Supercuts 2003 Annual Report Download

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REGIS CORP
FORM 10-K
(Annual Report)
Filed 09/17/03 for the Period Ending 06/30/03
Address 7201 METRO BLVD
MINNEAPOLIS, MN 55439
Telephone 9529477777
CIK 0000716643
Symbol RGS
SIC Code 7200 - Services-Personal Services
Industry Personal Services
Sector Services
Fiscal Year 06/30
http://www.edgar-online.com
© Copyright 2013, EDGAR Online, Inc. All Rights Reserved.
Distribution and use of this document restricted under EDGAR Online, Inc. Terms of Use.

Table of contents

  • Page 1
    REGIS CORP FORM 10-K (Annual Report) Filed 09/17/03 for the Period Ending 06/30/03 Address Telephone CIK Symbol SIC Code Industry Sector Fiscal Year 7201 METRO BLVD MINNEAPOLIS, MN 55439 9529477777 0000716643 RGS 7200 - Services-Personal Services Personal Services Services 06/30 http://www.edgar-...

  • Page 2

  • Page 3
    ..., Minnesota (Address of principal executive offices) (952) 947-7777 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class None Name of each exchange on which registered None 41-0749934 (I.R.S. Employer Identification No...

  • Page 4
    ...by reference to the closing price as of the last business day of the Registrant's most recently completed second fiscal quarter, December 31, 2002, was $1,092,201,863. The Registrant has no non-voting common stock. The number of outstanding shares of the Registrant's common stock, par value $.05 per...

  • Page 5
    ... PART III Item 10. Directors and Executive Officers of the Registrant Item 11. Executive Compensation Item 12. Security Ownership of Certain Beneficial Owners and Management Item 13. Certain Relationships and Related Transactions Item 14. Principal Accounting Fees and Services PART IV Item 15...

  • Page 6
    ..., Regis Salons, MasterCuts, Trade Secret, SmartStyle and Cost Cutters. During fiscal 2003, the Company and its franchisees provided services to 142.7 million customers worldwide. The Company has approximately 49,000 employees worldwide. Industry Overview Management estimates that annual revenues of...

  • Page 7
    ... parking. The Company primarily focuses on real estate opportunities within regional malls, strip centers and Wal-Mart Supercenters. Regis' North American salon concepts address the various customer preferences within the salon market. The Company's regional mall and strip center salon concepts...

  • Page 8
    ... to their customers. Sales of hair care and beauty products increased 12.7 percent in fiscal 2003 to a record $465.1 million and represented 29.4 percent of company-owned revenues. Control Over Salon Operations. The Company manages its expansive salon base through a combination of area and regional...

  • Page 9
    ... square feet and are located in regional malls, strip centers, WalMart Supercenters, high street locations and department stores. The Company's domestic operations consists of 7,591 salons (2,427 franchised), operating under five concepts, each offering attractive and affordable hair care products...

  • Page 10
    ... to men, women and children, although male customers account for over 65 percent of total haircuts. The average sale at Supercuts salons is approximately $12. At June 30, 2003, the Company operated 1,748 Supercuts stores in North America, including 961 franchised locations. Revenues from company...

  • Page 11
    ...owned salons in the international division operate in malls, leading department stores, high-street locations and grocery and retail chains under license arrangements or real property leases, consistently focused on the value-priced, moderate and upscale hair care and beauty market. The average sale...

  • Page 12
    ...-wide salons (company-owned and franchised) opened at the beginning and end of each of the last five years, as well as the number of salons opened, closed, relocated, converted and acquired during each of these periods. SALON LOCATION SUMMARY 1999 2000 2001 2002 2003 REGIS SALONS Open at beginning...

  • Page 13
    ... 2000 2001 2002 2003 SMARTSTYLE/COST CUTTERS IN WAL-MART Company-owned Salons: Open at beginning of period Salons constructed Acquired Less relocations Salon openings Conversions Salon closed Open at end of period Franchised Salons: Open at beginning of period Salons constructed Acquired Less...

