Steiner Leisure Ltd. (STNR, Financial) filed Quarterly Report for the period ended 2009-03-31.
Steiner Leisure Limited is the leading worldwide provider of spa services and skin and hair care products on board cruise ships. The company strives to create a relaxing and therapeutic environment where customers can receive body and facial treatments and hair styling comparable in quality to the finest land-based spas and salons. Also the company develops and markets premium priced high quality personal care products that are soldprimarily in connection with the services provide. The company operates four post-secondary schools offering degree and non-degree programs. Steiner Leisure Ltd. has a market cap of $445.2 million; its shares were traded at around $30.67 with a P/E ratio of 10.6 and P/S ratio of 0.9. Steiner Leisure Ltd. had an annual average earning growth of 12.9% over the past 10 years. GuruFocus rated Steiner Leisure Ltd. the business predictability rank of 5-star.
Spa Operations Segment Revenues. Spa Operations segment revenues decreased approximately 17.0%, or $18.2 million, to $89.1 million in the first quarter of 2009 from $107.3 million in the first quarter of 2008. Average weekly revenues for our resorts decreased 19.5% to $23,718 in the first quarter of 2009 from $29,470 in the first quarter of 2008. We had an average of 2,085 shipboard staff members in service in the first quarter of 2009, compared to an average of 2,008 shipboard staff members in service in the first quarter of 2008. Revenues per shipboard staff per day decreased by 17.0% to $391 in the first quarter of 2009 from $471 in the first quarter of 2008. Average weekly revenues for our shipboard spas decreased by 12.4% to $45,437 in the first quarter of 2009 from $51,895 in the first quarter of 2008. The decrease in revenues and the key performance indicators referenced above were primarily attributable to a softening of the economy worldwide, resulting in reduced spending by consumers at our spas.
Cost of services decreased $6.4 million to $67.5 million in the first quarter of 2009 from $73.9 million in the first quarter of 2008. Cost of services as a percentage of services revenues was 81.0% in both the first quarter of 2009 and 2008. This lack of change in cost of services as a percentage of service revenues was primarily due to the improved performance of our Schools segment. This increase was partially offset by increases in commissions allocable to services on cruise ships covered by agreements that provide for increases in commissions in the first quarter of 2009 compared to the first quarter of 2008.
Cost of products decreased $8.4 million to $25.0 million in the first quarter of 2009 from $33.4 million in the first quarter of 2008. Cost of products as a percentage of products revenue increased to 74.0% in the first quarter of 2009 from 73.3% in the first quarter of 2008. This increase was primarily attributable to an increase in commissions allocable to products on cruise ships covered by agreements that provide for increases in commissions in the first quarter of 2009 compared to the fist quarter of 2008.
In February 2008, our Board of Directors approved a new share repurchase plan under which up to $100.0 million of common shares can be purchased. At that time, our Board of Directors also terminated the prior plan. During the three months ended March 31, 2009, we purchased approximately 33,000 shares for approximately $0.8 million. These shares were surrendered by our employees to cover withholding taxes due in connection with the vesting of restricted shares. During the three months ended March 31, 2008, we purchased approximately 646,000 shares for approximately $22.5 million. We cannot provide assurance as to the number of additional shares, if any, that will be purchased under our share repurchase plan.
Effective June 29, 2006, we entered into a second amended and restated credit agreement with our bank, which increased the aggregate amount available for borrowing under our revolving line of credit from $20 million to $30 million. Effective June 28, 2007, we entered into a third amended and restated credit agreement which extended the maturity date of the revolving facility three years to July 2, 2010. As of March 31, 2009, there was $30.0 million available under the revolving facility. The credit agreement contains customary affirmative, negative and financial covenants, including limitations on dividends, capital expenditures and funded debt, and requirements to maintain prescribed interest expense and fixed charge coverage ratios. As of March 31, 2009, we were in compliance with these financial covenants. At March 31, 2009, the interest rate under the revolving credit facility was 2.7%.
