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Share Name | Share Symbol | Market | Type |
---|---|---|---|
OneSpaWorld Holdings Ltd | NASDAQ:OSW | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.37 | 2.22% | 17.01 | 17.00 | 17.01 | 17.12 | 16.51 | 16.54 | 195,116 | 18:16:40 |
Reaffirms Fiscal Year 2024 Guidance Introduces First Quarter 2024 Guidance of $204 to $209 Million in Revenue and $21.5 to $23.5 Million in Adjusted EBITDA
OneSpaWorld Holdings Limited (NASDAQ: OSW) (“OneSpaWorld,” or the “Company”), the pre-eminent global provider of health and wellness services and products on-board cruise ships and in destination resorts around the world, today announced its financial results for its fourth quarter and twelve months of fiscal 2023, ended December 31, 2023.
Leonard Fluxman, Executive Chairman, Chief Executive Officer and President, commented: “Our record fourth quarter concluded an outstanding year of financial and operating performance and continues to demonstrate the increasingly powerful impact of our strategies, innovation and scale across our complex business.”
Mr. Fluxman continued, “the year was highlighted by the delivery of best-ever revenue, which grew 45% to $794 million; income from operations which increased 258% to $54.2 million, and Adjusted EBITDA, which grew 77% to $89.2 million from the 2022 fiscal year. I am extremely proud of our dedicated team and onboard staff, whose commitment to service excellence assisted us in delivering double digit growth across certain key operating metrics as compared to fiscal years 2022 and 2019, as well as placing 5,904 staff members onboard, introducing new products and services, and introducing health and wellness centers on board 10 new ship builds, as well as executing new agreements with Crystal Cruises and Adora Cruises during the year.”
Mr. Fluxman concluded, “our team continues to enhance our industry leading business model, constantly innovating our unique value to our cruise line and destination resort partners and our delivery of outstanding experiences to their passengers and guests. We continue to vet and introduce new and enhanced services, products and facilities, while utilizing our strong cash flow to further invest in our powerful business model. We begin fiscal 2024 with strong momentum and expect to deliver another year of record performance and increasing value for our shareholders.”
Stephen Lazarus, Chief Financial Officer and Chief Operating Officer, added, “the strength of our business and our asset light operating model, combined with the discipline with which we execute, has enabled us to deliver increasing free cash flow and a strong balance sheet. The superior execution of our strategy is further reflected in our record fourth quarter performance, as we handily navigated turmoil in the Middle East and an unscheduled drydock of a large cruise ship, which impacted revenue. We ended the year with total liquidity of $48.9 million, after repaying an additional $5.0 million of our first lien term loan and utilizing $9.0 million to repurchase 789,046 of our common shares, at $11.46 per share, during the fourth quarter.”
Mr. Lazarus continued, “since the second quarter of 2022, we have repaid a total of $74.1 million in debt instruments, reducing ongoing interest expense. Our net debt leverage ratio at year end was 1.48 times, significantly improved from our year end 2019 at 3.62 times. As a result of our deleveraging, we have substantially strengthened our balance sheet and reduced our future interest expense. This deleveraging resulted in a one-time charge of $5.4 million, or $0.05 per diluted share, due to a deleveraging fee driven by our reduced net debt leverage ratio.”
Mr. Lazarus concluded, “with our strong 2023 performance and a positive outlook, we affirm our recently provided full fiscal year 2024 guidance, reflecting high-single digit Revenues and Adjusted EBITDA growth at the mid-points of our guidance ranges as compared to fiscal 2023 results.”
Fourth Quarter 2023 Highlights:
Fiscal Year 2023 Highlights:
Operating Network Update:
Liquidity Update:
The Company’s results are reported in this press release on a GAAP basis and on an as adjusted non-GAAP basis. A reconciliation of GAAP to non-GAAP financial information is provided at the end of this press release. This press release also refers to Adjusted EBITDA and Adjusted Net Income (non-GAAP financial measures), the terms for which definition and reconciliation are presented below.
Fourth Quarter Ended December 31, 2023 Compared to December 31, 2022
Results of operations for the fourth quarter of 2023 continued to accelerate from 2022 as the Company has returned to normalized operations since the conclusion of the COVID-19 pandemic.
Fiscal Year 2023 Ended December 31, 2023 Compared to December 31, 2022
Results of operations for the year ended December 31, 2023 continued to accelerate from 2022 as the Company has returned to normalized operations since the conclusion of the COVID-19 pandemic.
