Q2 2025 Regis Corp Earnings Call
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Speaker Change: Good morning, and thank you for joining the <unk> second quarter 2025 earnings Conference call I'm here Hutton Kirsten suffer executive Vice President and Chief Financial Officer, I am joined today by our President and Chief Executive Officer, Matthew Doctor All participants are in listen only mode.
And this conference is being recorded.
Speaker Change: I would like to remind everyone that the language on forward looking statements included in our earnings release and 8-K filing also applies to our comments made on the call. Today. These documents can be found on our website at www Dot readers club dotcom foreign Slash Investor Dash relations along with a reconciliation of any non.
Speaker Change: GAAP financial measures mentioned on today's call with their corresponding GAAP measures with that I will now turn the call over to Matt Doctor.
Matt Doctor: Thank you and good morning, everyone on today's call I will discuss our recent acquisition of the alliance along group in more detail.
Speaker Change: <unk> quarterly financial results and provide updates on our key initiatives.
Speaker Change: During the second quarter, we acquired our largest franchisee aligned Salon group and a move that has significant strategic and financial benefits and furthers our efforts to position the company for future growth.
Speaker Change: Taking a step back for a minute. This transaction is another milestone on the journey, we've been on stabilizing and growing the company and we are in a significantly stronger position today than just a short while ago.
Speaker Change: Around one year ago from the time of the Alliant transaction, we're putting efforts towards trying to stay listed on a national Securities Exchange.
Speaker Change: Strength in our balance sheet.
Speaker Change: Since then pro forma for the aligned transaction on a trailing 12 month basis from December we have grown adjusted EBITDA by 35% cut our debt and leverage ratios and approximately half and have line of sight to consistent cash flow generation versus what has been consistent cash use.
Speaker Change: Now turning back to align.
Speaker Change: We've had a belief that the optimal salon mix for Regis would include a strategic portfolio of company owned salons to complement our franchise business. While this was not possible given the corporate salons, we've had over the past several years, we're in wind down mode due to their performance.
Speaker Change: Once we have the ability to allocate capital post our June 2020 for refinancing the idea of buying back a portfolio of salons began to surface as a potential growth initiatives.
Speaker Change: Certainly and I think it would come to fruition as quickly as it did but it just so happened that the right opportunity presented itself and we pursued it opportunistically.
Speaker Change: Align is Lee Wright portfolio at the right time and quite frankly, it is one of the few portfolios that made sense given the size scale and turnkey operating infrastructure align had built over the years.
Speaker Change: Due to our strong familiarity with this group of salons, having supported the line is franchise or and previously owned and operated the salons that we acquired.
Speaker Change: We were able to get comfortable quickly with the risk and have a clear path and a defined path towards strong EBITDA and cash flow growth thinking.
Speaker Change: Digging a bit deeper into what made this the right portfolio.
Speaker Change: At 314 acquired salons. This portfolio has significant scale, but also preserves our fully franchise footprint strategy with 92% of salons in our system operated by our franchisees.
Speaker Change: The three brands acquired supercuts cost cutters and holiday hair, our strong representations of our system.
Speaker Change: Portfolio has exposure to multiple geographies and attractive concentration.
Speaker Change: The salons are nicely contiguous around Pennsylvania, Ohio, and Michigan, which enables operating leverage and they are in states with favorable rents and wage dynamics. Additionally, while the portfolio has been cash flowing we still see significant opportunity to drive results, leading to even more potential upside.
Speaker Change: We're very excited about executing and driving what could be significant value creation.
Speaker Change: As we look forward I could not be more excited about the composition of our regions and strategic position we are in.
Speaker Change: I spoke previously about the ability to finally go on offense and I cannot think of a better mix of corporate and franchise salons.
Speaker Change: Adding the aligned portfolio provides us a diversified way to grow as we have added several revenue profit and cash generation drivers that can have a material impact to regis as part of our corporate segment.
Speaker Change: Such as driving same store sales salon level operating expenses and margin.
Speaker Change: Closure of unprofitable locations and strengthening those who remain open corporate Salon G&A and new unit development. These now complement our existing levers of the franchise business of profitable sales growth G&A and new unit development, all of which continue to remain in place.
Speaker Change: Equally important from a strategic perspective.
Speaker Change: Acquisition gets us closer to the business and provides us a testing ground to further enhance the broader system and our brands.
