MINNEAPOLIS--(BUSINESS WIRE)--Regis Corporation (NYSE:RGS) ("Regis"), the global leader in the $160 billion hair care industry, today announced that it has filed with the Securities and Exchange Commission (the ″SEC″) definitive proxy materials in connection with the Company's 2011 Annual Meeting of Shareholders, scheduled for October 27, 2011. Regis shareholders of record as of August 30, 2011 will be entitled to vote at the 2011 Annual Meeting of Shareholders. The definitive proxy materials contain the unanimous recommendation of the Regis Board of Directors that shareholders elect the Board's seven nominees, Paul D. Finkelstein, Rolf F. Bjelland, Joseph L. ("Joel") Conner, Van Zandt Hawn, Susan S. Hoyt, Michael J. Merriman and Stephen E. Watson, six of whom are independent.
Regis also announced today that its Board has approved several new strategic initiatives and governance changes designed to position the Company to deliver enhanced value for shareholders. These initiatives and changes are outlined below.
Consistent with its ongoing evaluation of non-core assets, Regis has retained BofA Merrill Lynch as financial advisor in conjunction with its review of Hair Club for Men and Women. In the event of a completed divestiture, Regis currently anticipates returning excess cash to shareholders through a buyback or dividend. Regis does not anticipate providing updates of this evaluation unless and until the Board enters into a definitive agreement or the process is terminated.
Regis has taken steps to reduce and contain costs, having achieved $43 million of savings over the past three fiscal years. The Company has a firm goal in place of delivering improved earnings and cash flow in fiscal 2012 and beyond. To achieve this objective, Regis is implementing aggressive cost-cutting and cost containment programs. The Company previously announced expected cost savings of $20 million to $30 million for fiscal 2012. Today, Regis is announcing that it is increasing the level of expected savings from its current cost structure to $40 million to $50 million and expects to achieve this level over the next two fiscal years. In addition, the Board and management team are committed to continuing to identify and evaluate opportunities for further cost reduction. The targeted cuts focus on:
The Company believes these cost savings can be achieved without adversely affecting our stylists or future growth.
As part of its planned CEO succession process begun more than three years ago, the Regis Board of Directors has named Randy L. Pearce, who currently serves as President, to succeed Paul D. Finkelstein as Chief Executive Officer in February 2012. In addition, Mr. Finkelstein, who had previously announced his decision to step down as Chief Executive Officer in February 2012, will not stand for election as a director at the 2012 Annual Meeting of Shareholders. Similarly, Rolf F. Bjelland will not stand for election as a director at the 2012 Annual Meeting of Shareholders.
Regis also plans to appoint an independent Chairman of the Board by July 1, 2012, as well as add a new independent director to the Board during 2012. The Nominating and Corporate Governance Committee has already nominated Michael J. Merriman, an independent candidate, to stand for election at the 2011 Annual Meeting of Shareholders. David B. Kunin, who has served on the Board for 14 years, will not stand for election in 2011.
As Regis has stated on its recent earnings calls and at investor presentations, the Company has been implementing key initiatives to drive revenue growth. These initiatives are focused on:
Regis believes that making these targeted, strategic investments in the business is the best way to drive earnings and profitable growth.
Regis' Board is committed to acting in the best interest of all of the Company's shareholders. The Board is fully engaged in driving the overall strategy by which Regis seeks to deliver an excellent customer experience and create shareholder value, and believes that the strategic initiatives and governance changes announced today will enhance that effort.
Faegre & Benson LLP and Wachtell, Lipton, Rosen & Katz are serving as legal advisors to Regis. Perella Weinberg Partners and BofA Merrill Lynch are serving as the Company's financial advisors.
Regis Corporation (NYSE:RGS) is the beauty industry's global leader in beauty salons, hair restoration centers and cosmetology education. As of June 30, 2011, the Company owned, franchised or held ownership interests in approximately 12,700 worldwide locations. Regis' corporate and franchised locations operate under concepts such as Supercuts, Sassoon Salon, Regis Salons, MasterCuts, SmartStyle, Cost Cutters, Cool Cuts 4 Kids and Hair Club for Men and Women. In addition, Regis maintains an ownership interest in Provalliance, which operates salons primarily in Europe, under the brands of Jean Louis David, Franck Provost and Saint Algue. Regis also maintains ownership interests in Empire Education Group in the U.S. and the MY Style concepts in Japan. System-wide, these and other concepts are located in the U.S. and in over 30 other countries in North America, South America, Europe, Africa and Asia. For additional information about the company, please visit the Investor Information section of the corporate website at www.regiscorp.com.
This press release 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. 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," "believe," "project," "forecast," "expect," "estimate," "anticipate," and "plan." In addition, the following factors could affect the Company's actual results and cause such results to differ materially from those expressed in forward-looking statements. These factors include competition within the personal hair care industry, which remains strong, both domestically and internationally; price sensitivity; changes in economic conditions; changes in consumer tastes and fashion trends; the ability of the Company to implement its planned spending and cost reduction plan and to continue to maintain compliance with financial covenants in its credit agreements; labor and benefit costs; legal claims; risk inherent to international development (including currency fluctuations); the continued ability of the Company and its franchisees to obtain suitable locations and financing for new salon development and to maintain satisfactory relationships with landlords and other licensors with respect to existing locations; governmental initiatives such as minimum wage rates, taxes and possible franchise legislation; the ability of the Company to successfully identify, acquire and integrate salons that support its growth objectives; the ability of the Company to maintain satisfactory relationships with suppliers; or other factors not listed above. The ability of the Company to meet its expected revenue target is dependent on salon acquisitions, new salon construction and same-store sales increases, all of which are affected by many of the aforementioned risks. Additional information concerning potential factors that could affect future financial results is set forth in the Company's Annual Report on Form 10-K for the year ended June 30, 2011. 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.
The Company has filed a definitive proxy statement with the SEC with respect to the 2011 Annual Meeting of Shareholders. Investors and security holders are urged to read the definitive proxy statement because it contains important information. Investors and security holders may obtain free copies of the definitive proxy statement and other documents filed with the SEC at the SEC's web site at www.sec.gov and by contacting Investor Relations at (952) 947-7777. Investors and security holders may also obtain free copies of the documents filed with the SEC on the Company's website at http://www.regiscorp.com.