  • Page 14
    ...company-owned and franchise stores, the Company seeks conveniently located, highly visible strip shopping centers which allow customers adequate parking and quick and easy store access. Various other factors are considered in evaluating sites, including trade area demographics, availability and cost...

  • Page 15
    ... shopping malls for its Regis Salons, MasterCuts, Trade Secret and Mia & Maxx Hair Studio salons. The Company generally locates its mall based salons in fully enclosed, climate-controlled shopping centers having 400,000 or more square feet of leasable area and at least two full-line department store...

  • Page 16
    ...operational policies and procedures relating to quality of service, training, design and decor of stores, and trademark usage. The Company's field personnel make periodic visits to franchised stores to ensure that the stores are operating in conformity with the standards for each franchising program...

  • Page 17
    ...franchisees and new franchisees that open multiple salons may receive a reduction in initial franchise fees. Franchisee Training The Company provides new franchisees with training, focusing on the various aspects of store management, including operations, personnel management, marketing fundamentals...

  • Page 18
    ... brand image and high loyalty. Salon Training Programs The Company has an extensive hands-on training program for its stylists which emphasizes both technical training in hairstyling and cutting, hair coloring, perming and hair treatment regimes as well as customer service and product sales. The...

  • Page 19
    ... programs. The Company believes that its compensation structure for salon managers and stylists is competitive within the industry. Stylists benefit from the Company's high-traffic locations and receive a steady source of new business from walk-in customers. In addition, the Company offers a career...

  • Page 20
    ... hair care industry is highly fragmented and competitive. In every area in which the Company has a salon, there are competitors offering similar hair care services and products at similar prices. The Company faces competition within malls from companies which operate salons within department stores...

  • Page 21
    ...continuing growth are the result of the quality of its salon location selections and real estate strategies. Employees As of June 30, 2003, the Company had approximately 49,000 full- and part-time employees worldwide, of which approximately 43,000 employees were located in the United States. None of...

  • Page 22
    ... States, the Company's franchise operations are subject to the Federal Trade Commission's Trade Regulation Rule on Franchising (the "FTC Rule") and by state laws and administrative regulations that regulate various aspects of franchise operations and sales. The Company's franchises are offered to...

  • Page 23
    ... terms of at least five years, generally with the ability to renew, at the Company's option, for an additional five years. Salons operating within department stores in Canada and Europe operate under license agreements, while freestanding or shopping center locations in those countries have real...

  • Page 24
    ... an agreement with the Equal Employment Opportunity Commission ("EEOC") to settle allegations of discrimination in Supercuts. The $3.2 million settlement was accrued during the fourth quarter of fiscal year 2003 in corporate and franchise support costs in the Consolidated Statement of Operations...

  • Page 25
    ... and Related Stockholder Matters Regis common stock is listed and traded on the New York Stock Exchange under the symbol "RGS." The accompanying table sets forth the high and low closing bid quotations for each quarter during the previous two fiscal years as reported by Nasdaq through March 26, 2003...

  • Page 26
    ... .78 .93 500,582 166,986 $ .10 The following information is provided to facilitate comparisons of operating income and net income. Fiscal year 2000 and 1999 operating income was decreased by $2,940 and $16,133, respectively, related primarily to merger and restructuring charges. These items reduced...

  • Page 27
    ...the Years Ended June 30, 2003 2002 2001 Company-owned service revenues (1) Company-owned product revenues (1) Franchise revenues Company-owned operations: Profit margins on service (2) Profit margins on product (3) Direct salon (1) Rent (1) Depreciation (1) Franchise direct costs, including product...

  • Page 28
    ..., including 2,427 franchised salons, operating primarily under the trade names of Regis Salons, MasterCuts, Trade Secret, SmartStyle, Supercuts and Cost Cutters. The Company's international operations include 2,026 salons, including 1,627 franchised salons, located throughout Europe, primarily in...

  • Page 29
    ...the Company's opportunity to strategically combine the acquired business with the Company's existing structure to serve a greater number of customers through its expansion strategies. Cost of Product Used and Sold Product costs are determined by applying estimated gross profit margins to service and...

