UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): April 9, 2013

 

REGIS CORPORATION

(Exact name of registrant as specified in its charter)

 

Minnesota

 

1-12725

 

41-0749934

(State or other jurisdiction of incorporation)

 

(Commission File Number)

 

(IRS Employer Identification No)

 

7201 Metro Boulevard
Minneapolis, MN 55439
(Address of principal executive offices and zip code)

 

(952) 947-7777

(Registrant’s telephone number, including area code)

 

(Not applicable)

(Former name or former address, if changed from last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

o    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

o    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

o    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

o    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 



 

Regis Corporation
Current Report on Form 8-K

 

ITEM 2.01.  Completion of Acquisition or Disposition of Assets.

 

As previously disclosed, on July 13, 2012, Regis Corporation (the “Company”) entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with Aderans Co., Ltd., a Japanese corporation (“Aderans”). The sale of HC (USA), Inc., a Delaware corporation and wholly owned subsidiary of the Company (“Hair Club”), to Aderans for $163.5 million excluding closing adjustments and transaction fees was completed on April 9, 2013.

 

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

 

(b) Pro forma financial information.

 

The following unaudited pro forma consolidated statements of operations for years ended June 30, 2012, 2011, and 2010 have been prepared to present our results of operations as if the sale of Hair Club had occurred on July 1, 2009.  We have not presented the interim statements of operations for the quarters ended September 30, 2012 and December 31, 2012 as the Hair Club sale qualified as held for sale under ASC 205-20 Discontinued Operations, and was presented as a discontinued operation in our Form 10-Qs for those periods.  The pro forma adjustments are based on factually supportable available information and certain assumptions that management believes are reasonable.

 

The pro forma effect of the sale on the December 31, 2012 balance sheet as reported in our Form 10-Q for the quarter ended December 31, 2012 would be to increase cash for $163.5 million, excluding closing adjustments and transaction fees, and remove current and long-term assets held for sale of $16.8 and $180.0 million, respectively, and current and long-term liabilities held for sale of $16.5 and $28.8 million, respectively, resulting in an after-tax gain of $12.0 million.  The actual after-tax gain to be recognized by the Company during the three months ended June 30, 2013 will be adjusted by the closing adjustments and transaction fees.

 

These pro forma Consolidated Statements of Operations do not purport to be indicative of the financial position or results of operations of the Company as of such date or for such periods, nor are they necessarily indicative of future results. In the opinion of management, all necessary adjustments to the unaudited pro forma financial information have been made. The unaudited pro forma financial statements should be read in conjunction with historical consolidated financial statements of the Company, including the notes thereto, in the Company’s Form 10-K for the year ended June 30, 2012 and Form 10-Q for the quarters ended September 30, 2012 and December 31, 2012.

 

2



 

Item 9.01 Financial Statements and Exhibits (Continued)

 

REGIS CORPORATION

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(Dollars in thousands, expect per share data)

(Unaudited)

 

 

 

Twelve Months Ended June 30, 2012

 

 

 

Historical
Financial
Statement

 

Pro Forma 
Adjustment
Hair Club

 

Pro Forma
Financial
Statement

 

 

 

 

 

 

 

(a)

 

Revenues:

 

 

 

 

 

 

 

Service

 

$

1,712,703

 

$

68,812

 

$

1,643,891

 

Product

 

520,467

 

80,419

 

440,048

 

Royalties and fees

 

40,609

 

2,321

 

38,288

 

 

 

2,273,779

 

151,552

 

2,122,227

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Cost of service

 

985,154

 

42,693

 

942,461

 

Cost of product

 

249,655

 

28,020

 

221,635

 

Site operating expenses

 

198,725

 

6,479

 

192,246

 

General and administrative

 

302,572

 

38,943

(b)

263,629

 

Rent

 

340,805

 

9,036

 

331,769

 

Depreciation and amortization

 

118,071

 

13,101

 

104,970

 

Goodwill impairment

 

146,110

 

78,426

 

67,684

 

Total operating expenses

 

2,341,092

 

216,698

 

2,124,394

 

 

 

 

 

 

 

 

 

Operating loss

 

