Regis Reports Second Quarter 2008 Results

Second Quarter Earnings Meet Low End of Guidance
MINNEAPOLIS--(Business Wire)--Regis Corporation (NYSE:RGS), the global leader in the $170
billion hair care industry, today reported financial results for its
fiscal second quarter ending December 31, 2007. Net income for the
quarter was $22.6 million, or $0.51 per diluted share, which came in
at the low end of the Company's previously issued guidance of $0.51 to
$0.57 per diluted share. Second quarter earnings results benefited
from an unplanned adjustment to prior years' workers' compensation
reserves of approximately $0.05 per diluted share, the result of the
Company's continued success with its salon safety programs.

On January 11, 2008, the Company reported revenues for the second
quarter ended December 31, 2007 increased four percent to $682 million
versus $657 million in second quarter of fiscal 2007. Consolidated
same-store sales decreased 0.8 percent for the quarter.
Deconsolidation of the beauty schools reduced revenue in the quarter
by approximately $17 million. Absent the impact of the school
deconsolidation, consolidated revenues for the quarter would have
increased 6.5 percent.

"The momentum we have seen in the last nine months around our
service business slowed in the quarter. Like many retailers, we had a
disappointing holiday shopping season and, as a result, our quarterly
same-store sales came in below our expectations," commented Paul D.
Finkelstein, Chairman and Chief Executive Officer. "Today's casual
lifestyle continues to have a lingering impact on fashion and salon
visitation patterns. However, ours is a very predictable business and,
in our 85 year history, we've never experienced an annual same-store
sales decrease. We have a great business model and, over time,
customer visits will normalize. Until then, we will continue to focus
on increasing our average ticket and, more specifically, implementing
price increases."

Mr. Finkelstein continued, "The outlook for the second half of our
fiscal year has not changed and we expect our same-store sales to be
in the range of 0.5 to 2.5 percent. Our service business is off to a
strong start with North American same-store service sales increasing
over 3.5 percent in the first 20 days of the quarter and total North
American same-store sales increasing over 1.2 percent. However, based
on the results of the first two quarters, we now expect our full
fiscal year 2008 same-store sales to be in the range of 0.25 to 1.25
percent and related earnings to be in the range of $2.01 to $2.14 per
diluted share."

During the quarter, Regis added a net total of 52 locations. The
Company constructed 74 locations and franchisees built an additional
69 units. In addition, Regis acquired 19 corporate salons (including
18 franchise buybacks). The Company closed or relocated 92 corporate
and franchise locations during the quarter.

Third Quarter Fiscal 2008 Outlook

The following outlook pertains to the third quarter ending March
31, 2008, and assumes the previously announced merger of our
continental European franchise operations with Franck Provost will
close in late January, 2008:

-- Consolidated revenue is forecasted to grow three to five
percent to a range of $675 million to $685 million compared to
$655 million a year ago. (Note: The deconsolidation of beauty
schools and the continental European franchise operations
reduces revenue growth by approximately five percentage points
in the quarter.)

-- Consolidated same-store sales are forecasted to be in a range
of 0.5 to 2.5 percent.

-- The effective income tax rate is expected to be in a range of
34 to 35 percent, which reflects the adoption of FIN 48 and
the impact of the deconsolidation of the continental European
franchise business.

-- Earnings per diluted share are forecasted to be in the range
of $0.48 to $0.54, compared to $0.12 a year ago The year ago
period included a $0.43 per diluted share non-cash goodwill
impairment charge related to the beauty school merger with
Empire Education Group. In addition, the year ago period
benefited by $0.05 per diluted share from prior year workers'
compensation actuarial adjustments and jobs tax credits.

Fiscal Year 2008 Updated Outlook

The following points pertain to the fiscal year ending June 30,
2008:

-- Consolidated revenue is forecasted to grow approximately four
percent to $2.74 billion. (Note: The deconsolidation of beauty
schools and the continental European franchise operations
reduces revenue growth by approximately four percentage points
in fiscal 2008.)

-- Consolidated same-store sales are forecasted to be in a range
of 0.25 to 1.25 percent.

-- The effective income tax rate is expected to be in a range of
35 to 36 percent.

-- Earnings per diluted share are forecasted to be in a range of
$2.01 to $2.14.

