Regis Reports First Quarter 2010 Results
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-First Quarter Operational Earnings of $0.30 per Share-
MINNEAPOLIS--(BUSINESS WIRE)-- Regis Corporation (NYSE: RGS), the global leader in the $170 billion hair care industry, today reported financial results for its first fiscal quarter ended September 30, 2009. First quarter reported earnings of $0.14 per diluted share included three non-operational items which, as discussed immediately below, reduced reported earnings per diluted share by $0.16 on a net overall basis. Absent these non-operational items, the Company's first quarter operational earnings were $0.30 per diluted share.
The Company previously announced on August 20, 2009, that it would incur non-operational charges in the first quarter related to the pre-payment of debt and the undertaking of a store closing initiative in the U.K. The total pre-tax expense for these two non-operational items was $21.6 million. In addition, the Company recorded within discontinued operations after-tax income of $3.2 million primarily related to additional tax benefit from the sale of the Trade Secret business. The reconciliation of reported earnings to operational earnings is included in today's press release, and a more comprehensive reconciliation is available on the Company's website at www.regiscorp.com.
On October 8, 2009, the Company reported first quarter consolidated total same-store sales declined 4.5 percent. Reported revenues for the first quarter ended September 30, 2009 decreased 1.3 percent to $606 million compared to $614 million in the first quarter of fiscal 2009.
"First quarter same-store sales were slightly ahead of plan but remained challenging due to overall macro level economic conditions which have impacted our customer visitation patterns. However, we are very pleased with our first quarter operating results due to our continued focus on expense control. In fact, if you adjust last year's results for the impact of our recent equity and convertible note issuance, our operational earnings per share in the quarter were flat compared to last year," commented Paul D. Finkelstein, Chairman and Chief Executive Officer. "Additionally, our operational earnings included $0.03 per share related to the pending settlement of two legal claims. Although the cost of these settlements is appropriately included in our operational earnings of $0.30 per share, one could certainly add these back when looking at our first quarter operating performance."
Mr. Finkelstein concluded, "Our first quarter results demonstrate the strength of our business model. We are in the quintessential replenishment business offering an affordable necessity, and even in these tough economic times our operations are extremely profitable. With greater consumer frugality, our focus on value based concepts is the appropriate strategy. We continue to be bullish about the long range prospects of our Company."
Regis Corporation will host a conference call discussing first quarter results today, October 29, 2009 at 3 p.m., Central time. Interested parties are invited to listen by logging on to www.regiscorp.com or dialing 877-941-2333. A replay of the call will be available later that day. The replay phone number is 800-406-7325, access code 4162580#.
About Regis Corporation
Regis Corporation (NYSE: RGS) is the beauty industry's global leader in beauty salons, hair restoration centers and cosmetology education. As of September 30, 2009, the Company owned, franchised or held ownership interests in 12,900 worldwide locations. Regis' corporate and franchised locations operate under concepts such as Supercuts, Sassoon Salon, Regis Salons, MasterCuts, SmartStyle, Cost Cutters, Cool Cuts 4 Kids and Hair Club for Men and Women. In addition, Regis maintains an ownership interest in Provalliance, which operates salons primarily in Europe, under the brands of Jean Louis David, Franck Provost and Saint Algue. Regis also maintains ownership interests in Empire Education Group in the U.S. and the MY Style concepts in Japan. System-wide, these and other concepts are located in the U.S. and in over 30 other countries in North America, South America, Europe, Africa and Asia. Regis also maintains a 49 percent ownership interest in Intelligent Nutrients, a business that provides a wide variety of certified organic products for health and beauty. For additional information about the company, including a reconciliation of non-GAAP financial information and certain supplemental financial information, please visit the Investor Information section of the corporate website at www.regiscorp.com. To join Regis Corporation's email alert list, click on this link: http://www.b2i.us/irpass.asp?BzID=913&to=ea&Nav=1&S=0&L=1
