Regis Reports Third Quarter 2009 Results

Regis Corporation (NYSE:RGS), the global leader in the $170 billion hair care industry, today reported third quarter net income from continuing operations of $21.0 million, or $0.49 per diluted share, compared to $19.1 million or $0.44 per diluted share a year ago. Last year, third quarter earnings per diluted share from continuing operations included $0.07 of incremental tax expense related to the repatriation of international cash.

On April 8, 2009, the Company reported third quarter consolidated total same-store sales declined 4.5 percent. In addition, the Company reported that revenues for the third quarter ended March 31, 2009 decreased 2.4 percent to $604 million compared to $619 million in the third quarter of fiscal 2008. The deconsolidation of the European franchise salon operations reduced revenue in the quarter by approximately $5 million. Absent the impact of the European deconsolidation, consolidated revenues for the quarter would have decreased 1.6 percent.

"We were very encouraged with our ability to maintain our year-over-year profitability levels despite the extremely difficult sales environment,” commented Paul D. Finkelstein, Chairman and Chief Executive Officer. "We are on or ahead of plan with all of our debt reduction and cost saving initiatives. Our entire organization is focused on our near-term strategy of strengthening our balance sheet, significantly reducing expenditures in salon unit growth, reducing debt levels and controlling expenses.”

Mr. Finkelstein concluded, "Last quarter, we made the decision to discontinue providing quarterly and annual sales and earnings guidance, at least until economic conditions normalize. Today, it is still far too difficult to predict how long and how deep this recession will be. Therefore, we will not be providing fourth quarter or fiscal 2010 detailed revenue and earnings guidance. I would like to provide some insight into our current internal fiscal 2010 expectations. Based on the current economic environment, same-store sales could be in a range of negative three percent to positive one percent. At these same-store sales levels, EBITDA should be in a range of $200 million to $240 million. We expect total capital expenditures (CAPEX) and acquisition spend to be in the range of $90 million to $100 million, a reduction of approximately $35 million compared to fiscal 2009. The 2010 CAPEX budget includes approximately $55 million to $60 million for maintenance. Finally, we plan to pay down approximately $30 million to $50 million of debt during fiscal 2010.”

As of March 31, 2009 Regis Corporation owned, franchised, or held ownership interest in 12,854 worldwide locations.

Regis Corporation will host a conference call discussing third quarter results today, April 29, 2009 at 10 a.m., Central time. Interested parties are invited to listen by logging on to www.regiscorp.com or dialing 800-218-0713. A replay of the call will be available later that day. The replay phone number is 800-405-2236, access code 11128659#.

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 March 31, 2009, the Company owned, franchised or held ownership interests in over 12,800 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 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, 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; 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 for new salon development; 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, 2008. 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)
NON-GAAP FINANCIAL MEASURES (Unaudited)

The Company’s press release announcing results of operations for the three month period ended March 31, 2009 includes references to the following "non-GAAP financial measures” as defined by Regulation G of the Securities and Exchange Commission:

• Deconsolidation of the European franchise salon operations reduced revenue in the quarter by approximately $5 million. Absent the impact of the European deconsolidation, consolidated revenues for the quarter would have decreased 1.6 percent.

Non-GAAP Consolidated Revenues

On January 31, 2008, the Company merged its continental European franchise salon operations with the Franck Provost Salon Group. The results of operations through January 31, 2008 were included in the consolidated statement of operations.

The unaudited adjusted revenues, a non-GAAP financial measure (adjusted revenues) set for below, assumes the deconsolidation of the European franchise salon operations as of July 1, 2007. Management believes this measurement is a meaningful presentation of the revenue growth of the Company’s core salon and hair restoration businesses between the comparable periods, excluding the impact of deconsolidating the European franchise salon operations. If the Company had deconsolidated the European franchise salon operations on the date assumed in the adjusted revenues, the Company might have performed differently. You should not rely on the adjusted revenues as an indication of the revenues that the Company would have achieved, had the deconsolidation of the European franchise salon operations been completed at the date indicated, or of the future revenues that the Company will achieve after the deconsolidation of the European franchise salon operations.

The adjusted revenues are based on available information and certain assumptions that management believes are reasonable. The unaudited adjusted revenues should be read in conjunction with the historical financial statements of the Company.

Non-GAAP EBITDA

EBITDA represents net income plus income taxes, interest expense, depreciation and amortization and equity in income of affiliates. Management believes that EBITDA is an appropriate measure of evaluating operating performance and liquidity, because it reflects the resources available for strategic opportunities including, among others, to invest in the business, make strategic acquisitions and strengthen the balance sheet.