Results in an implied EV to LTM Adj. EBITDA multiple of ~7.5x for Restructured Regis. Current share price $16.66 LTM NA salon revenue 1,911

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1 Idea performance

2 Update 7/2/13 sholker [printed: August 29, :03 AM] [saved: August 29, :19 AM] C:\Documents and Settings\sholker\Desktop\Sholk\Presentation\Sholk Molecular Diagnostics Presentation Final.ppt The deterioration in business fundamentals continues as the L3M comparable salon sales decline of -1.4% YoY (vs. -1.9% last quarter) and investment in higher stylist hours caused LTM Adj. EBITDA drop to ~$130m Results in an implied EV to LTM Adj. EBITDA multiple of ~7.5x for Restructured Regis Restructured Regis enterprise value Restructured Regis EBITDA Current share price $16.66 LTM NA salon revenue 1,911 Common shares outstanding 56.7 Consolidated LTM adj. EBITDA 138 Shares underlying convertible senior notes 11.2 Less: International salon LTM adj. EBITDA 7 Shares underlying options 0.0 Adj. EBITDA 131 Fully diluted shares 67.9 Adj. EBITDA margin 6.9% Market capitalization 1,131 Implied EV/EBITDA 7.5x Add: Credit line borrowings ($400m capacity) 100 Equipment and leasehold notes payable 10 Other notes payable 0 Convertible senior notes assumed $ Less: Cash 180 Enterprise value 1,061 Less: International salons (UK) For sale 30 Empire Education Group Fix / for sale 45 Implied Restructured Regis enterprise value 985 1

3 Update 7/2/13 sholker [printed: August 29, :03 AM] [saved: August 29, :19 AM] C:\Documents and Settings\sholker\Desktop\Sholk\Presentation\Sholk Molecular Diagnostics Presentation Final.ppt At 7.5x LTM EBITDA and roughly 10.0x forward EBITDA (assuming a depressed L3M EBITDA margin of 5.3% going forward), market participants are clearly pricing in continued improvement in comparable salon sales to above 0% *Excludes divested Hair Club operations FYE 06/30 FYE 06/30 Last QE 9/30 QE 12/31 QE 3/31 QE 6/30 QE 9/30 QE 12/31 QE 3/ months Services 1, , , Products Royalties and fees Total revenue 2, , , Cost of service Cost of product Site operating expenses General and administrative Rent Depreciation and amortization Adjusted operating expenses 2, , , Adjusted operating income Add: depreciation and amortization Adjusted EBITDA Reference: Service margin 42.6% 42.7% 41.0% 43.2% 42.7% 42.0% 42.9% 40.9% 39.7% 40.2% Product margin 49.7% 49.6% 48.6% 50.3% 49.5% 49.7% 48.9% 48.1% 49.1% 48.4% Operating margin 4.5% 4.6% 2.5% 3.9% 3.8% 5.5% 5.3% 1.8% 1.7% 1.0% EBITDA margin 8.7% 8.8% 6.7% 8.0% 8.0% 9.7% 9.6% 5.9% 6.0% 5.3% Comparable salon sales growth -1.7% -3.1% -3.4% -3.3% -3.9% -3.3% -3.1% -1.9% -1.4% 2

4 Update 7/2/13 sholker [printed: August 29, :03 AM] [saved: August 29, :19 AM] C:\Documents and Settings\sholker\Desktop\Sholk\Presentation\Sholk Molecular Diagnostics Presentation Final.ppt To own the stock at this valuation, you must believe management s turnaround strategies are rational and can be executed such that comp sales improve materially from here (1% comp sales change equals ~$9m EBITDA change) That said, the behavioral clues suggestive of turnaround progress are mixed Negative?: Starboard Value, the activist fund that initiated the turnaround, reduced its RGS long position in Q4 12 to ~1m shares, from ~2.75m shares Positive?: RGS amended its poison pill on 6/13/13 so that owners can breach the 15% ownership threshold without triggering the pill, which suggests either Birch Run (PM on RGS board) or Fidelity are looking to add here 3

