salons constructed |
| 23 |
| 101 |
|
Acquired |
| 5 |
| 193 |
|
Franchise buybacks |
| 43 |
| 72 |
|
Less relocations |
| (4 | ) | (17 | ) |
Salon openings |
| 67 |
| 349 |
|
Conversions |
| — |
| — |
|
Salons closed |
| (23 | ) | (63 | ) |
Total company-owned salons |
| 3,361 |
| 3,317 |
|
- more -
Franchise salons: |
|
|
|
|
|
Open at beginning of period |
| 1,998 |
| 2,004 |
|
Salons constructed |
| 30 |
| 135 |
|
Acquired (2) |
| — |
| — |
|
Less relocations |
| (2 | ) | (19 | ) |
Salon openings |
| 28 |
| 116 |
|
Conversions |
| — |
| — |
|
Franchise buybacks |
| (43 | ) | (72 | ) |
Salons closed |
| (12 | ) | (50 | ) |
Total franchise salons |
| 1,971 |
| 1,998 |
|
|
|
|
|
|
|
Total, Strip Center Salons |
| 5,332 |
| 5,315 |
|
INTERNATIONAL SALONS (1) |
|
|
|
|
|
Company-owned salons: |
|
|
|
|
|
Open at beginning of period |
| 481 |
| 453 |
|
Salons constructed |
| 4 |
| 25 |
|
Acquired |
| 25 |
| 12 |
|
Franchise buybacks |
| — |
| 4 |
|
Less relocations |
| — |
| (3 | ) |
Salon openings |
| 29 |
| 38 |
|
Conversions |
| 4 |
| — |
|
Salons closed |
| (3 | ) | (10 | ) |
Total company-owned salons |
| 511 |
| 481 |
|
Franchise salons: |
|
|
|
|
|
Open at beginning of period |
| 1,574 |
| 1,587 |
|
Salons constructed |
| 23 |
| 110 |
|
Acquired (2) |
| — |
| — |
|
Less relocations |
| — |
| (1 | ) |
Salon openings |
| 23 |
| 109 |
|
Conversions |
| — |
| — |
|
Franchise buybacks |
| — |
| (4 | ) |
Salons closed |
| (13 | ) | (118 | ) |
Total franchise salons |
| 1,584 |
| 1,574 |
|
|
|
|
|
|
|
Total, International Salons |
| 2,095 |
| 2,055 |
|
(1) Canadian and Puerto Rican salons are included in the Regis Salons, Strip Center, MasterCuts and Trade Secret concepts and not included in the International salon totals.
(2) Represents primarily the acquisition of franchise networks.
TOTAL SYSTEM-WIDE SALONS: |
| September 30, 2007 |
| June 30, 2007 |
|
Company-owned salons: |
|
|
|
|
|
Open at beginning of period |
| 8,139 |
| 7,559 |
|
Salons constructed |
| 85 |
| 420 |
|
Acquired |
| 32 |
| 257 |
|
Franchise buybacks |
| 58 |
| 97 |
|
Less relocations |
| (15 | ) | (59 | ) |
Salon openings |
| 160 |
| 715 |
|
Conversions |
| 5 |
| — |
|
Salons closed |
| (39 | ) | (135 | ) |
Total company-owned salons |
| 8,265 |
| 8,139 |
|
- more -
Franchise salons: |
|
|
|
|
|
Open at beginning of period |
| 3,742 |
| 3,774 |
|
Salons constructed |
| 55 |
| 253 |
|
Acquired (2) |
| 42 |
| — |
|
Less relocations |
| (3 | ) | (20 | ) |
Salon openings |
| 94 |
| 233 |
|
Conversions |
| — |
| — |
|
Franchise buybacks |
| (58 | ) | (97 | ) |
Salons closed |
| (25 | ) | (168 | ) |
Total franchise salons |
| 3,753 |
| 3,742 |
|
|
|
|
|
|
|
Total Salons |
| 12,018 |
| 11,881 |
|
BEAUTY SCHOOLS |
|
|
|
|
|
Open at beginning of period |
| 56 |
| 54 |
|
Salons constructed |
| — |
| 2 |
|
Acquired |
| — |
| 1 |
|
Less relocations |
| (56 | ) | (1 | ) |
Total Beauty Schools |
| — |
| 56 |
|
HAIR RESTORATION CENTERS: |
|
|
|
|
|
Company-owned hair restoration centers: |
|
|
|
|
|
Open at beginning of period |
| 49 |
| 48 |
|
Salons constructed |
| — |
| — |
|
Acquired |
| — |
| 1 |
|
Franchise buybacks |
| 1 |
| 1 |
|
Less relocations |
| — |
| — |
|
Salon openings |
| 1 |
| 2 |
|
Sites closed |
| — |
| (1 | ) |
Total company-owned hair restoration centers |
| 50 |
| 49 |
|
Franchise hair restoration centers: |
|
|
|
|
|
Open at beginning of period |
| 41 |
| 42 |
|
Salons constructed |
| 2 |
| 3 |
|
Acquired |
| — |
| — |
|
Less relocations |
| (2 | ) | (2 | ) |
Salon openings |
| — |
| 1 |
|
Franchise buybacks |
| (1 | ) | (1 | ) |
Sites closed |
| — |
| (1 | ) |
Total franchise salons |
| 40 |
| 41 |
|
|
|
|
|
|
|
Total Hair Restoration Centers |
| 90 |
| 90 |
|
|
|
|
|
|
|
Ownership interest locations |
| 476 |
| 389 |
|
|
|
|
|
|
|
Grand Total, System-wide |
| 12,584 |
| 12,416 |
|
(2) 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.
