<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from_____________ to_________
For Quarter Ended September 30, 1997 Commission file number 011230
Regis Corporation
------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Minnesota 41-0749934
- -------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7201 Metro Boulevard, Edina, Minnesota 55439
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(612)947-7777
------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
---- ----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of October 29, 1997:
Common Stock, $.05 par value 23,342,225
- ---------------------------- -----------------
Class Number of Shares
1
<PAGE>
REGIS CORPORATION
INDEX
PART I. FINANCIAL INFORMATION Page No.
--------
Item 1. Consolidated Financial Statements:
Balance Sheet as of September 30, 1997
and June 30, 1997 3
Statement of Operations for the three
months ended September 30, 1997 and 1996 4
Statement of Cash Flows for the three
months ended September 30, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
Review Report of Independent Accountants 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-14
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 6. Exhibits and Reports on Form 8-K 16-17
Signature 18
2
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
REGIS CORPORATION
CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1997 AND JUNE 30, 1997
(DOLLARS IN THOUSANDS, EXCEPT SHARE AMOUNTS)
(UNAUDITED)
SEPTEMBER 30, 1997 JUNE 30, 1997
------------------ --------------
ASSETS
Current assets:
Cash $ 4,282 $ 8,935
Accounts receivable, net 10,297 12,388
Inventories 45,003 42,596
Deferred income taxes 6,209 6,335
Other current assets 4,869 6,819
--------- ---------
Total current assets 70,660 77,073
Property and equipment, net 143,527 139,573
Goodwill 98,354 99,818
Other assets 14,568 15,071
--------- ---------
Total assets $ 327,109 $ 331,535
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Long-term debt, current portion $ 32,310 $ 30,722
Accounts payable 20,348 24,111
Accrued expenses 35,890 37,291
--------- ---------
Total current liabilities 88,548 92,124
Long-term debt 76,354 82,740
Other noncurrent liabilities 7,505 7,557
Shareholders' equity:
Common stock, $.05 par value;
issued and outstanding, 23,341,425 and
23,317,924 shares at September 30, 1997
and June 30, 1997, respectively 1,167 1,166
Additional paid-in capital 120,891 120,483
Retained earnings 32,644 27,465
--------- ---------
Total shareholders' equity 154,702 149,114
--------- ---------
Total liabilities and
shareholders' equity $327,109 $331,535
--------- ---------
--------- ---------
See accompanying notes to unaudited Consolidated Financial Statements.
3
<PAGE>
REGIS CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
1997 1996
---- ----
Revenues:
Company-owned salons:
Service $ 130,078 $ 121,540
Product 51,864 42,381
--------- ---------
Franchise income 181,942 163,921
6,739 6,684
--------- ---------
188,681 170,605
--------- ---------
Operating expenses:
Company-owned:
Cost of service 74,520 70,011
Cost of product 28,594 23,393
Direct salon 17,275 16,232
Rent 25,470 23,069
Depreciation 6,037 5,307
--------- ---------
151,896 138,012
Selling, general and administrative 20,233 17,787
Depreciation and amortization 2,070 1,942
Loss on sale of Anasazi 1,979
Other 388 504
--------- ---------
Total operating expenses 176,566 158,245
--------- ---------
Operating income 12,115 12,360
Other income (expense):
Interest (2,417) (2,450)
Nonrecurring gains 156 218
Other, net 137 210
--------- ---------
Income before income taxes 9,991 10,338
Income taxes (4,195) (5,797)
--------- ---------
Net income $ 5,796 $ 4,541
--------- ---------
--------- ---------
Net income per share $ .24 $ .20
--------- ---------
--------- ---------
Weighted average common and common
equivalent shares outstanding 23,975 23,316
--------- ---------
--------- ---------
See accompanying notes to unaudited Consolidated Financial Statements.
