OSW - Earnings call transcript Q3 2020 | OneSpaWorld Holdings Limited

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Operator

Thank you for standing by. This is the conference operator. Welcome to the OneSpaWorld Third Quarter 2020 Earnings Conference Call. [Operator Instructions] I would now like to turn the conference over to Allison Malkin of ICR. Please go ahead.

Allison Malkin

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

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

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

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

Officer. to and Then Officer quarter President; Chairman; of today offering our review with including key on Chief service are COVID-XX our Officer and Fusfield, taken and update Leonard Glenn an innovation. response Stephen and in operations liquidity. our an discuss performance on a update staff begin Chief me our provide our actions will third Fluxman, and priorities and review Lazarus, Executive Financial our will Glenn Joining Leonard Chief Operating Executive

to more I detailed and turn Leonard. a liquidity. provide will Stephen over on And financials now, to like call would this, Following the the

Leonard Fluxman

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

As operations driven pandemic. the expected impact our the significant COVID-XX quarter reflected third to results by

we closed last March on on passengers of centers and our health As wellness ships to mentioned cruise all XX. quarter

today, of ships operations. two health on centers As resumed cruise and wellness

Our since destination are resorts reopened with closed restrictions. as XX, March today spas XX with capacity of albeit

preserving we quarter, namely, to the our for ensuring of on well-being when preparing active collaboration thirdly, strong continue priorities our and resume and operations During partners. staff, the innovation three liquidity, focus our with associates safety and and with

our of As first to extremely corporate to it of partners efforts their safety shipboard our priority resort to our of cruise ensure personnel. the keep our for and relates and resort and each appreciative staff our employees safe, line I'm

quarter ship as ship commenced re-embarked personnel of that these As but were in today the and as of XX personnel of have sailing efforts quarter. on vessels cruise a result repatriated, all end XX cruise three

at expenses credit ended availability resume. our while wellness second our as with capital pursue initiatives performance ensure a continuing $XX.X cash facility. on tightly in intensely the our to to to remain health and managing voyages on priority, Moving We including quarter investment million We strong focused liquidity. and centers

operations to liquidity with have continue sustain through the to December We we our significant believe XXXX. no voyages

passenger return many a CDC its for Centers a lead same preparing lifted CDC to issued and of Prevention, of the of time, to the our it Control you for expected resumption sale As order. Disease third of voyages. U.S. sailing are that framework is priority the conditional our as At to relates aware no crucial operations, phase the the

voyages, safeguards our that specific certification sailing three including phases to conducting requirements. and the of operators the implementing test ships limited We this additional simulated cruise to to a year meet testing providing mitigate line COVID-XX and framework risk, crew implement expect cruise to as continue partners abilities, members, for

partners cruise and expect partners our in line confident our during areas again. sea. with to of voyages, at can wellness health committed will the in call collaborating and revenue growth normalize. October, alongside has success this lead initiatives Glenn. team to significant of investing over we our we've and working [indiscernible] remain Overall, with are passengers resources placed to on the forward Commercial expanded I'd ensure long-term will Glenn. focus, We embark company like Officer. we model We and to our now add Thank Susan we as objectives to to conditions that remain possess include simulated Bonner joined cruises to and Chief achieve reporting share when our the advantages market And Susan that a our centers In business and turn look performance operation business to management our keeping you. as

Glenn Fusfield

Leonard you good everyone. Thank and, morning

quickly safety XX our with adapting to and operating employees. repatriated the health the related we navigate priority. environment our of to one to number those continue staff of aboard We these eliminating cruise repatriated ships, expenses Along current the ongoing pandemic of all by our personnel lines, the have all

I of mentioned crisis Leonard the I'm at that ensured this grateful is commendable. handled cruise proud passage time equally months. commenced remain safe onboard home thankful many in way that personnel understanding I'm As over staff our staff. during reembarked our sailing their end three the patience and ship quarter on difficult this ship Their the to for efforts. cruise professionalism, XX vessels for quarter. those

of As quarter capacity. have destination reopened end, resorts spas the XX reduced at

relax vacation to today's book times. the with willingness unprecedented during spas in our We they while are guests and appointments pleased of

