Regis Takes Immediate Action to Mitigate COVID-19 Impact
MINNEAPOLIS - (BUSINESS WIRE) - March 19, 2020 - Regis Corporation (NYSE: RGS), a leader in the haircare industry, whose primary business is franchising, owning, and operating technology enabled hair salons, today announced it has, over the last few weeks, taken various actions to mitigate the effect on its customers, franchisees, and corporate business operations from the national emergency that has arisen as a result of the COVID-19 virus.
Regis has taken a number of proactive measures in its salon operations, including:
- Regis has temporarily suspended operations in certain areas as required by government mandate and has been adjusting days of service or reducing hours of operation at select company-owned salon locations where it supports the company's liquidity initiatives.
- Online check-in has been encouraged and utilized in order to reduce the number of customers in the waiting area of our salons at any given time.
- Implemented an increased focus on cleanliness and sanitization by increasing and adding to our current supply of cleaning and sanitizing materials to ensure our stylists can clean and disinfect the salons even more thoroughly throughout the course of each business day.
- Close coordination of activities and risk mitigation efforts with all franchisees.
At the corporate level, Regis's actions include the following additional measures:
- Regis has drawn an additional $183 million from its current committed credit facility as a precautionary measure in order to increase its cash position and preserve financial flexibility in light of the current uncertainty in the global economy. Taking into account Regis's existing cash balance of approximately $61 million and the $183 million credit facility draw, Regis maintains approximately $244 million of liquidity at this time.
- In recognition of the difficult challenges that may be faced by its franchisees, Regis has temporarily suspended the collection of ad fund fees from its franchisees from March 1st through June 30th of this year. Regis is hopeful this will enable our franchisees, many of whom are small business owners, to address potential hardships during this national emergency.
- Requested that all non-essential personnel at our office locations work remotely utilizing remote technologies the company launched several months ago.
- Thoughtfully managing our purchasing activity and payables cycle based on evolving business conditions.
Hugh Sawyer, Chairman, President and CEO of Regis said, "Although our strategy has not changed, in the midst of these uncertain times resulting from the COVID-19 outbreak we drew upon our existing credit facility in an abundance of caution as part of our company-wide contingency planning effort. "We intend to take every appropriate step to facilitate the financial integrity of our company as we consider the safety and welfare of our employees and customers while confronting a business threat of still uncertain severity and duration," concluded Mr. Sawyer.
Kersten Zupfer, EVP and Chief Financial Officer stated, "We appreciate the support of our lenders, franchisees and other key constituents as we continue to vigorously manage our business during this unprecedented crisis."
About Regis Corporation
Regis Corporation (NYSE:RGS) is a leader in beauty salons and cosmetology education. As of December 31, 2019, the Company franchised, owned or held ownership interests in 7,152 worldwide locations. Regis' franchised and corporate locations operate under concepts such as Supercuts®, SmartStyle®, Cost Cutters®, Roosters® and First Choice Haircutters®. Regis maintains an ownership interest in Empire Education Group in the U.S. For additional information about the Company, including a reconciliation of certain non-GAAP financial information and certain supplemental financial information, please visit the Investor Information section of the corporate website at www.regiscorp.com.
Safe Harbor Statement
This press release 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," "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 a potential material reduction in revenue from our company-owned and franchised salons as a result of the uncertain duration and severity of the COVID-19 outbreak as well as the health of our stylists, customers and employees. 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.
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SOURCE Regis Corporation
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