OneSpaWorld(US:OSW)2025-02-19 19:24Financial Data and Key Metrics Changes - Total revenues increased 11% to $217.2 million compared to $194.8 million in Q4 2023 [11] - For the full year, total revenues increased 13% to a record $895 million compared to $794 million in fiscal year 2023 [11] - Income from operations increased 37% to $17.2 million compared to $12.6 million in Q4 2023 [11] - Adjusted EBITDA increased 14% to $26.7 million compared to $23.4 million in Q4 2023 [12] - Net income was $14.4 million or $0.14 per diluted share compared to a net loss of $7.3 million or $0.07 per diluted share in Q4 2023 [28] Business Line Data and Key Metrics Changes - Same Spa revenue overall was up more than 30% year-over-year, driven by increased participation in Medi-Spa services [20][43] - Medi-Spa services were available on 147 ships, up from 139 ships at the end of fiscal year 2023 [20] - The company expects to have Medi-Spa offerings increasing to 151 ships this year [21] Market Data and Key Metrics Changes - The company operated health and wellness facilities on 199 ships at year-end, compared to 193 ships at the end of fiscal 2023 [13] - The average ship count increased from 184 ships to 188 ships [13] Company Strategy and Development Direction - The company is focused on expanding higher-value services and products, including Medi-Spa IV therapy and Acupuncture [16] - A new seven-year agreement was entered into with Royal Caribbean International and Celebrity Cruises, extending a long-term relationship [15] - The company aims to enhance health and wellness center productivity through increased staff training and retention [17] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering another year of record performance in fiscal 2025, supported by strong financial results and operational accomplishments [10][24] - The company affirmed its fiscal 2025 guidance, expecting total revenue in the range of $950 million to $970 million [35] Other Important Information - The company reduced its debt to $100 million and ended the year with $58.6 million in cash [22][32] - An ongoing quarterly cash dividend payment and share repurchase program were initiated [22] Q&A Session Summary Question: What drove the 30% increase in same spa revenue for Medi-Spa? - The increase was primarily due to more passengers participating in Medi-Spa services, with a focus on adding more staff to meet demand [43][44] Question: Is the services gross margin at a normalized run rate? - There is nothing fundamentally weighing down the gross margin; the decrease in the fourth quarter was due to revenue levels and fixed costs [48][49] Question: Why is there no expected margin expansion despite higher prebooking activity? - There are no headwinds on the cost side, and the company is comfortable with a flat margin profile for the upcoming year [55] Question: How is the company balancing dividend growth versus share repurchases? - The company will evaluate stock buybacks based on market conditions and expects to grow dividends over the next couple of years [59] Question: Were norovirus incidents impactful to the Q1 '25 outlook? - No, norovirus incidents did not materially impact the outlook for Q1 [67] Question: Can you provide details on the dry dock impact for the year? - The first quarter was normal, and there is no anticipation of above-average dry docks in the second quarter [69] Question: Is the restructuring of product architecture still ongoing? - Yes, the company continues to rationalize its product offerings and focus on pricing transformation [73] Question: How does the current spending trend look for the rest of the year? - Current spending trends appear strong, with demand for services remaining high and no significant changes in discounting [95]