5 Update 3/4/13 sholker [printed: August 29, :03 AM] [saved: August 29, :19 AM] C:\Documents and Settings\sholker\Desktop\Sholk\Presentation\Sholk Molecular Diagnostics Presentation Final.ppt L3M comparable salon sales decline of -1.9% YoY (vs. -3.1% last quarter) and investment in higher stylist hours behind LTM Adj. EBITDA drop of $25m to $155- $160m (margin drop from over 9.5% to roughly 8%) Results in implied EV to LTM Adj. EBITDA multiple of 5.5x Restructured Regis enterprise value Restructured Regis EBITDA Current share price $17.91 LTM NA salon revenue 1,938 Common shares outstanding 56.6 Consolidated LTM adj. EBITDA 165 Shares underlying convertible senior notes 11.2 Less: International salon LTM adj. EBITDA 7 Shares underlying options 0.0 Adj. EBITDA 158 Fully diluted shares 67.8 Adj. EBITDA margin 8.1% Market capitalization 1,215 Implied EV/EBITDA 5.5x Add: Senior term notes 94 Equipment and leasehold notes payable 12 Other notes payable 0 Convertible senior notes assumed $ Less: Cash 218 Enterprise value 1,102 Less: Hair Club for Men value Sold July International salons (UK) For sale 35 Empire Education Group Fix / for sale 47 Implied Restructured Regis enterprise value 864 4

6 Update 3/4/13 sholker [printed: August 29, :03 AM] [saved: August 29, :19 AM] C:\Documents and Settings\sholker\Desktop\Sholk\Presentation\Sholk Molecular Diagnostics Presentation Final.ppt If investment in stylist hours does not drive traffic and L3M Adj. EBITDA margin of 6.1% were forward run-rate, back-of-envelope EBITDA is roughly $120m giving Restructured Regis a current implied EV/EBITDA multiple of 7.0x-7.5x Restructured Regis EV/EBITDA multiple assuming lower future EBITDA LTM NA salon revenue 1,938 L3M adj. EBITDA margin 6.1% Implied run-rate EBITDA 119 Implied Restructured Regis enterprise value 864 Implied EV/EBITDA multiple 7.3x If $120m were new run-rate, current 5.5x LTM multiple would result in share price of ~$15, implying downside of 20% Downside potential LTM adjusted EBITDA multiple 5.5x Implied run-rate EBITDA 119 Future enterprise value 652 Implied future market cap 1,003 Fully diluted shares 68 Implied future share price $14.78 Current share price $17.91 Downside -17% 5

7 Update 3/4/13 sholker [printed: August 29, :03 AM] [saved: August 29, :19 AM] C:\Documents and Settings\sholker\Desktop\Sholk\Presentation\Sholk Molecular Diagnostics Presentation Final.ppt While continued comp store sales declines are a risk, the follow-the-leader-style implementation of value-priced salon best practices should lead to stabilized sales and profits (though mall-based salon business warrants further attention given lagging SSS growth performance in recent quarter) Assuming the turnaround occurs, potential stock price upside of 30%-90% (see Slide 12 for EBITDA growth assumption rationale) Valuation Run-rate EBITDA 158 Add: growth potential Pro-forma EBITDA Current multiple Normalized multiple range 5.5x 5.5x 6.0x 8.0x Restructured Regis enterprise value 1,192 1,357 1,307 1,983 Add: Hair Club for Men value International salons (UK) Empire Education Group Total enterprise value 1,430 1,594 1,545 2,221 Less: Net debt (assume conversion of conv. sr. notes) (113) (113) (113) (113) Equity value 1,543 1,708 1,658 2,334 Fully diluted shares Implied share price $22.75 $25.17 $24.44 $34.40 Current share price $17.91 $17.91 $17.91 $17.91 Return potential 27% 41% 36% 92% 6