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

health destination we reopen the with of as operating are resorts fourth innovation by spas ready to majority guidelines and be that on of occupancy our COVID-XX As open. to ahead, and again so and and we when operations anticipate look centers We will resume resorts focus global that local spas we're staff the investing within of our scale jurisdictions. wellness quarter, continue end our to our voyages continuing the opened the destination more reduced of training in

In addition, we health centers to have voyages five ships expect and cruise year their wellness resume that on end. open by

results. cruise very While ships two early on experienced are we have sailing, that currently good

despite penetration rates the with and fact, prior occupancy. In our low years strong are consistent

turn We results and contactless will who service position. five third have over call of XX% one I on seen our liquidity book quarter Stephen new in With that guests one will to the our options. comment

Stephen Lazarus

morning, Good Glenn. ladies and you, gentlemen. Thank

be continued amidst The to us impacted third pandemic quarter for the challenging backdrop.

partners. XXXX. remain revenues just While operations quarter overview reopen. operations are global were revenues COVID-XX that more had highlights. to and year's results million our the Rather conditional compared quarter. as a a to generated focused across our, of no primarily revenues the preserving given we of our our the than third during lifted, are operations material third provide that well in $XXX.X scale limited staff EBITDA sales were third year. with the sailing and quarter The on this destination on resort I’ll website. $X.X in ready loss the We share we our full e-commerce quarter $XX.X Total as compared related global on million XX liquidity million in so pandemic as again few now as of orders timetospa.com cruise the continued for impacts million, resorts framework opened was during line quarter that quarterly spas our our last of third in we the for given our destination innovation the to investing training quarter resorts had and our Adjusted and the our a positive $XX.X of on to significant

cash continued As The the ended quarter costs the XXXX. to third borrowing line quarter end with previously of of $X.X under these to we repatriation fiscal the capacity layups. financing on-board, fleet the relating to the preparation quarter were total million and approximately quarter of second along of in the compared our related the and with as some impact million, and quarter million. the that costs in at in housing equity and $XX.X into of $XX third incurred We of of the for credit costs teams our increased mentioned, second

operations expect be sustain sufficient December We wages with to significant no XXXX. liquidity this of through to

guidance. and Notwithstanding company fiscal to net disruption the it GAAP As we provide and the ongoing relates continue impact adjusted our quarter fourth outlook, pandemic, to uncertainty GAAP will surrounding foregoing, due sustain the year. for not and to loss the XXXX COVID-XX a to expects of the business the

into take insights about However, the I thinking into year. would of and to our like the some share when remainder consideration business

industry is The to We'll year-end. by framework additional open thoughtfully manage issued association resorts destination and savings. for to XX set on line expenses cost XXXX identify expect conditional for we Firstly, server, XX, the which U.S. continue November tightly a expire curie

Glenn strong As operations our comfortable safety enhanced and have offerings resumed, to we resorts protocols. seen where health with receptivity have core mentioned, and clients our

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

us. to normalization would deliver capacity a And basis, please even expect expect of to you on a we historical Shirley, continue call we XX% questions. passenger could to levels. to And We cruising and revenue occur, breakeven. on EBITDA that limited we with With the basis. operations open with will for return when expect do that, to gradual forward if consistent to

Operator

Please [Operator Instructions] Stifel. Our go first Wieczynski question Steven with ahead. from is

Steven Wieczynski

got us you as potentially what months. operations cruise over getting sometime quarters I of the back forward guess and employees back look look quarter this potentially point, would start cash help might or So your two over Can to like assume next Leonard, here about of the you're guys soon? couple in I up position going to starting you given? at next your get probably running the think at burn lines some

Leonard Fluxman

Yes.

