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

Jeffrey S. Stein - Northcoast Research Stephanie Schiller Wissink - Piper Jaffray Companies, Research Division Jill R. Caruthers - Johnson Rice & Company, L.L.C., Research Division William R. Armstrong - CL King & Associates, Inc., Research Division Adam J. Peck - Heartland Advisors, Inc.

Good morning. My name is Jamie, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Regis Corporation Fiscal 2015 Second Quarter Earnings Call. [Operator Instructions] 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 (888) 203-1112, access code 395-8293. The replay will be available 60 minutes after the conclusion of today's call. I would like to remind everyone that to the extent, the company's statements or comments this morning represent forward-looking statements, I refer you to read 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 as well as others can be found on their website at www.regiscorp.com. Speaking today, will be 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 for questions. [Operator Instructions] I'd now like to turn the call over to Mr. Hanrahan for his comments. Dan, you may begin. Daniel J. Hanrahan: Thank you, Jamie. Good morning, everyone, and thank you for joining us today. With me today are Steve Spiegel, our Executive Vice President and Chief Financial Officer; Eric Bakken, our Executive Vice President and Chief Administrative Officer; and Mark Fosland, our Senior Vice President of Finance. Over the past few quarters, you have heard me talk about people, process and metrics and the influence they are having on the Regis turnaround. As I was preparing for today's call, and thinking about our transformation, I wanted to be sure I convey the right level of enthusiasm about where we are in the journey to turn Regis around. The progress and our strategy to build the leadership culture that creates a great environment for stylists to be successful and have satisfying careers gives me confidence about the future of Regis. At the same time, I am realistic about how much work we have ahead of us to deliver sustainable growth in revenues and profits. Today, I will walk you through some of the positive results we are seeing and the steps we are taking to continue the improvement. The key takeaway is our progress-to-date and future success is being driven by the quality of our leaders at the salon, district and regional levels in the field. Where we have strong leaders, creating a positive culture, we have positive results. The tools and executional processes we have developed in the hands of the right leaders are working. Where our leaders need further development or upgrading, we are not seeing the progress. It's important for me to remind you, we are transforming the culture in 7,000 salons and impacting over 40,000 employees. This transformation will take time and while our progress continues to move in the right direction, the improvement in our results will not be linear. Before I get to the results and the steps we are taking to continue the progress, I want to let you know our senior leadership team is now complete with the recent hiring of Annette Miller, as the Chief Merchandising Officer and the promotion of Ken Warfield to Senior Vice President of our Premium Division and Asset Protection. Annette comes to us from Target and brings extensive experience in merchandising. We were attracted to Annete because of the broad range of experiences she had at Target and her proven ability to solve problems and grow businesses. Ken has proven to be a very capable leader and problem solver. He has an extensive experience in the hair care industry and has worked for a number of highly successful multi-unit operations. We have been patient as we built out the leadership team, and I feel very good about the quality of people we have been able to attract to help us turn Regis around. All of our senior leaders are excited by the opportunity and are the kind of people who are energized by the work involved in a turnaround. Let me now walk you through some of the improvements we've seen over the past 3 quarters. The transformational changes we made and continue to advance are laying the foundation for our turnaround. Our best leaders using the processes and metrics we provide are getting traction and delivering quarter-after-quarter growth in their districts and salons. We are seeing a number of salons in districts that are driving positive same-store sales growth increase over the past 3 quarters. We are also seeing a number of districts and salons with consecutive quarter growth increase. Not surprisingly, Supercuts and SmartStyle are the best performers with a 2% service comp increase in the second quarter. Our focus on developing tools and processes for these brands is delivering positive results in the hands of our best leaders. These encouraging signs are tempered by the number of districts and salons that have not yet begun to gain traction in service or retail. During the second quarter, more than half of our salon's District Leaders, Regional Directors and Regional Vice Presidents posted positive same-store sales. There are essentially 3 factors contributing to this improvement: first, we are lapping disruption from transformational initiatives; second, execution is improving as we leverage the foundation we built last fiscal year and focus on our 3 corporate objectives for the current fiscal year; and third, and the key to our success, is the training and development of our leaders. Over the past 3 quarters, we provided you with an update on our initiative to improve performance in our lower performing salons. We began this initiative in the third quarter of last fiscal year when we targeted our worst performing salons for intervention. Leveraging detailed playbooks, our Regional Directors worked in these salons to improve their performance. While we saw a medium improvement from their presence in the salons, we were unable to sustain results over a longer