EX-99 2 exhibit99_1.htm STEINER LEISURE LIMITED

Exhibit 99.1

STEINER LEISURE LIMITED
Post Office Box N-9306
Suite 104A
Nassau, The Bahamas

For Release: IMMEDIATELY

Contact:    Leonard I. Fluxman, President and Chief Executive Officer (305) 358-9002, ext. 215

Steiner Leisure Limited Announces Fourth Quarter and 2006 Financial Results

NASSAU, THE BAHAMAS, February 28, 2007- Steiner Leisure Limited (NASDAQ: STNR) today announced financial results for the fourth quarter and year ended December 31, 2006.

Financial Results

Steiner Leisure's revenues for the fourth quarter ended December 31, 2006 rose 20.7% to $122.1 million from $101.1 million during the comparable quarter in 2005. Income from continuing operations, before discontinued operations for the fourth quarter, was $13.2 million compared with $10.8 million for the same quarter in 2005. In the fourth quarter of 2006, the Company adopted Staff Accounting Bulletin 108, Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements ("SAB 108"). The effect of adopting SAB 108 was an income tax benefit of $1.8 million during the fourth quarter of 2006 and had no impact on our results of operations for the year ended December 31, 2006.

Earnings per share before discontinued operations for the fourth quarter ended December 31, 2006 was $0.75 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 year ended December 31, 2006, rose 18.4% to $470.1 million from $397.2 million in 2005. Income from continuing operations, before discontinued operations for the year ended December 31, 2006, was $45.9 million, compared with $40.4 million in 2005.

Earnings per share before discontinued operations for the year ended December 31, 2006 was $2.60 per share compared with $2.23 per share 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 fourth quarter and annual financial results. The strong execution by our personnel allowed us to generate strong earnings growth and cash flow in 2006."

Corporate Overview

Steiner Leisure Limited is a worldwide provider of spa services. The Company's operations include spas and salons on 126 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.

Conference Call

The Company will be holding a conference call at 11:00 am (EST) on Thursday, March 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 five minutes before the scheduled time. The password is "Steiner". This call is available for replay from Thursday. March 1, 2007 (approximately 3 hours after the call takes place) until Wednesday, March 7, 2007 at 11:00 pm. You may reach it by dialing (402) 998-1330 for both domestic and international calls.

SELECTED FINANCIAL DATA

($ in thousands, except per share data)

(Unaudited)

   

Fourth Quarter Ended

Year Ended
   

December 31,

December 31,
   

2006(1)

  

2005

  

2006(1)

  

2005

Revenues:

                

    Services

$

80,972

$

67,259

$

317,731

$

268,401

    Products

  

41,103

  

33,879

  

152,411

  

128,817

        Total revenues

122,075

101,138

470,142

397,218
                 

Cost of Sales:

                

    Cost of services

  

65,256

  

54,316

  

253,772

  

214,022

    Cost of products

  

28,835

  

24,945

  

110,744

  

96,588

        Total cost of sales

  

94,091

  

79,261

  

364,516

  

310,610

        Gross profit

  

27,984

  

21,877

  

105,626

  

86,608
                 

Operating Expenses:

                

    Administrative

  

7,169

  

5,002

  

26,260

  

20,837

    Salary and payroll taxes

  

8,566

  

5,290

  

32,844

  

22,348

        Total operating expenses

  

15,735

  

10,292

  

59,104

  

43,185

        Income from continuing operations

  

12,249

  

11,585

  

46,522

  

43,423
                 

Other Income (Expense):

                

    Interest expense

  

(38

)

(82

)

(287

)

(275)

    Other income

  

324

  

220

  

1,933

  

553

        Total other income (expense)

  

286

  

138

  

1,646

  

278
                 

Income from continuing operations before provision for income taxes and discontinued operations

  


12,535

  


11,723

  


48,168

  


43,701
                 

Provision (benefit) for income taxes (2)

  

(635

)

885

  

2,248

  

3,302
                 

Income from continuing operations before discontinued operations

  


13,170

  


10,838

  


45,920

  


40,399
                 

Income from discontinued operations, net of taxes

  

--

  

788

  

225

  

769
                 
                 

Net income

$

13,170

$

11,626

$

46,145

$

41,168

Income per share-Basic:

    Income before discontinued operations

$

0.78

$

0.63

$

2.68

$

2.32

    Income from discontinued operations

--

0.05

0.01

0.04

$

0.78

$

0.68

$

2.69

$

2.36

Income per share-Diluted(3):

    Income before discontinued operations

$

0.75

$

0.61

$

2.60

$

2.23

    Income from discontinued operations

--

0.04

0.01

0.04

$

0.75

$

0.65

$

2.61

$

2.27

Weighted average shares outstanding:

    Basic

16,890

17,174

17,134

17,401

    Diluted

17,317

17,842

17,596

18,159

Notes:

  1. Includes post acquisition results of Utah College of Massage Therapy ("UCMT") and an affiliate which were acquired on April 3, 2006.
  2. During the fourth quarter of 2006, we adopted SAB 108. The affect of adopting SAB 108 was an income tax benefit of $1.8 million during the fourth quarter of 2006 and had no impact on our results of operations for the year ended December 31, 2006. This corrected an error relating to the different treatment for book and tax purposes of the Company's tax deductible goodwill which cannot be assumed to offset deductible temporary differences which create deferred tax assets, which was recorded in the second quarter of 2006.
  3. During 2006, considers the impact of stock options outstanding of a subsidiaries common stock of $143,000. During 2005, the impact was immaterial.

STATISTICS

   

Fourth Quarter Ended

  

Year Ended

December 31,

December 31,
   

2006

  

2005

  

2006

  

2005
                 

Average number of ships served1:

  

122

  

112

  

120

  

115

Spa

  

90

  

82

  

87

  

83

Non-Spa

  

32

  

30

  

33

  

32
                 

Average total number of staff on ships served:

  


1,884

  


1,656

  


1,807

  


1,653

Spa

  

1,650

  

1,443

  

1,577

  

1,424

Non-Spa

  

234

  

213

  

230

  

229
                 

Revenue per staff per day2:

$

443

$

450

$

464

$

455

Spa

$

461

$

470

$

485

$

477

Non-Spa

$

315

$

315

$

318

$

314
                 

Average weekly revenues:

$

47,835

$

46,475

$

48,840

$

45,721

Spa

$

59,259

$

57,619

$

61,298

$

57,508

Non-Spa

$

16,002

$

15,681

$

15,625

$

15,571
                 

Average number of land-based spas operated3

  


54

  


53

  


55

  


50
                 

Average weekly land-based spas revenues

$

24,437

$

25,524

$

25,881

$

26,441
                 

Total schools revenues4,5

$

11,928,000

$

4,393,000

$

39,812,000

$

17,750,000
                 

Total wholesale and retail product revenues

$

15,917,000

$

10,481,000

$

49,799,000

$

36,294,000

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 year 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.

4Includes $116,000 and $130,000 for the three months ended December 31, 2006 and 2005, respectively, and $537,000 and $670,000 for the year ended December 31, 2006 and 2005, respectively, relating to the Steiner training school near London, England.

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