Regis Corporation · NASDAQ:RGS
Regis — Alberto Culver — Merger or Acquisition (January 2006)
22 slides from Regis's merger presentation, Jan 17, 2006
Slide 1: Proposed Merger of Sally Beauty & Regis Corporation
Proposed Merger of Sally Beauty & Regis Corporation Boston/New York Roadshow January 17-19, 2006
Slide 2: $2.6 Billion Transaction (as of 1/10/06)
$2.6 Billion Transaction (as of 1/10/06) + Valuation Based On: > Comparable Companies » Precedent Transactions » Discounted Cash Flows + Valuation of Deal: > 114.5%X Net Sales » 9.6X EBITDA > 11X EBIT ae hes = > 16.9X Net Income Ce seo ao” Deal Highlights REGIS
Slide 3: Combining Sally & Regis
combining Sally & Regis 6/30/06E 6/30/07E Regis: Projected Sales $2.4 billion Projected EBITDA $300+ million Sally: Projected Sales $2.3 billion Projected EBITDA $270+ million New Regis: Projected Sales $5+ billion Projected EBITDA $650+ million EES Merger REGIS
Slide 4: Financial advantages
financial advantages * 125% increase in annual dividend to $0.36 + Higher pretax margins + Improved debt ratios + Better cash flow generation Merger Details
Slide 5: The opportunities
the opportunities In addition to approximately $20 million of near-term synergies, there are additional long-term opportunities to increase share- holder value + Build upon our vendor relationships + Reduce product diversion + Ability to develop our own brands + Identify salon acquisition targets +
Slide 6: Slide 6
Slide 7: Committed to growth
committed to growth Annual Revenues Over 11,000 worldwide locations Three profitable divisions — all poised for double-digit growth we (4 on me Generate predictable recurring revenue Organic & acquisition growth | | | [ | m 8 6 & te bilions of dollars EE Company Overview REGIS
Slide 8: Hair salons
hair salons + $150 billion worldwide market » 2% worldwide market share + 10,952 salons generating over $2 billion in revenue > 7,108 corporate > 3,844 franchised * 350,000 salons in North America * Continued acquisition opportunities ‘Salon counts as of 9/30/05 Company Overview
Slide 9: Hair salon growth
hair salon growth June June 1996 2005 Mall-based 1,463 2AM, Wal-Mart 157 1,497 Strip Centers 2,937 United Kingdom 343 426 Franchise: Domestic 2,310 International 1,592 1,963 10,879 Hair Salons REGIS
Slide 10: Acquisition opportunities
acquisition opportunities * 350,000 North American salons & barbershops + 50,000 (~15%) meet our acquisition criteria > strip center or regional mall locations > not top 5% or bottom 15% + 5,000 (~1%) are for sale at any time + Regis needs to acquire only 500 salons each year to meet growth goals Ha
Slide 11: Acquisition summary (excluding proposed Sally merger)
acquisition summary (excluding proposed Sally merger) From January 1994 to January 2006 Regis: + Completed over 330 deals + Acquired over 8,000 salons + Added over $1.0 billion to annual revenues Jean Louis WalMartSalons Barbers David & Sally BeautyiBSG Trade Secret. ———& Supercuts Stalgue — HairCiu
Slide 12: Prototypical acquisition: salons
prototypical acquisition: 10 salons Sales $2,500,000 Operating cash flow: Seller's historical $400,000 Regis’ future (w/ synergies) $500,000 Maximum purchase price: $1.75 million — $2.0 million Purchase price/operating cash flow: Seller's historical 5.0 times Regis’ future 3.5 — 4.0 times Hair Salon
Slide 13: Hair Club
HAIRCLUB hair restoration FOR MEN and WOMEN + $4 billion domestic market > Hair Club for Men and Women has 5% market share + 90 locations generating over $100 million in annual revenue > 41 corporate » 49 franchised + Attractive demographics — aging baby boomers + Consolidation opportunities + EBITD
Slide 14: Beauty schools
beauty schools + $1 billion domestic market + Attractive demographics > expanding pool of potential students » economic factors > increases in financial aid * Seeking 10% market share through acquisitions + EBITDA margins in excess of 20% ta NYSE RES
Slide 15: One-of-a kind company
one-of-a kind company + Lack of comparables + Growth company + Industry leader with only 2% share in our core business + Limited risk factors > predictable, replenishment business > no threat of technological obsolescence » no threat of foreign competition Financial Highlights
Slide 16: Unit growth
unit growth 1,963 Financial Highlights REGIS
Slide 17: Consolidated gross margin
consolidated gross margin 45.3% ; 44.0% Financial Highlights REGIS CORPORATION
Slide 18: 2005 hair salon revenue = $2.1 billion
2005 hair salon revenue = $2.1 billion = 67% Service 29% Product 4% Royalties & Fees Financial Highlights REGIS
Slide 19: Retail product sales, in millions
retail product sales, in millions + estimated 15% market share $720 $648 $578 7 : | 96 @ 04 05 06E Financial Highlights
Slide 20: Steady growth
steady growth 24 Bas 22 « Revenue (in billions) co | | a | as ay Leal 2x + EPS ne 22 *Reported 2005 EPS of $1 39 includes $0.83 per Aue $83 share non-cash charge related to $38 milion charge for goodwill impairment. | " 03 04 05 06E 8m: Financial Highlights REGIS
Slide 21: Safe harbor statement
safe harbor statement This presentation contains Torward-ooking statement wihi the meaning ofthe fede secuiee les, incudng statements concerning anticoated {ure events and expectation tat ave nat hitorcal fects, These fomarclooking Statement ae made pursuant to the ste harbor pronsion of the Private
Slide 22: Searchable text section of graphics shown above
Searchable text section of graphics shown above i nvestor presentation Proposed Merger of Sally Beauty & Regis Corporation Boston/New York Roadshow January 17-19, 2006 [GRAPHIC] [LOGO] [LOGO] $ 2 .6 Billion Transaction (as of 1/10/06) • Valuation Based On: • Comparable Companies • Precedent Transact
Alberto Culver — Merger or Acquisition (January 2006) on 6ix