period of time. In the fourth quarter of last fiscal year, we significantly improved their sales trends, but the salons as a group continue to post negative same-store sales. Last quarter, these salons continued to improve and posted positive same-store sales in the aggregate. In the second quarter, the momentum continued. In the aggregate, we've intervened in over 1,100 salons and have improved their trends approximately 1,500 basis points since this work began. We've maintained these improvements with training so that our District Leaders, Salon Managers and stylists have the requisite skills to execute and sustain performance. We were pleased with the results, so we expanded this initiative to an additional 200 salons during the second quarter. Although we are very early in this next tranche of salons, results have been positive. During the second quarter, we also expanded our use of technology to improve our guest and stylist experiences. Our IT department made further advances in its ongoing work to enhance SuperSalon speed, functionality and transaction efficiency. Our marketing team launched a new Supercuts mobile app, enabling guests to locate and check-in to Supercuts salons using mobile devices. This reduces wait times for our guests and the time it takes for stylists to check guests in our salons. Our marketing team also launched enhanced Supercuts and SmartStyle websites that contain content-rich information on beauty, product and styling trends and align more appropriately to each brand's position. The Supercuts website allows guests to locate and check-in to a salon. On the franchising front, we continue to see exciting new franchisee and unit growth, and our franchisees continue to post strong sales results. Over the last 6 months, we added 66 new franchisees to the system and opened 100 new franchise salon. We continue to strengthen the integrated foundation we've built for the turnaround, and these initiatives are helping to stabilize our business. Our foundation will add significant value when people, processes and metrics are interacting, and we are executing well throughout the organization. I now want to provide you an update on where we are in our 3 main focuses: leadership development, Asset Protection and technical education. Let's start with leadership development. We developed a number of training programs, which we will pilot or launch during the third quarter. This includes the next phase of Regional Vice President and Regional Director of leadership training. Training our senior field leaders to develop a leadership culture in their markets enables salons to profit. Our training to date has focused on our senior leaders in the field, helping them understand how to recruit high-quality leaders, train and develop their people, create accountability in their teams and a positive working environment for our Salon Managers and stylists. We have been particularly attendant to training these senior leaders to leverage recruitment pipelines to attract past talent to improve execution capabilities. Ongoing work to align human resources, business partners, to support field leaders, leverage our cosmetology school relationship with Empire Education and implement a national campus recruiting program all continue to help us cultivate a stylist talent pipeline. We have done a good job changing the culture from the top of the field organization. Our next step is to move faster to change the culture at the district and salon level. We are particularly excited about the work our Human Resources department has done to create the first educational programs tailored to District Leaders and Salon Managers. These programs integrate technical education with positive leadership. The quality of these new programs is excellent and the pilot programs has been extremely well-received by District Leaders and Salon Managers. As these leadership training programs influence our Salon Managers and stylists, we anticipate 2 benefits in the salons: first, we want to see an increase in the retention of Salon Managers and stylists; and second, we expect improvement in our execution capabilities and guest satisfaction. Let's now move on to Asset Protection. Our Asset Protection team's goal is consistent with our overall strategy of creating an environment where stylists can have successful and satisfying careers. Asset Protection is working together with our field leaders, positively contributing to the success of the Salon Manager and stylist. The Asset Protection organization is fully staffed and is helping Regis align the interest of stylists and shareholders to grow profitability. They continue to implement our stylist Asset Protection awareness program, encouraging field leaders and stylists to make the right choices to maximize their individual success and the revenues of Regis. During the second quarter, we conducted approximately 900 awareness training sessions with field leaders and stylists. Early results continue to be positive as sales performance improves post-training, as our field leaders hold the salons accountable for acceptable Asset Protection behaviors. Leveraging exceptional reporting tools and risk ranking reports developed earlier in the fiscal year has also helped the Asset Protection team prioritize its efforts against our most compelling opportunities to grow revenue. I am proud of the Asset Protection team's work and encouraged by their progress. They, too, are contributing to stylist retention and improved execution at the salon level as well as reducing our losses. We made a thoughtful investment in this area to capitalize on the opportunity to grow revenues and profits at the salon level. Early results indicate we will get a good return on this investment. Another very important way to improve stylist retention is to provide relevant and meaningful technical education. Our stylists are very interested in continuing the development of their craft. With the addition of our human resources leader, Carmen Thiede, we