Biz McShane Murphy | VP & Controller |
Matthew Doctor | President & CEO |
Kersten Zupfer | EVP & CFO |
Stephanie Wissink | Jefferies & Company |
Good morning, and thank you for joining the Regis fourth Quarter 2022 earnings release conference call. All participants are in a listen-only mode. The prepared remarks by our President and Chief Executive Officer, Matthew Doctor, and Executive Vice President and Chief Financial Officer, Kersten Zupfer, are accompanied by slides to help participants follow along. After the prepared remarks, we will have time for questions. Please use the Q&A feature or the raise-your-hand feature to ask a question. Kersten Officer. call and our Jim Matt Operations Chief joining on is this Lain, Also host, McShane, your I’m Biz Corporate Controller. Vice President and
a our the any along today, www.Regiscorp.com/investorrelations, measures. With along section measures with is located found to As non-GAAP on the release, These of and with GAAP financial included conference investor that, documents, on reconciliation corresponding I also in our turn earnings on now this like Today’s call call today’s apply site. can website, the will filing, of the would today. to financial in being our mentioned to the presentation remind over made are on be I with language the recorded. our supplemental that our X-K slides Matt. forward-looking comments statements everyone reminder, call
good and everyone. morning, Biz, Thanks,
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data We target are determine campaigns to looking right and in to our their audiences forward CRM to improve segment the and retention. cadence our enriching better
the efforts the this the content to presence on to at enhancing come to will early culminating and ultimately goes have enable investment, ahead. working smoothly will what for sales, our social only collective our company-wide isn’t, expect dollars customer turn, the greatest efforts And transition working been moving coming into flex June, The also retention, platform end shift stylists goal OSP shift and EBITDA that is be but last these already in on optimize should transition closely the to Zenoti. Since several turning There customer as goal, We traffic the the And not work real-time our visibility in to streams wholesale in a existing they Zenoti to us in growth. get and and again, we customers of months and on increase what our as versus to More our meet return once closed together and new dollars and media rollout-ready. ensure where Regis over sale this the started, are teams increasing the has needle and we’re the are. to legacy accordingly. stages be These functionality provide are and to, the and both months. will There combination us there functionality more quickly in of used And the will underway of is salon we to but brands, more we the and of other September. getting not ensure tests migrate be and to now this want that the brings. quality is our work on pilot salons mid for for lost our The to the I and transition speed, all And Zenoti. this with possible, migrated transition, locations majority system, to because Regis-ready, platform plan right companies. announce product while undertaking to addition from in that is Propoint we system the fruit, end a is calendar running franchisees waves are morning, by is a bearing fiscal OSP our will XXXX, work roughly some the was for of locations and our marketing brands, the QX catalyst features the Roosters expect sacrifice the migrating the to brand and in calendar are today X,XXX next massive of our our am already point-of-sale year, pleased the digital nuances QX. yesterday our not that Having on initiatives. added is to are all Zenoti successfully singular in
orderly drives transition and this a salons Tying eager our manner. in results. timely over having to So, this our we’re to very back how
addition will salons help transition positive payments to platform the the we in over further robust sales, more As debt given expect that on will migration will the engagement. go that nature of drive further to stylist customer impact see paydown, receive and Zenoti, towards to we
coming come months one As company-wide with goals, well. the in this other to on the as more two
face time. to also our time we to our I period in has was lot, the have am short to we proud energy. a proper And aware and on current continue lot a spent frankly, that have Quite was of Now, business dedicate reiterate we I know need of to a we that And I I the time been but update of able to our to achieve been lot move challenges that what there am a want on. where forward. ensuring
and the such Now company-wide our delivering our is of quite Kersten on we have a we fiscal to will growth have XXX% to team strong targeted have to time, to a have our goals in EBITDA and more now that a of XXXX. in of to Kersten? some that, our deliver, to that of forward over have results. goals focus confidence be position the conviction and as I have strong beginning since set – the QX the the provide these Regis Execution year. as turn we we been move needle, will that will around. full look dedicate able we in strong I detail call utmost just can on year we all in
