Good morning. My name is George, and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Regis Corporation Fiscal 2014 Second Quarter Earnings Call. All lines have been placed on mute to prevent any background noise. 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 800 406 7325, using the access code of 4662033#. 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 to 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, 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 would now like to turn the call over to Mr. Hanrahan for his comments. Dan, you may begin.

Thank you, George. Good morning everyone and thank you for joining us. 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. Before I get started, let me take a minute to discuss the one-off non-cash charges that impacted our second quarter, while I would normally not address technical accounting matters that’s important for me to comment on the $112 million of non-cash charges we reported during the quarter to impair goodwill and establish a valuation allowance against our deferred tax asset. I know the investment community understands these charges but as we have employees and business partners also listening in on the call, I wanted to make sure they understand these adjustments did not have a cash impact on our business. Our business model is sound, our balance sheet is strong and our business continues to generate positive cash flow. In fact our business generated $21.6 million in EBITDA as adjusted for the quarter. I’m confident in our ability to restore Regis to sustainable growth and improved profitability. As I have discussed and presented in detail on the past few conference calls for Regis to improve its long-term financial performance we need to become a best in class operator. On today’s call, I won’t reiterate all the details of our strategy, but I will quickly recap the three initiatives rolled out during the fourth quarter of fiscal 2013 that laid the foundation for us to execute our key strategies and the transition Regis into a best in class operator. For those of you who have been following us for a while you will note our strategy remains the same. First, we rolled out SuperSalon point-of-sale system…

Thank you, Dan, and good morning. Before discussing our consolidated financial and operating performance for the second quarter, I want to remind everyone of a change we made as a result of our field reorganization. District leaders labor costs are now reported within cost of service and their travel cost are now reported within site operating expenses. Previously, these costs were reported as general and administrative expenses. We included on our corporate website, re-casted historical annual and quarterly financial statements to better assist you with your comparisons. For the second quarter, we just reported a net loss of $110 million or $1.95 per diluted share. This excluded net discrete after-tax charges most of which were non-cash of $107.5 million or $1.91 per diluted share. Excluding discrete items, second quarter diluted net loss per share as adjusted was $0.04 compared to earnings of $0.03 in the prior year quarter. Adjusted EBITDA for the quarter came in at $21.6 million compared to $31.1 million in the prior year quarter. The second quarter same-store sales declines of 6.2% and all other things being equal to the prior year, one would expect diluted earnings per share is adjusted to decline by approximately $0.13 per share. Actual earnings per share as adjusted declined by $0.07 per share. The $0.06 per share improvement is primarily related to cost savings initiatives, cost reductions related to our field reorganization, reduced bonus expense, lower interest expense and certain tax credits partly offsetting these items were higher labor cost due to deleveraging cost by lower sales volumes. Increased depreciation expense, continued investment in salon connectivity, increased product and marketing cost due to increased promotional activity and increased health insurance cost. I will discuss these items in more detail shortly. We included in today’s press release as well as in our…

Thank you, Dan and Steve. The question-answer will begin at this time. (Operator Instructions) Our first question is from the line of Lorraine Hutchinson with Bank of America Merrill Lynch. Please go ahead.

Hi. It’s Paul Alexander for Lorraine, thank you. Hi, Dan, you spoke about why there continue to be operational issues during the turnaround. But can you talk a little bit about why there was a sequential deceleration in service comp this quarter? And if it’s about the turnover and field management issues, why do you think these issues has got worse now when you’ve already been working on your key strategies for a couple of quarters? And then do you think the sequential slowdown, was it all about the external environment, the cold weather? Thank you.