4
<PAGE>
REGIS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 5,796 $ 4,541
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 8,191 7,330
Deferred income taxes 667 (1,182)
Loss on sale of Anasazi 1,979
Changes in assets and liabilities, exclusive
of investing and financing activities (3,955) (1,616)
Other 269 1,123
--------- ---------
Net cash provided by operating activities 12,947 10,196
--------- ---------
Cash flows from investing activities:
Capital expenditures (10,995) (8,319)
Purchases of salon assets, net of cash acquired and
certain obligations assumed (2,004) (4,611)
--------- ---------
Net cash used in investing activities (12,999) (12,930)
--------- ---------
Cash flows from financing activities:
Borrowings on revolving credit facilities 25,694 44,983
Payments on revolving credit facilities (31,275) (44,700)
Proceeds from issuance of long-term debt 2,543
Repayment of long-term debt (1,424) (2,236)
Decrease in negative book cash balances (58)
Dividends paid (467) (361)
Proceeds from issuance of common stock 409 711
--------- ---------
Net cash used in financing activities (4,578) (1,603)
--------- ---------
Effect of exchange rate changes on cash (23) 7
--------- ---------
Decrease in cash (4,653) (4,330)
Cash:
Beginning of year 8,935 7,558
--------- ---------
End of year $ 4,282 $ 3,228
--------- ---------
--------- ---------
Changes in assets and liabilities, exclusive of investing
and financing activities:
Accounts receivable $ 1,741 $ 1,676
Inventories (2,565) (2,161)
Other current assets (2,407) 745
Other assets (248) (252)
Accounts payable (3,651) 2,267
Accrued expenses 2,965 (3,810)
Other noncurrent liabilities 210 (81)
--------- ---------
$ (3,955) $ (1,616)
--------- ---------
--------- ---------
</TABLE>
See accompanying notes to unaudited Consolidated Financial Statements.
5
<PAGE>
REGIS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION OF INTERIM CONSOLIDATED FINANCIAL STATEMENTS:
The unaudited consolidated statement of operations for the three months
ended September 30, 1997 and 1996, reflects, in the opinion of management,
all adjustments (which, with the exception of the matters discussed in Note
4 herein, include only normal recurring adjustments) necessary to fairly
present the results of operations for the interim periods. The results of
operations for any interim period are not necessarily indicative of results
for the full year.
The year-end balance sheet data was derived from audited financial
statements, but does not include all disclosures required by generally
accepted accounting principles. The unaudited interim consolidated
financial statements should be read in conjunction with Regis Corporation's
(the Company) consolidated financial statements which are incorporated by
reference in the Company's Annual Report on Form 10-K for the year ended
June 30, 1997. Coopers & Lybrand L.L.P., the Company's independent
accountants, have performed limited reviews of the financial data included
herein. Their report on such reviews accompanies this filing.
COST OF PRODUCT SALES. On an interim basis, product costs are determined
by applying an estimated gross profit margin.
2. NONRECURRING GAINS:
During the first quarters of fiscal 1998 and 1997, the Company received
$156,000 and $218,000, respectively, of principal payments from Premier
Salons. The Company had previously written off the related receivable, and
accordingly, is recording all subsequent principal payments as nonrecurring
gains.
3. FINANCING ARRANGEMENTS:
In July 1997, the Company borrowed $2,000,000 under a 7.48 percent senior
term note due July 2006. The proceeds were used to replace a portion of
the principal payment due on the 11.52 percent senior term notes in June
1997, which payment was made in June 1997 utilizing the Company's revolving
credit facility.
4. LOSS ON SALE OF ANASAZI:
In the first quarter of fiscal 1998, the Company recorded a special charge
of $1,979,000 associated with the divestiture of the business and assets of
Anasazi Exclusive Salon Products, LLC, a professional salon products
manufacturing firm the Company acquired in fiscal 1997. Anasazi was sold
to Curtis Acquisition LLC, which is controlled by two members of the
Company's Board of Directors, one of whom is the Chairman.
6
<PAGE>
REVIEW REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Directors of Regis Corporation:
We have reviewed the accompanying consolidated balance sheet of Regis
Corporation as of September 30, 1997, and the related consolidated statements of
operations and cash flows for the three months ended September 30, 1997 and
1996. These financial statements are the responsibility of the Company's
management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures to
financial data and making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an audit conducted
in accordance with generally accepted auditing standards, the objective of which
is the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to the consolidated financial statements referred to above for
them to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet as of June 30, 1997, and the related
consolidated statements of operations, changes in shareholders' equity and cash
flows for the year then ended (not fully presented herein); and in our report
dated August 22, 1997, we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying consolidated balance sheet as of June 30, 1997, is fairly stated,
in all material respects, in relation to the consolidated balance sheet from
which it has been derived.