million was from the of fourth and to Matt, XXXX. despite we advertising adjusted million positive EBITDA company-owned also associated to consolidated Thanks, was the incurring in declined and an fourth loss due improved sales revenue of from $X quarter the full million offset in a $XX prior improvement year. We reported our to of with to year’s decline compared good of salons transition adjusted royalty we adjusted loss is was and quarter quarter which increase Yesterday, caused an fourth million, revenues adjusted royalties. an basis, EBITDA of$ by in of annual a prior revenue. remaining XX On systemwide XX% sales the of $X to $X lower quarter XX% a now prior basis, driven growth EBITDA as distribution $XX revenue fiscal million, result million, being XXXX. year our in from a of X% $XX basis, $X franchised compared revenue The the quarter. G&A compared in compared by The in improved our EBITDA $XX $XX of expected, quarter, total Year-over-year morning. reflected On million, prior delivered decline improved million in away our product the Same-store to business. on structure. the loss million the salons. higher million adjusted XXX businesses These a quarter to year, losses
selling EBITDA on associated basis. ‘XX to $XX loss our a salons positive a in comparable of million adjusted with Excluding versus franchisees, of the million, we recorded loss fiscal $X
a of quarter. over structure in to of the core improvement the $XX profitable. adjusted of $X from same systemwide consecutive has in the business the Our related adjusted sales which and been year million improvement million loss The a $XX primarily prior period year. our posted company-owned having The million recorded approximately rightsizing a last the the $X period. that G&A third driven of core is in franchise loss the company-owned fewer is past primarily compared is year. business to improvement higher quarter quarter, improvement our by This EBITDA salons EBITDA $X million quarter, current the an in million This is segment
associated the We segment closures an or as reported salons million of expect do continuing fourth operations continue number losses which franchise transition forward. going sales the on buyouts. from We nearly through reduce $X significant distribution with from company-owned at loss The away lease a loss remaining of complete, million. to product the $X and is not to to includes we decrease, operating product quarter, of approximately in we incur losses expect
Additionally, the of company-owned $X remaining, million. segment approximately with operating reported XXX losses salons
forward. and to losses going these As mitigate terminate leases we end expect early,
was adjusted million G&A which quarter million, for $X Our year-over-year. improvement $XX the an is
that invest increase XXXX, quarter, While the in in marginally in G&A the mentioned. we the year fiscal activities saw Matt as we G&A same third revenue-generating do to we level of expect
remaining write-offs of offset million, of we be In in slightly million million to derecognition the strategic will our be range received. We on The million majority with cash we the from debt. operations, cash goodwill we will Zenoti, the of believe proceeds lower $XX purchase as discontinued the cash believe $XX our removal the a platform plans of $XX and our previously we XXXX. G&A and in $XX XXXX, reported is OSP of $XX discontinued this in up as our G&A rate year are million. and $XX a asset will expect to associated loss run in run to annually. the non-cash in a range a represents of million, of up fiscal of million, received, $XX a made of million, operations, to have to received of we price pay platform, by for $XX rate further by additional driven investment the down which operations be when in on recognize stated year year G&A our return that Based million OSP the In to OSP $XX fiscal $XX the proceeds recorded The received, gain consideration expect platform. significant gain discontinued be million
flows, fees with in of million debt offset connection fourth cash each million we $X items, sales, in used of cash including approximately one-time improved quarter. to Turning $X product operations, the in our cash a quarter, $X operations $X million quarter the the and the improvement of fourth of to is from which year amendment, million cash our used quarter quarter, paid an Adjusting was our in in $XX improvement compared cash million Cash XXXX. third from for of flows by from million $X approximately XXXX. use from fiscal
annual credit While to quarter, bonus we higher in year capital of improvement to a fiscal related to quarter year associated after continued in $X ‘XX expenditures. We used we quarter payments, in fiscal used agreement and first be first the with amendment, XXXX fees million cash the operations. expect use the due expect cash
Going less to forward, related we no expect in use significantly OSP. will investing as cash longer be we to CapEx,
week, last efforts. we earlier, announced outcome pleased our mentioned as the am of As with and I Matt refinancing