cash we've right some guidelines as expenses guided the us scale through going starting are they're you. board, eating by Steven we getting sure believe Steve, prior in typically we initial resorts on to So start. we get when of into thank currently further be get million you back see currently. lower now, in lodging Yes, how flow I kind burning they stuff will Not the Even the many ships we that. quarter, as gradual number expect we we're that prior quite until have, with up seen getting where up while mentioned, year-end, into quarter. is to Europe, we get to for clearly bringing CDC eat to to XX see Clearly, the to the certification. to itself. but first burn cruise, we our into because, give we've start we But would falls occupancies, cash get now. Look, $X right back despite can't will first of exact once in quarantined to than cruising, the as we to we believe, more an what move

Steven Wieczynski

a of gotten bit, on line little partners as in cruises? have or partners could So that to these add when place you of cruise potentially from your word you folks to for to some test any any need have yet

Leonard Fluxman

a I working all test these think look four there service. haven't that any to they're have number. is by ships very of the - particularly to I have they're I and return resumption top pathway don't Glenn three number we get believe know, cruises exact and But banners, you? certified. at You think banner, I the I seen through which as largest all will specific follow an least happy to

Glenn Fusfield

to big at QX No. go which start. to we thereafter, all assuming It'll Nothing voyages, far them all be as call three. we test one Maybe vessel as expect this in voyages or know, for the the let's do. a vessel it'll specific, it point two flawlessly, be

So reduced we're operating at and be to staffing. reduced going occupancies

we any can't in, And to to we'll little we start So, the and a specificity, get January. have mentioned Leon crew expect just for without call. bit wait you know, phone holidays for probably, hedge but bringing prepared because around the

crew information we're bit, on moving two QX. So the operations a little in speculation. do other to voyages commence a some moving the year-end than the have of of now, of commence in the January. any commencing We Asia few that's bit vessels right test But really little in now by without but we're is Steve, hedging

Steven Wieczynski

from goes we can I ships to itineraries up EBITDA help right from a a been Carnival guys I question, whatnot. ships other alone I last changes, now it that removed what So think that second that we've operators perspective. few you and Carnival there or to question And us fleets. a seen those my getting think a question wondering have if to a I'm I ships these guess is now remove the of or help and might amount significant I'm went think, so. their of long-term, your just way if here about to about operating operating in guess back And capacity about is line? what profitability bunch any is average understand contributed tough I us be at given guess on pre-COVID, change XX

question sense? makes So I hope that

Leonard Fluxman

the that ships never fleet to right are around retired, on do a ship-by-ship oldest into now. the ships ownership know, guidance tend in or in are that rest know, moving the maybe and we've given ships that the otherwise that underperform you the We Steve, typically of specific different you those basis. positions, being sold, service

that, can in that that retired ones associated sold, XXXX. the ones being - And the than come assume less service - material remaining the as either will the service or that the profitability into ships profitability profitability are expected one the with of ships, though in so, is either to or with for

Operator

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

Sharon Zackfia

that I wanted level? level have a you breakeven, think where can the to few the breakeven enterprise breakeven clarify or at occupancy was questions. that the I is ship you just at XX%

Leonard Fluxman

At the level? ship

Sharon Zackfia

those XX% still if of ships sailing how the money? generating point. know dynamics And losing I ships they're I the flow yet to if on about if levels. you're could up or don't two on actually this talk you are occupancy kind know, the that maybe at just sailings cash the you're don't cash what you're on

Leonard Fluxman

lost on on the occupancies occupancies, sailed, make The There I that of upon vessels - results. vessel money we the little bit two was money. just third pleased a based cost we level were [indiscernible] did a significantly sailed that a have in the the vessel. we're XX% actually we But quarter, charter with of mean, some that

Sharon Zackfia

and I couple at any is And change Okay. of I but seeing. you're that that or hear of services the there is the on of wonder sea of ships, using even it's in you're seeing? you kind And you're good know, any the if just guess, reduced normal change maintaining demographic get, it's on a to of that who kind profile occupancy, penetration mix in I land either spas. then the that only

