Daniel J. Hanrahan - Chief Executive Officer, President and Director Steven M. Spiegel - Chief Financial Officer and Executive Vice President

Paul Alexander - BofA Merrill Lynch, Research Division Jeffrey S. Stein - Northcoast Research William R. Armstrong - CL King & Associates, Inc., Research Division Jill R. Caruthers - Johnson Rice & Company, L.L.C., Research Division Daniel Hofkin - William Blair & Company L.L.C., Research Division

Good morning. My name is Angel, and I will be your conference facilitator today. At this time, I would like to welcome, everyone to the Regis Corporation's Fourth Quarter 2013 Conference Call. [Operator Instructions] There is a webcast presentation for the call today. If you would like to view the live webcast, please log on to the fourth quarter 2013 results webcast link under regiscorp.com in the Investor Relations section of the website. If anyone has not received a copy of today's press release, please call Regis Corporation at (952) 806-2154 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 1 (800) 406-7325, using access code 4635921 followed by the # key. The replay will be available 60 minutes after the conclusion of today's call. I would like to remind you that to the extent of the company's statements or comments this morning represent forward-looking statements, I refer to you the risk factors and other cautionary factors in today's news release, as well as the company's SEC filings. Reconciliation to the non-GAAP financial measures mentioned in the following presentation, as well as others, can be found on their website at www.regiscorp.com. With us today are Dan Hanrahan, Chief Executive Officer; and Steve Spiegel, Chief Financial Officer. After management has completed its review of the quarter, we will open the call up for questions. [Operator Instructions] I'd now like to turn the call over to Dan Hanrahan for his comments. Daniel J. Hanrahan: Thank you, Angel, and good morning, everyone. Thanks for joining us. Today, I plan to update you on our progress in executing upon our key strategic initiatives on recent business trends and in a number of accomplishments made during fiscal year 2013. I'm deliberately starting with strategy because our ability to execute upon strategic initiatives, first, as a leading indicator of where our business is headed. When I'm finished, I will turn the call over to Steve Spiegel, our Executive Vice President and CFO, who will provide additional details behind our fourth quarter financial results. Also with us today are Eric Bakken, our Executive Vice President and Chief Administrative Officer; and Mark Fosland, our Senior Vice President of Finance. Last quarter, I shared with you our strategy to turn around over business and drive improved long-term sustainable growth and profitability. In the fourth quarter, we made significant investments behind our strategies drawing from best-in-class operators. Our major focus was on 3 initiatives. We rolled out a new point-of-sale system to approximately 6,700 salons throughout North America. This point-of-sale system will provide management with vastly improved measurement in transparency into our salons. Second, we reorganized our field management organization. This management structure will enable localized mentoring and decision-making, improved geographic proximity and increased local market efficiency. Third, we standardize our retail plan-o-grams. This improved salon appearance, reduces inventory management time and increases distribution efficiencies. Each of these initiatives are transformational. Executing all 3 of these initiatives in a single quarter highlights our sense of urgency in creating a stable operating structure that will allow Regis to generate improved financial results on a sustainable basis. We can now transform Regis into a strong operator without making the changes we did in the fourth quarter. These initiatives are focused on generating guest traffic, delivering an outstanding guest experience, cultivating a loyal guest following and making Regis a great place for a stylist to work. As I said in the past, changes in strategic direction of an established business requires investment, execution and time. While there has been disruption to our current business performance, I'm proud of the progress our entire organization has made in laying the foundation for us to become a best-in-class operator. As I've said over the last several quarters, Regis is and remains a work in progress. My first year at Regis can be characterized as a year of discovery and strategy. A great deal of my time was spent with our best operators identifying those leading practices that would transition Regis into a best-in-class operator. We have formed a cohesive new leadership team that is supposed to be and rounded out. We crafted our long-term vision and mission and key strategies for the business, which I shared with you last quarter. We invested behind significant strategic initiatives to position Regis for a longer-term success, balancing our sense of urgency to improve, with ability of our organization to manage change. Fiscal year 2014 will be our year of transition and execution. It will be a year focused on execution where we begin to manage change, instead of change managing us. Operationally, our immediate focus will be on realizing the benefits from our field reorganization, the roll out of SuperSalon and salon workstations and the standardization of our retail plan-o-grams. Our marketing focus will be on leveraging technology to advance a number of key guest initiatives, including optimizing our price and completing research on category consumer and brand insights. This year is a critical year in our transition and will provide the foundation that will lead to a functioning organization that is poised to deliver long-term sustainable results. Last quarter, I shared with you characteristics of best-in-class operators to those of Regis. We cannot transform Regis into a stronger operator without making the changes we did this quarter. Having the right organization to lead and drive execution, using technology to facilitate information capture and real-time operating metrics and simplifying our business are the keys to turning Regis around. By rolling out technology, reorganizing the field and simplifying plan-o-grams, we laid the groundwork to begin this transformation, but we also put the organization under a lot of stress. It is important that our shareholders understand what we have done and the process we've put in place to mitigate both foreseen and unforeseen speed bumps as we stressed the organization. To that end, I would like to update you on where these 3 foundational areas stand. Let's first focus on technology. During the quarter, we completed the initial rollout of SuperSalons in over 90% -- 95% of North American salons. As you can see by this slide, the vast majority of our salons were installed in May and June representing a tremendous accomplishment and a testament to our organization's sense of urgency in executing the strategy. As we continue to optimize our use of this technology, we will benefit from improved salon level analytics in guest retention, stylist productivity, salon performance and enhance our Guest Relationship Management capabilities. As I said last quarter, implementing SuperSalon is a key strategic initiative that positions us for the future. Implementations of this magnitude, scope and speed rarely occur without challenges and we expected some near-term disruption. In anticipation of this, my leadership team was assigned help line duty to hear problems firsthand. We also recruited employees throughout the company to assist so that we could have a broader group help address challenges as they arose. Initially, our help lines were overwhelmed with call volume. One example of our more pervasive issue our salons were experiencing was around processing credit card transactions. Doug Reynolds, our Chief Information Officer, his team and our vendors, worked around-the-clock to find to find and implement quick solutions. This sense of urgency from our entire organization is the main reason most of our issues has been resolved. While our stylists -- well, some of our stylists are still climbing the SuperSalon learning curve, they are becoming more comfortable each day and as you can see by the daily decline in tech support calls. Our current objective is to ensure our salons become fluent in the use of SuperSalon. This will occur through a continuing culmination of web-based and hands-on user training. As learnings increase, we will process transactions more efficiently and data capture will improve. As we begin to gather salon level data, like wait times and productivity, we will be able to deliver real-time metrics for salon and field leaders to use in making actionable decisions that improve the overall guest experience. Capturing guest data will allow us to gain insights into guest behavior, communicate with guests, incent return visits, monitor retention and survey our guests to see how we can improve. Before providing an update on our field reorganization, it's important to remind everyone where we started. Our first challenge in addressing the discrepancy in our performance in best-in-class operators was getting through 2 layers of corporate management. We took appropriate steps to upgrade our field management. As discussed in our last call, we eliminated the divisional COO and VP layers of bureaucracy. This will enable us to execute better with our leaders working shoulder-to-shoulder with stylists, cutting hair and mentoring. In the past, we were not organized around geography and this restricted our ability to be local. Our prior focus of organized around brands and segments made it difficult for operators to spend as much time in the salons as necessary to be effective. Now we are local. Our field leaders and their decision-making are geographically aligned with their salon. Aligning geographically promotes in-the-salon leadership and mentoring, reduces travel and makes us a very efficient structure. Field leader incentives have been redesigned to align their interests with those of our shareholders by rewarding behaviors focused on profitable revenue growth. When I spoke with you last quarter, we had completed our territory map and had assigned a Regional Vice President to each of our regional territories. Of the 11 regions in our affordable haircare division, which we call the Eagle division, 10 of our Regional Vice Presidents were promoted from within our organization. I am very pleased with the quality of their leadership and tireless work ethic. This is a talented group of leaders who will be instrumental in the Regis turnaround. In the fourth quarter, we took on the significant task of building out the remainder of the team, which encompasses reassigning or hiring over 1,100 regional and district leaders. As you can imagine, restructuring of this magnitude will encounter issues and to get in front of them, we took a number of steps. In order to ensure real-time comprehensive feedback, our 11 Regional Vice Presidents report directly and have complete access to me. In addition, we set up weekly calls in which I participate, with members of our salon support team here in Minneapolis, to monitor progress and identify and resolve issues. We added outside staffing experts to help us search, both internally and externally, for qualified candidates and we reviewed the performance of almost 2,000 candidates before we built out our team. As of today, 93% of all positions have been filled. Many of these roles were filled by existing Regis employees. In fact, most of the Regional Director and Senior District Leader roles were filled by Regis Field Managers and we promoted over 600 Salon Managers to the District Leader position. Additionally, we eliminated over 10% of underperformers from our former field organization. As a result of all this activity, our stylists and salon managers are very excited about the opportunity to pursue a new career path with management opportunity. In addition, our district leaders not only oversee their salons, but they are productive on the salon floor serving guests. Recognizing that our field leaders have new roles and responsibilities, we knew that training salon level of execution and alignment on goals, strategy and tactics would be challenging. To that end, we brought all of our regional VPs and directors to Minneapolis for extensive leadership training, focusing on expectations, teamwork, new job responsibilities and strategies to prioritize and optimize execution. As part of this process, we spent a great deal of time understanding the needs of the field and understanding what salon support's roles should be in supporting their needs. Based on these feedback, we're creating alignment through our organization by prioritizing and realigning our salon support functions to better serve our field organizations and salons. As I discussed earlier, we put our top performers into a structure that rewards profitable growth and we are only just beginning to mentor and teach on the salon floor. Creating a winning culture in our salons is a top priority of our organization. Changing the culture requires an investment of time and effort. Our priorities are simple. We are cascading our leadership training program to our team of district leaders. We are focused on improving the guest experience, making sure our salons are properly staffed in creating a positive environment. Our leaders only recently hit the salon floor and, with every passing day, we become increasingly guest-focused as field leadership gains exposure and influence on stylists and salon. We are making progress. We have a scoreboard we use to monitor improvements in sales performance. In July, 15% of our districts were positive, or green as we refer to it, and as of yesterday our August total increased to 26%. In order to optimize retail performance and enable efficiencies throughout our supply chain, we made the decision in the fourth quarter to simplify and standardize retail plan-o-grams throughout our North American salons by the end of the quarter. This involved transitioning from over 1,300 to fewer than 50 plan-o-grams in approximately 7,000 salons, eliminating about 4,500 items from our retail product assortment and generating clearance sales approximating $13 million. This initiative will make it easier for guests to shop and stylists to sell retail products, improve salon appearance, by eliminating