Regis Corporation (NYSE: RGS), a leader in the haircare industry, whose primary business is franchising, owning, and operating technology enabled hair salons, today announced it has taken additional actions to mitigate the effect of the COVID-19 national emergency on its business operations.
Effective immediately, Regis has temporarily closed all of its corporate owned salons for a period of at least two weeks due to the continuing uncertainty around the COVID-19 health crisis and escalating state-level or local government mandates. An insignificant number of the Company’s franchise locations remain operational at this time. Additionally, Regis is implementing a furlough program which impacts a substantial majority of its workforce representing approximately 485 positions across its corporate office, field support and distribution centers. This decision, which is effective as of April 5, 2020, and is anticipated to last no less than 30 days, follows the Company’s March 19th announcement that it had closed salons as required by government mandate, reduced salon hours and suspended the collection of franchisee ad fund fees. In order to mitigate the financial challenge of the furlough on its employees, Regis will pay the employee portion of benefits premiums during this period if the employee has coverage under Regis sponsored benefits plans.
The Company also implemented tiered temporary wage reductions for the CEO (60% reduction), vice presidents and above (30% reduction) and 20% for substantially all other employees who will be working full time during the period of the furlough. Additionally, the Board of Directors is waiving their fees during the period. Regis will continue to follow the guidelines of government and health officials in determining when it will reopen its salons and offices.
Hugh Sawyer, Chairman, President and CEO of Regis stated, "Given the still uncertain duration and severity associated with the COVID-19 pandemic we have taken additional, aggressive steps to preserve the financial integrity of our Company and to protect the safety of our employees and customers." Mr. Sawyer concluded, "I am particularly grateful for the sacrifice of our stylists and employees and the support of our franchise partners as we confront this unprecedented national healthcare crisis."
About Regis Corporation
Regis Corporation (NYSE:RGS) is a leader in beauty salons and cosmetology education. As of December 31, 2019, the Company franchised, owned or held ownership interests in 7,152 worldwide locations. Regis' franchised and corporate locations operate under concepts such as Supercuts®, SmartStyle®, Cost Cutters®, Roosters® and First Choice Haircutters®. Regis maintains an ownership interest in Empire Education Group in the U.S. For additional information about the Company, including a reconciliation of certain non-GAAP financial information and certain supplemental financial information, please visit the Investor Information section of the corporate website at www.regiscorp.com.
Safe Harbor Statement
This press release contains or may contain "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 a potential material reduction in revenue from our company-owned and franchised salons as a result of the uncertain duration and severity of the COVID-19 outbreak as well as the health of our stylists, customers and employees. Additional information concerning potential factors that could affect future financial results is set forth under Item 1A on Form 10-K. 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.