  • Page 30
    ... The Company is involved in various lawsuits and claims that arise from time to time in the ordinary course of our business. Accruals are recorded for such contingencies based on our assessment that the occurrence is probable, and where determinable, an estimate of the liability amount. Management...

  • Page 31
    ... system-wide sales. Management believes that system-wide sales information is useful in assessing the overall health of the entire salon system. Consolidated revenues, which includes revenues of company-owned salons, royalties, initial franchise fees and product and equipment sales to franchisees...

  • Page 32
    ..., respectively. Same-store sales increases achieved during fiscal years 2003 and 2002 were driven primarily by higher product sales and a shift in the mix of service sales toward higher priced salon services, such as hair color. International Revenues. Total international revenues were $171.5, $119...

  • Page 33
    ... the result of franchise fees from salons opened in Europe due to the Company's increased presence in Europe after the fiscal 2002 acquisitions of the European franchise operations. Sales of product to franchise salons increased $7.4 million, or 27.6 percent, in fiscal year 2003 and $8.8 million or...

  • Page 34
    ... Cost of Revenue The Company's cost of revenues includes labor costs, the cost of product to provide services for company-owned salons and the cost of products sold to salon customers. The resulting gross margin percentage for fiscal year 2003 improved to 45.5 percent of company-owned revenues...

  • Page 35
    ...direct costs include all direct costs related to franchise salons, such as the cost of products and equipment sold to franchisees and direct costs incurred in the Company's offices in the United States, Canada and in Europe to support franchising activities. During fiscal year 2003, franchise direct...

  • Page 36
    ... a one-time income tax benefit of approximately $1.8 million resulting from the implementation of certain tax planning strategies. Exclusive of such fiscal year 2002 nonrecurring items, the Company's effective tax rate was 39.2 percent. Fiscal year 2003 was the first full year of operations from the...

  • Page 37
    ... currencies that underlie the Company's investments in those markets, and additional paid-in capital recorded in connection with stock issued for business acquisitions. Cash Flows Operating Activities Net cash provided by operating activities increased in fiscal year 2003 to $149.6 million. The...

  • Page 38
    ... in capital expenditures and $66.9 million in business and salon acquisitions. The Company constructed 397 new corporate salons in fiscal year 2003, including 168 new SmartStyle salons, 85 new Strip Center salons, 53 new Regis Salons, 47 new MasterCuts salons, 34 new Trade Secret salons, and ten new...

  • Page 39
    ... Company generally retains the right to the related salon assets net of any outstanding obligations in the event of a default by a franchise owner. Management has not experienced and does not expect any material loss to result from these arrangements. Other long-term obligations represent guarantees...

  • Page 40
    ... the Company to purchase all of their salon assets within a specified market for 90 percent of their original cost within two years from the date of the franchisee opening their first salon. As of June 30, 2003, 22 existing franchised salons were covered by such agreements and the related maximum...

  • Page 41
    ... of new salon construction and same-store sales. Each year, the Company anticipates building over 500 corporate salons and adding at least 300 franchised salons, while closing approximately 150 salons. The Company's longterm outlook for same-sales is in the two to four percent range. During...

  • Page 42
    ... Company's revenue and net earnings have generally been realized evenly throughout the fiscal year. The service and retail product revenues associated with its corporate salons, as well as the Company's franchise revenues, are of a replenishment nature. The Company estimates that customer visitation...

  • Page 43
    ... suitable locations and financing for new salon development; governmental initiatives such as minimum wage rates, taxes and possible franchise legislation; the ability of the Company to successfully identify and acquire salons that support its growth objectives; or other factors not listed above...

  • Page 44
    ....8 million to hedge its variable rate operating lease obligations as discussed on the following page. During fiscal year 2003, the $11.8 million swap was redesignated as a hedge of a portion of the interest payments associated with the Company's long-term financing program. The redesignation was the...

  • Page 45
    ... expected cost of borrowing for outstanding derivative balances as of June 30, 2003. The table below provides information about the Company's net investments in foreign operations and derivative financial instruments by functional currency and presents such information in United States (U.S.) dollar...