unnecessary clutter, reduce inventory management time throughout our supply chain and enable distribution efficiencies. On its own, this initiative is tactically complex in scope and has been disruptive to our business. As the SuperSalon rollout and field reorganization progress, we grew increasingly concerned about our ability to execute on this last initiative. We took immediate action to delay the actual reset for standardizing plan-o-grams to mid-August just to take some pressure off the organization. The combination of clearance activities, delayed implementation and challenges during a period of significant change was disruptive and highlights the opportunity to improve our ability to execute at Regis. As I mentioned throughout my comments, improving our ability to execute is critical to improving our performance and has our immediate focus. Now their store shelves have been reset and we are monitoring compliance with new plan-o-grams, we will be evaluating the impact these changes have on long-term retail performance and adjusting our assortment as necessary. Before I discuss the fourth quarter and recent trends in our business, I want to reiterate rolling out a point-of-sale systems throughout North America, reorganizing an entire field organization and standardizing retail plan-o-grams are transformational changes that allow Regis to travel forward along a strategic continuum. Each of these initiatives alone is transformational and executing upon all 3 in a single quarter represents a major step forward in executing against our turnaround. Factoring out the impact of the Easter shift from April of last year to March of this year, same-store service sales declined 140 basis points from the third to fourth quarter. As of August 25, the first quarter-to-date same-store service sales and product sales were down 3.4% and 14.9%, respectively. We have seen improvement in August same-store service sales which are down 2.4%, a 180 basis point improvement since July. We expect these trends to further improve with our field teams transition from reorganizing and hiring activities to focusing on their salons and as we become more comfortable with and optimize our use to SuperSalon. Our unit volume at retail was up approximately up 11% in the quarter and may have taken some consumers temporarily out of the product market. We have taken a number of steps to reverse this trend, including providing an additional incentive for our stylists to help gain traction on one of our retail promotions and we accelerated by 2 weeks the delivery of items within our new product assortment so that salon shelves could be reset sooner. Since salon resets are finishing up, product sales trends have yet to show improvement. I am pleased with the operational changes we have implemented. The impact these changes have had on our operation -- operating results are necessary to position Regis to generate sustainable revenue and profitability growth and I expect our business performance to improve over time. I expect that these transformational changes to disrupt our business, however, I'm not satisfied with our performance during the fourth and first quarters of fiscal years 2013 and '14. We must drive better execution, get our business back on course and continue to execute on changes that will enable the organization to move forward along a strategic path that will result in longer-term revenue and profitability growth. While I am focused today on the transformational change we needed to make the position Regis for strong future, it is also important not to lose focus on the many accomplishments we have made in the past year. Before I hand the call over to Steve, I'd like to take a minute to highlight a number of these. SmartStyle posted -- SmartStyle, our Walmart business, posted positive service counts of 2.3% for the year, the first time in over 5 years with positive guest count. We sold Provalliance and Hair Club for $268 million. We restructured our field organization, reducing span of control, improving geographic alignment, enabling more localized decision-making, incenting ownership behaviors and providing longer-term career paths for our employees. We completed the rollout of SuperSalon and salon workstations in well over 95% of our North American salons and in record time at that. We reduced our G&A expenses by $15.2 million or 6.5%, helping to fund some of our key strategic investment. We've prepaid our private placement notes, mitigating ongoing costly interest expense and restrictions on the use of our cash. We amended and extended our credit facility, providing us with significant liquidity and flexibility we needed to execute on our strategy. And most important, we crafted and have begun to execute on our strategy to stabilize Regis and turn this business around. I'll now hand the call over to Steve. Steven M. Spiegel: Thank you, Dan, and good morning. Before discussing our consolidated financial and operating performance for the fourth quarter, I want to remind everyone of terminology we began using in our second quarter. We refer to any nonoperational items as discrete items and to operational earnings as adjusted earnings. For the fourth quarter, Regis reported diluted net earning -- net income per share of $0.01. This included net discrete after tax charges of $2.8 million or $0.05 per share, primarily comprised of a noncash charge related to our inventory simplification program, made call costs incurred as a result of prepaying private placement debt, restructuring costs comprised mainly of severance and accelerated depreciation, partly offset by a gain from the sale of our Hair Club operations last April. Excluding discrete items, fourth quarter diluted net earnings per share, as adjusted, were $0.06 compared to $0.36 in the prior year quarter. Last year's diluted net earnings per share, as adjusted, of $0.36, included after tax earnings of $0.12 per share, mainly due to earnings from our equity investment in Provalliance, which were sold in the first quarter of this fiscal year, and the release of certain income tax reserves. Considering this, coupled with fourth quarter same-store sales declines of 3.1% and all other things being equal to the prior year, one would expect diluted earnings per share, as adjusted, to approximate $0.17 per share. Actual diluted earnings per share, as adjusted, of $0.06 are $0.11 per share lower than this expectation. Increased salon labor costs, primarily due to negative leverage associated with same-store sales declines, increased product cost mainly from retail clearance sales, higher connectivity costs for new point-of-sale technology and salon workstations and increased depreciation expense related to the write-down of underperforming salon assets, were partly offset by reduced utilities, maintenance and G&A expenses. I will discuss these items in more details shortly. We have included in today's press release, as well as in our corporate website, a reconciliation that Regis reported results to earnings, as adjusted, for the impact of discrete items for the fourth quarter of the current and prior years. Before I review our operating results, I want to update you on the financial impact during the fourth quarter of our inventory simplification program, which Dan discussed earlier. This initiative standardizes plan-o-grams, reduces the number of products that within our retail assortment and consolidates 4:1 private label brand. Historically, we've been able to recover our cost on this retail inventory through in-store promotional discounts. And during the fourth quarter, we cleared approximately $8 million of product at cost. However, given the change in the company's strategic direction to simplify and standardize plan-o-grams, the scope and size of this simplification program and the negative impact continued clearance sales would have on future product sales and margins, we deemed it to be more beneficial to immediately liquidate any remaining inventory into non-Regis distribution channels within existing parameters of supply agreements. This resulted in a discrete noncash after tax inventory charge of $7.7 million in the fourth quarter. While negatively impacting cost of product as a percent of product revenues, clearance sales and liquidation of inventories generates higher cash returns than past practices of repackaging and returning products the distribution centers for restocking, disposal or return to vendors. We will cover this in greater detail as I review our operating results. Moving on to fourth quarter operating results, my comments this morning will focus on as adjusted results. Revenues declined $26.6 million or 5% compared from the prior year quarter. Service revenues were $390 million, a decrease of $21.8 million or 5.3% from the prior year quarter, mainly driven by declines in North American salons. Compared to the prior year quarter, same-store service sales declined 3.1% comprised of a decline in guest traffic of 3.4%, offset by an increase in average ticket of 0.3%. We estimate the shift in Easter from April to March negatively impacted same-store service sales by approximately 70 basis points. As Dan commented earlier, we believe much of the remaining decline in same-store service sales can be attributed to the implementation of the field reorganization and roll out of SuperSalon and salon workstations. The remaining 2.2% decline in service compared to the prior year quarter was primarily due to a net reduction in store counts. Total company store counts decreased by 287 locations during the fiscal year. During the quarter, we built 28 company-owned salons and closed to relocate 118 company-owned on locations. Product revenues were $102 million, a decrease of $5.3 million or 4.9% compared to the prior year quarter. Product same-store sales declined 3.3%. Royalties and fees are $10.2 million, increased $500,000 or 5.2% versus the prior year quarter. Our franchisees posted positive same-store sales during the quarter and added 66 net locations over the last 12 months. For the year, we added 80 new franchisees for the system. Shifting our focus to cost of sales, cost of service and product as a percent of associated revenues increased 180 basis points to 57.7% compared to the prior year quarter. Cost of service as a percent of service revenues for the quarter was 58.9%, an increase of 180 basis points compared to the prior year quarter, primarily because stylist hours were flat, creating negative leverage up same-store service sales declines and health care cost increased due to the higher enrollment and claims. We continue to see sequential quarterly improvement in optimizing salon schedules and this improvement, along with expected seasonal declines in payroll taxes, contributed to a 90 basis point reduction in cost of service as a percent of service revenues when compared to the third quarter of this year. Cost of product as a percent of product revenues, which excludes the discrete after tax noncash charge discussed earlier, was 53.5%, an increase of 240 basis points compared to the prior year quarter, mainly driven by increased clearance sales. Site operating expenses of $48 million or 9.5% of revenues, decreased $1.2 million or 2.4% compared to the prior year quarter. The decrease was primarily driven by cost savings initiatives to lower utilities, repairs and maintenance expenses and timing of marketing spending which were partly offset by increased connectivity cost to support SuperSalon and salon workstations. General and administrative expenses decreased $3.5 million or 6.4% compared to the prior year quarter. Much of this improvement was timing related, reflecting reduced incentive compensation and lower levels of salary and travel expense due to vacancies in our new field organization. While we have lapped difficult cost reductions made in the prior year when the company restructured its senior management corporate organizations, we continue to focus on ways to simplify to drive further cost efficiencies. I have one additional clarification regarding our field reorganization. The reorganization will result in a change in expense classifications on our statement of operations beginning with the first quarter fiscal year 2014. Previously, field leaders did not work on the salon floor daily. As reorganized, field leaders will spend most of their time on the salon floor leading, mentoring and serving guests. Accordingly, it is appropriate to place these costs in the operation where they are managed by including their labor and travel cost in salon level expenses. As a result, district and senior district leader -- labor costs will be reported within cost of service, rather than G&A expenses. And their travel costs will be reported within site operating expenses rather than G&A expenses. This expense classification will have no financial impact on the company's reported operating earnings or reported net earnings or cash flow from operations. To help you with your models and comparisons, we are in the process of recasting our historical annual and quarterly financial statements, as supplemental financial data, to reflect these expense classifications. We plan to post recasted financial statements of our website not later than September 15, 2013. If you have any questions on this, please give Mark Fosland a call and he will be happy to provide assistance. Focusing for a few moments on liquidity. Our June 30, 2013 balance sheet remains strong. We have $200 million of cash and our business generated about $70 million of operating cash flow for the year ended June 30, 2013. In addition, total debt was $175 million and we have no outstanding borrowings under our $400 million revolving credit facility. We also took several actions in the fourth quarter to enhance our access to liquidity and overall flexibility. We extended the term of our revolving credit facility to June 2018 and amended several covenants to provide more flexibility as we execute on our turnaround. We also prepaid our private placement debt of $89 million, thereby eliminating its expensive coupon and certain limitations on the use of our cash. We believe our liquidity is sufficient to enable the company to invest in all of the areas needed to turn around our business, to service our debt and to manage the upcoming maturation of our convertible notes. This concludes the financial portion of the call. We would now like to answer any questions you may have. Operator, can you please provide the instructions for the Q&A portion of the call?

