REGIS CORPORATION
RECONCILIATION OF NON-GAAP FINANCIAL INFORMATION
We believe our presentation of non-GAAP measures, including operating income excluding certain non-cash charges, adjusted EBITDA and adjusted Franchise revenue, provides meaningful insight into our ongoing operating performance and a supplemental perspective of our results of operations. The non-GAAP measures are financial measures that do not reflect United States Generally Accepted Accounting Principles (GAAP). Presentation of the non-GAAP measures allows investors to review our core ongoing operating performance from the same perspective as management and the Board of Directors. These non-GAAP financial measures provide investors an enhanced understanding of our operations, facilitate investors' analyses and comparisons of our current and past results of operations and provide insight into the prospects of our future performance. We also believe the non-GAAP measures are useful to investors because they provide supplemental information that research analysts frequently use to analyze financial performance.
Items impacting comparability are not defined terms within U.S. GAAP. Therefore, our non-GAAP financial information may not be comparable to similarly titled measures reported by other companies. We determine the items to consider as "items impacting comparability" based on how management views our business, makes financial, operating and planning decisions and evaluates the Company's ongoing performance. The following items have been excluded from our non-GAAP adjusted EBITDA results: discontinued operations, one-time professional fees and legal settlements, severance expense, the benefit from lease liability decreases in excess of previously impaired right of use asset, lease termination fees and asset retirement obligation costs.
We present adjusted revenue to provide a meaningful Franchise adjusted EBITDA margin, which removes non-margin revenue from total revenue to arrive at an adjusted margin. Margin is a common metric used by investors, however, the majority of our revenue is offset by equal expense, so it does not contribute to our margin. We remove the non-margin revenue from this metric in order to show a meaningful margin rate.
The method we use to produce non-GAAP results is not in accordance with U.S. GAAP and may differ from methods used by other companies. These non-GAAP results should not be regarded as a substitute for corresponding U.S. GAAP measures, but instead should be utilized as a supplemental measure of operating performance in evaluating our business. Non-GAAP measures do have limitations as they do not reflect certain items that may have a material impact upon our reported financial results. As such, these non-GAAP measures should be viewed in conjunction with our financial statements prepared in accordance with U.S. GAAP.
Information concerning potential factors that could affect future financial results is set forth in the Company's Annual Report on Form 10-K for the year ended June 30, 2023. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. However, your attention is directed to any further disclosures made in our subsequent annual and periodic reports filed or furnished with the SEC on Forms 10-K,10-Q and 8-K and Proxy Statements on Schedule 14A.
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REGIS CORPORATION
Reconciliation of U.S. GAAP Net Income to Adjusted EBITDA
(Dollars in thousands)
(Unaudited)
Nine Months Ended March 31, | |||||
2024 | 2023 | ||||
Consolidated reported net income, as reported (U.S. GAAP) | $ | (141) | $ | (2,582) | |
Interest expense, as reported | 18,529 | 13,123 | |||
Income taxes, as reported | (201) | (213) | |||
Depreciation and amortization, as reported | 2,056 | 6,052 | |||
Long-lived asset impairment, as reported | 170 | 36 | |||
EBITDA (as defined above) | $ | 20,413 | $ | 16,416 | |
Professional fees and legal settlements | 62 | 898 | |||
Severance | 230 | 852 | |||
Lease liability benefit | (281) | (1,515) | |||
Lease termination fees | 205 | 1,571 | |||
Discontinued operations | (2,089) | (3,958) | |||
Adjusted EBITDA, non-GAAP financial measure | $ | 18,540 | $ | 15,842 | |
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REGIS CORPORATION
Reconciliation of Reported Franchise Adjusted EBITDA as a Percent of GAAP Franchise Revenue to Franchise Adjusted EBITDA as a Percent of Adjusted Franchise Revenue
(Dollars in thousands)
(Unaudited)
Nine Months Ended March 31, | |||||
2024 | 2023 | ||||
Franchise adjusted EBITDA | $ | 20,146 | $ | 17,338 | |
GAAP Franchise revenue | 148,567 | 169,717 | |||
Franchise adjusted EBITDA as a % of GAAP Franchise revenue | 13.6 % | 10.2 % | |||
Non-margin revenue adjustments: | |||||
Franchise rental income | $ | (72,534) | $ | (85,845) | |
Advertising fund contributions | (19,807) | (24,003) | |||
Adjusted Franchise revenue | 56,226 | 59,869 | |||
Franchise adjusted EBITDA as a percent of adjusted Franchise revenue | 35.8 % | 29.0 % |
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Regis Corporation published this content on 01 May 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 02 May 2024 10:07:25 UTC.