Paul Finkelstein – Chairman, President and CEO Randy Pearce – Senior EVP and Chief Financial and Administrative Officer Mark Kartarik – EVP, President of the Franchise Division

Jeff Stein – Stein Research Mike Hamilton – RBC David Cumberland – R. W. Baird

Good afternoon. My name is Chris and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Regis Corporation first quarter 2009 conference call. All lines have been placed on mute to prevent any background noise. If anyone has not received a copy of this morning's press release, please call Regis Corporation at 952-806-1798 and a copy will be faxed to you immediately. If you wish to access the replay for this call you may do so by dialing 1800-405-2236, entering access code 111-2006 pound 60 minutes after the conclusion of this conference. I would like to remind you that to the extent the company's statements or comments this afternoon represent forward-looking statements, I refer you to the risk factors and other cautionary factors in today's news release as well as the company's SEC filings. Reconciliation to non-GAAP financial measures mentioned in the following presentation can be found on their website at www.regiscorp.com. With us today are Paul Finkelstein, Chairman, President and Chief Executive Officer; and Randy Pearce, Senior Executive Vice President, Chief Financial, and Administrative Officer. After management has completed its review of the quarter, we will open the call for questions. (Operator instructions) I would now like to turn the conference over to Paul Finkelstein for his comments. Paul, you may begin.