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Steiner Leisure Limited is the leading worldwide provider of spa services and skin and hair care products on board cruise ships. The company strives to create a relaxing and therapeutic environment where customers can receive body and facial treatments and hair styling comparable in quality to the finest land-based spas and salons. Also the company develops and markets premium priced high quality personal care products that are soldprimarily in connection with the services provide. The company operates four post-secondary schools offering degree and non-degree programs. Steiner Leisure Ltd. has a market cap of $445.2 million; its shares were traded at around $30.67 with a P/E ratio of 10.6 and P/S ratio of 0.9. Steiner Leisure Ltd. had an annual average earning growth of 12.9% over the past 10 years. GuruFocus rated Steiner Leisure Ltd. the business predictability rank of 5-star.
Highlight of Business Operations:
Total revenues decreased approximately 14.3%, or $19.6 million, to $117.1 million in the first quarter of 2009 from $136.7 million in the first quarter of 2008. Of this decrease, $7.8 million was attributable to a decrease in services revenues and $11.8 million was attributable to a decrease in products revenues.Spa Operations Segment Revenues. Spa Operations segment revenues decreased approximately 17.0%, or $18.2 million, to $89.1 million in the first quarter of 2009 from $107.3 million in the first quarter of 2008. Average weekly revenues for our resorts decreased 19.5% to $23,718 in the first quarter of 2009 from $29,470 in the first quarter of 2008. We had an average of 2,085 shipboard staff members in service in the first quarter of 2009, compared to an average of 2,008 shipboard staff members in service in the first quarter of 2008. Revenues per shipboard staff per day decreased by 17.0% to $391 in the first quarter of 2009 from $471 in the first quarter of 2008. Average weekly revenues for our shipboard spas decreased by 12.4% to $45,437 in the first quarter of 2009 from $51,895 in the first quarter of 2008. The decrease in revenues and the key performance indicators referenced above were primarily attributable to a softening of the economy worldwide, resulting in reduced spending by consumers at our spas.
Cost of services decreased $6.4 million to $67.5 million in the first quarter of 2009 from $73.9 million in the first quarter of 2008. Cost of services as a percentage of services revenues was 81.0% in both the first quarter of 2009 and 2008. This lack of change in cost of services as a percentage of service revenues was primarily due to the improved performance of our Schools segment. This increase was partially offset by increases in commissions allocable to services on cruise ships covered by agreements that provide for increases in commissions in the first quarter of 2009 compared to the first quarter of 2008.
Cost of products decreased $8.4 million to $25.0 million in the first quarter of 2009 from $33.4 million in the first quarter of 2008. Cost of products as a percentage of products revenue increased to 74.0% in the first quarter of 2009 from 73.3% in the first quarter of 2008. This increase was primarily attributable to an increase in commissions allocable to products on cruise ships covered by agreements that provide for increases in commissions in the first quarter of 2009 compared to the fist quarter of 2008.
In February 2008, our Board of Directors approved a new share repurchase plan under which up to $100.0 million of common shares can be purchased. At that time, our Board of Directors also terminated the prior plan. During the three months ended March 31, 2009, we purchased approximately 33,000 shares for approximately $0.8 million. These shares were surrendered by our employees to cover withholding taxes due in connection with the vesting of restricted shares. During the three months ended March 31, 2008, we purchased approximately 646,000 shares for approximately $22.5 million. We cannot provide assurance as to the number of additional shares, if any, that will be purchased under our share repurchase plan.
Effective June 29, 2006, we entered into a second amended and restated credit agreement with our bank, which increased the aggregate amount available for borrowing under our revolving line of credit from $20 million to $30 million. Effective June 28, 2007, we entered into a third amended and restated credit agreement which extended the maturity date of the revolving facility three years to July 2, 2010. As of March 31, 2009, there was $30.0 million available under the revolving facility. The credit agreement contains customary affirmative, negative and financial covenants, including limitations on dividends, capital expenditures and funded debt, and requirements to maintain prescribed interest expense and fixed charge coverage ratios. As of March 31, 2009, we were in compliance with these financial covenants. At March 31, 2009, the interest rate under the revolving credit facility was 2.7%.
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