Attached files
| file | filename |
|---|---|
| 8-K/A - STEINER LEISURE Ltd | stnr8ka.htm |
| EX-99 - STEINER LEISURE Ltd | stnrexhibit99_1.htm |
| EX-23 - STEINER LEISURE Ltd | stnrexhibit23_1.htm |
| EX-99 - STEINER LEISURE Ltd | stnrexhibit99_2.htm |
Exhibit 99.3
Steiner Leisure Limited and Subsidiaries
Unaudited Pro Forma
Condensed Consolidated Financial Statements
On November 1, 2011, Steiner Leisure Limited ("Steiner Leisure") acquired all of the stock of Ideal Image Development, Inc. ("Ideal Image") for $175.0 million in cash less cash acquired. Ideal Image is a leader in the important and growing consumer healthcare category of laser hair removal.
The following Unaudited Pro Forma Condensed Consolidated Financial Statements of Steiner Leisure reflect adjustments to the historical consolidated financial statements of Steiner Leisure to give effect to the Ideal Image acquisition for the Unaudited Pro Forma Condensed Consolidated Financial Statements as of September 30, 2011 for the Unaudited Pro Forma Condensed Consolidated Balance Sheet and as if the transaction occurred on January 1, 2010 for the Unaudited Pro Forma Condensed Consolidated Statements of Income for the year ended December 31, 2010 and the nine months ended September 30, 2011.
The assumptions used and pro forma adjustments derived from such assumptions are based on currently available information and Steiner Leisure believes such assumptions are reasonable under the circumstances.
The following Unaudited Pro Forma Condensed Consolidated Financial Statements should be read in conjunction with the historical consolidated financial statements of Steiner Leisure and "Management's Discussion and Analysis of Financial Condition and Results of Operations" of Steiner Leisure included in the December 31, 2010 10-K of Steiner Leisure.
These Unaudited Pro Forma Condensed Consolidated Financial Statements are not necessarily indicative of Steiner Leisure's results of operations or financial condition had the acquisition been completed on the dates assumed. In addition, they are not necessarily indicative of Steiner Leisure's future results of operations or financial condition.
Steiner Leisure Limited
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2011
(Unaudited)
(in thousands)
|
|
Ideal |
|
|
|||||||||
|
ASSETS |
||||||||||||
|
CURRENT ASSETS: |
||||||||||||
|
Cash and cash equivalents |
$ |
69,718 |
$ |
13,574 |
$ |
(9,074 |
)b |
$ |
74,218 |
|||
|
Accounts receivable, net |
32,848 |
5,320 |
-- |
38,168 |
||||||||
|
Accounts receivable-students, net |
18,361 |
-- |
-- |
18,361 |
||||||||
|
Inventories |
60,042 |
-- |
-- |
60,042 |
||||||||
|
Prepaid expenses and other current assets |
14,023 |
731 |
-- |
14,754 |
||||||||
|
Total current assets |
194,992 |
19,625 |
(9,074 |
) |
205,543 |
|||||||
|
PROPERTY AND EQUIPMENT, net |
77,109 |
6,143 |
-- |
83,252 |
||||||||
|
GOODWILL |
117,057 |
21,787 |
100,588 |
c |
239,432 |
|||||||
|
OTHER ASSETS: |
||||||||||||
|
Intangible assets, net |
28,773 |
540 |
85,460 |
c |
114,773 |
|||||||
|
Deferred financing costs, net |
636 |
-- |
5,000 |
b |
5,636 |
|||||||
|
Deferred customer acquisition costs, net |
-- |
8,608 |
(8,608 |
)d |
-- |
|||||||
|
Other |
7,780 |
41 |
-- |
7,821 |
||||||||
|
Total other assets |
37,189 |
9,189 |
81,852 |
128,230 |
||||||||
|
Total assets |
$ |
426,347 |
$ |
56,744 |
$ |
173,366 |
$ |
656,457 |
||||
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
||||||||||||
|
CURRENT LIABILITIES: |
||||||||||||
|
Accounts payable |
$ |
17,263 |
$ |
1,662 |
$ |
-- |
$ |
18,885 |
||||
|
Accrued expenses |
36,061 |
2,921 |
-- |
38,982 |
||||||||
|