Thank you, Chris, and good afternoon, everyone. Obviously we are not satisfied with our first quarter results. First quarter revenues increased $13 million. Revenues would have increased $32 million or 5% absent of deconsolidation of the European franchise business and beauty schools. Reported EPS was $0.34 versus this year versus $0.46 last year. Operationally on a (inaudible) basis earnings were $0.39 a share. To add a little color, July and the first half of August performed satisfactorily. From mid-August on, with start of the financial crisis, it was a different story. The consumers stayed home and the first quarter was negatively impacted. EBITDA was $64 million compared to $74 million last year. The deconsolidation of European schools resulted in our booking $2.1 million less in EBITDA. We with the current credit environment many of you have been enquiring about our credit facilities and financial debt covenant. So, before any further review of the first quarter, I would like to address some of these questions. If we do not alter our behavior and current economic conditions continue we may have very little cushion under one of our financial debt covenant, the fixed charge coverage ratio. Parenthetically, we are on compliance at this present time. Having a small cushion is totally unacceptable to us. This potential problem is primarily a function of comps. We have never had a negative annual comp in our 86 year history. I don’t believe that will have a negative service sales comp this fiscal year. Our basic business is service which encompasses 70% of our revenues and it is highly predictable. This is the quintessential replenishment business. This is a very solid business. The product business is and will continue to be a challenge. We will address our product business later on in the conference call. Our challenge is to create cushion and reduce the risk of a covenant violation. Therefore we are taking immediate steps to reduce debt and interest expense by implementing the following: First, using an expanded IRS ruling on international cash borrowings or bring back $40 million to $50 million of international cash and pay down our revolving line of credit. Further, we’re working on a permanent solution to repatriate this cash at the very low effective tax rate. Second, we plan to reduce our $100 million CapEx budget of which $55 million is maintenance CapEx, by $15 million to $20 million. Third, we will reduce our $242 million inventory level which has ballooned up by $29 million in the quarter primarily due to a buildup of holiday items. Lower than expected sales and the Trade Secret transformation by at least $20 million. Fourth, we will also reduce our acquisition investment and loan budget of $75 million by at least $15 million to $20 million. These are the highlights of the investment component of our strategy, which will reduce indebtedness and interest expense. At the same time, we’re acting quickly and decisively to reduce home office expenses. (inaudible) initiative will save over $3.5 million incrementally this fiscal year. The expenditures, I’m going to talk about are in addition to the (inaudible). Some of these savings near term and will be restored in future fiscal years as they relate to the main stays of our very successful corporate culture. We feel that there’ll be no significant negative operational issues created by implementing these cutbacks this year. Several of you can recall that after we went private in 1987 the banking environment changed resulting in an awful experience for us in 1990 and 1991 but because of the cash flow characteristics of our business and the predictability of our business we resolved our issues and came back stronger than ever. We are committed to reducing operating expenses as necessary and depending upon sales levels we will reduce fiscal 2009 home office overhead by up to $15 million to $20 million. Sacrifices will be made. Cash bonuses are a significant portion of our executive compensation. These bonuses will likely be significantly reduced if not completely eliminated. Contribution to our profit sharing program, which is the primary retirement component for our home office employees and 850 field supervisors will likely be significantly reduced or potentially suspended this year as it was in 1990 and 1991. Marketing and charitable contributions [ph] will be cut substantially. Our marketing spend is image related. So sales should not be adversely affected in the short run. Many other areas beyond this will be impacted. As I just mentioned total cost savings will be between $15 million and $20 million. This plan should give us cushion as needed to weather up to a 2% negative comp and we certainly do not foresee comps being more than 2% negative as we have never had a negative comp in our 86 year history. Many of these initiatives have already been implemented. We’re confident that we’ll be able to create enough cushion necessary to significantly reduce the likelihood of any potential covenant violation. Randy will also provide more details on our credit facilities and financing activities in a few minutes. Now on to analyzing our first quarter results. Information found in today's press release coupled with information on our website will give you additional input to help you analyze our financial results. During the quarter we acquired 108 locations, built 55 and closed or relocated 69. Our franchisees built 29 and sold, closed or relocated 99 locations resulting in a decrease of 70 franchise locations during the quarter. As of September 30th, we added 2128 North American franchise locations. We ended the quarter 10,861 company-owned and franchise locations and total locations including ownership interests of 13,607. During the quarter, we spent $29 million on CapEx and $37 million for acquisitions and investments. Debt at the end of September 30th was $807 million and our debt-to-cap ratio was 45.3%. First quarter North American same-store service sales increased 6 tenths of one percent. There was a 4.8% price increase impact, a positive 0.4% service mix impact, and a negative 4.6% negative customer count intact. First quarter product comps decreased 7.7%. During our last conference call in August I stated that while I was more bullish for the long-term than I had been in years. I also stated that the economy had enormous challenges ahead of it. I did not understand and communicate was the credit crisis that has emerged to the forefront during the month of September and has affected virtually all the retailers. There is a very small segment