(67,313

)

(65,146

)

(2,167

)

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

Interest expense

 

(28,245

)

 

(28,245

)

Interest income and other, net

 

5,130

 

32

 

5,098

 

 

 

 

 

 

 

 

 

(Loss) income from continuing operations before income taxes and equity in (loss) income of affiliated companies

 

(90,428

)

(65,114

)

(25,314

)

 

 

 

 

 

 

 

 

Income taxes

 

5,279

 

849

(c)

4,430

(c)

Equity in (loss) income of affiliated companies, net of income taxes

 

(30,043

)

816

 

(30,859

)

 

 

 

 

 

 

 

 

Loss from continuing operations

 

$

(115,192

)

$

(63,449

)

$

(51,743

)

 

 

 

 

 

 

 

 

Loss per share from continuing operations:

 

 

 

 

 

 

 

Basic

 

$

(2.02

)

$

(1.11

)

$

(0.91

)

Diluted

 

$

(2.02

)

$

(1.11

)

$

(0.91

)

 

 

 

 

 

 

 

 

Weighted average common and common equivalent shares outstanding:

 

 

 

 

 

 

 

Basic

 

57,137

 

57,137

 

57,137

 

Diluted

 

57,137

 

57,137

 

57,137

 

 

See endnotes.

 

3



 

Item 9.01 Financial Statements and Exhibits (Continued)

 

REGIS CORPORATION

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(Dollars in thousands, expect per share data)

(Unaudited)

 

 

 

Twelve Months Ended June 30, 2011

 

 

 

Historical
Financial
Statement

 

Pro Forma
Adjustment
Hair Club

 

Pro Forma
Financial
Statement

 

 

 

 

 

 

 

(a)

 

Revenues:

 

 

 

 

 

 

 

Service

 

$

1,762,974

 

$

67,550

 

$

1,695,424

 

Product

 

523,194

 

75,729

 

447,465

 

Royalties and fees

 

39,701

 

2,409

 

37,292

 

 

 

2,325,869

 

145,688

 

2,180,181

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Cost of service

 

1,012,868

 

39,129

 

973,739

 

Cost of product

 

249,979

 

24,788

 

225,191

 

Site operating expenses

 

197,722

 

4,318

 

193,404

 

General and administrative

 

339,857

 

37,038

 

302,819

 

Rent

 

342,286

 

9,227

 

333,059

 

Depreciation and amortization

 

105,109

 

12,958

 

92,151

 

Goodwill impairment

 

74,100

 

 

74,100

 

Total operating expenses

 

2,321,921

 

127,458

 

2,194,463

 

 

 

 

 

 

 

 

 

Operating income (loss)

 

3,948

 

18,230

 

(14,282

)

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

Interest expense

 

(34,388

)

(14

)

(34,374

)

Interest income and other, net

 

4,811

 

88

 

4,723

 

 

 

 

 

 

 

 

 

(Loss) inome from continuing operations before income taxes and equity in income of affiliated companies

 

(25,629

)

18,304

 

(43,933

)

 

 

 

 

 

 

 

 

Income taxes

 

9,496

 

(6,837

)(c)

16,333

(c)

Equity in income of affiliated companies, net of income taxes

 

7,228

 

567

 

6,661

 

 

 

 

 

 

 

 

 

(Loss) income from continuing operations

 

$

(8,905

)

$

12,034

 

$

(20,939

)

 

 

 

 

 

 

 

 

(Loss) income per share from continuing operations:

 

 

 

 

 

 

 

Basic

 

$

(0.16

)

$

0.21

 

$

(0.37

)

Diluted

 

$

(0.16

)

$

0.21

 

$

(0.37

)

 

 

 

 

 

 

 

 

Weighted average common and common equivalent shares outstanding:

 

 

 

 

 

 

 

Basic

 

56,704

 

56,704

 

56,704

 

Diluted

 

56,704

 

56,704

 

56,704

 

 

See endnotes.

