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| RGS > SEC Filings for RGS > Form 8-K on 20-Feb-2009 | All Recent SEC Filings |
20-Feb-2009
Completion of Acquisition or Disposition of Assets, Financial Statements and Exhibits
On January 26, 2009, Regis Corporation (the "Company") entered into a Stock Purchase Agreement (the "Stock Purchase Agreement") with Premier Salons Beauty, Inc. ("Premier Salons") pursuant to which the Company agreed to sell to Premier Salons all of the outstanding shares of the Company's Trade Secret, Inc. subsidiary, which, including its subsidiaries, operates and franchises 709 hair care stores in the United States. As part of the transaction, the Company also agreed to sell to Premier Salons the assets of 12 hair care stores operating in Canada. The sale was completed on February 16, 2009.
The Company received a nominal amount of cash for the sale of Trade Secret, Inc. The Stock Purchase Agreement provides for customary representations, warranties, and covenants by the parties and requires the Company to indemnify Premier Salons against certain liabilities, including certain liabilities relating to the operation of the Trade Secret business prior to the February 16, 2009 closing date of the transaction.
The Company has agreed to provide certain administrative and other support services to Premier Salons and its affiliates in connection with the Trade Secret business for a transition period of six months following the sale completion date of February 16, 2009, with possible extension to not more than eleven months. The parties have entered into a security agreement under which the Company has been granted a security interest in certain of the assets of the Trade Secret business in order to secure the payment obligations of Premier Salons and its affiliates with respect to such transition services.
Pursuant to the Stock Purchase Agreement, the Company will reimburse Premier Salons for certain loss contingencies including any losses imposed against Premier Salons arising for litigation that existed prior to the sale completion date and for the termination of an existing office lease.
(b) Pro forma financial information.
The following unaudited pro forma Condensed Consolidated Statements of Operations for years ended June 30, 2008, 2007, and 2006 have been prepared to present our results of operations as if the sale of Trade Secret had occurred on July 1, 2005. We have not presented the interim statements of operations or balance sheet as the effect of the Trade Secret sale was already reflected in our Form 10-Q for the quarter and six months ended December 31, 2008. The pro forma adjustments are based on factually supportable available information and certain assumptions that management believes are reasonable.
The Company concluded that Trade Secret qualified as held for sale under Statement of Financial Accounting Standard No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, as of December 31, 2008 and is presented as discontinued operations in the Condensed Consolidated Statements of Operations for all periods presented in the Form 10-Q for the quarterly period ended December 31, 2008.
These pro forma financial statements do not purport to be indicative of the results of operations of the Company 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, 2008 and Form 10-Q for the quarter and six months ended December 31, 2008.
REGIS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, expect per share data)
Twelve Months Ended June 30, 2008
Historical Pro Forma Pro Forma
Financial Adjustment Financial
Statement Trade Secret Statement
(unaudited) (unaudited)
(a)
Revenues:
Service $ 1,894,257 $ 31,767 $ 1,862,490
Product 775,980 224,694 551,286
Royalties and fees 68,628 1,013 67,615
2,738,865 257,474 2,481,391
Operating expenses:
Cost of service 1,090,710 28,151 1,062,559
Cost of product 395,979 131,588 264,391
Site operating expenses 204,001 19,232 184,769
General and administrative 337,160 15,597 321,563
Rent 406,270 44,794 361,476
Depreciation and amortization 130,448 17,155 113,293
Goodwill impairment - - -
Terminated acquisition income, net - - -
Total operating expenses 2,564,568 256,517 2,308,051
Operating income 174,297 957 173,340
Other income (expense):
Interest expense (44,571 ) (292 ) (44,279 )
Interest income and other, net 8,373 200 8,173
Income from continuing operations before
income taxes and equity in income of
affiliated companies 138,099 865 137,234
Income taxes (53,744 ) 438 (54,182 )
Equity in income of affiliated companies, net
of income taxes 849 - 849
Income from continuing operations $ 85,204 $ 1,303 $ 83,901
Income per share from continuing operations:
Basic $ 1.97 $ 0.03 $ 1.94
Diluted $ 1.95 $ 0.03 $ 1.92
Weighted average common and common equivalent
shares outstanding:
Basic 43,157 43,157 43,157
Diluted 43,587 43,587 43,587
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See endnotes.