of the retailing community that is operating satisfactorily. Most retailers face significant challenges, especially those in high end categories. For the first time in my career there seems to be a bifurcation in the beauty industry. In the past different segments of the industry performed – all performed in similar fashion, namely affordable salon concepts such as Supercuts and the SmartStyle absent the effects of maturation performed in a similar fashion for Regis and some of the higher end concepts that is not the case today. Supercuts service comps for the first quarter were plus 2.8% and customer visits were down 3%. In the Regis division service comps were down 3.8% and customer visits were down 7% even more telling is the professional haircut product category. Procter & Gamble has done a recent research and concluded that the super premium brands, namely the brands sold in our stores are taking a significant hit, over most of them in past years, including the recession of 1991. Consumers seem to be trading down in many categories including hair care. Frankly, what this shows is that none of us can swim against the tide for ever. Virtually every industry has been affected. In the financial arena enough even Goldman Sachs will need to (inaudible) its capital base. The good news is that Regis is strong financially and the negative impact on us will be minimal compared to most others. We will have close to $300 million in EBITDA supported by debt of approximately $800 million. Eight months from now at the end of our fiscal 2009 year we expect our debt levels to be well below $700 million. In the current retail environment it is difficult to achieve our historical rates of return for new store builds and thus we’re making substantial cuts in our investments. Talking to strengthening our balance sheet and reducing our CapEx and acquisition expenditures looks to continue price increases. Our analysis shows that price increases have not negatively affected us at all and we certainly will anniversary our price increases this coming winter and spring. We continue to focus on expense control and on implementing positive payroll leverage programs for new hires in many of our divisions. Most of our work will be in – will be done by the end of the fiscal year and we expect to see improvements in service margins beginning in fiscal 2010. We continue to focus on closing stores and as of today we have closed 16 locations prior to the end of the lease terms and we’ve signed agreements for an additional five locations. Obviously, the landlord climate has changed. Developers do not like a lot of dark spaces but we are been very aggressive in our negotiations and are confident that the program will be as successful one. In order to reduce our losses and help our landlords we’re willing to cap our rental costs rather than close stores. This will help our landlord partners as well as us. We have talked ad nauseam about the challenges we have faced in the product arena. Diversion coupled with a shift to lower price goods along with increased competition has created significant challenges for us. It doesn’t help if product sales has been a huge core competency of ours having a 15% market share of all the products sold in beauty salons and barber shops in North America. It is obviously very difficult to sustain that kind of growth. However, rest assured we are extremely well positioned to be a major player in the retail product business with 65,000 of our stylists touching people every day and having a very special advantage of selling products over self service and discount stores. With respect to the Trade Secret transformation we have concluded that we will absolutely transform our product assortments to mirror those that exist in PureBeauty but we will not change the Trade Secret name. We underestimated the significant franchise that Trade Secret enjoys. While we were definitely had body, skin, and cosmetics to Trade Secret and will remodel Trade Secret stores at least at renewal time with the PureBeauty footprint. The name over the door will remain Trade Secret. New mall stores such as North Park in Dallas and (inaudible) in Southern California where Trade Secret didn’t exist will get the PureBeauty concept as though small developers want higher end imagery. The Empire Education Group is performing well. Likewise our 30% investment in the (inaudible) on the continent of Europe holds great promise for us. That business is extremely well managed and after the amalgamation and integration issues are sorted out Provo will have huge earnings growth potential. Our New RaZe for men higher end barber shop concept is right on plan. As we mentioned in our conference call this segment of the industry has performed extremely well in certain markets such as Phoenix and Seattle. It is scalable and the field is uncrowded. Assuming that we have 500 locations within five years 90% somewhat of these locations will be franchised. We’re confident based on our discussions with our franchisees during our annual franchise convention which took place in early October that we should add commitments for more franchisees to open at least ten within the next twelve months. This strategy is not to convert a $15 haircut customer to become a $30 haircut customer at Regis. Over 40% of our Regis Salon division’s haircut customers are male and the price for one haircut is $30. A significant portion of the male population go to a traditional beauty salon to get a haircut as cosmetologists generally do a better job of precision haircutting and traditional barbers. Thus the higher price male market already exists. We just want to increase our share of it. As you know, we have adjusted our forecast for the year based on the current economic conditions. Retailing is incredibly challenging today. However, rest assured that Regis is one of the least challenged companies in this sector and has a very, very good defensive holding. Currently based on a $13.5 stock price our company is trading at less than six and a half times after-tax cash flow and less than four and a half times EBITDA with the stock dropping from $27 to $13.5 dollars within the last three weeks. This company is too good, too strong, and our future prospects are too bright to be hammered to this degree. And with only a 2% worldwide a 4% domestic market share and being the only consolidator in North America, we certainly forecast significant earnings increases once current economic conditions stabilize. I do want to thank all of you for your support and will now pass the baton on to Randy.