[Operator Instructions] Your first question will come from the line of Lorraine Hutchinson from Bank of America Merrill Lynch. Paul Alexander - BofA Merrill Lynch, Research Division: It's Paul Alexander for Lorraine. Dan, could you talk a little bit more about how the transitions and transformations in the business resulted in the worst comps or the disruption in the business, as you're calling it. We understand the SuperSalon rollout was tough for some of the salons and the new plan-o-gram creates some issues with product, but how has that resulted in worse visitation? Did the SuperSalon rollout, like did that result in customers getting frustrated or something so they didn't coming back? Did you see visitation get worse? Did visitation essentially mirror the comp trend being worst in July and maybe better in August? I'm not sure. And then on the field reorganization, how did that result in some of the disruption? Was -- did that cause something negative for customers somehow? And also over the last couple of quarters, you've been talking about improving visitation by boosting stylist hours. But today you only said that hours were flat. So what happened with hours during the quarter? And how did that impact service comps? Daniel J. Hanrahan: Sure, Paul. Let me take them one at a time. Let's talk a little bit about the impact that we saw from changing the field organization and as well as change in -- on SuperSalon. And then I'll get into a little bit more on stylist hours. When we changed the field organization, I think what it showed us more than anything else is how important leadership is in this business. We went from a structure, as you've seen in the past, that was not geographic to the one that was geographic. Everybody got new salons, everybody had new salons for the first time and they created -- it created disruption in some of the salons. We saw salons where people got through it very well and we didn't see all salons lose revenue, but we did see salons where they just really struggled with any kind of change. And I think more than anything else, it pointed out to us, Paul, how much we need to improve on our ability to deal with change in the field. We did see also on the SuperSalon side, we did see some difficulty in -- with our stylists, some of our stylists being able to learn the system. And as a result of that, that did create some guest disruption. As I mentioned in my remarks, we had an issue with the credit card terminal and that did create some guest disruption as well. But what we saw is, and it's interesting in this and what gives me a lot of confidence about this business, is that we had good leaders that got through it but it also showed you how -- showed us, anyway, how important it is to have strong leadership in the field and the impact that strong leadership can be, when we have the right folks managing salons and the right folks managing the salon managers. In regards to stylist hours, we were -- a couple of things going on there. We started raising hours in the fourth quarter of last year. So some of that's lapping and we didn't feel like we needed to take hours up any higher than we did. And we raised -- we'll see a similar thing in Q1, where we started raising stylist hours in our Walmart and SmartStyle Salons to get to the appropriate number of people. And so we're starting to lap some of that, so that's part of the reason why you didn't see as -- we didn't increase hours as much as we've had in the past. We'll continue to watch that closely and we think we'll be much better at monitoring hours when we have people on the ground, when we've now got district leaders that have 5 to 8 salons. In the past, they had 15 to 20 and many of them were traveling long distances to get there. And now with much more control over those salons, we think we'll be better at optimizing our hours than we have in the past. Paul Alexander - BofA Merrill Lynch, Research Division: Great. And just a follow-up on all of these turnarounds -- turnaround initiatives rather, what do you think the trajectory of the payoff from all of these efforts will look like? Do you think they'll -- you'll reap the benefits kind of all of the same time? Is it possible we could see a more rapid improvement at some point, or a more abrupt change? Or do you think it will be spread out and result in a slow steady turn that takes a long period of time? Daniel J. Hanrahan: Well, we've been -- I've been very careful not to predict when things will finish. But I can tell you -- let me give you a little bit of clarity around that because I think it's an excellent question. We have seen salons where our better salon managers are better district leaders, are able to manage through all this change without any trouble. We -- even in July, when we changed as much as we did and we've asked ourselves around here a few times if we had to do it all over again, will we make all these changes at the same time. And the answer is yes. Because I think what we've done is we've gotten through all the things that we needed to do to put ourselves in a position to succeed. And so if we hadn't done that, I think we would've dragged this turnaround out a lot longer. We needed to do SuperSalon so that we can get the kind of information that we needed to manage our business. We needed to get our field leaders into the local markets so that we could get control of the business and we really felt strongly that we needed to clean up our plan-o-gram so that we can drive plan-o-gram -- so we can drive retail sales going into the future. So I -- I'm equivocating on this a little bit because I'm reluctant to put a time line on it but we have gone from 15% of our salons being positive in July to 26% of our salons being positive month-to-date in August. So that's a trend in the right direction. It's still going to take us time to get there but we do believe that all the things that we've done are going to position Regis for a long-term growth and I'm just not ready to put a time line on it yet.

