OSW - Earnings call transcript Q2 2020 | OneSpaWorld Holdings Limited

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by. This is the conference operator. Welcome to the OneSpaWorld Second Quarter 2020 Earnings Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. Instructions]. [Operator like conference now Malkin to turn ICR. with to would over the Allison I ahead. go Please

Allison Malkin

Good you. fiscal webcast. call quarter welcome XXXX and Thank and earnings morning, to OneSpaWorld's second

conditions nature statements like our and on call only may our alter results current on these statements significant today, and pandemic be of not forward-looking and factors flow you Before continues current could on outlook. constitute webcast our to financial of our to statements. operations, materially forward-looking uncertain actual number from The affecting its ongoing should begin, made available judgment place impact cash business. I'd that we expectations and position. impact certain undue These forward-looking statements. and a deemed you based to may and information as today's reliance reflect a dynamic remind differ materially analysis The on and of COVID-XX have Accordingly,

SEC quarter alter whether not was which earnings to on result of update furnished a For statements and a do and refer more thorough events as disclaimer with you our conference that included XXXX second to X-K. otherwise. be Form regarding any future We undertake webcast, in the in or to release, obligation statements, any to today the call or we is forward-looking the risks this information, associated uncertainties statements new made forward-looking discussion of the forward-looking

metrics this earnings be the addition, An In found refer may these today. certain filed metrics the company can earlier release call. non-GAAP to explanation of adjusted on in

who and Operating with will Officer be and key priorities Chairman; taken Executive our Chief Officer. the Fluxman, to Leonard Stephen, our our provide turn provide of our Fusfield, And response to and like our then and on including President; the Financial actions call the COVID-XX update. This and Leonard have offering. will discuss the liquidity review Executive will the Lazarus, begin are details Glenn followed we taken over to to financials, service Chief today me business actions return and liquidity. Then I'd Joining by home staff now, will and Stephen more Chief in Leonard. Officer Glenn

Leonard Fluxman

morning, Thank results quarter and second fiscal Good to XXXX Allison. conference welcome OneSpaWorld's call. you,

quarter by pandemic. significantly second were Our global impacted COVID-XX results the

All on ships remain of to and of on XXth, closed voyages. health our pending and resumption wellness cruise centers closed March passengers

on In remain all closed health and centers resorts addition, closed the wellness our March at and of destination throughout quarter. XXth were

of a which uncertain the XXth, was financing, Given duration $XX shareholders June on announced the approved on pandemic by million equity our we April XXth.

As a the capital our on our with we line credit. financing this of ended and balance borrowing to quarter and efforts capacity expenses liquidity, of including expenditures, million of result and $XX.X under cash our sheet reduce

mentioned our onset our staff preserve we As was thirdly, the crisis with areas: last collaborate liquidity; on of the focus three keep key continue our safe; since innovate quarter, and to partners. and One,

of to second against are the We these quarter. each areas made pleased have progress during

to like by priority, passage ship shipboard our it cruise safety our of and resort partners, each support staff the cruise staff, resorts As I'm to and for to efforts employees safe equally personnel. and our patience our of while would corporate I thank personally to keep first their relates our home. of and gratified ensure safe, lines our the awaiting

changing to cruise of extremely repatriated to resilience a team’s we I'm today, efforts, operation entire XX% of adapt personnel. proud the have and quickly as condition. these As of result ability also our

priority, Moving to our second liquidity.

operating, and believe our the cruise with are are June, that that In resorts equity very resources we lines there XXXX. we provides with our have no pleased December in We sustain million to sufficient event destination liquidity the we believe until shareholders approved offering readiness. sail that the operational $XX unlikely the which limited us

and return highest XX% to safety areas the prepare the of mind, that to health health staff more our will of continue wellness and share resources investing add our for operations we priority. with our at expect market we in With sea. than in centers are passengers, the voyages our and We this in of

provide operations service throughout our that line We and expenditures collaboration to service by destination expect experiences, with in so our and resume. position our operations extremely XXXX. partners working be to expenses, we remain in And we a managing offerings innovate capital and spa capital exceptional limited to guest cruise resort when disciplined are continuing

we the resumed receptivity destination resort by our reopening, offerings. of encouraged are the our we spa performance have of our to relates operations, it and where As spas

the While now, I'll turn significant predict the that we cannot confident normalize. placed and share business to of our objective our conditions long-term advantages remain COVID-XX, model path as over performance And we market achieve Glenn. have of business the to us ultimate call