/s/ Coopers & Lybrand L.L.P.
COOPERS & LYBRAND L.L.P.
Minneapolis, Minnesota
October 23, 1997
7
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SUMMARY
Regis Corporation, based in Minneapolis, is the world's largest owner, operator
and franchisor of hair and retail product salons with 3,348 salons (810
franchised) in 50 states, Puerto Rico and Canada and seven international
countries at September 30, 1997. Regis operates and franchises salons in six
divisions: Regis Hairstylists, Supercuts, MasterCuts, Trade Secret, Wal-Mart and
International and has 26,000 employees worldwide.
During the first quarter of fiscal 1998, the Company's consolidated revenues
increased 10.6 percent to a record $188,681,000. Operating income increased
14.0 percent to $14,094,000 exclusive of the nonrecurring charge of $1,979,000
related to the divestiture of Anasazi Exclusive Salon Products, LLC. Excluding
special charges associated with the divestiture of the Anasazi business and the
resolution of Supercuts income tax matters occurring during the first quarter of
fiscal 1998 and 1997, respectively, as well as nonrecurring gains, net income in
the first quarter of fiscal 1998 increased to a record $6,908,000, or $.29 per
share, an earnings per share increase of 16.0 percent from the first quarter of
fiscal 1997 net income of $5,911,000, or $.25 per share.
8
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated certain information
derived from the Company's Consolidated Statement of Operations expressed as a
percentage of total revenues, except as noted.
FOR THE THREE MONTHS ENDED
--------------------------
SEPTEMBER 30,
--------------
1997 1996
---- ----
Company-owned service revenues (1) 71.5% 74.1%
Company-owned product revenues (1) 28.5 25.9
Franchise income 3.6 3.9
Company-owned operations:
Profit margins on service (2) 42.7 42.4
Profit margins on product (3) 44.9 44.8
Direct salon (1) 9.5 9.9
Rent (1) 14.0 14.1
Depreciation (1) 3.3 3.2
Direct salon contribution (1) 16.5 15.8
Selling, general and administrative 10.7 10.4
Depreciation and amortization 1.1 1.1
Loss on sale of Anasazi 1.0
Operating income 6.4 7.2
Income before income taxes 5.3 6.1
Net income 3.1 2.7
Operating income, excluding nonrecurring items 7.5 7.2
Net income, excluding nonrecurring items 3.7 3.5
(1) Computed as a percent of company-owned revenues
(2) Computed as a percent of service revenues
(3) Computed as a percent of product revenues
9
<PAGE>
THREE MONTHS ENDED SEPTEMBER 30, 1997, COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1996:
REVENUES
REVENUES for the first quarter of fiscal 1998 were a record $188,681,000, an
increase of $18,076,000 or 10.6 percent, over the same period in fiscal 1997.
System-wide sales, inclusive of non-consolidated sales generated from franchise
salons, increased 10.5 percent in the first quarter of fiscal 1998 to
$253,322,000 from $229,190,000 in the same period in fiscal 1997. These
increases in company-owned and system-wide sales are the result of the total
number of salons added to the system through acquisitions and net salon openings
as well as same-store sales increases from existing salons.
For the first quarters of fiscal 1998 and 1997, respectively, revenues by
division are as follows:
1998 1997
---- ----
Regis Hairstylists $ 71,430 $ 67,172
Supercuts 24,811 25,024
MasterCuts 25,938 22,783
Trade Secret 27,086 19,180
Wal-Mart 8,511 7,427
International 24,166 22,335
Franchise Income 6,739 6,684
--------- ---------
$ 188,681 $ 170,605
--------- ---------
--------- ---------
Same-store sales for company-owned salons increased 5.8 percent in the first
quarter of fiscal 1998, compared to 2.5 percent in the same period in fiscal
1997. System-wide same-store sales for the first quarter of fiscal 1998
increased 5.2 percent, compared to 1.9 percent in the same period in fiscal
1997. Same-store sales increases achieved are primarily due to an increase in
the number of customers served. A total of 17,969,000 customers system-wide
were served during the first quarter of fiscal 1998. The Company utilizes an
audiovisual-based training system in its company-owned salons. Management
believes this training system provides its employees with improved customer
service and technical skills, and positively contributes to the increase in
customers served.
