Regis Corporation (NASDAQ: RGS) lifts earnings and cash flow on Alline deal
Filing Impact
Filing Sentiment
Form Type
10-Q
Regis Corporation reported higher profitability for the nine months ended March 31, 2026, driven by its Alline acquisition and stronger salon performance. Total revenue rose to $168.5 million from $149.7 million, while operating income increased to $17.8 million from $12.7 million. Income from continuing operations improved to $2.5 million versus a $1.4 million loss a year earlier, with diluted EPS from continuing operations of $0.89 compared to $(0.58).
System-wide revenue edged down to $796.6 million from $826.4 million, but total system-wide same-store sales turned positive at 1.1% versus a 1.3% decline. Company-owned salon revenue jumped to $58.5 million from $23.2 million, reflecting the Alline acquisition, and company-owned same-store sales grew 5.1%. Franchise revenue declined mainly because franchisees are signing their own leases and because of net salon closures.
Regis generated $8.9 million of operating cash flow, ending the period with $22.9 million in cash and cash equivalents and total cash, cash equivalents, and restricted cash of $40.9 million. Debt under the 2024 Credit Agreement totaled a $116.4 million term loan plus $1.0 million on the revolver, with a debt-to-capitalization ratio of 40.2%. The company recorded a $1.0 million gain by writing down the Alline earn-out liability to zero and maintained compliance with all debt covenants, with available liquidity of $31.9 million.
Positive
- None.
Negative
- None.
Insights
Regis shows improved profitability and cash generation, but growth relies heavily on acquisitions and leverage.
Regis lifted revenue to $168.5M and operating income to $17.8M, helped by the Alline acquisition and better company-owned salon performance. Same-store sales turned positive at 1.1%, signaling healthier underlying demand versus the prior-year decline.
However, franchise revenue fell as salons closed and franchisees took on their own leases, reducing pass-through rental income. Debt remains sizeable with a $116.4M term loan and a 40.2% debt-to-capitalization ratio as of March 31, 2026. Liquidity of $31.9M after the minimum covenant offers a buffer but limits flexibility.
The $1.0M gain from reducing the Alline earn-out liability and a 40.0% effective tax rate, influenced by prior valuation allowance changes and new tax legislation, add complexity to earnings quality. Subsequent filings may clarify how sustainable company-owned margin improvements are as integration of Alline matures.
Key Figures
Total revenue: $168.5M
Operating income: $17.8M
Income from continuing operations: $2.5M
+5 more
8 metrics
Total revenue
$168.5M
Nine months ended March 31, 2026; up from $149.7M in 2025
Operating income
$17.8M
Nine months ended March 31, 2026; up from $12.7M in 2025
Income from continuing operations
$2.5M
Nine months ended March 31, 2026; versus $1.4M loss in 2025
System-wide revenue
$796.6M
Nine months ended March 31, 2026; slightly below $826.4M in 2025
Total system-wide same-store sales
1.1%
Nine months ended March 31, 2026; versus (1.3%) in 2025
Cash, cash equivalents and restricted cash
$40.96M
As of March 31, 2026; up from $35.21M at June 30, 2025
Term loan balance
$116.4M
Principal outstanding as of March 31, 2026, under 2024 Credit Agreement
Debt-to-capitalization ratio
40.2%
Calculated at March 31, 2026, excluding lease liabilities
Key Terms
system-wide same-store sales, Tax Benefits Preservation Plan, paid-in-kind interest, earn-out liability, +2 more
6 terms
system-wide same-store sales financial
"Total system-wide same-store sales (1) | 2.6 % | (1.1) % | 1.1 % | (1.3) %"
Tax Benefits Preservation Plan regulatory
"The Company adopted a Tax Benefits Preservation Plan (the Plan) intended to help protect the availability of certain tax attributes"
A tax benefits preservation plan is a company’s set of policies and actions designed to protect valuable tax attributes—like net operating losses, credits, or favorable tax statuses—when the business changes ownership, reorganizes, or conducts large transactions. Investors care because preserving these tax benefits can reduce future tax bills and improve cash flow, much like keeping a valuable coupon valid so future purchases cost less, which can affect earnings and valuation.
paid-in-kind interest financial
"Paid-in-kind interest | 9,671 | 5,376"
Paid-in-kind interest is interest on a loan or bond that is paid by issuing more debt or additional securities instead of cash, so the borrower adds the unpaid interest to the principal balance. For investors, it matters because it preserves the borrower’s cash now but increases the total debt or dilutes ownership later—like taking a ballooning credit card balance instead of paying the bill—and can raise risk of higher leverage and reduced cash returns.
earn-out liability financial
"The Company recognized a gain on earn-out liability of $1.0 million in a prior quarter"
A promise made during an acquisition to pay extra money later if the bought business hits agreed targets; the buyer records this promise as a potential debt on its books. Think of it like agreeing to pay a bonus after the seller’s product reaches certain sales—investors watch it because it can change a company’s future cash needs, reported liabilities and the true cost of a deal, altering valuation and downside risk.
right of use asset technical
"Right of use asset (Note 8) | 188,206 | 229,861"
A right-of-use asset is an accounting entry that represents a company’s control of a leased item — such as a building, vehicle or equipment — recorded on the balance sheet even though the company doesn’t legally own it. It matters to investors because recognizing these assets (and the matching lease liabilities) changes reported size, leverage and profitability metrics and alters how lease payments show up in cash flow, so companies appear more or less indebted and efficient on paper; think of it like listing the rented car you use every day in your household inventory, which changes how your finances look to others.
franchise adjusted EBITDA financial
"Franchise adjusted EBITDA | $ | 6.2 | $ | 6.3 |"
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended | |||||
| OR | |||||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
| For the transition period from to | |||||
Commission file number 1-12725
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
( | ||||||||||||||
| (Registrant's telephone number, including area code) | ||||||||||||||
| (Former name, former address and former fiscal year, if changed since last report) | ||||||||||||||
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||||||||
| Title of each class | Trading symbol | Name of exchange on which registered | ||||||||||||
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 ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to be submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||||||||
| ☒ | Smaller reporting company | |||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act): Yes ☐ No ☒
Indicate the number of shares outstanding of each of the issuer's classes of common stock as of May 6, 2026: 2,498,778
REGIS CORPORATION
INDEX
Part I. | Financial Information | ||||||||||
Item 1. | Financial Statements (Unaudited): | ||||||||||
Condensed Consolidated Balance Sheets as of March 31, 2026, and June 30, 2025 | 3 | ||||||||||
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended March 31, 2026, and 2025 | 4 | ||||||||||
Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended March 31, 2026, and 2025 | 5 | ||||||||||
Condensed Consolidated Statements of Shareholders' Equity for the Three and Nine Months Ended March 31, 2026, and 2025 | 6 | ||||||||||
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended March 31, 2026, and 2025 | 7 | ||||||||||
Notes to Condensed Consolidated Financial Statements | 8 | ||||||||||
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 25 | |||||||||
Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 36 | |||||||||
Item 4. | Controls and Procedures | 36 | |||||||||
Part II. | Other Information | 37 | |||||||||
Item 1. | Legal Proceedings | 37 | |||||||||
Item 1A. | Risk Factors | 37 | |||||||||
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 38 | |||||||||
Item 5. | Other Information | 38 | |||||||||
Item 6. | Exhibits | 39 | |||||||||
Signatures | 40 | ||||||||||
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
REGIS CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
As of March 31, 2026, and June 30, 2025
(Dollars in thousands, except per share data)
| March 31, 2026 | June 30, 2025 | |||||||||||||
| ASSETS | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents (Note 7) | $ | $ | ||||||||||||
| Receivables, net | ||||||||||||||
| Inventory | ||||||||||||||
| Other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Property and equipment, net | ||||||||||||||
Goodwill (Note 1) | ||||||||||||||
| Other intangibles, net | ||||||||||||||
Right of use asset (Note 8) | ||||||||||||||
| Deferred tax asset (Note 5) | ||||||||||||||
| Other assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Accrued expenses | ||||||||||||||
Long-term debt, current portion (Note 9) | ||||||||||||||
Short-term lease liability (Note 8) | ||||||||||||||
| Total current liabilities | ||||||||||||||
Long-term debt, net (Note 9) | ||||||||||||||
Long-term lease liability (Note 8) | ||||||||||||||
| Other non-current liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
| Shareholders' equity: | ||||||||||||||
Common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated other comprehensive income | ||||||||||||||
| Retained earnings | ||||||||||||||
| Total shareholders' equity | ||||||||||||||
| Total liabilities and shareholders' equity | $ | $ | ||||||||||||
_______________________________________________________________________________
The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements.
3
REGIS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three and Nine Months Ended March 31, 2026, and 2025
(Dollars and shares in thousands, except per share amounts)
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Revenues: | ||||||||||||||||||||||||||
| Royalties | $ | $ | $ | $ | ||||||||||||||||||||||
| Fees | ||||||||||||||||||||||||||
| Advertising fund contributions | ||||||||||||||||||||||||||
Franchise rental income (Note 8) | ||||||||||||||||||||||||||
| Company-owned salon revenue | ||||||||||||||||||||||||||
| Total revenue | ||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||
| General and administrative | ||||||||||||||||||||||||||
Rent (Note 8) | ||||||||||||||||||||||||||
| Advertising fund expense | ||||||||||||||||||||||||||
| Franchise rent expense | ||||||||||||||||||||||||||
| Company-owned salon expense (1) | ||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
| Long-lived asset impairment | ||||||||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
| Other (expense) income: | ||||||||||||||||||||||||||
| Interest expense | ( | ( | ( | ( | ||||||||||||||||||||||
| Gain on earn-out liability | ||||||||||||||||||||||||||
| Other, net | ||||||||||||||||||||||||||
| Income (loss) from operations before income taxes | ( | |||||||||||||||||||||||||
| Income tax (expense) benefit | ( | ( | ||||||||||||||||||||||||
| Income (loss) from continuing operations | ( | |||||||||||||||||||||||||
| Income from discontinued operations (Note 3) | ||||||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
| Net income per share: | ||||||||||||||||||||||||||
| Basic: | ||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | $ | $ | $ | ( | |||||||||||||||||||||
| Income from discontinued operations | ||||||||||||||||||||||||||
| Net income per share (2) | $ | $ | $ | $ | ||||||||||||||||||||||
| Diluted: | ||||||||||||||||||||||||||
| Income (loss) from continuing operations | $ | $ | $ | $ | ( | |||||||||||||||||||||
| Income from discontinued operations | ||||||||||||||||||||||||||
| Net income per share, diluted (2) | $ | $ | $ | $ | ||||||||||||||||||||||
| Weighted average common and common equivalent shares outstanding: | ||||||||||||||||||||||||||
| Basic | ||||||||||||||||||||||||||
| Diluted | ||||||||||||||||||||||||||
_______________________________________________________________________________
(1)Includes cost of services and products sold to guests in our company-owned salons. Excludes general and administrative expense, rent, and depreciation and amortization related to company-owned salons .
