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July 26, 2006 04:04 PM Eastern Time

Steiner Leisure Limited Announces Second Quarter 2006 Financial Results

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NASSAU, The Bahamas--(BUSINESS WIRE)--July 26, 2006--Steiner Leisure Limited (Nasdaq:STNR) today announced financial results for the second quarter ended June 30, 2006. Included in our 2006 second quarter results are the post acquisition results of operations of Utah College of Massage Therapy ("UCMT"), a post secondary massage therapy school, and an entity affiliated with UCMT that offers spa products, equipment and services to UCMT students and others. We acquired UCMT and that other entity on April 3, 2006.

Steiner Leisure's revenues for the second quarter ended June 30, 2006 rose 19.9% to $117.2 million from $97.8 million during the comparable quarter in 2005. Income from continuing operations, before discontinued operations for the second quarter, was $10.8 million compared with $9.6 million for the same quarter in 2005.

Earnings per share before discontinued operations for the second quarter ended June 30, 2006 was $0.61 per share, compared with $0.53 per share for the comparable quarter in 2005. The earnings per share data are presented on a diluted basis.

Revenues for the six months ended June 30, 2006 rose 15.2% to $221.8 million from $192.5 million during the comparable six months in 2005. Income from continuing operations, before discontinued operations for the six months ended June 30, 2006 was $21.4 million compared with $18.7 million for the same six months in 2005.

Earnings per share before discontinued operations for the six months ended June 30, 2006 was $1.20 per share compared with $1.01 per share for the comparable six months in 2005. The above earnings per share data are presented on a diluted basis.

Leonard I. Fluxman, President and Chief Executive Officer of Steiner Leisure, commented, "Our second quarter performance was in line with our expectations. Despite the annual repositioning of certain ships to Alaska and the Mediterranean during this quarter, our execution in our maritime business remained strong."

Steiner Leisure Limited is a worldwide provider of spa services. The Company's operations include spas and salons on 124 cruise ships, and in 58 resort spas and two luxury day spas. Our cruise line and land-based resort customers include Carnival Cruise Lines, Caesars Entertainment, Celebrity Cruises, Crystal Cruises, Cunard/Seabourn Cruise Lines, Hilton Hotels, Holland America Line, Kerzner International, Marriott Hotels, Norwegian Cruise Lines, Princess Cruises and Royal Caribbean Cruises. Our Elemis Limited subsidiary manufactures its Elemis(R) brand products for use in our cruise ship and land-based spas. This top quality European line of beauty products is also distributed worldwide to exclusive hotels, salons, health clubs and destination spas. Elemis(R), as well as other Steiner products, including La Therapie(R), Ionithermie and Steiner Hair Care, are available at http://www.timetospa.com.

Steiner Leisure owns and operates four post secondary schools (comprised of a total of 14 campuses) located in Miami, Orlando, Pompano Beach and Sarasota, Florida; Baltimore, Maryland; Charlottesville, Virginia; York, Pennsylvania; Salt Lake City and Lindon, Utah; Las Vegas, Nevada; Tempe and Phoenix, Arizona; and Westminster and Aurora, Colorado. Offering degree and non-degree programs in massage therapy and, in some cases, skin care, these schools train and qualify spa professionals for health and beauty positions within the Steiner family of companies or other industry entities.

The Company will be holding a conference call at 11:00 am (EDT) on Thursday, July 27, 2006. Clive E. Warshaw, Chairman of the Board, and Leonard I. Fluxman, President and Chief Executive Officer, will discuss the contents of this press release.

If you wish to participate in this conference call, please call 706-679-5917 for domestic and international calls approximately ten minutes before the scheduled time. This call is available for replay from Thursday, July 27, 2006 (approximately 3 hours after the call takes place) until Thursday, August 3, 2006 at 12:00 pm. You may reach it by dialing 706-645-9291 for both domestic and international calls. The conference ID # is 2933467.

