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Proc-Type: 2001,MIC-CLEAR
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SECURITIES AND EXCHANGE COMMISSION FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2001 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 For the transition period from _____________ to ______________ STEINER LEISURE LIMITED Commission File Number: 0-28972 Commonwealth of The Bahamas 98-0164731 (State or other jurisdiction of incorporation or
organization) (I.R.S. Employer Identification No.) Suite 104A, Saffrey Square Nassau, The Bahamas Not Applicable (Address of principal executive offices) (Zip Code) (242) 356-0006 (Former name , former address and former fiscal year, if changed since
last report) Indicate by check 4 whether the
registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing requirements
for the past 90
days. [4
] Yes [ ] No Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date. Class Outstanding Common Shares, par value (U.S.) $.01 per share 16,629,678 (gross of 1,866,406 treasury shares) shares
as of May 10, 2001 STEINER LEISURE LIMITED INDEX PART I. FINANCIAL INFORMATION Page No. ITEM 1. Unaudited Financial Statements Condensed Consolidated Balance Sheets as of December 31, 2000 and March 31, 2001 3 Condensed Consolidated Statements of Operations for the Three Months
ended March 31, 2000 and 2001 4 Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2000 and 2001 5 Notes to Condensed Consolidated Financial Statements 6 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations 11 PART II OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K 16 SIGNATURES 17 PART I - FINANCIAL INFORMATION Item 1. Financial Statements STEINER LEISURE LIMITED AND SUBSIDIARIES ASSETS December 31, March 31, 2000 2001 CURRENT ASSETS: (Unaudited) Cash and cash equivalents $ 31,020,000 $ 37,091,000 Marketable securities 5,161,000 1,857,000 Accounts receivable 7,147,000 5,008,000 Accounts receivable - students, net 5,155,000 6,472,000 Inventories 10,053,000 10,141,000 Other current assets 2,000,000 4,046,000 Total current assets 60,536,000 64,615,000 PROPERTY AND EQUIPMENT, net 11,843,000 9,053,000 GOODWILL, net 13,983,000 13,801,000 OTHER ASSETS: Trademarks and product formulations, net 203,000 188,000 License rights, net 713,000 708,000 Other 949,000 1,444,000 Total other assets 1,865,000 2,340,000 Total assets $ 88,227,000 $ 89,809,000 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 3,846,000 $ 3,133,000 Accrued expenses 12,350,000 8,157,000 Current portion of deferred tuition revenue 6,194,000 7,187,000 Income taxes payable 1,173,000 1,065,000 23,563,000 19,542,000 LONG TERM DEFERRED TUITION REVENUE 81,000 94,000 MINORITY INTEREST 21,000 29,000 SHAREHOLDERS' EQUITY: Preferred shares, $.0l par value; 10,000,000 shares authorized, none issued and outstanding -- -- Common shares, $.0l par value; 100,000,000 shares authorized, 16,628,000 shares issued in 2000 and 16,629,000
issued in 2001 166,000 166,000 Additional paid-in capital 13,431,000 13,452,000 Accumulated other comprehensive loss (484,000 ) (824,000 ) Retained earnings 80,820,000 86,721,000 Treasury shares, at cost, 1,866,000 shares in 2000 and in 2001 (29,371,000 ) (29,371,000 ) Total shareholders' equity 64,562,000 70,144,000 Total liabilities and shareholders'
equity $ 88,227,000 $ 89,809,000 The accompanying notes to condensed consolidated financial
statements are an integral part of these balance sheets. STEINER LEISURE LIMITED AND SUBSIDIARIES (Unaudited) Three
Months Ended 2000 2001 REVENUES: Services $ 23,819,000 $ 26,092,000 Products 14,404,000 14,932,000 Total revenues 38,223,000 41,024,000 COST OF SALES: Cost of services 18,080,000 19,728,000 Cost of products 10,660,000 11,149,000 Total cost of sales 28,740,000 30,877,000 Gross profit 9,483,000 10,147,000 OPERATING EXPENSES: Administrative 2,020,000 2,154,000 Salary and payroll taxes 1,869,000 2,123,000 Amortization of goodwill 123,000 185,000 Total operating
expenses 4,012,000 4,462,000 Income from
operations 5,471,000 5,685,000 INTEREST INCOME 414,000 520,000 Income before
provision for income taxes and minority
interest 5,885,000 6,205,000 PROVISION FOR INCOME TAXES 311,000 296,000 Income before
minority interest 5,574,000 5,909,000 MINORITY INTEREST -- (8,000 ) Net income $ 5,574,000 $ 5,901,000 EARNINGS PER COMMON SHARE: Basic $ 0.36 $ 0.40 Diluted $ 0.35 $ 0.39 The accompanying notes to condensed consolidated financial
statements are an integral part of these statements. STEINER LEISURE LIMITED AND SUBSIDIARIES CONDENSED
CONSOLIDATED (Unaudited) Three
Months Ended 2000 2001 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 5,574,000 $ 5,901,000 Adjustments to reconcile net income to net cash provided by operating
