MINNEAPOLIS--(BUSINESS WIRE)--Regis Corporation (NYSE: RGS), a leader in the haircare industry, whose primary business is franchising, owning, and operating technology enabled hair salons, today announced, the completion of additional restructuring actions to improve its financial performance and further align costs with the Company’s transition to a fully franchised business model. The Company also announced that 84% of its system-wide salons were open as of July 1st and that it closed on the sale of 88 company-owned locations to franchisees during the month of June.
The Company’s ongoing transformation to a franchise platform enabled it to take further steps to eliminate administrative costs and personnel. These additional restructuring actions are expected to result in nearly $6.0 million of annualized general and administrative expense savings. In combination with G&A reductions announced in January, the Company has removed approximately $25 million of annualized general and administrative expense costs during FY20 including several officer positions. As part of the G&A expense reduction and organizational transition, its Chief Operating Officer who had primary responsibility for company-owned salons has resigned and will depart on July 17th. Mr. Lain will continue to provide certain consulting services to the Company through December 31, 2020.
As of July 1st, 88% of franchise salon locations were open and 68% of company-owned salons were open.
The Company also re-started its refranchising process in June and announced that an additional 88 company-owned salons were transferred to its asset-light franchise business during the month.
“Despite the ongoing challenges associated with COVID-19, we are pleased that our strategic transformation is continuing. During the month of June, we achieved another milestone where we could effectively re-engineer our cost structure for a growth-oriented future-state. Although this aspect of our transformation is certainly difficult, it is necessary to properly allocate capital and human resources to support investments in our rapidly growing franchise business. We also recognize these changes represent a deeply personal impact to our employees and their families and we are grateful for the many contributions they have made to the historical achievements of Regis,” said Hugh Sawyer, Chairman and Chief Executive Officer of Regis Corporation. Mr. Sawyer concluded, “Our salons continue to re-open and we were able to re-start the refranchising process after a brief hiatus. Further, despite uncertainty caused by the pandemic we are optimistic that the demand for our company-owned salons and core brands will continue. We remain committed to our transformation to a fully-franchised model on an expeditious timetable and the measured deployment of value-enhancing technology this year.”
About Regis Corporation
Regis Corporation (NYSE:RGS) is a leader in beauty salons and cosmetology education. As of March 31, 2020, the Company franchised, owned or held ownership interests in 7,026 worldwide locations. Regis’ franchised and corporate locations operate under concepts such as Supercuts®, SmartStyle®, Cost Cutters®, Roosters® and First Choice Haircutters®. Regis maintains an ownership interest in Empire Education Group in the U.S. For additional information about the Company, including a reconciliation of certain non-GAAP financial information and certain supplemental financial information, please visit the Investor Information section of the corporate website at www.regiscorp.com.
Safe Harbor Statement
This press release contains or may contain "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 the ability of the Company to recognize the expected savings from the restructuring actions and the risk that the Company is unable to conduct its operations with the reduced administrative resources. Additional information concerning potential factors that could affect future financial results is set forth under Item 1A on Form 10-K. 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.