Thanks Paul. In terms of the deceleration in -- as you put it in our service comp and I think it was driven primarily by the turnover that we talked about I mentioned and Steve mentioned. And we did not do as good a job keeping up with the turnover, I think we normally would. Fourth quarter is a little bit tougher time to hire than other quarters. One of the things that we did see is that as we put this business platform in that allows us to manage people, productivity and ask them to make commitments and hold them much more accountable we did see an increase in turnover in our lower performing people. So I don’t think there is ever any good turnover but if we are going to have turnover I would rather have it in our lowest performers. And then in regards to the external, we’ve - as a company have tried to stay away from blaming the weather for anything that’s going on, I mean we’re going to have weather every year. It seems like it’s probably is particularly bad this year in the upper Midwest, but we are going to have weather challenges ongoing. I think that that probably had an impact but I can’t quantify Paul exactly what the weather impact was. I would say it’s more that we just have to continue to train and upgrade our people where we have good people operating the strategies we are doing extremely well as I noted and we just need to continue to focus on training and developing our people and I remain very confident that as we do that we will get the kind of results that we want going forward.

All right. Thank you very much.

Thank you, Paul.

Thank you. And our next question is from the line of Jeff Stein with Northcoast Research. Please go ahead.

Hey, Dan couple of things. First, you identified the three buckets of performers and indicated that a minority or early adaptors and I'm just kind of curious roughly what percent you would place on that in terms of how many are kind of in the lower end of the bucket, the middle range of the bucket and then the upper end? And then wondering if you could talk a little bit about what your viewing and what you think are some of the issues on the product side that you’ve been able to identify and how you’re planning to correct those issues?

Sure. Let me start with what you asked about on the three buckets of performers on our business platform. I would without getting into exact numbers I mean we won’t give exact numbers but think of it as a bell shaped curve with the majority in the middle Jeff. Most of the people are pretty good people here and they’re really focused on understanding what it is that they need to do to be successful, they’ve adapted well, we’ve got some of that adapted extremely well just hit the ground running with it and are getting, we got, we talked about 3% comps within that bucket but we’ve got a range we’ve got people that are in the 10% to 15% to 25% range. So what it shows is that the strategy work and we need to train and develop our people to get them there. The last thing, I would say on that Jeff is that that bucket of good performers that is really nailing it. It’s larger than the bucket on the other end that are really struggling and not getting it. Most of the people sit right in the middle very focused on trying to understand what it is that they need to do with this, with these performance tools that we’ve given them at the -- mainly at the District Leader and the Salon Manger level and what we need to do is just make sure we give them the training that they need to develop. And we’re very, very focused on that. On the product side there is a number of things that we’re doing that we think can impact product positively. We talked about this platform and I think that is fundamental to the change there. We need to get our people in the field selling retail and selling it effectively. And again, I talked about those three buckets; those three buckets are not dissimilar on the product side as that they were on the service side. So a lot of this is driven by how well we execute in the field and that platform is a really strong tool that our best leaders are often running with. And then as I mentioned, we do have a search out for a new Chief Merchandising Officer and we think that will also help us. I’m meeting regularly with the team now and helping guide us through this as we look for a new Chief Merchandising Officer. So we think that that combination of those two things and just a better understating as we go forward of our promotional activity will be the thing that get us going in the right direction on products again.

Okay. And Dan with respect to your multi salons, you got roughly 25% of your revenues that come out of your Regis and MasterCuts Divisions and weather has been an issue for everybody but the other issue is just the ongoing secular drop that we’re seeing in mall traffic and I'm wondering what strategies you have in place to combat the general weakness we’re seeing in mall traffic because that’s something that is likely to continue good weather or bad weather?

Yes. And I want to reiterate that we don’t want to use weather as an excuse. The weather is going to be what the weather is going to be and we have to figure out how to manage our business regardless of what the weather is. On the mall based business, we’re seeing the same thing as we see with this business platform that we put in place. Our good mall-based operators can take this thing and run with it and can grow their business. We haven’t seen as many Jeff on the success side as we have on our value based business. The bell shaped curve is still pretty similar to what we see in our business in general. We need to execute well in those salons regardless of what where they’re placed whether they’re in a mall or a strip center or a power center. And we believe that with good execution we can make our Regis and our MasterCuts business work as well. There is enough traffic in those malls walking by everyday for us to get that business right. So that’s how we’re looking at it, its all about execution and delivering the great guest experience very similar programs that we’re executing in terms of training development in our value basis.