(2)Total is a recalculation; line items calculated individually may not sum to total due to rounding.
The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements.
4
REGIS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited)
For the Three and Nine Months Ended March 31, 2026, and 2025
(Dollars in thousands)
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Net income | $ | $ | $ | $ | ||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ( | ( | |||||||||||||||||||||||
| Comprehensive income | $ | $ | $ | $ | ||||||||||||||||||||||
_______________________________________________________________________________
The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements.
5
REGIS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (Unaudited)
For the Three and Nine Months Ended March 31, 2026, and 2025
(Dollars in thousands)
| Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total | ||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Foreign currency translation | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total | ||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2024 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Foreign currency translation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Stock warrants issued in connection with debt | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Nine Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total | ||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2025 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Foreign currency translation | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | ||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Net restricted stock activity | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Common stock issued in connection with warrant exercise | — | — | ||||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| Nine Months Ended March 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Common Stock | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Total | ||||||||||||||||||||||||||||||||||
| Shares | Amount | |||||||||||||||||||||||||||||||||||||
| Balance, June 30, 2024 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Foreign currency translation | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Net restricted stock activity | ( | — | — | ( | ||||||||||||||||||||||||||||||||||
| Common stock issued in connection with Alline acquisition (Note 13) | — | — | ||||||||||||||||||||||||||||||||||||
| Stock warrants issued in connection with debt | — | — | — | — | ||||||||||||||||||||||||||||||||||
| Balance, March 31, 2025 | $ | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||||
_______________________________________________________________________________
The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements.
6
REGIS CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
For the Nine Months Ended March 31, 2026, and 2025
(Dollars in thousands)
| Nine Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Cash flows provided by (used in) operating activities: | ||||||||||||||
| Net income | $ | $ | ||||||||||||
| Adjustments to reconcile net income to cash provided by operating activities: | ||||||||||||||
| Gain from sale of OSP (Note 3) | ( | |||||||||||||
| Depreciation and amortization | ||||||||||||||
| Deferred income taxes | ( | |||||||||||||
| Non-cash interest | ||||||||||||||
| Gain on earn-out liability | ( | |||||||||||||
| Long-lived asset impairment | ||||||||||||||
| Stock-based compensation | ||||||||||||||
| Amortization of debt discount and financing costs | ||||||||||||||
| Other non-cash items affecting earnings | ||||||||||||||
| Ad fund | ( | |||||||||||||
| Changes in operating assets and liabilities (1) | ( | ( | ||||||||||||
| Net cash provided by operating activities | ||||||||||||||
| Cash flows (used in) provided by investing activities: | ||||||||||||||
| Capital expenditures | ( | ( | ||||||||||||
| Asset acquisitions, net of cash acquired and certain obligations assumed | ( | |||||||||||||
| Proceeds from sale of OSP, net of fees | ||||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows (used in) provided by financing activities: | ||||||||||||||
| Borrowings on revolving credit facility | ||||||||||||||
| Repayments of revolving credit facility | ( | |||||||||||||
| Repayments of long-term debt | ( | ( | ||||||||||||
| Debt refinancing fees | ( | ( | ||||||||||||
| Proceeds from issuance of common stock in connection with warrant exercise | ||||||||||||||
| Proceeds from issuance of common stock for options exercised | ||||||||||||||
| Proceeds from issuance of long-term debt | ||||||||||||||
| Taxes paid for shares withheld | ( | ( | ||||||||||||
| Net cash (used in) provided by financing activities | ( | |||||||||||||
| Effect of exchange rate changes on cash and cash equivalents | ( | ( | ||||||||||||
| Increase in cash, cash equivalents, and restricted cash | ||||||||||||||
| Cash, cash equivalents, and restricted cash: | ||||||||||||||
| Beginning of period | ||||||||||||||
| End of period | $ | $ | ||||||||||||
| Supplemental non-cash disclosure | ||||||||||||||
| Stock issued in connection with Alline Acquisition | $ | $ | ||||||||||||
_______________________________________________________________________________
(1)Changes in operating assets and liabilities exclude ad fund and assets and liabilities sold or acquired.
The accompanying notes are an integral part of the unaudited Condensed Consolidated Financial Statements.
7
REGIS CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION OF UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The unaudited Condensed Consolidated Financial Statements of Regis Corporation (the Company) as of March 31, 2026, and for the three and nine months ended March 31, 2026, and 2025, reflect, in the opinion of management, all adjustments necessary to fairly state the consolidated financial position of the Company as of March 31, 2026, and its consolidated results of operations, comprehensive income, shareholders' equity and cash flows for the interim periods. Adjustments consist only of normal recurring items, except for any discussed in the notes below. The results of operations and cash flows for any interim period are not necessarily indicative of results of operations and cash flows for the full year.
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (SEC). Accordingly, they do not include all disclosures required by accounting principles generally accepted in the United States of America (GAAP). The unaudited Condensed Consolidated Financial Statements should be read in conjunction with the Company's Annual Report on Form 10-K for the year ended June 30, 2025, and other documents filed or furnished to the SEC during the current fiscal year.
Alline Salon Group Acquisition:
On December 19, 2024, the Company completed the transaction to acquire 100 percent ownership of Super C Group, LLC, doing business as Alline Salon Group (Alline). Refer to Note 13 to the unaudited Condensed Consolidated Financial Statements for additional information regarding the acquisition. The Company’s financial results for the three and nine months ended March 31, 2026, and 2025, include the results of Alline subsequent to the acquisition date, December 19, 2024.
Acquisition-related costs of $0.2 million and $1.4 million were incurred during the three and nine months ended March 31, 2025, respectively, and primarily represent third-party consulting and legal expenses associated with the acquisition of Alline completed on December 19, 2024. These costs were recorded within general and administrative expenses on the March 31, 2025, unaudited Condensed Consolidated Statement of Operations.
Goodwill:
As further described in Note 13 of these unaudited Condensed Consolidated Financial Statements, the acquisition of Alline resulted in recognition of approximately $10.3 million in goodwill, which was assigned to the company-owned operating segment.
As of March 31, 2026, and June 30, 2025, the franchise reporting unit had goodwill of $172.8 million and $173.1 million, respectively, and the company-owned reporting unit had goodwill of $10.3
Guarantees:
The Company, as a guarantor, is required to recognize, at inception of the guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. See Note 8 for further discussion of such obligations guaranteed.
8
Recently Issued Accounting Standards Not Yet Adopted:
In December 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The ASU includes amendments requiring enhanced income tax disclosures, primarily related to standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. The ASU is effective for annual reporting periods beginning after December 15, 2024, and shall be applied prospectively. The Company is currently evaluating the impact this new guidance will have on its annual disclosures for the current fiscal year.
In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-04) Disaggregation of Income Statement of Expenses," which requires additional disclosure of the nature of expenses included in the income statement in response to requests from investors for more information about an entity’s expenses. The new standard requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027. The requirements will be applied prospectively with the option for retrospective application. Early adoption is permitted. The Company is currently evaluating the impact this new guidance will have on its financial statements and disclosures.
In July 2025, the FASB issued ASU 2025-05, "Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets." The ASU includes amendments which provide entities with a practical expedient to assume that current conditions as of the balance sheet date will remain unchanged for the remaining life of the assets, effectively simplifying credit loss estimations for certain situations. The guidance is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within fiscal years beginning after that date. The Company does not believe the guidance will have a material impact on its financial statements and disclosures.
9
2. REVENUE RECOGNITION:
Revenue Recognition and Deferred Revenue:
Revenue recognized over time
Royalty and advertising fund revenues represent sales-based royalties that are recognized in the period in which the sales occur. Generally, royalty and advertising fund revenues are billed and collected monthly in arrears. Advertising fund revenues and expenditures, which must be spent on marketing and related activities per the franchise agreements, are recorded on a gross basis within the Condensed Consolidated Statements of Operations. The treatment increases both the gross amount of reported revenue and expense and generally has no impact on operating income and net income. Franchise fees are billed and received upon the signing of the franchise agreement. Recognition of these fees is deferred until the salon opens and typically recognized over 10 years , but is evaluated for immediate revenue recognition when a salon is acquired by Regis or closed. Franchise rental income is a result of the Company signing leases on behalf of franchisees and entering into sublease arrangements with the franchisees. The Company recognizes franchise rental income and expense when it is due to the landlord.
Revenue recognized at point of sale
Information about receivables, broker fees, and deferred revenue subject to the revenue recognition guidance is as follows:
| March 31, 2026 | June 30, 2025 | Balance Sheet Classification | ||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||
| Receivables from contracts with customers, net | $ | $ | Receivables, net | |||||||||||||||||
| Broker fees | Other assets | |||||||||||||||||||
| Deferred revenue: | ||||||||||||||||||||
| Current | ||||||||||||||||||||
| Gift card liability | $ | $ | Accrued expenses | |||||||||||||||||
| Deferred franchise fees open salons | Accrued expenses | |||||||||||||||||||
| Total current deferred revenue | $ | $ | ||||||||||||||||||
| Non-current | ||||||||||||||||||||
| Deferred franchise fees unopened salons | $ | $ | Other non-current liabilities | |||||||||||||||||
| Deferred franchise fees open salons | Other non-current liabilities | |||||||||||||||||||
| Total non-current deferred revenue | $ | $ | ||||||||||||||||||
10
Receivables relate primarily to payments due for royalties, advertising fees, rent, and sales of salon services and product paid by credit card. The receivables balance is presented net of an allowance for expected credit losses (i.e., doubtful accounts), related to receivables from franchisees. Management estimates the allowance based on the age of the receivable and creditworthiness of the franchisee. The following table is a rollforward of the allowance for credit losses for the periods indicated:
| Nine Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (Dollars in thousands) | ||||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||
| Provision for doubtful accounts (1) | ||||||||||||||
| Provision for franchisee rent (2) | ||||||||||||||
| Recoveries | ( | ( | ||||||||||||
| Other | ( | |||||||||||||
| Write-offs | ( | ( | ||||||||||||
| Balance at end of period | $ | $ | ||||||||||||
________________________________________________________________________________________
(1)The provision for doubtful accounts is recognized as general and administrative expense in the Condensed Consolidated Statements of Operations.