Your next question will come from the line of Jeff Stein from Northcoast Research. Jeffrey S. Stein - Northcoast Research: Dan, I'm wondering where you stand on the topic of nameplate consolidation? And other than kind of trying to benefit from some of the initiatives you undertook last year, is there any -- are there any new initiatives or major investments that you're intending to undertake in fiscal 2014 that could, in fact, prove to be disruptive as well? Daniel J. Hanrahan: Yes, in terms of consolidation, we believe -- continue to believe that there's opportunity for us because of the number of different brands we have and all the different banners that we fly underneath. But the most important thing we can do is get a hold of the salon business and operate those salons well at retail. At this point, we don't see consolidating brands on our horizon for this year. In our fiscal 2014, that's not on the horizon. So you won't see a big expenditure to do that. You won't see disruptions that we would create by that. Our focus is completely and entirely on getting strong execution in the field level. We have had, twice now, we have had our regional directors in and we put leadership training in place, we put a management system in place and allows them to follow up on the salons that gives me visibility all the way down to the salon level about what kind of commitment salon managers are making to deliver against their guest count increase goal. So all of our focus this year will be on executing and executing well on the salon and you won't see us make an investment to consolidate brands. Jeffrey S. Stein - Northcoast Research: Any other major initiatives that you're going to undertake during the current fiscal year? Daniel J. Hanrahan: No. We believe the things that we did this year were right. We've said -- in the fourth quarter, we're right. We put ourselves in a position to start to be able to execute much better. The one thing that became very clear is that at the salon level, that we don't handle change and manage change as well as we should. So the major initiative are behind us and the focus is going to be on managing the business well. Jeffrey S. Stein - Northcoast Research: Okay. And from -- that's G&A standpoint. If you're reducing the span of control, that would suggest that you're increasing the number of people and the number of payroll hours, would that be correct? I'm wondering how that ties in with the SG&A save that you mentioned earlier. Daniel J. Hanrahan: Why don't I let Steve take that and then I'll follow up on it. Steven M. Spiegel: Sure. I think there are 2 things going on there. I think, first, we reduce the span of control to enable more localized management decision-making and mentoring. So that places more people in the field but we've also, as Dan alluded to a little bit earlier in his presentation, we've aligned geographically and it's our belief that the reduced travel that we'll see from being aligned geographically will offset the cost of reduced span of control making this a slightly more efficient organization. Daniel J. Hanrahan: The other thing, Jeff, is that salon -- our district leaders are productive. So they actually use -- they take up some of the hours in the salon and there's -- we think there's real benefit to that beyond just the fact that they are productive but they are demonstrating to the other stylists how to do things. And when you're shoulder-to-shoulder with the other stylists in the salons and you're there for a full day rather than moving from salon to salon over the course of the day, you can be a much better coach, you can be a much better mentor. So we get the leadership opportunity but we also get some leverage because they're taking up some of the hours as well. Jeffrey S. Stein - Northcoast Research: Got it. Dan, 1 last item. In our market, at least in -- I'm in Ohio, Great Clips, one of your competitors, is advertising on television. They've got an online reservation service. And I'm wondering does SuperSalon have that capability? And it would seem to me that, that is an advantage. I mean, people are time pressed and the worst thing in the world, at least for me going to get a haircut, is showing up and finding that you have a 30-, 40-minute wait. Does SuperSalon have that capability? And then maybe you can also comment, you mentioned that your franchisee showed positive comps in the quarter. Can you be more specific in terms of what they posted? Daniel J. Hanrahan: Yes, let me start and then I'll turn it over to Steve. The answer to your question is SuperSalon gets us a lot of flexibility that we haven't had in the past. It does give us the ability to do the app like you're talking about. We have build out some pretty sophisticated guest satisfaction tools. We worked very hard on the Guest Relationship Management tool. Heather Passe, who is our CMO and her team are doing really good work there. So yes, you asked would we do anything majorly disruptive going forward. We see a lot of marketing things that we can do over the course of 2014 that would not disrupt the execution at the salon level but would add value to it. So the kind of things that you're talking about, Jeff, are exactly the kind of things that Heather and her team are hard at work at. And we'll put those into the market when we think that they can add the most advantage to us. And then I'll turn it over to Steve for the financial question. Steven M. Spiegel: Yes. Regarding our franchisees, overall their comps were up 80 basis points in the fourth quarter. That would've been a positive 110 basis points for service, offset by a negative 170 basis points for retail. Jeffrey S. Stein - Northcoast Research: Steve, did they go through the same product liquidation that the company-operated locations did? Steven M. Spiegel: No, they did not.

