Regis Corporation reports $41.5mn net income for Q4
23 Aug '06
3 min read
As previously noted, the company was engaged in a wage and hour lawsuit. In June 2006, the company settled the suit for $2.8 million.
While the company does not admit any liability in this matter, management determined that the cost to defend its position coupled with the distraction created by the litigation exceeded the $2.8 million cost to settle the lawsuit.
The fourth quarter closure of 64 underperforming salons resulted in $6.5 million of non-core expense. The underperforming salons were primarily mall-based concepts, such as Regis and MasterCuts. As a result of these closures, the company wrote-off $2.4 million in assets.
The remaining average lease life for these locations was three years. As a result, Regis paid $4.1 million to buyout these leases.
"Simply put, our fiscal year 2006 results were unacceptable for Regis Corporation," commented Paul D. Finkelstein, Chairman and Chief Executive Officer. "We are committed to improving operational results."
Regis Corporation will host a conference call discussing fourth quarter and fiscal year results today, August 23, 2006 at 10:00 a.m., Central Time.
Regis Corporation is the beauty industry's global leader in salons, hair restoration centers and education.
As of June 30, 2006, the company owned or franchised 11,477 worldwide locations; which included 11,333 beauty salons, 90 hair restoration centers and 54 beauty schools operating under concepts.
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