(2)The provision for franchisee rent is recognized as rent in the Condensed Consolidated Statements of Operations.
Broker fees are the costs associated with using external brokers to identify new franchisees. These fees are paid upon the signing of the franchise agreement, capitalized, and expensed over the term of the franchise agreement as general and administrative expense in the Condensed Consolidated Statements of Operations. The following table is a rollforward of the broker fee balance for the periods indicated:
| Nine Months Ended March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| (Dollars in thousands) | ||||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||
| Amortization | ( | ( | ||||||||||||
| Write-offs (1) | ( | |||||||||||||
| Balance at end of period | $ | $ | ||||||||||||
________________________________________________________________________________________
(1)Broker fees of $0.9 million were written off in connection with the Alline acquisition for the nine months ended March 31, 2025.
Deferred revenue includes the gift card liability and deferred franchise fees for unopened salons and open salons. Deferred franchise fees related to open salons are generally recognized on a straight-line basis over the term of the franchise agreement but is evaluated for immediate revenue recognition when a salon is acquired by Regis or closed. Franchise fee revenue for the three months ended March 31, 2026, and 2025, was $1.0 million and $1.8 million, respectively, and for the nine months ended March 31, 2026, and 2025, was $3.0 million and $5.5 million, respectively. Estimated revenue expected to be recognized in the future related to deferred franchise fees for open salons as of March 31, 2026, is as follows (dollars in thousands):
| Remainder of 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
11
3. DISCONTINUED OPERATIONS:
On June 30, 2022, the Company sold its Opensalon® Pro (OSP) software-as-a-service solution to Soham, Inc. As a result of the sale, the Company classified the OSP business as discontinued operations in the financial statements for all periods presented. The Company received no zero dollars and $8.5 million, respectively, of proceeds related to the number of salons migrating to Soham's Zenoti product. Income taxes have been allocated to continuing and discontinued operations based on the methodology required by accounting for income taxes guidance. There was no tax impact recorded for the three and nine months ended March 31, 2025, due to a valuation allowance. Cash provided by (used in) investing activities for the nine months ended March 31, 2025, includes $8.5 million of cash from discontinued operations.
12
4. SHAREHOLDERS' EQUITY:
Authorized Shares and Designation of Preferred Class:
The Company has 5.0 million shares of capital stock authorized, par value $0.05 , of which all outstanding shares, and shares available under the Stock Option Plans, have been designated as common stock.
Stock-Based Employee Compensation:
During the three and nine months ended March 31, 2026, and 2025, the Company granted restricted stock units as follows:
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Restricted stock units (RSUs) | ||||||||||||||||||||||||||
The RSUs granted during the three and nine months ended March 31, 2026, and 2025, vest after one year or in equal amounts over a three-year
Total compensation cost for stock-based payment arrangements totaling $(0.2 ) million and $0.4 million, and $0.7 million and $2.0 million for the three and nine months ended March 31, 2026, and 2025, respectively, was recorded within general and administrative on the Condensed Consolidated Statements of Operations.
Stock Warrants Issued in Connection with Long-Term Debt:
In connection with the 2024 Credit Agreement (as defined in Note 9 to the unaudited Condensed Consolidated Financial Statements), the Company issued detachable warrants to affiliates of TCW Asset Management Company, LLC, and Asilia Investments. Pursuant to the warrants, the holders can purchase up to an aggregate 407,542 shares of common stock of the Company, par value $0.05 per share (Common Stock), at an exercise price equal to $7.00 per share. In December 2024, the Company amended the 2024 Credit Agreement. The Company issued additional warrants to affiliates of TCW Asset Management Company, LLC, and Asilia Investments. In connection with this amendment, the warrant holders can purchase up to an aggregate 64,372 shares of Common Stock, at an exercise price equal to $23.86 per share. The warrants are exercisable for a seven-year period beginning June 24, 2024, and December 19, 2024, respectively. The warrants may also be exercised on a cashless basis if, at the time of exercise, there is no effective registration statement registering, or the prospectus therein is not available for, the issuance of the shares of Common Stock underlying the warrants.
In addition, in connection with the issuance of the warrants, the Company granted an exemption in favor of each holder pursuant to Section 36 of the Tax Benefits Preservation Plan, dated January 29, 2024, as the same may be amended from time to time, among the Company and Equiniti Trust Company, LLC (the Plan), such that neither holder was deemed to be an “Acquiring Person” (as defined in the Plan) solely in connection with (i) the issuance of the warrants nor (ii) the acquisition of beneficial ownership of securities of the Company pursuant to the exercise of the warrants.
The warrants and the shares of Common Stock issuable upon the exercise of such warrants have not been registered under the Securities Act of 1933, as amended (Securities Act), and may not be sold absent registration or an applicable exemption from the registration requirements of the Securities Act. Based in part upon the representations of each holder in each warrant, the offering and sale of each warrant is exempt from registration under Section 4(a)(2) of the Securities Act and/or Rule 506 of Regulation D promulgated under the Securities Act.
The combined value of these warrants was valued at $2.8 million using a relative fair value method and accounted for through additional paid-in capital upon issuance. Further, the related financing fees incurred as a result of warrant issuance are recorded through a contra-equity account and amounted to $0.2 million.
For the warrants originally issued in June 2024, prior to the second anniversary of the issue date, the Company may call for cancellation up to an aggregate 203,771 shares of Common Stock underlying the warrants for consideration equal to $15.00 per share; provided, that the volume weighted average price on the trading day immediately preceding the date the Company delivers a written call notice to a holder exceeds $20.00 . For the warrants issued in December 2024, prior to the second anniversary of the issue date, the Company may call for cancellation up to an aggregate 32,186 shares of Common Stock underlying the warrants for consideration equal to $51.13 per share; provided, that the volume weighted average price on the trading day immediately preceding the date the Company delivers a written call notice to a holder exceeds $68.17 . As of March 31, 2026, the Company has no intention of exercising either call provision. The Company will reassess this intention on a quarterly basis.
Stock Warrants Issued in Connection with Consulting Services Agreement:
13
On August 1, 2025, as part of a consulting services agreement, the Company issued two warrants to purchase Common Stock of the Company to Forum3 Inc., consisting of: (i) a warrant, exercisable through October 31, 2025, to purchase up to $490,000 in aggregate value of shares of Common Stock at an exercise price of the greater of $22 per share and the 10 -day average closing price immediately prior to any exercise (the Initial Warrant); and (ii) a warrant to purchase up to an additional 35,000 shares of Common Stock, at an exercise price of $24.20 per share (the Coverage Warrant). The Coverage Warrant is eligible to vest proportionally to the extent the Initial Warrant is exercised, and, to the extent vested, will remain exercisable until August 1, 2028. At issuance, the fair value of these warrants was determined to be $0.5 million using the Black-Scholes model as described below. The warrant is not remeasured in future periods as it meets the conditions for equity classification.
The Company valued the warrants, based on a Black-Scholes model, using the life of the warrants as the expected term, expected volatility of 177 % , a risk-free interest rate of 4.03 %, and a forfeiture rate of 38.8 % under the assumption that only $0.3 million of the Initial Warrant would be exercised.
On September 11, 2025, Forum3 Inc. exercised $300,000 of the Initial Warrant at the 10 -day average closing price of $23.87 per share for a total of 12,567 shares. The remaining $190,000 of the Initial Warrant expired on October 31, 2025.
Tax Benefits Preservation Plan:
The Company adopted a Tax Benefits Preservation Plan (the Plan) intended to help protect the availability of certain tax attributes (including net operating loss carryforwards) by deterring acquisitions of the Company’s common stock above a specified ownership threshold. In connection with the adoption of the Plan, the Company declared a dividend distribution of one preferred stock purchase right (a Right) for each outstanding share of common stock to shareholders of record as of February 9, 2024. The dividend had a de minimis value. The Rights are set forth in the Plan, dated as of January 29, 2024, as the same may be amended from time to time between the Company and Equiniti Trust Company, LLC, as Rights Agent. On January 27, 2025, the Company entered into Amendment No. 1 to the Plan, extending the expiration date of the Plan from January 29, 2025, to January 29, 2028 (the Extension). Pursuant to the terms of the Plan, the Company submitted the Extension to its shareholders for ratification at the October 28, 2025 annual shareholders meeting, and the shareholders ratified the Plan.
The material terms of the Rights include, among others: (i) the ownership threshold that generally triggers the Rights becoming exercisable (an Acquiring Person) is 4.95 % beneficial ownership, subject to customary exemptions, grandfathering, and Board discretion as set forth in the Rights Agreement; (ii) prior to the Distribution Date (as defined in the Rights Agreement), the Rights trade together with the Company’s common stock and are not exercisable; (iii) upon the Distribution Date, the Rights detach and become exercisable to purchase from the Company one one-thousandth of a share of the Company’s Series A Junior Participating Preferred Stock at an initial purchase price of $73.00 , subject to adjustment; (iv) if a person becomes an Acquiring Person, each Right (other than Rights held by the Acquiring Person, which become void) generally entitles its holder to purchase, for the exercise price, a number of shares of the Company’s common stock having a market value of two times the exercise price (a “flip-in” feature), subject to the terms and limitations in the Rights Agreement; (v) upon certain business combination transactions following the occurrence of an Acquiring Person, Rights holders may have the right to purchase common stock of the acquiring company at a discount (a “flip-over” feature), subject to the terms of the Rights Agreement; (vi) the Rights are redeemable by the Board at $0.0001 per Right prior to the time a person becomes an Acquiring Person, and the Board may exchange the Rights for shares of common stock (or other consideration) under specified circumstances; and (vii) the Rights expire on January 29, 2028, unless earlier redeemed or exchanged in accordance with the Rights Agreement.
The Company evaluated the Rights under applicable U.S. GAAP, including the guidance for freestanding financial instruments indexed to, and potentially settled in, an entity’s own equity. The Company concluded that the declaration and distribution of the Rights did not result in recognition of an asset or liability and did not have an impact on the Company’s consolidated balance sheets as of June 30, 2025 or consolidated statements of operations or cash flows for the three years ended June 30, 2025 because (i) the Rights were issued to existing shareholders as a dividend with no proceeds received, (ii) the Rights were not exercised during the nine months ended March 31, 2026, and (iii) the Rights are contingently exercisable only upon the occurrence of specified events and, based on their terms, are intended to be classified in shareholders’ equity rather than as liabilities. Costs directly attributable to the adoption of the Plan (e.g., external legal, advisory, and filing fees) were recorded in general and administrative expense as incurred, consistent with the nature of the costs.