8 Buy Regis Corp (RGS) common stock Doug Bennett October 5, 2012

9 Thesis sholker [printed: August 29, :03 AM] [saved: August 29, :19 AM] C:\Documents and Settings\sholker\Desktop\Sholk\Presentation\Sholk Molecular Diagnostics Presentation Final.ppt Regis Corporation, an owner, operator and franchisor of hair salons, is in the early stages of an activist-led restructuring that will likely improve EBITDA in the core North American salons business by 40%-75% The potential upside in EBITDA and accompanying expansion of the current 4.8x multiple to a more appropriate growth multiple implies 30%-100%+ upside in Regis common stock (RGS), while downside risk would likely require multiple contraction The favorable upside potential, low likelihood of EBITDA decline from the current trough level and low financial risk suggests RGS is an attractive long position for a concentrated portfolio 8

10 Background sholker [printed: August 29, :03 AM] [saved: August 29, :19 AM] C:\Documents and Settings\sholker\Desktop\Sholk\Presentation\Sholk Molecular Diagnostics Presentation Final.ppt 8/16/11: Activist investment firm Starboard Value sends letter to Regis board outlining fundamental reasons for stock underperformance, announces intention to nominate 3 directors at FY2011 annual meeting For more background on Starboard Value, see Appendix I 10/12/11: Starboard files a more detailed presentation outlining Regis problems and proposed solutions Regis had among the highest gross margin in specialty retail but the lowest EBIT margin Company plagued by bad investment and financing decisions and an entrenched, richly paid management and board Starboard outlined plan to divest non-core assets, drive same-store sales through adoption of salon industry best practices and restructure the business to reduce overheard/improve scalability 10/27/11: Starboard wins proxy contest and nominees are elected to the board (note negative Say-on-pay voting results) 10/27/11 - Present: Old management out, new CEO in, 2 of 4 non-core businesses sold, field teams restructured and salon management best practices are being implemented 9

11 Current valuation sholker [printed: August 29, :03 AM] [saved: August 29, :19 AM] C:\Documents and Settings\sholker\Desktop\Sholk\Presentation\Sholk Molecular Diagnostics Presentation Final.ppt Excluding the value of non-core businesses sold or slated for sale, the market implies a ~$880m value for the core, Restructured Regis enterprise, or roughly 4.8x LTM EBITDA of ~$185m Restructured Regis enterprise value Restructured Regis EBITDA Current share price $18.38 LTM revenue 1,981 LTM reported EBIT 165 Common shares outstanding 57.4 Shares underlying convertible senior notes 11.2 Add: Shares underlying options 0.0 Reported unallocated corp. operating expenses (173) Fully diluted shares 68.6 Regis salons impairment charge 68 Market capitalization 1,262 Accelerated POS system depreciation 16 Senior management restructuring and severance 10 Add: Professional fees 5 Senior term notes 111 Field restructure and other 3 Equipment and leasehold notes payable 15 Deferred compensation 2 Other notes payable 0 Self-insurance reserve adjustments 1 Convertible senior notes assumed $ Pure Beauty note receivable (recovery) reserve (1) Less: Legal settlements (1) Cash 112 Adjusted EBIT 95 Enterprise value 1,276 Adj. operating margin 4.8% Less: Add: estimated NA salon D&A 89 Provalliance JV value Sold May Adjusted EBITDA 184 Hair Club for Men value Sold July Adj. EBITDA margin 9.3% International salons (UK) For sale 35 Empire Education Group For sale 95 Implied EV/EBITDA 4.8x Implied Restructured Regis enterprise value

12 Core North American salon operations Unit-level EBITDA (excluding unallocated corporate overhead) has fallen as a result of same store sales declines, primarily due to declining guest counts, in addition to an inefficient operating structure North American salons revenue growth factors Revenue: Regis MasterCuts Trade Secrets NA NA NA NA NA NA SmartStyle SuperCuts Promenade NA Total revenue 2, , , , , , ,981.1 Reported EBIT EBIT margin 12.6% 13.6% 13.7% 13.0% 10.7% 8.2% 8.3% Add: non-cash / one-time expenses Adj. EBIT Adj. EBIT margin 12.6% 13.6% 14.0% 13.0% 12.4% 11.9% 11.8% Add: Est. D&A Est. N.A. Salon EBITDA EBITDA margin 17.4% 18.3% 18.6% 17.8% 17.0% 16.4% 16.2% 11

