×

Steiner Leisure Limited Announces Third Quarter 2014 Financial Results

NASSAU, The Bahamas, Oct. 29, 2014 (GLOBE NEWSWIRE) -- Steiner Leisure Limited (Nasdaq:STNR) today announced financial results for the third quarter and nine months ended September 30, 2014.

Steiner Leisure's revenues for the third quarter ended September 30, 2014 increased 2.3% to $219.7 million from $214.8 million during the comparable quarter in 2013. Net income for the third quarter of 2014 was $12.1 million compared with $11.5 million for the same quarter in 2013.

Earnings per share for the third quarter ended September 30, 2014 was $0.87 per share compared with $0.77 per share for the comparable quarter in 2013. The earnings per share data are presented on a diluted basis.

Revenues for the nine months ended September 30, 2014 increased 1.8% to $645.7 million from $634.5 million during the comparable nine months in 2013. Net income for the nine months ended September 30, 2014 was $27.8 million compared with $36.5 million for the same nine months in 2013.

Earnings per share for the nine months ended September 30, 2014 was $1.93 per share compared with $2.46 per share for the comparable nine 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 www.timetospa.com and www.blissworld.com.

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 64 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, October 30, 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 five minutes before the scheduled time. The password is "Steiner." The call is available for replay from Thursday, October 30, 2014 (approximately 3 hours after the call takes place) through Thursday, November 6, 2014 at approximately 5:00 pm (ET). You may reach it by dialing (203) 369-0501 for both domestic and international calls. The password is "33146."

SELECTED FINANCIAL DATA
($ and shares in thousands, except per share data)
(Unaudited)
Third Quarter Ended
September 30,
Nine Months Ended
September 30,
2014 2013 2014 2013
Revenues:
Services $ 149,389 $ 148,323 $ 451,098 $ 444,635
Products 70,288 66,508 194,578 189,863
Total revenues 219,677 214,831 645,676 634,498
Cost of Sales:
Cost of services 126,452 126,732 378,546 367,939
Cost of products 44,561 43,783 128,851 126,467
Total cost of sales 171,013 170,515 507,397 494,406
Gross profit 48,664 44,316 138,279 140,092
Operating Expenses:
Administrative 17,472 11,526 46,850 38,667
Salary and payroll taxes 16,419 18,533 56,762 56,455
Total operating expenses 33,891 30,059 103,612 95,122
Income from operations 14,773 14,257 34,667 44,970
Other Income (Expense):
Interest expense (712) (899) (2,165) (3,455)
Other income 202 132 671 435
Total other income (expense) (510) (767) (1,494) (3,020)
Income before provision for income taxes 14,263 13,490 33,173 41,950
Provision for income taxes 2,157 2,038 5,423 5,466
Net income $ 12,106 $ 11,452 $ 27,750 $ 36,484
Income per share:
Basic $ 0.88 $ 0.78 $ 1.94 $ 2.49
Diluted $ 0.87 $ 0.77 $ 1.93 $ 2.46
Weighted average shares outstanding:
Basic 13,771 14,661 14,299 14,648
Diluted 13,883 14,912 14,393 14,826
STATISTICS
Third Quarter Ended
September 30,
Nine Months Ended
September 30,
2014 2013 2014 2013
Average number of ships served1: 147 157 149 155
Spa 108 116 111 114
Non-Spa 39 41 38 41
Average total number of staff on ships served: 2,582 2,706 2,633 2,690
Spa 2,217 2,332 2,275 2,317
Non-Spa 365 374 358 373
Revenue per staff per day2: $ 418 $ 414 $ 409 $ 414
Spa $ 434 $ 433 $ 427 $ 434
Non-Spa $ 319 $ 297 $ 297 $ 288
Average weekly revenues: $ 51,285 $ 49,938 $ 50,679 $ 50,263
Spa $ 62,180 $ 61,093 $ 61,416 $ 61,755
Non-Spa $ 20,959 $ 18,792 $ 19,493 $ 18,311
Average number of land-based spas served 3 63 67 65 67
Average weekly land-based spas revenues $ 25,998 $ 27,497 $ 27,386 $ 28,934
Total schools revenues $ 19,907,000 $ 20,203,000 $ 58,620,000 $ 59,383,000
Total wholesale and retail product revenues $ 41,775,000 $ 35,879,000 $ 108,838,000 $ 99,313,000
Average number of Ideal Image locations 3,4 110 95 109 87
Average weekly Ideal Image revenues $ 25,583 $ 25,400 $ 27,023 $ 28,332
Ideal Image revenues $ 36,986,000 $ 31,565,000 $ 114,874,000 $ 96,323,000
Ideal Image cash revenues 5 $ 34,423,000 $ 37,408,000 $ 106,099,000 $ 120,693,000
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
($ in thousands)
Third Quarter Ended
September 30,
Nine Months Ended
September 30,
2014 2013 2014 2013
Ideal Image revenues $ 36,986 $ 31,565 $ 114,874 $ 96,323
Accrual to cash adjustments (2,563) 5,843 (8,775) 24,370
Ideal Image cash revenues $ 34,423 $ 37,408 $ 106,099 $ 120,693

CONTACT: Leonard I. Fluxman President and Chief Executive Officer (305) 358-9002, ext. 1215

Source:Steiner Leisure Limited