Steiner Announces Financial Results
Steiner Leisure Limited Announces First Quarter 2002 Financial Results
NASSAU, The Bahamas May 2, 2002--Steiner Leisure Limited (Nasdaq:STNR) today announced financial results for the quarter ended March 31, 2002. These results reflect the completion in the third quarter of 2001 of the acquisitions of Mandara Spa LLC and Mandara Spa Asia Limited, the Greenhouse Day Spas and C.Spa, Inc. These transactions were accounted for under the purchase method and as a result the financial results below include the results of the acquired entities subsequent to their acquisitions.
Steiner Leisure's revenues for the first quarter ended March 31, 2002 rose 49.3% to $61.2 million from $41.0 million during the comparable quarter in 2001. Net income for the quarter was $2.5 million compared with $5.9 million for the same quarter in 2001.
Earnings per share for the quarter ended March 31, 2002 was $0.15 per share compared with $0.39 per share for the comparable quarter in 2001. The above earnings per share data are presented on a diluted basis.
Clive E. Warshaw, Chairman of the Board of Steiner Leisure, commented "We are very pleased with the improvement of the operating results of our core business this quarter as compared to the fourth quarter of 2001. The land-based spa businesses we acquired in the third quarter of 2001 have now been substantially integrated. We will continue to focus these divisions on increasing revenues and improving operating efficiencies."
Steiner Leisure Limited is the leading worldwide provider of spa services. The Company's operations include spas and salons on 105 cruise ships, and in 51 resort spas and 19 luxury day spas. Our cruise line and land-based resort customers include Carnival Cruise Line, Royal Caribbean Cruise Lines, Princess Cruises, Disney Cruises, Celebrity Cruises, Norwegian Cruise Lines, Holland America Lines, Marriott, Park Place Entertainment and Sun International. Elemis Limited, a dedicated spa therapy company, manufactures its Elemis® brand for use in our cruise ships and land-based spas. This top quality European line of beauty products is also distributed worldwide to some of the most exclusive five star hotels, salons, health clubs and destination spas. Elemis®, as well as other Steiner private label products, including La Therapie®, Ionithermie, and Steiner Hair Care, are available at http://www.timetospa.com.
Steiner Leisure also owns and operates three post secondary schools (comprised of a total of nine campuses) located in Miami, Fort Lauderdale, Orlando and Sarasota, Florida; Baltimore, Maryland; and Charlottesville, Blacksburg and Winchester, Virginia. Offering degree and non-degree programs in massage therapy and skin care, these schools train and qualify spa professionals for health and beauty positions within the Steiner family of companies or other industry entities.
Cautionary Note Regarding Forward-Looking Statements
This press release contains a forward looking statement within the meaning of the Private Securities Litigation Reform Act. This forward-looking statement reflects our current views about future events and are subject to risks and uncertainties which may cause actual results to differ materially from those expressed or implied by such forward-looking statements.
This forward-looking statement relates to the future focus of our land-based spas. Our ability to effectuate that focus is dependent upon certain factors, including factors that could cause actual results to differ materially from those expressed or implied by our forward-looking statement including the following: the continuing effect on the economy in general and the travel and leisure segment in particular of the events of September 11, 2001; terminability with limited or no advance notice under certain circumstances of land-based spa agreements; negotiations with land-based spa lessors resulting in agreements which may not be as beneficial to us as anticipated or non-renewals of agreements; our dependence on the continued viability of the resorts where we operate our land-based spas; our dependence on the resort industry and our being subject to the risks of that industry; any future obligation to make minimum payments to lessors of land-based spas that we may operate in the future, irrespective of the revenues received by us from customers; increase in rent payments accompanying renewals of land-based spa agreements; our dependence on a single product manufacturer; economic downturns that could reduce the number of customers at resorts and that could otherwise reduce consumer demand for our products and services; our dependence for success on our ability to recruit and retain qualified personnel; changes in the taxation of our Bahamas subsidiaries; changing competitive conditions, including increased competition from other land-based spa providers; our limited experience in land-based operations, including with respect to the integration of acquired businesses; uncertainties beyond our control that could effect our ability to timely and cost-effectively construct land-based spa facilities; operation of facilities in countries with histories of economic and/or political instability; product liability or other claims against us by customers of our products or services; restrictions on us as a result of our credit facility; and changes in laws and government regulations applicable to us.