us the and including call. through provides call remarks. coverage discussed the and leverage, Q&A, thank you earlier back XX, million term to to covenant credit reduced million. agreement minimum revolving runway all we $XX and million. in your includes adequate the latter credit will us of strategic XX, the continued of my like extended not invest tested credit total Under to We ratio a of facility, XXXX. approximately fixed This prepared $XX August liquidity amended minimum two and from liquidity XX, have provisions typical XXXX, lead I’d amendment, covenants, December and the terms concludes facility EBITDA, The financial a million covenants, charge liquidity to loan, from $XXX support Biz, in revolving the Regis. currently the with turn $XX credit have a amendment interest are and Under the XXXX. believe to $XX amended date our priorities converted We amendment, in to March and the was who facility the until maturity which with for million
Kersten. you, instructions]. [Operator Thank
with and Our first question Stephanie go unmute, to is ahead. from Wissink Jefferies. Steph, remember Please
everyone. Good morning,
few questions. a have We
and versus just so. of the is, maybe first or year X% Any you, volume over taken price for this sense comp is Kersten, the period. to is the about thinking about The the talk in last value? that Just increases you’ve
take that is outlined, increases, we by number didn’t strategic higher business. much the a Yes. this talk that actually Yes, fundamentals and on of of Steph, as of about that’s three No. underlying it priorities we – – I call, one. the kind driven price the the level Hey, can it’s drive Matt. it’s
– sales kind the and price, the what’s and about lean around think tactics half on call drive of near-term we a of, I levers year, just probably in we’ll As world on some the us. this bit continue it as to in first going industry given to
and in the couple probably our shift probably those next And we’re it, to move So of would a have to the we – it mentioned take of towards hold. investments of traffic-driving talking marketing we’re will with up efforts as a in now, play, our that I come the into from months, thereafter. dollars expect actually through education fully as major year. the perspective, be think education end – initiatives hold about that starting us of through end will kind And dollars, will will catalyst the about traffic making that kind price launched continue that come will shift being the that we’re starting of and investments
have So, of and both back good a heading year. half price of traffic mix into we’ll this probably the
we can on Just And performance different bit helpful. different or a a bit segments, spend talk the little little more other delta that’s the lines? maybe monikers, moniker, business by any Smart Matt, business time just brand. by and the Okay, difference Style between
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really go large-scale a remodel. Bringing having up way. image to will a We’re presence, that comments long and probably
piece. a So, that’s
inroads. There their some are will are programs digital Another ingrained going TV basically one the Walmart nature. their made is be to to of the We’ve We’ve be captive a on ad to just and time, the some more of first we’re awesome part for really are actually, that which store. marketing in-store. Examples lot banners that. been launching in talking of get walls, kind that huge ecosystem, doing of
and run show video loops just Style there. that is to that We’re raise going will awareness Smart
anything long a time in like that has happened. time First that
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spoke we in yes, But education, rest, brand, Smart that regarding brand extra your addition that bit for as traffic-driving things Smart of go dollars, from hopefully is the well, of in Zenoti, those initial Style going and help in-salon in ecosystem to mechanisms shift marketing we gap So, have reimaging. to the Style will there a all which Smart about will beyond above exciting to the lot going really addition back but perspective. to things on a a a question, little Style from
we hear. All right, portion on obligations bit versus related behalf on that be product your and the mentioned the to Sally revenue, and technical, in sheet, complete franchisees. encouraging you’re a anticipate going think Beauty. little true-up what apologize. is balance wanted sort P&L? is lease with is recorded This Kersten, of royalties the in to where going it Is but And fees model then mean, largely be to I outstanding I Should facilities to to I you’re fees fees any that of nuanced just, Regis-owned the that’s carrying those to I your the of be will on of what line? and with kind that transition respect you
one the hit Yes. Maybe I’ll first hit on first. the – I’ll
the as it’s footnote pretty lease there deep XX-K, know relates it good obligations. I So, to a the but in is
with million $X to the leases, associated the So, only then to then corporate left related of total the and associated leases. franchise And relates our that’s $XX to leases, balance with relates about on sheet salons. there’s remainder remainder APCO the million the
so Okay. That’s us. much. for you it Thank
your There day. questions this other for time. open are in a at We no great Have thank Regis. everyone interest