have moved to build out our technical training capabilities. We have done this in 4 areas: first, we recently promoted one of our strongest field leaders who has 16 years of experience in training, operational and artistic roles to Creative Director to run our Training department. This position will develop and oversee all of our salon technical training programs. Second, we have been working to become more localized in the way we deliver and execute technical and experiential training. We have begun on-boarding and aligning Artistic Directors with Regional Directors. We have trained our Regional Directors to be effective leaders of their regions, and we are now giving them another resource to improve their performance by targeting their salons with local training. Third, we have worked with some of our vendor partners to develop training programs for our people using their resources. Many of our partners have outstanding training programs, which we have not benefited from in the past. The pilot programs have been very successful, and we plan to expand vendor-sponsored training programs regionally. Fourth, is our Supercuts training program. Although this is not a new effort, it is an extremely important one. Our Supercuts training program is an industry-leading technical training program that we are expanding as we continue to grow our Supercuts franchise base. Before concluding, I would like to make one further comment on our second quarter results. While same-store sales trends stabilized during the second quarter, adjusted EBITDA declined. At the risk of being repetitive, we are a people organization and investments we make often flow through our income statement instead of our balance sheet. While this impacts near-term profitability, these investments continue to build our foundation and will enable us to turn the business and provide significant operating leverage when successful. Our guiding principle remains focused on funding investments and managing inflation through disciplined cost management and rigorous review of all spending to ensure we continue to protect the strong balance sheet we have built. We are confident our strategy is working. Second quarter results provide further signs of gaining traction where we have strong leaders in place. We continue to leverage the foundation we've built, which is resulting in sustainable, improved execution in just over half of our book. However, I believe it is worth saying again, that we have 7,000 salons and 40,000 employees to impact. We have significant work ahead of us to drive consistent and sustainable performance across the entire portfolio. As a result, our turnaround won't be linear, and we will continue to see variability in our results. Overtime, the variability will smooth as we continue to develop and upgrade our leaders. Steve? Steven M. Spiegel: Thank you, Dan, and good morning. Before discussing our performance for the second quarter, I want to remind you of 2 housekeeping items: first, as a result of the valuation allowance against most of our deferred tax assets associated reported and as-adjusted results of operations are not comparable to prior periods. Second, we included in today's press release, as well as on our corporate website, a reconciliation bridging reported results to earnings as adjusted for the impact of discrete items for the second quarter of the current and prior years. In the interest of brevity, our press release includes detailed explanations for our major P&L line items. So my comments will bridge as-adjusted results for the second quarter of fiscal 2015 with those of the second quarter of fiscal 2014. For the second quarter, Regis reported a net loss of $19.1 million or $0.35 per diluted share. This includes approximately $10.3 million of net discrete charges or $0.19 per diluted share. Adjusted EBITDA for the quarter came in at $17.2 million compared to $22.5 million in the prior year quarter. Excluding discrete impacts, second quarter diluted net loss per share as adjusted was $0.16 compared to $0.03 in the prior-year quarter. Excluding the $0.12 per share impact of the valuation allowance on income tax expense, this represents a decline of $0.01 per share, which was driven by a $0.01 per share impact from lower sales comps. Lower depreciation expense, improved salon productivity, lower interest expense, higher franchise royalties and fees, cost savings and reduced health insurance costs were essentially offset by planned strategic investments around Asset Protection in human resources; minimum wage and other inflationary increases; higher field incentives, as we lap an incentive-lite year; the lapping of certain onetime benefits; and a lower noncash equity in earnings of Empire Education. Shifting to liquidity. We are focused on funding investments and managing inflation through disciplined cost management and rigorous review of all spending to ensure we continue to protect the strong balance sheet we have built. To that end, our business generated close to $22 million of operating cash flow during the quarter. We finished the quarter with $196 million of cash, total debt of $120 million and no outstanding borrowings under our $400 million revolving credit facility. Before concluding, I want to address our year-to-date income tax expense. For the 6 months ended December 31, 2014, we recognized $9.1 million of income tax expense. $6.6 million of which relates to tax benefits we claim for goodwill amortization and do not recognize for GAAP purposes. As I mentioned last quarter, this noncash tax expense will approach $9 million for the current year, but could fluctuate significantly from quarter-to-quarter. Further, this noncash charge will continue annually in decreasing amounts as long as we have a deferred tax asset valuation allowance in place. This concludes the financial portion of the call. We would now like to answer any questions you may have. Jamie, can you please provide the instructions for the Q&A portion of the call?