14
5. INCOME TAXES:
A summary of the income tax (expense) benefit and corresponding effective tax rate is as follows:
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||
| Income tax (expense) benefit | $ | ( | $ | $ | ( | $ | ||||||||||||||||||||
| Effective tax rate | % | ( | % | % | % | |||||||||||||||||||||
The increase in the Company’s effective tax rate for the three and nine months ended March 31, 2026, primarily relates to the change in the Company's valuation allowance position during the year ended June 30, 2025, current period discrete tax expense related to share-based compensation, and the impact of tax credits. The income tax provision for the three and nine months ended March 31, 2026, is primarily a non-cash deferred tax expense, which is no longer offset by a valuation allowance as a result of the valuation allowance release that occurred for the year ended June 30, 2025.
On July 4, 2025, legislation known as the One Big Beautiful Bill Act (OBBBA) was signed into law. The OBBBA makes changes to the United States corporate income tax system, including, among other provisions, the modification of the limitation on business interest deductions under Section 163(j) of the Code, 100 percent bonus depreciation on qualified property and expansion of the 45B FICA Tip Tax Credit provisions applicable to the beauty salon industry. The impacts of the OBBBA are reflected in our results for the three and nine months ended March 31, 2026.
With limited exceptions, due to net operating loss carryforwards, our federal, state, and foreign tax returns are open to examination for all years since 2014, 2013, and 2016, respectively.
6. COMMITMENTS AND CONTINGENCIES:
The Company is a plaintiff or defendant in various lawsuits and claims arising out of the normal course of business. Like certain other franchisors, the Company has faced allegations of franchise regulation and agreement violations. Additionally, because the Company may be the tenant under a master lease for a location subleased to a franchisee, the Company has faced allegations of nonpayment of rent and associated charges. Further, similar to other retail employers, the Company has faced, and may continue to face, allegations of purported class-wide consumer and wage and hour violations.
Litigation is inherently unpredictable, and the outcome of these matters cannot presently be determined. Although the actions are being vigorously defended, the Company could incur judgments in the future or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period.
7. CASH, CASH EQUIVALENTS, AND RESTRICTED CASH:
The table below reconciles the cash and cash equivalents balances and restricted cash balances recorded within other current assets on the Condensed Consolidated Balance Sheets to the amount of cash, cash equivalents, and restricted cash reported on the Condensed Consolidated Statements of Cash Flows:
| March 31, 2026 | June 30, 2025 | |||||||||||||
| (Dollars in thousands) | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash, included in other current assets (1) | ||||||||||||||
| Total cash, cash equivalents, and restricted cash | $ | $ | ||||||||||||
(1)Restricted cash within other current assets primarily relates to consolidated advertising cooperatives funds, which can only be used to settle obligations of the respective cooperatives, and contractual obligations to collateralize the Company's self-insurance programs.
15
8. LEASES
At contract inception, the Company determines whether a contract is, or contains, a lease by determining whether it conveys the right to control the use of the identified asset for a period of time. If the contract provides the Company the right to substantially all of the economic benefits from the use of the identified asset and the right to direct the use of the identified asset, the Company considers it to be, or contain, a lease. The Company leases its company-owned salons and its corporate facilities under operating leases. The original terms range from one to 11 years with many leases renewable for an additional five to 10-year term at the option of the Company. In addition to the obligation to make fixed rental payments for the use of the salons, the Company has variable lease payments that are based on sales levels. For most leases, the Company is required to pay real estate taxes and other occupancy expenses. Total rent includes the following:
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||
| Office rent (1) | $ | $ | $ | $ | ||||||||||||||||||||||
| Lease termination expense (2) | ||||||||||||||||||||||||||
| Lease liability benefit (3) | ( | ( | ( | ( | ||||||||||||||||||||||
| Franchise salon rent | ||||||||||||||||||||||||||
| Company-owned salon rent (4) | ||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | ||||||||||||||||||||||
(1)Rental income associated with the sublease of the corporate office space is recorded in other income and was $0.3 0.9
(2)Costs incurred to exit salons before the lease end date in order to relieve the Company of future lease obligations.
(3)Upon termination of previously impaired leases, the Company derecognizes the corresponding ROU assets and lease liabilities which results in a net gain. In addition, the Company recognizes a benefit from lease liabilities decreasing in excess of previously impaired ROU assets for ongoing leases that were previously impaired.
(4)Includes rent related to the salons acquired in the December 2024 Alline acquisition. See Note 13.
The Company leases salon premises in which the majority of its franchisees operate and has entered into corresponding sublease arrangements with franchisees. All lease-related costs are passed through to the franchisees. The Company records the rental payments due from franchisees as franchise rental income and the corresponding amounts owed to landlords as franchise rent expense on the Condensed Consolidated Statements of Operations. For the three and nine months ended March 31, 2026, and 2025, franchise rental income and franchise rent expense were $13.0 16.9 47.6 58.5 five years . The Company expects to renew the SmartStyle master lease and certain leases for locations subleased to our franchisees upon expiration of those leases. Other leases are expected to be renewed by the franchisee upon expiration.
All the Company's leases are operating leases. The lease liability is initially and subsequently measured at the present value of the unpaid lease payments at the lease commencement date, including one lease term option when the lease is expected to be renewed. The ROU asset is initially and subsequently measured throughout the expected lease term at the carrying amount of the lease liability, plus initial direct costs, less accrued lease payments and unamortized lease incentives received, if any. Expense for lease payments is recognized on a straight-line basis over the lease term, including the lease renewal option when the lease is expected to be renewed. Generally, the non-lease components, such as real estate taxes and other occupancy expenses, are separate from rent expense within the lease and are not included in the measurement of the lease liability because these charges are variable.
The discount rate used to determine the present value of the lease payments is the Company's estimated collateralized incremental borrowing rate, based on the yield curve for the respective lease terms, as the interest rate implicit in the lease cannot generally be determined. The Company uses the portfolio approach in applying the discount rate based on the original expected lease term. The weighted average remaining lease term was 4.72 and 4.68 years, and the weighted average discount rate was 6.88 % and 6.45 % for all salon operating leases as of March 31, 2026, and June 30, 2025, respectively.
16
As of March 31, 2026, future operating lease commitments, including one renewal option for leases expected to be renewed, to be paid and received by the Company were as follows (dollars in thousands):
| Fiscal Year | Leases for Franchise Salons | Leases for Company-owned Salons | Corporate Leases | Total Operating Lease Payments | Sublease Income to be Received from Franchisees | Net Rent Commitments | ||||||||||||||||||||||||||||||||
| Remainder of 2026 | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
| 2027 | ( | |||||||||||||||||||||||||||||||||||||
| 2028 | ( | |||||||||||||||||||||||||||||||||||||
| 2029 | ( | |||||||||||||||||||||||||||||||||||||
| 2030 | ( | |||||||||||||||||||||||||||||||||||||
| Thereafter | ( | |||||||||||||||||||||||||||||||||||||
| Total future obligations | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
| Less amounts representing interest | ||||||||||||||||||||||||||||||||||||||
| Present value of lease liability | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Less short-term lease liability | ||||||||||||||||||||||||||||||||||||||
| Long-term lease liability | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
As a result of having assigned our interest in obligations under certain real estate leases directly to our franchisees, the Company is secondarily liable on such lease agreements as guarantor. These leases have varying terms, the latest of which expires in 2035. As of March 31, 2026, the maximum potential amount of future payments the Company could be required to make under these guarantees is approximately $4.8 million, and no liability has been recognized in the Consolidated Balance Sheets for these guarantees, as the probability of default is considered remote.
17
9. FINANCING ARRANGEMENTS:
The Company's debt consists of the following:
| Nine Months Ended March 31, 2026 | Fiscal Year 2026 | Balance at March 31, 2026 | Balance at June 30, 2025 | ||||||||||||||||||||||||||
| (Average cash interest rate %) | (Dollars in thousands) | ||||||||||||||||||||||||||||
| Term loan (1) | $ | $ | |||||||||||||||||||||||||||
| Paid-in-kind interest | |||||||||||||||||||||||||||||
| Deferred financing fees (2) | ( | ( | |||||||||||||||||||||||||||
| Term loan, net | |||||||||||||||||||||||||||||
| Revolving credit facility (1) | |||||||||||||||||||||||||||||
| Fair value of warrants issued to lenders | ( | ( | |||||||||||||||||||||||||||
| Total debt, net | |||||||||||||||||||||||||||||
| Less: long-term debt, current portion | ( | ( | |||||||||||||||||||||||||||
| Total long-term debt, net | $ | $ | |||||||||||||||||||||||||||
_______________________________________________________________________________
(1)The term loan and revolving credit facility mature on June 24, 2029. The interest rate applicable to any letter of credit is 5.25 % and paid currently in cash.
(2)Deferred financing fees, inclusive of $4.3 million of Original Issue Discount fees, are amortized on a straight-line basis over the term of the agreement.
The Company's credit agreement, as amended, (the 2024 Credit Agreement) includes a $120.0 million term loan and a $25.0 million revolving credit facility, with a $10.0 million minimum liquidity covenant, is secured by the Company's assets, and expires June 24, 2029. The debt refinancing in June of 2024, was considered a troubled debt restructuring, which resulted in a $94.6 million ($39.83 per weighted average diluted share) gain on the extinguishment of the prior agreement. Any unamortized financing fees that existed at the date of the new agreement were written off.
In connection with the 2024 Credit Agreement, the Company issued detachable stock warrants to the debt lenders. See Note 4 for additional details.
As of March 31, 2026, the Company had outstanding standby letters of credit under the revolving credit facility of $6.0 million, primarily related to the Company's self-insurance program. As of March 31, 2026, total available liquidity, net of the $10.0 million minimum liquidity covenant, and available credit under the $25.0 million revolving credit facility, as defined by the amended agreement, were $31.9 million and $19.0 million, respectively. The Company was in compliance with its covenants and other requirements of the financing arrangements as of March 31, 2026.
The interest rate on the 2024 Credit Agreement is based on the secured overnight financing rate (SOFR) plus margin. The margin is subject to change based on the Company's total leverage ratio, remeasured annually on a predetermined date set by the lender. When the Company's total leverage ratio is greater than or equal to 3.75 to 1.00, the margin applicable to the term loan and revolving credit facility is 9.00 3.75 to 1.00, the margin rate is 8.50 %. In either scenario, the Company has elected the option to pay 4.50 % of the margin as paid-in-kind (PIK) interest (added to the principal balance and thereafter accruing interest), and the remainder is paid currently in cash. The SOFR base rate applicable to the debt has a floor of 2.50 % per annum. The interest rate applicable to any letter of credit is 5.25 % and paid currently in cash.