Okay. And store closings, that’s my final question, any thoughts in terms of the back half of the year, how many locations you might close and what the annualized losses of those locations might be?

We don’t typically give guidance on store closings. But we continue to opportunistically look at locations that are underperforming and that are right for closure and I would anticipate the pace will be very similar to what you’ve seen in the last 12 months.

Got it. Thank you.

Thank you. And our next question is from the line of Bill Armstrong with CL King & Associates. Please go ahead. Bill Armstrong - CL King & Associates: Good morning, gentlemen. You talked about a steep learning curve with these, with the field organizational changes. I was wondering if may be you could describe for the typical stylist in one of your salons what sort of learning curve he or she may be under going that? And what the timeline might be for an individual getting up that learning curve?

Yes, it’s not, I wouldn’t say it was a stylist. I think our stylists are good stylists where we’ve got a good group of stylists across our portfolio of brands that do a very, very good job cutting hair, delivering a good guest experience. Its more around leadership and what we’ve learned in the past six months is that leadership is an extremely important part of this equation and just like any business, if the teams are positively motivated and feeling good about themselves they do a better job and where we have put people in new rolls, they are, some of them are struggling, some of them are struggling to understand the different operating procedures within the different brands. Some of them are struggling to be good leaders and that’s where our training and development work is primarily focused is around leadership. And so that’s what I talk about when I'm talking about the steeper learning curve. It’s not at the stylist level, it’s at the District Leader level and at the Salon Manager level on some respect because we have good people in place and strong Salon Mangers, strong District Leader, we deliver very good results. And it’s incumbent upon us to do a good job training them so that they can be successful. But I don’t want to leave you with the impression that the stylists are on a learning curve because of the organizational change we made. Bill Armstrong - CL King & Associates: Okay. Thanks for that clarification. So what do you think is causing the increased turnover in the stylists than in -- and as it related, on a related point why do you think you’re struggling to replace them?

Let me start with struggling to replace. I think that’s the combination of being in the fourth quarter during the holiday season and again training and development of our newest leaders. We got to make sure that they’re well focused on training and developing our people. And if we get new stylist in and we’re not doing a good job training and developing them that’s when we see them move off to another location. And what we will become over time is we will become a company where stylists want to come because of the training and development that we give them. We’re not there yet today and that’s an opportunity area for us to make sure that we deliver the kind of training and development at the stylist level that they need and then again it gets back to this idea leadership. If we’ve got strong leaders focused on creating a good work environment, we can keep people. So we can track through the organization and we can see where we’ve got leaders -- where we’ve got turnover and it pretty much equates to our leadership development opportunity. And I mentioned in my work that we’ve done a lot of digging into training and development and the work that needed so that we can have that kind of leaders that can not only attract good people but retain them and deliver the kind of results our best operators are giving us. Bill Armstrong - CL King & Associates: Okay. And then one final question, probably to Steve and that just concerns royalties -- the franchise royalties so your franchisee had positive comps and it looks like you had an approximate 4% increase in the number of franchise salon opened during the quarter compared to a year ago so but franchise royalties were flat. Did you, are the rates lower or what’s -- how do you reconcile that?

Well, actually our franchise revenue for the quarter was up about 150 bps year-over-year and its hard to see this when you look at the face of our financial statements because the prior year line item also includes income from booth rental that’s less significant in the current year.

And this is Eric, I would add to that. There is a lower royalty fee in the first year. So when our franchisees come on generally the royalty rate is 4% in the first year and 6% thereafter. So as we’re adding more and more new franchisees and new store openings you get that 4% royalty in the first year and that’s really for a half year. So you’ll continue to see that build over time but it takes a little while to ramp it up. Bill Armstrong - CL King & Associates: I see, and when you say booth rental you’re talking about in your company owned stores or --

On booth rental in company owned stores yes. Bill Armstrong - CL King & Associates: Okay. And that’s being, are you facing that out or what’s causing a reduction there?