SERVICE REVENUES in the first quarter of fiscal 1998 were $130,078,000, an
increase of $8,538,000 or 7.0 percent, over the same period in fiscal 1997.
This increase is a result of strong service same-store sales increase of 5.5
percent, salon acquisitions the Company has made during the past twelve months
as well as accelerated new salon construction.
10
<PAGE>
PRODUCT REVENUES in the first quarter of fiscal 1998 were $51,864,000, an
increase of $9,483,000 or 22.4 percent, over the same period in fiscal 1997.
This increase continues a trend of escalating product revenues due to strong
product same-store sales growth of 6.8 percent, a reflection of the continuous
focus on product awareness and training and acceptance of national label
merchandise. Product revenues as a percent of total company-owned revenues
increased to 28.5 percent of revenues compared to 25.9 percent of revenues in
the same period in fiscal 1997.
FRANCHISE INCOME, including royalties, initial franchise fees and product sales
made by the Company to franchisees, increased slightly to $6,739,000 in the
first quarter of fiscal 1998.
COST OF REVENUES
Cost of both service and product revenues in the first quarter of fiscal 1998
were $103,114,000, compared to $93,404,000, in the same period in fiscal 1997.
The resulting combined gross margin percentage for the first quarter of fiscal
1998 improved 30 basis points to 43.3 percent of revenues compared to 43.0
percent of revenues in the same period in fiscal 1997. As discussed below, this
improvement was primarily due to strong same-store sales and the increased sales
leverage in the Company's fixed cost payroll divisions.
SERVICE MARGINS were 42.7 percent in the first quarter of fiscal 1998, compared
to 42.4 percent in the same period in fiscal 1997. This 30 basis point
improvement is primarily due to continued sales leverage of the Supercuts
division on fixed cost payrolls, and strong service same-store sales increases
of 5.5 percent.
PRODUCT MARGINS were 44.9 percent in the first quarter of fiscal 1998, compared
to 44.8 percent in the same period in fiscal 1997. This 10 basis point
improvement is primarily a result of the Company's enhanced purchasing power
being achieved in the first quarter of fiscal 1998, following the Supercuts and
Wal-Mart acquisitions.
DIRECT SALON
This expense category includes direct costs associated with salon operations
such as advertising, promotion, insurance, telephone and utilities. Direct salon
expense of $17,275,000 improved as a percent of company-owned revenues to 9.5
percent in the first quarter of fiscal 1998 from 9.9 percent in the same period
in fiscal 1997. The improvement resulted from an increased ability to leverage
these costs against increased revenues from a maturing salon base, as well as
the closure of under-performing stores, primarily in the Supercuts division.
11
<PAGE>
RENT
Rent expense in the first quarter of fiscal 1998 was $25,470,000 or 14.0 percent
of company-owned revenues, compared to $23,069,000 or 14.1 percent of
company-owned revenues, in the same period in fiscal 1997. The percentage
improvement is primarily due to Supercuts as a result of strong same-store sales
and the closure of under-performing stores.
DEPRECIATION - SALON LEVEL
Depreciation expense at the salon level remained fairly consistent at 3.3
percent of revenues, declining 10 basis points over the first quarter in fiscal
1997, due to an increase in salon construction and acquisitions between the two
periods.