Your next question will come from the line of Mr. Bill Armstrong from CL King & Associates. William R. Armstrong - CL King & Associates, Inc., Research Division: On the processing of credit cards, was that an issue with SuperSalon, with the ability of the system or a glitch on the system? Or was it a matter of training your salon personnel to process these transactions? Daniel J. Hanrahan: No, it was the credit card terminal itself, we had a couple of issues there and our processor jumped in right away and helped straighten out that issue. So our processor actually was quite pleased with their response to that. But it was actually the credit card terminal that created some trouble for us, Bill, which led to people having to do a manual authorization, a call-in. And there was some discomfort at the salon level with doing the manual authorizations, so we had salons asking people to pay cash. We've got that fixed quickly. We're not having those credit card challenges that we had before, so that's in the rearview mirror. But it was not SuperSalon, it was the credit card terminal that we had. William R. Armstrong - CL King & Associates, Inc., Research Division: Got it. Okay. As far as the plan-o-grams, maybe you could describe the changes in a little more detail. And why is the change in plan-o-grams hurting retail sale? Daniel J. Hanrahan: Yes, what we did with that, with the change in plan-o-grams is we took the slowest moving items out that were in our mix and as we mentioned, that we had 1,300 different plan-o-grams and we took the slowest moving items out. We worked with our largest supplier to increase the -- not increase, but put the right SKUs in, the SKUs that they're behind in terms of marketing, the SKUs that they're behind in terms of education. And that process, I think again, demonstrated that we are not great at executions -- or execution or executing change in our salons. So as we had to pull off the -- pull the stuff off the shelf and put the new on, it created dislocation in the salon. What we did -- again, I keep coming back to the same point and I don't mean to sound like a broken record, but where we have salon managers that execute well, where we have district leaders that execute well, we didn't see the falloff in the retail business. But it was, Bill, it was really just a function of the fact that the salons had difficulty pulling the old stuff off the shelf, getting the new stuff stocked and they didn't execute that well. We learned a lot through that process and we think that the steps that we've taken are the right ones. We get better training out of this. We've gotten some cost efficiencies from our vendors and we've got the new product trends, the right products on the shelf with our vendors. And we think that what we've done is the right thing. We've gotten a lot of good feedback from the field about the new plan-o-gram. They're positive about it. We just haven't seen it take hold yet. And some of it is just a function of we need to refocus our stylist now that we've made the change on being effective sellers of retail product again. William R. Armstrong - CL King & Associates, Inc., Research Division: And just to clarify, that plan-o-gram rollout is complete now, right? Daniel J. Hanrahan: Yes. We've got product in all the salons. I can't tell you that we've got all 7,000-plus salons completely done because we don't. There's still a handful that are still struggling to get it done. But we are tracking those down daily and we're helping them get reset. So that's -- the vast majority of them are done, Bill. William R. Armstrong - CL King & Associates, Inc., Research Division: Okay. On your reorganization, you're going to have district managers spending more time on the stores. Are they actually going to be cutting hair? Daniel J. Hanrahan: Yes. We have -- our district managers will be spending a fairly sizable portion, percentage of their time in salons. What we have had in the past is because they had a lot more salons and they were so geographically dispersed, they were just hustling to get from salon to salon, making a quick visit, checking in, looking at the numbers and moving on. So there wasn't a lot of coaching and mentoring going on. What we found, or what I found is I was going out and looking at the businesses that we had purchased, so I focused a lot of my attention on the ones that we had purchased that had the best financial result. And luckily for me, a lot of the people that ran those businesses for the owners are still in our company. And I found them. And one of the things that was loud and clear from that group is that our district managers, our district leaders, aren't cutting hair anymore and they needed to be in there shoulder-to-shoulder to really understand what goes on in the salon and to really be able to have an impact on the salon. And we see some of our very, very best franchisees do the exact same thing. So when we did the restructure, we brought in 14 of our best leaders that had the best results in the field. And it was very clear from them and from some of our best franchisees that we have a great opportunity that we were missing. So we put them in. And I'm pleased with the enthusiasm and the energy. I spent a lot of time in the field and the enthusiasm and energy in the district leaders is dramatically changed from where it was when they were hustling to get from salon to salon. Now they're in there, they're productive and they're helping and mentoring and making our salons better. So yes, it's a long-winded, and I apologize for the long-winded answer, but I want to give you some context around it. William R. Armstrong - CL King & Associates, Inc., Research Division: No, I appreciate that. So with the district managers showing up at the salon every couple of weeks, say, does that create any scheduling issues? Because now also you've got another guy who's cutting hair and does that create any competition for commission dollars with the store personnel? Daniel J. Hanrahan: No. We don't believe that to be the case. They are scheduled in, so we schedule in advance. So they know the person is coming in, they're going to be scheduled in the salon. And what we're finding is the best district leaders -- and this is a function of we need to do our job on our end through the regional VPs and the regional directors to make sure that we train them well -- they're very well received. And the stylist and salon managers are happy to have them in the store because they're in there coaching, developing and mentoring. And what I'm hearing is that they're just so new, somebody's not doing a drive-by once a month, they're in my salon every -- at least every 2 weeks and in many cases, every week, helping us all be successful. So it's viewed as positive rather than negative. William R. Armstrong - CL King & Associates, Inc., Research Division: Okay, very good. Last question, I think this would be for Steve, and that regards the convertible notes. What are the company's options in terms of possibly redeeming those notes early? I'm not sure if you have the ability to do that or what kind of premium you might pay. And maybe just what's your stance generally in terms of trying to get those off the balance sheet, or just wait for them to mature, wait for holders to convert into shares? What's your stance on that? Steven M. Spiegel: Well, we're leaving our options open. And the way the bonds work is there are $172.5 million 5% notes and they mature in July of 2014 although they are convertible at the option of the holder as early as April of 2014. Today, the conversion ratio of these bonds is about 65.4 shares per $1,000 of par value, so that represents about 11.3 million shares at a price approximating $15.28. Generally speaking, if the notes are in the money, we have the option to sell them cash, stock or a combination of the 2. If they're out of the money, we have to sell them in cash. And right now, we keep our options open. The bonds trade at a pretty high premium. And I'm not sure that at this point in time, we've made a firm determination on whether to take them out early or not, but that's something we're always looking at.