Speaker Change: <unk> has a rich history of operating is not operated in a dynamic and changing environment. Our franchisees have been facing for the last several years and.
Speaker Change: And with ownership and operational responsibility for hundreds of salon locations across multiple brands and geographies. We are now directly immersed in the day to day business of operating salons.
Speaker Change: This hands on experience will provide us a greater appreciation of the opportunities and challenges facing our franchisees. In addition to a controlled proving ground, where we can develop and test guests and stylists initiatives, which we believe will improve our relationship and trust within the franchise system.
Speaker Change: Regarding the financials of the transaction, we just acquired a line for initial consideration of $22 million.
Speaker Change: Consideration for the transaction included $19 million in cash, which was paid at closing and roughly 140000 shares of our common stock valued at $3 million. The cash was sourced from $4 million of cash on hand, and $15 million and additional borrowings from an amendment to our existing term loan.
Speaker Change: Do you want to take a moment to acknowledge and once again, thank our lenders TCW and midcap financial for being supportive partners on this transaction.
Speaker Change: For the 12 months ended October 31, 2024 align as an entity reported unaudited revenue of $83 million $11 1 million or four wall, EBITDA and $5 8 million in corporate EBITDA.
Speaker Change: Based on our purchase price of $22 million. This represents an attractive purchase valuation of approximately three times revenue roughly two times store level EBITDA and three eight times corporate EBITDA.
Speaker Change: Ahead of closing the transaction, we identified several synergies, which we believe we can quickly improve operational efficiency that can deliver $1 $5 million in savings most of those synergies and savings should be phased in by the time, we enter calendar 2026 and to be clear no G&A other than the corporate infrastructure acquired from <unk>.
Speaker Change: <unk> is required to be added to support the business.
Speaker Change: And when factoring in synergies and our current capital structure not only are the effective multiples more attractive but also the transaction represents a four eight times multiple on cash flow again, not only does this represent an attractive financial and strategic transaction on our results have been delivered but I want to reiterate the opportunity we have executed in <unk>.
Speaker Change: Entering additional profitability and cash flow.
Speaker Change: To wrap up on aligned before turning to our results lineup strong culture and team who will continue to operate the business with our oversight and.
Speaker Change: In partnership we believe we can combine the best practices with our operational expertise to create a winning combination to drive further growth profitability and incremental value.
Speaker Change: We do not plan on acquiring other salons in our system in the foreseeable future as we are pleased with the composition and opportunity with this portfolio and we have plenty of work to do to integrate further operationalize and grow this business I'll touch a bit more on the current state of this portfolio and our key initiatives later during the call.
Speaker Change: Turning now to our second quarter results are.
Speaker Change: Our second quarter results were largely in line with our expectations.
Speaker Change: Fortunately, we have grown year over year across operating income net income earnings per share adjusted EBITDA and cash flow and have returned to generating positive cash from operations.
Speaker Change: Despite the persistently challenging challenging sales environment.
Speaker Change: Same store sales declined one 6% in the second quarter same store sales is a key operating metric that we are keenly focused on and invested in improving for the second quarter. There were several factors that drove the decline, perhaps most notably was a challenged December due to a smaller window between Thanksgiving and Christmas versus a year ago.
Speaker Change: So with the gap between Thanksgiving and Christmas almost a full week less versus last year, given the timing of haircut cycles, we saw less of a build into the end of the year as pre Thanksgiving holiday services likely carry through to the new year.
Speaker Change: There has also been a disparity amongst our brands as it relates to sales performance.
Speaker Change: Supercuts was represents a little less than half of our system from a store count perspective, and approximately 60% of our royalties was positive 5% for the quarter, our smart style brand, which represents our captive brand within Walmart has continued to see softer sales with a six 4% decline versus last year's quarter and smart <unk>.
Speaker Change: Brand that we and our franchisees believe in however, our recent focus there between ourselves and our franchise partners is in closing unprofitable locations and re modeling the remaining fleet as we enter fiscal 2026, the large scale closures and Remodels will have largely been worked through and we look forward to advancing that.
Speaker Change: Brand with a smaller more viable footprint.
Speaker Change: Regarding the broader store closures across all of our brands. The salons that have closed and those that we have slated to close during the remainder of the fiscal year are impacting same store sales as well.
Speaker Change: Our previous guidance of closures during the fiscal year approximating the number of closures from last year still holds.
