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ACQUISITIONS (Tables) | 9 Months Ended
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Mar. 31, 2025
Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract] |
Schedule of Business Acquisitions, by Acquisition | The preliminary fair value of total consideration transferred by the Company upon acquisition is $24.6 million, as detailed below.
Consideration | (Dollars in thousands)
Cash, net of cash acquired (1) | $ | 18,631 |
Equity instruments (140,552 of Regis common shares) (2) | 3,000 |
Contingent consideration arrangement (preliminary estimate) (3) | 3,000 |
Fair value of total consideration | $ | 24,631 |
_______________________________________________________________________________ (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 provisional fair value of $3.0 million on the acquisition date and as of March 31, 2025, which is included in accrued expenses ($1.0 million) and other noncurrent liabilities ($2.0 million) in the unaudited Condensed Consolidated Balance Sheets. The fair value of the contingent consideration arrangement is provisional while the Company completes its fair value assessment. 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 provides revenues and operating income from Alline that are included in our unaudited Condensed Consolidated Financial Statements:
|  | Three Months Ended March 31, 2025 |  | Nine Months Ended March 31, 2025
Total revenues |  | $ | 18,290 |  |  | $ | 20,993 |
Operating income |  | 786 |  |  | 1,266 |
Schedule of Estimated Fair Values of the Assets Acquired and Liabilities Assumed | 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 | $ | 3,640 |
Property and equipment | 7,654 |
Goodwill (1) | 12,574 |
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 | $ | 24,631 |
(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 not yet obtained all the information required to finalize the valuations of the assets acquired and liabilities assumed. As such, we expect that goodwill could change from the amount noted above. (2)Intangible assets includes $2.4 million related to the preliminary fair value of reacquired rights and $1.4 million related to the preliminary fair value of favorable leasehold interests, net. a.The reacquired rights were preliminarily 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 preliminary 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.
Schedule of Business Acquisition, Pro Forma Information | The following table presents pro forma information as if the Alline Acquisition had occurred on July 1, 2023:
|  | Three Months Ended March 31, |  | Nine Months Ended March 31,
|  | 2025 |  | 2024 |  | 2025 |  | 2024
Total revenues |  | $ | 56,957 |  |  | $ | 66,655 |  |  | $ | 182,676 |  |  | $ | 209,039 |
Operating income |  | 5,021 |  |  | 4,106 |  |  | 15,703 |  |  | 16,787 |

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- Definition Tabular disclosure of a material business combination completed during the period, including background, timing, and recognized assets and liabilities. This table does not include leveraged buyouts. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 3 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479328/805-10-50-3 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Name Accounting Standards Codification -Topic 805 -SubTopic 10 -Section 50 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479328/805-10-50-2 + Details
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- Definition Tabular disclosure of the amounts recognized as of the acquisition date for each major class of assets acquired and liabilities assumed. May include but not limited to the following: (a) acquired receivables; (b) contingencies recognized at the acquisition date; and (c) the fair value of noncontrolling interests in the acquiree. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 805 -SubTopic 20 -Name Accounting Standards Codification -Paragraph 1 -Section 50 -Publisher FASB -URI https://asc.fasb.org/1943274/2147479907/805-20-50-1 + Details
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