13 Restructuring initiatives sholker [printed: August 29, :03 AM] [saved: August 29, :19 AM] C:\Documents and Settings\sholker\Desktop\Sholk\Presentation\Sholk Molecular Diagnostics Presentation Final.ppt Regis activist-controlled board completed an extensive study of Regis business shortly after taking control of the company Analyzed customer transactions Spoke with customers about in-salon experience Interviewed employees and franchise owners Researched industry best practices to understand how competition was succeeding Key deficiencies in the in-salon guest experience were identified in the study Customers were leaving primarily because their expectations were not met in terms of service and salon experience Competitors were more consistently meeting these expectations Certain Regis brands were competing with each other 12

14 Restructuring initiatives sales growth Improve quality of stylist service / improve stylist retention Stylist compensation will now include a guest retention component Repeat guests will generate compensation for original stylist Salon/field managers will focus on supporting and mentoring stylists; distracting HR and local-level marketing responsibilities will be transferred to specialists Many salon and field managers usually begin as outstanding stylists this initiative will allow them to spend more time in the salon, focusing on what they do best Additional corporate operations and HR staff will be funded by increasing the span of control of regional managers and district leaders, who will now be eligible for a performance-based bonus (stakeholder incentive misalignment a major problem pre-restructuring) Updated, third-party POS system fully implemented by end of CY2012 Enhanced customer demographic info Will allow customers to remotely monitor wait times at local Regis salons with a smartphone app (they are copying successful first-mover Great Clips) First CRM program implemented Will allow analysis of customer lifetime value and retention Management will use customer data to make more informed marketing decisions (i.e. type and level of promotion required to drive positive NPV customer trials) Prior to activists taking control, the company did not capture customer data 13

15 Restructuring initiatives sales growth Management states in the recent 10K: Although we have generally been experiencing negative same-store sales we believe our strategy of focusing on the in-salon guest experience will improve same-store sales. North American salons revenue growth factors Acquisitions (previous twelve months) 4.4% 4.5% 4.6% 3.7% 0.8% 1.2% 0.7% Same-store sales 1.1% 0.9% 1.8% -2.9% -3.3% -1.8% -3.2% New stores 3.3% 2.6% 2.4% 2.0% 0.8% 0.6% 1.3% Foreign currency 0.4% 0.2% 0.8% -0.9% 0.5% 0.5% 0.0% Franchise revenues -0.1% 0.0% 0.1% -0.1% 0.0% 0.0% 0.0% Closed salons -0.4% -0.4% -0.4% -0.5% -0.4% -1.4% -2.3% Other -1.1% -0.6% 1.1% Total 8.7% 7.8% 9.3% 1.3% -2.7% -1.5% -2.4% Same-store sales will likely grow as salon chain management best practices are implemented Company-owned SuperCuts and the concepts under the Promenade umbrella materially underperform franchised stores SuperCuts average salon sales (franchised - $340k ; corporate - $270k) Promenade avg. salon sales (franchised - $280k ; corporate - $245k) Combined, these concepts account for 45% of Restructured Regis revenue Company-owned salons in the $17-$22 haircut segment (79% of Restructured Regis revenue) materially underperform stores of other salon chains Great Clips and Sports Clips do $306k and $318k avg. sales per salon vs. Regis $230k-$280k 14

