OSW - Earnings call transcript Q4 2024 | OneSpaWorld Holdings Limited

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Operator

Good day, and welcome to the OneSpaWorld Fourth Quarter 2024 Earnings Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to Allison Malkin of ICR. Please go ahead.

Allison Malkin

you. Thank welcome Webcast. Quarter and Earnings Fiscal OneSpaWorld's and Call to morning, and Fourth XXXX Good

statements. begin, like call we These information be Before I'd to forward-looking made statements that deemed judgment available you actual and on analysis statements certain reflect a affecting factors on number and forward-looking and differ should place from reliance results Accordingly, today's undue not constitute only and our forward-looking as may of to current materially webcast these of our may statements. remind you today, expectations on business. based

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

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

our Chief are fiscal XXXX and Operating Financial performance and Executive on guidance. today Executive priorities the our fiscal more Stephen details an Lazarus, and we quarter key begin on will of as XXXX. fourth Leonard Then financials and Leonard me with Stephen Fluxman, will Officer President; and Joining Officer. begin Officer Chief Chairman, provide Chief and a XXXX fiscal update review provide

I now call operator to the turn of like will to Leonard. over begin the over we to the portion the remarks, to prepared our Following turn the question-and-answer would call. call

Leonard Fluxman

quarter It's OneSpaWorld's pleasure fourth Good Allison. welcome and Thank which Call. year of operational speak Year Fiscal you, accomplishments. concluded and and XXXX financial share excellent to with Earnings our Conference results, today another Fourth Quarter you a to and morning,

record to commitment produced to begin outlook for performance affirming guidance. results. year our XXXX position, an another in million every XX% of the $XXX.X to and guests whose our issued to and as strong and operations, service are our XXXX outlined cruise positive resort earlier quarter. consecutive which XXXX our million in press power with strong our and Total on deliver day outstanding invaluable robust the delivering continues fiscal year second to our of center a team of line marking and innovation business, delivered evidence of $XXX.X finish of our our performance. we We especially combined revenues outstanding and a which positioned team year XXXX fiscal team wellness Our financial provided passionate morning, contributions focused partners. I increased fiscal of extraordinary year experiences performance, And our to growth across global and expect health of full highlights compared and recognize steadfast fourth strongly our for to strong all given this enormously the our dedicated, Touching quarter want capable are recently XXXX, destination on release fiscal record XXXX.

XX% the For fourth in to full million Income of fiscal $XXX year XX% total compared million compared to operations to from million in the a $XX.X record revenues $XXX year, increased XXXX. $XX.X increased quarter to XXXX. million

$XX.X quarter And XXXX. the increased $XX.X $XX.X XXXX. fourth million fiscal operations XX% million from compared finally, year XX% $XX.X in income year, full to compared million in of EBITDA to increased adjusted to million to the For

ships on year and of count included with personnel the year X,XXX For wellness we ships ship an adjusted and million ships towards year-end on strong the compares financial average of ships. key noteworthy count Also XX% operated a XXX $XX.X to ship increased progress at compared on fiscal XXX XXX compared year-end, with of XXX vessels XXXX. health This cruise results, full our record strategic facilities personnel our EBITDA with XXXX. year, million an to $XXX.X X,XXX we at with At a in fiscal priorities. cruise ship year-end ship year-end, average vessels at had fiscal XXXX. Along total

Let these me highlights share you. with

and First, wellness and fold. inclusive our health wellness highly line cruise the X services, new shipbuilds of visible maritime with the current and partners adding Manara our fold. renovated new partnerships Mitsui to our we captured X new expanded Aroya Fuji and to cruise growth ship We new added line health Ocean and centers,

entered Royal than more board we both and wellness health Celebrity XXXX. on fiscal into operating banners. XXX vessels X XXXX with with Cruises, In to expect X-year a ended Caribbean maritime XX-year new and relationship our International add and agreement in centers new addition, extending We

to services and Second, expansion for therapy drive revenues the we expand continue products. demand to those and higher-value to modalities. Medi-Spa this regard, increased and In continues Acupuncture our IV