Regis Corporation will host a conference call discussing second
quarter results today, January 22, 2008 at 10:00 a.m., Central Time.
Interested parties are invited to listen by logging on to
www.regiscorp.com or dialing 800-257-7063. A replay of the call will
be available later that day. The replay phone number is 800-405-2236,
access code 11104730#.

About Regis Corporation

Regis Corporation (NYSE:RGS) is the beauty industry's global
leader in beauty salons, hair restoration centers and cosmetology
education. As of December 31, 2007, the Company owned, franchised or
held ownership interests in over 12,600 worldwide locations. Regis'
corporate and franchised locations operate under concepts such as
Supercuts, Jean Louis David, Vidal Sassoon, Regis Salons, MasterCuts,
Trade Secret, SmartStyle, Cost Cutters and Hair Club for Men and
Women. In addition, Regis maintains ownership interests in Empire
Education Group and various other salon concepts such as Cool Cuts 4
Kids, and the Beauty Takashi and Beauty Plaza concepts in Japan.
System-wide, these and other concepts are located in the U.S. and in
eleven other countries in North America, Europe and Asia. Regis also
maintains a 50 percent ownership interest in Intelligent Nutrients, a
joint venture that provides a wide variety of certified organic
products for health and beauty. For additional information about the
company, including management's current financial outlook and a
reconciliation of non-GAAP financial information, please visit the
Investor Information section of the corporate website at
www.regiscorp.com. To join Regis Corporation's email alert list, click
on this link:
http://www.b2i.us/irpass.asp?BzID=913&to=ea&Nav=1&S=0&L=1

This press release contains "forward-looking statements" within
the meaning of the federal securities laws, including statements
concerning anticipated future events and expectations that are not
historical facts. These forward-looking statements are made pursuant
to the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995. The forward-looking statements in this document
reflect management's best judgment at the time they are made, but all
such statements are subject to numerous risks and uncertainties, which
could cause actual results to differ materially from those expressed
in or implied by the statements herein. Such forward-looking
statements are often identified herein by use of words including, but
not limited to, "may," "believe," "project," "forecast," "expect,"
"estimate," "anticipate" and "plan." In addition, the following
factors could affect the Company's actual results and cause such
results to differ materially from those expressed in forward-looking
statements. These factors include competition within the personal hair
care industry, which remains strong, both domestically and
internationally; price sensitivity; changes in economic conditions;
changes in consumer tastes and fashion trends; labor and benefit
costs; legal claims; risk inherent to international development
(including currency fluctuations); the continued ability of the
Company and its franchisees to obtain suitable locations for new salon
development; governmental initiatives such as minimum wage rates,
taxes and possible franchise legislation; the ability of the Company
to successfully identify, acquire and integrate salons that support
its growth objectives; the ability of the Company to maintain
satisfactory relationships with suppliers; or other factors not listed
above. The ability of the Company to meet its expected revenue growth
is dependent on salon acquisitions, new salon construction and
same-store sales increases, all of which are affected by many of the
aforementioned risks. Additional information concerning potential
factors that could affect future financial results is set forth in the
Company's Annual Report on Form 10-K for the year ended June 30, 2007.
We undertake no obligation to publicly update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise. However, your attention is directed to any
further disclosures made in our subsequent annual and periodic reports
filed or furnished with the SEC on Forms 10-K, 10-Q and 8-K and Proxy
Statements on Schedule 14A.

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*T
REGIS CORPORATION (NYSE: RGS)
CONDENSED CONSOLIDATED BALANCE SHEET (Unaudited)
as of December 31, 2007 and June 30, 2007
(In thousands, except per share data)

December 31, 2007 June 30, 2007
----------------- ----------------
ASSETS
Current assets:
Cash and cash equivalents........ $ 172,855 $ 184,785
Receivables, net................. 51,153 67,773
Inventories...................... 208,107 196,582
Deferred income taxes............ 9,699 18,775
Other current assets............. 65,346 57,149
----------------- ----------------
Total current assets............ 507,160 525,064

Property and equipment, net........ 484,499 494,085
Goodwill........................... 829,446 812,383
Other intangibles, net............. 191,182 213,452
Investment in affiliates........... 89,086 20,213
Other assets....................... 82,606 66,917
----------------- ----------------

Total assets.................... $ 2,183,979 $ 2,132,114
================= ================

LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities:
Long-term debt, current portion.. $ 244,041 $ 223,352
Accounts payable................. 69,573 74,532
Accrued expenses................. 212,660 240,748
----------------- ----------------
Total current liabilities....... 526,274 538,632

Long-term debt and capital lease
obligations....................... 523,265 485,879
Other noncurrent liabilities....... 203,646 194,295
----------------- ----------------
Total liabilities............... 1,253,185 1,218,806
----------------- ----------------

Shareholders' equity:
Common stock, $0.05 par value;
issued and outstanding
42,881,965 and 44,164,645 common
shares at December 31, 2007 and
June 30, 2007, respectively..... 2,144 2,209
Additional paid-in capital....... 141,321 178,029
Accumulated other comprehensive
income.......................... 97,174 78,278
Retained earnings................ 690,155 654,792
----------------- ----------------

Total shareholders' equity...... 930,794 913,308
----------------- ----------------

Total liabilities and
shareholders' equity......... $ 2,183,979 $ 2,132,114
================= ================
*T

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REGIS CORPORATION (NYSE: RGS)
CONSOLIDATED STATEMENT OF OPERATIONS (Unaudited)
(In thousands, except per share data)

Three Months Ended Six Months Ended
December 31, December 31,
----------------------------------------
2007 2006 2007 2006
-------- -------- --------- ---------
Revenues:
Service................... $457,868 $440,345 $ 917,586 $ 874,897
Product................... 202,696 196,752 389,478 381,677
Royalties and fees........ 21,677 19,893 42,702 39,659
-------- -------- --------- ---------
682,241 656,990 1,349,766 1,296,233
-------- -------- --------- ---------

Operating expenses:
Cost of service........... 265,977 249,613 529,037 495,138
Cost of product........... 105,045 100,164 199,122 194,393
Site operating expenses... 48,844 54,967 102,529 110,773
General and administrative 86,144 81,411 172,496 159,364
Rent...................... 99,768 93,163 197,531 185,335
Depreciation and
amortization............. 31,604 30,412 63,186 59,954
-------- -------- --------- ---------
Total operating expenses. 637,382 609,730 1,263,901 1,204,957
-------- -------- --------- ---------

Operating income......... 44,859 47,260 85,865 91,276

Other income (expense):
Interest.................. (11,760) (10,671) (22,338) (20,509)
Other, net................ 2,092 1,582 4,247 2,393
-------- -------- --------- ---------

Income before income
taxes and equity in
income of affiliated
companies............... 35,191 38,171 67,774 73,160

Income taxes................ (13,021) (11,297) (24,671) (23,193)
Equity in income of
affiliated companies....... 386 -- 52 --
-------- -------- --------- ---------

Net income............. $ 22,556 $ 26,874 $ 43,155 $ 49,967
======== ======== ========= =========

Net income per share:
Basic.................. $ 0.52 $ 0.60 $ 0.99 $ 1.11
======== ======== ========= =========
Diluted................ $ 0.51 $ 0.59 $ 0.98 $ 1.09
======== ======== ========= =========

Weighted average common and
common equivalent shares
outstanding:
Basic.................. 43,369 44,673 43,559 44,858
======== ======== ========= =========
Diluted................ 43,915 45,596 44,172 45,847
======== ======== ========= =========

Cash dividends declared per
common share............... $ 0.04 $ 0.04 $ 0.08 $ 0.08
======== ======== ========= =========
*T

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REGIS CORPORATION (NYSE: RGS)
SELECTED CASH FLOW DATA
(In thousands)

Six Months Ended
December 31,
----------------------
2007 2006
---------- ----------

Net cash provided by operating activities..... $ 93,549 $ 101,281
Net cash used in investing activities......... (117,071) (95,201)
Net cash provided by financing activities..... 3,115 13,128
---------- ----------
Effect of exchange rate changes on cash and
cash equivalents............................. 8,477 1,525
---------- ----------
(Decrease) increase in cash and cash
equivalents.................................. (11,930) 20,733
Cash and cash equivalents:
Beginning of year............................ 184,785 135,397
---------- ----------
End of year.................................. $ 172,855 $ 156,130
========== ==========
*T

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REGIS CORPORATION (NYSE: RGS)
Salon / School / Hair Restoration Center Counts and Revenues