REGIS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, expect per share data)
Twelve Months Ended June 30, 2007
Historical Pro Forma Pro Forma
Financial Adjustment Financial
Statement Trade Secret Statement
(unaudited) (unaudited)
(a)
Revenues:
Service $ 1,793,802 $ 29,322 $ 1,764,480
Product 752,280 223,368 528,912
Royalties and fees 80,506 560 79,946
2,626,588 253,250 2,373,338
Operating expenses:
Cost of service 1,014,781 25,835 988,946
Cost of product 380,492 122,229 258,263
Site operating expenses 208,101 17,487 190,614
General and administrative 328,644 10,921 317,723
Rent 382,820 40,998 341,822
Depreciation and amortization 124,137 12,673 111,464
Goodwill impairment 23,000 - 23,000
Terminated acquisition income, net - - -
Total operating expenses 2,461,975 230,143 2,231,832
Operating income 164,613 23,107 141,506
Other income (expense):
Interest expense (41,770 ) (123 ) (41,647 )
Interest income and other, net 5,113 60 5,053
Income from continuing operations before
income taxes and equity in income of
affiliated companies 127,956 23,044 104,912
Income taxes (44,786 ) (7,613 ) (37,173 )
Equity in income of affiliated companies, net
of income taxes - - -
Income from continuing operations $ 83,170 $ 15,431 $ 67,739
Income per share from continuing operations:
Basic $ 1.86 $ 0.35 $ 1.51
Diluted $ 1.82 $ 0.34 $ 1.48
Weighted average common and common equivalent
shares outstanding:
Basic 44,723 44,723 44,723
Diluted 45,623 45,623 45,623
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See endnotes.
REGIS CORPORATION
PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, expect per share data)
Twelve Months Ended June 30, 2006
Historical Pro Forma Pro Forma
Financial Adjustment Financial
Statement Trade Secret Statement
(unaudited) (unaudited)
(a)
Revenues:
Service $ 1,634,028 $ 29,517 $ 1,604,511
Product 718,942 232,691 486,251
Royalties and fees 77,894 654 77,240
2,430,864 262,862 2,168,002
Operating expenses:
Cost of service 928,515 25,888 902,627
Cost of product 371,018 130,899 240,119
Site operating expenses 199,602 18,652 180,950
General and administrative 294,092 9,098 284,994
Rent 350,926 40,152 310,774
Depreciation and amortization 115,903 12,829 103,074
Goodwill impairment - - -
Terminated acquisition income, net (33,683 ) - (33,683 )
Total operating expenses 2,226,373 237,518 1,988,855
Operating income 204,491 25,344 179,147
Other income (expense):
Interest expense (34,989 ) (76 ) (34,913 )
Interest income and other, net 651 30 621
Income from continuing operations before
income taxes and equity in income of
affiliated companies 170,153 25,298 144,855
Income taxes (60,575 ) (8,623 ) (51,952 )
Equity in income of affiliated companies, net
of income taxes - - -
Income from continuing operations $ 109,578 $ 16,675 $ 92,903
Income per share from continuing:
Basic $ 2.43 $ 0.37 $ 2.06
Diluted $ 2.36 $ 0.36 $ 2.00
Weighted average common and common equivalent
shares outstanding:
Basic 45,168 45,168 45,168
Diluted 46,400 46,400 46,400
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See endnotes.
(a) Elimination of Trade Secret operating results included in our historical consolidated statements of operations.
(d) Exhibits.
EXHIBIT
NUMBER
99 Regis Corporation News Release dated February 16, 2009
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