Regis Corporation (NYSE:RGS), the global leader in the $160 billion haircare industry, today reported a fourth quarter net loss of $1.11 per share. These results include non-operational after-tax items of $89.2 million, primarily related to goodwill impairment in the Company’s Regis salon division and the write-down of the equity investment in Empire Education. Excluding non-operational items, fourth quarter operational earnings increased to $0.40 per diluted share from $0.37 in the year-earlier quarter. Sales totaled $568.2 million versus $592.0 million in the 2011 fourth quarter.
“The gain in fourth quarter operational earnings amidst a negative sales trend reflects Regis’ ongoing commitment to controlling costs, managing our business more efficiently and a decrease in the effective income tax rate,” said Dan Hanrahan, President and Chief Executive Officer. “I have been on the job for less than three weeks and I believe there is significant opportunity to improve our performance. We are committed to improving the salon experience for our guests, hiring and retaining the best stylists, continuing our efforts to simplify our operating model and effectively leveraging our scale as North America’s largest salon company.”
Commenting on fiscal 2012, Hanrahan said, “Regis faced a number of challenges in the past year, but reported operational earnings per diluted share of $1.30, which was up 11.4% from fiscal 2011. We have lots of work ahead of us. The previously announced sale of non-core assets will allow us to focus on our core business.”
FISCAL 2012 CONSOLIDATED FINANCIAL HIGHLIGHTSConsolidated Highlights
- Sales of $2,273.8 million, down 2.2% from $2,325.9 million in fiscal 2011.
- Same-store sales declined 3.1% versus a decline of 1.7% in fiscal 2011.
- Same-store transaction counts for our salon businesses declined 3.0% in fiscal 2012.
- Gross margin decreased 10 basis points to 44.7% of sales from 44.8% in fiscal 2011.
- Operational operating margins remained flat with fiscal year 2011 at 5.0% of sales.
- Operational net income of $80.5 million increased 13.0%, from $71.2 million in fiscal 2011.
- Operational diluted earnings per share of $1.30 increased 11.4%, from $1.16 in fiscal 2011.
- Operational EBITDA of $220.4 million decreased 2.8%, from $226.6 million in fiscal 2011.
- Net store base decreased by 54 units in fiscal 2012 for a total store count of 12,647 at June 30, 2012.
- The reported income tax rate was 5.8%, which includes the impact of the non-operational charges. The operational income tax rate was 28.6%.
- Total cash at June 30, 2012 grew to $111.9 million, an increase of $15.7 million since June 30, 2011.
- Total debt at June 30, 2012 decreased to $287.7 million, a decline of $25.7 million since June 30, 2011.
- Sales of $568.2 million, down 4.0% from $592.0 million in the fourth quarter of fiscal 2011.
- Same-store sales declined 3.0% versus a decline of 1.7% in the fourth quarter of fiscal 2011.
- Same-store transaction counts for our salon businesses declined 4.0% in the fourth quarter of fiscal 2012.
- Gross margin decreased 40 basis points to 44.6% of sales from 45.0% in the fourth quarter of fiscal 2011.
- Operational operating margins remained flat with the fourth quarter of fiscal 2011 at 5.7% sales.
- Operational net income of $25.6 million increased 11.8%, from $22.9 million in the fourth quarter of fiscal 2011.
- Operational diluted earnings per share of $0.40 increased 10.4%, from $0.37 in the fourth quarter of fiscal 2011.
- Operational EBITDA of $59.1 million decreased 4.1%, from $61.7 million in the fourth quarter of fiscal 2011.
- Net store base decreased by 15 units in the fourth quarter for a total store count of 12,647 at June 30, 2012.
- The reported income tax rate was 21.2%, which includes the impact of the non-operational charges. The operational income tax rate was 19.5%.
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