RGS - NASDAQ

Good morning, and thank you for joining the Regis Second Quarter Fiscal 2024 Earnings Conference Call. I'm your host Biz McShane, Vice President, Corporate Controller. All participants are in listen-only mode. The prepared remarks by our President and Chief Executive Officer, Matthew Doctor and Executive Vice President and Chief Financial Officer, Kersten

Thank you, Biz. And good morning, everyone. On today's call, I will discuss our Q2 fiscal 2024 results and share my observations about the progress we have made to stabilize Regis over the past 2 years as well as our ongoing work to reaccelerate growth and drive value for all of our stakeholders. Jumping right into our results for the quarter and first half of the year. Same-store sales rose 1.9% in the quarter and 1.8% year-to-date. Now while we ended the quarter 1.9% above last year, we saw a progression in comparable sales throughout the quarter with October being a bit more challenging coming in roughly flat year-over-year. Well, in the month of December, we were up 4.5% versus December of 2022. And from a sales perspective, we're seeing notable disparity between our top and bottom quartile salons, and this is really driving the overall sales comp. We are really seeing some bright spots in those top quartile salons across all of our brands as they have collectively demonstrated approximately 6% same-store sales for the quarter with positive traffic comps. Adjusted Q2 EBITDA on a consolidated basis was $6 million compared to $7.8 million in the prior year's quarter. Part of that gap between this quarter and Q2 fiscal 2023 is due to the onetime $1.1 million received from the state of North Carolina, with the remaining due to our lower salon count driving lower revenues and timing of expenses. For the first half of fiscal 2024, our adjusted EBITDA of $13.5 million is a $1.8 million improvement versus the first half fiscal 2023 adjusted EBITDA of $11.7 million. We reported operating income of $4.8 million in the quarter versus $700,000 in Q2 fiscal '23. This is a $4.1 million improvement. Operating income for the first half has improved by $9 million versus the prior year at $12.2 million versus $3.2 million during the first half of fiscal 2023. We ended Q2 with total liquidity of $38 million. Kersten will go into the details relating to our liquidity and cash used which continues to improve year-over-year on a normalized basis. We project our cash use to decline in the second half of the year, assuming no dramatic changes to our business. Additionally, our $2 million indemnity payment from