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October 31, 2007 04:22 PM Eastern Time

Steiner Leisure Limited Announces Third Quarter 2007 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, 2007.

Steiner Leisure's revenues for the third quarter ended September 30, 2007 rose 11.2% to $140.4 million from $126.3 million during the comparable quarter in 2006. Income from continuing operations for the third quarter was $11.4 million in both 2007 and 2006.

Earnings per share for the third quarter ended September 30, 2007 was $0.68 per share, compared with $0.66 per share for the comparable quarter in 2006. The earnings per share data are presented on a diluted basis.

Revenues for the nine months ended September 30, 2007 rose 13.2% to $394.0 million from $348.1 million during the comparable nine months in 2006. Income from continuing operations, before discontinued operations for the nine months ended September 30, 2007 was $33.7 million compared with $32.8 million for the same nine months in 2006.

Earnings per share before discontinued operations for the nine months ended September 30, 2007 was $1.96 per share compared with $1.85 per share for the comparable nine months in 2006. The above earnings per share data are presented on a diluted basis.

Leonard I. Fluxman, President and Chief Executive Officer of Steiner Leisure, commented, The maritime business executed very well and the rest of the business performed in line with our expectations.

Steiner Leisure Limited is a worldwide provider of spa services. The Companys operations include spas and salons on 132 cruise ships, and in 52 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 (EDT) on Thursday, November 1, 2007. 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, November 1, 2007 (approximately 3 hours after the call takes place) through Thursday, November 8, 2007 at approximately 9:00 pm. You may reach it by dialing (800) 731-6039 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,
2007 2006 2007

2006(1)

Revenues:
Services $ 92,682 $ 85,942

 

$

263,498 $ 236,759
Products 47,749 40,350 130,509 111,308  
Total revenues 140,431 126,292 394,007 348,067  
 
Cost of Sales:
Cost of services 75,269 68,586 212,253 188,516
Cost of products 35,185 29,901 93,901 81,909  
Total cost of sales 110,454 98,487 306,154 270,425  
Gross profit 29,977 27,805 87,853 77,642  
 
Operating Expenses:
Administrative 8,332 6,903 23,841 19,091
Salary and payroll taxes 9,452 8,521 28,092 24,278  
Total operating expenses 17,784 15,424 51,933 43,369  
Income from continuing operations 12,193 12,381 35,920 34,273  
 
Other Income (Expense):
Interest expense (132 ) (164 )

(280

)

 

(249 )
Other income 397 340 1,352 1,609  
Total other income (expense) 265 176 1,072 1,360  
 
Income from continuing operations before provision for income taxes and discontinued operations
12,458

12,557

36,992

35,633
 
Provision for income taxes 1,085 1,167 3,278 2,883  
 
Income from continuing operations before discontinued operations 11,373 11,390 33,714 32,750
 
Income from discontinued operations, net of taxes -- -- -- 225  
 
 

Net income

$ 11,373 $ 11,390

 

$

33,714 $ 32,975  
 

Income per share-Basic:

Income before discontinued operations $ 0.69 $ 0.67

 

$

2.00 $ 1.91

Income from discontinued operations

-- -- -- 0.01  
$ 0.69 $ 0.67

 

$

2.00 $ 1.92  
 

Income per share-Diluted (2):

Income before discontinued operations $ 0.68 $ 0.66

 

$

1.96 $ 1.85

Income from discontinued operations

-- -- -- 0.01  
$ 0.68 $ 0.66

 

$

1.96 $ 1.86  
 
Weighted average shares outstanding:
Basic 16,519 16,956 16,818 17,217
Diluted 16,837 17,344 17,182 17,691

Notes:

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

(2) Considers the impact of stock options outstanding of a subsidiarys common stock of $29,000 for the three months ended September 30, 2006 and $37,000 and $95,000 for the nine months ended September 30, 2007 and 2006, respectively. The impact was anti-dilutive for the three months ended September 30, 2007.

STATISTICS

 
Third Quarter Ended   Nine Months Ended

September 30,

 

  September 30,
2007   2006   2007 2006
Average number of ships served1: 129 123 127   119
Spa 95 90 94 86
Non-Spa 34 33 33 33
 
Average total number of staff on ships served:
2,021

1,875

1,976

1,781
Spa 1,784 1,648 1,737 1,553
Non-Spa 237 227 239 228
 
Revenue per staff per day2: $ 503 $ 485 $ 477 $ 471
Spa $ 523 $ 505 $ 498 $ 494
Non-Spa $ 357 $ 339 $ 331 $ 319
 
Average weekly revenues: $ 55,213 $ 51,694 $ 52,058 $ 49,186
Spa $ 68,395 $ 64,441 $ 64,773 $ 62,013
Non-Spa $ 17,684 $ 16,455 $ 16,533 $ 15,501
 

Average number of land-based spas served3

53 56 54 56
 
Average weekly land-based spas revenues $ 25,880 $ 24,944 $ 26,191 $ 26,356
 
Total schools revenues4,5 $ 11,804,000 $ 11,725,000 $ 35,154,000 $ 27,884,000
 
Total wholesale and retail product revenues $ 16,892,000 $ 12,788,000 $ 46,099,000 $ 33,882,000

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 $53,000 and $126,000 for the three months ended September 30, 2007 and 2006, respectively, and $212,000 and $421,000 for the nine months ended September 30, 2007 and 2006, 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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