activities- Depreciation and amortization 585,000 571,000 Minority interest -- 8,000 (Increase) decrease in- Accounts receivable (594,000 ) 766,000 Inventories 313,000 (328,000 ) Other current
assets (376,000 ) (1,108,000 ) Other assets 564,000 (1,442,000 ) Increase (decrease) in- Accounts payable 91,000 (617,000 ) Accrued expenses (1,008,000 ) (906,000 ) Income taxes payable (104,000 ) (85,000 ) Deferred tuition revenue 444,000 1,006,000 Net cash provided
by operating activities 5,489,000 3,766,000 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of marketable securities (988,000 ) -- Proceeds from the maturities of the
marketable securities -- 3,073,000 Proceeds from the sale of marketable
securities -- 254,000 Capital expenditures (290,000 ) (2,734,000 ) Proceeds from the sale of fixed
assets -- 4,969,000 Net cash (used in)
provided by investing activities (1,278,000 ) 5,562,000 CASH FLOWS FROM FINANCING ACTIVITIES: Purchase of treasury shares (722,000 ) (3,225,000 ) Net proceeds from stock option
exercises -- 21,000 Net cash used in
financing activities (722,000 ) (3,204,000 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH (54,000 ) (53,000 ) NET INCREASE IN CASH AND CASH EQUIVALENTS 3,435,000 6,071,000 CASH AND CASH EQUIVALENTS, beginning of period 23,893,000 31,020,000 CASH AND CASH EQUIVALENTS, end of period $ 27,328,000 $ 37,091,000 SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during
the period for- Income taxes $ 403,000 $ 101,000 The accompanying notes to condensed consolidated financial
statements are an integral part of these statements. STEINER LEISURE LIMITED AND SUBSIDIARIES (Unaudited) (1) BASIS OF PRESENTATION OF INTERIM CONDENSED CONSOLIDATED FINANCIAL
STATEMENTS: The unaudited condensed consolidated statements of operations
for the three months ended March 31, 2000 and 2001 reflect, in the opinion of
management, all adjustments (which include only normal recurring adjustments)
necessary to fairly present the results of operations for the interim periods.
The results of operations for any interim period are not necessarily indicative
of results for the full year. The year-end balance sheet data was derived from audited
financial statements, but does not include all disclosures required by generally
accepted accounting principles. The unaudited interim condensed consolidated
financial statements should be read in conjunction with the audited consolidated
financial statements included in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 2000. (2) ORGANIZATION Steiner Leisure Limited (including its subsidiaries, where
the context requires, "Steiner Leisure," "we,"
"us," "our" and the "Company" refer to Steiner
Leisure Limited) provides spa services and skin and hair care products to
passengers on board cruise ships worldwide. The Company, incorporated in the
Bahamas, commenced operations effective November 1995 with the contributions of
substantially all of the assets and certain of the liabilities of the Maritime
Division (the "Maritime Division") of Steiner Group Limited, now known
as STGR Limited ("Steiner Group"), a U.K. company and an affiliate of
the Company, and all of the outstanding common stock of Coiffeur Transocean
(Overseas), Inc. ("CTO"), a Florida corporation and a wholly owned
subsidiary of Steiner Group. The contributions of the net assets of the Maritime
Division and CTO were recorded at historical cost in a manner similar to a
pooling of interests. In February 1999, the Company began operating the luxury
health spa at the Atlantis Resort on Paradise Island in The Bahamas (the
"Atlantis Spa"). In connection with the operation of the spa, the
Company paid the resort's owner the greater of a minimum monthly rental and an
amount based on our revenues at the spa. In December 2000, Sun International
Bahamas Limited ("Sun International"), the operator of the Atlantis
Resort, exercised its option to buy out the remaining term of the Company's
lease. Effective January 31, 2001, the Company no longer offers its services and
products at the Atlantis Spa. The Company received $4.9 million from Sun
International as consideration for the leasehold improvements made by the
Company and did not recognize any gain or loss in connection with the buy-out. In August 1999, the Company acquired the assets of Florida
College of Natural Health, Inc. ("Florida College"). As a result of
the acquisition, the Company currently operates through a wholly-owned
subsidiary, a post-secondary school (comprised of four campuses) in Florida
offering degree and non-degree programs in massage therapy and skin care and
