REGIS CORP Q2 FY2025 earnings call

• Acquisition of Alline Salon Group: Acquired for $22 million, with $19 million cash and ~140,000 shares. Alline had $83M revenue, $11.1M 4-wall EBITDA, $5.8M corporate EBITDA in 12 months ended Oct 31, 2024. Synergies expected to deliver $1.5M savings by 2026. • Financial Results: Second quarter adjusted EBITDA up 12.7% to $7.1M, earnings per diluted share $2.71. Includes income from discontinued operations ($7.4M from OpenSalon Pro sale). • Brand Initiatives: Supercuts brand refresh in progress, focusing on 18-44 age segment. Loyalty program Supercuts Rewards launched, with 27% of Supercuts sales via members. Brand excellence standards and digital efforts to strengthen in-salon operations. • Alline Integration: Integration of 314 salons progressing, focusing on systems, people, and culture integration. Need to get operationally ready before full optimization.

For the 12 months ended October 31, 2024, Alline as an entity reported unaudited revenue of $83 million, $11.1 million of 4-wall EBITDA and $5.8 million in corporate EBITDA. The franchise business had same-store sales decline of 1.6% in the second quarter. Royalty and fee revenue was down due to fewer franchise salons and same-store sales decline. The company-owned segment (Alline acquisition) contributed $2.7 million in revenue and $0.5 million in EBITDA in the less than two weeks post-acquisition. The franchise business represents a significant portion, with Supercuts (≈60% of royalties) having 0.5% same-store sales growth, while SmartStyle had a 6.4% decline. The corporate segment from Alline adds to growth drivers.

• Expect closures in calendar 2025 to be the last year of significant closures, with pace slowing in future years. • Adjusted G&A excluding Alline expected to be in range of $39.5 million, run rate G&A closer to $38 million. With Alline, fiscal 2025 G&A adjusted expected to be in range of $42 million, run rate G&A $42.5M to $43M. • Expect to generate cash for remainder of fiscal year 2025 and evaluate strategies to deploy capital for highest value.

• Challenges in same-store sales due to factors like smaller Thanksgiving-Christmas window, disparities among brands, and salon closures. • Integration risks of Alline salon portfolio if not executed seamlessly, including ensuring proper systems, people, and culture integration. • Risks related to brand strategy execution, such as not achieving expected results from brand refresh and loyalty program optimization.