Speaker Change: The salons that have closed during the second quarter and those that are projected to close at a roughly 130 basis points drag on overall comps for the second quarter.
Speaker Change: I will provide additional detail regarding sales drivers later when discussing our initiatives, but I can say that even flat to slightly positive sales comps or not we're aiming for but rather the outsized growth that we believe is achievable over time as I stated before we are fully cognizant that we ultimately need to drive traffic to our salons, especially new.
Speaker Change: Guest traffic and find more ways to increase frequency, but at the same time I do need to be realistic about the work that has continued to be required in the road ahead to unlock this growth from where we are today.
Speaker Change: Our adjusted EBITDA for the second quarter was up 12, 7% year over year to $7 $1 million versus $6 3 million a year ago.
Speaker Change: Earnings per diluted share was $2 71.
Speaker Change: Versus <unk> 43 in the prior year quarter.
Speaker Change: Do you need to call out that our earnings per share includes income from discontinued operations of $7 4 million, which was driven largely by $7 5 million of proceeds we received from our sale of open Salon approach is annuity in the second quarter our.
Speaker Change: Our adjusted earnings per share was <unk> 61.
Speaker Change: Versus a loss of <unk> 18 in.
Speaker Change: In the prior year quarter.
Speaker Change: Turning to our strategy and business initiatives.
Speaker Change: While we continue making progress across our brand initiatives. We are also in the midst of Recalibrating, our priorities and focus areas for few reasons first the.
Speaker Change: The composition and trajectory of the company has changed quite dramatically in a very short period of time between our refinancing eight months ago and the align acquisition about two months ago.
Speaker Change: Given our company owned segment now represents a meaningful driver of growth of warrants is one specific area of focus and Additionally, as I've mentioned post our refinancing in June 2024, with the ability to focus solely on our core salon business versus all of the efforts we've put towards stabilizing reaches.
Speaker Change: Uncovering some additional findings that will require attention and effort specifically as it relates to the positioning and identity of our brands.
Discussed on previous calls that we had brought in consultants to help us define the vision and direction of the Supercuts brand specifically alongside us in our franchise partners.
Speaker Change: Over the past three months.
Speaker Change: We have been collaborating closely to chart a path for refreshing and modernizing the brand.
Speaker Change: Through these efforts, we believe we will not only attract more guests, especially those in the younger demographic.
Speaker Change: But will also help us appeal to top stylist talent from a recruitment and retention perspective.
Speaker Change: We aim to attract an increased number of guests within the highly valuable 18 to 44 age segment that we have historically under indexed.
Speaker Change: This will require work streams beyond just tweaking around the edges, but rather dedication to examining the overall brand architecture imagery digital assets like websites and apps as well as the optimal customer journey of the future.
Speaker Change: We are looking to define where it is we're going to go based on guest research and determining what steps and innovation is required to bridge from current to future state.
Speaker Change: We're still in the process of defining what the strategy and positioning is in collaboration with our outside resources and franchisees and when the time is right. We will discuss this in more detail.
Speaker Change: As we continue down the path of refining our overall brand strategy and positioning we will continue our focus on strengthening in the Salon operations through our brand excellent standards and digital efforts.
Speaker Change: As there is no substitute for strong operations, resulting in convenient.
Speaker Change: Quality hair care and exceptional service.
Speaker Change: <unk> execution is a critical enabler and the foundation for any broader brand work as new marketing and positioning cannot overcome anything less than stellar experiences. Conversely relevant branding will help amplify and drive business. So these efforts truly go hand in hand to unlock the true power of the brand.
Speaker Change: Turning to the implementation of our brand excellent standards.
Speaker Change: This initiative is designed to define and bring accountability to the ultimate end and guest experience at the salon level to ensure it is consistent and maximizes the potential for return visits by our guests.
Speaker Change: In January we completed the first wave of visits all supercuts locations and through this effort, we have gathered a wealth of valuable insights and actionable data, but we have not had access to previously we are now in the process of analyzing the readouts in driving actions based on the findings, while I'm not going to get into any detail on it.
Speaker Change: How many salons are compliant and what areas or is it not.
Speaker Change: One thing has become abundantly clear after our initial pass through of the data and that is that there is a strong correlation between brand compliance and Salon performance I am encouraged to see that we have several strong performers as well as those of clear opportunities to improve and drive additional results and strengthen the system at.