  • Page 46
    ... cross currency swap derivative financial instrument expires in fiscal 2007. At June 30, 2003 and 2002, the Company's net investment in this derivative financial instrument was in a $6.7 and $2.4 million loss position, respectively, based on its estimated fair value. For the year ended June 30, 2003...

  • Page 47
    Table of Contents REPORT OF INDEPENDENT AUDITORS To the Shareholders and Directors of Regis Corporation: In our opinion, the accompanying consolidated balance sheet and the related consolidated statements of operations, of changes in shareholders' equity and comprehensive income and of cash flows ...

  • Page 48
    Table of Contents REGIS CORPORATION CONSOLIDATED BALANCE SHEET (Dollars in thousands, except per share amounts) June 30, 2003 2002 ASSETS Current assets: Cash Receivables, net Inventories Deferred income taxes Other current assets Total current assets Property and equipment, net Goodwill Other ...

  • Page 49
    Table of Contents REGIS CORPORATION CONSOLIDATED STATEMENT OF OPERATIONS (Dollars and shares in thousands, except per share amounts) 2003 Years Ended June 30, 2002 2001 Revenues: Company-owned salons: Service Product Franchise revenues: Royalties and fees Product sales $1,117,562 465,053 1,582,615...

  • Page 50
    adjusted amounts. The accompanying notes are an integral part of the Consolidated Financial Statements. 46

  • Page 51
    ... fair market value of financial instruments designated as hedges of interest rate exposure, net of taxes and transfers Stock repurchase plan Proceeds from exercise of stock options Shares issued through franchise stock incentive program Shares issued in connection with salon acquisitions Tax benefit...

  • Page 52
    Table of Contents Additional Paid-In Capital Accumulated Other Comprehensive Income (Loss) Retained Earnings Total Comprehensive Income $150,793 $ (2,274) (921) (160) (1,460) $128,587 53,088 1,971 149 11,860 716 (4,...

  • Page 53
    Table of Contents REGIS CORPORATION CONSOLIDATED STATEMENT OF CASH FLOWS (Dollars in thousands) 2003 Years Ended June 30, 2002 2001 Cash flows from operating activities: Net income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Amortization Deferred ...

  • Page 54
    ... United States are primarily located in strip shopping centers. The company-owned and franchised salons in the UK, France and several other countries are owned and operated in malls, leading department stores, mass merchants and high-street locations. At June 30, 2003 and 2002, approximately three...

  • Page 55
    ... of reported income from the Company's international operations. Inventories: Inventories consist principally of hair care products held either for use in salon services or for sale. Inventories are stated at the lower of cost or market with cost determined on a weighted average basis. Property...

  • Page 56
    ... recognizes revenue from initial franchise fees at the time franchisee salons are opened. Product sales by the Company to franchisees are recorded at the time product is shipped to franchise locations. Franchise expenses included in franchise direct costs in the Consolidated Statement of Operations...

  • Page 57
    ... under contingent stock agreements. Diluted EPS is calculated as net income divided by weighted average common shares outstanding, increased to include assumed exercise of dilutive securities. Stock options with exercise prices greater than the average market value of the Company's common stock are...

  • Page 58
    ... 2002, the Company adopted the provisions of FAS No. 143, "Accounting for Asset Retirement Obligations," which addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. The initial adoption of...

  • Page 59
    ... entered into a five-year operating lease agreement in June 2000 relating to its Salt Lake distribution center. Based on the Company's analysis of the new Interpretation, the operating lease structure was with a variable interest entity. Under Interpretation No. 46, effective July 1, 2003, if no...

  • Page 60
    ... pro forma net income and earnings per share as if the fair value-based method of accounting had been used. No stock-based employee compensation cost is reflected in net income, as all options granted under those plans had an exercise price equal to the market value of the underlying stock on the...

  • Page 61
    ... FAS No. 123, the Company's pro forma net income and pro forma earnings per share for the years ended June 30, 2003, 2002 and 2001 would have been as follows: For the Years Ended June 30, 2003 2002 2001 Net income, as reported Deduct: Total stock-based employee compensation expense determined under...

