STEINER LEISURE LIMITED
Post Office Box N-9306
Suite 104A
Nassau, The Bahamas
For Release: IMMEDIATELY
Contact: Leonard I. Fluxman, President and Chief Executive Officer (305) 358-9002, ext. 215
Steiner Leisure Limited Announces Second Quarter 2003 Financial Results
NASSAU, THE BAHAMAS, July 31, 2003 - Steiner Leisure Limited (NASDAQ: STNR) today announced financial results for the second quarter ended June 30, 2003. Included in other income for the second quarter is $400,000 of business interruption insurance proceeds. These proceeds relate to damages incurred by some of our Mandara resort spa properties as a result of a typhoon in Guam in December 2002.
Steiner Leisure's revenues, excluding its discontinued day spa operations, for the second quarter ended June 30, 2003 rose 8.0% to $65.8 million from $60.9 million during the comparable quarter in 2002. Income from continuing operations, excluding discontinued operations and before cumulative effect of a change in accounting principle for the second quarter, was $5.3 million compared with $5.6 million for the same quarter in 2002.
Earnings per share before discontinued operations and cumulative effect of a change in accounting principle for the second quarter ended June 30, 2003 was $0.32 per share, compared with $0.34 per share for the comparable quarter in 2002. The earnings per share data are presented on a diluted basis.
Revenues, excluding our discontinued day spa operations, for the six months ended June 30, 2003 rose 10.3% to $131.0 million from $118.8 million during the comparable six months in 2002. Income from continuing operations, excluding discontinued operations and before cumulative effect of a change in accounting principle for the six months ended June 30, 2003 was $10.5 million compared with $10.9 million for the same six months in 2002.
Earnings per share before discontinued operations and cumulative effect of a change in accounting principle for the six months ended June 30, 2003 was $0.64 per share compared with $0.66 per share for the comparable six months in 2002. The above earnings per share data are presented on a diluted basis.
Leonard I. Fluxman, President and Chief Executive Officer of Steiner Leisure, commented "Although like other segments of the leisure industry, we were negatively impacted by factors outside of our control, such as the war in Iraq and the SARS epidemic, we are pleased with the operating results that our business segments were able to produce."
Steiner Leisure Limited is a worldwide provider of spa services. The Company's operations include spas and salons on 109 cruise ships, and in 58 resort spas and two luxury day spas. Our cruise line and land-based resort customers include Carnival Cruise Line, Celebrity Cruises, Crystal Cruises, Disney Cruises, Holland America Lines, Kerzner International, Marriott, Norwegian Cruise Lines, Park Place Entertainment, Princess Cruises and Royal Caribbean Cruise Lines. Our Elemis Limited subsidiary manufactures its Elemis® brand products for use in our cruise ship and land-based spas. This top quality European line of beauty products is also distributed worldwide to exclusive 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 www.timetospa.com.
Steiner Leisure also owns and operates three post secondary schools (comprised of a total of eight campuses) located in Miami, Fort Lauderdale, Orlando and Sarasota, Florida; Baltimore, Maryland; York, Pennsylvania and Charlottesville 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.
The Company will be holding a conference call at 11:00 am (EST) on Friday, August 1, 2003. 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 (952) 556-2807 for domestic and international calls approximately ten minutes before the scheduled time and reference number 202258 and the Chairperson as Clive Warshaw. This call is available for replay from Friday, August 1, 2003 (approximately 3 hours after the call takes place) until Friday, August 9, 2003 at 12:00 pm. You may reach it by dialing (703) 925-2510 for both domestic and international calls. The PIN access code is 202258.