Thanks, Paul, and good afternoon, everyone. I plan to discuss our first quarter results and then address several other topics including an update of our fiscal 2009 guidance. As we have said many times before our earnings guidance directly correlates to our same-store sales guidance. At the beginning of the quarter, we had forecasted our operational earnings to be in the range of $0.41 to $0.47 per share and that was based on forecasted same-store sales range of negative 1% to positive 1%. With our actual comps for the quarter coming in below plan at negative 160 basis points one would therefore expect our earnings to be slightly below the low end of the range and they were. Today we are reporting operational earnings of $0.39 per share. Our actual reported earnings for the quarter came in a nickel lower at $0.34 per share due to non-operational costs associated with our trade secret and store closures initiatives, both of which we previously discussed with you. You’ll find a concise reconciliation of our reported earnings to our operational earnings included in today’s press release as well as on our corporate website. One other point worth noting, the hurricanes. Hurricanes gust up in height that hit the United States during our September quarter, impacted 250 of our salons and nearly 2000 of our employees. As a result, we suffered lost profits and incurred additional costs which serve to reduce our first quarter earnings by $0.02 per share. Let me now transition my comments by giving you a bit more detail behind our first quarter operating results for each business segment. A breakout of our segment performance is found in today's press release. My comments this afternoon are going to focus on our operational performance. Again you’ll find a reconciliation of our reported earnings to our operational earnings on our corporate website. Let us begin with our largest revenue segment which is our North American salons. North American salon revenue, which represented 88% of our consolidated first quarter revenue increased 4% during the quarter to $597 million. This revenue growth was due to a net quarter-over-quarter increase in the number of Company-owned salons that we operated. Dampening this increase was a 160 basis point decline in overall same-store sales, a 30 basis point decline due to lost sales as a result of the hurricanes as well as the negative impact of 100 basis points due to deconsolidating our school business with the Empire Education Group on August 1 of 2007. Service revenue in our North American salons grew 5% during the quarter to $427 million. This increase included a 60-basis-point increase in service same-store sales. Average ticket grew 5.2% during the quarter largely due to price increases that we implemented in the last half of our 2008 fiscal year. However, offsetting this increase in average ticket was a 4.6% decline in same-store customer accounts during the quarter as consumers continued to extend the time between salon visits. I can assure you that we’re not losing market share as evidenced by data we received from our franchisees, from independent salon owners that we acquire, from major salon competitors as well as from our retail vendors. To the contrary, we are impacted by macro fashion and economic factors. As Paul mentioned it appears some customers may also be trading down in price, for example, the decline in a first quarter same-store customer visits ranged from negative 7.3% in our higher-end flagship Regis concept to negative 3% in our more affordable Supercuts concept. Regardless, with the system-wide average service ticket of only $20 we certainly provide affordable choices for all of our customers. Switching now to product, our retail product revenue grew 3% in the quarter to $160 million, but was tempered by a decline in product same-store sales of 7.7%. Royalties and fees from our North American franchise salons were $10.2 million essentially flat with the same period a year ago. New franchise units that were added to the system over the past twelve months are being offset by franchise buybacks, franchise unit closures, and relocations. Our combined gross margin rate for North American salons came in at exactly 43% during the first quarter. This overall rate was 40-basis-point below plan and 90 basis points less than the same period last year. Our first quarter service margin rate for North American salons came in at exactly 42%. We were very pleased with this rate. Despite the current economic conditions our service margins came in on plan but were 30 basis points below the rate we reported in the same period a year ago. The planned reduction largely related to our recent Hair Cuttery and PureBeauty salon acquisitions, which have higher cost payroll plans. Our operating people continue to do an outstanding job of managing salon payroll costs which as you know is the largest expense item we have. Our retail product margin rate in the first quarter came in at 45.6%, down 120 basis points from plan and down 230 basis points from the rate we reported last year in our first quarter. We had budgeted for a quarter-over-quarter in product margins primarily due to two factors which we previously talked about. During the past year we completed the acquisitions of BSO, Beauty Supply Outlet, as well as PureBeauty and BeautyFirst. These businesses have a number of franchise units and the in turns sell retail products to these owners. The products we sell them are obviously at the lower average margin than the products they sell in our corporate locations, which serves to reduce our consolidated product margin rate. In addition, the PureBeauty and BeautyFirst acquisition included 63 company-owned stores. These stores have lower average retail margins due to their product assortment. These two factors accounted for a planned reduction in margin of about 110 basis points. The unplanned reduction in product margin rate can be attributed to several items. First, we experience