The 2024 Credit Agreement includes scheduled quarterly payments totaling $1.1 million in fiscal year 2026 and $3.0 1.5 million to satisfy the annual mandatory prepayment of 75 % of excess cash flow as defined in the 2024 Credit Agreement. This amount was applied as a prepayment of the term loan and reduced the Company's unrestricted cash balance accordingly.
18
10. FAIR VALUE MEASUREMENTS:
Fair value measurements are categorized into one of three levels based on the lowest level of significant input used: Level 1 (unadjusted quoted prices in active markets); Level 2 (observable market inputs available at the measurement date, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data).
Assets and Liabilities Measured at Fair Value on a Recurring Basis
As of March 31, 2026, and June 30, 2025, the estimated fair value of the Company's cash, cash equivalents, restricted cash, receivables, inventory, deferred compensation assets, accounts payable and debt approximated their carrying values.
Upon the acquisition of Alline, the Company recorded the estimated fair value of the contingent consideration liability assumed in the Condensed Consolidated Balance Sheets within other noncurrent liabilities. The earn-out liability is adjusted at fair value quarterly until settled utilizing the Monte Carlo simulation, and changes in fair value are reported in our Condensed Consolidated Statements of Operations. As of March 31, 2026, management's revised estimates indicated a fair value of zero dollars.
The change in the earn-out liability measured at fair value using significant unobservable inputs (Level 3) is as follows:
| (Dollars in thousands) | |||||||||||
Earn-out liability at June 30, 2025 | $ | ||||||||||
| Less: gain on earn-out liability | |||||||||||
Earn-out liability at March 31, 2026 | $ | ||||||||||
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
We measure certain assets, including the Company's tangible fixed and other assets, and goodwill, at fair value on a nonrecurring basis when they are deemed to be other than temporarily impaired. The fair values of these assets are determined, when applicable, based on valuation techniques using the best information available, and may include quoted market prices, market comparables and discounted cash flow projections.
11. EARNINGS PER SHARE:
The Company's basic earnings per share is calculated as net income divided by weighted average common shares outstanding, excluding unvested outstanding stock options (SOs), stock appreciation rights (SARs), restricted stock units (RSUs), and stock-settled performance units (PSUs). The Company's diluted earnings per share is calculated as net income divided by weighted average common shares and common share equivalents outstanding, which includes shares issued under the Company's stock-based compensation plans and warrants issued in connection with the Company's credit and consulting services agreements. Stock-based awards with exercise prices greater than the average market price of the Company's common stock are excluded from the computation of diluted earnings per share. The computation of weighted average shares outstanding, assuming dilution, excluded stock-based awards as detailed below, as they were not dilutive under the treasury stock method.
The following table sets forth the presentation of shares outstanding used in the calculation of basic and diluted earnings per share (EPS):
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| (Shares in thousands) | ||||||||||||||||||||||||||
| Denominator for basic EPS - weighted average common shares | ||||||||||||||||||||||||||
| Dilutive shares associated with option plans | ||||||||||||||||||||||||||
| Denominator for diluted EPS - weighted average common shares and dilutive potential common shares | ||||||||||||||||||||||||||
| Options excluded from EPS calculation - anti-dilutive | ||||||||||||||||||||||||||
19
12. SEGMENT INFORMATION:
Segment information is presented on the same basis that the Company internally organizes the business for assessing performance and making decisions regarding allocation of resources. The Company's Chief Operating Decision Maker (CODM) is our President and Chief Executive Officer. Revenue, expenses, and operating income (loss) by segment are regularly reviewed by the CODM to make decisions about resources to be allocated to the segments, assess current performance, and forecast future performance. Our CODM manages our business primarily by reviewing consolidated results by segment on a quarterly basis and using those results along with forecasts and other non-financial information in our annual budgeting process. The Company's CODM does not evaluate reportable segments using assets and capital expenditure information. Consistent with our internal management reporting, unallocated expenses include certain items impacting comparability. These unallocated items are not defined terms within GAAP. They are based on how management views the business, makes financial, operating and planning decisions and evaluates the Company's ongoing performance and are not attributable to either segment. Unallocated fees include one-time professional fees and settlements, severance expense, the benefit from lease liability decreases in excess of previously impaired ROU assets, lease termination fees, asset retirement obligation costs, goodwill and long-lived asset impairment charges, and the benefit from the Company's debt refinancing.
Financial information concerning the Company's reportable operating segments is shown in the tables below.
| Three Months Ended March 31, 2026 | Nine Months Ended March 31, 2026 | |||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||
| Franchise | Company-owned | Total | Franchise | Company-owned | Total | |||||||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Expenses (1) | ||||||||||||||||||||||||||||||||||||||
| General and administrative | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Rent | ||||||||||||||||||||||||||||||||||||||
| Other expenses (2) | ||||||||||||||||||||||||||||||||||||||
| Company-owned salon expense | ||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||||||||||||||
| Operating income | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Unallocated expense, net | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total net income | $ | $ | ||||||||||||||||||||||||||||||||||||
(1)The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. Intersegment expenses are included within the amounts shown.
(2)Other expenses include advertising fund and franchise rent expenses which are offset in total revenue and, as such, not used as a primary measure of performance by our CODM.
20
| Three Months Ended March 31, 2025 | Nine Months Ended March 31, 2025 | |||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | (Dollars in thousands) | |||||||||||||||||||||||||||||||||||||
| Franchise | Company-owned | Total | Franchise | Company-owned | Total | |||||||||||||||||||||||||||||||||
| Total revenue | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Expenses (1) | ||||||||||||||||||||||||||||||||||||||
| General and administrative | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||
| Rent | ||||||||||||||||||||||||||||||||||||||
| Other expenses (2) | ||||||||||||||||||||||||||||||||||||||
| Company-owned salon expense | ||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||||||||||||||
| Long-lived asset impairment | ||||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | $ | $ | $ | $ | ( | $ | |||||||||||||||||||||||||||||||
| Unallocated expenses, net | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total net income | $ | $ | ||||||||||||||||||||||||||||||||||||
(1)The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker. Intersegment expenses are included within the amounts shown.
(2)Other expenses include advertising fund and franchise rent expenses which are offset in total revenue and, as such, not used as a primary measure of performance by our CODM.
The Franchise reportable operating segment is comprised of franchise salons located mainly in strip center locations and Walmart stores. Franchise salons offer high quality, convenient and value-priced hair care and beauty services and retail products. This segment operates primarily in the U.S., Puerto Rico, and Canada and primarily includes the Supercuts, SmartStyle, Cost Cutters, First Choice Haircutters, Roosters, and Magicuts concepts.
The company-owned salons reportable operating segment is comprised of company-owned salons located mainly in strip center locations. Company-owned salons offer high quality, convenient and value priced hair care and beauty services and retail products. Supercuts, Cost Cutters, and Holiday Hair operating in the U.S. are generally within the company-owned salons segment.
21
Segment information is prepared on the same basis that the CODM reviews financial information for operational decision-making purposes. The Company's reportable operating segments consisted of the following salons:
| March 31, 2026 | June 30, 2025 | |||||||||||||
FRANCHISE SALONS: | ||||||||||||||
Supercuts | ||||||||||||||
SmartStyle/Cost Cutters in Walmart stores | ||||||||||||||
Portfolio Brands | ||||||||||||||
Total North American salons | ||||||||||||||
Total International salons (1) | ||||||||||||||
Total franchise salons | ||||||||||||||
as a percent of total franchise and company-owned salons | % | % | ||||||||||||
COMPANY-OWNED SALONS: | ||||||||||||||
Supercuts | ||||||||||||||
Portfolio Brands | ||||||||||||||
Total company-owned salons | ||||||||||||||
as a percent of total franchise and company-owned salons | % | % | ||||||||||||
Total franchise and company-owned salons | ||||||||||||||
_______________________________________________________________________________
(1)Canadian and Puerto Rican salons are included in the North American salon totals.
13. ACQUISITIONS:
On December 19, 2024, the Company transferred consideration to acquire 100 percent of the equity interests of Alline (the Alline acquisition), its largest franchisee, consisting of 314 salons. The transaction provides Regis with a turn-key operating infrastructure and gets the Company closer to salon operations alongside franchisees and the salon portfolio provides a testing ground for brand and operational initiatives. The transaction terminated the existing franchise arrangements between Regis and Alline, which resulted in the Company recognizing a loss of $0.2 million upon settlement, which is included in the unaudited Condensed Consolidated Statements of Operations as a component of operating income for the nine months ended March 31, 2025.
The acquisition was accounted for as a business combination with the purchase price allocated using information available as of December 19, 2024. Assets acquired and liabilities assumed were recorded at estimated fair values based on management’s estimates, available information, and supportable assumptions that management considered reasonable.
As of June 30, 2025, the purchase price and related allocation were revised as a result of additional information obtained and revisions to the provisional estimates of fair value, including, but not limited to, the completion of independent appraisals and valuations related to property and equipment, intangible assets, right of use assets and corresponding lease obligations. There were no adjustments made to these allocations in the three and nine months ended March 31, 2026.
The fair value of total consideration transferred by the Company upon acquisition is $22.6 million, as detailed below.
22
| Consideration | (Dollars in thousands) | ||||
| Cash, net of cash acquired (1) | $ | ||||
Equity instruments ( | |||||
| Contingent consideration arrangement (3) | |||||
| Fair value of total consideration | $ | ||||
_______________________________________________________________________________
(1)Includes cash transferred of $20.0 million, net of cash acquired of $1.4 million.
(2)The number of common shares (140,552 ) issued as part of the consideration paid for Alline was determined by dividing the $3.0 million by the 30 -trading day volume weighted average price of the common stock as reported on the Nasdaq Global Market as of and including December 17, 2024.
(3)The contingent consideration arrangement requires Regis to pay the former owners of Alline additional cash consideration if certain 4-Wall EBITDA or Adjusted EBITDA thresholds are met for each of the three subsequent annual earn-out periods as well as a cumulative 4-Wall EBITDA or Adjusted EBITDA threshold for the cumulative three subsequent annual earn-out periods. The potential undiscounted amount of all future payments that Regis could be required to make under the contingent consideration arrangement is between $0 and $3.0 million. Regis recognized a fair value of $1.0 million as of June 30, 2025, which is included in other noncurrent liabilities in the Consolidated Balance Sheets in the Company's Annual Report on Form 10-K for the year ended June 30, 2025. As of March 31, 2026, the Company determined the value of the contingent consideration arrangement is $0 . The Company recognized a gain on earn-out liability of $1.0 million in a prior quarter which is included in our Condensed Consolidated Statements of Operations for the nine months ended March 31, 2026. 4-Wall EBITDA is defined as earnings before interest, tax, depreciation and amortization and excluding corporate general and administrative expenses for acquired salons. The earn-out liability is adjusted at fair value quarterly, as needed, until settled utilizing the Monte Carlo simulation, and changes in fair value will be reported in our Condensed Consolidated Statements of Operations. Refer to Note 10 to the Condensed Consolidated Financial Statements for additional information regarding the valuation.