This press release contains "forward-looking statements" within the meaning of the federal securities laws, including statements concerning anticipated future events and expectations that are not historical facts. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. The forward-looking statements in this document reflect management's best judgment at the time they are made, but all such statements are subject to numerous risks and uncertainties, which could cause actual results to differ materially from those expressed in or implied by the statements herein. Such forward-looking statements are often identified herein by use of words including, but not limited to, "may," "believe," "project," "forecast," "expect," "estimate," "anticipate" and "plan." In addition, the following factors could affect the Company's actual results and cause such results to differ materially from those expressed in forward-looking statements. These factors include competition within the personal hair care industry, which remains strong, both domestically and internationally; price sensitivity; changes in economic conditions, and in particular, continued weakness in the U.S. and global economies; changes in consumer tastes and fashion trends; the ability of the Company to implement its planned spending and cost reduction plan and to continue to maintain compliance with the financial covenants in its credit agreements; labor and benefit costs; legal claims; risk inherent to international development (including currency fluctuations); the continued ability of the Company and its franchisees to obtain suitable locations and financing for new salon development and to maintain satisfactory relationships with landlords and other licensors with respect to existing locations; governmental initiatives such as minimum wage rates, taxes and possible franchise legislation; the ability of the Company to successfully identify, acquire and integrate salons that support its growth objectives; the ability of the Company to maintain satisfactory relationships with suppliers; the ability of the Company to consummate the planned closure of salons and the related realization of the anticipated costs, benefits and time frame; or other factors not listed above. The ability of the Company to meet its expected revenue target is dependent on salon acquisitions, new salon construction and same-store sales increases, all of which are affected by many of the aforementioned risks. Additional 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, 2009. 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.
REGIS CORPORATION (NYSE: RGS) CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited) as of September 30, 2009 and June 30, 2009 (In thousands, except per share data) September 30, 2009 June 30, 2009 ASSETS Current assets: Cash and cash equivalents $ 100,629 $ 42,538 Receivables, net 60,107 44,935 Inventories 163,146 158,570 Deferred income taxes 24,888 22,086 Income tax receivable 38,427 47,164 Other current assets 36,106 37,693 Total current assets 423,303 352,986 Property and equipment, net 382,664 391,538 Goodwill 768,511 764,422 Other intangibles, net 125,250 126,961 Investment in and loans to affiliates 202,868 211,400 Other assets 52,877 45,179 Total assets $ 1,955,473 $ 1,892,486 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Long-term debt, current portion $ 50,017 $ 55,454 Accounts payable 79,808 62,394 Accrued expenses 154,116 156,638 Total current liabilities 283,941 274,486 Commitments and contingencies Long-term debt and capital lease 427,529 578,853 obligations Other noncurrent liabilities 246,134 236,287 Total liabilities 957,604 1,089,626 Shareholders' equity: Common stock, $0.05 par value; issued and outstanding 57,105,604 and 2,855 2,194 43,881,364 common shares at September 30, 2009 and June 30, 2009, respectively Additional paid-in capital 324,872 151,394 Accumulated other comprehensive income 67,242 51,855 Retained earnings 602,900 597,417 Total shareholders' equity 997,869 802,860 Total liabilities and shareholders' $ 1,955,473 $ 1,892,486 equity
REGIS CORPORATION (NYSE: RGS) CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited) (In thousands, except per share data) Three Months Ended September 30, 2009 2008 Revenues: Service $ 449,278 $ 469,035 Product 126,191 134,183 Product sold to Premier (1) 19,962 Royalties and fees 10,119 10,311 605,550 613,529 Operating expenses: Cost of service 255,969 267,077 Cost of product 59,533 65,619 Cost of product sold to Premier (1) 19,962 Site operating expenses 52,676 48,402 General and administrative 72,560 77,764 Rent 85,825 92,211 Depreciation and amortization 27,191 27,268 Lease termination costs 3,577 1,151 Total operating expenses 577,293 579,492 Operating income 28,257 34,037 Other income (expense): Interest expense (27,316 ) (10,220 ) Interest income and other, net 2,232 1,735 Income from continuing operations before income taxes and equity in income of affiliated companies 3,173 25,552 Income taxes (1,619 ) (9,958 ) Equity in income of affiliated companies, 3,057 492 net of income taxes Income from continuing operations 4,611 16,086 Income (loss) from discontinued operations, 3,161 (1,600 ) net of taxes Net income $ 7,772 $ 14,486 Net income (loss) per share: Basic: Income from continuing operations 0.09 0.38 Income (loss) from discontinued operations 0.06 (0.04 ) Net income per share, basic $ 0.14 (2 ) $ 0.34 Diluted: Income from continuing operations 0.09 0.37 Income (loss) from discontinued operations 0.06 (0.04 ) Net income per share, diluted $ 0.14 (2 ) $ 0.34 (2 ) Weighted average common and common equivalent shares outstanding: Basic 54,143 42,787 Diluted 54,184 43,107 Cash dividends declared per common share $ 0.04 $ 0.04
(1) Premier Salons Beauty, Inc. (Premier) purchased Trade Secret, Inc. from Regis Corporation on February 16, 2009. The agreement included a provision that Regis Corporation will supply product to Premier at cost for a transition period of approximately six months following the date of the sale, with possible extension to not more than eleven months.