to LED continue and our Our fleet ramping services to these XXXX. perform, continue and meegaWite will facial cryotherapy fiscal of light our services we in

able members We wellness retain as day, metrics, our on attribute and members to revenue to and staff the member. growth generate better revenue revenue a they by we train passenger per offerings success center higher health weekly to day increase Third, enhancing the staff compared which initiatives We to grew revenue continued day per experienced operating focused members. recommend driven of per per attract, strong staff first per maritime in experienced the productivity. contract that and growth per in staff as are staff staff of

we to believe company we create. strong empowering first culture the We a their and our continue to see contract, returning dedication the staff testament to is members which after

in grow we we staff, retain will of our a continue further emphasize metrics. Looking place ahead, have to to best operating which to initiatives number our

our the new a retail services we also are percentage partners total in utilizing service service per training. metrics benefit guests phase remained spend to reflecting guest. strong Prebooking as even just in revenue operational scale. Our XX%, and that frequency, fueled beginning sales spend of as This increased, of revenue the spa, increases and average at

continue do We saw prebook. And more passengers up overall not Spa that more finally, year-over-year. see productivity than same quarter revenue those to than than our XX% services to The we that XX% with continue expand MedSpas. spending prebook more

We on increase strengthened available continue ships, XXX balance XXX we we of fiscal at add our increasing have year-end, year. our board to ships and on were and structure year. have enhanced offerings nurses Medi-Spa of this from service ships and XXX doctors XXXX expect services capital to We to Fourth, number to sheet. the the end offering. At MediSpa now up

float and Steiner Leisure investor, we exited. private public increased year, reduced equity debt as our the a $XXX During to Limited million our

cash cruise globe. payment the recognition across year-end, our confidence on Additionally, to ended Board and repurchase are We outstanding our and approved we we and have strategy repurchase had responsible environment resort for exemplary guests program. and million service our communities in an of in share dividend Fifth, of of remaining to equally Directors of the and commitment our the social our year, destination employees, stewardship documenting published outlook initiation ongoing to $XX the our quarterly the to the million and their $XX.X year by line our million in investing debt $XX down inaugural company and shares proud year. $XX program. after responsibility our and unwavering million during with care our disbursing $XX.X million cash share report, million sustainability partners At impacts the paying common dividends, $XX.X quarterly repurchase this in

will of increasing ability performance to year ongoing part Our we in our positive With sustainability growth ahead visible performance. shareholders remain Stephen? the team financial integral ability in quarter longer call that success believe opportunities our that, deliver and complex over near year our With with our I'll summary, commitment talented drive Stephen, to ahead fourth successful business an to we is strength of value to strategy to manages the clearly the more highly XXXX our business provide and positive In of on and our fiscal momentum, details our long-term results. and precision. turn term. and confident our who demonstrates the

Stephen Lazarus

Good you, morning, Thank Leonard. everybody.

our with revenue, XXXX, fiscal throughout delivered EBITDA. operations record performance year from and extremely are which We adjusted pleased income

$XXX.X operations. per $X.XX million ended compared increased primarily to the and associated wellness as our generation. change Net and loss we of strong product centers. of quarter a service in exercised XXXX. in net sheet prebooked million attributable Additionally, health $XX.X was of X increase of of contributed the in associated million positively we on $X.X from fourth with quarter on the year land our capital guest share in the impacted primarily quarter being to interest to revenue positive details increased the net in and XXXX. a for to in of the the of million and $XX further million penetration $XX.X the continue million XXXX million liabilities fourth spend fourth in health from of in loss Similarly, income $XXX.X service and and million or and increased $X.X or with reflected expense attributable to from compared compared volume million enhance other revenue a strong revenues XXXX. the this revenue costs quarter The million $XX compared on was $XXX.X our diluted or increase million of increased compared $X.X at fleet revenue product expense morning. in to net structure million flow XXXX. Contributing $XX with $X.XX increased million a Cost quarter reported and now a $X.X The compared cost quarter share and revenue quarter on and service more of canceled XXXX, of income earlier quarter warrant of to operating that centers was with expansion, X% $XXX the $XX.X increase the share revenue attributable of $X.X sea increase million higher wellness net results XX% diluted by warrants each in to revenue costs will balance income of were driven land year fourth with $X.X of of million were fourth were value and which fourth sea fourth to incurred operating were cash and change per quarter income XXXX, products decrease wellness in revenue quarter onboard $XX.X the XXXX, at product health of to to fair in in I during in being in $XX.X our million, our expense our guests. increase with primarily million the spend, a the centers $XXX.X of million of Total service the from by which million XXXX. fourth All with for