Its just -- it’s not a strategic emphasis for us. Bill Armstrong - CL King & Associates: Okay. Thanks.

Thank you. And our next question is from the line of Daniel Hofkin with William Blair. Please go ahead.

Good morning. Just going back to the comment about kind of your early adaptors, I haven’t, obviously you haven’t called that out specifically in prior calls. But I’d be interested in what you’re seeing in terms of the sequential trend for them and also the share of the total pie that they’re representing lets say this quarter versus the fiscal first quarter? That’s my first question.

All right Daniel. So in terms of the early adopters I'm not going to get into the -- what share it is or what percentage of our business it is.

Whether it got bigger in the --

Well, I can’t talk about that. What I can tell you is that, that group improved not only are they growing but they did improve over the first quarter and that first quarter of the year was an improvement over the last six months of the prior year. And so that’s what gives a confidence about the strategy that we have in place is because the people that are our best operators are showing improvement in the business consistently quarter-on-quarter-on-quarter and I think that’s what your question was. Is that are they able to sustain it and are they able to maintain it and the answer to that is yes and we’ve seen, we’ve actually seen the improvement increase. And so it’s not like it’s a steady state steady percentage up but over that time period we’ve seen these good operators improve it.

Can you put any just rough number on like you said in some cases well in excess of 3% positive in the fiscal second quarter was that flat in the first quarter just some --

Sure, sure I understand the question. Yes, we had in the, these are operators in the first quarter where and I can get down to individuals but I don’t think that will be helpful to you. You think that what we’ve seen is, we’ve seen people getting as high as 25% comp that are executing against the strategy and that those people are pretty consistent first quarter to second quarter but that’s substantially above what they were in the last six months of the prior year those best operators. And what we’re doing is, our field leaders are spending a lot of time with those folks understanding how they’ve been able to adapt to the strategy so easily and comfortably and that’s how we’re developing the training program for the rest of our people. And for example we had all of our Regional Directors and Regional VPs in last week and helping to develop the training program for the field and then that’s the work that they’ll go back out and then they’ll train their district leaders. And I'm talking about district people with five to eight salons that are able to get that kind of traction.

Okay. Is there anything, I mean have you been able to identify anything about the leadership in these salons because you’re basically putting it on the leadership more than the individual stylists. In terms of what it is about them that’s making them perform better so far to be early adapters and how you can kind of hire people – what to look for in terms of hiring?

Yes, that’s an excellent question. Now we have a Chief Human Resources Officer for the first time and she is spending a lot of her time understanding the consist – what’s the similar makeup of our best leaders and what are those skill sets that they have. So if we do have to go outside the hire what will that look like. And what it really all boils down to Daniel is good leadership. And we’ve got, we have technical training here we just, we haven’t ever really done any work around leadership training and that’s what that’s the work we did last week with our folks. We looked at what we need to do for each of our district leaders to train them and help them be more successful than they are today. So we have a training program all the way down to the individual district leader. As we get them trained we’ll cascade that down further down in all the way to the Salon Manager. But these good once what they’re doing is they’re keeping their salon fully staffed with well-motivated stylists and they’re creating the kind of environment in the salon where people want to be and they’re showing their people how to deliver a great guest experience. Those are the common themes that we’re seeing across these folks.

Okay. And then I guess my last question is back to an earlier question about the mall based concepts. Is there, it’s obviously minority of the total company but would you think in terms of the possibility of closing or relocating in material number of those over time?