(2) Total is a recalculation; line items calculated individually do not sum to total.
REGIS CORPORATION (NYSE: RGS) SELECTED CASH FLOW DATA (In thousands) Three Months Ended September 30, 2009 2008 Net cash provided by operating activities $ 38,524 $ 27,803 Net cash provided by (used in) investing 2,007 (60,923 ) activities Net cash provided by financing activities 12,593 35,072 Effect of exchange rate changes on cash and 4,967 (4,313 ) cash equivalents Increase (decrease) in cash and cash 58,091 (2,361 ) equivalents Cash and cash equivalents: Beginning of year 42,538 127,627 End of year $ 100,629 $ ,8 125,266
REGIS CORPORATION (NYSE: RGS) Salon / Hair Restoration Center Counts and Revenues September 30, June 30, SYSTEM-WIDE LOCATIONS: 2009 2009 Company-owned salons 7,982 7,981 Franchise salons 2,050 2,045 Company-owned hair restoration centers 62 62 Franchise hair restoration centers 33 33 Ownership interest locations 2,730 2,804 Total, system-wide 12,857 12,925 SALON LOCATION SUMMARY September 30, June 30, NORTH AMERICAN SALONS: 2009 2009 REGIS SALONS Open at beginning of period 1,071 1,078 Salons constructed 5 20 Acquired 2 23 Less relocations (5 ) (14 ) Salon openings 2 29 Conversions Salons closed (7 ) (36 ) Total, Regis Salons 1,066 1,071 MASTERCUTS Open at beginning of period 602 615 Salons constructed 6 14 Acquired Less relocations (2 ) (10 ) Salon openings 4 4 Conversions Salons closed (17 ) Total, MasterCuts Salons 606 602 TRADE SECRET Company-owned salons: Open at beginning of period 674 Salons constructed 10 Acquired Franchise buybacks Less relocations (4 ) Salon openings 6 Conversions Salons sold (655 ) Salons closed (25 ) Total company-owned salons September 30, June 30, 2009 2009 Franchise salons: Open at beginning of period 106 Salons constructed 1 Acquired Less relocations Salon openings 1 Franchise buybacks Interdivisional reclassification (3) (43 ) Salons sold (57 ) Salons closed (7 ) Total franchise salons Total, Trade Secret Salons SMARTSTYLE/COST CUTTERS IN WAL-MART Company-owned salons: Open at beginning of period 2,300 2,212 Salons constructed 38 71 Acquired Franchise buybacks 24 Less relocations (3 ) (2 ) Salon openings 35 93 Conversions Salons closed (3 ) (5 ) Total company-owned salons 2,332 2,300 Franchise salons: Open at beginning of period 122 146 Salons constructed 2 1 Acquired Less relocations Salon openings 2 1 Conversions Franchise buybacks (24 ) Salons closed (1 ) Total franchise salons 124 122 Total, SmartStyle/Cost Cutters in Wal-Mart 2,456 2,422 Salons SUPERCUTS Company-owned salons: Open at beginning of period 1,114 1,132 Salons constructed 2 27 Acquired Franchise buybacks 1 6 Less relocations (2 ) Salon openings 3 31 Conversions (2 ) Salons closed (7 ) (47 ) Total company-owned salons 1,110 1,114 September 30, June 30, 2009 2009 Franchise salons: Open at beginning of period 1,022 997 Salons constructed 13 51 Acquired (2) Less relocations (1 ) (7 ) Salon openings 12 44 Conversions 1 1 Franchise buybacks (1 ) (6 ) Salons closed (5 ) (14 ) Total franchise salons 1,029 1,022 Total, Supercuts Salons 2,139 2,136 PROMENADE Company-owned salons: Open at beginning of period 2,450 2,399 Salons constructed 6 36 Acquired 71 Franchise buybacks 3 53 Less relocations (4 ) (16 ) Salon openings 5 144 Conversions 1 Salons closed (18 ) (94 ) Total company-owned salons 2,437 2,450 Franchise salons: Open at beginning of period 901 914 Salons constructed 10 40 Acquired Less relocations (2 ) (7 ) Salon openings 8 33 Conversions (1 ) Franchise buybacks (3 ) (53 ) Interdivisional reclassification (3) 43 Salons closed (8 ) (36 ) Total franchise salons 897 901 Total, Promenade 3,334 3,351 INTERNATIONAL SALONS (1) Company-owned salons: Open at beginning of period 444 472 Salons constructed 4 Acquired Franchise buybacks Less relocations (1 ) Salon openings 3 Conversions Salons closed (13 ) (31 ) Total, International salons 431 444 September 30, June 30, TOTAL SYSTEM-WIDE SALONS: 2009 2009 Company-owned salons: Open at beginning of period 7,981 8,582 Salons constructed 57 182 Acquired 2 94 Franchise buybacks 4 83 Less relocations (14 ) (49 ) Salon openings 49 310 Conversions (1 ) Salons sold (655 ) Salons closed (48 ) (255 ) Total company-owned salons 7,982 7,981 Franchise salons: Open at beginning of period 2,045 2,163 Salons constructed 25 93 Acquired (2) Less relocations (3 ) (14 ) Salon openings 22 79 Conversions 1 Franchise buybacks (4 ) (83 ) Salons sold (57 ) Salons closed (13 ) (58 ) Total franchise salons 2,050 2,045 Total Salons 10,032 10,026 HAIR RESTORATION CENTERS: Company-owned hair restoration centers: Open at beginning of period 62 57 Salons constructed 2 8 Acquired Franchise buybacks 2 Less relocations (2 ) (5 ) Salon openings 5 Conversions Sites closed Total company-owned hair restoration centers 62 62 September 30, June 30, 2009 2009 Franchise hair restoration centers: Open at beginning of period 33 35 Salons constructed Acquired Less relocations Salon openings Franchise buybacks (2 ) Sites closed Total franchise hair restoration centers 33 33 Total Hair Restoration Centers 95 95 Ownership interest locations 2,730 2,804 Grand Total, System-wide 12,857 12,925
(1) Canadian and Puerto Rican salons are included in the Regis Salons, MasterCuts, Supercuts and Promenade concepts and not included in the International salon totals. (2) Represents primarily the acquisition of franchise networks. (3) On February 16, 2009 the Company announced the completion of the sale of Trade Secret retail product division to Premier Salons Beauty, Inc. As a result of this transaction, the Company reported the Trade Secret operations as discontinued operations for all periods presented. Forty-three franchise salons were not included in the sale of Trade Secret to Premier Salons Beauty, Inc. and are not reported as discontinued operations. These franchise salons are now included in Promenade. Relocations represent a transfer of location by the same salon concept. Conversions represent the transfer of one salon concept to another concept.