compared As interest during financial the centers. in the in to inputs of $X.X XXXX. fourth fourth $X.XX of increase wellness you value million year market Adjusted as lower EBITDA warrant increased a result and the attributable diluted of quarter of quarter income fair million of reflecting to balances, adjusted warrants those of of of $XX.X of decrease ships during The million instruments. prices in change the other productivity deriving incurred and in XXXX, net of know, adjusted income $X.X income fourth stock year. fee number expense change adjusted million $XX.X to income Adjusted health in $X.XX of of was EBITDA the from the share the quarter our income primarily was centers an per compared exercised changes onetime or the of net value operating in of from The in net during the and net primarily our was million health by share the of the $X.X million value $XX.X per maritime offset remeasurement wellness $XX.X fourth common quarter fair observable last to onboard deleveraging adjusted was and operations or debt XXXX. derived million liabilities diluted

diluted million, of adjusted compared reflecting per million increased share XXXX. adjusted net with from compared $XXX diluted or $X.XX adjusted And million million EBITDA For XXXX. XXXX to in increase year $XXX.X to year, EBITDA $XX.X to adjusted of net income XX% total or as increasing fiscal $X.XX of the for XX% per the $XX.X million in an fiscal $XX.X to million fiscal XX.X% share of income revenue $XXX

XXXX, million. availability utilized We full debt total our repurchased X.XX sponsor, total to $XX.X dividends. for over reducing balance with of returning cash December revolving pay on repaid ended as cash our to facility, net $XXX the Limited. our million us Since to of million indebtedness, with million enhance we $XXX.X $XXX reducing the Turning with of the our sheet. was XXXX. saw deferred XX, In service undrawn mentioned, Total costs equity investor million and have the to $XXX public Leisure us fourth to debt term was we quarter, million. facility year million the $X.X $XXX.X structure, million December $XX.X of The our $XX and year in million at million fiscal $XX increasing debt year-end. Steiner giving shares exit the And of financing compared XX, million total in and XXXX, in private mark float $XX have revolving liquidity million at capital at

forward flow after-tax generate an fiscal flow shareholders capital generation efficient our dividend year to move us program. positive structure flow and payment to continue We from that and enable cash growth in operations to invest our throughout robust and repurchase long-term and XXXX. through expect will value share cash return We with cash to quarterly

million current to expects company have to in $XX authorization, and continue remaining the shares on share XXXX. We repurchase repurchase our

affirming in With on fiscal single-digit fiscal strong outlook, revenue year our XXXX EBITDA positive guidance growth performance high adjusted are XXXX a to reflecting guidance of full guidance, and and results. our compared that to as recently Moving at provided. year midpoint provided range the XXXX we the our

commence fiscal million the million, $XXX of $XXX the revenue in expect million. of million 'XX, fourth the and range EBITDA full new in majority X a we to total in open voyages Adjusted centers $XXX quarter As reminder, of expect onboard expected of range $XXX to to to of is the for year XXXX, year. the in we are introductions Health the shipbuild expected which

we And to expect million, of For range $XX in number year $X.X with day. favorable remain quarter these both up of total of impact quarter XXXX by record XXXX you expected first XXXX in in to of dry million are And of to operating last are for if EBITDA positioned performance total in XXXX. docks leap to the entering we and our factors $XX that Dave, represent XXXX, includes of $XXX quarter call million. OneSpaWorld XXXX, will first is with strongly the value for the XXXX negatively combination addition, range in that, revenue The of fiscal quarter We ahead, year higher approximately confident for of revenue the Due versus could adjusted the and the million first the a summary, year first And in increased with we another fiscal please. of shareholders. the we million. $XXX in will go expected questions. open X less expecting momentum.

