Press Release: Steiner Leisure Limited
November 2, 2001
NASSAU, The Bahamas -- Steiner Leisure Limited (Nasdaq:STNR) yesterday announced financial results for the third
quarter ended September 30, 2001. During this quarter, the Company completed the acquisitions of Mandara Spa LLC
and Mandara Spa Asia Limited (July 3, 2001), Greenhouse Day Spas (July 12, 2001) and C.Spa, Inc. (July 31, 2001).
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 third quarter ended September 30, 2001 rose 37% to $58.1 million from $42.5
million during the comparable quarter in 2000. Net income for the quarter was $3.6 million compared with $6.3 million
for the same quarter in 2000.
Earnings per share for the quarter ended September 30, 2001 was $0.22 per share compared with $0.40 per share for
the comparable quarter in 2000. The above earnings per share data are presented on a diluted basis.
Revenues for the nine months ended September 30, 2001 rose 18% to $141.6 million from $120.0 million during the
comparable nine months in 2000. Net income for the nine months ended September 30, 2001 was $15.5 million compared
with $17.5 million for the same nine months in 2000.
Earnings per share for the nine months ended September 30, 2001 was $0.99 per share compared with $1.10 per share
for the comparable nine months in 2000. The above earnings per share data are presented on a diluted basis.
Clive E. Warshaw, Chairman of the Board of Steiner Leisure, commented, ``The terrorist attacks of September 11
and their aftermath have, not unexpectedly, had a dramatic impact on our operating results. Immediately following
the attacks of September 11, seven cruises were cancelled and for the remainder of September cruise ships sailed
at substantially lower occupancies than anticipated. Our resort spas were severely impacted by declines in occupancy
at the related hotels and our day spas encountered lower levels of customer traffic. Additionally, during the quarter,
Renaissance Cruises filed for bankruptcy. During the quarter, we have been integrating our newly acquired businesses.
This process has included training, introduction of the Elemis product line and the continued evaluation of personnel.
The completion of this process was delayed by the attacks but is expected to be completed in the fourth quarter.
We have begun to see positive trends in our business and we are hoping this continues through the fourth quarter''.
Steiner Leisure Limited is the leading worldwide provider of spa services. The Company's operations include spas
and salons on 107 cruise ships, 50 resort spas and 17 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 on board Steiner cruise ships 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, Sarasota, Virginia and Baltimore. Offering degrees in massage, advanced 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
Certain statements in this press release and in our other published information may contain forward-looking statements.
Such forward-looking statements include, among others, statements regarding: our proposed activities pursuant to
agreements with cruise lines or land-based operators; our future land-based activities; scheduled introductions
of new ships by cruise lines; our ability to generate sufficient cash flow from operations; the extent of the taxability
of our income; the affects of acquisitions and new projects; and the Company's future financial results. Such forward-looking
statements are not guarantees of future performance and involve known and unknown risks, uncertainties and other
factors, which may cause the actual results, performance or achievements to differ materially from results, performance
or achievements expressed or implied in such forward-looking statements. Such factors include the continuing effect
on the economy in general and the travel and leisure segment in particular of the events of September 11, 2001;
our dependence on cruise line concession agreements and land-based spa agreements of specified terms and that are
terminable by cruise lines and the lessors of land-based spas with limited or no advance notice under certain circumstances;
our dependence on the financial viability of the cruise lines and land-based resorts we serve; the risk that renewals
of an agreement with a cruise line or land-based spa will require reductions in margins on existing agreements,
as well as on the renewed agreement, with that cruise line or land-based spa; our dependence on the cruise industry
and the luxury resort industry and our being subject to the risks of those industries; uncertainties beyond our
control that could affect our ability to timely and cost effectively construct land-based spa facilities; the Company's
limited experience in land-based spas; risks that accompany the acquisition and operation of facilities in countries
with histories of economic and/or political instability; the risk that the Company will be unable to effectively
integrate newly acquired businesses or facilities; the risk that the Company's operations and strategy could be
limited by the need to comply with the covenants in the recent financing; changes in tax and other laws and regulations
affecting Steiner Leisure Limited and other factors described in further detail in Steiner Leisure Limited's filings
with the Securities and Exchange Commission, including the risk factors set forth in the Company's Annual Report
on Form 10-K for the year ended December 31, 2000.
The Company will be holding a conference call at 10:00 am (EST) on Friday, November 2, 2001. 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 10180048 and the Chairperson as Clive Warshaw.
This call is available for replay from Friday, November 2, 2001 (approximately 3 hours after the call takes place)
until Friday, November 9, 2001 at 4:00 pm. You may reach it by dialing 913/385-6780 for both domestic and international
calls. The PIN access code is ``2172.''
SELECTED FINANCIAL DATA
($ in thousands, except per share data)
Third Quarter Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
--------- --------- --------- ---------
Revenues:
Services $ 39,938 $ 27,395 $ 92,978 $ 75,641
Products 18,156 15,137 48,635 44,321
--------- --------- --------- ---------
Total revenues 58,094 42,532 141,613 119,962
--------- --------- --------- ---------
Cost of Sales:
Cost of services 32,443 20,729 72,712 57,251
Cost of products 13,651 11,219 36,421 32,814
--------- --------- --------- ---------
Total cost
of sales 46,094 31,948 109,133 90,065
--------- --------- --------- ---------
Gross profit 12,000 10,584 32,480 29,897
--------- --------- --------- ---------
Operating Expenses:
Administrative 2,999 2,119 7,314 6,208
Salary and payroll
taxes 4,285 2,041 8,549 5,891
Goodwill Amortization 186 203 556 490
--------- --------- --------- ---------
Total operating
expenses 7,470 4,363 16,419 12,589
--------- --------- --------- ---------
Income from
operations 4,530 6,221 16,061 17,308
--------- --------- --------- ---------
Other Income (Expense):
Interest expense (958) -- (958) --
Other income 151 402 1,109 1,177
--------- --------- --------- ---------
Total other
income (expense) (807) 402 151 1,177
--------- --------- --------- ---------
Income before
provision for
income taxes 3,723 6,623 16,212 18,485
Provision for income
taxes 108 342 681 976
--------- --------- --------- ---------
Net income $ 3,615 $ 6,281 $ 15,531 $ 17,509
========= ========= ========= =========
Income per share:
Basic $ 0.23 $ 0.41 $ 1.03 $ 1.14
Diluted $ 0.22 $ 0.40 $ 0.99 $ 1.10
Weighted average
shares outstanding:
Basic 15,612 15,264 15,049 15,404
Diluted 16,560 15,784 15,721 15,879
STATISTICS
Third Quarter Ended Nine Months Ended
September 30, September 30,
2001 2000 2001 2000
--------- --------- --------- ---------
Average number of
ships served(1) 110 108 101 105
Average total number
of staff on ships
served 1,218 1,097 1,120 1,063
Revenue per staff
per day(2) $ 362 $ 365 $ 360 $ 358
(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 period 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.
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Contact:
Steiner Leisure Limited, Miami
Leonard I. Fluxman, 305/358-9002