negative payroll leverage in our Trade Secret salons in the first quarter due to negative product comps of 16.3%. Next, the trend that we have seen over the course of the last year is continuing as promotional products are becoming a higher percentage of our overall product sales mix. We are not promoting or discounting at a higher rate but we are seeing the consumers are becoming more value focused and are buying our promotions at an increased rate compared to the prior year. I am now going to switch to site operating expense, and this expense category includes costs directly incurred by our salons, such as advertising, insurance, utilities and janitorial costs. This expense category improved 30 basis points in the first quarter coming in better than planned at 8.3% of sales. Cost saving initiatives we have implemented throughout the past year contributed to the quarter-over-quarter improvement. Next I will address our North American salon G&A expense, which came in essentially on plan in the first quarter at 5.9% of revenue but was 10 basis points higher than the same period last year. Most of this increase was due to a planned increase in field supervisor travel expenses associated with increased fuel costs. First quarter rent expense for our North American salons came in 15.1% of sales, which exceeded plan by 50 basis points and was 60 basis points above last year’s first quarter rate. We continue to experienced negative leverage in this fixed cost category as salon rents are increasing at a faster rate than our overall same-store sales growth. Switching to depreciation and amortization expense, let me quickly say that our first quarter rate of 3.6% came in essentially on plan and was 20 basis points better than the rate we reported last year in our first quarter. Recall that last year in our first quarter our D&A rate was a bit higher than normal due to the timing of asset write-offs associated with salon closures. As you will also recall, in our fourth quarter of fiscal 2008, we rolled off $4.5 million in fixed assets related to 160 underperforming salons. We’re now seeing a planned current year reduction in this expense category as we’re no longer depreciating salon assets in these locations. The net effect of all the items I have just discussed caused our operating income for our North American salons to come in at 11% of first quarter revenue. Next, let's review the first quarter performance of our international salon segment. As we’ve discussed with you during the last two quarters, analyzing the quarter-over-quarter line item comparisons for this business is very difficult. This segment includes our company-owned salons located primarily in the United Kingdom. Historically, our international salon segment had also included results from our franchise business on the continent of Europe. However, following our joint venture transaction with Frank Provo, the European business was deconsolidated effective January 31st. As a result, our first quarter fiscal 2009 international segment does not include any continental Europe activity, whereas this activity was fully consolidated in the comparative prior year first quarter. For this reason, the quarter-over-quarter comparisons are tough. However, I will provide a bit more color behind the quarterly change in revenue and also give you some high level comments on any expense categories, which may have surprised us during the quarter. Those of you who build segment models may once again want to give Mark Fosland or Alex Forliti a call here at Regis and they can help you out. Our international salon revenue which comprised 7% of our consolidated first quarter revenue came in at $48 million, a reduction of $15 million from the same period a year ago. This decline was due to the deconsolidation of our continental Europe franchise salon business, as well as a 3.3% decrease in overall same-store sales. When reviewing the international first quarter operating results on an apples-to-apples basis our UK salon business remain tough due to the English economy. We were certainly disappointed with a first quarter decline in overall same-store sales of 3.3%. However, we were pleased that we nevertheless achieved our operating income plan for the quarter due to strong controls over payrolls and other costs. Let's now talk about Hair Club for Men and Women. First quarter revenue from our hair restoration centers increased 9% to $35.1 million. Hair Club’s revenue growth benefited from positive first quarter comps of 1.2% as well as the acquisition of seven franchise centers and the construction of four new corporate locations over the past year. Hair Club’s revenues represented 5% of our consolidated first quarter revenue. Our first quarter operating margin rate for hair club came in below plan at 16.8% and was down from last year’s reported operating margin rate of 21.7%. The decline largely related to $450,000 of legal and financial due diligence cost that we expensed during the quarter associated with the potential acquisition, which we ultimately passed on. In addition, we experienced lower operating margins at the seven acquired franchise centers as well as the four recently built locations. We also had a planned increase in advertising expense during the quarter. Hair Club’s first quarter EBITDA margin came in at over 24%. We remain very pleased with the performance of this segment of our business. Let me switch gears now and I would like to make a quick comment regarding our first quarter G&A rate, which appears in the corporate segment of our P&L. Our first quarter G&A costs came in on plan at 4.9% of sales, which were 30 basis points lower than the same period a year ago. The primary reason for the quarter-over-quarter improvement related to a current year reduction in consulting fees paid to Deloitte in connection with our expense control initiative project. The major components within our corporate G&A continues to be salaries and related benefits for the 850 or so