23
The following table summarizes the estimated fair value of the assets acquired and liabilities assumed as of the acquisition date:
| (Dollars in thousands) | |||||
| Current assets | $ | ||||
| Property and equipment | |||||
| Goodwill (1) | |||||
| Intangible assets (2) | |||||
| Right of use assets | |||||
| Other assets | |||||
| Assumed current liabilities | ( | ||||
| Assumed lease liabilities | ( | ||||
| Fair value of total consideration | $ | ||||
_______________________________________________________________________________
(1)Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Specifically, the goodwill that will be recorded as part of the acquisition of Alline includes the following:
a.the expected synergies and other benefits that we believe will result from combining the operations of Alline with the operations of Regis; and
b.any intangible assets that do not qualify for separate recognition.
Goodwill is not amortized and is deductible for tax purposes. All the goodwill related to the acquisition of Alline is related to our company-owned operating segment.
(2)Intangible assets includes $2.4 million related to the fair value of reacquired rights and $1.4 million related to the fair value of favorable leasehold interests, net.
a.The reacquired rights were valued using a form of the income approach where the asset's value is determined by its ability to generate future cash flows by isolating and discounting the cash flows attributable to the asset. The Company assumed a four-year life based on the weighted average remaining contract term, assuming no renewals.
The following table provides revenues and operating income from Alline that are included in our Condensed Consolidated Financial Statements:
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||||
| Total revenues | $ | $ | $ | $ | ||||||||||||||||||||||
| Operating income | ||||||||||||||||||||||||||
The following table presents pro forma information as if the Alline acquisition had occurred on July 1, 2024:
| Three Months Ended March 31, 2025 | Nine Months Ended March 31, 2025 | |||||||||||||
| Total revenues | $ | $ | ||||||||||||
| Operating income | ||||||||||||||
24
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) provides management's perspective on our financial condition, results of operations, liquidity and certain other factors that may affect our future results. This MD&A should be read in conjunction with the MD&A included in our June 30, 2025, Annual Report on Form 10-K and other documents filed or furnished with the SEC during the current fiscal year.
MD&A includes certain non-GAAP measures. The following items have been excluded from our non-GAAP adjusted EBITDA results: stock-based compensation expense, discontinued operations, one-time professional fees and legal settlements, severance expense, the benefit from lease liability decreases in excess of previously impaired right of use asset, lease termination fees, and asset retirement obligation costs.
MANAGEMENT'S OVERVIEW
Regis Corporation (NasdaqGM:RGS) is a leader in the beauty salon industry. As of March 31, 2026, the Company franchised or owned 3,770 locations, primarily in North America. Our locations consisted of 3,497 franchised salons and 273 company-owned salons. Regis’ franchised and corporate locations operate under concepts such as Supercuts®, SmartStyle®, Cost Cutters®, Roosters® and First Choice Haircutters®. As of March 31, 2026, the Company had 1,655 employees of which 1,497 were acquired as part of the Alline acquisition.
CRITICAL ACCOUNTING ESTIMATES
There have been no material changes to our critical accounting estimates from those described under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025.
Goodwill
The Company assesses goodwill impairment on an annual basis, during the Company's fourth fiscal quarter, and between annual assessments if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. An interim impairment analysis was not required in the three months ended March 31, 2026. As of March 31, 2026, and June 30, 2025, the franchise reporting unit had goodwill of $172.8 million and $173.1 million, respectively, and the company-owned reporting unit had goodwill of $10.3 million as of both March 31, 2026, and June 30, 2025.
Our significant accounting policies can be found in Note 1 to the Consolidated Financial Statements contained in Part II, Item 8 of the June 30, 2025, Annual Report on Form 10-K. There have been no changes to our critical accounting policies from those disclosed on our Form 10-K for the year ended June 30, 2025.
25
RESULTS OF OPERATIONS
System-wide results
Our results are impacted by our system-wide sales, which include sales by all points of distribution, whether owned by our franchisees or the Company. While we do not record sales by franchisees as revenue, and such sales are not included in our unaudited Condensed Consolidated Financial Statements, we believe that this operating measure is important in obtaining an understanding of our financial performance. We believe system-wide sales information aids in understanding how we derive royalty revenue and in evaluating performance. In the nine months ended March 31, 2026, a net 150 franchise salons and 21 company-owned salons have closed.
The following table summarizes system-wide revenue and system-wide same-store sales by concept:
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| (Dollars in millions) | ||||||||||||||||||||||||||
| System-wide revenue | $ | 261.1 | $ | 266.9 | $ | 796.6 | $ | 826.4 | ||||||||||||||||||
| Supercuts | 5.0 | % | 1.1 | % | 3.2 | % | 0.8 | % | ||||||||||||||||||
| SmartStyle | (3.3) | (7.4) | (4.6) | (6.8) | ||||||||||||||||||||||
| Portfolio Brands | 1.4 | (0.9) | 0.8 | (1.5) | ||||||||||||||||||||||
| Total system-wide same-store sales (1) | 2.6 | % | (1.1) | % | 1.1 | % | (1.3) | % | ||||||||||||||||||
(1)System-wide same-store sales are calculated as the total change in sales for system-wide franchise and company-owned locations that were open on a specific day of the week during the current period and the corresponding prior period. Quarterly system-wide same-store sales are the sum of the system-wide same-store sales computed on a daily basis. Franchise salons that do not report daily sales are excluded from same-store sales. System-wide same-store sales are calculated in local currencies to remove foreign currency fluctuations from the calculation.
26
Condensed Consolidated Results of Operations (Unaudited)
The following table sets forth, for the periods indicated, certain information derived from our unaudited Condensed Consolidated Statements of Operations. The percentages are computed as a percent of total consolidated revenues, except as otherwise indicated, and the increase (decrease) is measured in basis points. Variances calculated on amounts shown in millions may result in rounding differences.
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in millions) | % of Total Revenue | Increase (Decrease) | (dollars in millions) | % of Total Revenue | Increase (Decrease) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Royalties | $ | 13.2 | $ | 13.5 | 25.2 | % | 23.7 | % | 150 | $ | 40.9 | $ | 44.0 | 24.3 | % | 29.4 | % | (510) | ||||||||||||||||||||||||||||||||||||||||||||
| Fees | 1.9 | 2.4 | 3.6 | 4.2 | (60) | 5.4 | 7.7 | 3.2 | 5.1 | (190) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Advertising fund contributions | 5.2 | 5.2 | 9.9 | 9.1 | 80 | 16.1 | 16.3 | 9.6 | 10.9 | (130) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Franchise rental income | 13.0 | 16.9 | 24.8 | 29.6 | (480) | 47.6 | 58.5 | 28.2 | 39.1 | (1,090) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Company-owned salon revenue | 19.1 | 19.0 | 36.5 | 33.3 | 320 | 58.5 | 23.2 | 34.7 | 15.5 | 1,920 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative | 10.0 | 11.2 | 19.1 | 19.6 | (50) | 31.6 | 36.4 | 18.8 | 24.3 | (550) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Rent | 3.6 | 4.1 | 6.9 | 7.2 | (30) | 10.4 | 7.3 | 6.2 | 4.9 | 130 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Advertising fund expense | 5.2 | 5.2 | 9.9 | 9.1 | 80 | 16.1 | 16.3 | 9.6 | 10.9 | (130) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Franchise rent expense | 13.0 | 16.9 | 24.8 | 29.6 | (480) | 47.6 | 58.5 | 28.2 | 39.1 | (1,090) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Company-owned salon expense (1) | 14.0 | 13.8 | 26.7 | 24.2 | 250 | 42.5 | 16.5 | 25.2 | 11.0 | 1,420 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 0.9 | 0.7 | 1.7 | 1.2 | 50 | 2.5 | 1.6 | 1.5 | 1.1 | 40 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Long-lived asset impairment | — | — | — | — | — | — | 0.4 | — | 0.3 | (30) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operating income (2) | 5.7 | 5.0 | 10.9 | 8.8 | 210 | 17.8 | 12.7 | 10.6 | 8.5 | 210 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest expense | (5.0) | (5.1) | (9.5) | (8.9) | 60 | (15.6) | (14.8) | (9.3) | (9.9) | (60) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gain on earn-out liability | — | — | — | — | — | 1.0 | — | 0.6 | — | 60 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other, net | 0.2 | 0.3 | 0.4 | 0.5 | (10) | 1.0 | 0.7 | 0.6 | 0.5 | 10 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income tax (expense) benefit (3) | (0.2) | — | 17.7 | (0.4) | N/A | (1.7) | 0.1 | 40.0 | 6.2 | N/A | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income (loss) from continuing operations (2) | 0.7 | 0.3 | 1.3 | 0.5 | 80 | 2.5 | (1.4) | 1.5 | (0.9) | 240 | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income from discontinued operations | — | — | — | — | — | — | 8.4 | — | 5.6 | (560) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net income (2) | 0.7 | 0.3 | 1.3 | 0.5 | 80 | 2.5 | 7.0 | 1.5 | 4.7 | (320) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
_______________________________________________________________________________
(1)Includes cost of services and products sold to guests in our company-owned salons. Excludes general and administrative expense, rent and depreciation and amortization related to company-owned salons.
(2)Total is a recalculation; line items calculated individually may not sum to total due to rounding.
27
(3)Computed as a percent of income (loss) from continuing operations before income taxes. The income tax basis point change is noted as not applicable (N/A) because the discussion within the MD&A is related to the effective income tax rate.
28
Three and Nine Months Ended March 31, 2026, Compared with Three and Nine Months Ended March 31, 2025
Royalties
During the three and nine months ended March 31, 2026, royalties decreased $0.3 million and $3.1 million, or 2.2% and 7.0%, respectively, primarily due to a decrease in franchise salon count caused by franchise salon closures. The decrease for the nine months ended March 31, 2026, includes a greater impact from the Alline acquisition conversion of franchise salons to company-owned as these salons converted in December 2024.
