Steiner Leisure Limited Announces Third Quarter 2007 Financial Results

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.

“The maritime business executed very well and the rest of the business performed in line with our expectations.”

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 Company’s 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 [phone] 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 [phone] 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 subsidiary’s 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 served^1:		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 day^2:	$	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 served^3		53		56		54		56
Average weekly land-based spas revenues	$	25,880	$	24,944	$	26,191	$	26,356
Total schools revenues^4,5	$	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.