| Significant Accounting Policies [Text Block] | (3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES : Our significant accounting policies were described in Note 2 to our consolidated financial statements included in our 2014 Annual Report. There have been no significant changes in our significant accounting policies for the six months ended June 30, 2015, unless otherwise described below. (a) Principles of Consolidation and Basis of Presentation We hold variable interests in physician-owned entities that provide cosmetic services to the Ideal Image centers’ guests. These entities were set up for regulatory compliance purposes. We bear the benefits and risks of loss from operating those entities through contractual agreements. Our consolidated financial statements include the operating results of those entities. The assets and liabilities of these entities are not material to the consolidated balance sheets. (b) Inventories Inventories, consisting principally of beauty products, are stated at the lower of cost (first-in, first-out) or market. Inventories consist of the following (in thousands): June 30, December 31, 2015 2014 Finished goods $ 52,259 $ 48,736 Raw materials 3,310 3,366 $ 55,569 $ 52,102 (c) Income Taxes A valuation allowance is provided on deferred tax assets if it is determined that it is more likely than not that the deferred tax asset will not be realized. The majority of our income is generated outside of the United States. We believe a large percentage of our shipboard services income is foreign-source income, not effectively connected to a business we conduct in the United States and, therefore, not subject to United States income taxation. (d) Translation of Foreign Currencies For currency exchange rate purposes, assets and liabilities of our foreign subsidiaries are translated at the rate of exchange in effect at the balance sheet date. Equity and other items are translated at historical rates and income and expenses are translated at the average rates of exchange prevailing during the year. The related translation adjustments are reflected in the Accumulated Other Comprehensive Loss caption of our Condensed Consolidated Balance Sheets. Foreign currency gains and losses resulting from transactions, including intercompany transactions, are included in the results of operations. The transaction gains (losses) included in the Administrative expenses caption of our Condensed Consolidated Statements of Income were approximately $1.3 million and $0.4 million for the three months ended June 30, 2015 and 2014, respectively, and approximately ($0.4 million) and $0.7 million for the six months ended June 30, 2015 and 2014, respectively. The transaction gains (losses) in the Cost of Products caption of our Condensed Consolidated Statements of Income were approximately ($0.8 million) and ($0.3 million) for the three months ended June 30, 2015 and 2014, respectively, and approximately ($0.3 million) and ($0.4 million) for the six months ended June 30, 2015 and 2014, respectively. (e) Earnings Per Share Basic earnings per share is computed by dividing the net income available to common shareholders by the weighted average number of outstanding common shares. The calculation of diluted earnings per share is similar to basic earnings per share except that the denominator includes dilutive common share equivalents such as share options and restricted share units. Reconciliation between basic and diluted earnings per share is as follows (in thousands, except per share data): Three Months Ended Six Months Ended June 30, June 30, 2015 2014 2015 2014 Net income $ 8,952 $ 8,283 $ 17,064 $ 15,644 Weighted average shares outstanding used in calculating basic earnings per share 12,832 14,454 12,916 14,567 Dilutive common share equivalents 142 84 115 86 Weighted average common and common share equivalents used in calculating diluted earnings per share 12,974 14,538 13,031 14,653 Income per common share: Basic $ 0.70 $ 0.57 $ 1.32 $ 1.07 Diluted $ 0.69 $ 0.57 $ 1.31 $ 1.07 Options and restricted share units outstanding which are not included in the calculation of diluted earnings per share because their impact is anti-dilutive 2 182 22 158 The Company issued approximately 3,000 of its common shares upon the exercise of share options during both the three and six months ended June 30, 2015 and 2014, respectively. (f) Stock-Based Compensation The Company granted approximately 10,000 and 12,000 restricted share units during the three and six months ended June 30, 2015 and 2014, respectively. (g) Recent Accounting Pronouncements In January 2015, amended GAAP guidance was issued changing the requirements for reporting extraordinary and unusual items in the income statement. The update eliminates the concept of extraordinary items. The presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and will be expanded to include items that are both unusual in nature and infrequently occurring. A reporting entity may apply the amendments prospectively or retrospectively to all periods presented in the financial statements. The guidance will be effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted provided that the guidance is applied from the beginning of the fiscal year of adoption. The adoption of this newly issued guidance is not expected to have an impact on our consolidated financial statements. In February 2015, amended GAAP guidance was issued affecting current consolidation guidance. The guidance changes the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. This guidance must be applied using one of two retrospective application methods and will be effective for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2015. Early adoption is permitted, including adoption in any interim period. The adoption of this newly issued guidance is not expected to have an impact on our consolidated financial statements. In April 2015, amended GAAP guidance was issued simplifying the presentation of debt issuance costs. The guidance requires that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by these amendments. This guidance will be applied on a retrospective basis, wherein the balance sheet of each individual period presented should be adjusted to reflect the period-specific effects of applying the new guidance. The guidance will be effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted for financial statements that have not been previously issued. The adoption of this newly issued guidance is not expected to be material to our consolidated financial statements. In April 2015, amended GAAP guidance was issued to clarify a customer’s accounting for fees paid in a cloud computing arrangement. The amendments provide guidance to customers about whether a cloud computing arrangement includes a software license or if the arrangement should be accounted for as a service contract. This guidance will impact the accounting of software licenses but will not change a customer’s accounting for service contracts. The guidance will be effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. An entity can elect to adopt the amendments either prospectively or retrospectively. We are currently evaluating the impact, if any, that the adoption of this newly issued guidance would have on our consolidated financial statements. In July 2015, amended GAAP guidance was issued that simplifies the subsequent measurement of inventories by replacing the lower of cost or market test with a lower of cost and realizable value test. The guidance applies only to inventories for which cost is determined by methods other than last in first out (“LIFO”) and the retail inventory method (“RIM”). Entities that use LIFO or RIM will continue to use existing impairment models. This guidance is effective for annual periods, including interim periods within those annual periods, beginning after December 15, 2016. We are currently evaluating the impact, if any, that the adoption of this newly issued guidance would have on our consolidated financial statements. (h) Fair Value Measurements U.S. GAAP defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants at the measurement date. Additionally, the inputs used to measure fair value are prioritized based on a three-level hierarchy. The three levels of inputs used to measure fair value are as follows: ● Level 1 - Quoted prices in active markets for identical assets and liabilities. ● Level 2 - Observable inputs other than quoted prices included in Level 1. This includes dealer and broker quotations, bid prices, quoted prices for similar assets and liabilities in active markets, or other inputs that are observable or can be corroborated by observable market data. ● Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes discounted cash flow methodologies and similar techniques that use significant unobservable inputs. We have no assets or liabilities that are adjusted to fair value on a recurring basis. We did not have any assets or liabilities measured at fair value on a nonrecurring basis during the six months ended June 30, 2015, or 2014. Cash and cash equivalents is reflected in the accompanying Condensed Consolidated Financial Statements at cost, which approximated fair value estimated using Level 1 inputs as they are maintained with high-quality financial institutions and having original maturities of three months or less. The fair values of our term and revolving loans were estimated using Level 2 inputs based on quoted prices for those or similar instruments. The fair values of the term and revolving loans were determined using applicable interest rates as of June 30, 2015 and December 31, 2014 and approximate the carrying value of such debt because the underlying instruments were at variable rates that are repriced frequently. It is not practicable to estimate the fair value of the student receivables, since observable market data is not readily available, and no reasonable estimation methodology exists. (i) Concentrations of Credit Risk Student notes receivable represent extensions of credit to students that generally mature 60 months subsequent to the students' graduation dates. We extend credit after an evaluation of credit scores and credit information. Revenues related to the issuance of such notes are recognized over the students' applicable course or program period at the net amount expected to be collected on such notes. Any future adjustments to our estimate of collectability of the notes are recorded as an adjustment to bad debt expense. Generally, no interest is charged while the student attends courses and the interest rate generally increases to 9.5% once the student graduates. Interest income is recorded as amounts are received. Loan origination fees are deferred and recognized over the life of the notes as an adjustment of interest income. Any other lending costs, such as servicing fees, are charged to expense as incurred. These notes receivable are included in other current assets and other assets for the short-term and long-term balances, respectively. Student notes receivable are stated net of an allowance for doubtful accounts. We establish and monitor an allowance for doubtful accounts based on historical bad debt experience for these loans and other qualitative information. Generally, a student's notes receivable balance is written off once it is determined to be uncollectible (if the note is more than 90 days past due, based on collection efforts, and/or if a student has filed for bankruptcy). Payments received on past due student notes receivable are recorded against bad debt expense. A roll-forward of the allowance for doubtful accounts for student notes receivables at June 30, 2015 is as follows (in thousands): Balance at beginning of period $ 3,494 Provision 2,718 Write-offs (2,353 ) Balance at end of period $ 3,859 As of June 30, 2015, the delinquency status of gross notes receivable was as follows (in thousands): Current $ 5,583 1-30 836 31-60 922 61-90 416 91+ 282 $ 8,039 (j) Seasonality A significant portion of our revenues are generated from our cruise ship spa operations. Certain cruise lines, and, as a result, Steiner Leisure, has experienced varying degrees of seasonality as the demand for cruises is stronger in the Northern Hemisphere during the summer months and during holidays. Accordingly, generally, the third quarter and holiday periods result in the highest revenue yields for us. Historically, the revenues of Ideal Image were weakest during the third quarter and, if this trend continues, this could offset to some extent the strength of our shipboard operations during the summer months. Our product sales are strongest in the third and fourth quarters as a result of the December holiday shopping period. |