Glenn Fusfield

Thank you, Leonard. morning, Good everyone.

quickly and efforts, also those safety to repatriated with to adapting May’s of the and voyage operating during unprecedented the cruise and our health pleased at thank as staff navigate priority. environment, our have this I'm crisis. to one home to like number those our continue that commendable. staff of of would time We XX%. ship all today, handled cruise ship from Along staff. understanding current grateful the ensured professionalism, this up passage pandemic I'm I patience are for we by our way is XX% lines, the of equally Their safe the of personnel, has their proud

vacation unprecedented the capacity, in while pleased are to While period times. guests are willingness they and the spas, of relax we reduced at appointments a of hotels with during operating our book

spa comfortable also are by have the those with service we provided. overwhelmingly been our extremely noting Customer facilities, very and for level safety with that our pleased feedback positive utilizing appointments. of them satisfied the demand has made feel have enhanced We protocols been with

albeit and to ahead, destination our and will operations resort scale to ready lifted sail so of continuing anticipate are As more that most once innovation we're global open. look of our our we spas on destination our staff those focus in we We training orders are of and investing that be and will our hotels spas Stephen over With by quarter second I call reduced to on position. operating jurisdictions. results who resort of at with quarter, the guidelines within open the comment occupancy will COVID-XX third turn liquidity local that, will the the end

Stephen Lazarus

Thank you, Glenn. quarter having health and all history, completed We to revenues of due the closure gentlemen. a unlike Good morning, other our ladies our and of in no any ships, cruise our in safety our staff board With land-based resorts of the due on COVID-XX on liquidity. preserving operations our centers the wellness remain and focused limited pandemic. to and teams material

in on full as quarter the million given were Adjusted to related of well metrics, separation second second incurred our significant as impacts the in We to to as total this e-commerce EBITDA year. compared compared website. operations, in of the and fleet share year's results, layups. including quarter for were related on quarter $XX a I $X and mind, our Revenues With second quarter provide primarily second our the quarter, income only loss million quarter of in sales generated on-board costs timetospa.com of housing typically $XX.X of teams highlights. costs last was of this our repatriation the I a XXXX. higher-than-expected for incurred productivity million in second million some to significant in $XXX.X While COVID-XX revenues overview the will

into cash quarter fiscal borrowing of to continued million And of these line under first of the capacity at and as $XX.X of QX. $XX.X end of our costs we XXXX. compared the million with Some credit ended the quarter

pandemic timing of to the As provide global the COVID-XX given of outlook, our continue path uncertainty guidance. voyages of will it the relates to take, ultimate will we and the that the not resumption

August. would be like the as We our order in we low you QX XX resort by end will the will I you to with to be point observations for However, assess believe expect destination share some open spas business. for sales of

additional will there strong continue currently savings protocols. and if to Where the association comfortable of and expenses industry tightly with We we health safety which XX, announced resort date, to identify sail receptivity further October for and is extension XXXX offerings, a have are enhanced cruise seen U.S. operations manage resumed, no our spa have line our guests is cost

While material the bring this back and voyages expect to resume. have personnel believe talent quickly fiscal year, operations and scan we we health we cruise from aboard centers wellness to revenues ships capabilities and when generate do not our

return please up just to to with if the you consistent deliver [four-wall] operations point, will cruising don't a occur levels. open like that, go to to And limited capacity when, expect revenue And some the We and a we basis, we gradual with on and Cody, we'd could which on for normalization questions. call even call? when historical ahead the passenger at EBITDA open And expect expect of with occurs, XX% we on-board basis. breakeven. would to know would