DIRECT SALON CONTRIBUTION
For the reasons described above, direct salon contribution, representing
company-owned salon revenues less associated operating expenses, improved in the
first quarter of fiscal 1998 to $30,046,000, or 16.5 percent of company-owned
revenues, compared to $25,909,000 or 15.8 percent of company-owned revenues in
the same period of fiscal 1997.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative (SG&A) expenses increased to $20,233,000, or
10.7 percent of total revenues in the first quarter of fiscal 1998, from
$17,787,000, or 10.4 percent of total revenues in the same period in fiscal
1997. Expenses in this category include field supervision (payroll, related
taxes and travel) and home office administration costs (such as warehousing,
salaries, occupancy costs and professional fees). This 30 basis point increase
is primarily driven by higher warehouse expenses due to volume increases
partially offset by cost reductions associated with the amalgamation of the
Supercuts back office functions.
All direct and indirect expenses associated with franchise operations, other
than the cost of products sold to franchisees, are included in SG&A expense.
The cost of products sold and associated franchise activities remained
relatively consistent in both first quarters of fiscal 1998 and 1997.
DEPRECIATION AND AMORTIZATION - CORPORATE
Depreciation and amortization remained consistent at 1.1 percent of total
revenues in both periods.
12
<PAGE>
LOSS ON SALE OF ANASAZI
See Note 4 to the unaudited Consolidated Financial Statements.
OPERATING INCOME
Operating income in the first quarter of fiscal 1998, excluding nonrecurring
items, improved to $14,094,000, an increase of $1,734,000, or 14.0 percent over
the same period in fiscal 1997. Operating income, excluding nonrecurring items,
as a percentage of total revenues was 7.5 percent in the first quarter of fiscal
1998 compared to 7.2 percent in the same period in fiscal 1997. This
improvement is attributable primarily to improved gross margins and the
leveraging of direct salon expenses, partially offset by higher SG&A expenses as
a percent of total revenues.
INTEREST
Interest expense in the first quarter of fiscal 1998 was $2,417,000, or 1.3
percent of total revenues, compared to $2,450,000 or 1.4 percent of total
revenues in the same period in fiscal 1997. Interest expense has remained
relatively consistent between the two periods because, although debt levels have
increased, average interest rates were lower during the period.
INCOME TAXES
The Company's effective income tax rate for fiscal 1998 is estimated to be
approximately 41.0 percent, compared to 66.6 percent in fiscal 1997. The
Company's effective tax rate for fiscal 1997 was negatively affected by certain
nondeductible merger and transaction costs associated with the Supercuts merger.
Additionally, as part of the tax provision for the period ended September 30,
1996, the Company recorded a $1,500,000 charge associated with the resolution
of Supercuts income tax matters related to years prior to 1996 resulting from
the completion of an Internal Revenue Service examination.
NET INCOME
Net income in the first quarter of fiscal 1998 was $5,796,000 or $.24 per share,
compared to net income of $4,541,000 or $.20 per share in the same period in
fiscal 1997. Exclusive of nonrecurring items in both periods, net income in the
first quarter of fiscal 1998 increased to $6,908,000 or $.29 per share, compared
to net income in the same period in fiscal 1997 of $5,911,000 or $.25 per share,
a net income per share increase of 16.0 percent.
13
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Customers generally pay for salon services and merchandise in cash at the time
of sale, which reduces the Company's working capital requirements. Net cash
provided by operating activities in the first three months of fiscal 1998 was
$12,947,000 compared to $10,196,000 during the same period in fiscal 1997. The
increase between the two periods is primarily due to improved operating
performance.
During the first three months of fiscal 1998, the Company had worldwide capital
expenditures of $11,644,000, of which $649,000 related to acquisitions, and
$2,166,000 related to the Company's new distribution center. The Company
constructed 12 new Regis Hairstylists salons, 16 new MasterCuts salons, 16 new
Trade Secret salons, 13 new Wal-Mart salons and 6 new International salons, and
completed 19 major remodeling projects. All capital expenditures during the
first three months of fiscal 1998 were funded by cash flow from the Company's
operations and borrowings under its revolving credit facilities.
The Company anticipates its worldwide salon development program for fiscal 1998
will include the construction of approximately 200 new company-owned salons, and
60 major remodeling and conversion projects. It is expected that expenditures
for these new salons and other projects will be approximately $41,000,000 in
fiscal 1998, excluding capital expenditures for acquisitions and the Company's
new distribution center.