REVENUES BY CONCEPT:
Three Months Ended
September 30,
(Dollars in thousands) 2009 2008
North American salons:
Regis $ 110,601 $ 122,322
MasterCuts 41,092 43,431
SmartStyle (1) 131,274 131,256
Supercuts (1) 79,070 78,271
Promenade (1)(4) 169,741 154,654
Total North American salons (3) 531,778 529,934
International salons 38,799 48,448
Hair restoration centers (1) 34,973 35,147
Consolidated revenues $ 605,550 $ 613,529
Percent change from prior year (1.3 )% 1.0 %
Same-store sales decrease (2) (4.5 )% (0.1 )%
(1) Includes aggregate franchise royalties and fees of $10.1 and $10.3 million for the three months ended September 30, 2009 and 2008, respectively. North American salon franchise royalties and fees represented 93.8 percent of total franchise revenues in the three months ended September 30, 2009 and 2008, respectively. (2) Salon same-store sales are calculated on a daily basis as the total change in sales for company-owned salons which were open on a specific day of the week during the current period and the corresponding prior period. Quarterly and year-to-date salon same-store sales are the sum of the same-store sales computed on a daily basis. Relocated salons are included in same-store sales as they are considered to have been open in the prior period. International same-store sales are calculated in local currencies so that foreign currency fluctuations do not impact the calculation. Management believes that same-store sales, a component of organic growth, are useful in order to help determine the increase in salon revenues attributable to its organic growth (new salon construction and same-store sales growth) versus growth from acquisitions. (3) Beginning with the period ended December 31, 2008, the operations of Trade Secret concept within the North American reportable segment were accounted for as a discontinued operation. All periods presented reflect Trade Secret as a discontinued operation. Accordingly, Trade Secret revenues are excluded from this presentation. (4) Premier Salons Beauty, Inc. (Premier) purchased Trade Secret, Inc. from Regis Corporation on February 16, 2009. The agreement included a provision that Regis Corporation will supply product to Premier at cost for a transition period of approximately six months following the date of the sale, with possible extension to not more than eleven months. For the three ended September 30, 2009, the Company generated revenue of $20.0 million, respectively, in product sold to Premier, which represented 3.3 percent of consolidated revenues, respectively.
FINANCIAL INFORMATION BY SEGMENT:
Financial information concerning the Company's salon, school and hair restoration businesses is shown in the following tables.
For the Three Months Ended September 30, 2009 (1)
Hair
Salons Restoration Unallocated
(Dollars in North International Centers Corporate Consolidated
thousands) America
Revenues:
Service $ 405,141 $ 28,193 $ 15,944 $ $ 449,278
Product 97,188 10,606 18,397 126,191
Product sold 19,962 19,962
to Premier (2)
Royalties and 9,487 632 10,119
fees
531,778 38,799 34,973 605,550
Operating
expenses:
Cost of 232,452 14,557 8,960 255,969
service
Cost of 48,670 5,409 5,454 59,533
product
Cost of
product sold 19,962 19,962
to Premier
Site operating 48,750 2,671 1,255 52,676
expenses
General and 27,787 2,835 8,421 33,517 72,560
administrative
Rent 73,593 9,404 2,282 546 85,825
Depreciation
and 17,920 1,500 3,014 4,757 27,191
amortization
Lease
termination 25 3,552 3,577
costs
Total
operating 469,159 39,928 29,386 38,820 577,293
expenses
Operating 62,619 (1,129 ) 5,587 (38,820 ) 28,257
income (loss)
Other income
(expense):
Interest (27,316 ) (27,316 )
expense
Interest
income and 2,232 2,232
other, net
Income (loss)
from
continuing
operations
before income
taxes and
equity in
income
of affiliated $ 62,619 $ (1,129 ) $ 5,587 $ (63,904 ) $ 3,173
companies
(1) Beginning with the period ended December 31, 2008, the operations of the Trade Secret concept within the North American reportable segment were accounted for as a discontinued operation. All comparable periods reflect Trade Secret as a discontinued operation. (2) Premier Salons Beauty, Inc. (Premier) purchased Trade Secret, Inc. from Regis Corporation on February 16, 2009. The agreement included a provision that Regis Corporation will supply product to Premier at cost for a transition period of approximately six months following the date of the sale, with possible extension to not more than eleven months.
For the Three Months Ended September 30, 2008(1)
Hair
Salons Restoration Unallocated
(Dollars in North International Centers Corporate Consolidated
thousands) America
Revenues:
Service $ 417,549 $ 35,399 $ 16,087 $ -- $ 469,035
Product 102,713 13,049 18,421 -- 134,183
Royalties and 9,672 639 -- 10,311
fees
529,934 48,448 35,147 -- 613,529
Operating
expenses:
Cost of 239,655 18,750 8,672 -- 267,077
service
Cost of 52,915 7,025 5,679 -- 65,619
product
Site operating 44,339 2,645 1,418 -- 48,402
expenses
General and 31,570 4,167 8,704 33,323 77,764
administrative
Rent 77,305 12,347 2,052 507 92,211
Depreciation
and 18,191 1,816 2,704 4,557 27,268
amortization
Lease
termination 1,151 -- 1,151
costs
Total
operating 465,126 46,750 29,229 38,387 579,492
expenses
Operating 64,808 1,698 5,918 (38,387 ) 34,037
income (loss)
Other income
(expense):
Interest -- -- -- (10,220 ) (10,220 )
expense
Interest
income and -- -- -- 1,735 1,735
other, net
Income (loss)
from
continuing
operations
before income
taxes and
equity in
income
of affiliated $ 64,808 $ 1,698 $ 5,918 $ (46,872 ) $ 25,552
companies
(1) Beginning with the period ended December 31, 2008, the operations of the Trade Secret concept within the North American reportable segment were accounted for as a discontinued operation. All comparable periods reflect Trade Secret as a discontinued operation.