Operator

[Operator Instructions].

from comes William Our first question Sharon Zackfia Blair. with

Sharon Zackfia

kind that is what say did talk leading [Technical up of so, about of the Difficulty] On of there? or kind if of same was And Leonard, you spa XX%? can the kinds than or factor increases ticket more you MedSpa revenue those

Leonard Fluxman

the you just Sorry, Sharon, broke can up end. second repeat at part? the you But

Sharon Zackfia

revenue the Yes, same by primarily sorry. ticket in driven or durability I was traffic? on whether MedSpa, about asking spa that's

Leonard Fluxman

the on increase outcome spar has year-over-year So which offering, Obviously, result prices of incredible of a been indeed, XX% focus our part that adding growth to of higher an staff Volume huge and MedSpa, more just on in ticket. has continues modality. grow. single a major ours focus a same also the to it's been of

seeing, see to up to that more we to can we and of and this And demand that nurses continue take will the grow. care the we're doctors the extent load volume so

XXXX real been through we get has the for To extent there continue of So or a large incremental staffing, and all growth. 'XX. estate better will that can to focus contributes

Sharon Zackfia

Okay.

taking So in primary driver is the then just part passengers more MedSpa.

it's per visits that not MedSpa passenger, sense. So more makes if

Leonard Fluxman

have a ships, of It's on limited say, we're some coming that bit doctor than, or doctors. to we in. a little more don't extent X passengers the Obviously, more

a a definitely on the to utilization been rooms that's can estate board. that different different all the nurses, ships we modalities across X of for have and part and maximization the we sharing at the that least strategy doctor utility, real we facility modalities, continue On extend by follow

it's paying yes, So definitely off.

Sharon Zackfia

that anything Or seen kind services? little recently. on bit? but Is is I we Okay. gross a was services gross my there, question that -- variable in the are margin there than And expansion run rate weighing lot more for margin. there down second little what there's that was the we've then normalized costs of that's a of on kind know of year-over-year bit a less a

Leonard Fluxman

it weighing down, quarter. fourth in There is Sharon, nothing the

know, less quarter. third the you in As revenue total is

the little in some the saw cost. covering there bit so variable, of primarily of costs. a third a are fixed quarter, we And it's but proportion flow-through just Yes, incremental fixed

revenue the benefit nothing fundamental it is we levels some to higher, are the when significantly There so in though fourth And relates did see quarter. decrease that as from that.

Operator

question the Steve And from Stifel. comes Wieczynski with next

Steven Wieczynski

margin side I of want on to the the story. stay

of guidance expecting it's So essentially the we is flat of range, think around XX.X% which a if were look your right the year, I you or for somewhere at with XXXX. midpoint in where you're margin, probably for kind that

take well, board. levels just higher prebooking I be there once on price spend opportunity board, bit some to add expansion a opportunity you for would on year, why folks want I think this margin but little not activity better given obviously wouldn't which understand the only So as to have are to

terms wondering things. be out of of the on headwinds there So the might maybe cost missing that side in what just I'm of some

Stephen Lazarus

experiencing cost the side relates No, relates you're specifically of headwinds anything not things. -- aren't any missing it it that. on not We're as Steve, anything to there to as

presented thus we we margin put, numbers a simply that in feel comfortable very is profile would something far say think with. the flat I

built know, that to any you we into As have have been provided not pricing date. in

the And comfortable at something we feel time. from for focus To margin with being we perspective, time may slight certainly our cetera, a end et that be see so a is at maintaining on that there the dollar at generation, there of improve But opportunity would the with is day, point pricing, in extent headwind all absolute rate. this the nothing.

