Regis Corp. (NYSE:RGS) Q3 2018 Earnings Conference Call - Final Transcript
May 01, 2018 • 10:00 am ET
Taking into account these two items and normalizing last year's total adjusted G&A of $35.5 million by approximately $12.7 million results in a pro forma 3Q '17 G&A in the range of $48.2 million, which we feel is a more apples-to-apples comparison. Comparing that to this year's third quarter adjusted G&A of $44.4 million, means that we have reduced total G&A by approximately $3.8 million or 7.9% during the quarter versus what we should have otherwise been expecting.
Turning now to the balance sheet. We executed on several key transactions during the quarter that has helped strengthen our overall liquidity position, while providing optimal balance sheet flexibility for the company's continued strategic transformation work.
First, in late March, the company closed on a new unsecured $260 million five-year revolving credit facility that expires in March of 2023. The new revolver replaces the company's previous $200 million unsecured five-year credit facility that was set to expire this June.
Subsequent to closing the facility in late March, we exercised a portion of the accordion feature of the credit facility to welcome an additional bank into the syndicate, thereby raising the overall capacity of the unsecured credit facility available to Regis to $295 million.
Concurrent with this credit facility closing, the company also redeemed its outstanding 5.5% senior term notes that were due in December of 2019. The redemption was funded with $90 million of lower cost borrowings from the new credit facility and $34 million of cash. And lastly, during the third quarter, the company repurchased $585,000 or roughly 1.2% of its common shares for a total of $9.6 million. As a reminder, at the end of third quarter, we have approximately $50 million of share repurchase capacity remaining under our existing Board-approved share repurchase program.
So turning to the quarter-end balance sheet. We had $90 million of outstanding borrowings under the new credit facility, and we ended the quarter with a cash balance of $105 million. The quarter-over-quarter decrease in cash is driven primarily by a $34 million we used to fund the retirement of our senior term notes, $11 million for CapEx and the white boxing of the 597 non-performing SmartStyle salons we exited, and $9.6 million used to repurchase shares during the quarter.
Before I turn the call back to Ryan for questions, let me remind you of a couple of items that impacted year-over-year comparability of the results we just reported. First, due to the sale in subsequent franchise in substantially all of our mall-based salons and UK businesses back in October, these operations are now shown as discontinued operations in the P&L.
The financial statements provided in our press release and 10-Q for both current and prior periods have been recast to reflect the discontinued operations. However, prior year press releases and disclosures would not reflect this change and are not comparable to our current operations.
The second item involves the field reorganization's change that I described earlier, which created an $8.5 million decrease in cost