employees working here in Minneapolis and the 500 associates that work at our two distribution centers. Centralized back office support functions provide leverage to our operating model. For example, over the past five years our company-owned salon have increased at a compounded annual rate of over 9%, revenues have increased at a compounded rate of over 10%, yet our home office headcount has experienced a slower annual growth rate of around 5% to 6%. Despite this leverage, we continue to be very aggressive with the expense control during these challenging times of slow sales growth. Now that concludes my comments concerning our individual business segments but let me take a moment now and comment on a few other things and first I’m going to start with inventory levels. Our inventories as Paul mentioned grow by $29 million in the first quarter to $242 million. Much of the increase was anticipated due to the customary buildup in advance of the upcoming Christmas holiday season. In addition about $5 million of the increase related to temporary inventory build as we transitioned the PureBeauty warehouse operations out of Wichita into the Regis distribution centers. Despite these two factors our inventory levels are higher than we would want them to be, which quite frankly is unacceptable to us. Retail product sales were lower than planned during the quarter and our buyers did not have time to react to reduce their purchases. Has Paul stated we plan to reduce overall inventories by about $20 million by the end of our current fiscal year. At the now speak to our interest expense and our debt levels. As we had expected, our first quarter interest expense came in at $10.3 million. Our total debt on September 30 stood at $807 million, which was up $42 million since our most recent fiscal year end and our debt-to-capitalization ratio at the end of September stood at 45.3%. The increase in total debt was largely expected due to the timing of salon acquisitions, which were front end loaded once again this fiscal year. In addition, the buildup in inventories which I just discussed also contributed to our increasing in debt. We expect our debt levels to decline as our fiscal year progresses. Paul has already outlined in detail our plans to strengthen our financial position by cutting our CapEx and acquisition budget, reducing our inventories, and significantly reducing other operating expenses. I just like to add a few additional comments on this topic. We know what it feels like to be highly levered as we were in the early 1990s after taking the company private. Rest assured, we have no plans to revisit that era. For many years we have talked about the strong predictable cash flow characteristics of our company. These characteristics have not changed. Even in this difficult environment, we will generate after tax cash flow of nearly $200 million by reducing our CapEx and acquisition budgets, reducing inventories, and cutting operating expenses we anticipate we will end the year with total debt of under $700 million. Our entire management team is committed to implementing this plan which will enhance profitability, further strengthen our balance sheet and improve our financial debt covenant ratios. Anecdotally, let me also say that we continue to have strong long-term relationships with our lending institutions and we maintain open lines of communication with them. We just recently held a bank meeting and I believe our bankers and their credit committees understand our strategy, our business model, and they know our sensitivities. Despite a tough credit environment we recently closed on an $85 million term loan, which was oversubscribed. Again, we have great relationships with our lenders and we intend to maintain that. Let me focus on the final topics. Our recent store closure announcement, our Trade Secret transformation project, and our future sales and earnings guidance. As you recall in early July we announced plans up to 160 underperforming salons prior to their lease termination dates. I think that Paul mentioned that during the first quarter we were successful in closing 16 salons and we have agreements in place on another 5 stores. As a result, we incurred related lease buyout costs of $1.2 million or nearly $0.02 a share, which is identified as a separate line item on the face of our P&L in the first quarter. We expect that loss avoidance from these closed locations will add approximately $800,000 to earnings on an annualized basis and cumulative EBITDA of $2.2 million over the remaining lease terms. We continue to aggressively work with our landlords to close additional salons and we will keep you posted in quarters ahead as to our progress. As you also recall, we recently discussed our Trade Secret initiative with you. To-date we have built two new stores and converted 15 existing Trade Secret locations to the PureBeauty format. Costs associated with these projects as well as duplicative facility costs served to reduce our first quarter reported earnings by about $2.7 million or just under $0.04 per share. Lastly let me address our guidance. Our first quarter sales release issued on October 6th, included the revision to our same-store sales and earnings guidance for our current 2009 fiscal year. Today’s earnings release reiterates this information and also includes our second quarter outlook. We currently expect our same-store sales for the full 2009 fiscal year to be in the range of negative 100 basis points to a positive 100 basis points resulting in operational earnings of $1.77 to $2.03 per share. For our second fiscal quarter of 2009 we believe operational earnings should be in the range of $0.42 to $0.48 per share and that is based on a comp expectation of negative 100 basis points to positive 100 basis points. That is it. That completes my prepared remarks. Paul and I would now be happy to answer any questions you may have. So, Christopher can you step in and provide some guidance, we appreciate that.