Speaker Change: Data point for those salons that are fully compliant in critical areas like salon workstations walls, and the reception and waiting area. They are demonstrating stronger same store sales and traffic by 500 basis points and.
Speaker Change: And over 400 basis points, respectively versus those that have opportunity in these targeted areas that makeup critical components.
Speaker Change: The guest experience.
Speaker Change: To us this reinforces both the potential of the brand as well as the work we have in front of us to move more towards this uniformity of execution.
Speaker Change: We are measuring progress during the second wave of visits start in April.
Speaker Change: In addition, we're exploring ways to get a better handle and measurement on the service component of the excellent standards versus strictly salon preparation and maintenance.
Speaker Change: The data we are gathering here as critical as it relates directly to the Salon environment, which is a key element of shaping guest impressions. The overall experience and the possibility of a return.
Speaker Change: Given the valuable insights we're seeing at Supercuts, we are actively working to rollout these standards.
Speaker Change: Our other brands to ensure consistency and elevate the guest experience across the enterprise, we will introduce and familiarize. Our franchisees are the standards for all brands outside of supercuts over the remainder of our fiscal 2025 and likely a launch excellence visits across these brands as we move into fiscal 2026.
Speaker Change: <unk>.
Speaker Change: Turning to our digital efforts, which form another key pillar of the guest experience and is key to attracting guests increasing those repeat visits and driving more convenience.
Speaker Change: Our major initiatives here that forms yet another key ingredient for the future has been the nationwide launch of our supercuts loyalty program Supercuts rewards.
Speaker Change: During our first fiscal quarter.
Speaker Change: The supercuts rewards is a first of its kind program that offers a new way for guests to earn points access additional promotions and receive free haircuts and savings for choosing supercuts as part of their hair care routine.
Speaker Change: Since our launch our membership has continued to grow and we're currently at 27% of all Supercuts sales via members of the program across our system.
Speaker Change: Our initial findings indicate that the program is influencing and driving the incremental behaviors. We're looking for from guests and franchisees who are engaged with the program.
Speaker Change: Highlight this salon membership levels as a percentage of total salon sales range from single digits to upwards of 90% for.
Speaker Change: For those that have reached the target of 50% of sales from members of which currently approximately 250 salons are at mostly in the pilot in wave one phase salons.
Those loans are demonstrated outperformance of same store sales and traffic by 200 basis points versus those below that threshold in our second fiscal quarter.
Speaker Change: Loyalty is also reducing the days between service visits to drive incremental frequency, we're seeing that largely in the cohort of pilot and wave one salons, given the maturity of the program and these specific locations.
Speaker Change: That is the behavior, we will continue to monitor across all loyalty salons as the program matures.
Speaker Change: And we're super excited about the potential of this program has on our resolve it can deliver and drive with broader adoption, which remains a key focus and while we're proud of accomplishing this major launch.
Speaker Change: There has been in the works for a while the current state of the program is far from the end destination. There is a lot that we can optimize on between waste survive, even more convenience and even more incentive benefits to members.
Speaker Change: We are currently exploring additional levers to accelerate enrollments and increased adoption of the programs that we do offer and in addition, we are also beginning pilot programs in our other brands to see how we can further leverage rewards is drive frequency and retention.
Speaker Change: One other quick note as part of our digital transformation initiatives are near term item are also closely reviewing is the guest check in process to improve the in salon flow and ease of operations and transparency for our guests and our stylists.
Speaker Change: Now why behind all of these initiatives is to improve the experience and gather data and information that will ultimately drive more traffic to our salons and help us to turn the trend on the same store sales and grow franchisee profitability.
Speaker Change: As I mentioned earlier the acquisition of a line is a strategically important element of our results to drive system results as well as our own and I wanted to touch on the current state of the business and our initiatives for this portfolio.
Speaker Change: Regarding the state of align there is significant opportunity to improve topline trends as this portfolio has demonstrated opportunity versus the rest of the system over the last 12 months from a same store sales and traffic perspective.
Speaker Change: We like the fact, the portfolio has continued to grow profitability and cash flow and therefore, there is significant opportunity to grow even further when as traffic and sales trends are reversed while it's only been a few months since we completed the acquisition the integration of these salons into our ecosystem is progressing nicely and I cannot stress enough.
Speaker Change: How important we are taking the systems people and culture integration as that will be critical for long term success. We have a lot we want to do here, but we cannot skip this important foundational step.