December 31, June 30,
SYSTEM-WIDE LOCATIONS: 2007 2007
------------ ------------

Company-owned salons 8,303 8,139
Franchise salons 3,767 3,742
Beauty career schools -- 56
Company-owned hair restoration centers 55 49
Franchise hair restoration centers 35 41
Ownership interest locations 475 389
------------ ------------
Total, system-wide 12,635 12,416
============ ============

SALON LOCATION SUMMARY

December 31, June 30,
NORTH AMERICAN SALONS: 2007 2007
------------ ------------
REGIS SALONS
Open at beginning of period 1,099 1,079
Salons constructed 9 17
Acquired -- 49
Less relocations (6) (14)
------------ ------------
Salon openings 3 52
Conversions 1 (1)
Salons closed (13) (31)
------------ ------------
Total, Regis Salons 1,090 1,099
============ ============

MASTERCUTS
Open at beginning of period 629 642
Salons constructed 5 15
Acquired -- --
Less relocations (4) (12)
------------ ------------
Salon openings 1 3
Conversions -- --
Salons closed (4) (16)
------------ ------------
Total, MasterCuts Salons 626 629
============ ============

TRADE SECRET
Company-owned salons:
Open at beginning of period 613 615
Salons constructed 8 20
Acquired 2 3
Franchise buybacks 8 --
Less relocations (5) (11)
------------ ------------
Salon openings 13 12
Conversions -- 1
Salons closed (10) (15)
------------ ------------
Total company-owned salons 616 613
------------ ------------

December 31, June 30,
2007 2007
------------ ------------

Franchise salons:
Open at beginning of period 19 19
Salons constructed 2 --
Acquired 42 --
Less relocations (1) --
------------ ------------
Salon openings 43 --
Franchise buybacks (3) --
Salons closed -- --
------------ ------------
Total franchise salons 59 19
------------ ------------

Total, Trade Secret Salons 675 632
============ ============

SMARTSTYLE/COST CUTTERS IN WAL-MART
Company-owned salons:
Open at beginning of period 2,000 1,739
Salons constructed 84 242
Acquired -- --
Franchise buybacks 12 21
Less relocations (1) (2)
------------ ------------
Salon openings 95 261
Conversions -- --
Salons closed -- --
------------ ------------
Total company-owned salons 2,095 2,000
------------ ------------

Franchise salons:
Open at beginning of period 151 164
Salons constructed 4 8
Acquired -- --
Less relocations -- --
------------ ------------
Salon openings 4 8
Conversions -- --
Franchise buybacks (12) (21)
Salons closed -- --
------------ ------------
Total franchise salons 143 151
------------ ------------

Total, SmartStyle/Cost Cutters in Wal-Mart
Salons 2,238 2,151
============ ============

STRIP CENTERS
Company-owned salons:
Open at beginning of period 3,317 3,031
Salons constructed 39 101
Acquired 6 193
Franchise buybacks 51 72
Less relocations (8) (17)
------------ ------------
Salon openings 88 349
Conversions -- --
Salons closed (44) (63)
------------ ------------
Total company-owned salons 3,361 3,317
------------ ------------

December 31, June 30,
2007 2007
------------ ------------
Franchise salons:
Open at beginning of period 1,998 2,004
Salons constructed 68 135
Acquired (2) -- --
Less relocations (7) (19)
------------ ------------
Salon openings 61 116
Conversions -- --
Franchise buybacks (56) (72)
Salons closed (26) (50)
------------ ------------
Total franchise salons 1,977 1,998
------------ ------------

Total, Strip Center Salons 5,338 5,315
============ ============

INTERNATIONAL SALONS (1)
Company-owned salons:
Open at beginning of period 481 453
Salons constructed 13 25
Acquired 25 12
Franchise buybacks -- 4
Less relocations (1) (3)
------------ ------------
Salon openings 37 38
Conversions 1 --
Salons closed (4) (10)
------------ ------------
Total company-owned salons 515 481
============ ============

Franchise salons:
Open at beginning of period 1,574 1,587
Salons constructed 50 110
Acquired (2) -- --
Less relocations -- (1)
------------ ------------
Salon openings 50 109
Conversions 3 --
Franchise buybacks -- (4)
Salons closed (39) (118)
------------ ------------
Total franchise salons 1,588 1,574
------------ ------------

