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ACQUISITIONS | 12 Months Ended
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Jun. 30, 2025
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract] |
ACQUISITIONS | ACQUISITIONS: FOOTNOTE OPEN PENDING FINALIZATION OF VALUATION On December 19, 2024, the Company transferred consideration to acquire 100 percent of the equity interests of Alline (the Alline Acquisition), its largest franchisee, consisting of 314 salons. The transaction provides Regis with a turn-key operating infrastructure and gets the Company closer to salon operations alongside franchisees, and the salon portfolio provides a testing ground for brand and operational initiatives. The transaction terminated the existing franchise arrangements between Regis and Alline, which resulted in the Company recognizing a loss of $0.2 million upon settlement, which is included in the Consolidated Financial Statements as a component of operating income for the year ended June 30, 2025. The acquisition was accounted for as a business combination with the purchase price allocated on a preliminary basis using information available as of December 31, 2024. Assets acquired and liabilities assumed were recorded at estimated fair values based on management’s estimates, available information, and supportable assumptions that management considered reasonable. As of June 30, 2025, the purchase price and related allocation have been revised as a result of additional information obtained and revisions to the provisional estimates of fair value, including, but not limited to, the completion of independent appraisals and valuations related to property and equipment, intangible assets, right of use assets and corresponding lease obligations. The fair value of total consideration transferred by the Company upon acquisition is $22.6 million, as detailed below.
Consideration | (Dollars in thousands)
Cash, net of cash acquired (1) | $ | 18,621 |
Equity instruments (140,552 of Regis common shares) (2) | 3,000 |
Contingent consideration arrangement (3) | 1,000 |
Fair value of total consideration | $ | 22,621 |
_______________________________________________________________________________ (1)Includes cash transferred of $20.0 million, net of cash acquired of $1.4 million. (2)The number of common shares (140,552) issued as part of the consideration paid for Alline was determined by dividing the $3.0 million by the 30-trading day volume weighted average price of the common stock as reported on the Nasdaq Global Market as of and including December 17, 2024. (3)The contingent consideration arrangement requires Regis to pay the former owners of Alline additional cash consideration if certain 4-Wall EBITDA or Adjusted EBITDA thresholds are met for each of the three subsequent annual earnout periods as well as a cumulative 4-Wall EBITDA or Adjusted EBITDA threshold for the cumulative three subsequent annual earnout periods. The potential undiscounted amount of all future payments that Regis could be required to make under the contingent consideration arrangement is between $0 and $3.0 million. Regis recognized a fair value of $1.0 million as of June 30, 2025, which is included in other noncurrent liabilities in the Consolidated Balance Sheets. 4-Wall EBITDA is defined as earnings before interest, tax, depreciation and amortization and excluding corporate general and administrative expenses for acquired salons. The following table summarizes the preliminary estimated fair value of the assets acquired and liabilities assumed as of the acquisition date:
| (Dollars in thousands)
Current assets | $ | 3,630 |
Property and equipment | 7,976 |
Goodwill (1) | 10,252 |
Intangible assets (2) | 3,780 |
Right of use assets | 7,292 |
Other assets | 56 |
Assumed current liabilities | (2,352) |
Assumed lease liabilities | (8,013) |
Fair value of total consideration | $ | 22,621 |
_______________________________________________________________________________ (1)Preliminary Goodwill is calculated as the excess of the consideration transferred over the net assets recognized and represents the future economic benefits arising from other assets acquired that could not be individually identified and separately recognized. Specifically, the goodwill that will be recorded as part of the acquisition of Alline includes the following: a.the expected synergies and other benefits that we believe will result from combining the operations of Alline with the operations of Regis; and b.any intangible assets that do not qualify for separate recognition. Goodwill is not amortized and is deductible for tax purposes. All the goodwill related to the acquisition of Alline is related to our company-owned operating segment. The Company has obtained all the information required to finalize the valuation of the assets acquired and liabilities assumed, except for information related to certain assumed liabilities. As such, we expect that goodwill could change from the amount noted above. (2)Intangible assets include $2.4 million related to the fair value of reacquired rights and $1.4 million related to the fair value of favorable leasehold interests, net. a.The reacquired rights were valued using a form of the income approach where the asset's value is determined by its ability to generate future cash flows by isolating and discounting the cash flows attributable to the asset. The Company assumed a four-year life based on the weighted average remaining contract term, assuming no renewals. b.Upon acquisition, the Company assumed lease agreements with lease payments fixed at a rate below the current market rate. As a result, a favorable lease asset of $1.4 million has been recorded on the balance sheet. This asset represents the benefit the Company receives from having lease payments below market and will be amortized to rent expense on a straight-line basis over the remaining terms of the respective leases. The Company incurred $1.4 million of acquisition related costs which are included in general and administrative expense in Regis’s Consolidated Statements of Operations for the year ended June 30, 2025, respectively. The following table provides revenues and operating income from Alline that are included in our Consolidated Financial Statements since the date of acquisition:
|  |  | December 19, 2024 through June 30, 2025
Total revenues |  |  | $ | 40,813 |
Operating income |  |  | 2,424 |
The following table presents pro forma information as if the Alline Acquisition had occurred on July 1, 2022:
|  |  | For the Fiscal Year Ended June 30,
|  |  | 2025 |  | 2024 |  | 2023
Total revenues |  |  | $ | 239,350 |  |  | $ | 277,210 |  |  | $ | 309,025 |
Operating income |  |  | 24,066 |  |  | 22,575 |  |  | 10,230 |

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