Steven Wieczynski

And capital you. second question, Got then allocation. Okay.

these stock your wondering well guys share about obviously, are And Just isn't today, uncharacteristic Leonard, And growth of release. thinking would repurchases. versus how market to maybe balancing more buyback? Just you of a kind type understand move to growth are the you moves trying get you about aggressive the in dividend now. reacting types thinking be things your versus on of where dividend the how guys buyback

Leonard Fluxman

Yes.

absolutely, we Steve, at like on a look a it's price it take day at. go if right and see the this, we'll to So

We have algorithm. an

getting to close think I we're that range.

the stock. to extent we dilutive or continue neutral, it's to slightly will buy So

buying to think the it pick continue I the we extent stock will price, up. at it's right to

right can amount so then I over years. substantial yield but a authorization, right can tremendous excess will the to And of we we a continue quite with it to have how grow we'll at expect now, we continue is that. the and mean, we on this to the couple continue this and we start, but dividend left continue accumulate. that next utilize said, now, it, a Stephen determine dividend it's cash to grow As place it's not the and evaluate look to in

Steven Wieczynski

you I into quarter? projected they on X want by into more housekeeping, ship have basis a be like understand of probably the Steve, won't the the more do guys coming quick look if -- kind count you probably Just ships quarter. fourth are the where quarterly Okay. given one And could, to

Stephen Lazarus

I in, only tell X you QX. comes in and ships that all X the mean ship are QX, in I QX, remainder in QX can there's Yes. specifically. in X

Steven Wieczynski

Okay.

quarter kind So loaded this of everything is year. fourth

Leonard Fluxman

get in but only of you capacity, Yes, is Steve, XXXX, most really year which get a great. you of X/XX, the full

Operator

Truist. the next And question Miller from comes with Gregory

Gregory Miller

couple norovirus on XQ off XQ. 'XX incidents were impactful your materially guidance. your to you I'm A of questions with Start for outlook? curious,

Stephen Lazarus

Not at all.

Gregory Miller

this dry you docks docks, the could Okay. in quarterly cadence as be detail anticipation year, any the some And over dock impact of well? course the about how as it then if there dry any quarter of thinking relates or we terms second to of was provide should dry above-average more in

Stephen Lazarus

is... There

Difficulty]. was quarter first normal, [Technical The

Operator

Laura the question from And Champine Loop comes next Capital. with

Laura Champine

product your past that a Historic architecture was better, trade-up. product offering, or changing talked in in QX? you've Is that restructuring to and of quarters, in resulting the few clear, kind have about good, best

Leonard Fluxman

focus necessarily to year not products do which pricing we been the a throughout products. to last process top rationalization. transformation continue our into So XX SKU selling That's XX or in of bring are

And so that do rationalization. to starting we're

year. off Some of the paid benefits last

continue it's a will takes yes, to Laura. focus little on it -- when XXX We moving across But that, you're work. ships,

to sure a not So switch a by of make And It's a right. have we quick not flip we then it's anything. it process. that banner or banner, have

all the in working, then take So if we've it we've it cases, we'll working or transformation changes if it, tweak subtle the at pricing done will we place, not test that's determine look a time. and right if and at and some we we're or make overrationalized

Laura Champine

it. Got

you XXXX? out continue does saw increases at in million your in that think just Would that pace $XX your imply you guidance prebookings. -- type you revenues I release of the from press that in called same see to increase a

Leonard Fluxman

for the is all not only Look, huge serve. banners we that a focus, prebooking

than it as do better Some before. others, I mentioned

mix our we the benefit the to for We there's attachment a services support attachment to getting and spend revenue. prebook there them that's get to see margin, better press obviously, in through the are on And more from that, trying extent doors, at of the quickly is a going extent as will too. from because helpful will growth to that focus the XX% to imagery, which better we to that more as possible passengers we continue better And more.

Operator

question Georgieva Research. from Assia the final And comes Infinity with

Assia Georgieva

questions. quick of couple A

you terms estate, the flexible And down overall understand greater a higher, doctor only builds, new in of but expand bit cost are But you Medi-Spa day the X have if from a sailing, nurses? have the economics for little part more real Medi-Spa the and -- spa. spa an X of that better footage you So where setup? infrastructure could the you all, if the actual the in further is road, First would not to of be utilization. have equation example, enough the have plans, inaugural doctors the the we and square obviously, of X can X nurses,

So that was of first apologize, my question. I question. kind a longish

Leonard Fluxman

Okay.