  • Page 62
    ...provides additional information concerning selected balance sheet accounts as of June 30, 2003 and 2002: (Dollars in thousands) 2003...under capital ... and payroll related costs Insurance Taxes payable, primarily income taxes Book overdrafts payable Acquisition purchase price payable Restructuring Other...

  • Page 63
    ... NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED 2003 (Dollars in thousands) Cost Accumulated Amortization 2002 Accumulated Amortization Net Cost Net Amortized intangible assets: Trade names Product license agreements Franchise agreements Non-compete agreements Other $29,722 14,481 16...

  • Page 64
    ... The following provides additional information concerning the Company's restructuring liabilities related to its fiscal year 2000 merger with Supercuts UK, its fiscal year 1999 mergers and its restructuring liability related to its fiscal year 1999 restructuring plan for its international operations...

  • Page 65
    ... and non-compete agreements as well as issuing 613,249, 962,933 and 715,056 shares, respectively, of the Company's common stock (see Note 3). 3. ACQUISITIONS: During fiscal years 2003, 2002 and 2001, the Company made numerous acquisitions. These acquisitions have been recorded using the purchase...

  • Page 66
    ... the walk-in customer base of the acquired hair salon brand. Residual goodwill further represents the Company's opportunity to strategically combine the acquired business with the Company's existing structure to serve a greater number of customers through its expansion strategies. Internationally...

  • Page 67
    ... earnings per share for the year ended June 30, 2003. 4. FINANCING ARRANGEMENTS: The Company's long-term debt as of June 30, 2003 and 2002 consists of the following: (Dollars in thousands) Interest rate % Maturity Dates 2003 2002 Amounts outstanding 2003 2002 Senior term notes Revolving credit...

  • Page 68
    ...-to-market adjustment and current market interest rates, the carrying values of the Company's debt instruments, based upon discounted cash flow analyses using the Company's current incremental borrowing rate, approximate their fair values at June 30, 2003 and 2002. Aggregate maturities of long-term...

  • Page 69
    ...: In the normal course of business, the Company is exposed to market risk related to changes in interest rates and foreign currency exchange rates. The Company has established policies and procedures that govern the management of these exposures. By policy, the Company does not enter into such...

  • Page 70
    ... fiscal year 2003. As a result, the fair value swaps did not have a net impact on earnings. Foreign Currency Exchange Risk: The majority of the Company's revenue, expense and capital purchasing activities are transacted in United States dollars. However, because a portion of the Company's operations...

  • Page 71
    ... amount and, in most cases, real estate taxes and other expenses. Rent expense for the Company's international department store salons is based primarily on a percent of sales. The Company also leases the premises in which the majority of its franchisees operate and has entered into corresponding...

  • Page 72
    ...CONTINUED Future Minimum Lease Payments: As of June 30, 2003, future minimum lease payments (excluding percentage rents based on sales) due under existing noncancellable operating leases with remaining terms of greater than one year are as follows: Fiscal year (Dollars in thousands) Corporate leases...

  • Page 73
    ... an agreement with the Equal Employment Opportunity Commission ("EEOC") to settle allegations of discrimination in Supercuts. The $3.2 million settlement was accrued during the fourth quarter of fiscal year 2003 in corporate and franchise support costs in the Consolidated Statement of Operations...

  • Page 74
    ...as a result of the following: (Dollars in thousands) 2003 2002 2001 U.S. statutory rate State income taxes, net of federal income tax benefit Other, primarily meals and entertainment, and nondeductible goodwill Nonrecurring federal benefit 35.0% 35.0% 35.0% 3.0 3.3 3.3 (0.5) 0.9 2.0 (1.5) 37.5% 37...

  • Page 75
    ...9. BENEFIT PLANS: Profit Sharing Plan: Effective July 1, 2003, the Company's qualified employee stock ownership plan (ESOP) was converted to a profit sharing plan. The profit sharing plan covers substantially all field supervisors, warehouse and corporate office employees. The profit sharing plan is...