Balance Sheet Highlights
Warrant Expiration
Fiscal Year 2024 Guidance
Three Months Ended March 31, 2024
Year Ended December 31, 2024
Total Revenues
$
204-209 million
$
850-870 million
Adjusted EBITDA
$
21.5-23.5 million
$
90-100 million
Conference Call Details
A conference call to discuss the fourth quarter 2023 financial results is scheduled for Wednesday, February 28, 2024, at 10:00 a.m. Eastern Time. Investors and analysts interested in participating in the call are invited to dial 1-877-283-8977 (international callers please dial 1-412-542-4171) and provide the passcode 10186273 approximately 10 minutes prior to the start of the call. A live audio webcast of the conference call will be available online at https://onespaworld.com/investor-relations. A replay of the call will be available by dialing 844-512-2921 (international callers please dial 412-317-6671) and entering the passcode: 10186273. The conference call replay will be available from 2:00 p.m. Eastern Time on Wednesday, February 28, 2024 until 11:59 p.m. Eastern Time on Wednesday, March 6, 2024. The Webcast replay will remain available for 90 days.
About OneSpaWorld
Headquartered in Nassau, Bahamas, OneSpaWorld is one of the largest health and wellness services companies in the world. OneSpaWorld’s distinguished health and wellness centers offer guests a comprehensive suite of premium health, wellness, fitness and beauty services, treatments, and products, currently onboard 193 cruise ships and at 51 destination resorts around the world. OneSpaWorld holds the leading market position within the cruise line industry of the historically fast-growing international leisure market and has been built upon its exceptional service standards, expansive global recruitment, training and logistics platforms, irreplicable operating infrastructure, extraordinary team, and a history of service and product innovation that has enhanced its guests’ personal care experiences while vacationing for over 65 years.
On March 19, 2019, OneSpaWorld completed a series of mergers pursuant to which OSW Predecessor, comprised of direct and indirect subsidiaries of Steiner Leisure Ltd., and Haymaker Acquisition Corp. (“Haymaker”), a special purpose acquisition company, each became indirect wholly owned subsidiaries of OneSpaWorld (the “Business Combination”). Haymaker is the acquirer and OSW Predecessor the predecessor, whose historical results have become the historical results of OneSpaWorld.
Forward-Looking Statements
This press release includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. The expectations, estimates, and projections of the Company may differ from its actual results and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” or the negative or other variations thereof and similar expressions are intended to identify such forward looking statements. These forward-looking statements include, without limitation, expectations with respect to future performance of the Company, including projected financial information (which is not audited or reviewed by the Company’s auditors), and the future plans, operations and opportunities for the Company and other statements that are not historical facts. These statements are based on the current expectations of the Company’s management and are not predictions of actual performance. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Factors that may cause such differences include, but are not limited to: the impact of the COVID-19 pandemic on our business, operations, results of operations and financial condition, including liquidity for the foreseeable future; the demand for the Company’s services together with the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors or changes in the business environment in which the Company operates; changes in consumer preferences or the market for the Company’s services; changes in applicable laws or regulations; the availability or competition for opportunities for expansion of the Company’s business; difficulties of managing growth profitably; the loss of one or more members of the Company’s management team; loss of a major customer and other risks and uncertainties included from time to time in the Company’s reports (including all amendments to those reports) filed with the SEC. The Company cautions that the foregoing list of factors is not exclusive. You should not place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based, except as required by law. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this communication.
Non-GAAP Financial Measures
We refer to certain financial measures that are not recognized under U.S. generally accepted accounting principles (“GAAP”). Please see “Note Regarding Non-GAAP Financial Information” and “Reconciliation of GAAP to Non-GAAP Financial Information” below for additional information and a reconciliation of the non-GAAP financial measures to the most comparable GAAP financial measures.