16 Restructuring initiatives sales growth Regis management has indicated EBITDA rises around $9 million for each 1% increase in same store sales Company-owned SuperCuts and Promenade concepts are underperforming franchises and competitors concepts by 15%-25% on a sales per salon basis If comparable stores sales were to rise by 15% in this segment representing 45% of Restructured Regis revenue, EBITDA would rise by ~$60m The other concepts, especially those in the $17-$22 haircut segment representing 79% of Restructured Regis revenue, should also see some lift in sales from implementation of salon management best practices If the entire company experiences just a 10% comp lift over the next few years, current run-rate EBITDA would rise by ~$90m, roughly 50% higher than the current $180m-$190m run-rate Despite a 10% comp lift, Regis salon sales would still be below those of its franchiseeand competitor-owned salons 15

17 Restructuring initiatives expense reduction Expense reductions implemented in late FY2012 will drive $25m in net expense reductions in the next 12 months Management indicates more expense cuts are likely this year, one analyst mentioned the company guiding an additional $10m in annual savings Implies a pro-forma operating margin of 6.0%-6.5%, which appears rational relative to most indirect comps identified in the RGS proxy Pro-forma EBIT / EBITDA margins Comparable company Enterprise Value ($m) LTM EBIT margin LTM EBITDA margin RADIOSHACK CORP % 5.4% LTM operational EBIT 95 JACK IN THE BOX INC 1, % 10.9% Add: expense cuts Restructured Regis (pro-forma) 1, % 11.0% Run-rate EBIT (assuming flat sales) GAMESTOP CORP-CLASS A 2, % 8.1% % of revenue 6.1% 6.6% PAPA JOHN'S INTL INC 1, % 9.8% CRACKER BARREL OLD COUNTRY 1, % 9.7% Add: D&A BRINKER INTERNATIONAL INC 3, % 12.6% Run-rate EBITDA PETSMART INC 7, % 12.1% % of revenue 10.5% 11.0% FOOT LOCKER INC 4, % 9.7% ADVANCE AUTO PARTS INC 5, % 13.6% STARBUCKS CORP 36, % 18.0% SERVICE CORP INTERNATIONAL 4, % 23.8% AUTOZONE INC 17, % 21.4% H&R BLOCK INC 4, % 22.9% DINEEQUITY INC 2, % 27.6% Median 3, % 12.4% Source: Bloomberg The company will reduce 50+ brands with individual field teams to brands operating under 4 standard operating models Consistent, quality service at a competitive price drives sales, not the salon name Will increase marketing efficiency New model is more standardized and scalable than the piecemeal structure it replaces 16

18 Implications for run-rate EBITDA In sum, run-rate EBITDA (assuming no new salons) could rise $85m-$125m over the next couple of years to $270m-$310m Assuming flat sales, expense cuts will yield Restructured Regis $25m-$35m in additional EBITDA EBITDA could rise another $60m-$90m assuming same-store sales rise as Regis copies aspects of its better run competitors business models Cumulative EBITDA growth of 40%-75% 17

19 Potential multiple expansion If EBITDA stabilizes and begins growing, the current depressed EV/EBITDA multiple of 4.8x is likely to expand to the 6.0x-8.0x range of a steady, modestly growing specialty retailer Only secularly impaired Gamestop and Radioshack trade at a cheaper valuation Value-priced salons operating according to industry best practices exhibit little risk of secular decline Competitive advantages vs. predominantly mom-and-pop competitors suggest growth potential (See Appendix II) Comparable company Enterprise Value ($m) EV/EBITDA LTM EV/Sales LTM GAMESTOP CORP-CLASS A 2, x 0.3x RADIOSHACK CORP x 0.1x Restructured Regis (pro-forma) x 0.4x ADVANCE AUTO PARTS INC 5, x 0.8x FOOT LOCKER INC 4, x 0.8x CRACKER BARREL OLD COUNTRY 1, x 0.8x JACK IN THE BOX INC 1, x 0.8x SERVICE CORP INTERNATIONAL 4, x 2.0x BRINKER INTERNATIONAL INC 3, x 1.1x AUTOZONE INC 17, x 2.0x DINEEQUITY INC 2, x 2.7x PETSMART INC 7, x 1.2x PAPA JOHN'S INTL INC 1, x 1.0x STARBUCKS CORP 36, x 2.8x H&R BLOCK INC 4, x Median 3, x 1.1x Source: Bloomberg Activist investors holding concentrated positions control the board and are incentivized to sell the company once stabilized One easy exit captures fair trading value plus a control premium An ideal private equity candidate if stabilized, a cash cow with low capital requirements 18