  • Page 76
    ... voting power of all classes of stock of the Company or any subsidiary of the Company. Options may also be granted to the Company's outside directors for a term not to exceed ten years from the grant date. The 2000 Plan contains restrictions on transferability, time of exercise, exercise price and...

  • Page 77
    Table of Contents NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED Stock options outstanding and weighted average exercise prices are as follows: Options Outstanding Weighted Average Exercise Price Shares Balance, June 30, 2000 Granted Cancelled Exercised Balance, June 30, 2001 Granted ...

  • Page 78
    ...'s measure of compensation cost for its incentive stock plans, as well as pro forma information. Other: The Company has unfunded deferred compensation contracts covering certain management and executive personnel. Associated costs included in corporate and franchise support costs on the Consolidated...

  • Page 79
    ..., 2003, the Board of Directors elected to increase the maximum repurchase amount to $100.0 million. The timing and amounts of any repurchases will depend on many factors, including the market price of the common stock and overall market conditions. During the year ended June 30 2003, 860,301 shares...

  • Page 80
    .... The Company operates its domestic (North American) operations through five primary concepts: Regis Salons, MasterCuts, Trade Secret, SmartStyle and Strip Center (primarily Supercuts and Cost Cutters) salons. Each of the concepts offers similar products and services, concentrates on the mass-market...

  • Page 81
    ...'s reportable operating segments is shown in the following table as of June 30, 2003, 2002 and 2001: (Dollars in thousands) 2003 2002 2001 Total company-owned service revenues: Domestic International Total Total company-owned product revenues: Domestic International Total Total franchise royalties...

  • Page 82
    Total Purchases of salon assets: Domestic International Total $ 77,460 $ 66,232 $ 80,224 $ $ 68,109 23,518 91,627 $ 26,060 73,774 $ 99,834 $ 64,422 22 $ 64,444 77

  • Page 83
    ... of Contents QUARTERLY FINANCIAL DATA (Unaudited) (Dollars in thousands, except per share amounts) Quarter Ended Year Ended September 30 December 31 March 31 June 30 2003 Revenues Operating income Net income Net income per diluted share Dividends declared per share $399,223 36,348 19,717 .44...

  • Page 84
    ...and that such information is accumulated and communicated to management, including the chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applied its judgment in assessing the costs and benefits of such...

  • Page 85
    ..., Education and Marketing Chief Operating Officer, Strip Center Division Chief Operating Officer, SmartStyle Chief Operating Officer, Regis Salons and MasterCuts Chief Operating Officer, Trade Secret President, International Division Senior Vice President, International Managing Director, UK Chief...

  • Page 86
    ... of Financial Reporting from 1991 to 1994. Melissa Boughton has served as Senior Vice President of Real Estate since December of 2002, and has been in the shopping center industry for over 20 years. Prior to joining the Company, she served as Vice President of Real Estate at Best Buy, Inc. Bert...

  • Page 87
    ... and has served as Vice President, Salon Operations since 1998. Raymond Duke was elected Senior Vice President, International Managing Director, UK in February, 1999 and has served as Vice President since 1992. Vicki Langan was elected Chief Operating Officer, Supercuts in April 2001 and has served...

  • Page 88
    ... herein by reference. The following table provides information about the Company's common stock that may be issued upon the exercise of stock options under all of the Company's equity compensation plans in effect as of June 30, 2003. Number of securities remaining available for future issuance...

  • Page 89
    ... have therefore been excluded. (b) Reports on Form 8-K: The following reports on Form 8-K were filed during the three months ended June 30, 2003: Form 8-K dated April 7, 2003 related to the announcement of the Company's consolidated revenues and consolidated same-store sales for the month and third...

  • Page 90
    ... reference.) Employee Stock Ownership Plan and Trust Agreement dated as of May 15, 1992 between the Registrant and Myron Kunin and Paul D. Finkelstein, Trustees. (Incorporated by reference to Exhibit 10(q) as part of the Company's Report on Form 10-K dated September 27, 1993, for the year ended June...

