Good morning and thank you for joining the Regis Third Quarter 2022 Earnings Release Conference Call. All participants are in a listen-only mode. The prepared remarks by newly appointed President and Chief Executive Officer, Matthew Doctor, and Executive Vice President and Chief Financial Officer, Kersten Zupfer, are accompanied by slides to help participants all along. After the prepared remarks, we will have time for questions. Please use the chat feature or the "Raise your hand " feature to ask a question. Also joining Matt and Kersten on this call is Jim Lain, our Chief Operations Officer. I am your host, Biz McShane, Vice President and Corp. Controller. As a reminder, this conference is being recorded. I would like to remind everyone that the language on forward-looking statements included in our earnings release and 8-K filing also apply to our comments made on the call today. These documents, along with our presentation today, can be found on our website at www.regiscorp.com /investor -relations, along with a reconciliation of any non-GAAP financial measures mentioned on today's call with their corresponding GAAP measures. Today's slides are located in the supplemental financial section of the investor site. With that, I will now turn the call over to Matt.

Thanks, Biz. And good morning, everyone. Today, I will walk you through highlights of our third quarter results, and the status of the some of the key initiatives we highlighted on the last call, as well as how we are refining our priorities and areas of focus. Kersten will cover our results in more detail, in addition to addressing a few one-time items, as there continues to be some noise in our reported results as we work through the shift in our business model. Our third quarter same-store sales and adjusted EBITDA improved year-over-year. Total adjusted EBITDA came in around break-even for the quarter and franchise EBITDA, which represents a proxy of our go-forward business model, was positive compared to a loss in the prior-year and positive for the second quarter in a row. As sales remained well below pre-COVID-19 levels, the organizational moves we have made a streamlined our G&A have helped mitigate losses during this period of slower than expected sales recovery. As our legacy businesses continue to wind down and sales eventually improve, we will benefit as our G&A remains largely fixed. While our results would reflect progress on the path to profitability, they remain below where we want them to be. There were several factors during the quarter that affected our results. Some one-time and some related to ongoing issues. The Omicron variant had an impact on sales throughout the quarter, as we had articulated that it would on our last call. In addition, several themes continued to affect our business as we drive towards recovery. Our sales continue to be challenged by labor issues with active stylists and stylist hours remaining significantly below pre-COVID-19 levels. The labor shortage translate to an outsized effect on our results. Given the specialized labor pool in the fact stylists…

Thanks, Matt. And good morning. Yesterday, we reported on a consolidated basis third quarter revenues that reflect our transition to a fully franchised business model and the continuing challenges across both customer traffic and the labor market. Total revenues of $65 million declined to $36 million from the prior year as expected due to the 98% of our salons now franchised compared to 87% in the prior year, and the transition away from our product distribution business. These business changes cause revenue to decline by $41 million offset by $5 million of improved royalty and advertising revenue. Third quarter royalty revenues were below our expectations and reflected the impact from continued labor shortages and the persistence of the pandemic, including the Omicron variant that impacted our results in the quarter. Same store sales growth was 9% in the quarter compared to the third quarter 2021, but still lagging behind pre-COVID-19 levels. As Matt noted, addressing labor issues and engaging customers through digital marketing are our priorities that will address revenue growth. While Matt addressed our headline EBITDA figures earlier, I want to put into context the results in progress compared to last year. On an adjusted basis the third quarter consolidated Adjusted EBITDA was essentially a break even compared to a loss of $20 million in the prior year's quarter. Adjusted EBITDA improved due to higher system wide sales and management's efforts to lower our cost structure. On a year-to-date basis, adjusted EBITDA loss of $4 million is an improvement of $52 million, from a loss of $56 million in the fiscal 2021, nine-month period. Our core franchise business achieved adjusted EBITDA of $3 million, a $10 million improvement compared to a loss of $7 million in the prior year. This is the second quarter in a row that our…

Thank you, Kersten. As a reminder, please use the raise your hand feature or you can use the Question-and-Answer feature to answer a question. Our first question is from Grace Menk with Jefferies. Please remember to unmute Grace before you ask your question.

Thanks Biz. Hi, good morning and thank you for the question and congratulations on the appointment Matthew. Starting out, I was just wondering if you could talk about the 9% same-store sales trends that you're seeing. How did those vary by region and concept? And are you still seeing any capacity constraints in any regions?

Hey, Grace this is Matt, appreciate the congratulations and thanks for the question. So in terms of regions, it's all pretty similar themes as we mentioned on prior calls. The regions that we're most restrictive call during the pandemic are the regions that are lagging the most. And those are a little bit less, we're doing a bit better. So that's kind of -- it's been that way since the pandemic and it continues to hold today. In terms of brands, we do have a breakout in our release of where each individual brands are. Our Supercuts seems to be outperforming kind of the rest of the system with SmartStyle being one that is lagging a bit due to a little bit of a captive nature there and ties to Walmart where traffic is a little bit down, but we have a bunch of initiatives on that underway to address that business as well. But that's kind of the macro which again had similar themes that we've been seeing, we're continuing to see where things kind of mid being moving up nominally as we continue to the year.