Total, International Salons 2,103 2,055
============ ============

December 31, June 30,
TOTAL SYSTEM-WIDE SALONS: 2007 2007
------------ ------------
Company-owned salons:
Open at beginning of period 8,139 7,559
Salons constructed 158 420
Acquired 33 257
Franchise buybacks 71 97
Less relocations (25) (59)
------------ ------------
Salon openings 237 715
Conversions 2 --
Salons closed (75) (135)
------------ ------------
Total company-owned salons 8,303 8,139
============ ============

December 31, June 30,
2007 2007
------------ ------------
Franchise salons:
Open at beginning of period 3,742 3,774
Salons constructed 124 253
Acquired (2) 42 --
Less relocations (8) (20)
------------ ------------
Salon openings 158 233
Conversions 3 --
Franchise buybacks (71) (97)
Salons closed (65) (168)
------------ ------------
Total franchise salons 3,767 3,742
------------ ------------

Total Salons 12,070 11,881
============ ============

BEAUTY SCHOOLS
Open at beginning of period 56 54
Salons constructed -- 2
Less closures (56) --
Acquired -- 1
Less relocations -- (1)
------------ ------------
Total Beauty Schools -- 56
============ ============

HAIR RESTORATION CENTERS:
Company-owned hair restoration centers:
Open at beginning of period 49 48
Salons constructed 1 --
Acquired -- 1
Franchise buybacks 6 1
Less relocations (1) --
------------ ------------
Salon openings 6 2
Sites closed -- (1)
------------ ------------
Total company-owned hair restoration
centers 55 49
============ ============

Franchise hair restoration centers:
Open at beginning of period 41 42
Salons constructed 2 --
Acquired -- 3
Less relocations (2) (2)
------------ ------------
Salon openings -- 1
Franchise buybacks (6) (1)
Sites closed -- (1)
------------ ------------
Total franchise hair restoration
centers 35 41
------------ ------------

Total Hair Restoration Centers 90 90
============ ============

Ownership interest locations 475 389

------------ ------------
Grand Total, System-wide 12,635 12,416
============ ============
*T

(1) Canadian and Puerto Rican salons are included in the Regis
Salons, Strip Center, MasterCuts and Trade Secret concepts and not
included in the International salon totals.

(2) Represents primarily the acquisition of franchise networks.

Relocations represent a transfer of location by the same salon
concept.

Conversions represent the transfer of one salon concept to another
concept.

REVENUES BY CONCEPT:

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Three Months Ended Six Months Ended
December 31, December 31,
----------------------------------------------
(Dollars in thousands) 2007 2006 2007 2006
--------- --------- ---------- ----------
North American salons:
Regis................ $ 128,862 $ 125,461 $ 256,348 $ 247,736
MasterCuts........... 43,879 44,093 87,468 88,142
Trade Secret (1)..... 67,684 72,442 127,990 137,904
SmartStyle........... 122,179 112,513 244,282 223,802
Strip Centers (1).... 213,476 190,404 426,555 382,235
Other (3)............ -- -- 5,558 --
--------- --------- ---------- ----------
Total North American
salons 576,080 544,913 1,148,201 1,079,819

International salons
(1)................... 73,056 60,369 136,337 116,244
Beauty schools (3)..... -- 21,976 -- 41,341
Hair restoration
centers (1)........... 33,105 29,732 65,228 58,829
--------- --------- ---------- ----------
Consolidated revenues $ 682,241 $ 656,990 $1,349,766 $1,296,233
========= ========= ========== ==========

Percent change from
prior year 3.8% 8.3% 4.1% 8.8%

Same-store sales
(decrease) increase
(2) (0.8)% 0.5% 0.0% 0.2%
*T

(1) Includes aggregate franchise royalties and fees of $21.7 and
$19.9 million for the three months ended December 31, 2007 and 2006,
respectively, and $42.7 and $39.7 million for the six months ended
December 31, 2007 and 2006, respectively. North American salon
franchise royalties and fees represented 45.7 and 47.7 percent of
total franchise revenues in the three months ended December 31, 2007
and 2006, respectively, and 47.0 and 48.7 percent of total franchise
revenues in the six months ended December 31, 2007 and 2006,
respectively.