  • Page 91
    ... 30, 1997.) Compensation and non-competition agreement dated May 7, 1997, between the Company and Myron Kunin. (Incorporated by reference to Exhibit 10(z) of the Company's Report on Form 10-K dated September 24, 1997, for the year ended June 30, 1997.) Series F Senior Note drawn from Private Shelf...

  • Page 92
    ... as of July 10, 1998 between the Registrant and Prudential Insurance Company of America. (Incorporated by reference to the Company's Report on Form 10-K dated September 17, 1998, for the year ended June 30, 1998.) Term Note C Agreement between the Registrant and LaSalle National Bank dated September...

  • Page 93
    ...) of the Company's Report on Form 10-K dated September 24, 2002, for the year ended June 30, 2002.) Series J Senior Notes between the Registrant and purchasers listed in the attached purchaser schedule. Consent of PricewaterhouseCoopers LLP President and Chief Executive Officer of Regis Corporation...

  • Page 94
    ...Pearce Randy L. Pearce, Executive Vice President, Chief Financial and Administrative Officer (Principal Financial and Accounting Officer) DATE: September 17, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf...

  • Page 95
    ... the 2003 Annual Report on Form 10-K of Regis Corporation also included an audit of the financial statement schedule listed in Item 14(a)(2) of this Form 10-K. In our opinion, this financial statement schedule presents fairly, in all material respects, the information set forth therein when read in...

  • Page 96
    Table of Contents REGIS CORPORATION SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS as of June 30, 2003, 2002 and 2001 (dollars in thousands) Column A Column B Balance at beginning of period Charged to costs and expenses Column C Column D Column E Balance at end of period Description Charged to ...

  • Page 97
    ...from time to time in New York City as its Prime Rate. Payments of principal, Yield Maintenance Amount, if any, and interest are to be made at the main office of Bank of New York in New York City or at such other place as the holder hereof shall designate to the Company in writing, in lawful money of...

  • Page 98
    ...entitled to the benefits thereof. This Note is subject to optional prepayment, in whole or from time to time in part, on the terms specified in the Agreement. This Note is a registered Note and, as provided in the Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or...

  • Page 99
    ...from time to time in New York City as its Prime Rate. Payments of principal, Yield Maintenance Amount, if any, and interest are to be made at the main office of Bank of New York in New York City or at such other place as the holder hereof shall designate to the Company in writing, in lawful money of...

  • Page 100
    ...entitled to the benefits thereof. This Note is subject to optional prepayment, in whole or from time to time in part, on the terms specified in the Agreement. This Note is a registered Note and, as provided in the Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or...

  • Page 101
    ...from time to time in New York City as its Prime Rate. Payments of principal, Yield Maintenance Amount, if any, and interest are to be made at the main office of Bank of New York in New York City or at such other place as the holder hereof shall designate to the Company in writing, in lawful money of...

  • Page 102
    ...entitled to the benefits thereof. This Note is subject to optional prepayment, in whole or from time to time in part, on the terms specified in the Agreement. This Note is a registered Note and, as provided in the Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or...

  • Page 103
    ...from time to time in New York City as its Prime Rate. Payments of principal, Yield Maintenance Amount, if any, and interest are to be made at the main office of Bank of New York in New York City or at such other place as the holder hereof shall designate to the Company in writing, in lawful money of...

  • Page 104
    ...entitled to the benefits thereof. This Note is subject to optional prepayment, in whole or from time to time in part, on the terms specified in the Agreement. This Note is a registered Note and, as provided in the Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or...

  • Page 105
    ...from time to time in New York City as its Prime Rate. Payments of principal, Yield Maintenance Amount, if any, and interest are to be made at the main office of Bank of New York in New York City or at such other place as the holder hereof shall designate to the Company in writing, in lawful money of...

  • Page 106
    ...entitled to the benefits thereof. This Note is subject to optional prepayment, in whole or from time to time in part, on the terms specified in the Agreement. This Note is a registered Note and, as provided in the Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or...

  • Page 107
    ...from time to time in New York City as its Prime Rate. Payments of principal, Yield Maintenance Amount, if any, and interest are to be made at the main office of Bank of New York in New York City or at such other place as the holder hereof shall designate to the Company in writing, in lawful money of...