Operator

Instructions] Jefferies. first Steph Wissink Please ahead. is question Our [Operator from with go

Steph Wissink

And for you're think related more mentioned cost with what hopefully that then Stephen your And you. nature. bit in that in We if staff? to one-time you seemed costs I'm Now within -- have costs it's the almost two complete But of break can one-time us quarter the second were you repatriation nature help I structure, exercise. the that a the out in questions. wondering

payroll we about and you costs how in may So QX And be then could a that the QX what go help just recur? not the administrative if the QX, think costs salary on us forward we modeling the P&L should basis? and qualify were as just and

Stephen Lazarus

Steph. morning, Good

to employees on-board that to So, housing pay relate on-board. to costs our the some the and on-board, of largest of component the of folks we obviously retainers had also the [indiscernible]

as allowing homes off encountered for effort possible, folks governments vessels, our partners. difficult process our with et extremely folks were the and every their own to local been made were has the repatriation or myriad cetera. back And as to has folks been that safely not a problems no cruise due get quickly know, you to As of there line get to on while

to we originally million folks them keeping incurred home approximately and have additional not an did $X.X we getting of ultimately on-board relating anticipated. that costs So

we a tell some of would reduced XX in the folks go would you, to today. month not we expect on-board While still normal been have And I in significantly this that July. circumstance, see to has forward, did people

time, However, example, which they cruise in in way been two Italy, lines the are of for sailing just where because number begin weeks’ to that we situations, times where go moved told the expect already. by they there will not zero have three to

those that they've So putting sail will a onto that to to house begin we're back the to in quarantine begin time again. stock locally. those now And to period stock for vessels Each had the we those X-week put we move vessels onto moved, vessels. the hope folks

of to of sail. there that to also hope, some very, salvage happens, what additional we going be of But is things. are very of comes the go. moved that each ready going have lines cruise and time because you will return make being there situation And of begin revenue being And But excess So those therefore, that know, in fluidity as costs to in difficult seven that is a some be times our we trying partners those for on. just the already. forward point vessels good some their larger it sure that will to forecast to as we're

quarter, one-time the the in as reorganization. inventory filed we provided reserve, On unfortunately Pullmantur for you an for know costs

office, associated addition our in occurs costs may that large, assuming which transit some accounts receivable with vessels not occur. repatriate. to in moving providing lost So to as of get or continues damaged that we and was that also inventory as for number that day There's the decommission inventory we’re

of as are sort to difficult mentioned, It’s gear to the cruise costs. diminish of whether we’ll forward. expect do up as We that. will for prepare probably it going it bulk one-time the I say Exactly to sailing, that's resume because, lines be? So going and

Steph Wissink

do partnerships And water, you and one you your I to the getting, great. have has is your had in terms work on contracts think how last given us question vessels might breakeven understanding return that can as what breakeven. around what open need you or of flexibility contracts around that up like that's had you conversations follow of around Okay, we're about stat those utilization? XX% the Is this your capacity to then anticipate thinking any point utilization, to still be? XX% feel regarding call a

Stephen Lazarus

a believe breakeven count do we XX% on vessels. still on to with basis We would that at XX% [four-wall] passenger

Operator

with Blair. Our Zackfia ahead. next Sharon William is question Please from go

Sharon Zackfia

associate to Sorry to is encouraging now I your you’ve talking facilities? the the us old that like years given reopened hear was -- What spas you of right Could some of, those like start that or Just of background. my you're two land-based guess rate kind trying kind how think give if out the of now it if land-based triangulate cruise commentary of some the for in at occupancy what and you there. occupancy looks what the spas? the based what at and the at sense? to looks XX% makes get can translating into the that's on capture kind lines of utilization of right XX%, seeing