(2) Salon same-store sales increases or decreases are calculated
on a daily basis as the total change in sales for company-owned salons
which were open on a specific day of the week during the current
period and the corresponding prior period. Quarterly and year-to-date
salon same-store sales increases are the sum of the same-store sales
increases computed on a daily basis. Relocated salons are included in
same-store sales as they are considered to have been open in the prior
period. International same-store sales are calculated in local
currencies so that foreign currency fluctuations do not impact the
calculation. The Company began including Hair Restoration Centers in
its same-store sales calculation beginning with the third fiscal
quarter of 2007. Management believes that same-store sales, a
component of organic growth, are useful in order to help determine the
increase in salon revenues attributable to its organic growth (new
salon construction and same-store sales growth) versus growth from
acquisitions.

(3) On August 1, 2007, the Company contributed its accredited
cosmetology schools to Empire Education Group, Inc. For the three and
six months ended December 31, 2007 the results of operations for the
month ended July 31, 2007 are reported in the North American salons
segment.

FINANCIAL INFORMATION BY SEGMENT:

Financial information concerning the Company's salon, school and
hair restoration businesses is shown in the following tables.

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For the Three Months Ended
December 31, 2007(1)
--------------------------------------

Salons Hair
--------------------------- Restoration
(Dollars in thousands) North America International Centers
------------- ------------- -----------
Revenues:
Service..................... $ 399,377 $ 43,224 $ 15,267
Product..................... 166,803 19,133 16,760
Royalties and fees.......... 9,900 10,699 1,078
------------- ------------- -----------
576,080 73,056 33,105
------------- ------------- -----------
Operating expenses:
Cost of service............. 233,667 24,091 8,219
Cost of product............. 90,002 10,117 4,926
Site operating expenses..... 43,829 3,708 1,307
General and administrative.. 33,394 11,786 7,357
Rent........................ 83,324 14,284 1,728
Depreciation and
amortization............... 21,690 2,589 2,552
------------- ------------- -----------
Total operating expenses...... 505,906 66,575 26,089
------------- ------------- -----------

Operating income (loss)....... 70,174 6,481 7,016

Other income (expense):
Interest.................... -- -- --
Other, net.................. -- -- --
------------- ------------- -----------
Income (loss) before income
taxes and equity in income of
affiliated companies......... $ 70,174 $ 6,481 $ 7,016
============= ============= ===========

Unallocated
(Dollars in thousands) Corporate Consolidated
------------------- -----------------
Revenues:
Service..................... $ -- $ 457,868
Product..................... -- 202,696
Royalties and fees.......... -- 21,677
------------------- -----------------
-- 682,241
------------------- -----------------
Operating expenses:
Cost of service............. -- 265,977
Cost of product............. -- 105,045
Site operating expenses..... -- 48,844
General and administrative.. 33,607 86,144
Rent........................ 432 99,768
Depreciation and
amortization............... 4,773 31,604
------------------- -----------------
Total operating expenses...... 38,812 637,382
------------------- -----------------

Operating income (loss)....... (38,812) 44,859

Other income (expense):
Interest.................... (11,760) (11,760)
Other, net.................. 2,092 2,092
------------------- -----------------
Income (loss) before income
taxes and equity in income of
affiliated companies......... $ (48,480) $ 35,191
=================== =================
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(1) On August 1, 2007, the Company contributed its accredited
cosmetology schools to Empire Education Group, Inc. The Company
retained ownership of its one North America and four United Kingdom
Vidal Sassoon schools. Results of operations for the Vidal Sassoon
schools are included in the respective North American and
international salon segments.

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For the Three Months Ended
December 31, 2006
--------------------------------------

Salons
--------------------------- Beauty
(Dollars in thousands) North America International Schools
------------- ------------- -----------
Revenues:
Service..................... $ 372,161 $ 35,234 $ 20,142
Product..................... 163,256 15,919 1,834
Royalties and fees.......... 9,496 9,216 --
------------- ------------- -----------
544,913 60,369 21,976
------------- ------------- -----------
Operating expenses:
Cost of service............. 215,863 18,618 8,184
Cost of product............. 84,591 9,883 1,126
Site operating expenses..... 46,739 2,721 4,216
General and administrative.. 30,345 11,556 2,796
Rent........................ 77,690 11,111 2,241
Depreciation and
amortization............... 20,631 2,193 829
------------- ------------- -----------
Total operating expenses...... 475,859 56,082 19,392
------------- ------------- -----------

