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

Thank you, Chris, and good afternoon, everyone. Obviously we are not satisfied with our first quarter results. First quarter revenues increased $13 million. Revenues would have increased $32 million or 5% absent of deconsolidation of the European franchise business and beauty schools. Reported EPS was $0.34 versus this year versus $0.46 last year. Operationally on a (inaudible) basis earnings were $0.39 a share. To add a little color, July and the first half of August performed satisfactorily. From mid-August on, with start of the financial crisis, it was a different story. The consumers stayed home and the first quarter was negatively impacted. EBITDA was $64 million compared to $74 million last year. The deconsolidation of European schools resulted in our booking $2.1 million less in EBITDA. We with the current credit environment many of you have been enquiring about our credit facilities and financial debt covenant. So, before any further review of the first quarter, I would like to address some of these questions. If we do not alter our behavior and current economic conditions continue we may have very little cushion under one of our financial debt covenant, the fixed charge coverage ratio. Parenthetically, we are on compliance at this present time. Having a small cushion is totally unacceptable to us. This potential problem is primarily a function of comps. We have never had a negative annual comp in our 86 year history. I don’t believe that will have a negative service sales comp this fiscal year. Our basic business is service which encompasses 70% of our revenues and it is highly predictable. This is the quintessential replenishment business. This is a very solid business. The product business is and will continue to be a challenge. We will address our product business later on in the conference call. Our…

Thanks, Paul, and good afternoon, everyone. I plan to discuss our first quarter results and then address several other topics including an update of our fiscal 2009 guidance. As we have said many times before our earnings guidance directly correlates to our same-store sales guidance. At the beginning of the quarter, we had forecasted our operational earnings to be in the range of $0.41 to $0.47 per share and that was based on forecasted same-store sales range of negative 1% to positive 1%. With our actual comps for the quarter coming in below plan at negative 160 basis points one would therefore expect our earnings to be slightly below the low end of the range and they were. Today we are reporting operational earnings of $0.39 per share. Our actual reported earnings for the quarter came in a nickel lower at $0.34 per share due to non-operational costs associated with our trade secret and store closures initiatives, both of which we previously discussed with you. You’ll find a concise reconciliation of our reported earnings to our operational earnings included in today’s press release as well as on our corporate website. One other point worth noting, the hurricanes. Hurricanes gust up in height that hit the United States during our September quarter, impacted 250 of our salons and nearly 2000 of our employees. As a result, we suffered lost profits and incurred additional costs which serve to reduce our first quarter earnings by $0.02 per share. Let me now transition my comments by giving you a bit more detail behind our first quarter operating results for each business segment. A breakout of our segment performance is found in today's press release. My comments this afternoon are going to focus on our operational performance. Again you’ll find a reconciliation of our reported…

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

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

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

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

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

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

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

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

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

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

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

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

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

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

You are welcome Mike.

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

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

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

I am sorry. Let me ask Mark.

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

That is relating to gross margin.

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

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

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

You are welcome.

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

Have a good day everyone. Take care.

Thank you.

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