Good morning ladies and gentlemen. My name is Greg and I will be your conference facilitator today. At this time, I would like to welcome everyone to the Regis Corporation Fiscal 2017 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 sent 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 9251692. This replay will be available 60 minutes after the conclusion of today’s call. I would like to remind everyone that to the extent of the company’s statements or comments this morning 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, as well as others, can be found on their website at www.regiscorp.com. Speaking today will be, Dan Hanrahan, Chief Executive Officer; and Mike Pomeroyas, 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.

Thanks, Greg. Good morning, everyone, and thank you for joining us today. With me are Mike Pomeroyas, our Interim Chief Financial Officer and a professional at Huron Business Advisory; Eric Bakken, our Executive Vice President and Chief Administrative Officer; and Mark Fosland, our Senior Vice President of Finance. The strength of our franchise business was demonstrated in a challenging second quarter retail environment as our franchisees once again posted positive same-store sales results. Our franchisees have now posted positive annual same-store sales growth for 10 consecutive fiscal years and our royalty revenue increased 4.3% in the quarter. We have made a serious commitment to transform our business operationally and strategically to drive improved shareholder value. We intend to operate our salons successfully, sell certain salons to franchisees and continue to close underperforming salons. As I mentioned on our last call, we are committed to a thoughtful, well planned strategic transformation that increases the scale of our franchise business. To accelerate our goal of improved performance across a broader base of our salons, we announced last quarter, we had formally engaged Huron Business Advisory to assist in the analysis and development of the best means of delivering an accelerated and expanded franchise business model. While still in the early stages, we are pleased by our progress to-date working in collaboration with Huron. We expect our initial focus will be on franchising our underperforming company-owned SmartStyle salons located in Walmart. We believe this represents an opportunity for our existing and new franchisees, as these locations have built-in Walmart guest traffic, which can be coupled with franchise operators who have proven capabilities to react nimbly to local conditions and the market knowledge to implement necessary changes to operations, stylist labor, wages and pricing to improve front-line salon performance. In December, we issued our…

Thank you, Dan, and good morning. I will limit my comments today, since I just began my role as the Regis Interim CFO, and Dan has already recapped our unaudited performance for the quarter, including the highlights of the company’s year-to-date results. Further, our press release and 10-Q include detailed explanations for our major P&L items. As a result, my update relates to financial housekeeping items and the company’s current view of liquidity. There are three financial housekeeping items of which I would like to share. First, included in today’s press release as well as on our corporate website is management’s reconciliation bridging reported results to earnings as adjusted for the impact of discrete items for the second quarter of the current and prior years. Second, I want to remind you that the valuation allowance in place against most of our deferred tax assets makes it very difficult to compare after-tax results to prior periods. For the six months ended December 31, 2016, we recorded tax expense of $3.5 million. However, $3.3 million of that was non-cash and related to tax benefits we claim for goodwill amortization, but cannot currently recognize for GAAP purposes. The non-cash tax expense related to this issue will approach $7.8 million for the full-year, and we expect that this will continue on an annual basis going forward in decreasing amounts, as long as we have the deferred taxes of valuation allowance in place. As management has discussed in the past, this non-cash charge or benefit could fluctuate significantly from quarter-to-quarter as a result of how the effective tax rate is determined at interim periods. Third, during last quarter’s call, management mentioned that our first quarter G&A expenses impacted by timing and certain one-time benefits, but that we are still estimating G&A for the full-year to…

Of course, and thank you, Dan and Mike. The question-and-answer session will begin at this time. [Operator Instructions] And first from Piper Jaffray, we have Steph Wissink.

Hi, good morning, gentleman, and just a few follow-up questions. Dan, I know you don’t want to get into the franchising evaluation. But can you just tell us a little bit about what the process entails? How rigorous is it? How deep is it across the kind of portfolio of units? Can you just talk a little bit about the process just so we can understand what Huron is essentially being hired to do?