FINANCING
See Note 3 to the unaudited Consolidated Financial Statements.
Management believes that cash generated from operations and amounts available
under its revolving credit facilities will be sufficient to fund its anticipated
capital expenditures and required debt repayments for the foreseeable future.
DIVIDENDS
During the first quarter of fiscal 1998, the Company paid quarterly dividends of
$467,000, or $.02 per share.
14
<PAGE>
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On October 14, 1997, at the annual meeting of the shareholders of the
Company, the shareholders approved an increase in the authorized
shares available under the Company's Stock Option Plan from 1,650,000
to 2,200,000. There were 20,511,534 shares voted in favor of the
proposal and 701,120 shares against the proposal. The elections of
the Company's directors also took place with the following results:
Election of Directors:
FOR WITHHOLD AUTHORITY
Rolf F. Bjelland 21,104,277 108,377
Frank E. Evangelist 21,099,647 113,007
Paul D. Finkelstein 21,101,155 111,499
Christopher A. Fox 21,097,072 115,582
Thomas L. Gregory 21,101,269 111,385
Van Zandt Hawn 21,105,435 107,219
Susan Hoyt 21,105,207 107,447
David B. Kunin 21,093,070 119,584
Myron Kunin 21,100,047 112,607
15
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits:
Exhibit 15 Letter Re: Unaudited Interim Financial Information.
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K:
There were no reports on Form 8-K filed during the three months ended
September 30, 1997.
16
<PAGE>
Exhibit 15
LETTER RE: UNAUDITED INTERIM FINANCIAL INFORMATION
Securities and Exchange Commission
450 Fifth Street, North West
Washington, D.C. 20549
RE: Regis Corporation
Registrations on Form S-8
(File No. 33-44867, No. 33-89882)
Registration on Form S-4
(File No. 333-12099)
Registrations on Form S-3
(File No. 333-28511, No. 33-82094,
No. 33-86276, No. 33-89150,
No. 33-92244, No. 33-96224 and
No. 33-80337)
We are aware that our report dated October 23, 1997, on our reviews of the
interim financial information of Regis Corporation as of September 30, 1997
and for the three month periods ended September 30, 1997 and 1996, and
included in the Company's quarterly report on Form 10-Q for the quarter ended
September 30, 1997, is incorporated by reference in these registration
statements. Pursuant to Rule 436(c) under the Securities Act of 1933, this
report should not be considered a part of such registration statements
prepared or certified by us within the meaning of Sections 7 and 11 of that
Act.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Minneapolis, MN
October 31, 1997
17
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REGIS CORPORATION
Date: October 31, 1997 By: /s/ Frank E. Evangelist
----------------------------------
Frank E. Evangelist
Senior Vice President, Finance
Chief Financial Officer
Signing on behalf of the
registrant and as principal
accounting officer
18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE FIRST
QUARTER BALANCE SHEET AND INCOME STATEMENT AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 4,282
<SECURITIES> 0
<RECEIVABLES> 10,353
<ALLOWANCES> (56)
<INVENTORY> 45,003
<CURRENT-ASSETS> 70,660
<PP&E> 264,980
<DEPRECIATION> 121,453
<TOTAL-ASSETS> 327,109
<CURRENT-LIABILITIES> 88,548
<BONDS> 0
0
0
<COMMON> 1,167
<OTHER-SE> 153,535
<TOTAL-LIABILITY-AND-EQUITY> 327,109
<SALES> 51,864
<TOTAL-REVENUES> 188,681
<CGS> 28,594
<TOTAL-COSTS> 151,896
<OTHER-EXPENSES> 4,437<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,417
<INCOME-PRETAX> 9,991
<INCOME-TAX> 4,195
<INCOME-CONTINUING> 5,796
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,796<F2>
<EPS-PRIMARY> 0
<EPS-DILUTED> .24<F3>
<FN>
<F1>Includes loss on the sale of Anasazi Exclusive Salon Products, Inc. of
$1,979.
<F2>Excluding non-recurring items, net income would be $6,908.
<F3>Excluding non-recurring items, EPS would be $.29.
</FN>
</TABLE>