Operating income (loss)....... 69,054 4,287 2,584

Other income (expense):
Interest.................... -- -- --
Other, net.................. -- -- --
------------- ------------- -----------
Income (loss) before income
taxes........................ $ 69,054 $ 4,287 $ 2,584
============= ============= ===========

Hair
Restoration Unallocated
(Dollars in thousands) Centers Corporate Consolidated
------------ ----------- ------------
Revenues:
Service..................... $ 12,808 $ -- $ 440,345
Product..................... 15,743 -- 196,752
Royalties and fees.......... 1,181 -- 19,893
------------ ----------- ------------
29,732 -- 656,990
------------ ----------- ------------
Operating expenses:
Cost of service............. 6,948 -- 249,613
Cost of product............. 4,564 -- 100,164
Site operating expenses..... 1,291 -- 54,967
General and administrative.. 6,542 30,172 81,411
Rent........................ 1,608 513 93,163
Depreciation and
amortization............... 2,390 4,369 30,412
------------ ----------- ------------
Total operating expenses...... 23,343 35,054 609,730
------------ ----------- ------------

Operating income (loss)....... 6,389 (35,054) 47,260

Other income (expense):
Interest.................... -- (10,671) (10,671)
Other, net.................. -- 1,582 1,582
------------ ----------- ------------
Income (loss) before income
taxes........................ $ 6,389 $ (44,143) $ 38,171
============ =========== ============
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For the Six Months Ended
December 31, 2007(1)
--------------------------------------

Salons Hair
--------------------------- Restoration
(Dollars in thousands) North America International Centers
------------- ------------- -----------
Revenues:
Service..................... $ 806,516 $ 81,653 $ 29,417
Product..................... 321,636 34,426 33,416
Royalties and fees.......... 20,049 20,258 2,395
------------- ------------- -----------
1,148,201 136,337 65,228
------------- ------------- -----------
Operating expenses:
Cost of service............. 468,555 44,512 15,970
Cost of product............. 170,635 18,728 9,759
Site operating expenses..... 93,037 6,915 2,577
General and administrative.. 66,388 23,600 14,516
Rent........................ 166,320 26,913 3,385
Depreciation and
amortization............... 43,585 5,048 5,049
------------- ------------- -----------
Total operating expenses...... 1,008,520 125,716 51,256
------------- ------------- -----------

Operating income (loss)....... 139,681 10,621 13,972

Other income (expense):
Interest.................... -- -- --
Other, net.................. -- -- --
------------- ------------- -----------
Income (loss) before income
taxes and equity in income of
affiliated companies......... $ 139,681 $ 10,621 $ 13,972
============= ============= ===========

Unallocated
(Dollars in thousands) Corporate Consolidated
------------------- -----------------
Revenues:
Service..................... $ -- $ 917,586
Product..................... -- 389,478
Royalties and fees.......... -- 42,702
------------------- -----------------
-- 1,349,766
------------------- -----------------
Operating expenses:
Cost of service............. -- 529,037
Cost of product............. -- 199,122
Site operating expenses..... -- 102,529
General and administrative.. 67,992 172,496
Rent........................ 913 197,531
Depreciation and
amortization............... 9,504 63,186
------------------- -----------------
Total operating expenses...... 78,409 1,263,901
------------------- -----------------

Operating income (loss)....... (78,409) 85,865

Other income (expense):
Interest.................... (22,338) (22,338)
Other, net.................. 4,247 4,247
------------------- -----------------
Income (loss) before income
taxes and equity in income of
affiliated companies......... $ (96,500) $ 67,774
=================== =================
*T

(1) On August 1, 2007, the Company contributed its accredited
cosmetology schools to Empire Education Group, Inc. For the six months
ended December 31, 2007, the results of operations for the month ended
July 31, 2007 are reported in the North American salons segment. The
Company retained ownership of its one North America and four United
Kingdom Vidal Sassoon schools. Results of operations for the Vidal
Sassoon schools are included in the respective North American and
international salon segments.