  • Page 108
    ...entitled to the benefits thereof. This Note is subject to optional prepayment, in whole or from time to time in part, on the terms specified in the Agreement. This Note is a registered Note and, as provided in the Agreement, upon surrender of this Note for registration of transfer, duly endorsed, or...

  • Page 109
    ...Operations Group Gateway Center Two, 10th Floor 100 Mulberry Street Newark, NJ 07102-4077 Attention: Manager (3) Address for all other communications and notices: The Prudential Insurance Company of America c/o Prudential Capital Group Two Prudential Plaza 180 N. Stetson Ave., Suite 5600 Chicago, IL...

  • Page 110

  • Page 111
    ...Group Gateway Center Two, 10th Floor 100 Mulberry Street Newark, NJ 07102-4077 Attention: Manager (3) Address for all other communications and notices: Pruco Life Insurance Company c/o Prudential Capital Group Two Prudential Plaza 180 N. Stetson Ave., Suite 5600 Chicago, IL 60601 Attention: Managing...

  • Page 112
    ...notices relating to payments: ING Investment Management LLC 5780 Powers Ferry Road, NW, Suite 300 Atlanta, GA 30327-4943 Attention: Securities Accounting Facsimile: (770) 690-5057 (3) Address for all other communications and notices: Prudential Private Placement Investors, L.P. 4 Gateway Center, 100...

  • Page 113
    ... notices relating to payments: JPMorgan Chase Bank 14201 Dallas Parkway - 13th Floor Dallas, TX 75254-2917 Attn: Income Processing - G. Ruiz a/c: G09588 (3) Address for all other communications and notices: Prudential Private Placement Investors, L.P. 4 Gateway Center, 100 Mulberry Street Newark, NJ...

  • Page 114
    ...transfers: RGA Reinsurance Company Attn: Banking Dept. 1370 Timberlake Manor Parkway Chesterfield, MO 63017-6039 (3) Address for all other communications and notices: Prudential Private Placement Investors, L.P. 4 Gateway Center, 100 Mulberry Street Newark, NJ 07102 Attention: Albert Trank, Managing...

  • Page 115
    ... Company 1600 McConnor Parkway Schaumburg, Illinois 60196-6801 Attention: Dave Shroba, Manager Telephone: (847) 874-7444 Facsimile: (847) 874-5643 (3) Address for all other communications and notices: Prudential Private Placement Investors, L.P. 4 Gateway Center, 100 Mulberry Street Newark, NJ...

  • Page 116
    ...Bank of New York New York, NY (ABA No.: 021-000-018) (2) Address for all notices relating to payments: Prudential Investment Management, Inc. c/o The Prudential Insurance Company of America Investment Operations Group Gateway Center Two, 10th Floor 100 Mulberry Street Newark, NJ 07102-4077 Attention...

  • Page 117
    ...90809, 333-31874, 333-57092 and 333-72200), and Form S-8 (Nos. 33-44867 and 33-89882) of Regis Corporation of our report dated August 26, 2003, relating to the consolidated financial statements, which appears in the Annual Report on Form 10-K. We also consent to the incorporation by reference of our...

  • Page 118
    ...'s ability to record, process, summarize and report financial information; and Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial reporting. (b) September 17, 2003 /s/ Paul D. Finkelstein...

  • Page 119
    ...2002 I, Randy L. Pearce, Executive Vice President, Chief Financial and Administrative Officer of Regis Corporation, certify that: 1. 2. I have reviewed this annual report on Form 10-K of Regis Corporation; Based on my knowledge, this report does not contain any untrue statement of a material fact or...

  • Page 120
    ... Act of 1934; and (2) The information contained in the Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Registrant. September 17, 2003 /s/ Paul D. Finkelstein Paul D. Finkelstein, President and Chief Executive Officer

  • Page 121
    ... The information contained in the Annual Report on Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Registrant. September 17, 2003 /s/ Randy L. Pearce Randy L. Pearce, Executive Vice President, Chief Financial and Administrative Officer