ONESPAWORLD HOLDINGS LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
Three Months Ended December 31,
Year Ended December 31,
$
%
$
%
2023
2022
Inc/(Dec)
Inc/(Dec)
2023
2022 (1)
Inc/(Dec)
Inc/(Dec)
REVENUES:
Service revenues
$
158,887
$
138,963
$
19,924
14
%
$
648,091
$
446,518
$
201,573
45
%
Product revenues
35,919
29,959
5,960
20
%
145,954
99,741
46,213
46
%
Total revenues
194,806
168,922
25,884
15
%
794,045
546,259
247,786
45
%
COST OF REVENUES AND OPERATING EXPENSES:
Cost of services
131,708
114,865
16,843
15
%
541,356
375,136
166,220
44
%
Cost of products
30,700
24,302
6,398
26
%
125,649
87,555
38,094
44
%
Administrative
4,349
4,147
202
5
%
17,111
15,777
1,334
8
%
Salary, benefits and payroll taxes
9,097
10,698
(1,601
)
(15
)%
36,805
35,830
975
3
%
Amortization of intangible assets
4,205
4,205
—
—
16,823
16,823
—
—
Long-lived assets impairment
2,129
—
2,129
100
%
2,129
—
2,129
100
%
Total cost of revenues and operating expenses
182,188
158,217
23,971
15
%
739,873
531,121
208,752
39
%
Income from operations
12,618
10,705
1,913
18
%
54,172
15,138
39,034
258
%
OTHER (EXPENSE) INCOME:
Interest expense, net
(8,427
)
(4,820
)
(3,607
)
(75
)%
(21,115
)
(15,755
)
(5,360
)
(34
)%
Change in fair value of warrant liabilities
(10,821
)
(7,800
)
(3,021
)
(39
)%
(37,557
)
54,400
(91,957
)
(169
)%
Total other (expense) income, net
(19,248
)
(12,620
)
(6,628
)
(53
)%
(58,672
)
38,645
(97,317
)
(252
)%
(Loss) Income before income tax expense
(6,630
)
(1,915
)
(4,715
)
(246
)%
(4,500
)
53,783
(58,283
)
1295
%
INCOME TAX EXPENSE (BENEFIT)
674
415
259
62
%
(1,526
)
624
(2,150
)
(345
)%
NET (LOSS) INCOME
$
(7,304
)
$
(2,330
)
$
(4,974
)
(213
)%
$
(2,974
)
$
53,159
$
(56,133
)
1887
%
NET (LOSS) PER VOTING AND NON-VOTING SHARE:
Basic
$
(0.07
)
$
(0.03
)
$
(0.03
)
$
0.57
Diluted
$
(0.07
)
$
(0.03
)
$
(0.03
)
$
0.49
WEIGHTED-AVERAGE SHARES OUTSTANDING:
Basic
100,232
92,911
97,826
92,507
Diluted
100,232
92,911
97,826
95,105
(1) Diluted EPS includes an adjustment to exclude $6.1 million from net income for the year ended December 31, 2022, which is attributable to the gain on fair value of in-the-money warrant liabilities as they were dilutive in this period.
Three Months Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Selected Statistics
Period End Ship Count
193
179
193
179
Average Ship Count (1)
184
169
180
146
Average Weekly Revenues Per Ship
$
75,903
$
71,208
$
80,013
$
66,494
Average Revenues Per Shipboard Staff Per Day
$
520
$
565
$
555
$
539
Period End Resort Count
51
50
51
50
Average Resort Count (2)
51
47
50
47
Average Weekly Revenues Per Resort
$
15,165
$
15,796
$
15,242
$
14,946
Capital Expenditures (in thousands)
$
2,544
$
1,557
$
5,415
$
4,825
Forecasted
Q1 2024
FY 2024
Period End Ship Count
193
197
Average Ship Count (1)
188
191
Period End Resort Count
51
50
Average Resort Count (2)
51
50
(1)
Average Ship Count reflects the fact that during the period ships were in and out of service and is calculated by adding the total number of days that each of the ships generated revenue during the period, divided by the number of calendar days during the period.
(2)
Average Resort Count reflects the fact that during the period destination resort health and wellness centers were in and out of service and is calculated by adding the total number of days that each destination resort health and wellness center generated revenue during the period, divided by the number of calendar days during the period.
Note Regarding Non-GAAP Financial Information
This press release includes financial measures that are not calculated in accordance with GAAP, including Adjusted net income (loss), Adjusted net income (loss) per diluted share, Adjusted EBITDA and Unlevered after-tax free cash flow.
We define Adjusted net income (loss) as net income (loss), adjusted for items, including increase in depreciation and amortization expense resulting from the Business Combination, non-cash stock-based compensation, impairment charges of long-lived assets and change in fair value of warrant liabilities. Adjusted net income (loss) per diluted share is defined as Adjusted net income (loss) divided by the weighted average diluted shares outstanding during the period, as if such shares had been outstanding during the entire three and twelve month periods ended December 31, 2023 and 2022.