[Operator Instructions] And we'll take our first question from Jeff Stein. Jeffrey S. Stein - Northcoast Research: Dan, question for you on your field leadership team. You've kind of kept us up-to-date in terms of the GAAP here between best performers and your underperformers, and I'm just kind of curious, I think you referenced that just over 50% of your District Leaders are now kind of performing and you're seeing positive comps in their salons. And I'm wondering based upon the history that you have with the ones that you brought on board and trained, how long does it take before -- roughly, before you get to, let's say, 90%? And I know it's not perfect science, but does it take -- when you bring a new leader on board and if it's the right guy, does it take 6 months for him to perform? 1 year? So how long is this process? And what could we expect to hear a year from now? Daniel J. Hanrahan: Thanks, Jeff. I don't think there's any specific timeline that we've seen. I can tell you that when you look at the -- I'll refer back to that group of salons that we talked about that were the worst-performing, when we were able to identify and focus our leaders against those, we made pretty significant process -- progress over the 3 quarters to a year. We're also -- we are new to this a little bit. We're turning the business around, and we feel like we're making good progress. But I don't think that we can say at this point that there is a any firm number that when we bring a new leader in, it takes -- they takes them 6 months to get up to speed and another 3 months to get progress and another 3 months after that to sustain it. I think what we have seen is that, where we have been able to train and develop our leaders, they get pretty good progress pretty quickly. I think the opportunity as well as the challenge we have is with almost 1,000 districts, we've got a lot of people that we've got to get to train them, develop them and -- or in some cases, upgrade them. But I don't think there's a hard number that we've looked at. And I can tell you that people develop at different rates as well. And where we see talent and it's taking a little longer to develop and we're comfortable with that person, we know it's a good person, we'll hang on to them and we'll continue to train and develop them, and they may take a little longer than somebody else to come up to speed quickly. So no hard fast number, but what we are seeing is that new leaders that we brought from the organization -- into the organization and our best leaders that are in the organization are making good progress. Jeffrey S. Stein - Northcoast Research: Okay. And as far as the dollars that you invest and you've alluded several times in past calls to the fact that your investment is mainly through the P&L, not capital spending, so to speak. It sounds like you're continuing to initiate new training programs. So as we look ahead over the next 12 months, when does the investment in the P&L so to speak, begin to normalize so that you reach a level where once you do begin to post positive comps on a consistent basis, we can see leverage? Daniel J. Hanrahan: We're starting to see -- I'd say we're pretty close to that point right now, Jeff. I ask the team all the time what our investment in G&A is doing to drive EBITDA, drive top line and EBITDA. And they've responded well. We are -- we look to all the training and development work that we're going to do from here on out, we're looking to fund within our current G&A run, not continue to add cost of business. Jeffrey S. Stein - Northcoast Research: Got it, got it, okay. And just final question, it sounds like you're continuing to kind of make progress. But when I look at things sequentially, and I don't know if that's a fair way to look at it, there was kind of a slight step back between Q1 and Q2 in terms of your comp performance. How would you address that issue? Is it -- are there macro factors involved? Or is it just it is what it is? Daniel J. Hanrahan: Yes. No, we don't lean on macro factors at all, Jeff. We saw -- obviously, we saw last week, I'll talk just very briefly about what we saw -- actually, this week, in Boston. We saw that heavy, heavy snow. Most of our stores were closed. The few that were open on the fringe of that snowstorm didn't have great traffic. But we bounced right back from it. Our good folks bounced right back from it. When you look at what happened from quarter-to-quarter, our service comps were basically the same. The retail wasn't. The retail didn't hold up. And I said last quarter that I thought we continued to have challenges around retail. What I am really excited about on the retail side is the hiring of Annette Miller. We spent a -- we were patient. We wanted to find somebody really strong, and I think we found a real winner in Annette. A very thoughtful, intelligent, she had wide variety of experiences at Target. I mean, Target, if you look at Annette's resume, Target threw at her a lot of tough challenges and she responded to all of them, and I'm confident she'll be a big help to us here. So I think you have to -- what you have to read into that, it was a more retail that drove that difference than on the service side.

