Hair Care Company Announces New Credit Facility: Debt Refinance
Regis Corporation Announces New Credit Facility to Refinance Existing Debt.
Disclaimer: The information provided in this article is intended for informational purposes only and should not be construed as financial advice. It reflects the latest announcement from Regis Corporation regarding their new credit facility and refinancing efforts.
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Regis Corporation, a entity in the haircare industry, has recently made a noteworthy announcement concerning its financial restructuring. As disclosed, the Company has successfully entered into a new senior secured credit facility with TCW Asset Management Company LLC and Midcap Financial Trust. This financial arrangement aims to replace existing debt, thereby optimizing the Company's capital structure and ensuring better financial health.
Details of the Credit Facility
The newly established credit facility encompasses a $105 million term loan, which effectively replaces the previous debt and reduces outstanding indebtedness by over $80 million. This move is estimated to save Regis approximately $7 million annually in cash interest. The Company now has access to a $25 million revolving credit facility. Both the term loan and revolving credit facility are set to mature on June 24, 2029. Upon transitioning the Company’s outstanding letters of credit to the new revolving credit facility, Regis anticipates having full access to the availability in excess of these letters of credit. This development is expected to provide substantial liquidity and flexibility, essential for the Company's operations and future growth.
Matthew Doctor, the President and Chief Executive Officer of Regis Corporation, expressed satisfaction with the refinancing agreement. He described it as a pivotal step towards achieving sustainable long-term growth and value creation. By conducting a thorough review of their capital structure, Regis has managed to secure an agreement that not only reduces debt but also enhances the overall health of the balance sheet. This maneuver is set to increase financial flexibility, allowing the Company to concentrate on transforming its business operations.
Doctor further emphasized the confidence shown by TCW and Midcap in the long-term prospects of Regis. The investment from these entities reflects their belief in the Company’s potential to enhance shareholder value. Regis remains committed to improving the customer experience, implementing innovative technology, supporting the stylist and franchisee community, and managing corporate expenses efficiently. Updates on these initiatives will be shared during the fiscal fourth quarter 2024 earnings call.
Additional Information
Detailed information regarding the transaction and pro forma capitalization levels can be found in the June 2024 Refinancing Transaction Summary. This document is available on the Investor Relations section of Regis Corporation's corporate website under Presentations & Supplemental Financial Information. Further details will also be accessible via Form 8-K filed with the Securities and Exchange Commission.
Jefferies LLC served as the financial advisor for this refinancing effort, while Weil, Gotshal & Manges LLP provided legal counsel to Regis. Regis Corporation, listed on the NasdaqGM under the ticker symbol RGS, is a leader in the haircare industry. As of March 31, 2024, the Company franchised or owned 4,557 locations. These locations operate under well-known concepts such as Supercuts®, SmartStyle®, Cost Cutters®, Roosters®, and First Choice Haircutters®. Each brand caters to different market segments, offering a variety of services and price points to meet diverse consumer needs. Supercuts® is one of the more recognizable brands under the Regis umbrella, known for its convenient, no-appointment-necessary service model. Supercuts® caters to a wide demographic, providing quality haircuts at affordable prices. The brand is particularly popular among professionals and families seeking reliable and efficient haircare services.
SmartStyle® operates primarily within Walmart stores, making it a convenient option for shoppers. This full-service hair salon brand offers a range of services including haircuts, color treatments, and styling. SmartStyle® aims to provide professional salon experiences at reasonable prices, appealing to the budget-conscious consumer.
Cost Cutters®
Cost Cutters® focuses on providing value-oriented haircare services. The brand targets families and individuals looking for high-quality haircuts without breaking the bank. Cost Cutters® prides itself on offering a broad array of services, from basic trims to more elaborate styling and color treatments, all at competitive prices. Roosters® is marketed towards men who appreciate a classic barbershop experience. This brand stands out by offering traditional grooming services in a modern setting. Services include precision haircuts, shaves, and various grooming treatments designed to cater to the discerning gentleman. Roosters® blends the nostalgia of a traditional barbershop with contemporary amenities.
First Choice Haircutters® serves a diverse clientele, offering a wide range of haircare services at affordable prices. Known for its family-friendly atmosphere, the brand provides everything from haircuts to color services. First Choice Haircutters® is committed to delivering quality and convenience, making it a popular choice for families and individuals alike. The new credit facility represents a crucial financial restructuring for Regis Corporation. By reducing debt and securing favorable terms, Regis is positioned to focus on its core business operations and long-term objectives. This includes enhancing customer satisfaction, leveraging technology for operational improvements, and supporting the stylist and franchisee network that forms the backbone of the Company.
The leadership at Regis is optimistic about the future, with plans to continue refining their business model and exploring new opportunities for growth. The support from TCW and Midcap indicates a strong belief in the Company's direction and potential for value creation. Moving forward, stakeholders can expect regular updates on the Company’s progress and strategic initiatives during quarterly earnings calls and through official communications.
Regis Corporation's recent announcement of a new credit facility marks a pivotal moment in the Company's financial strategy. By securing this agreement with TCW Asset Management Company LLC and Midcap Financial Trust, Regis has taken a substantial step towards improving its financial health and operational flexibility. This development is expected to facilitate the Company's efforts in enhancing customer experiences, supporting its community of stylists and franchisees, and managing corporate resources effectively.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. For detailed information regarding the transaction, please refer to the official documents available on the Investor Relations section of the Regis Corporation website and the Form 8-K filed with the Securities and Exchange Commission.
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