We would, we evaluate every salon if it comes up but we’re not thinking today about closing or relocating a large number of them. A lot of the malls especially we have a relationship with the landlords that has a lot of mall and so it isn’t, it is something that we work on with landlord by landlord. But what we haven’t found is relocating them outside the mall to be a great solution. We just need to execute better inside those malls Daniel and result -- even in the B and C malls, we’ve got salons that are performing extremely well and then they execute well, they work the lease line as potential guest walk past the lease line and they’re growing their business. So it’s a little bit like weather, I want to be hesitant to blame anything on the weather or blame anything on mall traffic because I think that when we get our act together and we execute well we can move the dial inside the malls as well as in strip centers and power centers.

Okay. Thank you very much.

Thank you, Daniel.

Thank you. And our next question is from the line of Jill Nelson with Johnson Rice & Company. Please go ahead. Jill Nelson - Johnson Rice & Company: Good morning. My first question relates to both service and product margins. It appeared that you had some stabilization in the first quarter but entering the second quarter you faced some additional pressures on both those margin lines. I know you’re seeing some de-leverage on a weaker comp could you talk about maybe some other issues that are playing into that number?

Yes, I think the largest impact that affected our service comps sequentially was the fact that we didn’t get the leverage out of stylist hours that we got in the first quarter based on our sales declines. On the product side, as we mentioned we were a bit more promotional in the quarter in order to start to turnaround the performance of retail comps and that directly impacted our margins. Jill Nelson - Johnson Rice & Company: And are these factors if we continue to see these similar comps for a couple quarters out, are these factors, I mean do we think these margins levels are kind of the current run rate that we should see or is it something you can fix in the near term?

In our business, I think that the way to improve our margins is to leverage growing comps. So we believe that as we begin to see the business turnaround and our comps improve, we’ll start to see improvement in that percentage. Jill Nelson - Johnson Rice & Company: Okay. And then last question, a follow up on the incremental turnover you saw on the stylist this quarter. Was it more of kind of management’s control of trying to improve the workforce that you feel like it was the stylists choice wanting to leave?

Let me take that one. I think Jill, I think it was more stylist choice wanting to leave but at the end of the day that’s really what we need to control. So it wasn’t that we fired a large number of stylist by any stretch of imagination it’s more that as I would – as I mentioned earlier. We need to do a better job of providing the kind of leadership that will help our stylists be successful and that’s what drove the increased turnover is the combination of that. And I think that we are asking them to at the salon level be part of the solution and we did put that management’s performance program in place. And that’s a platform for accountability and we think that given that the lower – more lower producing stylists left us than higher producing stylists we think that some of it’s driven by the fact that and we’re holding them accountable. And that for their performance and so but we weren’t out firing stylists, this was more self selection. Jill Nelson - Johnson Rice & Company: Appreciate. Thank you.

Thank you.

Thank you. And our next question is from the line of Jeremy Kahan with Bow Street. Please go ahead.

Hi, there. Can you give us an any indication of order to-date trends have started to stabilize? And then second, can you just give us an update on how we should be thinking about normalized CapEx levels? Thank you.

I’ll take the first one and then I’ll let Steve talk about CapEx Jeremy. As you can imagine we’re part ways to the first month of the first quarter. So I won’t comment on where we are in the quarter. What I can tell you is that we continue to see the same kind of thing that we saw with our strong performers. That our strong performers continue to perform very well with kind of results we would like to see that middle band is still struggling. It has been a crazy weather month so that would make it even more confusing for me to respond to it. But I can tell you we’re seeing on that bell shaped curve, we’re seeing similar things and I remain encouraged by how our best operators are performing. And as I mentioned earlier, we had all of our Regional Directors and Regional VPs in this week for further training. It’s a motivated group, they know what they need to do to be successful, they know how they need to train their District Leaders and their Salon Managers to be successful as well. Thank you.

And I guess just a follow up on that. Was there any degradations throughout the quarter or is it pretty consistent over the last three months?

Are you talking about this quarter we just finished?

Correct.

The results were pretty consistent. The results are pretty consistent over the three months. And you want Steve, I’ll give it to you for the second part of that.