(Operator instructions) Our first question is with Jeff Stein with Stein Research. Please go ahead. Jeff Stein – Stein Research: It is Stein (inaudible).

We know the name Jeff. Jeff Stein – Stein Research: Okay. First of all the CapEx and acquisition budget, why not cut it more, you know, it seems that we’re heard from other companies that are making very dramatic reductions in their CapEx budgets and some of those companies aren’t facing the covenant issues that Regis has. Why not a more dramatic reduction? Why not wait until the real estate environment settles and perhaps you can even get better deals and buy these guys even cheaper.

Jeff we have cut everything we have possibly could. A lot of it has already been frontloaded and spent. Of the $100 CapEx budget $55 million is maintenance CapEx and we have deferred as much as we possibly can or limited as much as we possibly can. Likewise we front load our acquisitions. So, we made every possible cut that we could make in order to (inaudible) cash. Jeff Stein – Stein Research: Okay. Your Trade Secret conversion, it sounds that kind of the initial batch has not gone as well as you expected and I am wondering why not just stop the conversion process until you feel like you got the model right before spending money that might not – made not necessarily payback for you.

Right, number one, this is – we’re not implementing a conversion. We’re implementing a transformation. We did make a mistake with respect to underestimating the consumer franchise created by the Trade Secret brand. It does make sense to add assortments. And many of those assortments are doing just fine. Our problem is not with the added assortments. Our problem is more so with the fact that the super premium categories of taking a hit, and frankly without some of the added assortments we would have had more of a problem. Also Jeff there is a learning curve issue. There is no like company and it is going to take us a while and we and our investors, I think, have to be patient. It will take time especially in this economic environment where we’re seeing less traffic in the malls than we have ever seen. It is just going to have to take some time. And investment decisions really shouldn’t be made in great times or awful times and believe me we understand the urgency of it and we will but we’re going to want to do it right. You know, this is nothing. Our current situation has very little to do with what occurred in 1990 and 1991, and we were really (inaudible). On a worst case scenario and we have already had some conversations with our banks, we’ll have some higher interest costs in the event that we have covenant issues, but if we effect these plans and comps come in less than 2% negative of the covenant issues will not be an issue. Jeff Stein – Stein Research: Okay. Final question real quickly. You planned your comps at minus 1 to plus 1 second –

Give this one to randy. Jeff Stein – Stein Research: Okay. Randy, you plan to comp minus 1 to plus 1 for the second quarter and it seems to me that historically your product comps have skewed more heavily to products in the second quarter. So with your comps trending kind of negative double digit wouldn’t it seem – it would seem to me that perhaps comps might be even tougher in Q2 than Q1. So, I am wondering what gives you the level of optimism to budget within that narrow range.

Well it is a good question Jeff and nobody has a crystal ball on that. The upcoming holiday season is always critical for us. You’re absolutely right the trade because of the product we behave more like a retailer over the holiday season than any other time with probably 60% of our sales and profits come in the last maybe 6, 7 weeks of the quarter. So, look we feel that we are very well positioned with promotional product going into the upcoming holiday season. We’re also looking at the service side of the business as we had seen in the last half of the fiscal year as well as in the first probably half of our first quarter our service comps were very strong. We’re hoping again nobody has a crystal ball but we are hoping that we’re going to see some momentum to the extent that we don’t, then you are right. That maybe we may fall more towards the low end of the range. Jeff Stein – Stein Research: Okay. Thanks a lot guys.

Thank you. Our next question is from Mike Hamilton with RBC. Please go ahead. Mike Hamilton – RBC: Thanks very much. Good afternoon.

Hi, Mike. Mike Hamilton – RBC: I was wondering if you could touch on a couple of areas related to triggers, one, I assume that you went through late last fiscal year your review of goodwill and intangibles, are there any triggers that could precipitate a review near term. No

No, not near term. Although again we continue to look at – Trade Secret is going to be the most sensitive and you are talking about an impairment charge I assume. Mike Hamilton – RBC: Correct.

And that one is on our radar screen and again the transformation efforts that we currently have underway by adding new product assortments to trade may be able to, you know, alleviate any risk of that but absent that again we will evaluate it. Typically, we evaluate goodwill in the normal course during our third fiscal quarter but we’re not seeing anything yet that is causing us to have to have trigger an earlier evaluation of it. Mike Hamilton – RBC: Right. On your debt covenant potential for violation. Do your store closing initiatives carry anything there? I assume they don’t?

