|
EMPIRE BEAUTY SCHOOLS AND REGIS CORPORATION ANNOUNCE MERGERrn rnFranklin K. Schoeneman, chairman and chief executive officer of Empire Education Group, today announced that Regis Corporation (NYSE:RGS) intends to merge its 51 accredited cosmetology schools with Empire Beauty Schools, Inc.’s 37 accredited cosmetology schools. The merger will create a new company called Empire Education Group, Inc., which will become the largest provider of cosmetology education in North America. The consolidated new Empire Education Group will own 88 accredited cosmetology schools with revenues of approximately $130 million annually and will be overseen by the current Empire management team. The transaction is expected to close on July 1, 2007. rnrnThe new privately-held company will include 88 cosmetology schools with rich heritages in the cosmetology education industry in 18 states. They include A Cut Above (Indiana); Arthur Angelos (Rhode Island); Artistic Beauty Colleges (Arizona, Colorado); Blaine the Schools (Massachusetts); Chic University of Cosmetology (Michigan); Concorde Academy (New Jersey); Empire Beauty Schools (Georgia, Illinois, Maryland, Massachusetts, New Jersey, New York, North Carolina, Pennsylvania, Virginia); European Academy (New Jersey); The Hair Design School (Kentucky); Martin’s College of Cosmetology (Wisconsin); National Motion Institute (New Jersey); Pierre’s School of Cosmetology (Maine); Scot Lewis Schools (Minnesota). rnrnAs a result of the merger, Empire Beauty Schools will own 51% of the new company, with Schoeneman remaining majority stockholder. All current members of the Empire Beauty Schools executive team will retain their leadership positions, including Schoeneman, chairman and chief executive officer; Michael D. Bouman, president and chief operating officer; Joseph A. Carretta, senior vice president, operations; Bruce R. Schmidt, senior vice president, marketing and James A. Wunderle, senior vice president/chief financial officer. Regis Corporation will own 49% of the new company. Paul D. Finkelstein, chairman and chief executive officer of Regis Corporation, will sit on the board of directors of the new company. rnrn“This merger is totally consistent with Empire’s founding principles and values, which focus on our passionate commitment to creating opportunities for people to improve their lives,” says Schoeneman, whose family has owned and operated some of the most successful cosmetology schools in North America for more than 50 years. “By merging with an industry partner, who clearly understands the need for quality cosmetology education in North America, we now have the opportunity to fulfill our core purpose on a much greater scale. The entire Empire team looks forward to partnering with all of our colleagues in the cosmetology school business and in the professional salon industry to help people realize rewarding careers that fit their lifestyles and achieve their dreams in this wonderful business.” rnrnSays Finkelstein, “We entered the beauty school business almost three years ago with the vision of truly improving cosmetology education in America and that is still our goal today. In order to maximize the enormous potential of the beauty school division, it would be necessary for Regis to invest heavily in information technology platforms and management. Merging with Empire is by far the best and fastest way for us to achieve our goals. We are highly confident that Empire’s management team will operate the beauty schools at the highest level. Regis will be able to add significant value to the joint venture with our strong education and marketing programs, coupled with the ancillary benefits that the Vidal Sassoon Academies (which are not part of this transaction) and Horst Rechelbacher (the founder of Aveda and a beauty industry icon), will provide. In addition, we will have double the number of qualified graduates who will have placement opportunities at our Regis operated salons." rnrnThe Company will record an estimated $20 to $25 million pre-tax non-cash charge as a result of the transaction. "We expect the integration of the Regis schools into Empire Education Group to take several months and there will be significant integration costs, which will result in the transaction reducing earnings by approximately $0.05 per diluted share in fiscal year 2008," commented Mr. Finkelstein. "Once the integration is complete, we will share in significant synergies and operating improvements. Long-term, this transaction should be very accretive and our expectations will be to add significantly more shareholder value than the impairment charge." rnrnIn conclusion, Mr. Finkelstein stated, "Turning over the management of the beauty school business to the industry's premier management team led by Frank Schoeneman is the optimal way to grow the segment and drive shareholder value and will allow Regis management to continue to focus on energizing our core salon business. We will provide further detail of this transaction on our third quarter earnings conference call scheduled for April 25, 2007 at 10:00 a.m. Central Time." rnFor more information about Regis, go to www.regiscorp.com, and for more information about Empire Education Group, go to www.empire.edu rnrnEmpire Education Group’s Chairman/CEO Franklin K. Schoeneman answers your questions about the merger between Empire Beauty Schools and Regis Corp’s cosmetology schools rnrnQ: How does it feel to lead the largest chain of cosmetology schools under a single ownership? rnFS: Being the largest is not important to our team. What is important is that we are doing our best to provide new opportunities for each individual in every school to improve his or her life. That said, when we can replicate that success for the 20,000 individuals across almost 90 schools whom we will educate yearly, that means the cosmetology education we provide is the means to a better life for thousands and thousands of people. Whether their dream is to work in a salon, own a day spa, become a platform artist, style celebrities or continue their education to become a cosmetology school