SELECTED FINANCIAL DATA
($ in thousands, except per share data)
(Unaudited)
| | | Second Quarter Ended | Six Months Ended |
| | | | |
| | | | | | | | | |
Revenues: | | | | | | | | |
Services | $ | 45,897 | $ | 42,053 | $ | 91,772 | $ | 82,024 |
Products | | | | | | | | |
Total revenues | | | | | | | | |
| | | | | | | | | |
Cost of Sales: | | | | | | | | |
Cost of services | | 37,350 | | 33,353 | | 74,082 | | 64,555 |
Cost of products | | | | | | | | |
Total cost of sales | | | | | | | | |
Gross profit | | | | | | | | |
| | | | | | | | | |
Operating Expenses: | | | | | | | | |
Administrative | | 3,337 | | 3,039 | | 6,705 | | 6,087 |
Salary and payroll taxes | | | | | | | | |
Total operating expenses | | | | | | | | |
Income from continuing operations | | | | | | | | |
| | | | | | | | | |
Other Income (Expense): | | | | | | | | |
Interest expense | | (852 | ) | (989 | ) | (1,819 | ) | (1,890) |
Equity and minority interest | | 42 | | (185 | ) | 146 | | (613) |
Other income | | | | | | | | |
Total other income (expense) | | | ) | | ) | | ) | |
| | | | | | | | | |
Income from continuing operations before provision for income taxes, discontinued operations and cumulative effect of a change in accounting principle | |
5,600
| |
5,790
| |
11,127
| |
11,239
|
| | | | | | | | | |
Provision for income taxes | | | | | | | | |
| | | | | | | | | |
Income from continuing operations before discontinued operations and cumulative effect of a change in accounting principle | |
5,291
| |
5,593
| |
10,485
| |
10,867
|
| | | | | | | | | |
Loss from discontinued operations (which includes loss on disposal in 2003 of $715 and $1,548 for the three and six months ended June 30, 2003, respectively), net of taxes | |
(1,303
|
)
|
(2,678
|
)
|
(3,134
|
)
|
(5,442)
|
| | | | | | | | | |
Cumulative effect of a change in accounting principle, net of taxes | | | | |
| | | |
| | | | | | | | | |
Net income (loss) | $ | | $ | | $ | | $ | |
| | | | | | | | |
Income (loss) per share-Basic: | | | | | | | | |
Income before discontinued operations and
cumulative effect of a change in accounting
principle |
$
|
0.32
|
$
|
0.35
|
$
|
0.64
|
$
|
0.68
|
Loss from discontinued operations | | (0.08 | ) | (0.17 | ) | (0.19 | ) | (0.33) |
Cumulative effect of a change in
accounting principle | | | | |
| | | |
| $ | | $ | | $ | | $ | |
| | | | | | | | |
Income (loss) per share-Diluted: | | | | | | | | |
Income before discontinued operations and
cumulative effect of a change in accounting
principle |
$
|
0.32
|
$
|
0.34
|
$
|
0.64
|
$
|
0.66
|
Loss from discontinued operations | | (0.08 | ) | (0.16 | ) | (0.19 | ) | (0.33) |
Cumulative effect of a change in
accounting principle | | | | |
| | | |
| $ | | $ | | $ | | $ | |
| | | | | | | | |
Weighted average shares outstanding: | | | | | | | | |
Basic | | 16,393 | | 15,957 | | 16,389 | | 15,886 |
Diluted | | 16,503 | | 16,402 | | 16,484 | | 16,435 |
STATISTICS
| | | Second Quarter Ended | | Six Months Ended |
| | | | | |
| | | | | | | | |
| | | | | | | | | |
Average number of ships served1: | | 100 | | 98 | | 101 | | 98 |
Spa | | 65 | | 58 | | 65 | | 58 |
Non-Spa | | 35 | | 40 | | 36 | | 40 |
| | | | | | | | | |
Average total number of staff on ships served: | |
1,282
| |
1,159
| |
1,283
| |
1,152
|
Spa | | 1,049 | | 927 | | 1,049 | | 910 |
Non-Spa | | 233 | | 232 | | 234 | | 242 |
| | | | | | | | | |
Revenue per staff per day2: | $ | 379 | $ | 393 | $ | 380 | $ | 390 |
Spa | $ | 405 | $ | 423 | $ | 409 | $ | 424 |
Non-Spa | $ | 265 | $ | 272 | $ | 254 | $ | 263 |
| | | | | | | | | |
Average weekly revenues: | $ | 34,058 | $ | 32,435 | $ | 33,800 | $ | 32,108 |
Spa | $ | 45,803 | $ | 47,336 | $ | 45,872 | $ | 46,860 |
Non-Spa | $ | 12,320 | $ | 10,974 | $ | 11,667 | $ | 11,056 |
| | | | | | | | | |
Average number of land-based spas operated3,4,5 | |
48
| |
47
| |
48
| |
46
|
| | | | | | | | | |
Average weekly land-based spas revenues5 | $ | 20,093 | $ | 18,879 | $ | 20,488 | $ | 18,430 |
| | | | | | | | | |
Total schools revenues6 | $ | 4,165,000 | $ | 4,296,000 | $ | 8,335,000 | $ | 8,685,000 |
| | | | | | | | | |
Total wholesale and retail product revenues | $ | 4,888,000 | $ | 3,794,000 | $ | 8,884,000 | $ | 7,128,000 |
_____________
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 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 Excludes the effect of eleven land-based resort spas that we operate through a joint venture in which we own a 49% interest.
4 Average number of land-based day spas operated reflects the fact that during the period spas were opened or closed and, accordingly, the number of spas served during the period varied.
5 Includes resort spas and two spas referred to as "day spas" in prior statistical presentations.
6 Includes $150,000 and $78,000 for the three months ended June 30, 2003 and 2002, respectively, and $315,000 and $190,000 for the six months ended June 30, 2003 and 2002, respectively, relating to the Steiner training school near London, England.
