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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 8-K/A
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 15, 1997
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REGIS CORPORATION
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(Exact name of registrant as specified in its charter)
MINNESOTA
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(State or other jurisdiction of incorporation)
0-11230 41-0749934
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(Commission File Number) (IRS Employer Identification No.)
7201 Metro Boulevard, Minneapolis, MN 55439
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 947-7000
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(Former name or former address, if changed since last report)
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SIGNATURES
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 hereunto duly authorized.
REGIS CORPORATION
Date: May 15, 1997 By: /s/ Frank E. Evangelist
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Frank E. Evangelist
Senior Vice President-Finance
Chief Financial Officer
Signing on behalf of the Registrant
and as principal accounting officer
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EXHIBIT INDEX
Exhibit A Narrative Update, Item 1 "Business" of the Registrant's Form
10-K for the fiscal year ended June 30, 1996 (filed in Form
8-K)
Exhibit B Audited consolidated balance sheet as of June 30, 1995 and
1996, and the related consolidated statements of operations,
changes in shareholders' equity and cash flows for the years
ended June 30, 1994, 1995 and 1996, and related Management's
Discussion and Analysis of Financial Condition and Results
of Operations (changed pages filed herein)
Exhibit C Unaudited consolidated balance sheet as of September 30,
1996, and the related consolidated statements of operations
and cash flows for the three months ended September 30, 1995
and 1996, and related Management's Discussion and Analysis
of Financial Condition and Results of Operations (filed in
Form 8-K)
Exhibit 15 Letter Re: Unaudited Interim Financial Information (filed in
Form 8-K)
Exhibit 23 Consent of Independent Accountants (filed in Form 8-K)
Exhibit 27.1 September FDS (filed in Form 8-K)
Exhibit 27.2 June FDS (filed in Form 8-K)
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Directors of
Regis Corporation:
We have audited the accompanying consolidated balance sheet of Regis
Corporation as of June 30, 1995 and 1996, and the related consolidated
statements of operations, changes in shareholders' equity and cash flows for
the years ended June 30, 1994, 1995 and 1996. These financial statements are
the responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the consolidated financial position of
Regis Corporation as of June 30, 1995 and 1996, and the consolidated results
of its operations and its cash flows for the years ended June 30, 1994, 1995
and 1996, in conformity with generally accepted accounting principles.
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Minneapolis, Minnesota
May 9, 1997
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REGIS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, Continued
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8. RESTRUCTURING:
During the three months ended December 31, 1995, a majority of the Board of
Directors of Supercuts concluded that it was appropriate to modify
Supercuts' strategic growth plans and to replace its Chairman of the Board
and Chief Executive Officer (Lipson). It was decided that future expansion
efforts would focus primarily on expanding with existing franchisees in
existing franchise markets. Additionally, because of the significant
operating losses and negative cash flow from certain salons, it was decided
that salons in certain markets would be closed or sold to franchisees or
other third parties. The anticipated date of completion of the
restructuring is December 1997. Until closures and dispositions are
completed, the results of operations of these salons will continue to be
included in the Company's results.
The restructuring charge described above was approximately $11,965,000 (as
adjusted from the $18,925,000 originally reported due to conforming
accounting adjustments - Note 3). Approximately $7,000,000 of this charge
relates to store closings or dispositions. The balance relates principally
to the Lipson litigation (Note 11). This charge was recorded in the quarter
ended December 31, 1995.
In order to revise estimates included in the December 1995 restructuring
charge for legal and professional fees, an additional $858,000 was charged
against earnings in the quarter ended June 30, 1996. This additional charge
resulted in aggregate restructuring charges of $12,823,000 for the year
ended June 30, 1996. Of the $12,823,000 charge, $4,384,000 was related to
non-cash activity (i.e. primarily the write-off of assets that were
purchased before the merger and do not require a cash outlay for disposal).
As of June 30, 1996, $6,493,000 of the Company's 1996 restructuring
charges are included in accrued expenses in the balance sheet and are
primarily associated with litigation matters, as described in Note 11,
and salon closures and dispositions.
In the quarter ended December 31, 1996, an additional $2,909,000 was
charged against earnings to revise restructuring charge estimates made in
fiscal 1996 and $1,500,000 was charged against earnings associated with
identified Regis salon closures. The changes in the estimated June 30,
1996 restructuring charges represent changes in accounting estimates
associated with litigation matters, legal and professional fees and lease
obligations. Of the $4,409,000 charge recorded in the quarter ended
December 31, 1996, $330,000 was related to non-cash activity.
The Supercuts and Regis salons identified for closure or disposition,
related to the December 1995 and 1996 restructuring charges described
above, contributed approximately $7,000,000 of annual revenues with
associated after-tax annualized operating losses of approximately
$1,000,000.
Continued
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YEAR ENDED JUNE 30, 1995 COMPARED TO YEAR ENDED JUNE 30, 1994:
REVENUES
REVENUES. Revenues for fiscal 1995 were a record $524,253,000,
representing an increase of $70,692,000, or 15.6 percent, over fiscal 1994.
This increase was attributable to net salon openings, acquisitions, and
increases in same-store sales. Domestic salons accounted for $64,086,000 of
the total revenue increase. The balance of the overall revenue increase of
$6,606,000 related to the Company's International salons.
For fiscal 1995, revenues from Regis Hairstylists were $257,161,000, an
increase of 3.6 percent; revenues from Supercuts salons were $102,065,000, an
increase of 33.3 percent; revenues from MasterCuts salons were $70,510,000,
an increase of 18.6 percent; Trade Secret company-owned revenues were
$46,476,000, an increase of 51.8 percent; and International salon revenues
were $43,463,000, an increase of 17.9 percent.
A total of 58,500,000 customers were served in fiscal 1995, an increase
of 10.4 percent, from 53,000,000 customers served in fiscal 1994.
SERVICE REVENUES. Service revenues in fiscal 1995 were $378,943,000, an
increase of $42,602,000, or 12.7 percent, over fiscal 1994. This increase
was primarily due to net salon openings and increases in customers served.
PRODUCT REVENUES. Product revenues in fiscal 1995 were $120,381,000, an
increase of $25,640,000, or 27.1 percent, over fiscal 1994. The Trade Secret
retail product salon operations represented $14,555,000 of this overall
increase, reflecting the full year impact of the Trade Secret acquisition,
additional acquisitions in the current year and net salon openings.
Product revenues for the Company's Regis Hairstylists, Supercuts and
MasterCuts salons were $70,947,000, and represented 17.3 percent of their
fiscal 1995 revenues, up from 16.9 percent in fiscal 1994, reflecting
increased customer awareness and further acceptance of national brand salon
merchandise and sales training of Company associates.
COST OF SALES
Cost of sales in fiscal 1995 was $289,879,000, compared to $251,702,000
in fiscal 1994. The resulting combined gross margin for fiscal 1995 improved
to 41.9 percent, compared to 41.6 percent in fiscal 1994. This improvement is
due to several factors, the most significant of which is an increase in the
percentage of product revenues in Regis Hairstylists and MasterCuts, which
generally have a higher gross profit margin than service revenues. Salary
and commissions paid to hairstylists, the major component of cost of sales,
also favorably improved in fiscal 1995 due to the increase in sales from
MasterCuts salons which have lower payroll costs than Regis Hairstylists
salons.
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