- more -
REVENUES BY CONCEPT:
|
| For the Three Months Ended |
| ||||
(Dollars in thousands) |
| 2007 |
| 2006 |
| ||
North American salons: |
|
|
|
|
| ||
Regis |
| $ | 127,487 |
| $ | 122,275 |
|
MasterCuts |
| 43,589 |
| 44,049 |
| ||
Trade Secret(1) |
| 60,305 |
| 65,462 |
| ||
SmartStyle |
| 122,103 |
| 111,290 |
| ||
Strip Center(1) |
| 213,079 |
| 191,830 |
| ||
Other(3) |
| 5,558 |
| — |
| ||
Total North American Salons |
| 572,121 |
| 534,906 |
| ||
|
|
|
|
|
| ||
International salons(1) |
| 63,281 |
| 55,875 |
| ||
Beauty schools(3) |
| — |
| 19,365 |
| ||
Hair restoration centers(1) |
| 32,123 |
| 29,097 |
| ||
Consolidated revenues |
| $ | 667,525 |
| $ | 639,243 |
|
Percent change from prior year |
| 4.4 | % | 9.4 | % | ||
Salon same-store sales increase (decrease) (2) |
| 0.9 | % | (0.3% | ) |
(1) Includes aggregate franchise royalties and fees of $21.0 and $19.8 million for the three months ended September 30, 2007 and 2006, respectively. North American salon franchise royalties and fees represented 48.3 and 49.6 percent of total franchise revenues in the three months ended September 30, 2007 and 2006, respectively.
(2) Salon same-store sales increases or decreases are calculated on a daily basis as the total change in sales for company-owned salons which were open on a specific day of the week during the current period and the corresponding prior period. Quarterly and year-to-date salon same-store sales increases are the sum of the same-store sales increases computed on a daily basis. Relocated salons are included in same-store sales as they are considered to have been open in the prior period. International same-store sales are calculated in local currencies so that foreign currency fluctuations do not impact the calculation. The Company began including Hair Restoration Centers in its same-store sales calculation beginning with the third fiscal quarter of 2007. Management believes that same-store sales, a component of organic growth, are useful in order to help determine the increase in salon revenues attributable to its organic growth (new salon construction and same-store sales growth) versus growth from acquisitions.
(3) On August 1, 2007, the Company contributed substantially all of its accredited cosmetology schools to Empire Education Group, Inc. For the three months ended September 30, 2007 the results of operations for the month ended July 31, 2007 are reported in the North American salons segment.
- more -
FINANCIAL INFORMATION BY SEGMENT:
Financial information concerning the Company’s salon, school and hair restoration businesses is shown in the following tables.