Glenn Fusfield

Thanks Sharon.

certainly these bit on we expect. obviously little So a two ships, it's Italian mainly, younger, would that

risk the Stephen And folks it's occupancies. So that was are there. it as mentioned, tolerant low very

So our services. of They folks measure to were against. wasn't large contactless a set enjoying it

services There touch inclined. We have no of for basically if full well. as was menu services, great a a are so our traditional they demand

had people to going and willingness or I our was say the have in very small voyages. that to set very a measure a that rate. back penetration travel. number on very happy small it we're same who effluent strictly and crowd, But again, I'd it Europeans, very ability So think a played But small timeframe that high was folks we of of to at can the was time to it

touchless offering, it's any no-touch services. as generalizations. were new difficult traditional we're with and that both really as that our of So our make services well happy their our to technology We covered selection

offerings. into entire services taking of broaden are they those can, they resort offer into mind precaution. the And don't And it. other of at seem on it, that we're traditional the just are expand couldn't offerings. contactless the asking facials, being of our asking And , and our to still anxiety they Massages people body for. where continue outside having, the some our will for demographics. as side, scope on inhibit jurisdictions or play where we COVID-XX we time, same and advantage asked People we the to are stress their similarly, move So for we facials, and were promoting, to will where geographies services,

our selection into and very happy with when our the we're folks the So they spa. of come offerings

do and So is that. really threshold up, the they're happy good we're businesses news when open crossing the about

Sharon Zackfia

cross really have And threshold, them last kind then of That's to to…? to unusual just, had question was the you any promotional or activity helpful. my do discounting getting

Glenn Fusfield

are No, holding I holding actually value we’re had fairly – promotions always mean, yes great we and and well, cross actually nice added pricing we've promotions, opportunities.

have Of more take really to course drive of that And of do business. at have we just opportunity that. we we do any that But we don't discounting through yet sea than done on land. not advantage to

Operator

with Please is question Jefferies. Stephanie next Our ahead. go Wissink from

Stephanie Wissink

sea, as can of think you've you for Glenn, your some pre CRM to returning sailing on wondering just with about your on working a been you question partners? sailing, initiatives is post if us I'm update that you

Glenn Fusfield

much progress, right. Well, it's still a in work very

perspective, currently reaction integrated XX% we services. to our heavily And And bars, we're concept development we to when perspective, but potentially the a is cruise message an into willingness and opportunity a for they think maybe very now that work know, into for a in our amount from But to with are, are to partners environment, our with sell digital we be fitness or come progress about cabins same fears concepts at Remembering creating be prepay. not come the even cabin tremendous you digital an along It same to we're just go about the retail maintain want that and to trying if is regimens at physical pre-book whether just content the same that an living, the as spa trying business spa. yoga, to piggyback for concept So mindful well opportunity and choose that and guests same presailing is time. and that had and because putting within pretail their opportunity to will the come components IT though, wellness there has wellness time upstairs that to up with the initial that created folks content time the innovation spa. they we're from wouldn't of is have beauty across at get from a us realizing these a to collaborate exercise able retail product any in that talking that. technology work for and at folks to just of and time. we're to the with that And not be I'm cabins has to the it their another then as going really to

pushing So, again, buy our at a have have laid game there, And definitive as a all to do because of we But it's is it really partner it's our execution same time. so the don't know, we’re plan, early saying, we yes, stuff. to say we need don't out go. plan you the

Stephanie Wissink

the follow-up be think training prepared staffing infrastructure And terms expense a and return final in function to readiness, that and restaffing about Thank corporate ports, corporate the you. of we it the just mindful then to variable bit just back anything the of and support being events. but staffing, also not to office at you but as structure? I expense question, some a around little the only infrastructure of support step to in one should wanting cost kind of question sea the maybe need Steve's of understand on think structure, we to Should your

Glenn Fusfield

appointed sufficient level that see will structure significant folks obviously, of I’ll expense will corporate the time, and term. reengage months next near anticipate and that the to to They potentially service that in corporate so. return we or say in expect point the have six when be at to happening that support a time to this we service don't over becomes return is to the volume enough training we At

Operator

with Our Georgieva Infinity go next question is Please ahead. from Assia Research.