Thanks, that's helpful. And then on the capacity constraints in any regions.

No, really, there's no capacity restraints from any sort of government or local restrictions that are impacting our salons at this point.

Great. And then, my next question, I was hoping we could dig a little deeper into the lower customer counts that you're seeing impacted by those longer cycles. It's kind of a three-part question, but I guess, is this trend indicative of kind of the new normal that you foresee following the pandemic or do you expect that will return to pre -pandemic levels as socialization continues to normalize? And then also do you see any impact from inflation affecting that frequency of return? And then thirdly, what levers you have to help mitigate the impact of that on results?

Yeah, absolutely. I appreciate, it's a good question. In terms of the trend and foreseeing it normalize, there's speculation as to exactly what's going to happen if people are going to move back. What I will say is from survey results that we've seen, there is a desire at some point when socialization happens and people are back in offices, that there is a desire to return to the salon and get their hair cut by professional trained individuals. So it's probably not so much of an if, I think it's more of a matter of when and to speculate on that when not exactly sure, but some of the data points to that being the case. In terms of inflation and kind of the rest of what we foresee. Kind of on a point back to regardless of what's going on, there's so much opportunity that we have, even if there's longer haircut cycles, they're still really strong. There is a good traffic that does come through our salons for one reason or another. And I think we have a really, really good opportunity in the short-term to do a better job of keeping them. So regardless if a customer who is lagging a little bit and extending the cycles out, we do have folks who are visiting our salons. What we need to do is to mitigate and give people a reason to come back in a more frequent manner. That's why things like CRM direct marketing, the hiring efforts around stylists and make sure that they're there to provide the services. All these things can help retain customers which will have an impact on near and medium-term traffic, which will help kind of bridge the gap over to eventually seeking net new traffic. So I think we just have a lot of opportunity with what we have today that will help, and then just building on top of that will take us to another level in the future.

That's really helpful. Thank you and actually a great segue to my last question, which is just on the tech platform rollout and what feedback you're getting from the salons who are adopting it already. Thank you.

Yeah, now, as I mentioned, this is a big initiative and I want to be cognizant on how we speak about technology given how they initiative this is. Currently we have an end of lively solutions and new solutions is where we need to be. We've spoken a lot about OSP in the past and what it can do, but I'd rather start talking about it again where we can be absolute in what it does do. As I mentioned, we're going to continue to work with the functionality as appropriate. And I want to come back and talk about this one in more detail when we're ready to ramp adoption back up, and what exactly that full solution looks like.

Very helpful. Thank you.

Thank you.

Thank you, Grace. Okay, Matt, we've had a couple of questions about sales come through the chat feature, and I just wanted to -- so the question is January sales which were impacted by Omicron, how does that compare to more recent months?

Yeah. So January was -- I appreciate the question. January was super impacted. And since then, we have seen sales through the quarter and beyond improve from there. But the same things do continue to hold, which is why I kind of point back to our initiatives, which is why it's so imperative to start launching those. And we're encouraged that those matter really in any environment. I mean, they matter in this environment with a challenge labor market and doing a better job of retaining customers, but they're also so foundational to even in good times. Let's say the pandemic didn't happen, the idea of driving talent brand to hire and retain stylists’ matters. The idea of having technology to interact with before, during, and after visit matters. And customer retention direct digital social media marketing to meet folks where they are matter s. So all these things we think will be helpful in addressing the current environment that we're in but also super encouraged that these are wildly foundational and our [Indiscernible] said it'll be here for years to come in addressing our sales.

Thank you. The next question. As a consumer business, please comment on your plans for press releases, social media activity, things in that nature please.

Absolutely. Appreciate the question. I kind of point back to our opportunities in marketing. And I kind of mentioned that we have a huge opportunity to shift a little bit of our focus towards digital and social. I mean, a theme you're going to start hearing from me more and more is the need, specially this industry given the cycle times, to meet stylists and consumers where they are. And as I've mentioned, they are living more and more on those social media platforms. We need to kind of meet them and connect with them on those platforms. Big opportunity to build our brands at these levels. Big opportunity of increased content output, with relevant content, and show up in authentic manners. So I think when we talk about stylists recruiting and direct marketing, all these things are interrelated because increasing the focus on education, investing in our people, being out there and training our folks to execute on these services, these are things that can we can talk about and can show up in a very authentic manner on these platforms. So serves a lot of purposes beyond just that, but can serve baseline fundamental things for us to really talk about in a meaningful way on these platforms that matter so much. So big opportunity and more to come on these.

Thank you Matt. That's it for our questions today. Thank you very much for joining the Regis third-quarter earnings call. We appreciate your interest.