Our next question comes from Steph Wissink with Piper Jaffray. Stephanie Schiller Wissink - Piper Jaffray Companies, Research Division: I have a series of questions and maybe I'll just click through a couple of them and I'll let you answer them and come back to the others. My first question was the leadership improvement at the field level, if you could just help us qualify, what percent of the leaders have turned over? Where are you in kind of the matriculation process of the turnover in that leadership rank? And then if you could also talk a little bit about the salons that are performing within either that control group of those that are rolling now into the control group. Is it only just the leadership change that's really influencing that improvement in performance? Or are there other improvements that you're making whether it's merchandising or product or other changes at the salon level that might be accompanying that leadership change that are enabling those salons to perform somewhat better? Daniel J. Hanrahan: Sure, okay. So you want me to take those 2 first? Stephanie Schiller Wissink - Piper Jaffray Companies, Research Division: Yes, let's do that. Then I have just some quick ones right following. Daniel J. Hanrahan: Sure. So in terms of leadership improvement at the field level, we don't think of it in terms of turnover. Certainly, we turnover employees as we upgrade. But the way we think about it more than anything else is what we can do to help our employees be successful and how we can train them and develop good leaders. There's real value in the people that we have in this organization because of their experience and their understanding of the business. So when we have to, we go outside and we've been able to -- especially over the last year, we've been able to attract terrific people to our organization. Recruiting into Regis is not a challenge. People are buying into what we're doing here and they're excited about being part of the organization. So we don't think about it, Steph, in terms of how many can we turnover. We think of it more in terms of how many we can develop into being strong leaders and I think that the numbers we quoted earlier today with over half of our salons performing well, that matches up to over half of our districts performing. In terms of what changes in a salon. The leadership is really, really crucial in a salon. It's really crucial throughout our entire field structure. Like any organization, people like to be led well and managed well and they do better work when they feel like they've been led well and managed well. So what ends up happening as a result of this training is 2 things: they become better at executing, because our leaders help them be more successful around delivering against the guest expectations and delivering a great guest experience. And then the other thing that happens and I reference it a couple of times in my comments, is that we increase retention. Where we have good leaders, we have less turnover. And in any company that I've ever worked in, when you can reduce turnover and you have highly engaged employees, business results are better. So that's what's happening for us. Stephanie Schiller Wissink - Piper Jaffray Companies, Research Division: Okay, that's very helpful. And maybe just a couple of follow-ups, more on the statistical side here. But on the fleet review, can you just give us a sense on where you are in reviewing the overall fleet for potential closers? And you referenced 66 franchisees. I'm curious, how many of those franchisees were taking on additional units versus new build or new construction? And then the last one, I'm really intrigued by this mobile deployment, particularly in your value salons. Can you just give us [indiscernible] around some of the metrics related to consumer adoption, and maybe where you're seeing that pass-through into some of the productivity metrics at those salons specifically? Daniel J. Hanrahan: Okay. So let me just knock franchisees out right away. So the franchisees that we reference, the new ones that have come on, they're all brand-new. They're new to our system. And so the majority of those when they come on, they sign up for 3 salons. Our way our system works, you can sign up for 1 or you can sign up for 3. The vast, vast majority sign up for 3. So those 66 new you should think of those as probably high 2.5 to 3 total salons per group. Help me with the first one again. Closures, closures, all right. No. Let me tell you a little bit about the process and the way we think about it. And what's changed in the last -- since I've joined the organization is Eric Bakken runs our real estate organization, and we identify, through the real estate organization, when leases are coming up and for lease renewal, obviously. But there's another level of rigor around that, that looks at how is the salon doing, how is the salon progressing and then we evaluate that salon in terms of how we're going to approach the landlord and the lease. When I joined a couple of years ago, we were fairly comfortable. Our field organization is -- better way to say it, our field organization was fairly comfortable having salons close as we built out talent and put the right folks in place at the Regional Vice President level and Regional Director level. They're now fighting that, as they don't want to see the salons close because they believe that they can fix them and they've have had -- all now - I've had experience within their regions. Seen what they can do when they put good leaders in place. So it doesn't mean that if in a center that, and I'm making this up now, that Home Depot and the Publix grocery store both go out of business and we happen to be the only store in the entire center that we may in fact end up making the decision to close it. But today, it is a real give-and-take between field -- field organization and real estate and the field organization presses very hard to keep the salons in place. So is that helpful? Stephanie Schiller Wissink - Piper Jaffray Companies, Research Division: Yes, very helpful. And then can you just give us some tidbits on the mobile adoption? I'm curious on that as well. Daniel J. Hanrahan: Yes, I don't have any of the numbers right off the top of my head. I can give you some sort of qualitative stuff that we're seeing is that there's a lot of excitement in our salons about it, it was adopted very well, I was very impressed by the enthusiasm that the salons have. One of the things we're very careful about is putting things down into the salons and asking them to do work that won't allow stylists to actually cut hair or do color. And we're seeing mobile check-in increase. If you want to, you can give Mark Fosland a call after, and he can give you or Paul Down [ph] a call after and they can give you a little more detail on some of the specifics on it. But I can tell you that there's a -- and then the way I like look at it, there's enthusiasm in the field and it's growing.