related areas. As the result of an acquisition in April 2000, the Company
operates through two wholly-owned subsidiaries two post-secondary massage
therapy schools (comprised of five campuses) in Maryland, Pennsylvania and
Virginia (the "Additional Schools"). On October 19, 2000, the Company entered into an agreement to
build and operate a luxury spa facility at the Aladdin Resort and Casino in Las
Vegas, Nevada. The term of the lease of the facilities will be 15 years with a
five year renewal option if certain sales levels are achieved. The build-out is
anticipated to cost approximately $13.5 million and the spa is expected to open
in late 2001. Total costs of $3.6 million have been incurred through March 31,
2001 related to this agreement. (3) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Marketable Securities Marketable securities consist of investment grade commercial
paper. The Company accounts for marketable securities in accordance with
Statement of Financial Accounting Standards Board Statement No. 115,
"Accounting for Certain Investments in Debt and Equity Securities"
and, accordingly, all such instruments are classified as "available for
sale" securities which are reported at fair value, with unrealized gains
and losses reported as a separate component of shareholders' equity. (b) Goodwill Goodwill represents the excess of cost over the fair market
value of identifiable net assets acquired. Goodwill is amortized on a
straight-line basis over its estimated useful life of 20 years. The Company
continually evaluates intangible assets and other long-lived assets for
impairment whenever circumstances indicate that carrying amounts may not be
recoverable. When factors indicate that the assets acquired in a business
purchase combination and the related goodwill may be impaired, we recognize an
impairment loss if the undiscounted future cash flows expected to be generated
by the asset (or acquired business) are less than the carrying value of the
related asset. (c) Income Taxes Steiner Leisure files a consolidated tax return for its
domestic subsidiaries. In addition, our foreign subsidiaries file income tax
returns in their respective countries of incorporation, where required. Steiner
Leisure follows Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("SFAS 109"). SFAS No. 109
utilizes the liability method and deferred taxes are determined based on the
estimated future tax effects of differences between the financial statement and
tax bases of assets and liabilities given the provisions of enacted tax laws.
SFAS No. 109 permits the recognition of deferred tax assets. Deferred income tax
provisions and benefits are based on the changes to the asset or liability from
period to period. (d) Translation of Foreign Currencies Assets and liabilities of foreign subsidiaries are translated
at the rate of exchange in effect at the balance sheet date; income and expenses
are translated at the average rates of exchange prevailing during the year. The
related translation adjustments are reflected in the accumulated other
comprehensive income section of the consolidated balance sheets. Foreign
currency gains and losses resulting from transactions, including intercompany
transactions, are included in the condensed consolidated statements of
operations. The majority of the Company's income is generated outside of the
United States. (e) Earnings per share Basic earnings per share is computed by dividing the net
income available to shareholders by the weighted average number of outstanding
common shares. The calculation of diluted earnings per share is similar to that
of basic earnings per share except that the denominator includes dilutive common
share equivalents such as share options. The computation of weighted average
common and common equivalent shares used in the calculation of basic and diluted
earnings per share is as follows: Three
Months Ended 2000 2001 Weighted average shares outstanding used in calculating basic earnings per share 15,588,000 14,762,000 Dilutive common share equivalents 410,000 531,000 Weighted average common and common equivalent 15,998,000 15,293,000 Options outstanding which are not included in the calculation of diluted earnings per share because their impact is antidilutive 855,000 989,000 (f) Recently Issued Accounting Pronouncements The Company adopted SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities on January 1, 2001. SFAS No. 133, as amended
by SFAS No. 138, requires the recognition of all derivatives on the balance
sheet as either assets or liabilities measured at fair value. Derivatives that
do not qualify for hedge accounting must be adjusted to fair value through
income. Adoption of SFAS No. 133 did not have a material impact on the