Fees
During the three months ended March 31, 2026, fees decreased $0.5 million, or 20.8%, primarily due to salon closures. During the nine months ended March 31, 2026, fees decreased $2.3 million, or 29.9%, as a result of salon closures in the current year, as well as terminated franchise fees related to the Alline acquisition in the prior year period.
Advertising Fund Contributions
During the three months ended March 31, 2026, advertising fund contributions remained flat compared to the prior year period. During the nine months ended March 31, 2026, advertising fund contributions decreased $0.2 million, or 1.2%, primarily due to lower salon count.
Franchise Rental Income
During the three and nine months ended March 31, 2026, franchise rental income decreased $3.9 million and $10.9 million, or 23.1% and 18.6%, respectively, primarily due to franchisees signing their own leases and the decrease in franchise salon count.
Company-Owned Salon Revenue
During the three months ended March 31, 2026, company-owned salon revenue increased $0.1 million, or 0.5%, primarily due to the closure of underperforming salons. During the nine months ended March 31, 2026, company-owned salon revenue increased $35.3 million, from $23.2 million to $58.5 million, due to the increase in company-owned salon count related to the Alline acquisition.
General and Administrative
General and administrative expense for the three and nine months ended March 31, 2026, decreased $1.2 million and $4.8 million, or 10.7% and 13.2%, respectively, primarily due to lower corporate compensation expenses in the current year period and lapping of education events, offset partially by increased company-owned general and administrative expense.
Rent
During the three months ended March 31, 2026, rent expense decreased $0.5 million, or 12.2%, primarily due to the closure of underperforming company-owned salons. During the nine months ended March 31, 2026, rent expense increased $3.1 million, or 42.5%, primarily as a result of rent expense associated with the salons from the Alline acquisition.
Advertising Fund Expense
During the three months ended March 31, 2026, advertising fund expense remained flat compared to the prior year period. During the nine months ended March 31, 2026, advertising fund expense decreased $0.2 million, or 1.2%, primarily due to lower salon count.
29
Franchise Rent Expense
During the three and nine months ended March 31, 2026, franchise rent expense decreased $3.9 million and $10.9 million, or 23.1% and 18.6%, respectively, primarily due to franchisees signing their own leases and the decrease in franchise salon count.
Company-Owned Salon Expense
Company-owned salon expense, for the three and nine months ended March 31, 2026, increased $0.2 million and $26.0 million from $13.8 million to $14.0 million and from $16.5 million to $42.5 million, respectively, primarily due to the Alline acquisition in the prior year period.
Depreciation and Amortization
Depreciation and amortization for the three and nine months ended March 31, 2026, increased $0.2 million and $0.9 million, or 28.6% and 56.3%, respectively, primarily due to depreciation expense associated with the assets acquired in the Alline acquisition.
Long-Lived Asset Impairment
In the three and nine months ended March 31, 2026, the Company did not record any long-lived asset impairments. In the nine months ended March 31, 2025, the Company recorded long-lived asset impairment charges of $0.4 million related to the right-of-use asset associated with the corporate office lease.
Interest Expense
For the three months ended March 31, 2026, interest expense decreased $0.1 million or 2.0%, primarily due to declining interest rates. The $0.8 million increase in interest expense for the nine months ended March 31, 2026, was primarily due to higher debt outstanding, offset partially by declining rates. Cash interest decreased $0.2 million for the three months ended March 31, 2026, and remained flat for the nine months ended March 31, 2026, compared to the prior year periods.
Gain on Earn-Out Liability
The $1.0 million gain on earn-out liability in the nine months ended March 31, 2026, is due to a change in the estimated fair value expected to be paid in conjunction with the Alline acquisition.
Other, Net
Other, net primarily relates to corporate sublease income and foreign currency gains and losses. Other, net decreased $0.1 million and increased $0.3 million, respectively, in the three and nine months ended March 31, 2026, primarily due to foreign currency gains and losses adjustments.
Income Tax (Expense) Benefit
During the three months ended March 31, 2026, the Company recognized a tax expense of $0.2 million, with a corresponding effective tax rate of 17.7%, as compared to recognizing a small tax benefit with a corresponding effective tax rate of (0.4)% during the three months ended March 31, 2025. During the nine months ended March 31, 2026, the Company recognized a tax expense of $1.7 million, with a corresponding effective tax rate of 40.0%, as compared to recognizing a tax benefit of $0.1 million, with a corresponding effective tax rate of 6.2% during the nine months ended March 31, 2025. See Note 5 to the unaudited Condensed Consolidated Financial Statements.
Income from Discontinued Operations
Income from discontinued operations in the nine months ended March 31, 2025, relates to proceeds received from the sale of OSP related to the number of salons migrating to the Zenoti platform. See Note 3 to the unaudited Condensed Consolidated Financial Statements.
30
Results of Operations by Segment
Based on our internal management structure, we report two segments: franchise and company-owned salons. See Note 12 to the unaudited Condensed Consolidated Financial Statements. Significant results of continuing operations are discussed below for each of these segments.
Franchise Salons
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Decrease (1) | 2026 | 2025 | Decrease (1) | |||||||||||||||||||||||||||||||||
| (Dollars in millions) | (Dollars in millions) | |||||||||||||||||||||||||||||||||||||
| Royalties | $ | 13.2 | $ | 13.5 | $ | (0.3) | $ | 40.9 | $ | 44.0 | $ | (3.1) | ||||||||||||||||||||||||||
| Fees | 1.9 | 2.4 | (0.5) | 5.4 | 7.7 | (2.3) | ||||||||||||||||||||||||||||||||
| Advertising fund contributions | 5.2 | 5.2 | — | 16.1 | 16.3 | (0.2) | ||||||||||||||||||||||||||||||||
| Franchise rental income | 13.0 | 16.9 | (3.9) | 47.6 | 58.5 | (10.9) | ||||||||||||||||||||||||||||||||
| Total franchise revenue (1) | $ | 33.3 | $ | 38.0 | $ | (4.7) | $ | 110.0 | $ | 126.5 | $ | (16.5) | ||||||||||||||||||||||||||
| Franchise same-store sales (2) | 2.0 | % | (0.7) | % | 0.8 | % | (1.1) | % | ||||||||||||||||||||||||||||||
| Franchise adjusted EBITDA | $ | 6.2 | $ | 6.3 | $ | (0.1) | $ | 18.9 | $ | 20.7 | $ | (1.8) | ||||||||||||||||||||||||||
| Total franchise salons | 3,497 | 3,776 | (279) | |||||||||||||||||||||||||||||||||||
_______________________________________________________________________________
(1)Total is a recalculation; line items calculated individually may not sum to total due to rounding.
(2)Franchise same-store sales are calculated as the total change in sales for franchise locations that were open on a specific day of the week during the current period and the corresponding prior period. Quarterly franchise same-store sales are the sum of the franchise same-store sales computed on a daily basis. Franchise salons that do not report daily sales are excluded from same-store sales. Franchise same-store sales are calculated in local currencies to remove foreign currency fluctuations from the calculation.
Three and Nine Months Ended March 31, 2026, Compared with Three and Nine Months Ended March 31, 2025
Franchise Revenue
Franchise revenue decreased $4.7 million and $16.5 million during the three and nine months ended March 31, 2026, primarily due to the decrease in franchise rental income due to franchisees signing their own leases, and the decrease in franchise salon count.
Franchise Adjusted EBITDA
During the three and nine months ended March 31, 2026, franchise adjusted EBITDA totaled $6.2 million and $18.9 million, a decrease of $0.1 million and $1.8 million, respectively, compared to the three and nine months ended March 31, 2025. The decline in the three and nine months ended March 31, 2026, was primarily due to decreases in royalties and fees, offset partially by decreased general and administrative expenses.
31
Company-Owned Salons
| Three Months Ended March 31, | Nine Months Ended March 31, | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Increase (Decrease) (1) | 2026 | 2025 | Increase (1) | |||||||||||||||||||||||||||||||||
| (Dollars in millions) | (Dollars in millions) | |||||||||||||||||||||||||||||||||||||
| Company-owned salon revenue | $ | 19.1 | $ | 19.0 | $ | 0.1 | $ | 58.5 | $ | 23.2 | $ | 35.3 | ||||||||||||||||||||||||||
| Company-owned same-store sales comps | 9.6 | % | (6.8) | % | 5.1 | % | (6.7) | % | ||||||||||||||||||||||||||||||
| Company-owned salon adjusted EBITDA | $ | 1.4 | $ | 0.8 | $ | 0.6 | $ | 4.8 | $ | 1.2 | $ | 3.6 | ||||||||||||||||||||||||||
| Total company-owned salons | 273 | 311 | (38) | |||||||||||||||||||||||||||||||||||
_______________________________________________________________________________
(1)Total is a recalculation; line items calculated individually may not sum to total due to rounding.
Three and Nine Months Ended March 31, 2026, Compared with Three and Nine Months Ended March 31, 2025
Company-Owned Salon Revenue
During the three months ended March 31, 2026, company-owned salon revenue increased $0.1 million, primarily due to the closure of underperforming salons. Company-owned salon revenue increased $35.3 million during the nine months ended March 31, 2026, primarily due to the impact of the Alline acquisition.
Company-Owned Salon Adjusted EBITDA
In the three and nine months ended March 31, 2026, company-owned salon adjusted EBITDA improved $0.6 million and $3.6 million, respectively, primarily due to income generated by the salons acquired in the Alline acquisition in the current year periods.
32
LIQUIDITY AND CAPITAL RESOURCES
The Company has a credit agreement with TCW Asset Management Company, LLC, and MidCap Financial Trust, which matures in June 2029. In addition to a $10.0 million minimum liquidity covenant, the agreement includes typical provisions and financial covenants, including leverage and fixed-charge coverage ratio covenants. The agreement was amended in December 2024 in connection with the Alline acquisition.
Sources of Liquidity
Funds generated by operating activities, available cash and cash equivalents and our credit agreement are our most significant sources of liquidity. The Company believes it has sufficient liquidity, cash on hand and borrowing capacity to meet its obligations in the next twelve months and until maturity of the credit agreement in June 2029.
As of March 31, 2026, cash and cash equivalents were $22.9 million, with $21.9 million and $1.0 million within the United States and Canada, respectively.
As of March 31, 2026, the Company's borrowing arrangements include a $116.4 million term loan, $9.7 million of paid-in-kind interest and a $25.0 million revolving credit facility that matures in June 2029. As of March 31, 2026, the unused available credit under the revolving credit facility was $19.0 million, and total available liquidity, net of the $10.0 million minimum liquidity covenant, was $31.9 million. See Note 9 to the unaudited Condensed Consolidated Financial Statements.