Our next question comes from Jill Nelson with Johnson Rice. Jill R. Caruthers - Johnson Rice & Company, L.L.C., Research Division: I know you've referenced quite a few times this morning about over half of the salons are comping positive in the second quarter. Could you kind of talk about how that has-- trend as progressed over the past few quarters? Daniel J. Hanrahan: Yes, it's grown, Jill. We've seen an increase in that over the past few quarters. We were well -- if you go back 3 or 4 quarters, and we weren't even anywhere near half that have grown and if -- we've seen is that a significant portion have come in those past 2 quarters. And we have also just over half of those that have been positive for 3 consecutive quarters. So we're starting to see, again, it just really comes back to good leaders and it takes time. You've got to put a good Salon Manager in place. You've got to recruit and retain stylists, and then you've got to build those stylists confidence up and help them be successful. But we've seen improvement in that over the last 3 quarters. Jill R. Caruthers - Johnson Rice & Company, L.L.C., Research Division: Okay. And then just more a question on expenses. Your site operating expenses had a nice year-over-year decline on absolute basis. And I know in the press release, you called out some adjustments to self-insurance, the timing of marketing. Just trying to see if some of these factors are maybe onetime or timing shift and/or if we think this year-over-year dollar decline could be sustainable going forward. Steven M. Spiegel: Yes. I don't think that they're onetime. Self-insurance is something that we're evaluating every quarter as well as freight moves with the business. And the timing of marketing was favorable this quarter and it could swing the other way next quarter. So I wouldn't say it's onetime. Jill R. Caruthers - Johnson Rice & Company, L.L.C., Research Division: Okay. And then just last question, more of a bigger picture just kind on the product retail side of the business. Clearly, you had to get more promotional this quarter to drive some sales. So they kind of fell below what you were hoping for. Just -- you've been under the new plan of Graham's set for a year now. Could you just talk about where do you feel is the biggest challenge in that business? Daniel J. Hanrahan: I think that, I don't want to punt on the question but Annette's been here in a month and has -- is a very thoughtful person and I think over the next couple of quarters, we'll be able to talk more about that, have some better thoughts for you on what we're going to be doing on the retail side. I think that we need the time with Annette to really think through and give you a better answer. I can tell you that we have put a lot of attention against our -- selling what we call combos. So sale with a service, and we've seen our -- again, it's where our best leaders are. We've seen the organization adapt well to that. We see a lot of opportunity there. But I think that our mix of product in salons and our promotional efforts are a real opportunity for us. We'll have more for you on that over the next few quarters as Annette learns the business.

