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PROSPECTUS SUPPLEMENT
DATED JUNE 24, 1997
TO PROSPECTUS DATED JUNE 4, 1997
500,000 SHARES
[LOGO]
COMMON STOCK
All of the 500,000 shares of Common Stock offered hereby are being sold by Regis
Corporation (the "Company").
The Common Stock of the Company is quoted on the Nasdaq National Market under
the symbol "RGIS." On June 23, 1997, the closing sale price of the Common Stock
as reported by the Nasdaq National Market was $23.50
See "Risk Factors" on page 2 of this Prospectus Supplement for a discussion of
certain factors that should be considered by prospective investors.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION, NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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<CAPTION>
Price to Underwriting Proceeds to
Public Discount(1) Company(2)
<S> <C> <C> <C>
Per Share.......................................... $23.00 $0.75 $22.25
Total.............................................. $11,500,000 $375,000 $11,125,000
</TABLE>
(1) The Company has agreed to indemnify the Underwriter against certain
liabilities, including liabilities under the Securities Act of 1933, as
amended (the "Securities Act"). See "Underwriting."
(2) Before deducting expenses payable by the Company estimated at $33,000.
The shares of Common Stock are offered by the Underwriter subject to prior sale
when, as, and if delivered to and accepted by the Underwriter and subject to its
right to reject orders in whole or in part. It is expected that delivery of the
certificates representing shares of Common Stock will be made at the offices of
Piper Jaffray Inc. in Minneapolis, Minnesota on or about June 27, 1997.
PIPER JAFFRAY INC.
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CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS THAT
STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK, INCLUDING
PURCHASES OF THE COMMON STOCK TO STABILIZE ITS MARKET PRICE AND PURCHASES OF THE
COMMON STOCK TO COVER ANY SHORT POSITION IN THE COMMON STOCK MAINTAINED BY THE
UNDERWRITERS. FOR A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING".
RISK FACTORS
CHALLENGES OF GROWTH
The Company has undergone, and intends to continue, a period of significant
growth. The Company intends to achieve this growth by constructing new salons,
acquiring existing salon chains and increasing same-store sales. In October
1996, the Company received shareholder approval for the merger agreement with
Supercuts, Inc., a national operator of approximately 420 company-owned and
franchisor of approximately 750 hair care salons at the acquisition date. This
growth has resulted in, and is expected to continue to create, new and increased
responsibilities for management personnel, as well as added pressures on the
Company's operating and financial systems. The Company's ability to manage
future growth effectively and accomplish its overall goals will depend on its
ability to integrate new employees and systems into its overall operations and
to continue to improve its operational, financial and management systems and
controls. If the Company is unable to manage growth effectively, the Company's
business and results of operations could be materially and adversely affected.
LEVERAGE; TANGIBLE NET WORTH
Following the completion of this offering (this "Offering"), the Company
will continue to have indebtedness and limited tangible net worth. As of March
31, 1997, the Company had total debt of $123 million, of which $20.1 million was
short-term and $102.9 million was long-term.
As of March 31, 1997, the Company had total shareholder's equity of $127.1
million and tangible net worth of $28.2 million, as a result of a remaining
unamortized goodwill balance of $98.9 million recorded in connection with the
October 1988 going-private transaction and certain acquisitions.
CONTROL OF THE COMPANY
Upon completion of this Offering, Curtis Squire, Inc., a holding company
controlled by Myron Kunin, the Chairman of the Board of the Company, will own
approximately 25% of the outstanding Common Stock and will effectively remain in
a position to elect the Company's Board of Directors and control the Company.
SHARES ELIGIBLE FOR FUTURE SALE
Future sales of substantial amounts of Common Stock in the public market
could adversely affect the market price of the Common Stock. Upon completion of
this Offering, the Company will have 23,317,724 outstanding shares of Common
Stock. Of these shares, 17,113,532 shares, including the 500,000 shares sold in
this Offering, will be freely tradable without restriction under the Securities
Act. The remaining 6,204,192 shares of Common Stock are "restricted securities"
within the meaning of Rule 144 under the Securities Act and are eligible for
sale, subject to the volume and other resale restrictions imposed by Rule 144.
In general, under Rule 144 as currently in effect, any person (or persons
whose shares are aggregated) who has beneficially owned restricted securities
for at least one year is entitled to sell, within any three-month period, a
number of shares that does not exceed the greater of (i) 1% of the then
outstanding shares of the Common Stock (233,177 shares immediately after
completion of this Offering) or (ii) the average
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weekly trading volume during the four calendar weeks immediately preceding the
date on which notice of the sale is filed with the Commission. Sales pursuant to
Rule 144 are also subject to certain requirements relating to manner of sale,
notice and availability of current public information about the Company. A
person who is not deemed to have been an affiliate of the Company at any time
during the 90 days immediately preceding the sale and whose restricted
securities have been fully paid for two years since the later of the date they
were acquired from the Company or the date they were acquired from an affiliate
of the Company may sell such restricted securities under Rule 144(k) without
regard to the restrictions described above.