consolidated financial statements, as no derivative contracts have been entered
into and there are no current plans to do so in the future. (g) Reclassifications Certain prior year amounts have been reclassified to conform
to the current period presentation. (4) ACQUISITIONS In April 2000, the Company acquired the assets that now
constitute the Additional Schools in consideration of approximately $4.1 million
(including purchase price adjustments) in cash. The transaction was accounted
for under the purchase method of accounting. The purchase price exceeded the
fair market value of net assets acquired resulting in goodwill of approximately
$5.3 million. Unaudited pro forma consolidated results of operations
assuming the Additional Schools acquisition had occurred at the beginning of the
period presented are as follows: Three
Months Ended Revenues $ 39,483,000 Net income 5,675,000 Basic and diluted earnings per share 0.36 The above pro forma consolidated statement of operations is
based upon certain assumptions and estimates which the Company believes are
reasonable. The unaudited pro forma consolidated results of operations may not
be indicative of the operating results that would have been reported had the
acquisition been consummated on January 1, 2000, nor are they necessarily
indicative of results which will be reported in the future. (5) ACCRUED EXPENSES Accrued expenses consist of the following: December 31, March 31, 2000 2001 (Unaudited) Operative commissions $ 1,575,000 $ 1,699,000 Guaranteed minimum rentals 2,975,000 2,342,000 Bonuses 651,000 582,000 Staff shipboard accommodations 470,000 449,000 Earn-out 715,000 -- Amount due for treasury shares 3,225,000 -- Other 2,739,000 3,085,000 Total $ 12,350,000 $ 8,157,000 (6) COMPREHENSIVE INCOME SFAS No. 130, "Reporting Comprehensive Income,"
establishes standards for reporting and disclosure of comprehensive income and
its components in financial statements. The components of Steiner Leisure's
comprehensive income are as follows: Three
Months Ended 2000 2001 Net income $ 5,574,000 $ 5,901,000 Unrealized gain (loss) on marketable securities, net of income taxes 3,000 12,000 Foreign currency translation adjustments, (78,000 ) (836,000 ) net of income taxes Comprehensive income $ 5,499,000 $ 5,077,000 (7) SEGMENT INFORMATION Information about the Spa Operations and Schools segments for
the three months ended March 31, 2000 and 2001, is as follows. Three
Months Ended 2000 2001 Revenues: Spa Operations $ 36,221,000 $ 37,106,000 Schools 2,002,000 3,918,000 $ 38,223,000 $ 41,024,000 Operating Income: Spa Operations $ 5,485,000 $ 5,250,000 Schools (14,000 ) 435,000 $ 5,471,000 $ 5,685,000 December 31, March 31, 2000 2001 Identifiable Assets: Spa Operations $ 61,878,000 $ 62,583,000 Schools 26,349,000 27,226,000 $ 88,227,000 $ 89,809,000 Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations General Steiner Leisure Limited (including its subsidiaries and
predecessors, "Steiner Leisure," "we," "us" and
"our" refer to Steiner Leisure) is the leading worldwide provider of
spa services and skin and hair care products on board cruise ships. We sell our
services and products to cruise passengers. Payments to cruise lines are based
on a percentage of our passenger revenues and, in certain cases, a minimum
annual rental or a combination of both. We also sell our services and products
through land-based channels. In 1999, we began offering services and products
similar to those we offer on cruise ships at the luxury spa at the Atlantis
Resort on Paradise island in The Bahamas. Effective January 31, 2001, we no
longer offered our services and products at the Atlantis Spa. Also, in 1999, we
began offering post-secondary degree and non-degree programs in massage therapy,
skin care and related areas at our school (comprised of four campuses) in
Florida. In 2000, we began offering post-secondary degree and non-degree
programs in massage therapy at our two schools (comprised of five campuses) in
Maryland, Pennsylvania and Virginia. In October 2000, we entered into an
agreement to build and operate a luxury spa facility at the Aladdin Resort and
Casino in Las Vegas, Nevada. Steiner Leisure and Steiner Transocean Limited, our
subsidiary that conducts our shipboard operations, are Bahamas international
business companies ("IBCs"). The Bahamas does not tax Bahamas IBCs.
Under current legislation, we believe that income from our maritime operations
will be foreign source income that will not be subject to United States, United
Kingdom or other taxation. Approximately, 86% of our income for the first three
months of 2001 was not subject to United States or United Kingdom income tax.