Speaker Change: Most of the next calendar year over year will be ensuring that we do this seamlessly while building those foundational blocks and much like the rest of our system, we're going to ensure we go back to basics and uphold the standards that we put in place.
Speaker Change: In addition, we'll be looking at compensation plans service pricing and making sure that we're focused on the right kpis to drive proper behavior against what truly matters. We have a lot of ambitious plans for this portfolio, including being a testing ground as I mentioned earlier as part of the strategic rationale. However, we cannot skip steps in knee.
Speaker Change: To get operationally ready first in order to truly maximize our efforts here.
Speaker Change: In closing there are a lot of exciting transformative things happening here at Regis.
Speaker Change: There is much work to be done.
Speaker Change: Im energized by the approach, we're taking and the progress that we're making.
Speaker Change: Im encouraged by the opportunities to reignite growth and putting brand positioning identity in the insulin experienced back at the forefront of our efforts. We are actively putting the pieces in place to increase perception and traffic to our salons to drive growth and ultimately increase value in a meaningful way for all of our key stakeholders.
Speaker Change: Including our franchisees, our shareholders and our lenders.
Speaker Change: Want to thank you again for joining and for your interest in Regis and I will now turn the call over to Kirsten for a detailed review of the Q2 financials Kirsten.
Kirsten: Thanks, Matt.
Kirsten: A reminder, our fiscal 2022nd quarter results include the results of the 314th lines that we acquired from align which closed on December 19, 2020 for the acquired salons contributed $2 $7 million in revenue and half a million dollars in EBITDA and the less than two weeks post acquisition.
Kirsten: Pro forma financial information related to the Alliant acquisition are included in footnote 15 of the Form 10-Q, we filed earlier today I guess, some pro forma financial information will be filed on form 8-K in early March.
Kirsten: Our second quarter results were largely in line with our expectations total second quarter revenues were $46 7 million a decline of $4 3 million or eight 5% compared to the prior year.
Kirsten: Our client was primarily due to a reduction in no margin franchise rental income and advertising fund revenue and royalty revenue was partially offset by $2 $7 million of revenue from the acquired Alliance fund.
Kirsten: Overall decline was expected due to the closure of unprofitable franchise location and is a key element of our strategy to drive improvements in the overall health of our franchise portfolio.
Kirsten: Royalty and fee revenue, which represents sales from our core business was down $555000.
Kirsten: $17 8 million versus $18 3 million in the prior year second quarter due to a lower number of franchise salons and a decline of one 6% and same store sales, partly offset by the recognition of deferred revenue associated with the acquired alliance funds, we have a net 726 fewer franchise.
Kirsten: Patients than a year ago at December 31.
Kirsten: 118, net franchise closures in the quarter had an average trailing 12 month sales volume of $151000. This compares to a top quartile Salon average sales volume over the same period of $460000, but the Tac courthouse sales outperforming at both line by 309.
Kirsten: This demonstrates the high performance potential within our system as well as how large the gap of underperformance in these closure salons.
Kirsten: As discussed in the call last quarter. We continue I continue to expect calendar 2025 to be the last year closures in the order of magnitude that we have been saying the pace should slow down in the years ahead.
Kirsten: We posted GAAP operating income of $5 $5 million in the second quarter, an improvement of 718000 compared to $4 8 million in the prior year quarter.
Kirsten: This year over year increase was driven by the alliance acquisition and lower operating expenses, primarily lower G&A expense, which was partially offset by franchise bad debt rent expense Alliant acquisition costs and royalty revenue.
Kirsten: We again produced an operating profit in the second quarter of fiscal year 2025, and we expect that to continue.
Kirsten: We reported income from continuing operations of $206000 compared to a loss from continuing operations of $1 million a.
Kirsten: A year ago in the year ago quarter. This improvement was driven by improved profitability, resulting from lower operating expenses as well as the lower interest expense.
Kirsten: During the second quarter, the company received $7 $5 million of proceeds related to a divestiture of open Salon Pro which was completed in 2022. This gain which is reflected in discontinued operations resulted in net income for the quarter of $7 $4 million or $2 $63 per.
Kirsten: Diluted share.
Kirsten: This was the final payment related to the open so I'm proud divestiture.
Kirsten: Turning to our adjusted results.
Kirsten: As a reminder, in the first quarter of fiscal year 2025, we made a change to our methodology to exclude stock based compensation expense when presenting our adjusted results.
