Regis Corporation (NYSE:RGS) Q3 2022 Earnings Conference Call May 10, 2022 10:00 AM ET

Company Participants

Matthew Doctor – President and Chief Executive Officer

Kersten Zupfer – Executive Vice President and Chief Financial Officer

Biz McShane Murphy – Vice President and Controller

Conference Call Participants

Grace Menk - Jefferies

Biz McShane Murphy

Good morning and thank you for joining the Regis Third Quarter 2022 Earnings Release Conference Call. All participants are in a listen-only mode. The prepared remarks by newly appointed President and Chief Executive Officer, Matthew Doctor, and Executive Vice President and Chief Financial Officer, Kersten Zupfer, are accompanied by slides to help participants all along. After the prepared remarks, we will have time for questions. Please use the chat feature or the "Raise your hand " feature to ask a question. Also joining Matt and Kersten on this call is Jim Lain, our Chief Operations Officer.

I am your host, Biz McShane, Vice President and Corp. Controller. As a reminder, this conference is being recorded. I would like to remind everyone that the language on forward-looking statements included in our earnings release and 8-K filing also apply to our comments made on the call today. These documents, along with our presentation today, can be found on our website at www.regiscorp.com /investor -relations, along with a reconciliation of any non-GAAP financial measures mentioned on today's call with their corresponding GAAP measures. Today's slides are located in the supplemental financial section of the investor site. With that, I will now turn the call over to Matt.

Matthew Doctor

Thanks, Biz. And good morning, everyone. Today, I will walk you through highlights of our third quarter results, and the status of the some of the key initiatives we highlighted on the last call, as well as how we are refining our priorities and areas of focus. Kersten will cover our results in more detail, in addition to addressing a few one-time items, as there continues to be some noise in our reported results as we work through the shift in our business model. Our third quarter same-store sales and adjusted EBITDA improved year-over-year. Total adjusted EBITDA came in around break-even for the quarter and franchise EBITDA, which represents a proxy of our go-forward business model, was positive compared to a loss in the prior-year and positive for the second quarter in a row.

As sales remained well below pre-COVID-19 levels, the organizational moves we have made a streamlined our G&A have helped mitigate losses during this period of slower than expected sales recovery. As our legacy businesses continue to wind down and sales eventually improve, we will benefit as our G&A remains largely fixed. While our results would reflect progress on the path to profitability, they remain below where we want them to be. There were several factors during the quarter that affected our results. Some one-time and some related to ongoing issues.