Earnings from Steiner Training and Elemis Limted, our United Kingdom
subsidiaries, which accounted for a total of 7.7% of our pretax income for the
first three months of 2001, will be subject to U.K. tax rates (generally up to
31%). The income from our United States subsidiaries, Steiner Beauty Products,
Inc. (which sells products in the U.S.), Steiner Management Services, LLC (which
performs administrative services) and Steiner Education Group, Inc. (which runs
our schools through its subsidiaries) will generally be subject to U.S. federal
income tax at regular corporate rates (generally up to 35%) and may be subject
to additional U.S. federal, state and local taxes. When we commence the
operations of our spa at the Aladdin Resort, Steiner Spa Resorts (Nevada), Inc.,
our U.S. subsidiary through which that spa will be operated, also will be
subject to these U.S. taxes. Our Bahamas subsidiary which conducted our Atlantis
Spa operations is not an IBC and has been subject to tax on its revenues of
approximately one percent. To the extent that our income from non-maritime
operations increases more rapidly than any increase in our maritime-related
income, the percentage of our income subject to tax would increase. Results of Operations The following table sets forth for the periods indicated,
certain selected income statement data expressed as a percentage of revenues: Three
Months Ended 2000 2001 Revenues: Services Products 37.7 36.4 Total revenue 100.0 100.0 Cost of sales: Cost of services 47.3 48.1 Cost of products 27.9 27.2 Total cost of sales 75.2 75.3 Gross profit 24.8 24.7 Operating expenses: Administrative 5.3 5.2 Salary and payroll taxes 4.9 5.2 Amortization of goodwill 0.3 0.5 Total operating expenses 10.5 10.9 Income from operations 14.3 13.8 Other income 1.1 1.2 Income before provision for income taxes 15.4 15.0 Provision for income taxes 0.8 0.7 Net income 14.6 % 14.3 % Three Months Ended March 31, 2001 Compared to Three Months
Ended March 31, 2000 Revenues. Revenues increased approximately 7.3%, or $2.8
million, to $41.0 million in the first quarter of 2001 from $38.2 million in the
first quarter of 2000. Of this increase, $2.2 million was attributable to an
increase in services revenues and $528,000 was attributable to an increase in
products revenues. The increase in revenues was primarily attributable to an
average of four additional spa ships in service in the first quarter of 2001
compared to the first quarter of 2000, and the commencement of operations at our
Additional Schools in the second quarter of 2000. We had an average of 1,044
ship-board staff members in service in the first quarter of 2001 compared to an
average of 1,052 shipboard staff members in service in the first quarter of
2000. Revenues per shipboard staff per day increased by 2.0% to $358 in the
first quarter of 2001 from $351 in the first quarter of 2000. Cost of Services. Cost of services as a percentage of
services revenue decreased to 75.6% in the first quarter of 2001 from 75.9% in
the first quarter of 2000. This decrease was due to increases in productivity of
shipboard staff during the first quarter of 2001 compared to the first quarter
of 2000, and the effect of the lower cost of services as a percentage of
services revenues at our Additional Schools, which were not owned by us during
the first quarter of 2000. This decrease was partially offset by increases in
rent allocable on cruise ships covered by agreements that provide for increases
in rent in the first quarter of 2001 compared to the first quarter of 2000. Cost of Products. Cost of products as a percentage of
products revenue increased to 74.7% in the first quarter of 2001 from 74.0% in
the first quarter of 2000. This increase was due to increases in rent allocable
to products sales on cruise ships covered by agreements which provide for
increases in rent in the first quarter of 2001 compared to the first quarter of
2000. Operating Expenses. Operating expenses as a percentage of
revenues increased to 10.9% in the first quarter of 2001 from 10.5% in the first
quarter of 2000 as a result of the operating expenses and goodwill amortization
at our Additional Schools, which were not owned by us during the first quarter
of 2000. Provision for Income Taxes. The provision for
income taxes decreased to an overall effective rate of 4.8% for the first
quarter of 2001 from an overall effective rate of 5.3% for the first quarter of
2000 primarily due to the income earned in jurisdictions that do not tax our
income being greater than our income earned in jurisdictions that tax our
income. Seasonality Although certain cruise lines have experienced moderate
seasonality, we believe that the introduction of cruise ships into service
throughout a year has mitigated the effect of seasonality on our results of
operations. In addition, decreased passenger loads during slower months for the
cruise industry has not had a significant impact on our revenues. However, due
to our dependence on the cruise industry, revenues may in the future be affected
by seasonality. Liquidity and Capital Resources Cash flow from operating activities during the first three
months of 2001 was $3.8 million compared to $5.5 million for the first three
months of 2000. Steiner Leisure had working capital of approximately $45.1