 

4



 

Item 9.01 Financial Statements and Exhibits (Continued)

 

REGIS CORPORATION

PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

(Dollars in thousands, expect per share data)

(Unaudited)

 

 

 

Twelve Months Ended June 30, 2010

 

 

 

Historical
Financial
Statement

 

Pro Forma
Adjustment
Hair Club

 

Pro Forma
Financial
Statement

 

 

 

 

 

 

 

(a)

 

Revenues:

 

 

 

 

 

 

 

Service

 

$

1,784,137

 

$

66,325

 

$

1,717,812

 

Product

 

534,593

 

72,978

 

461,615

 

Royalties and fees

 

39,704

 

2,483

 

37,221

 

 

 

2,358,434

 

141,786

 

2,216,648

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

Cost of service

 

1,015,720

 

37,158

 

978,562

 

Cost of product

 

263,883

 

21,568

 

242,315

 

Site operating expenses

 

199,338

 

5,305

 

194,033

 

General and administrative

 

291,991

 

36,207

 

255,784

 

Rent

 

344,098

 

9,013

 

335,085

 

Depreciation and amortization

 

108,764

 

12,198

 

96,566

 

Goodwill impairment

 

35,277

 

 

35,277

 

Lease termination costs

 

2,145

 

 

2,145

 

Total operating expenses

 

2,261,216

 

121,449

 

2,139,767

 

 

 

 

 

 

 

 

 

Operating income

 

97,218

 

20,337

 

76,881

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

Interest expense

 

(54,414

)

(26

)

(54,388

)

Interest income and other, net

 

10,410

 

(4

)

10,414

 

 

 

 

 

 

 

 

 

Income from continuing operations before income taxes and equity in income of affiliated companies

 

53,214

 

20,307

 

32,907

 

 

 

 

 

 

 

 

 

Income taxes

 

(25,577

)

(7,365

)(c)

(18,212

)(c)

Equity in income of affiliated companies, net of income taxes

 

11,942

 

909

 

11,033

 

 

 

 

 

 

 

 

 

Income from continuing operations

 

$

39,579

 

$

13,851

 

$

25,728

 

 

 

 

 

 

 

 

 

Income per share from continuing:

 

 

 

 

 

 

 

Basic

 

$

0.71

 

$

0.25

 

$

0.46

 

Diluted

 

$

0.71

 

$

0.25

 

$

0.46

 

 

 

 

 

 

 

 

 

Weighted average common and common equivalent shares outstanding:

 

 

 

 

 

 

 

Basic

 

55,806

 

55,806

 

55,806

 

Diluted

 

66,753

 

56,023

(d)

56,023

(d)

 

See endnotes.

 

5



 

Item 9.01 Financial Statements and Exhibits (Continued)

 

REGIS CORPORATION

NOTES TO THE PRO FORMA FINANCIAL STATEMENTS

(Unaudited)

 


(a)         Beginning in the first quarter of fiscal year 2013, the Company reclassified certain salon marketing and advertising expenses that were previously within the cost of service and general and administrative expense to site operating expense. The impact of these reclassifications have been excluded from the Pro Forma Financial Statements.

 

(b)         $2.5 million of professional fees related to the sale of Hair Club were previously included within our Unallocated Corporate Segment and have been included in the Hair Club Pro Forma Adjustment.

 

(c)          Income taxes have been allocated to continuing and discontinued operations based on the methodology required by accounting for income tax guidance.

 

(d)         As a result of the Hair Club Pro Forma Adjustments, the impact of the convertible debt is anti-dilutive to the Pro Forma Financial Statements for the twelve months ended June 30, 2010 and is therefore excluded from the weighted average shares for diluted earnings per share.

 

6



 

Item 9.01 Financial Statements and Exhibits (Continued)

 

(d) Exhibits.

 

EXHIBIT
NUMBER

 

 

 

 

 

99

 

Regis Corporation News Release dated April 9, 2013

 

7



 

SIGNATURE

 

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

REGIS CORPORATION

 

 

 

 

 

 

 

 

Dated: April 10, 2013

 

By:

/s/ Eric Bakken

 

 

 

Name: Eric Bakken, Title: Secretary

 

EXHIBIT INDEX

 

EXHIBIT
NUMBER

 

 

 

 

 

99

 

Regis Corporation News Release dated April 9, 2013

 

8