Steiner Leisure Limited Announces Second Quarter 2014 Financial Results

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NASSAU, The Bahamas, July 30, 2014 (GLOBE NEWSWIRE) -- Steiner Leisure Limited (Nasdaq:STNR) today announced financial results for the second quarter ended June 30, 2014.

Steiner Leisure's revenues for the second quarter ended June 30, 2014 increased 1.0% to $209.3 million from $207.7 million during the comparable quarter in 2013. Net income for the second quarter was $8.3 million compared with $12.3 million for the same quarter in 2013.

Earnings per share for the second quarter ended June 30, 2014 was $0.57 per share, compared with $0.83 per share for the comparable quarter in 2013. The earnings per share data are presented on a diluted basis.

Revenues for the six months ended June 30, 2014 increased 2.0% to $426.0 million from $419.7 million during the comparable six months in 2013. Net income for the six months ended June 30, 2014 was $15.6 million compared with $25.0 million for the same six months in 2013.

Earnings per share for the six months ended June 30, 2014 was $1.07 per share compared with $1.69 per share for the comparable six months in 2013. The above earnings per share data are presented on a diluted basis.

Steiner Leisure Limited is a worldwide provider and innovator in the fields of beauty, wellness and education. We are dedicated to maintaining the highest quality standards and continually evolving to include and anticipate new developments within our industry. We aim to maintain and expand our existing diverse portfolio of services, products and brands, as well as to seek out new opportunities to complement our business.

Our services include traditional and alternative massage, body and skin treatment options, fitness, acupuncture, herbal medicine, medi-spa treatments and laser hair removal. We are committed to providing our customers with a wide-ranging assortment of beauty products, including premium quality options developed by us under our own brands, as well as those purchased from third parties.

Our distribution channels include our shipboard and land-based spas and salons, destination spas, health clubs, department stores and third party retail outlets and distributors. We also sell our products on certain British Airways flights, on QVC, by catalog, and online through our websites, including and

Our post-secondary schools offer programs in massage therapy and skin care, among others, and, along with our recruiting and training operations, prepare spa professionals for careers in the health and wellness industry, including within the Steiner family of companies.

Our cruise line operations are conducted in spas onboard 148 ships, including Azamara Club Cruises, Carnival Cruise Lines, Crystal Cruises, Cunard Cruise Line, Holland America Line, Norwegian Cruise Line, P&O Cruises, Princess Cruises, Royal Caribbean Cruises, Seabourn Cruise Lines, Silversea Cruises, Thomson Cruises and Windstar Cruises.

Our land-based spa operations are carried out under our Elemis®, Mandara®, Chavana®, Bliss® and Remède® brands and take place in 67 locations, including resort spas, urban hotel spas and day spas. In addition, a total of 28 resort and hotel spas are operated under our brands by third parties pursuant to license agreements with the company. Our land-based customers include Caesar's Entertainment, Hilton Hotels, Kerzner International, Loews Hotels, Marriott Hotels, Nikko Hotels, Planet Hollywood, Sofitel Luxury Hotels, St. Regis Hotels, W Hotels and Resorts and Westin Hotels and Resorts.

Our Ideal Image customized laser hair removal services are provided by highly trained, experienced practitioners through a nationwide network of 127 treatment centers (17 of which are operated by franchisees) across 31 states, as well as two locations in Canada.

We develop and sell a variety of high quality beauty products under our Elemis, La Thérapie™, Bliss, Remède, Laboratoire Remède® and Jou® brands.

Our schools operations consist of 12 post-secondary schools (comprised of a total of 32 campuses) located in Phoenix, Scottsdale, Tempe and Tucson, Arizona; Westminster and Aurora, Colorado; Groton, Newington and Westport, Connecticut; Miami, Orlando, Pompano Beach, Sarasota and Tampa/St. Pete, Florida; Chicago, Crystal Lake and Joliet, Illinois; Baltimore, Maryland; Boston, Massachusetts; Las Vegas, Nevada; Hoboken and Wall, New Jersey; King of Prussia and York, Pennsylvania; Arlington, Houston and Richardson, Texas; Salt Lake City and Lindon, Utah; Charlottesville, Virginia; and Federal Way and Seattle, Washington. Offering programs in massage therapy and, in some cases, skin care, these schools train and qualify spa professionals for health and beauty positions within the industry, including our own operations.

As part of our employee recruitment operations for our shipboard spas, we provide education to our shipboard employees through our rigorous training programs, at our primary training facilities near London, England or one of our satellite training centers in South Africa and the Philippines. These employees are sourced primarily from the British Isles, Australia, South Africa, Southeast Asia, Canada, the Caribbean and continental Europe.