|
| For the Three Months Ended September 30, 2007(1) |
| |||||||||||||
|
| Salons |
| Hair |
| Unallocated |
|
|
| |||||||
(Dollars in thousands) |
| North America |
| International |
| Centers |
| Corporate |
| Consolidated |
| |||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
| |||||
Service |
| $ | 407,139 |
| $ | 38,429 |
| $ | 14,150 |
| $ | — |
| $ | 459,718 |
|
Product |
| 154,833 |
| 15,293 |
| 16,656 |
| — |
| 186,782 |
| |||||
Royalties and fees |
| 10,149 |
| 9,559 |
| 1,317 |
| — |
| 21,025 |
| |||||
|
| 572,121 |
| 63,281 |
| 32,123 |
| — |
| 667,525 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
| |||||
Cost of service |
| 234,888 |
| 20,421 |
| 7,751 |
| — |
| 263,060 |
| |||||
Cost of product |
| 80,633 |
| 8,611 |
| 4,833 |
| — |
| 94,077 |
| |||||
Site operating expenses |
| 49,208 |
| 3,207 |
| 1,270 |
| — |
| 53,685 |
| |||||
General and administrative |
| 32,994 |
| 11,814 |
| 7,159 |
| 34,385 |
| 86,352 |
| |||||
Rent |
| 82,996 |
| 12,629 |
| 1,657 |
| 481 |
| 97,763 |
| |||||
Depreciation and amortization |
| 21,895 |
| 2,459 |
| 2,497 |
| 4,731 |
| 31,582 |
| |||||
Total operating expenses |
| 502,614 |
| 59,141 |
| 25,167 |
| 39,597 |
| 626,519 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Operating income |
| 69,507 |
| 4,140 |
| 6,956 |
| (39,597 | ) | 41,006 |
| |||||
|
|
|
|
|
|
|
|
|
|
|
| |||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
| |||||
Interest |
| — |
| — |
| — |
| (10,578 | ) | (10,578 | ) | |||||
Other, net |
| — |
| — |
| — |
| 2,155 |
| 2,155 |
| |||||
Income before income taxes |
| $ | 69,507 |
| $ | 4,140 |
| $ | 6,956 |
| $ | (48,020 | ) | $ | 32,583 |
|
(1) On August 1, 2007, the Company contributed substantially all of its accredited cosmetology schools to Empire Education Group, Inc. For the three months ended September 30, 2007 the results of operations for the month ended July 31, 2007 are reported in the North American salons segment.
-more-
|
| For the Three Months Ended September 30, 2006 |
| ||||||||||||||||
|
| Salons |
| Beauty |
| Hair |
| Unallocated |
|
|
| ||||||||
(Dollars in thousands) |
| North America |
| International |
| Schools |
| Centers |
| Corporate |
| Consolidated |
| ||||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Service |
| $ | 371,199 |
| $ | 33,690 |
| $ | 16,964 |
| $ | 12,699 |
| $ | — |
| $ | 434,552 |
|
Product |
| 153,908 |
| 13,441 |
| 2,401 |
| 15,175 |
| — |
| 184,925 |
| ||||||
Royalties and fees |
| 9,799 |
| 8,744 |
| — |
| 1,223 |
| — |
| 19,766 |
| ||||||
|
| 534,906 |
| 55,875 |
| 19,365 |
| 29,097 |
| — |
| 639,243 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Cost of service |
| 212,372 |
| 17,978 |
| 8,036 |
| 7,139 |
| — |
| 245,525 |
| ||||||
Cost of product |
| 79,704 |
| 7,992 |
| 1,802 |
| 4,731 |
| — |
| 94,229 |
| ||||||
Site operating expenses |
| 48,105 |
| 2,354 |
| 4,330 |
| 1,017 |
| — |
| 55,806 |
| ||||||
General and administrative |
| 29,045 |
| 10,170 |
| 2,367 |
| 6,277 |
| 30,094 |
| 77,953 |
| ||||||
Rent |
| 76,895 |
| 10,995 |
| 2,236 |
| 1,664 |
| 382 |
| 92,172 |
| ||||||
Depreciation and amortization |
| 20,139 |
| 1,872 |
| 812 |
| 2,334 |
| 4,385 |
| 29,542 |
| ||||||
Total operating expenses |
| 466,260 |
| 51,361 |
| 19,583 |
| 23,162 |
| 34,861 |
| 595,227 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Operating income (loss) |
| 68,646 |
| 4,514 |
| (218 | ) | 5,935 |
| (34,861 | ) | 44,016 |
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Interest |
| — |
| — |
| — |
| — |
| (9,838 | ) | (9,838 | ) | ||||||
Other, net |
| — |
| — |
| — |
| — |
| 811 |
| 811 |
| ||||||
Income (loss) before income taxes |
| $ | 68,646 |
| $ | 4,514 |
| $ | (218 | ) | $ | 5,935 |
| $ | (43,888 | ) | $ | 34,989 |
|
- END -