Yes. Normalized capital spending is between $50 million and $60 million a year.

Great. Thank you, very much.

You’re welcome.

Thank you.

Thank you. And we have Bill Armstrong with CL King. Please go ahead. Bill Armstrong - CL King & Associates: Hi, guys. Just a follow up that you mentioned that a lot of the stylists who left were sort of the lower tiers of productivity. And you mentioned creating a culture and accountability. How do you measure productivity of stylists and if I’m a stylist how would I go about increasing my productivity?

Sure. We measure in terms of dollars you generate per hour on the service side and then the total amount of retail you sell. With this platform that we put together, we’ve given them a number of what we call lead measures that can help drive productivity at the salon level depending upon the format that you’re in or the banner that you’re in that can range from working the lease line and engaging potential guests to come in and for a free consultation and get a service to passing out referral card collecting emails. And what we’ve seen is, I’ll give you a – this is admittedly a one-off example but I think it’s an important one that’s indicative of how quickly we can turn the business if we’re – we focused on it in the right way. And one of our SuperCuts, one of our Salon Managers decided that she like this idea of something that we called fishing, going out and if you’re happen to be in a mall you go out and you work with all the other retailers in the mall. If you happen to be in one of our salons like Wal-Mart it’s been on the lease line and as people walk by welcoming them into Wal-Mart and asking if they be interested in a consultation. And this particular SuperCut manager went to a closed by office building working in a strip center that building was about a mile down the road and literally in the – over the course of a quarter had her business up 70%. This was a fairly strong performing salon to begin with and had the business up 70% in that quarter just by going into that particular business – into that business building and passing our card. So they can’t impact their business. They just don’t have to wait to walk in and get traffic and that’s what we have been focused on training all the way through our system is to have them understand they can be accountable for driving traffic as well as delivering a great guest experience inside the salon. Bill Armstrong - CL King & Associates: Okay. Great, thanks very much for that illustration.

Thank you, Bill.

Thank you. And our next question is from Ravi Devisetty with Nidhi Capital. Please go ahead.

Hey, good morning gentlemen. Have a few questions, three questions. And I know you gave turnaround and all this stuff and my question is, what kind of benchmark we should evaluate you guys from looking at other than same-store sales and revenues. And what are your – what are the milestones you have and can you go over the timelines we should see those for your -- evaluating guys?

Well, Ravi, I can tell you that we won’t give a timeline, but I can tell you, how we look at ourselves and how we look at our business and hopefully that will give you some idea of what it is that we are doing. Clearly, as you pointed out is, comps right, but even more importantly than that is – we look at all salons. We look at where they sit in the geography. We look at the population. And we have an understanding of what the potential is just based on the kind of work that we have done in our marketing department to understand which guest are most interested in which of our different service offering. So if you look at, our SuperCuts through our SmartStyle business and you look at our Regis or all others, we have a pretty good understanding of what that should be. So we hold ourselves accountable for that. We look at guest retention. So we are at the point now where we have a pretty good handle on about 60% of the guest that come in. We are able to identify them. And we continue to build on that month after month after month. And so we look at guest retention and we evaluate ourselves on how well we are retaining guest. We look at stylist retention. We evaluate ourselves on how well we are retaining stylist. You heard some questions on margin, we look at margin a big and really important tool for us, is making sure that we have the schedules right. Are we properly scheduled on weekends versus the middle of the week, are we scheduling to the advantage of the consumer versus the advantage of our stylist. So a number of measures along those lines that are very important to us in terms of service. And then on the retail side, we look at something that we call combination sales. So what percentage of the sales that we get ourselves to somebody that’s also in for a service. What happens to our retail sales in terms of just walking? What percentage of those walk-in guest can we convert into a service guest? And then we also look at how well we are selling our promotional materials what correlation is between promotional and our full price sales. So all things along those lines Ravi is how we are evaluating ourselves.