Current portion of capital lease obligation |
-- |
1,261 |
(1,261 |
)a |
-- |
|||||||
|
Current portion of long-term debt |
-- |
6,874 |
(6,874 |
)a |
16,500 |
|||||||
|
16,500 |
b |
|||||||||||
|
Current portion of deferred rent |
1,064 |
-- |
-- |
1,064 |
||||||||
|
Current portion of deferred tuition revenue |
23,202 |
-- |
-- |
23,202 |
||||||||
|
Deferred revenue |
-- |
43,862 |
(4,825 |
)d |
39,037 |
|||||||
|
Gift certificate liability |
13,156 |
-- |
-- |
13,156 |
||||||||
|
Income taxes payable |
2,070 |
117 |
-- |
2,187 |
||||||||
|
Total current liabilities |
92,816 |
56,657 |
3,540 |
153,013 |
||||||||
|
DEFERRED INCOME TAX LIABILITY |
14,058 |
749 |
-- |
|
14,807 |
|||||||
|
LONG-TERM CAPITAL LEASE OBLIGATION |
-- |
516 |
(516 |
)a |
-- |
|||||||
|
LONG-TERM DEFERRED RENT |
10,770 |
-- |
-- |
10,770 |
||||||||
|
LONG-TERM DEFERRED TUITION REVENUE |
1,198 |
-- |
-- |
1,198 |
||||||||
|
LONG-TERM DEFERRED REVENUE |
-- |
17,425 |
(1,917 |
)d |
15,508 |
|||||||
|
LONG-TERM DEBT |
-- |
2,994 |
(2,994 |
)a |
148,500 |
|||||||
|
|
|
148,500 |
b |
|
||||||||
|
COMMITMENTS & CONTINGENCIES |
||||||||||||
(continued)
Steiner Leisure Limited
Pro Forma Condensed Consolidated Balance Sheet
As of September 30, 2011
(Unaudited)
(in thousands)
(CONTINUED)
|
|
Ideal |
|
|
|||||||||
|
SHAREHOLDERS' EQUITY: |
||||||||||||
|
Preferred shares, $.01 par value; 10,000 shares authorized, none issued and outstanding |
|
|
|
|
|
|
|
|
|
|||
|
Common shares, $.01 par value; 100,000 shares authorized, 23,738 shares issued in 2011 |
|
|
|
|
|
|||||||
|
1 |
b |
|||||||||||
|
Additional paid-in capital |
161,126 |
10,616 |
(10,616 |
)a |
166,282 |
|||||||
|
5,156 |
b |
|||||||||||
|
Accumulated other comprehensive loss |
(3,464 |
) |
-- |
-- |
(3,464 |
) |
||||||
|
Retained earnings |
417,144 |
(30,836 |
) |
30,836 |
a |
417,144 |
||||||
|
Treasury shares |
(267,538 |
) |
(1,466 |
) |
1,466 |
a |
(267,538 |
) |
||||
|
Total shareholders' equity |
307,505 |
(21,597 |
) |
26,754 |
312,662 |
|||||||
|
Total liabilities and shareholders' equity |
$ |
426,347 |
$ |
56,744 |
$ |
173,367 |
$ |
656,458 |
Steiner Leisure Limited
Pro Forma Condensed Consolidated Statement of Income
For the nine months ended September 30, 2011
(Unaudited)
(in thousands, except per share data)
|
|
Ideal |
|
|
|||||||||
|
REVENUES: |
||||||||||||
|
Services |
$ |
344,999 |
$ |
52,308 |
$ |
(2,877 |
)g |
$ |
394,430 |
|||
|
Products |
170,748 |
-- |
-- |
170,748 |
||||||||
|
Total revenues |
515,747 |
52,308 |
(2,877 |
) |
565,178 |
|||||||
|
COST OF REVENUES: |
||||||||||||
|
Cost of services |
280,930 |
34,456 |
-- |
315,386 |
||||||||
|
Cost of products |
118,876 |
-- |
-- |
118,876 |
||||||||
|
Total cost of revenues |
399,806 |
34,456 |
-- |
434,262 |
||||||||
|
Gross profit |
115,941 |
17,852 |
(2,877 |
) |
130,916 |
|||||||
|
OPERATING EXPENSES: |
||||||||||||
|
Administrative |
28,600 |
3,141 |
(695 |
)h |
31,046 |
|||||||
|
Salary and payroll taxes |
42,605 |
6,976 |
-- |
|
49,581 |
|||||||
|
Total operating expenses |
71,205 |
10,117 |
(695 |
) |
80,627 |
|||||||
|
Income from operations |
44,736 |
7,735 |
(2,182 |
) |
50,289 |
|||||||
|
OTHER INCOME (EXPENSES), NET: |
||||||||||||
|
Interest expense |
(1,578 |
) |
(802 |
) |
(2,857 |
)f |
(5,237 |
) |
||||
|
Other income (expense) |
277 |
30 |
-- |
307 |
||||||||
|
Total other income (expense), net |
(1,301 |
) |
(772 |
) |
(2,857 |
) |
(4,930 |
) |
||||
|
Income before provision for income taxes |
43,435 |
6,963 |
(5,039 |
) |
45,359 |
|||||||
|
PROVISION FOR INCOME TAXES: |
4,810 |
655 |
578 |
e |
6,043 |
|||||||
|
Net income (loss) |
$ |
38,625 |
$ |
6,308 |
$ |
(5,616 |
) |
$ |
39,317 |
|||
|
Income per share: |