These risk factors are described in greater detail in Steiner Leisure's Annual Report on Form 10-K for the year ended December 31, 2001 filed with the Securities and Exchange Commission.
We assume no duty to update any forward-looking statements contained in this press release.
The Company will be holding a conference call at 11:00 am (EST) on Friday, May 3, 2002. Clive E. Warshaw, Chairman of the Board, and Leonard I. Fluxman, President and Chief Executive Officer, will discuss the contents of this press release.
If you wish to participate in this conference call, please call (415) 217-0050 for domestic and international calls approximately 10 minutes before the scheduled time and reference number 04190016 and the Chairperson as Clive Warshaw. This call is available for replay from Friday, May 3, 2002 (approximately 3 hours after the call takes place) until Friday, May 10, 2002 at 3:00 pm. You may reach it by dialing (913) 385-6780 for both domestic and international calls. The PIN access code is 2178.
SELECTED FINANCIAL DATA
($ in thousands, except per share data)
First Quarter Ended
March 31,
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2002 2001
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Revenues:
Services $ 42,463 $ 26,092
Products 18,782 14,932
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Total revenues 61,245 41,024
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Cost of Sales:
Cost of services 35,739 19,728
Cost of products 14,174 11,149
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Total cost of sales 49,913 30,877
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Gross profit 11,332 10,147
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Operating Expenses:
Administrative 3,435 2,154
Salary and payroll taxes 3,932 2,123
Goodwill amortization -- 185
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Total operating expenses 7,367 4,462
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Income from operations 3,965 5,685
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Other Income (Expense):
Interest expense (928) --
Minority interest (428) (8)
Other income 78 520
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Total other income (expense) (1,278) 512
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Income before provision for
income taxes 2,687 6,197
Provision for income taxes 177 296
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Net income $ 2,510 $ 5,901
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Income per share:
Basic $ 0.16 $ 0.40
Diluted $ 0.15 $ 0.39
Weighted average shares
outstanding:
Basic 15,815 14,762
Diluted 16,489 15,293
STATISTICS
First Quarter Ended
March 31,
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2002 2001
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Average number of ships served(1): 97 94
Spa 57 47
Non-Spa 40 47
Average total number of staff on ships
served: 1,144 1,055
Spa 892 751
Non-Spa 252 304
Revenue per staff per day(2): $ 383 $ 358
Spa $ 421 $ 407
Non-Spa $ 247 $ 237
Average weekly revenues: $ 31,439 $ 28,101
Spa $ 46,041 $ 44,938
Non-Spa $ 10,794 $ 10,877
Average number of resort spas served(3)(4) 43 --(5)
Average weekly resort spas revenues $ 17,670 $ --(5)
Average number of day spas served(4) 19 --(5)
Average weekly day spas revenues $ 18,484 $ --(5)
Total schools revenues $4,277,000 $3,918,000
Total wholesale and retail
product revenues $3,445,000 $3,045,000
(1) Average number of ships served reflects the fact that during
the period ships were in and out of service and, accordingly, the
number of ships served during the year varied.
(2) Revenue includes all sales from services and products on board
ships. Staff includes all shipboard employees. Per day refers to each
day that a cruise ship is in service.
(3) Excludes the effect of seven resort spas that we operate
through a joint venture in which we own a 49% interest.
(4) Average number of resort and day spas served reflects the fact
that during the period these spas were opened or closed and,
accordingly, the number of spas served during the period varied.
(5) Comparable prior period amounts are not available as the
resort and day spas were acquired in the third quarter of 2001.