million at March 31, 2001 compared to $37.0 million at December 31, 2000. In connection with the construction of the Atlantis Spa, we
spent $2.5 million in 1999 and $3.1 million in 1998. These $5.6 million in
capital expenditures were to be amortized over the fifteen-year term of our
arrangement with the Atlantis Resort. Effective January 31, 2001, the operator
of the Atlantis Resort exercised its option to buy out the remaining term of our
lease and, as a result, effective January 31, 2001 we no longer offered our
services and products at the Atlantis Spa. In connection with that buy-out we
received $4.9 million from the operator of the Atlantis Resort and did not
recognize any gain or loss connection with the buy-out. In April 2000, Steiner Leisure acquired the assets of a total
of two post-secondary massage therapy schools located in Maryland, Pennsylvania
and Virginia. The purchase price for the Additional Schools of approximately
$4.1 million in cash was funded from our working capital. On October 19, 2000, Steiner Leisure entered into an
agreement to build and operate a luxury spa facility at the Aladdin Resort and
Casino in Las Vegas, Nevada. The term of the lease of the facilities will be 15
years with a five-year renewal option if certain sales levels are achieved. The
build-out will cost approximately $13.5 million and the spa is expected to open
in late 2001. Total costs of $3.6 million have been incurred through March 31,
2001 related to this agreement. The build-out is expected to be funded from our
working capital. In April 2001, Steiner Leisure entered into an agreement to
acquire Greenhouse Day Spas for $24.7 million in cash and $3.0 million in
Steiner Leisure shares. In addition, $3.0 million and options to purchase
200,000 Steiner Leisure common shares can be earned by the sellers if certain
EBITDA thresholds are obtained. This chain of luxury day spas consists of eleven
spas located in various U.S. cities. The transaction is expected to close by May
31, 2001. The purchase is expected to be funded from our working capital.
Washington, D.C. 20549
(Exact name of Registrant as Specified in its Charter)
CONDENSED CONSOLIDATED BALANCE SHEETS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
March 31,
STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2000 AND
2001
March 31,
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31,
March 31, 2000
March 31,
March 31,
March 31,
62.3
%
63.6
%
Through May 11, 2001, we purchased a total of 1,902,150 of our common shares in the open market for an aggregate purchase price of approximately $30.0 million. The cash used to make such purchases was funded from our working capital. These purchases were made pursuant to a share purchase program authorized by our Board of Directors.
We believe that cash generated from operations is sufficient to satisfy the cash required to operate our business for the foreseeable future. Any significant acquisition may require outside financing.
Inflation and Economic Conditions
Steiner Leisure does not believe that inflation has had a material adverse effect on revenues or results of operations. However, public demand for leisure activities, including cruises, is influenced by general economic conditions, including inflation. Periods of economic recession or high inflation, particularly in North America where a significant number of cruise passengers reside, could have a material adverse effect on the cruise industry upon which we are dependent. Current softness of the economy in North America and industry analysts' concerns with respect to cruise industry over capacity could have a material adverse affect on our business, results of operation and financial condition.
Cautionary Statement Regarding Forward-Looking Statements
From time to time, including herein, Steiner Leisure may publish "forward-looking" statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The words "may," "will," "intend," "expect," "proposed," "anticipate," "believe," "estimate" and similar expressions are intended to identify such forward-looking statements.
Such forward looking statements include, among others, statements regarding:
Such statements involve known and unknown risks, uncertainties and other factors which may cause our actual results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied by such forward-looking statements include, but are not limited to, the following:
We assume no duty to update any forward-looking statements. The risks to which we are subject are more fully described under "Certain Factors That May Affect Future Operating Results" Steiner Leisure's Annual Report on Form 10-K for the fiscal year ended December 31, 2000, filed with the Securities and Exchange Commission.
PART II - OTHER INFORMATION |
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Item 6 |
Exhibits and Reports on Form 8-K |
||
(a) |
Exhibits |
||
None |
|||
(b) |
Reports on Form 8-K |
||
No reports on Form 8-K were filed by Steiner Leisure during the quarter ended March 31, 2001. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Dated: May 14, 2001
STEINER LEISURE LIMITED |
|
(Registrant) |
|
/s/ Clive E. Warshaw |
|
Clive E. Warshaw |
|
/s/ Leonard I. Fluxman |
|
Leonard I. Fluxman |
|
/s/ Glenn J. Fusfield |
|
Glenn J. Fusfield |
|
/s/ Carl S. St. Philip |
|
Carl S. St. Philip |
|
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