The Company will be holding a conference call at 11:00 am (ET) on Thursday, July 31, 2014. 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 (517) 308-9020 for domestic and international calls approximately ten minutes before the scheduled time. The password is "Steiner". This call is available for replay from Thursday, July 31, 2014 (approximately 3 hours after the call takes place) until Thursday, August 7, 2014 at approximately 4:00 pm (ET). You may reach it by dialing (402) 220-4771 for both domestic and international calls. The password is "33146".

($ and shares in thousands, except per share data)
Second Quarter Ended Six Months Ended
June 30, June 30,
2014 2013 2014 2013
Services $146,415 $145,000 $301,709 $296,312
Products 62,848 62,653 124,290 123,355
Total revenues 209,263 207,653 425,999 419,667
Cost of Sales:
Cost of services 122,837 120,093 252,094 241,207
Cost of products 41,722 42,007 84,290 82,684
Total cost of sales 164,559 162,100 336,384 323,891
Gross profit 44,704 45,553 89,615 95,776
Operating Expenses:
Administrative 14,466 12,329 29,378 27,141
Salary and payroll taxes 19,905 18,285 40,343 37,922
Total operating expenses 34,371 30,614 69,721 65,063
Income from operations 10,333 14,939 19,894 30,713
Other Income (Expense):
Interest expense (697) (1,137) (1,453) (2,556)
Other income 326 159 469 303
Total other income (expense) (371) (978) (984) (2,253)
Income before provision for income taxes 9,962 13,961 18,910 28,460
Provision for income taxes 1,679 1,669 3,266 3,428
Net income $8,283 $12,292 $15,644 $25,032
Income per share:
Basic $0.57 $0.84 $1.07 $1.71
Diluted $0.57 $0.83 $1.07 $1.69
Weighted average shares outstanding:
Basic 14,454 14,635 14,567 14,641
Diluted 14,538 14,808 14,653 14,783

Second Quarter Ended Six Months Ended
June 30, June 30,
2014 2013 2014 2013
Average number of ships served1: 145 154 149 154
Spa 108 113 112 113
Non-Spa 37 41 37 41
Average total number of staff on ships served: 2,552 2,675 2,658 2,681
Spa 2,200 2,302 2,304 2,310
Non-Spa 352 373 354 371
Revenue per staff per day2: $401 $396 $405 $413
Spa $418 $413 $423 $434
Non-Spa $292 $288 $285 $283
Average weekly revenues: $49,306 $48,053 $50,376 $50,431
Spa $59,735 $58,853 $61,039 $62,099
Non-Spa $19,234 $18,332 $18,722 $18,063
Average number of land-based spas served 3 65 68 66 68
Average weekly land-based spas revenues $27,084 $28,946 $28,068 $29,654
Total schools revenues $19,050,000 $19,321,000 $38,714,000 $39,181,000
Total wholesale and retail product revenues $35,079,000 $33,425,000 $67,063,000 $63,434,000
Average number of Ideal Image locations 3,4 109 87 109 83
Average weekly Ideal Image revenues 4 $27,575 $29,325 $27,635 $30,021
Ideal Image revenues $39,074,000 $33,066,000 $77,888,000 $64,758,000
Ideal Image cash revenues 5 $35,729,000 $44,326,000 $71,703,000 $83,285,000

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 period varied.

2 Revenue includes all sales of services and products on ships. Staff includes all shipboard employees. Per day refers to each day that a cruise ship is in service.

3 Average number of land-based day spas and Ideal Image locations operated reflects the fact that during the period spas and centers were opened or closed and, accordingly, the number of spas and centers served during the period varied.

4 Excludes 17 centers which are operated by franchisees.

5 "Cash revenues" are non-generally accepted accounting principles ("non-GAAP") as defined by the Securities and Exchange Commission. Management believes that the presentation of cash revenues serves to enhance the understanding of Ideal Image's performance. This non-GAAP measure should be considered in addition to and not as a substitute for, or superior to, measures of financial performance prepared in accordance with generally accepted accounting principles ("GAAP"). See below for a reconciliation of GAAP results to the non-GAAP measures.

Reconciliation of Non-GAAP Measures
Second Quarter Ended Six Months Ended
June 30, June 30,
2014 2013 2014 2013
Ideal Image revenues $39,074,000 $33,066,000 $77,888,000 $64,758,000
Accrual to cash adjustments (3,345,000) 11,260,000 (6,185,000) 18,527,000
Ideal Image cash revenues $35,729,000 $44,326,000 $71,703,000 $83,285,000

CONTACT: Leonard I. Fluxman, President and Chief Executive Officer (305) 358-9002, ext. 215

Source:Steiner Leisure Limited