-0-
*T
For the Six Months Ended
December 31, 2006
--------------------------------------

Salons
--------------------------- Beauty
(Dollars in thousands) North America International Schools
------------- ------------- -----------
Revenues:
Service..................... $ 743,360 $ 68,924 $ 37,106
Product..................... 317,164 29,360 4,235
Royalties and fees.......... 19,295 17,960 --
------------- ------------- -----------
1,079,819 116,244 41,341
------------- ------------- -----------
Operating expenses:
Cost of service............. 428,235 36,596 16,220
Cost of product............. 164,295 17,875 2,928
Site operating expenses..... 94,844 5,075 8,546
General and administrative.. 59,390 21,726 5,163
Rent........................ 154,585 22,106 4,477
Depreciation and
amortization............... 40,770 4,065 1,641
------------- ------------- -----------
Total operating expenses...... 942,119 107,443 38,975
------------- ------------- -----------

Operating income (loss)....... 137,700 8,801 2,366

Other income (expense):
Interest.................... -- -- --
Other, net.................. -- -- --
------------- ------------- -----------
Income (loss) before income
taxes........................ $ 137,700 $ 8,801 $ 2,366
============= ============= ===========

Hair
Restoration Unallocated
(Dollars in thousands) Centers Corporate Consolidated
------------ ----------- ------------
Revenues:
Service..................... $ 25,507 $ -- $ 874,897
Product..................... 30,918 -- 381,677
Royalties and fees.......... 2,404 -- 39,659
------------ ----------- ------------
58,829 -- 1,296,233
------------ ----------- ------------
Operating expenses:
Cost of service............. 14,087 -- 495,138
Cost of product............. 9,295 -- 194,393
Site operating expenses..... 2,308 -- 110,773
General and administrative.. 12,819 60,266 159,364
Rent........................ 3,272 895 185,335
Depreciation and
amortization............... 4,724 8,754 59,954
------------ ----------- ------------
Total operating expenses...... 46,505 69,915 1,204,957
------------ ----------- ------------

Operating income (loss)....... 12,324 (69,915) 91,276

Other income (expense):
Interest.................... -- (20,509) (20,509)
Other, net.................. -- 2,393 2,393
------------ ----------- ------------
Income (loss) before income
taxes........................ $ 12,324 $ (88,031) $ 73,160
============ =========== ============
*T

-0-
*T
REGIS CORPORATION (NYSE: RGS)
PRO FORMA REVENUES (Unaudited)
(In thousands)

The Company's press release announcing results of operations for the
three month period ended December 31, 2007 includes references to the
following "non-GAAP financial measure" as defined by Regulation G of
the Securities and Exchange Commission:

- pro forma results for the deconsolidation of the 51 wholly
owned accredited cosmetology schools (schools) to Empire
Education Group, Inc., in exchange for a 49.0 percent
minority interest in Empire Education Group, Inc.

On August 1, 2007, the Company contributed the schools to Empire
Education Group, Inc., and the results of operations through July 31,
2007 were included in the consolidated statement of operations. The
Company retained ownership of its one North America and four United
Kingdom Vidal Sassoon schools.

The unaudited pro forma revenues set forth below for the Company give
the effect of the deconsolidation of the schools being completed on
July 1, 2006 and excludes product sales to Empire Education Group,
Inc. Management believes this measurement accurately portrays the
true revenue growth of the Company's core salon and hair restoration
businesses between the comparable periods, excluding the impact of
deconsolidating the school business. If the Company had completed the
agreement and deconsolidated the schools on the dates assumed in the
pro forma revenues, the Company might have performed differently. You
should not rely on the pro forma financial information as an
indication of the revenues that the Company would have achieved, had
the deconsolidation of the schools been completed at the dates
indicated, or of the future revenues that the Company will achieve
after the deconsolidation of the schools.

The pro forma revenues are based on available information and certain
assumptions that management believes are reasonable. The unaudited
pro forma revenues should be read in conjunction with the historical
financial statements of the Company.
*T

-0-
*T
Three Months Ended Three Months Ended
December 31, 2007 December 31, 2006
---------------------- ----------------------
(Dollars in thousands) (Dollars in thousands)
Consolidated revenues,
reported $ 682,241 $ 656,990
Increase in consolidated
revenues, reported 3.8%

Consolidated revenues,
reported $ 682,241 $ 656,990
Deconsolidation of
schools (17,243)
Product sales to Empire
Education Group, Inc. (594)
---------------------- ----------------------
Consolidated revenues,
adjusted $ 681,647 $ 639,747
====================== ======================
Increase in consolidated
revenues, adjusted 6.5%
*T

REGIS CORPORATION
Mark Fosland, 952-806-1707
Vice President, Finance
or
Alex Forliti, 952-806-1767
Director, Finance-Investor Relations

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