Uses of Cash
The Company closely manages its liquidity and capital resources. The Company's liquidity requirements depend on key variables, including the performance of the business, the level of investment needed to support its business strategies, credit facilities and borrowing arrangements, and working capital management.
Cash Requirements
The Company's most significant contractual cash requirements as of March 31, 2026, were lease commitments and interest payments. See Notes 8 and 9 to the unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q.
33
Cash Flows
Cash Flows from Operating Activities
During the nine months ended March 31, 2026, cash provided by operating activities was $8.9 million compared to $7.0 million in the nine months ended March 31, 2025, primarily due to higher operating income in the current year period, offset partially by cash accumulated in the ad fund in the prior year.
Cash Flows from Investing Activities
During the nine months ended March 31, 2026, cash used in investing activities of $1.4 million was primarily due to capital expenditures. During the nine months ended March 31, 2025, cash used in investing activities of $10.9 million was primarily related to the $18.6 million used in the Alline acquisition, partially offset by proceeds from the sale of OSP of $8.5 million.
Cash Flows from Financing Activities
During the nine months ended March 31, 2026, cash used in financing activities was $1.7 million, primarily as a result of the repayment of long-term debt of $2.4 million, partially offset by proceeds from the issuance of common stock. During the nine months ended March 31, 2025, cash provided by financing activities was $7.2 million, primarily as a result of $15.0 million of proceeds from the issuance of long-term debt and $4.3 million of borrowings under the revolving credit facility partially offset by repayments of the revolving credit facility of $10.2 million.
Financing Arrangements
See Note 9 of the Notes to the unaudited Condensed Consolidated Financial Statements included in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, and Note 8 of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, for additional information regarding our financing arrangements.
Debt to Capitalization Ratio
Our debt to capitalization ratio, calculated as the principal amount of debt, including paid-in-kind interest accrued, as a percentage of the principal amount of debt and shareholders' equity at fiscal quarter end, was as follows:
_______________________________________________________________________________
| Debt to Capitalization (1) | ||||||||
| March 31, 2026 | 40.2 | % | ||||||
| June 30, 2025 | 40.3 | % | ||||||
(1)Excludes the long-term lease liability as that liability is offset by the ROU asset.
Share Repurchase Program
In May 2000, the Board approved a stock repurchase program with no stated expiration date. Since that time and through March 31, 2026, the Board has authorized $650.0 million to be expended for the repurchase of the Company's stock under this program. All repurchased shares become authorized but unissued shares of the Company. The Company last purchased shares through this program in fiscal year 2020. As of March 31, 2026, a total accumulated 1.5 million shares have been cumulatively repurchased for $595.4 million. At March 31, 2026, $54.6 million remain outstanding under the approved stock repurchase program. The Company does not expect to repurchase shares in fiscal year 2026.
34
SAFE HARBOR PROVISIONS UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This Quarterly Report on Form 10-Q, as well as information included in, or incorporated by reference from, future filings by the Company with the Securities and Exchange Commission and information contained in written material, press releases and oral statements issued by or on behalf of the Company 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," "will," "believe," "project," "forecast," "expect," "estimate," "anticipate," and "plan." These uncertainties include a potential material adverse impact on our business and results of operations as a result of changes in consumer shopping trends and changes in manufacturer distribution channels; laws and regulations could require us to modify current business practices and incur increased costs including increases in minimum wages; changes in the general economic environment; changes in consumer tastes, hair product innovation, fashion trends and consumer spending patterns; our ability to realize the anticipated benefits of the Alline acquisition; reliance on franchise royalties and overall success of our franchisees’ salons; our salons' dependence on a third-party supplier agreement for merchandise; our and our franchisees' ability to attract, train and retain talented stylists and salon leaders; the success of our franchisees, which operate independently; data security and privacy compliance and our ability to manage cyber threats and protect the security of potentially sensitive information about our guests, franchisees, employees, vendors or Company information; the ability of the Company to maintain a satisfactory relationship with Walmart; marketing efforts to drive traffic to our franchisees' and company-owned salons; our ability to maintain and enhance the value of our brands; reliance on legacy information technology systems; reliance on external vendors; the use of social media; the effectiveness of our enterprise risk management program; potential challenges with the planning or implementation of our new enterprise resource planning system; our ability to minimize risks associated with owning and operating additional salons; ability to generate sufficient cash flow to satisfy our debt service obligations; compliance with covenants in our financing arrangement; premature termination of agreements with our franchisees; the continued ability of the Company to implement cost reduction initiatives and achieve expected cost savings; continued ability to compete in our business markets; potential liabilities related to the employee retention credit received by Alline; reliance on our management team and other key personnel; the ability to attract and retain key personnel; the continued ability to maintain an effective system of internal control over financial reporting; changes in tax exposure; the ability of our Tax Preservation Plan to protect the future availability of the Company's tax assets; potential litigation and other legal or regulatory proceedings; or other factors not listed above. 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.
35
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risk from changes in interest rates and changes in foreign currency exchange rates. There has been no material change to the factors discussed within Part II, Item 7A in the Company's June 30, 2025, Annual Report on Form 10-K.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed by the Company in the reports filed or submitted under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosure. Management, with the participation of the CEO and CFO, evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) promulgated under the Exchange Act), at the end of the period. Based on their evaluation, our CEO and CFO concluded that our disclosure controls and procedures were effective as of March 31, 2026.
Changes in Internal Control Over Financial Reporting
There were no material changes in our internal control over financial reporting during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
36
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a defendant in various lawsuits and claims arising out of the normal course of business. Like certain other franchisors, the Company has been faced with allegations of franchise regulation and agreement violations. Additionally, because the Company may be the tenant under a master lease for a location subleased to a franchisee, the Company faces allegations of non-payment of rent and associated charges. Litigation is inherently unpredictable, and the outcome of these matters cannot presently be determined. Although the actions are being vigorously defended, the Company could, in the future, incur judgments or enter into settlements of claims that could have a material adverse effect on its results of operations in any particular period.
Item 1A. Risk Factors
There have been no material changes in our risk factors from those disclosed in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, except as follows: The risk factor related to the search for a new Chief Executive Officer has been removed as the Company has appointed a new CEO, Susan Lintonsmith, as previously disclosed in our Current Report on Form 8-K filed on March 16, 2026.
37
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Share Repurchase Program
In May 2000, the Board approved a stock repurchase program with no stated expiration date. Since that time and through March 31, 2026, the Board has authorized $650.0 million to be expended for the repurchase of the Company's stock under this program. All repurchased shares become authorized but unissued shares of the Company. The Company last purchased shares through this program in fiscal year 2020. As of March 31, 2026, a total accumulated 1.5 million shares have been repurchased for $595.4 million. At March 31, 2026, $54.6 million remain outstanding under the approved stock repurchase program. The Company does not expect to repurchase shares in fiscal year 2026.
Item 5. Other Information
During the three months ended March 31, 2026, no director or officer of the Company adopted terminated
38
Item 6. Exhibits
Exhibit 10.1 | President and CEO Offer Letter Agreement, dated February 18, 2026, between the Company and Susan Lintonsmith. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed March 16, 2026.) | |||||||
Exhibit 10.2 | Letter Agreement for Chief Operating Officer, dated March 13, 2026, between the Company and Jim Lain. (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed March 16, 2026.) | |||||||
Exhibit 31.1 | President and Chief Executive Officer of Regis Corporation: Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
Exhibit 31.2 | Executive Vice President and Chief Financial Officer of Regis Corporation: Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
Exhibit 32 | Chief Executive Officer and Chief Financial Officer of Regis Corporation: Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| Exhibit 101 | The following financial information from Regis Corporation's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026, formatted in Inline Xtensible Business Reporting Language (iXBRL) and filed electronically herewith: (i) the Condensed Consolidated Balance Sheets; (ii) the Condensed Consolidated Statements of Operations; (iii) the Condensed Consolidated Statements of Comprehensive Income; (iv) the Condensed Consolidated Statements of Shareholders' Equity; (v) the Condensed Consolidated Statements of Cash Flows; and (vi) the Notes to Condensed Consolidated Financial Statements. | |||||||
| Exhibit 104 | The cover page from Regis Corporation's Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026, formatted in iXBRL (included as Exhibit 101). | |||||||
39
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 thereunto duly authorized.
| Date: May 13, 2026 | By: | /s/ KERSTEN D. ZUPFER | ||||||
| Kersten D. Zupfer, | ||||||||
| Executive Vice President and Chief Financial Officer | ||||||||
| (Principal Accounting Officer) | ||||||||
40
FAQ
How did Regis Corporation (RGS) perform financially for the nine months ended March 31, 2026?
Regis generated higher revenue and profit, with revenue of $168.5 million versus $149.7 million a year earlier and operating income of $17.8 million versus $12.7 million. Income from continuing operations improved to $2.5 million from a $1.4 million loss.
What were Regis Corporation’s system-wide sales and same-store sales trends in this 10-Q?
System-wide revenue was $796.6 million, slightly below $826.4 million in the prior year. However, total system-wide same-store sales grew 1.1%, a reversal from a 1.3% decline, with Supercuts up 3.2% and SmartStyle still negative.
How did the Alline acquisition impact Regis Corporation’s results?
The Alline acquisition significantly increased company-owned salon activity, lifting company-owned revenue to $58.5 million from $23.2 million and boosting company-owned adjusted EBITDA. The deal also added about $10.3 million of goodwill allocated to the company-owned segment.
What is Regis Corporation’s debt and liquidity position as of March 31, 2026?
Regis had a $116.4 million term loan, $9.7 million of paid-in-kind interest, and $1.0 million drawn on its revolver. It reported $22.9 million in cash and total available liquidity of $31.9 million after the $10 million minimum liquidity covenant.
How much cash did Regis Corporation generate from operations in this period?
Regis produced $8.9 million of net cash from operating activities, compared with $7.0 million a year earlier. The improvement mainly reflects higher operating income, partly offset by changes in working capital and lower advertising fund-related cash accumulations.
What were Regis Corporation’s key salon counts and mix at March 31, 2026?
Regis operated or franchised 3,770 salons, down from 3,941. This included 3,497 franchised salons and 273 company-owned salons. Franchise locations represented 92.8% of the network, while company-owned salons accounted for 7.2%.
Did Regis Corporation report any significant one-time items in this 10-Q?
Yes. Regis recorded a $1.0 million gain from reducing the estimated fair value of the Alline earn-out liability to zero. In the prior year, results also benefited from $8.4 million of income from discontinued operations tied to the OSP software sale.