Sure. I’m happy to expand on that Steph, thank you. I’m going to go at this in a couple of different ways. I’ll start with Huron and then I’ll start with what we’re doing to sell our salons into franchise. So Huron has come in to help us evaluate our business as a whole and look for ways to increase our franchise opportunity and look at different business models that will drive the most shareholder value. And we have found them to be very helpful, very thoughtful folks. And as you saw, we actually rated Huron and we brought Mike in to be part of our team. So Mike is already adding a lot of value here. And I think the fact that, we’ve got Mike here from Huron and we’ve got Huron in here would really help us be very thoughtful about how the company is structured as a franchise and a corporate salon company going forward in the best possible way. In terms of selling into franchise, that is – that process is now in full swing. As I mentioned, we have the finance – the Franchise Disclosure Document is completed. We have that in the hands of our – in our franchise team. And we went after this in three phases, pretty much concurrently. The first phase was we went to some of our biggest franchisees today and we presented it to them and we showed them what the opportunity is and we got good interest there. Then we took it out to the rest of our franchise base and we’ve gotten a very good interest from them. And then we went to the market in general with our franchise sales team and the interest is, we’ve been very pleased with the interest that we’ve had so far. We have our – we actually have our first discovery day when people come in that would be new to our franchise opportunity with us at the end of February, takes a little while to get the message out and recruit these people, but we’re very happy. It will be one of the largest groups we’ve ever had come in. And we’re anxious to get in front of them and talk to them about the opportunity. But I can tell you where – it’s early, early days, Steph, but we’re pleased with the interest that we’ve seen so far.

Okay. And then just as a follow-up, I know, Mike you mentioned that you’ve been charged with improving all areas of the business, which just sounds incredibly daunting. But if you could just maybe boil it down to the one or two things that you think over the next 6 to 12 months that would go to benefit the core business, but also as you do evaluate this kind of franchise sales opportunity. What are the one or two things that you think are the most important that we should be thinking about?

Well, at this point in time, it’s kind of early. But it’s really just to support the overall team with the franchising initiative. Simply put, as Dan had mentioned, Huron is in helping with that. My background, while it varies in different industries can also help out on that front. It’s – the business down the road being more franchise heavywill look different. And so I hope to help Dan and his team accomplish that.

And then a final one for us guys, it’s just related to traffic. So it’s intriguing that you mentioned that your online check-in were up 2x over the last kind of year or so. But the traffic numbers seem to still be really sluggish. So help us reconcile what you’re seeing in terms of your technology uptake versus just broad levels of traffic pullback? And I know there was some holiday shifting in the quarter, but negating that element, traffic consistently seems to be the issue on the comp rates?

.: The one thing that and it’s the reason that we made the decision to shift strategically and become more of a franchise company is we’ve seen what strong operators our franchisees are. And our franchisees delivered in what is a very tough retail, it was a very tough retail environment in the fourth quarter. They delivered same-store comp sales increases, which made for 10 consecutive years. And we have a number of our best performer – performing leaders who also delivered very strong same-store sales and traffic growth. So I really believe that this focus that we have on shifting to franchise and selling our underperforming salon into franchise will help us in a number of ways. Obviously, those salons that are – aren’t performing well will get in the hands of good franchisees, they will operate them better. It will also take down the number of salons that our best operators have to manage and that will focus them on salons that are doing well today and they can make them even better. So, we have a holistic approach to improving the company by shifting towards the franchise business. So it obviously, it helps us on the franchise, but it – we believe that will also help us on the corporate side.

Thank you.

Thank you.

All right. And this concludes the Q&A portion of the call. I will turn the floor back to Dan.

Okay. And I’ll just say thank you, everybody. We look forward to talking to you again next quarter and updating you on our progress as we move to become more of a franchise company. Thank you and have a good weekend.

And ladies and gentlemen, this concludes our conference call for today. 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 once again by dialing 1888-203-1112, access code 9251692. Thank you all for participating and have a nice day. All parties may now disconnect.