                        SELECTED FINANCIAL DATA
          ($ and shares in thousands, except per share data)
                              (Unaudited)

                                   Second Quarter       Six Months 
                                        Ended             Ended
                                       June 30,          June 30,
                                 -----------------  -----------------
                                  2006(1)    2005    2006(1)    2005
                                 -------- --------  -------- --------
Revenues:
    Services                    $ 79,871 $ 65,169  $150,817 $130,495
    Products                      37,355   32,603    70,958   62,021
                                 -------- --------  -------- --------
        Total revenues           117,226   97,772   221,775  192,516
                                 -------- --------  -------- --------

Cost of Sales:
    Cost of services              63,427   51,917   119,930  103,209
    Cost of products              27,631   24,786    52,008   47,141
                                 -------- --------  -------- --------
        Total cost of sales       91,058   76,703   171,938  150,350
                                 -------- --------  -------- --------
        Gross profit              26,168   21,069    49,837   42,166
                                 -------- --------  -------- --------

Operating Expenses:
    Administrative                 6,393    5,045    12,188   10,675
    Salary and payroll taxes       8,402    5,647    15,757   11,342
                                 -------- --------  -------- --------
        Total operating expenses  14,795   10,692    27,945   22,017
                                 -------- --------  -------- --------
        Income from continuing
         operations               11,373   10,377    21,892   20,149
                                 -------- --------  -------- --------

Other Income (Expense):
    Interest expense                 (73)     (62)      (85)    (113)
    Other income                     344       62     1,269      210
                                 -------- --------  -------- --------
        Total other income
         (expense)                   271       --     1,184       97
                                 -------- --------  -------- --------

Income from continuing
 operations before provision for
 income taxes and discontinued
 operations                       11,644   10,377    23,076   20,246

Provision for income taxes           865      813     1,716    1,586
                                 -------- --------  -------- --------

Income from continuing
 operations before discontinued
 operations                       10,779    9,564    21,360   18,660

Income (loss) from discontinued
 operations, net of taxes             --       (3)      225      (17)
                                 -------- --------  -------- --------


Net income                      $ 10,779 $  9,561  $ 21,585 $ 18,643
                                 ======== ========  ======== ========

Income (loss) per share-Basic:
    Income before discontinued
     operations                 $   0.62 $   0.55  $   1.23 $   1.06
    Income (loss) from
     discontinued operations          --       --      0.01       --
                                 -------- --------  -------- --------
                                $   0.62 $   0.55  $   1.24 $   1.06
                                 ======== ========  ======== ========

Income (loss) per share-Diluted:
    Income before discontinued
     operations                 $   0.61 $   0.53  $   1.20 $   1.01
    Income (loss) from 
     discontinued operations          --       --      0.01       --
                                 -------- --------  -------- --------
                                $   0.61 $   0.53  $   1.21 $   1.01
                                 ======== ========  ======== ========

Weighted average shares
 outstanding:
    Basic                         17,329   17,312    17,350   17,653
    Diluted                       17,774   18,087    17,866   18,491

     Notes:

     (1) Includes post acquisition results of UCMT and its affiliate
         which were acquired on April 3, 2006.
                              STATISTICS

                         Second Quarter Ended     Six Months Ended
                               June 30,               June 30,
                        ---------------------- -----------------------
                           2006       2005        2006        2005
                        ----------- ---------- ----------- -----------

Average number of ships
 served(1):                    119        115         118         115
Spa                             86         82          85          82
Non-Spa                         33         33          33          33

Average total number of
 staff on ships served:      1,771      1,646       1,733       1,632
Spa                          1,543      1,412       1,504       1,397
Non-Spa                        228        234         229         235

Revenue per staff per
 day(2):               $       468 $      448 $       464 $       447
Spa                    $       491 $      471 $       487 $       473
Non-Spa                $       308 $      314 $       310 $       300

Average weekly
 revenues:             $    48,549 $   44,962 $    47,853 $    44,422
Spa                    $    61,391 $   56,662 $    60,694 $    56,460
Non-Spa                $    14,924 $   15,706 $    15,022 $    14,832

Average number of land-
 based spas served (3)          56         49          56          48

Average weekly land-
 based spas revenues   $    26,608 $   26,785 $    27,072 $    27,578

Total schools
 revenues(4,5)         $11,052,000 $4,239,000 $16,160,000 $ 8,665,000

Total wholesale and
 retail product
 revenues              $11,534,000 $9,428,000 $21,093,000 $17,352,000

_____________

(1) Average number of ships served reflects the fact that during
the period ships were in and out of service and, accordingly, the
number of ships served during the period varied.
(2) Revenue includes all sales of services and products on ships.
Staff includes all shipboard employees. Per day refers to each day
that a cruise ship is in service.
(3) Average number of land-based day spas operated reflects the
fact that during the period spas were opened or closed and,
accordingly, the number of spas served during the period varied.
(4) Includes $126,000 and $151,000 for the three months ended June
30, 2006 and 2005, respectively, and $295,000 and $368,000 for the six
months ended June 30, 2006 and 2005, respectively, relating to the
Steiner training school near London, England.
(5) Includes post acquisition results of UCMT and its affiliate
which were acquired on April 3, 2006.




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