What made Regis stock more than double on Tuesday?

Regis Corp (NASDAQ: RGS) has entered into a “new senior secured credit facility” with the global asset manager TCW Asset Management Company LLC and Midcap Financial Trust. 

Its shares are up well over 100% on Tuesday. 

Why does it matter for Regis stock?

A $105 million term loan, the company’s press release added, will replace its existing debt and will help lower its outstanding indebtedness by over $80 million. 

Regis Corp will also get to save roughly $7.0 million in annual cash interest as well on the back of today’s announcement. According to Matthew Doctor - its chief executive officer:

Regis stock is still down some 10% versus its year-to-date high in late January. 

RGS secured access to $25 million

The agreement announced this morning will also secure access for Regis Corp to a revolving credit facility worth $25 million. 

The aforementioned credit facility as well as the term loan will mature in five years (June 24th, 2029). CEO Doctor also said in the press release on Tuesday:

The hair salons operator plans on updating investors on its progress during the earnings call for its fourth quarter of 2024. Regis stock does not currently pay a dividend. 

Regis took a hit to revenue in fiscal Q3

Chief executive Matthew Doctor dubbed TCW and Midcap investment a “testament to their confidence in the long-term prospects” of Regis Corp on Tuesday. 

He also confirmed that the Nasdaq-listed firm remains committed to “improving customer experience, implementing new tech, and managing corporate expenses”.

In May, RGS reported $287 million in system-wide revenue for its third financial quarter - down from $299 million a year ago. Its net loss also increased year-on-year from $1.6 million to $2.3 million in Q3. CEO Doctor said at the time:

Last week, equity analysts at StockNews.com initiated coverage of Regis stock with a “sell” rating. Shares of the hair salons company have a 52-week high of $28 and a 52-week low of $3.87 at writing. 

Following today’s surge, shares of Regis Corp are trading well above their 50-day and 200-day moving averages.