Glenn Fusfield

Stephen, I'll take and that. jump in

So -- hi good morning. Sharon,

Sun like lot full some it's and of well So a -- a running necessarily with of mixed guests, up very change bit Mohegan are Connecticut business necessarily. pull a little albeit group in a to bag. regard, little doing that in Properties in powers not

XXX% they're that would throughput a they’re say particular at I spa, prior Ocean for In spa. Caribbean, example, So Probably the enjoying property. the coming into the at year’s in occupancy. XX% versus Club,

up Cherokee XX% complete it's see, opened [indiscernible] you So occupancy. also just bag. about We has mixed a

we the forth we Do example, we Not same up by the capture some of properties? can’t we guests it’s the mixed bag the a year coming Northeast, regulation another certainly this at a time spas. but So, is these that the rates facials, the in put occupancy, do properties but have flow have state. to Mohegan of on necessarily, last are had

a doing we're So permanent it’s not That's facials not discussion. ongoing yet. decision,

So certainly we and hotels But are that. levels it's again, to compared point. with to are pretty look expected. this But to occupancies able that at what we overall, forward the growing business period-over-period Mohegan low leading occupancies is much again occupancy we capture

Sharon Zackfia

estimate to be good on sailing break you -- occupancy curious and it's But can I ships XX% a answer. I do is How many to know the that you I'm guess, this breakeven? need where to hear is And question even. to tough ships

Glenn Fusfield

of are Well, aspect you business. that's if the vessels, the that question. are Stephen to understand difficult of all other he many will to wants around sailing also dimensions, of of need ships a number and a There to to And because I it complexities where commit hit mix defer the but so it mix many really we which ships the voyages from mix and of that of the on our depends of into equation. [indiscernible] would within fleet the how actually have days water ships, revenue that compile depends actually those and ships revenue on we days can the and

context. number tough just answer, in to So like it's one a

Stephen Lazarus

it of itinerary, I be depending would at how size ship cost right, intricacies say, because days, of sailing. with We on company maybe on we ourselves of to Sharon challenging the Yes, of number does exactly the regards look et think which of revenues. so, XX% of on around but generally speaking, year's or cetera, look vessel, it many obviously our cetera, become commit number a et length payroll depending actually to vessels settling and kind furloughs, basis, at XX% on structure, at breakeven. On you prior around to will

Operator

Our from Stifel. Steven is with Wieczynski next question

Steven Wieczynski

the the we out of math the if now XXXX, Xs. of you kind of have the in back to cash were So guys mid think number terms costs of I May, mid burn, the is in I in Xs and monthly kind and back end our And -- is look we XQ. I cash And the of went correct, to some to go there kind understand expenses. that want been burn more and to

be you you've number cash of you small that’s that really it's Xs? spas you mid you -- on to benefit some your is is, the question Xs based the guys into -- the the a got so or also but are guess some get I kind base back get operation in based that So, is of through door? going 'XX, when that mid can liquidity because commencing obviously And that to and land can end

Stephen Lazarus

sort So for about that is of and $X.X million math to is slide talked on $X.X cash million tells to that the part pure you originally reason some we burn, I now, get cetera. the obviously to as that going expenses where situation, we than which have million, just had we're close December the of there is in it and the -- to talked incur all we this earlier of of example, will quarantine getting whole be for about know on to et reality situations which $X.X

reduce preparing may next Yes, sailing year. ship to such Europe situation our So, somebody is that? in If than for most sail expenses. that seem We can the definitively, shortly. right to until action get June definitely have to because said we it likely year, example, But that there year, take perhaps. later we could lower be in for sailing me the have early going next there doesn't this is but U.S. to

So realistic being the cruise right then now ready situation it’s that able I as good a know, proceed we to to and and with we estimate number go based as it down. such being everything is think the sail, really our and of short we're upon can expense, when ship

Steven Wieczynski

your then it’s no look satisfied to let's Stephen, cash XX where burn that you explore that's But strong, still terms right what Or at now. of say other liquidity do to improve continue you And pretty you right with to in at want matter position, options are position? it’s now? months