Your next question comes from the line of Jill Caruthers from Johnson Rice. Jill R. Caruthers - Johnson Rice & Company, L.L.C., Research Division: I apologize, I was dropped from the call, if these questions were asked earlier. Could you talk about stylist retention rates, if you've seen that change given all the initiatives you've got going on, and some learning curves? Daniel J. Hanrahan: Yes, you broke up right at the beginning. Is this Jill? Jill R. Caruthers - Johnson Rice & Company, L.L.C., Research Division: Yes. Daniel J. Hanrahan: Okay, Jill. We haven't seen any change in stylist retention rates at this time. And I think it's too early to see that. With the steps we've taken to create a clear path for stylists that we believe will benefit over time, getting closer to the salons and having a smaller span of control and being in the salons a lot more often, creating a great work environment for stylists, we believe will have a positive impact. But it's, at this point, is just too early to tell. Jill R. Caruthers - Johnson Rice & Company, L.L.C., Research Division: Okay. And then 1 question. You talked about a marketing shift lower from the expenses in the fourth quarter. Is that being shifted into the first quarter and is that tying into any new initiatives? Daniel J. Hanrahan: No, no. That's -- that was just the marketing spend was down a little bit in the fourth quarter. We didn't see the opportunity to spend against some things when we were making so many changes. So we were just -- we were a little bit cautious with our marketing money in that quarter but it wasn't something that we shifted from the fourth into the first. Jill R. Caruthers - Johnson Rice & Company, L.L.C., Research Division: Okay. And then just a big picture question, kind of, I guess, what's the length of the customer patience as you've seen in the multiple years of traffic declines? Is -- do you hit a point where your customers are just totally frustrated, where she does takes Regis out of the question, or what's the ability of regaining her back after consecutive years of traffic declines? Daniel J. Hanrahan: I think -- excellent question, Jill. I don't spend a lot of time being concerned about that when I see how quickly good people can turn salons around. And I've watched, as we put good people in salons, I've watched what a quick impact that they can have when they execute well. What our challenge is, is to do a good job training our leaders, get the right salon managers in place and they can have a pretty quick impact on the business. So the question is how quickly can we train people up. How quickly can we make sure that people are getting the kind of service they need within the salons. One of the things, we've done some very, very early research and we do see a lot of people switch. We see a lot of switchers. So we see a lot of people that move from salon to salon. And we just see that when we've got good people operating and executing well, we can win. So that, I guess, is what gives me comfort that we haven't chased people away permanently.