We define Adjusted EBITDA as loss from continuing operations before interest expense, income taxes (benefit) expense, depreciation and amortization, adjusted for the impact of certain other items, including non-cash stock-based compensation expense, impairment charges of long-lived assets and change in fair value of warrant liabilities.
We define Unlevered after-tax free cash flow as Adjusted EBITDA minus capital expenditures and cash taxes paid.
We believe that these non-GAAP measures, when reviewed in conjunction with GAAP financial measures, and not in isolation or as substitutes for analysis of our results of operations under GAAP, are useful to investors as they are widely used measures of performance and the adjustments we make to these non-GAAP measures provide investors further insight into our profitability and additional perspectives in comparing our performance to other companies and in comparing our performance over time on a consistent basis. Adjusted net income (loss), Adjusted net income (loss) per diluted share, Adjusted EBITDA and Unlevered after-tax free cash flow have limitations as profitability measures in that they do not include total amounts for interest expense on our debt and provision for income taxes, and the effect of our expenditures for capital assets and certain intangible assets. In addition, all of these non-GAAP measures have limitations as profitability measures in that they do not include the effect of non-cash stock-based compensation expense and the impact of certain expenses related to items that are settled in cash. Because of these limitations, the Company relies primarily on its GAAP results.
In the future, we may incur expenses similar to those for which adjustments are made in calculating Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as a basis to infer that our future results will be unaffected by extraordinary, unusual, or nonrecurring items.
Reconciliation of GAAP to Non-GAAP Financial Information
The following table reconciles Net income (loss) to Adjusted net income (loss) for the fourth quarters and year-to-date periods ended December 31, 2023 and 2022 and Adjusted net income (loss) per diluted share for the fourth quarters and year-to-date periods ended December 31, 2023 and 2022 (amounts in thousands, except per share amounts):
Three Months Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Net (loss) income
$
(7,304
)
$
(2,330
)
$
(2,974
)
$
53,159
Change in fair value of warrant liabilities
10,821
7,800
37,557
(54,400
)
Depreciation and amortization (a)
3,761
3,761
15,044
15,044
Long-lived assets impairment
2,129
—
2,129
—
Stock-based compensation
3,093
3,597
10,138
12,893
Adjusted net income
$
12,500
$
12,828
$
61,894
$
26,696
Adjusted net income per diluted share
$
0.12
$
0.14
$
0.63
$
0.28
Diluted weighted average shares outstanding
100,232
92,911
97,826
95,105
(a) Depreciation and amortization refers to addback of purchase price adjustments to tangible and intangible assets resulting from the Business Combination.
The following table reconciles Net (loss) income to Adjusted EBITDA and Unlevered after-tax free cash flow for the fourth quarter and year-to-date periods ended December 31, 2023 and 2022 (amounts in thousands):
Three Months Ended
Year Ended
December 31,
December 31,
2023
2022
2023
2022
Net (loss) income
$
(7,304
)
$
(2,330
)
$
(2,974
)
$
53,159
Income tax expense (benefit)
674
415
(1,526
)
624
Interest expense, net
8,427
4,820
21,115
15,755
Change in fair value of warrant liabilities
10,821
7,800
37,557
(54,400
)
Depreciation and amortization
5,542
6,379
22,040
22,353
Long-lived assets impairment
2,129
—
2,129
—
Stock-based compensation
3,093
3,597
10,138
12,893
Business combination costs (b)
—
—
713
—
Adjusted EBITDA
$
23,382
$
20,681
$
89,192
$
50,384
Capital expenditures
(2,544
)
(1,557
)
(5,415
)
(4,825
)
Cash paid during the period for income taxes
(3,970
)
(99
)
(4,716
)
(434
)
Unlevered after-tax free cash flow
$
16,868
$
19,025
$
79,061
$
45,125
(b) Business combination costs refers to legal and advisory fees incurred by OneSpaWorld in connection with the secondary offering and warrant conversion.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240228774853/en/
ICR: Investors: Allison Malkin, 203-682-8225 allison.malkin@icrinc.com
Follow OneSpaWorld: Instagram: @onespaworld Twitter: @onespaworld LinkedIn: OneSpaWorld Facebook: @onespaworld
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