Stephen Lazarus

that explore options levels with right? put way take Glenn, from some and We've cannot of just either to reduction regards organization way by sort or to So of employees some and will salary down. that. the We company steps into recently, different furloughed entire always on salaries things salary or the We are Steve. of you tell terminated portfolio, are reduced Leon taken throughout place. they've the all the is open, additional Barring did spas XXX% continue other

may we to opportunities we now, we that can service, some expenses. to as to in telling extent point But a go are the of take more to wouldn't and the as we learn we what aggressive we're we'll steps business the ever be to and reduce can at feel continue we basically be the look as right ready continue we us. about where say more delays, return manage to have I to lines So and satisfied at cruise they're

Steven Wieczynski

for One what like more base. your quick one. employee been And Glenn. with conversations It's have the Glenn, actually

things As go to to again back willingness, do to work? when their commence

Glenn Fusfield

about first ready talking back come base, our they shipboard imagine to are employee of to work. So all,

we a have as in got Stephen one vessels period. So, we board, on crews our already mentioned, sitting quarantine

So in to period into then addition before isolation XX to of obligation at home course have to vessel with X-day and to they are home, their and X-day -- isolation willing an of get as these to isolation just quarantine. And an COVID This at to period days go requirements, to a folks they work. travel get even all there example. is they to have for to in testing. have XX sorts the sit back

work them. on don't to So imagine they do to They them showing I be willing environment of burdens you them of these come they're occupancy. in what fine want all going all have still reduced to can income And work that then a know commend these of just passengers. they're the go and will we're and the obligations. to and to with pre-joining XX%

are We have -- either experienced database kind We mentioned of a the created staff understand productive crew. of Stephen or before. our that veterans who

management, They're They're love OneSpaWorld. So their are and to guys they back back onboard life really sea. the productive cause. the staff These the dedicated we're at we're to dedicated bringing dedicated first. to veterans, spa bringing leadership

So we goal. have great a

into just waiting to are logistics fall We for place.

they're about. what poor girls guys we and do and all So these are know shuffled -- to

moving folks. mentioned times. dates to different with first changed, As with along to these back service push caused And this their three different Stephen is crew crews X return

our also don’t good of credit reduced in So reduced hanging But guests And managing. we're I have lot them we a as there. forget labor give have occupancies from ships force. with perspective,

So on like each it's not vessel we're either. up staffing onset for the

Operator

Please is go Our Infinity Georgieva next Instructions] ahead. Assia [Operator question with Reserch from

Assia Georgieva

we ships. those Given lost you mentioned, Stephen, have Pullmantur, as

sailing the do to And some Corporation entity, in assume the beginning especially we that let's on reduction assume vessels number in will be of the revenues you of almost a constant projected XXXX the decline at in relative your Carnival should basis, changes, to back be proportionate normal?

Stephen Lazarus

morning, point. a Good Assia. Yes. good That's

any for not announced been to are the assuming that once a have that of decommission all operates. vessels that or We return will fleet Pullmantur for

that sold from relations we're Although, you that point account vessels we likely our will decommissioned of removed as with then. revenue. Pullmantur less of we than aware of ships I reference we taking that tell it's of a may have as being it that do into a is some operate service, partners know and potentially whom that those upon or X% the are

not so a certainly not And while it’s that significant. number it’s tiny

Assia Georgieva

percentage So basis, impact have Stephen. of actually revenue. it an from would less Thank your capacity a you, to

Operator

to This remarks. Fluxman conference turn the concludes the would question-and-answer session. over for closing to back I Leonard any like

Leonard Fluxman

speaking Thanks, and everyone, Thanks We comments joining look and your us appreciate call. we our on for questions you with to very today. much. forward third quarter

Operator

This conference today's concludes call.

disconnect and Thank you your for lines. may participating have pleasant You a day.

OneSpaWorld Holdings Limited (OSW) 12 Aug 202020 Q2 Earnings call transcript