Your next question will come from the line of Jamie Yacco [ph] from Montparnasse [ph].

If I extrapolate the recent trends for a full quarter and that would imply a reduction around 40% to the EBITDA year-over-year, is there something I'm missing or can you confirm if my math is right? Steven M. Spiegel: Yes, I'll tell you what, as far as dealing with your model, how about we take that off-line with you and Mark Fosland will give you a ring?

Okay. And then Dan, just bigger picture, can you point anything that has changed in the industry since you've taken over? And maybe with the initiatives in place, same-store sale declines have been robust and where is the lost customer going? Is this an industry-wide phenomenon, or is Regis losing market share? Daniel J. Hanrahan: No, I don't think it's an industry-wide phenomenon. When I look at the industry information, it's a healthy industry and there is great opportunity for us to get our act together. We've lost guests to other hair salons. There's no indications that I see that would suggest that the industry is in any kind of jeopardy, any kind of extremist. This is us. We need to execute better, Jamie. And we -- I think with the plans that we put in place will take time, as I said in my opening comments, but we feel very good that we put the right plans in place and that what we need to do is go get market share. And what I can -- I guess what I want to keep reiterating is where we've got good operators we see good result. And it's incumbent upon us to create the right environment so that we can train and develop good leaders. Because when we do, we see the results follow. But no, I don't see an industry that's in pain.

And then I guess just going back to the comps. Is there -- can you tell us what the comps were in July and August of last year? Are we really seeing an uptick in performance? Or is August, for whatever reason, a softer comp than July? Daniel J. Hanrahan: I don't have those comps right off my fingertips for the month of July. Steven M. Spiegel: Yes. We don't have the monthly comps with us. But when Mark returns your call, he'll give you that information as well.