I’m sorry. Mike Hamilton – RBC: In other words the magnitude of any charge there, does that carry into your covenant calculations?

Well to the extent that we incur cash outflow to pay store closure fees, yes that would incur more interest expense and that is going to run counter to what we are trying to achieve. One of the things that we are going to be doing is working aggressively with our landlords not only to close doors but we also realize and we have said this before in this environment landlords don’t want dark spaces. We would be more than happy to have rent caps. I think Paul mentioned that as well. That does not require any cash outflow. It improves profitability and EBITDA. So that is even better as it relates to the covenant. Mike Hamilton – RBC: Do covenant issues skew your thinking at all as to how you are approaching it either in timing as to when you may be trying to push through the closings or in being more willing to go to the caps?

No I think we’re going to be more willing to go to the caps. And again, it isn’t necessarily a covenant issue although it is helpful to the covenant calculation. We are just finding that and we have said it before that 160 stores that we had identified, we knew that we were not going to be successful in closing 100% of them. We were getting some push back from landlords and rightfully so and as a result I think we’re just restrategizing a bit and we’re going to try to work with landlords and make it a win-win situation for them and for us by working on rent caps and coincidentally that will help our covenant as well. Mike Hamilton – RBC: Thanks. One more for you called don’t want you to get lonely there. Can you comment at all to the degree you have got sensitivity to timing of pricing increases what you are trying to roll in the near term here?

Most of our price increases came mid-winter and we will anniversary those. Last year we increased prices in 6000 of our (inaudible) company-owned stores comparatively 2500 a year for the three or four years prior, and we should expect the same kind of implementation this year. Mike Hamilton – RBC: Thanks for the insight.

You are welcome Mike.

.: David Cumberland – R. W. Baird: Hi thanks. First a couple of questions on the repatriation of cash. What is the planned timing of bringing back the 40 to 50 million and do you assume the use of that to reduce debt to get under $700 million by the end of the fiscal year?

Yes, the timing is soon. And we do your earmark $40 million to $50 million and the proceeds would be used to pay down debt, and that is a component of the more than $100 million debt reduction strategy that we have. David Cumberland – R. W. Baird: And beyond that 40 to 50 how much more of your cash position is international that could be repatriated?

Well thought of the total cash that we have at the end of September over $100 million, I think it is $106 million to be precise is international cash that we have in Canada, the UK, and Europe. There is a tax consequence associated with it, I mean again we have that in reserve. We could attach it if necessary but at this point in time we’re trying to repatriate the cash in the most tax efficient manner possible and we have kind of at this point identified that we can do $40 million to $50 million. And we have the opportunity to do more in the future if need be. David Cumberland – R. W. Baird: Then on the Trade Secret transformation, how many are assumed in Q2 to correspond to the $0.01 to $0.02 impact?

I am sorry. Let me ask Mark.

I’m being told it is about another 15 and I think that we have estimated that it may impact earnings by $0.01 to $0.02 in the second quarter. So, comparable activity in Q2 as it was in Q1. David Cumberland – R. W. Baird: Thanks and then last question. I think I heard Paul refer to $3.5 million in incremental cost savings. Could you elaborate on what that involves?

That is relating to gross margin.

Regis gross margin initiative. Yes last fiscal year in 2008 through some grass root cost savings initiatives here at Regis. We realized savings of $5 million. We expect that it’ll be in the $8 to $9 million range or an incremental $3 million to $4 million in our current fiscal 2009 year. David Cumberland – R. W. Baird: And then the 15.

And that has nothing to do with the $15 to $20 million additional overhead savings. That is in addition to –

It will be with those RGS savings that I had just cited relating to the $8 million to $9 million of savings this current fiscal year is built into our expectation as well in earnings guidance. David Cumberland – R. W. Baird: Understood, thank you.

You are welcome.

Thank you, Mr. Cumberland. There are no further questions at this time. I will now turn the conference back to Paul.

Have a good day everyone. Take care.

Thank you.

Ladies and gentlemen, if you wish to access the replay for this call you may do so by dialing 1-800-405-2236 with an access code of 11120067 pound. This concludes our conference for today. Thank you for participating and have a nice day. All parties may now disconnect