Look, economics They changed. same. have the So Medi-Spa are not the

So We that could X by of increase facility service for similar better are the having decide nurses -- not operate say, IV our that's maximized room doesn't The margins spa. a algorithm under what are. having, of they a services. in utilization doctor X and massage or other requirement a utilized benefit necessarily doing larger it's change infusions and types nurses or the

extent space the of have is at where to our the need we're ability where to facility up to Medi-Spa look we outside at So offering the that, algorithm go look limited, Medi-Spa. and the we change utilization

all where not and across assist but the our better certainly the priced, that on see that accuteuncture, higher of Medi-Spa, utilization think of are definitely services all continue other facilities focus only we I So services will the to demand continue. the

Assia Georgieva

is estate the point. at right the a limiting attracting and aspect. nurses, more personnel really doctors real factor It's this So not

Leonard Fluxman

limitation. see going say I'm not board. like bigger a on not MedSpas I'd Look, to it's to

through demand that. can we certainly the push I think

to of to going going mix I the our is think obviously, areas on areas say it's We're enough. dry focus repurpose the can an the and that's see the to there's not be forward, perhaps on different new areas. dock. that where builds mean relaxation MedSpa sort we But and rooms of in starting the the flow, opportunity. I a

It's that limitation all experience. layout contributes to overall an us we it's maximum absolute the our spa utilizing use a what demand. have in rooms today. not the no, at So But of more and

that but we We'd challenge. to have love continue to banner. space, that's always So every more a across look at

Assia Georgieva

Yes. love my the space. terms second I is you of to And the question industry. know would tone of more more in have

voyages week. As track you XX,XXX about each know, I

spending P&L I of board indicator the strong, about a to that on like on, I the seeing seems imagine bookings, have because season Because for you're people they've going doing spent. of that that current on the for ago months would and versus bode of about happening year compare planning were Do X you're and expect the advanced now bookings. time is believe U.K. the wave way the being money ticket just far, seeing now, so seems real I bookings. banners some of you're had or rest advanced because ago months be wanted simultaneous probably almost what's including said very record for sort to cruise that you well months it X.X X actually what's the what And in And out

Leonard Fluxman

less Yes. better mean, ticket discounting, board. strength got reports and analyst demand Look, all strong a it you've that mean, passenger you've the lately, geographies, reading if supports look at I I and got maybe yields. you when than some still been clearly, we've more on so others. ticket And

see services. our continue to So we for demand

on of February, take a view has every far, discounting changed, we But the hasn't, the here no passenger. whether and very if of we in is look clear a different indicator So than the our in of itself which and quality it's the early softness. at in January, so We year. but sit developing it it's year, start materially of

And so that materially hasn't changed.

Assia Georgieva

Okay. a I of the where today day. IPO. more. aware dry can think each guess I company, November cruise that guys X% question discussed each ship, the And I day been track first that's the And an am I voyage, I having be leap But following year that I Stephen, fully figure just 'XX, a so you overall the is since again, because, you have have quoted each the pinpoint X one less for those. we extra a comment. docks in of year would after of for QX? you XXXX, time

Stephen Lazarus

the of $X.X is million. was Yes. dry we The the day and the combination provided information us docks

Assia Georgieva

the And day Right. X.X million. is

Stephen Lazarus

did breakdown provide and between the not the We day the dry docks.

Operator

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

Leonard Fluxman

appreciate we we Thank joining attention results you, call, you, very about seeing much, everybody's Dave, to in conferences forward enthusiasm first upcoming for everybody, May. investor we thank and you in the when you Thank our everybody. And our our story. quarter and and first quarter look and report

Operator

now has presentation. conference concluded. The Thank attending you for today's

You may now disconnect.

OneSpaWorld Holdings Limited (OSW) 19 Feb 252024 Q4 Earnings call transcript