COMPETITION
The hair care industry is highly competitive, with limited barriers to
entry. In every locality in which the Company has a salon, there are competitors
offering similar services and products. In many cases, the Company faces one or
more competitors within the malls in which it operates, including companies
operating sales as departments within department stores, other salon chains,
independently owned salons and salons operating under franchises from
franchising companies that provide assistance in training, marketing and
advertising. In addition, in order to obtain space in high-profile mall
locations, the Company must be competitive as to rent and other customary tenant
obligations.
RECENT DEVELOPMENTS
On June 19, 1997, the Company reached a complete settlement with David E.
Lipson and certain entities controlled by or associated with Mr. Lipson,
including DEL Investments Corporation (formerly DEL Holding Corporation)(the
"Lipson Parties"), of all lawsuits pending between the Lipson Parties and the
Company's wholly owned subsidiary Supercuts, Inc. Under the settlement
agreement, the Lipson Parties and Supercuts, Inc. released each other from all
claims any party may have against the other, all pending litigation between the
parties will be dismissed and the Company has paid the Lipson Parties an
aggregate of $6.7 million. Because the Company has previously established a
reserve for costs associated with this litigation, the settlement will not have
a material effect upon the Company's net income for the quarter or year ending
June 30, 1997.
USE OF PROCEEDS
The Company intends to use $6.7 million of the proceeds from this Offering
to fund the settlement with David E. Lipson and the Lipson Parties. See "Recent
Developments". The balance of the proceeds will be used by the Company for
general working capital purposes.
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UNDERWRITING
Piper Jaffray Inc. (the "Underwriter"), has agreed, subject to the terms and
conditions of the Purchase Agreement, to purchase from the Company 500,000
shares of Common Stock. The Underwriter is committed to purchase and pay for all
such shares if any are purchased (excluding shares covered by the over-allotment
option granted therein).
The Underwriter has advised the Company that it proposes to offer the Common
Stock directly to the public initially at the public offering price set forth on
the cover page of this Prospectus Supplement. After the public offering, the
public offering price and other selling terms may be changed by the Underwriter.
In connection with this Offering, the Underwriter and its affiliates may
engage in transactions that stabilize, maintain or otherwise affect the market
price of the Common Stock. Such transactions may include stabilization
transactions effected in accordance with Rule 104 of Regulation M under the
Securities Exchange Act of 1934, as amended, pursuant to which such persons may
bid for or purchase Common Stock for the purpose of stabilizing its market
price. The Underwriter also may create a short position for the account of the
Underwriter by selling more Common Stock in connection with the Offering that it
is committed to purchase from the Company, and in such case may purchase Common
Stock in the open market following completion of the Offering to cover such
short position. Any of the transactions described in this paragraph may result
in the maintenance of the price for the Common Stock at a level above that which
might otherwise prevail in the open market. None of the transactions described
in this paragraph is required, and, if they are undertaken, they may be
discontinued at any time.
The Company has agreed that it will not sell, offer to sell, issue,
distribute or otherwise dispose of any shares of Common Stock for a period of 30
days after commencement of this Offering without the prior written consent of
the Underwriter.
LEGAL MATTERS
The validity of the shares of Common Stock being offered hereby is being
passed upon for the Company by Bert M. Gross, General Counsel of the Company.
Certain legal matters relating to this Offering will be passed upon for the
Underwriter by Faegre & Benson LLP, Minneapolis, Minnesota.
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No dealer, salesperson or any other person has been authorized to give any
information or to make representations not contained or incorporated by
reference in this Prospectus Supplement and the accompanying Prospectus, and, if
given or made, such information or representations must not be relied upon as
having been authorized by the Company or the Underwriter. This Prospectus
Supplement and the accompanying Prospectus do not constitute an offer to sell or
a solicitation of an offer to buy any of the securities offered hereby by anyone
in any jurisdiction in which such offer or solicitation is not authorized or in
which the person making such offer or solicitation is not qualified to do so or
to any person to whom it is unlawful to make such an offer or solicitation.
Neither the delivery of this Prospectus Supplement or the accompanying
Prospectus nor any sale made hereunder or thereunder shall under any
circumstances create any implication that the affairs of the Company since the
date hereof or thereof or the information contained herein or therein is correct
as of any time subsequent to the date of this Prospectus Supplement or the
accompanying Prospectus.
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TABLE OF CONTENTS
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Page
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<S> <C>
Prospectus Supplement
Risk Factors.............................................................. 2
Recent Developments....................................................... 3
Use of Proceeds........................................................... 3
Underwriting.............................................................. 4
Legal Matters............................................................. 4
Prospectus
The Company............................................................... 2
Available Information..................................................... 2
Incorporation of Certain Information by Reference......................... 2
Use of Proceeds........................................................... 3
Plan of Distribution...................................................... 3
Legal Opinions............................................................ 4
Experts................................................................... 4
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500,000 SHARES
REGIS CORPORATION
COMMON STOCK
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P R O S P E C T U S
S U P P L E M E N T
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PIPER JAFFRAY INC.
June 24, 1997
