OneSpaWorld(US:OSW)2023-08-05 17:20Financial Data and Key Metrics Changes - Total revenues for Q2 2023 reached a record $200.5 million, a 57% increase from $127.4 million in Q2 2022 [11][26] - Adjusted EBITDA more than doubled to a record $21.6 million compared to $9.1 million in the same quarter last year [33][34] - Adjusted net income was $15 million or $0.15 per diluted share, up from $4 million or $0.04 per diluted share in Q2 2022 [33] - Cash at quarter end was $30 million, an increase from $24 million at the end of Q1 2023 [14] - Total debt net of deferred financing costs decreased to $182.5 million from $230.2 million a year ago [14] Business Line Data and Key Metrics Changes - Health and wellness centers on ships increased to 183 from 172 year-over-year, with expectations to reach 192 by year-end [8] - Revenue per ship per day increased by 30% compared to Q2 2022 [27] - Average guest spend and revenue per staff per day saw high single-digit increases compared to Q2 2019 [29] Market Data and Key Metrics Changes - The company expects total revenue for fiscal 2023 to be in the range of $770 million to $790 million, reflecting a 43% increase from fiscal 2022 [7][35] - The penetration of retail sales and prebookings continued to rise, with prebooking capabilities now available on 89% of ships [9][76] Company Strategy and Development Direction - The company is focused on expanding guest services and product offerings, with plans to add health and wellness centers on eight new ships [5][10] - A new agreement with Crystal Cruises was secured to provide exclusive spa and wellness services on their vessels [4] - The company aims to capture new ship growth with existing cruise line partners while exploring opportunities with new operators [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strong consumer demand and positive momentum, leading to raised fiscal year guidance [25][36] - The company noted that guest spend has increased, with a 2% rise in Q2 and a 7% increase compared to both 2019 and 2022 [39] - Management remains cautious about potential economic downturns but is optimistic about continued strong performance [62] Other Important Information - The company repaid $5 million on the second lien term loan and prepaid $15.5 million on the first lien term loan during the quarter [14] - The staffing level is at approximately 98%, with ongoing recruitment efforts to maintain service quality [90] Q&A Session Summary Question: How is the customer base expected to perform in the back half of the year? - Management indicated confidence based on strong forward bookings and positive feedback from cruise lines and airlines regarding summer bookings [37][38] Question: Are customers still spending adequately after treatments? - Guest spend has increased, with a 2% rise in Q2 and a 7% increase compared to 2019 and 2022 [39] Question: What are the margin opportunities for the company? - Management noted that while the focus is on growing absolute dollars, they are starting to see improved margins compared to 2019 levels [45][66] Question: How is the staffing environment currently? - Staffing is strong, with 98% of positions filled and ongoing recruitment to enhance service delivery [90] Question: What is the outlook for prebooked services? - Prebooked passengers tend to spend 25% to 30% more than those who do not prebook, which is expected to positively impact overall revenue [94][96]