Good morning and thank you for joining the Regis First Quarter 2023 Earnings Release Conference Call. All participants are in a listen-only mode. The prepared remarks by our President and Chief Executive Officer, Matthew Doctor; and Executive Vice President and Chief Financial Officer, Kersten Zupfer are accompanied by the slides to help participants follow on. After the prepared remarks, we will have time for questions. Please use the chat feature or 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, Corporate Controller. As a reminder, this conference is being recorded. I'd like to remind everyone that the language on forward-looking statements included in our earnings release and 8-K filing are also applied to our comments made on the call today. These documents along with our presentation can be found on our website www.regiscorp.com/investorRelations along with the reconciliation of any non-GAAP financial measures mentioned on our call today with the corresponding GAAP measure. Today's slides are also located in the Supplemental Financial section of the Investor site. With that, I will now turn the call over to Matt.

Thank you, Biz. Good morning, everyone, and thank you for your interest in Regis. I am excited to speak with you today and share our results for the quarter. Over the past several quarters, perhaps years even, we've been discussing what our company will look like and what the results should be on the other side of completing the transition to a fully franchised model, and winding down our legacy businesses. Over the course of the past year, we've made a lot of progress on this front. And I mentioned on our last call that we should start demonstrating positive EBITDA going forward and we are starting to do exactly that. We have come a long way through the hard work and resilience of the Regis team and our franchise, and that work is coming to fruition in our results. I am pleased to share our positive start to the year with the first quarter marking key milestones as we make progress towards advancing our strategy. To this end in the first quarter, we generated more EBITDA than all of fiscal 2022, and we recorded positive operating income for the first time since the quarter ended September 30, 2018. And while we have certainly come a long way, I would be remiss, if I didn't acknowledge there is still significant work ahead. Work that we are addressing head on through the initiatives we have in place and have discussed at length on previous calls. As we have strong conviction that they are the right ones to capitalize on the foundational work that has transformed Regis into an asset-light franchise model. With a durable balance sheet, talented team and dedicated franchisees, we continue to be laser-focused on providing our franchisees with the tools to ensure we continue to build the momentum…

Thanks, Matt and good morning. We are pleased to speak with you to share our first quarter performance, which demonstrated strong progress against our strategy to transform Regis into an asset-light franchise operator. This has led to us delivering continued improvements in profitability. Notably, the first quarter marked our initial period of positive consolidated operating income since September of 2018, driven by improved core revenue consisting of royalty and fee income and reductions in G&A. Net income was another positive with an increase of $11.9 million to positive $1.5 million from a loss of $10.4 million in the first quarter last year. The increase in net income reflects the improvement in income from operations and the gain associated, with proceeds received from the sale of OSP to Zenoti, which Matt discussed. Overall, we are very pleased with the overall progress in our business. On the top line, while total first quarter revenues of $62 million declined $15 million from the prior year, as expected due to our transition to a fully franchised business model, core revenue improved by nearly $1 million due to higher average royalty rates. And system-wide same-store sales increased 4.5% in the quarter. We remain intently focused on implementing initiatives to drive system-wide sales growth, with actions to improve stylist recruitment and training. Our goal continues to be to increase awareness of the many opportunities and benefits stylists and beauty school students can expect from joining our organization. I want to spend some time on our adjusted results to eliminate the noise we, see in the reported results. On an adjusted basis, first quarter consolidated adjusted EBITDA was $4 million compared to a loss of $5 million in the prior year's quarter. Adjusted EBITDA improved due to higher royalties and our lower cost structure. Our adjusted G&A…

Thank you, Kersten. As a reminder, please use the raise your hand or Q&A feature to ask a question. The first question that we got was tell us about the trends in the sales channel. We are hearing about other companies in the beauty industry where customers are spacing out time between appointments longer due to financial stress.

Yeah. Sure. Thanks for the question. It's Matt. I touched on this a little bit earlier regarding some of the trends in consumer behavior. It's certainly something that we're seeing, not necessarily even due to financial stress, but I'd probably say another word, I'd use is inconsistent since COVID inconsistent between the length of lengthening out the cycles, having longer hair cycle, hairstyles who they're going to and where and how long this will last for. What I would say to that is even in this environment, and even if that being the case there's still significant opportunity for us to ensure even those who may be going less still stay with us and don't go elsewhere. So getting back to that point of customer retention and doing a better job there. This will be a positive impact on that. And also there's still the opportunity to drive new traffic and keep them as well. So even in this kind of environment those two will still be net positives. And going back to something, I said in the call which is capitalizing on driving some trends. And this I mean actual hairstyle trends versus visitation trends having these folks within our salons, we can build service tickets to the promotional calendars we're talking about hopefully ensuring that, when folks do come on we can be the salons they look forward to go to for their baseline service as well as drive trends in hair and give them further reason to come back versus just give me the usual, which of course is totally okay as well.

All right. Well, we're not seeing any further questions here. I appreciate everyone joining. I just want to say probably won't be speaking to you until the New Year. So have a happy and healthy holiday season, and look forward to speaking to you all when we report second quarter results. Thank you.