20 Valuation and return potential At the current depressed 4.8x EV/EBITDA multiple for Restructured Regis, EBITDA growth would result in a 30%-50% stock return over the next few years ($24-$27 per share range) At a valuation closer in line with its stable specialty retail peers, combined EBITDA growth and multiple expansion could move the stock 50%-100%+ ($30-$40 per share range) Valuation LTM adj. EBITDA 184 Add: expense cuts Run-rate EBITDA Add: growth potential Pro-forma EBITDA Current multiple Normalized multiple range 4.8x 4.8x 6.0x 8.0x Restructured Regis enterprise value 1,285 1,476 1,613 2,471 Add: Provalliance JV value Hair Club for Men value International salons (UK) Empire Education Group Total enterprise value 1,683 1,874 2,011 2,868 Less: Net debt (assume conversion of conv. sr. notes) Equity value 1,668 1,859 1,996 2,854 Fully diluted shares Implied share price $24.30 $27.08 $29.08 $41.57 Current share price $18.38 $18.38 $18.38 $18.38 Return potential 32% 47% 58% 126% 19

21 Valuation and return potential Around 10% of newly hired CEO Daniel Hanrahan s first-year compensation is 20,000 shares of restricted stock which vest only if the stock has traded above $35 per share for 20 consecutive trading days sometime in the next 5 years A potential clue as to where the Board thinks the stock can realistically trade New CEO Daniel Hanrahan's first-year compensation $ value % of total Base salary 850, % 125% bonus 1,062, % Long-term equity incentive program 2,250, % Special equity award 2,016, % 20,000 restricted shares if RGS stock hits $35 700, % Total 6,879, % Recently appointed board member s investment firm, Birch Run Capital, increased position $10m to $117m around $18 per share in the three trading days after the 10-K was released on 8/29/12 Purchases were made immediately after an earnings quiet period, and after the director had examined the company s turnaround progress as a board member since 8/1/12 The fund s RGS position accounted for 50% of Birch Run s long equity portfolio prior to the recent open market purchases (credit and other AUM unknown) Work sample suggests a Birch Run is a quality firm: ( 20

22 Appendix I: Starboard Value Recently spun out of Ramius Capital ($9b+ AUM) Cowen Group (COWN) subsid. Good historical performance Spun out of Cowen Group due to potential conflict of interest (investment banking, activist investing under same roof) Cowen maintains equity stake 21

23 Appendix II: Competitive advantages and growth opp. Regis is the largest salon chain operator in the US, but it and its franchisees only operate 9,300 of the 94,000 salon and barber shops with paid employees in the US Regis LTM sales of $2 billion represent roughly 9% of this $22 billion annual market As the largest operator, Regis still holds under 5% market share in the $41 billion total salon and barber shop market, which includes 900,000 additional nonemployer based salon establishments (i.e. individual owner/operators, chair lessors, chair lessees, at-home hair stylists [$19 billion in collective sales]) If new management can successfully realign incentives so Regis boxes consistently deliver convenient salon services at a competitive price, Regis can resume growth Regis scale allows it to offer employees upward mobility and better benefits relative to smaller competitors Advantage over mom-and-pop competitors in retailing hair products Scale allows discounted purchases vs. mom-and-pop (i.e. $10 MSRP shampoo is sourced at $3 per bottle vs. $5 for mom-and-pop) Product retailing is 10%-35% of total salon revenue across Regis concepts Scale allows the company to grow and respond to threats early through acquisition Salons and small groups of salons typically sell for 3.0x-5.0x EBITDA Competitor Great Clips has grown comparable store sales for 30 straight quarters and brisk new salon growth continues a better run Regis could do the same 22