Assia Georgieva

Good morning, guys.

you also possibly run. trial terms levels, In levels expect the the of but maybe to you would over a possibly people ramping this of South the of transfer of expect crewing lower you to staff holidays lower generally available be Or the and corresponding Caribbean the the just staffing closer for January to half starting and you resumption up? usual Florida? a being couple have? mentioned, service, ships around of levels Initially, How winter in anticipation with do occupancy do to crews that season have

Glenn Fusfield

we them and all, have of waiting first the really for here Well, can't keep deployment. just staff

necessarily we the And expense. at to afford to you don't want that modality. staffing have look levels So by

we in if - would So where acupuncture pain staff would or staff as up. staffed of large reduction or management you for have your would for directors, team a that be builds have team your like you doctor where reduction have services, fully we in a and drastic slight drops. subset occupancy of fitness the a But example, occupancy sense in doctor there'll be medi-spa maybe have we one as your one drops there body

So you at modality. to have look it by

I and the in is about from start to of all staff overall the think over - their of First out weeks increase as the returns next occupancy service. to that XX% occupancies blend vessel there then calculation, way it'll ramp

deploy will to nuances and that cruise home. their we staff remember geography deploy quarantine different every we staff pertains vessel from has every requirements So in But line, restrictions. COVID it the as every -

line it's bag, and really a a depending right cruise mixed on geography it's now. So whole

Assia Georgieva

all Glenn, in involved I imagine logistics the this… can't

Glenn Fusfield

It’s consistency an incredible [indiscernible] without partnership. any

Assia Georgieva

of to ships that Any already onboard some fly weather? in Southeast bring them cruise vessels lines to the opposed the use through as various the have Asia to crew possibility that having to

Glenn Fusfield

in We thousands the be to us repatriation of if, as would of they same would they fact, absolutely there course way crew. they did in advantage that of did start do of partners take that. Well include operating the

using that any been subject but of, any west big as back ships repatriate in as certainly if the road, were that And us. definitive the big of endeavoring any the notified sense down from far, include as matter they have So ships certainly is discussed. has aware been of partners would crew of, there anything or the they earmarked I'm we've of nothing to that fairies far nature.

Assia Georgieva

great, really That will that be helpful. would be

the still would order, of or of orders you there that lot CDC be you to the I that any personal know [indiscernible] technical is terms identified need two given provide? items service flushed out. pertain more a Have specific In anything that

Glenn Fusfield

first guidelines social along that operating and we and protection own have they are remember to and or their ask call of all or GPS which by, protection, And line. for they sensitization. we sent some may been abide Well, all, that's our will distancing, incorporated now be physical and all right that have to to facilities. GPS own own necessary we for us we've will where for abiding guidelines you the safety our own be But created will part. using our to guidelines to have but call or we been partners, guidelines. accepted and cruise they all the exceptions be really, it equipment, be PPE, by cruise lines There And by open modify public of it own as most facilities the personal our well and by very it's received. whether on interpretation, whether their Certain protection what on

necessary We some and outside great that, CDC in the working we do obligations And also folks complying, to lines for have our facilitate everything we opportunity have return the for But reticence. are innovative service. we cruise guidelines, of compliant. despite within to the some we'll are enhance who are them partners private really myriad experiences to of with the ideas

Operator

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

Leonard Fluxman

for further to We you thank on and return speaking Thank forward us just updates want look Thank details our to with everybody today. much. cetera fourth joining service to giving quarter et on I you call. very you again. you

Operator

today's conference This call. concludes

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

OneSpaWorld Holdings Limited (OSW) 11 Nov 202020 Q3 Earnings call transcript