Okay. And then lastly for me, just trying to understand kind of how you guys are thinking about potential health care increases for 2014? Daniel J. Hanrahan: Yes, 2014 is an interesting thing for health care because there is no longer the automatic enrollment. So automatic enrollment went away. We are on the -- we're working with the RILA Group, the Retail Industry Leaders Association. We work closely in line with them and with outside experts, if this legislation continues to change. So we're watching it very carefully. We're in constant communication with our salons and our stylists. We haven't, in the past, our stylists have not been great users of our retail health care. Whether they choose to be in the future or not it's still early to tell. But in '14, we're just going to have to watch it and see what happens. But we're paying very close attention to it.

Okay. And then can you give us sort of like a range of numbers that you think you could be affected by? Steven M. Spiegel: It's actually too early to tell. There are so many moving parts to the law. There is still a lot of changes that have just recently been enacted regarding State participation both in Medicaid expansion and in insurance exchanges. And it's still unclear where the auto enrollment legislation is going. So I think there are enough uncertainties, coupled with the fact that we have a variable work force, that at this moment in time I think it would not be prudent to try to even guess a range.

And our final question comes from the line of Daniel Hofkin from William Blair & Company. Daniel Hofkin - William Blair & Company L.L.C., Research Division: Just wanted to maybe circle up, most of my questions have been asked. But as you're thinking about all of the initiatives that you put in place, particularly the last 3 to 6 months, do you feel like the expense structure is sort of maxed out at this point and now it's more a matter of getting gradual payback, hopefully, on the top line? Or do you feel like as you look out over the next year, there's more buckets of investments just from a big picture standpoint? I mean, where are we in sort of -- are we at a trough at this point in terms of profitability from your standpoint? Steven M. Spiegel: Yes, we would definitely -- we definitely believe we're in a trough in profitability. And we anticipate over time the business is going to perform. And I think as the business begins to show indication of sustained growth and profitability, that could potentially indicate to us the need to reinvest in our business in certain areas. So on a macro level, it's hard to say that we're done investing in our business because I don't think we'll ever be done. But I think it's safe to say that we think we troughed out in terms of where our profitability should be. Daniel Hofkin - William Blair & Company L.L.C., Research Division: Okay. And in terms of just the broader comment, talking, I wanted to make sure I understood where you said that disruption has not necessarily been as well received. Can you just talk specifically about is it related to the, let's say, some of the product changeovers? Is it the point-of-sale system? Is it the greater attention being paid by the sort of regional managers at the store level? Just, what's been the rub. Daniel J. Hanrahan: Okay. I just want to take a step back because we did a lot in that quarter. We restructured the field, we put a POS system in. What we have seen is that our salons and our stylists don't deal well with change. So any kind of change throws them off a little bit and when we saw that. We've experienced it and I spent a lot of time with our regional VP, so I consider all of the excellent operators and I think they would all repeat exactly what I'm going to say and that is that we need to be much better at dealing with change. And we need to be aware of any changes we make in the future, the impact that it can have on the business. And these folks just didn't handle it well. And in dealing with that change, we didn't see probably the intensity or the energy on trying to bring new guests into the salon. We have a lot of ability to do that, in many of our models they were too focused on the change rather than trying to attract new guests in the salon. What I'd like to just reiterate is that the structure that we went to is -- in having the district leaders in the salons being productive, our best franchisees use that structure and it works extremely well for them. So we're confident that the structure we put in place is the right one. Our best franchisees use SuperSalon, so we're confident that the system we put in place is the best one. And then the changes we made on retail, the product mix, we worked hand in hand with our biggest suppliers. So we're confident that we did the right thing there. But we did learn through this process, Daniel, that we need to help our leaders be better at change. And that we think that as we do, we think we'll see the improvement. And what we have seen is that change like this doesn't follow a straight line. We've got some of our salons performing well, very well, we've got other salons that are struggling. But where we've got good leaders, they are executing and operating like our best franchisees are. Daniel Hofkin - William Blair & Company L.L.C., Research Division: Do you think that the -- I mean, is this a personnel issues going forward, or do you feel like the leaders or sort of the field structure that you have, including the specific people involved, are kind of across-the-board the right people? Daniel J. Hanrahan: I think that I would characterize it more as a personnel opportunity. I think we've got good people. I think we need to do a much better job than we have historically done in training and developing our leaders. As I mentioned earlier, we've had our regional directors in a couple of times within the last 3 months. And leadership training and management training, we put a management tool in place that goes all the way down to the salon level that allows us to track their commitments and see the progress they're making against their commitments to develop their business. We'll be -- our district leaders will be holding weekly meetings with each salon to see how they're progressing against that. And that kind of tool and that kind of rigor and discipline was never in the system before and we're in the process of putting that into the system now. And we think by introducing that kind of discipline and rigor into the leadership training and management training, that we'll be developing strong leaders. It doesn't mean that we won't have to go find people as we have attrition, that we aren't going to find everybody internally, but I think we've got a lot of strong people here that we need to develop.

And there are no further questions at this time. I will now turn the conference back to Dan. Daniel J. Hanrahan: Then I would like to just say thanks to everybody for participating. I'd like to reiterate that the structure that we put in place is one that our best franchisees use. It's also one that the best groups that we purchased used. We've had a lot of input from the field. We feel good about the changes that we've made. We know that we've got a lot of work to do but we feel very good about the changes that we've made. And we think that although it's going to occur over time, we think we're positioning Regis very well for the future. And I'd say thanks very much for participating on the call and I look forward to talking to you next quarter.

Ladies and gentlemen, if you wish to access the replay for this presentation, you may do so by visiting regiscorp.com in the Investor Relations section of the website or by dialing 1 (800) 406-7325 with an ID number of 4635921 followed by the # key. This concludes our conference for today. Thank you, all, for participating and have a nice day. All parties may now disconnect.