teacher, we help them achieve that dream. That’s what matters to us most! rnEmpire has been building on its heritage of providing cosmetology education for more than 70 years. From the national to the local levels and throughout our company, we have what I believe to be the finest team in the industry who is up to the challenge of preparing our students to achieve their professional and personal goals. In fact, across the board from our education to curriculum development to financial aid department, our team has literally centuries of combined experience in the education and cosmetology businesses. rnThat expertise extends to the school level, as well. Not only are we very selective when hiring our more than 500 educators, but we provide ongoing training in both education methods, as well as the most up-to-date technical information used in salons and spas. We also have created a career path for our teachers, so they are constantly pursuing their own career goals, as they help their students achieve theirs. rnEmpire has pioneered and uses the Certified Learning in Cosmetology (CLiC) curriculum, a series of textbooks and teaching tools that move our students beyond the industry standard and passing their State Board exams into “real world” skills that our Salon Advisory Board members tell us are needed for success in our students’ first jobs. rnrnQ: How will the merger between Regis’ cosmetology schools and Empire Beauty Schools into Empire Education Group benefit the professional salon industry? rnFS: By providing new professionals who are prepared to fill the hundreds of thousands of entry-level job openings in salons and day spas across the country. The CLiC (Certified Learning in Cosmetology) curriculum focuses on teaching both technical skills, as well as customer service, self marketing, retailing and other non-technical skills that help prepare these new professionals for success. Empire partners with salons in all of its communities on an ongoing basis to ensure that its students will be successful when they begin their careers in those establishments. rnIn addition, Empire Education Group has a strong heritage in and commitment to cosmetology school education serving the professional salon industry. Empire has provided cosmetology school education for more than 70 years. I represents the third generation in my family to serve the professional salon industry, and my son, Kyle, who joined the company in 2006, represents the fourth generation of our family with a passionate commitment to educating people to improve their lives. rnrnQ: Beyond curriculum, how else does Empire prepare its students beyond the classroom to achieve their dreams through careers that matter? rnFS: People who pursue cosmetology careers are naturally caring people. They thrive on helping others feel better about themselves! To that end, in 2005, Empire launched its National Day of Beauty to raise money for the Red Cross to help victims of Hurricane Katrina. We did that at the request of our teachers and students—they came to us and asked how we could help! We raised more than $60,000 in one day! Last year, we adopted KidsPeace as our official partner in cause marketing. They are a great partner for Empire, because we have a parallel mission and philosophy—to create opportunities for people to improve their lives. We raised $23,500 for this worthy organization. We are already preparing for our 2007 National Day of Beauty, which is scheduled for October 13, 2007. Now, with almost 90 schools participating, we will be able to make an even greater contribution! rnOn another level, we have created the opportunity for our students to attend their first national professional show, with National Competition and Show. Our third annual event takes place next month on May 6 and 7 in Valley Forge, PA. During this growing event, our students from around the country have the opportunity to meet potential employers, top educators from around the country and almost 100 vendors and to network with one another. It gives them the “30,000 feet view” of what their chosen industry is all about on a national level. The event also features our National Competitions for hair and nails. It started with competitions on the school level at each campus in February. The winners from each campus in each of four categories proceed to the national level and compete in Valley Forge against their colleagues from around the country. The national winners receive fabulous prize packages, including international education trips, professional tools and advanced training classes. Again, it’s all about opening our students’ eyes to their new professional world, expanding their universe and providing even greater opportunities for professional and personal growth. rnrnrnQ: How does Empire give back to the cosmetology school business? rnFS: We are very involved on the national and state levels. For example, for the past two years, we have contributed $30,000 per year to support the government relations committee of the American Association of Cosmetology Schools. rnWe also dedicate hundreds of volunteer hours per month to our industry. Michael D. Bouman, president and chief operating officer, sits on the board of directors of the American Association of Cosmetology Schools and chairs the accreditation committee. Dorothy Sorressi, our vice president of education, is a commissioner for the National Accrediting Commission of Cosmetology Arts & Sciences (NACCAS). She served for many years on the American Association of Cosmetology Schools board of directors and chaired the Cosmetology Educators of America and convention committees. Joseph A. Carretta, our senior vice president of operations, is an active board member for the Pennsylvania Association of Private School Administrators and is an active member of the American Association of Cosmetology Schools Government Relations Committee and its advisory board. I was previously the chair of the Pennsylvania State Board of Cosmetology. Now, Carol Edwards sits on that board. rnAs a leader in the industry, we take those responsibilities very seriously.
|