Okay. And just on that question, but from our perspective you are looking at the numbers and obviously they are very challenging. But, we have absolutely no clue, okay, how many stores you have made any progress and I understand you don’t want to disclose any numbers in the first pie, second pie or third pie and we are sitting here. We don’t know how many people moved from second pie to first pie? How many are there in the first pie or second pie? So can you give us some visibility what’s going on, so that okay the management has made progress from first quarter to third quarter this much progress and some second quarter to third quarter. So I don’t have any visibility to judge you guys other than looking at same-store sales and the basic numbers. So that’s number one. Number two, couple of more questions, we also have is, I also noticed that your franchisees are doing obviously better comps than your company stores. Can you compare your comps versus franchisee comps every quarter and see why they are doing a better job versus yours. And number three, there are lot of companies that are selling their stores to franchisees, at what point would you decide and say, hey, our strategy is not working maybe franchisees can do a better job than us. Maybe we should move some of our stores to franchisees.

Okay. Let me start with the last one first, in terms of selling to franchisees, we have said on previous calls that we have done that. We continue to do that. We have a great relationship with our franchisees. And if there is a store that we can’t make a go of it, we have to sell that to franchisee. And we will continue to take advantage of that opportunity. And to build on – so to build on that question a little bit, we have been focused on growing our franchisee store locations, we have not been with the exception of our Wal-Mart partnership, we have not been growing our own salons. We have decided to focus salon growth in two areas. One is with Wal-Mart and others with our franchisees. So I think we are doing exactly what you are asking. We do compare ourselves to our franchisees, quarter after quarter after quarter Ravi. We do know they outperform us. But I can tell you that our good operators are performing at the same kind of levels that our franchisees are and getting the same kind of growth that our franchisees are. I think you probably know from your research that we do about $50,000 less a store than our franchisee is doing, its one other things that we used to measure the opportunity that we have to close the gap with our franchisees.

Okay.

That answered your question, sir?

No. There are other two questions I was talking about how many people will consider or your early adaptors, so those numbers would really help us to judge you guys how much progress you guys are making because other than same-store sales we cannot just judge. How you guys are progressing? You know what I mean?

Yes. I understand the question Ravi. I mean, we are not comfortable getting into that level of detail. I can tell you that that group is bigger. It’s not growing as fast as we would like to as evidenced by our results. But, we are getting more people into that group quarter-by-quarter that’s where we are focused, as we are focused on training and developing that organization. But, unfortunately I’m not going to be able to get into the individual detail on how many have moved from group, you know, A, B, and C.

All right. Thank you, again. The next question is from Fred Graham with Nomura Securities. Please go ahead.

Hi. Based on your disclosures doesn’t just look like you repurchased any of the convertible notes, can you please provide some more clarity around that?

Sure. The convertible notes mature in July of 2014, which is our fiscal year 2015. As we said last month it’s our intention to use the proceeds from the $120 million note issuance that we just entered into as well as some of our cash on the balance sheet to settle the converts, when they come due. The way they work mechanically is, they are non-callable and mature. They are non-callable until they mature prior to April 15, the holders can put the debt to Regis within some very unique incidences, one of which is if our stock trades above $19.82 a share for 20 out of 30 consecutive trading days. In addition to other limited instances, all this can convert their option at many time after April 25 for 2014. Before April 15, we have the options to settle in cash, stock or combination of both. While no definitive decisions have been made like I said we are going to opt to settle in cash to the extent that’s our intention at this time. We are required after April 15, 2014 to select a method and notify holders of that method and then honor that method.

Okay. With stock down here, would you ever think about tendering for the bonds or not just wait until they come to due in July until it happens?

I think we are going to keep our options open.

Okay. All right. Great. Thank you.

And I’m showing no further questions. I will turn the call back to Dan for closing comments.

Thank you for joining us on the call. I know that Mark will be available to answer any questions today and over the next few days. Thank you, operator.