Our next question comes from Bill Armstrong with CL King & Associates. William R. Armstrong - CL King & Associates, Inc., Research Division: I was wondering if you could update us on trends in stylist turnovers throughout the chain? Daniel J. Hanrahan: Yes, it's improving. We don't give specifics, Bill, on where we are on turnover. But we have seen it improving. And I can tell you that it is improving more again where we've got good leaders. They have helped reduce turnover in their markets, and it's significantly different than where we see -- where we don't think we have as strong a leader in place. And we -- Mark Fosland has put together some really good tools for our field organization to use that identifies our top stylists and our best performing managers, and making sure that our top field leader -- our field leaders and people of not just the Salon Manager, but up the chain, are reaching out to those top performers to let them know they're loved and wanted at the company and appreciated for the work they do. William R. Armstrong - CL King & Associates, Inc., Research Division: And on the franchisees, once again, they comped positive and that's been a trend for a while. When you look at -- and I know you've compared what they do versus what your company stores do, do you think it's kind of an issue of leadership as you've emphasized? Or are there other differences that may be less -- that you may have less ability to close? Daniel J. Hanrahan: No, I think it's --Bill I think you nailed it. I think it's leadership. I know most of our franchisees. They're all very, very good business people. They're excellent leaders. They're very positive in the salons. They really, really do a great job. I've worked with them in the salons. I'm extremely impressed with the way they lead their people, and the level of engagement their people have and the respect their people have for them. So we want to emulate them. I mean, one of the things we've done from the very beginning is said that we watched what our best operators and franchise do, and we've seen that they're terrific leaders and that's where they deliver the great results. And it's also the reason I believe that we can fix this. I don't think there's anything fundamentally wrong with the business. I think it's a question of building out our leadership and doing it as expediently as we can.

Our next question comes from Adam Peck with Heartland Funds. Adam J. Peck - Heartland Advisors, Inc.: Just as far as franchisee comps, you care to disclose what the actual number was? Daniel J. Hanrahan: No, we don't do that, Adam. It was -- I can tell you it was a good number, though. I was very proud of our franchisees. Adam J. Peck - Heartland Advisors, Inc.: Okay, yes. Because if you look at the royalties line, that growth rate seems to be inflecting upwards. So is it -- could we assume then that the -- same-store sales for the franchisees is inflecting upwards as well. Daniel J. Hanrahan: Yes, you can. You can assume that. It's a combination of new franchisees. So we've opened more stores and so that helps. But we've also seen our franchisees increase their revenues. Adam J. Peck - Heartland Advisors, Inc.: Right. Because it looks like stores are up 5.8%, but royalty revenue was up 12.8%. Daniel J. Hanrahan: Well, it helps to have all the new ones that we've put in place and open 100 new stores. So we're starting to see the benefit of the work we did over the past couple of years to focus our attention on Supercuts and to grow the Supercuts brand. And so it's been a good program. We're proud of what we've been able to accomplish and what our franchisees have done. Adam J. Peck - Heartland Advisors, Inc.: Great. And then on Asset Protection, you said there were 900 training sessions? Daniel J. Hanrahan: Yes. Adam J. Peck - Heartland Advisors, Inc.: Would that be for 900 stores? Or would it be more than 900 stores? Daniel J. Hanrahan: No, we do it store by store. So that was -- we covered 900 stores in the quarter. Adam J. Peck - Heartland Advisors, Inc.: Okay. So is that a good run rate to think about going forward? Daniel J. Hanrahan: Yes, yes. We're 1,700 year-to-date. So we actually were able to increase it a little bit. And -- but I feel like that 800 to 900 is a pretty good number because we don't do a flyby when we do it. We go in and we really work to make a difference, and we're seeing good results. And I think the approach Ken and his team have taken, which is more about helping the salons be successful and understand that good Asset Protection processes are good for everybody, is also helping us change the culture of the company. Adam J. Peck - Heartland Advisors, Inc.: Okay. So you said the early results are positive. Is it fair to say that they're materially positive? Daniel J. Hanrahan: Yes. I think it, obviously, it's -- the interest, it's a great question. And I'll answer it 2 ways. Where we have strong leaders, their substantially better than where we have a weak leader because a strong leader pays attention to what's happened in the training program or if we have to go in and do an intervention. And then keeps that momentum going within that salon. Where the weaker leader, even though their results improved, they don't get as strong as sustainable results. The results are sustainable but a strong leader improves them by quite a bit more. And you've got to remember too, that we go to the worst salons where we have the most egregious problems and that's another reason why I think that we see better results.

This concludes the Q&A portion of the call. I will now turn the call back to Dan. Daniel J. Hanrahan: Thanks to all of you for joining the call. We are very focused management team here, and we'll continue to make progress. I look forward to talking to you again in the 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 (888) 203-1112, access code 3958293. This concludes our conference for today. Thank you, all, for participating, and have a nice day. All parties may now disconnect.