OneSpaWorld(US:OSW)2025-05-01 20:40PART I - FINANCIAL INFORMATION Item 1. Unaudited Financial Statements Presents OneSpaWorld's unaudited Q1 2025 condensed consolidated financial statements, including balance sheets, operations, comprehensive income, equity, cash flows, and notes Condensed Consolidated Balance Sheets | Metric | March 31, 2025 (in thousands) | December 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :----------------------------- | :------------------------------ | :-------------------- | | Cash and cash equivalents | $22,605 | $57,439 | $(34,834) | | Total current assets | $129,439 | $161,505 | $(32,066) | | Intangible assets, net | $525,899 | $530,032 | $(4,133) | | Total assets | $708,715 | $746,423 | $(37,708) | | Total current liabilities | $74,668 | $79,405 | $(4,737) | | Long-term debt, net | $92,376 | $93,557 | $(1,181) | | Total liabilities | $178,151 | $191,926 | $(13,775) | | Total shareholders' equity | $530,564 | $554,497 | $(23,933) | Condensed Consolidated Statements of Operations | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | YoY Change (%) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | :------------- | | Service revenues | $178,519 | $172,209 | $6,310 | 3.66% | | Product revenues | $41,111 | $39,017 | $2,094 | 5.37% | | Total revenues | $219,630 | $211,226 | $8,404 | 3.98% | | Income from operations | $16,837 | $16,977 | $(140) | -0.82% | | Interest expense, net | $(1,147) | $(2,955) | $1,808 | -61.18% | | Change in fair value of warrant liabilities | $0 | $7,723 | $(7,723) | -100.00% | | Net income | $15,271 | $21,166 | $(5,895) | -27.85% | | Basic EPS | $0.15 | $0.21 | $(0.06) | -28.57% | | Diluted EPS | $0.15 | $0.21 | $(0.06) | -28.57% | Condensed Consolidated Statements of Comprehensive Income | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Net Income | $15,271 | $21,166 | $(5,895) | | Foreign currency translation adjustments | $111 | $(38) | $149 | | Net unrealized (loss) gain on derivative | $(559) | $267 | $(826) | | Amount realized and reclassified into earnings | $(228) | $(947) | $719 | | Total other comprehensive loss, net of tax | $(676) | $(718) | $42 | | Total comprehensive income | $14,595 | $20,448 | $(5,853) | Condensed Consolidated Statements of Equity | Metric | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | | Balance, December 31 | $554,497 | $434,069 | | Net income | $15,271 | $21,166 | | Stock-based compensation | $3,560 | $2,094 | | Repurchase and retirement of common shares | $(37,901) | $(7,736) | | Dividends | $(4,187) | $0 | | Exercise of Sponsor and Public Warrants | $0 | $57,628 | | Balance, March 31 | $530,564 | $515,536 | Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Three Months Ended March 31, 2025 (in thousands) | Three Months Ended March 31, 2024 (in thousands) | Change (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------- | | Net cash provided by operating activities | $10,107 | $14,954 | $(4,847) | | Net cash used in investing activities | $(1,697) | $(1,206) | $(491) | | Net cash (used in) provided by financing activities | $(43,347) | $23,962 | $(67,309) | | Net (decrease) increase in cash and cash equivalents and restricted cash | $(34,834) | $37,686 | $(72,520) | | Cash and cash equivalents and restricted cash, End of period | $23,803 | $66,588 | $(42,785) | Notes to Condensed Consolidated Financial Statements Detailed notes provide context for financial statements, covering business, accounting policies, intangible assets, debt, equity, stock-based compensation, revenue recognition, and other financial instruments - OneSpaWorld is a global provider of health, wellness, fitness, and beauty services and products on cruise ships and in land-based destination resorts, with its predominant business based on cruise ship and resort operations25 - The company's net intangible assets were $525.9 million as of March 31, 2025, primarily consisting of retail concession agreements, with amortization expense of $4.1 million for the quarter36 - Long-term debt, net, decreased slightly to $92.4 million as of March 31, 2025, following a new credit agreement in September 2024 including a $100 million term loan and a $50 million undrawn revolving facility, with quarterly amortization payments of 1.25% on the term loan373841 - A quarterly dividend of $0.04 per share was paid on March 26, 2025, and the company repurchased 2,094,498 common shares for $37.9 million during Q1 2025, approving a new $75.0 million share repurchase program on April 30, 2025454777 - Stock-based compensation expense increased to $3.6 million in Q1 2025 from $2.1 million in Q1 2024, primarily due to $1.4 million in incremental expense from accelerated vesting related to an executive departure4849 - The company uses interest rate swap agreements with a notional amount of $98.7 million to hedge its exposure to changes in cash flows from its variable rate Term Loan Facility, designated as cash flow hedges69 - Income tax expense decreased to $0.4 million in Q1 2025 from $0.6 million in Q1 2024, driven by a lower effective tax rate due to higher earnings in foreign jurisdictions and lower earnings in the U.S73 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's financial condition and operating results for Q1 2025, highlighting key performance indicators, revenue drivers, liquidity, and future performance factors Overview - OneSpaWorld is the leading global operator of health and wellness centers on cruise ships and a significant operator at destination resorts, holding an 18x market share advantage over its closest maritime competitor80 - The company's competitive advantage stems from its extensive global infrastructure, deep staff expertise, broad service offerings, and robust recruitment, training, and logistics platforms81 [Key Performance Indicators](index=27&type=section&id=Key%20