||||||||||||
|
Basic |
$ |
2.58 |
$ |
2.60 |
||||||||
|
Diluted |
$ |
2.54 |
$ |
2.56 |
||||||||
|
Weighted average shares outstanding: |
||||||||||||
|
Basic |
14,983 |
125 |
b |
15,108 |
||||||||
|
Diluted |
15,209 |
125 |
b |
15,334 |
||||||||
Steiner Leisure Limited
Pro Forma Condensed Consolidated Statement of Income
For the year ended December 31, 2010
(Unaudited)
(in thousands, except per share data)
|
|
|
|
|
|||||||||
|
REVENUES: |
||||||||||||
|
Services |
$ |
410,857 |
$ |
49,573 |
$ |
(2,727 |
)g |
$ |
457,703 |
|||
|
Products |
209,528 |
-- |
-- |
209,528 |
||||||||
|
Total revenues |
620,385 |
49,573 |
(2,727 |
) |
667,231 |
|||||||
|
COST OF REVENUES: |
||||||||||||
|
Cost of services |
335,118 |
44,854 |
-- |
379,972 |
||||||||
|
Cost of products |
140,956 |
-- |
-- |
140,956 |
||||||||
|
Total cost of revenues |
476,074 |
44,854 |
-- |
520,928 |
||||||||
|
Gross profit |
144,311 |
4,719 |
(2,727 |
) |
146,303 |
|||||||
|
OPERATING EXPENSES: |
||||||||||||
|
Administrative |
36,133 |
2,248 |
-- |
38,381 |
||||||||
|
Salary and payroll taxes |
53,325 |
3,596 |
-- |
56,921 |
||||||||
|
Total operating expenses |
89,458 |
5,844 |
-- |
95,302 |
||||||||
|
Income from operations |
54,853 |
(1,125 |
) |
(2,727 |
) |
51,001 |
||||||
|
OTHER INCOME (EXPENSES), NET: |
||||||||||||
|
Interest expense |
(3,388 |
) |
(1,577 |
) |
(3,249 |
) f |
(8,214 |
) |
||||
|
Other income (expense) |
151 |
(300 |
) |
-- |
(149 |
) |
||||||
|
Total other income (expense), net |
(3,237 |
) |
(1,877 |
) |
(3,249 |
) |
(8,363 |
) |
||||
|
Income before provision for income taxes |
51,616 |
(3,002 |
) |
(5,976 |
) |
42,638 |
||||||
|
PROVISION FOR INCOME TAXES: |
7,293 |
574 |
770 |
e |
8,637 |
|||||||
|
Net income (loss) |
$ |
44,323 |
$ |
(3,576 |
) |
$ |
(6,746 |
) |
$ |
34,001 |
||
|
Income per share: |
||||||||||||
|
Basic |
$ |
2.99 |
$ |
2.27 |
||||||||
|
Diluted |
$ |
2.94 |
$ |
2.24 |
||||||||
|
Weighted average shares outstanding: |
||||||||||||
|
Basic |
14,832 |
125 |
b |
14,957 |
||||||||
|
Diluted |
15,069 |
125 |
b |
15,194 |
||||||||
Notes:
- Reflects the elimination of Ideal Image's debt, capital lease obligations, equity and retained earnings.
- Cash and debt financing incurred and equity issued connection with the acquisition of Ideal Image.
- Reflects the elimination of Ideal Image's recorded goodwill and intangible asset and the addition of goodwill and intangibles initially identified in connection with the acquisition of Ideal Image by Steiner Leisure. This allocation is preliminary and subject to change. Additional information is necessary to complete the purchase price allocation.
- Reflects fair value adjustments. This amount is preliminary and subject to change. Additional information is necessary to complete the purchase price allocation.
- Reflects tax adjustments recorded in connection with the acquisition of Ideal Image. This amount is preliminary and subject to change. Additional information is necessary to complete the purchase price allocation.
- The pro forma interest expense assumes borrowing funds at 2.5% (plus LIBOR) annual interest rate for the purchase price of $175 million. The annual interest rate is based on Steiner's credit facility rate as of December 31, 2010. The interest expense assumes the closing of the transaction and funds were borrowed on January 1, 2010.
- The pro forma effect of fair value adjustment of assumed performance obligation assumes the transaction closed January 1, 2010. The following table reflects the purchase price allocation which is preliminary and subject to change.
|
|
Purchase Price |
|
||
|
Trade names |
$ |
86,000 |
Indefinite |