REGIS CORPORATION (NYSE: RGS)
NON-GAAP FINANCIAL MEASURES (Unaudited)
The Company's press release announcing results of operations for the three month period ended September 30, 2009 includes references to the following "non-GAAP financial measures" as defined by Regulation G of the Securities and Exchange Commission:
- First quarter reported earnings of $0.14 per diluted share included three non-operational items, which on a net overall basis reduced reported earnings per diluted share by $0.16. Absent these non-operational items, the Company's first quarter operational earnings were $0.30 per diluted share.
- The total pre-tax expense for these two non-operational items was $21.6 million. In addition, the Company recorded within discontinued operations after-tax income of $3.2 million primarily related to additional tax benefit from the sale of the Trade Secret business.
Non-GAAP Diluted Net Income Per Share The table below is provided to assist the reader's understanding of the three month period ending September 30, 2009 earnings. The Company believes that adjusted net income per diluted share from operations, a non-GAAP financial measure, is a useful basis to compare the Company's results against, because unusual items during the three month period ending September 30, 2009, impacted the Company's reported net income (see "Adjustments" in table below). The presentation below reconciles as reported net income per diluted share (U.S. GAAP amounts) to adjusted net income per diluted share from operations. The adjusted net income per diluted share information should not be construed as an alternative to reported results under U.S. GAAP.
Three Months Three Months
Ended Ended
September 30, September 30,
2009 2008
(Dollars) (Dollars)
Diluted net income per share, as reported $ 0.143 $ 0.336
(U.S. GAAP) (5)
Adjustments:
Fees on pre-payment of debt (1) (6) $ 0.171 $
Lease termination costs (2) (6) 0.034 0.016
Discontinued operations (3) (6) (0.050 ) 0.038
Diluted net income per share from operations, $ 0.298 $ 0.390
adjusted
Offering impact (4) $ (0.095 )
Diluted net income per share from operations, $ 0.295
pro-forma
(1) The first quarter ending September 30, 2009 included $18.0 million ($10.9 million after-tax) in expenses associated with the prepayment of debt. (2) The first quarters ending September 30, 2009 and 2008 included $3.6 million ($2.1 million after-tax) and $1.2 million ($0.7 million after-tax), respectively, in expense associated with the lease termination costs as part of the store closing plan of up to 80 and 160 underperforming company-owned salons, respectively. (3) The first quarters ending September 30, 2009 and 2008 included $3.2 million and ($1.6) million in income (loss), respectively from Trade Secret business, which is reported as discontinued operations. (4) On a pro-forma basis for the three months ended September 30, 2008, adjustments for the debt and equity offerings that occurred during the three months ending September 30, 2009 would have increased net income through the incremental savings on interest expense by approximately $2.0 million after-tax and increased the number of diluted shares by approximately 20.5 million. (5) Diluted weighted average common and common equivalent shares outstanding were 54.2 and 43.1 million shares for the three months ended September 30, 2009 and 2008, respectively. The dilutive effect of the convertible debt was not included in the reported diluted earnings per share as the effect was anti-dilutive under the if-converted method. (6) The earnings per share impact of the adjustments for the three months ended September 30, 2009 includes the convertible share common stock equivalent of 9.5 million additional shares as operational earnings are dilutive under the if-converted method. The impact of the additional 9.5 million shares changed the EPS impact of the discontinued operations adjustment from $0.06 per share to $0.05 per share.
Source: Regis Corporation
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