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October 25, 2006 04:00 PM Eastern Time

Steiner Leisure Limited Announces Third Quarter 2006 Financial Results

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NASSAU, The Bahamas--(BUSINESS WIRE)--Steiner Leisure Limited (NASDAQ:STNR) today announced financial results for the third quarter and nine months ended September 30, 2006.

Steiner Leisure's revenues for the third quarter ended September 30, 2006 rose 21.9% to $126.3 million from $103.6 million during the comparable quarter in 2005. Income from continuing operations, before discontinued operations for the third quarter, was $11.4 million compared with $10.9 million for the same quarter in 2005.

Earnings per share before discontinued operations for the third quarter ended September 30, 2006 was $0.66 per share, compared with $0.61 per share for the comparable quarter in 2005. The earnings per share data are presented on a diluted basis.

Revenues for the nine months ended September 30, 2006 rose 17.6% to $348.1 million from $296.1 million during the comparable nine months in 2005. Income from continuing operations, before discontinued operations for the nine months ended September 30, 2006 was $32.8 million compared with $29.6 million for the same nine months in 2005.

Earnings per share before discontinued operations for the nine months ended September 30, 2006 was $1.85 per share compared with $1.62 per share for the comparable nine 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, "We are pleased with our financial results. Overall, the business performed well.

Steiner Leisure Limited is a worldwide provider of spa services. The Companys operations include spas and salons on 124 cruise ships, and in 53 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® 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®, as well as other Steiner products, including La Therapie®, Ionithermie, and Steiner Hair Care, are available at 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 (EST) on Thursday, October 26, 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 517-308-9020 for domestic and international calls approximately ten minutes before the scheduled time. The password is Steiner. The call is available for replay from Thursday, October 26, 2006 (approximately 3 hours after the call takes place) through Thursday, November 2, 2006 at approximately 10:00 pm. You may reach it by dialing 203-369-0699 for both domestic and international calls.

SELECTED FINANCIAL DATA

($ and shares in thousands, except per share data)

(Unaudited)

 
Third Quarter Ended Nine Months Ended
September 30,   September 30,
2006(1) 2005  2006(1) 2005 
Revenues:
Services $ 85,942  $ 70,647  $ 236,759  $ 201,142 
Products 40,350  32,917  111,308  94,938 
Total revenues 126,292  103,564  348,067  296,080 
 
Cost of Sales:
Cost of services 68,586  56,497  188,516  159,706 
Cost of products 29,901  24,502  81,909  71,643 
Total cost of sales 98,487  80,999  270,425  231,349 
Gross profit 27,805  22,565  77,642  64,731 
 
Operating Expenses:
Administrative 6,903  5,160  19,091  15,835 
Salary and payroll taxes 8,521  5,716  24,278  17,058 
Total operating expenses 15,424  10,876  43,369  32,893 
Income from continuing operations 12,381  11,689  34,273  31,838 
 
Other Income (Expense):
Interest expense

(164)

(80)

(249)

(193)
Other income 340  123  1,609  333 
Total other income (expense) 176  43  1,360  140 
 
Income from continuing operations before provision for income taxes and discontinued operations
12,557 

11,732 

35,633 

31,978 
 
Provision for income taxes 1,167  831  2,883  2,417 
 
Income from continuing operations before discontinued operations 11,390  10,901  32,750  29,561 
 
Income (loss) from discontinued operations, net of taxes -- 

(2)

225  (19)
 
 
Net income $ 11,390  $ 10,899  $ 32,975  $ 29,542 
 
Income (loss) per share-Basic:
Income before discontinued operations $ 0.67  $ 0.64  $ 1.91  $ 1.69 
Income (loss) from discontinued operations --  --  0.01  -- 
$ 0.67  $ 0.64  $ 1.92  $ 1.69 
 
Income (loss) per share-Diluted:
Income before discontinued operations $ 0.66  $ 0.61  $ 1.85  $ 1.62 
Income (loss) from discontinued operations --  --  0.01  -- 
$ 0.66  $ 0.61  $ 1.86  $ 1.62 
 
Weighted average shares outstanding:
Basic 16,956  17,131  17,217  17,478 
Diluted 17,344  17,837  17,691  18,266 
 

Notes:

(1) Includes post acquisition results of Utah College of Massage Therapy (UCMT) and an affiliate which were acquired on April 3, 2006.

STATISTICS

 
Third Quarter Ended Nine Months Ended
September 30, September 30,
2006  2005  2006  2005 
 
Average number of ships served1: 123  118  119  116 
Spa 90  85  86  83 
Non-Spa 33  33  33  33 
 
Average total number of staff on ships served:
1,875 

1,691 

1,781 

1,652 
Spa 1,648  1,457  1,553  1,417 
Non-Spa 227  234  228  235 
 
Revenue per staff per day2: $ 485  $ 472  $ 471  $ 456 
Spa $ 505  $ 493  $ 494  $ 480 
Non-Spa $ 339  $ 342  $ 319  $ 314 
 
Average weekly revenues: $ 51,694  $ 47,501  $ 49,186  $ 45,475 
Spa $ 64,441  $ 59,393  $ 62,013  $ 57,472 
Non-Spa $ 16,455  $ 16,938  $ 15,501  $ 15,537 
 

Average number of land-based spas served3

56  51  56  49 
 

Average weekly land-based spas revenues

$ 24,944  $ 25,280  $ 26,356  $ 26,774 
 
Total schools revenues4,5 $ 11,725,000  $ 4,692,000  $ 27,884,000  $ 13,357,000 
 
Total wholesale and retail product revenues $ 12,788,000  $ 8,461,000  $ 33,882,000  $ 25,813,000 
 

_____________

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 $172,000 for the three months ended September 30, 2006 and 2005, respectively, and $421,000 and $540,000 for the nine months ended September 30, 2006 and 2005, respectively, relating to the Steiner training school near London, England.

5 Includes post acquisition results of UCMT which was acquired on April 3, 2006.




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