Regis : FY 2024 Q1 Non-GAAP

Non-GAAP Reconciliations:

We believe our presentation of non-GAAP measures including adjusted EBITDA and adjusted Franchise revenue provide meaningful insight into our ongoing operating performance and a supplemental perspective of our results of operations. The non-GAAP measures are financial measures that do not reflect United States Generally Accepted Accounting Principles (GAAP). Presentation of the non-GAAP measures allows investors to review our core ongoing operating performance from the same perspective as management and the Board of Directors. These non-GAAP financial measures provide investors an enhanced understanding of our operations, facilitate investors' analyses and comparisons of our current and past results of operations and provide insight into the prospects of our future performance. We also believe the non-GAAP measures are useful to investors because they provide supplemental information that research analysts frequently use to analyze financial performance.

Items impacting comparability are not defined terms within U.S. GAAP. Therefore, our non-GAAP financial information may not be comparable to similarly titled measures reported by other companies. We determine the items to consider as "items impacting comparability" based on how management views our business, makes financial, operating and planning decisions and evaluates the Company's ongoing performance.

The following items have been excluded from our non-GAAP adjusted EBITDA results: discontinued operations, one-time professional fees and legal settlements, severance expense, the benefit from lease liability decreases in excess of previously impaired right of use asset, lease termination fees and asset retirement obligation costs.

We present adjusted revenue to provide a meaningful Franchise adjusted EBITDA margin, which removes non-margin revenue from total revenue to arrive at an adjusted margin. Margin is a common metric used by investors, however, the majority of our revenue is offset by equal expense, so it does not contribute to our margin. We remove the non-margin revenue from this metric in order to show a meaningful margin rate.

The method we use to produce non-GAAP results is not in accordance with U.S. GAAP and may differ from methods used by other companies. These non-GAAP results should not be regarded as a substitute for corresponding U.S. GAAP measures, but instead should be utilized as a supplemental measure of operating performance in evaluating our business. Non-GAAP measures do have limitations as they do not reflect certain items that may have a material impact upon our reported financial results. As such, these non-GAAP measures should be viewed in conjunction with our financial statements prepared in accordance with U.S. GAAP.

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REGIS CORPORATION

Reconciliation of U.S. GAAP Net Income to Adjusted EBITDA

(Dollars in thousands)

(Unaudited)

	Three Months Ended September 30,
	2023				2022
Consolidated reported net income, as reported (U.S. GAAP)	$	1,194		$	1,468
Interest expense, as reported		6,188			3,817
Income taxes, as reported		(148)			28
Depreciation and amortization, as reported		370			1,251
EBITDA	$	7,604		$	6,564
Professional fees and legal settlements		-			708
Severance		-			2
Lease liability benefit		(128)			(602)
Lease termination fees		(13)			458
Discontinued operations		-			(3,306)
Adjusted EBITDA, non-GAAP financial measure	$	7,463		$	3,824

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REGIS CORPORATION

Reconciliation of Reported Franchise Adjusted EBITDA as a Percent of GAAP Franchise Revenue to Franchise Adjusted EBITDA as a Percent of Adjusted Franchise Revenue

(Dollars in thousands)

(Unaudited)

	Three Months Ended September 30,
		2023			2022
Franchise adjusted EBITDA	$	7,960		$	4,993
GAAP Franchise revenue		51,436			58,757
Franchise adjusted EBITDA as a percent of GAAP Franchise revenue		15.5 %			8.5 %
Non-margin revenue adjustments:
Franchise rental income	$	(24,667)		$	(30,330)
Advertising fund contributions		(7,226)			(8,251)
Adjusted Franchise revenue	$	19,543		$	20,176
Franchise adjusted EBITDA as a percent of adjusted Franchise revenue		40.7 %			24.7 %

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