Kirsten: Adjusted results in the current year and prior years have been adjusted to reflect this presentation. We believe our adjusted results are more representative view of the business reconciliations of our GAAP results to our adjusted non-GAAP results can be found in our press release.
Kirsten: On an adjusted basis second quarter consolidated EBITDA was $7 $1 million.
Kirsten: Compared to $6 3 million in the prior year corner.
Kirsten: The $845000 improvement was primarily due to a lower G&A sublease revenue and the Alliant acquisition.
Kirsten: That by lower royalty revenue franchise bad debt in foreign currency loss.
Kirsten: Our adjusted G&A was $9 $6 million, a decrease of $1 $9 million compared to the prior year period.
Kirsten: We remain committed to diligent management of our corporate G&A expenses and continue to expect our fiscal year 2025, adjusted G&A, excluding aligned to be in the range of $39 5 million and our run rate G&A to be closer to $38 million as.
Kirsten: As a reminder, the run rate range.
Kirsten: Range represents close to $5 5 million of savings versus the 2024, while the $39 5 million represents additional investments in our business that offset savings to the extent, we see opportunity to invest further in our initiatives.
Kirsten: Change the acquisition of align as four $5 million to $5 million of incremental annual G&A expense or.
Kirsten: Our fiscal year 2025, G&A adjusted for our line is expected to be in the range of $42 million and the run rate G&A to be $42 $5 million to $43 million.
Kirsten: Our core franchise business adjusted EBITDA was $6 4 million in the quarter at $218000 decreased compared to $6 6 million.
Kirsten: In the prior year quarter.
Kirsten: This decline is primarily explained by lower franchise revenue franchise bad debt.
Kirsten: Rent and foreign currency loss.
Kirsten: Step by lower G&A and sublease revenue.
Kirsten: Our company owned segment adjusted EBITDA was $725000 for the quarter, an improvement of $1 $1 million from the same quarter last year, primarily related to the addition of <unk> from the align acquisition as previously mentioned the alliance loans contributed $5 million of EBITDA in the second.
Kirsten: <unk>.
Kirsten: During the three months ended December 31, 2024, we generated $2 $1 million in cash from operations, which is an improvement of $6 $2 million from the prior year three month period.
Kirsten: During the six months ended December 31, we generated $780000 in cash from operations, which is an improvement of $7 $6 million from the prior year six month period.
Kirsten: Improvements in cash generated from operations is primarily due to less cash used for working capital purposes, and lower cash interest. We continue to believe that we will generate cash for the remainder of fiscal year 2025.
Kirsten: And now that we are generating cash after years of using cash we are evaluating strategies, including building a balanced in the interim and look to deploy capital in areas that we believe will drive the highest value when taking into account all key stakeholders.
Kirsten: Additionally, in the second quarter, we received approximately $7 $5 million of the proceeds related to the annuity migrations as mentioned earlier, we have reached the end of the earn out period for this transaction and do not expect any proceeds in future periods.
As a reminder, under our new financing arrangement. These proceeds will stay in the business and we're not required to pay down debt as they were under our previous financing arrangement.
Kirsten: Turning to liquidity as of December 31, 2024, we had $25 $9 million of available liquidity, including $15 7 million of available revolver capacity and $10 $2 million of cash as of December 31, 2024, our debt outstanding excluding deferred finance.
Kirsten: <unk> and the value of the warrants plus crude painting kind interest was $126 4 million.
Kirsten: As a reminder, due to accounting standards, our balance sheet shows approximately $248 $3 million of operating lease liabilities related to liabilities associated with sub leasing our salons to our franchisees over the entire life of their respective leases BS.
Kirsten: These liabilities are serviced by our franchisees and should not be factored into reduces debt position. So long as our franchisees continue to pay their obligations as they happen. We expect these liabilities will continue to decrease as the leases mature and as they continue to move away from Vantiv leases.
Lee: Lee This is solely responsible for refi ability is for any corporate office space net of Publicis and the company owned salon totaling approximately $29 5 million.
This concludes my prepared remarks, I would like to thank you for your continued support and interest in region.
Lee: Okay.
Lee: Please feel free to reach out to Investor Relations at Regis Corp, Dot com to discuss any questions related to the business. Our quarterly results with that we will wrap up the <unk> second quarter fiscal year 2025 earnings call.
Lee: Goodbye.