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): February 16, 2009

 

REGIS CORPORATION

(Exact name of registrant as specified in its charter)

 

 

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.

 

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.

 

ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

 

(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.

 

2

 

REGIS CORPORATION

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, expect per share data)

 

		Twelve Months Ended June 30, 2008
		Historical Financial Statement			Pro Forma Adjustment Trade Secret			Pro Forma Financial 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

 

See endnotes.

 

3

 

REGIS CORPORATION

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, expect per share data)

 

		Twelve Months Ended June 30, 2007
		Historical Financial Statement			Pro Forma Adjustment Trade Secret			Pro Forma Financial 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

 

See endnotes.

 

4

 

REGIS CORPORATION

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, expect per share data)

 

		Twelve Months Ended June 30, 2006
		Historical Financial Statement			Pro Forma Adjustment Trade Secret			Pro Forma Financial 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

 

See endnotes.

 

5

 

REGIS CORPORATION

NOTES TO THE PRO FORMA FINANCIAL STATEMENTS

 

(a)          Elimination of Trade Secret operating results included in our historical consolidated statements of operations.

 

6

 

(d) Exhibits.

 

EXHIBIT NUMBER
99		Regis Corporation News Release dated February 16, 2009

 

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: February 20, 2009	By:	/s/ Eric Bakken
		Name: Eric Bakken, Title: Secretary

 

EXHIBIT INDEX

 

 

EXHIBIT NUMBER
99		Regis Corporation News Release dated February 16, 2009

 

8