OneSpaWorld Holdings Limited

Good day and welcome to the One Spa World first quarter 2024 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touch-tone phone. To withdraw your question, please press star, then two. And please note this event is being recorded. And now I would like to turn the conference over to Allison Malkin for some introduction. Please go ahead, Allison.

Thank you. Good morning, and welcome to One Spa World's first quarter 2024 Earnings Common Webcast. Before we begin, I'd like to remind you that certain statements and information made available on today's call-in webcast may be deemed to constitute forward-looking statements. These forward-looking statements reflect our judgment and analysis only as of today, and actual results may differ materially from current expectations based on a number of factors affecting our business. Accordingly, you should not place undue reliance on these forward-looking statements. For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made in this conference call and webcast, we refer you to the disclaimer regarding forward-looking statements that is included in our first quarter 2024 earnings release, which was furnished to the SEC today on Form 8K. We do not undertake any obligation to update or alter any forward-looking statements, whether as a result of new information, future events, or otherwise. In addition, the company may refer to certain adjusted non-GAAP metrics on this call. An explanation of these metrics can be found in our earnings release issued earlier this morning. Joining me today are Leonard Fluxman, Executive Chairman, Chief Executive Officer and President, and Stephen Lazarus, Chief Financial Officer and Chief Operating Officer. Leonard will begin with a review of our first quarter 2024 performance. and provide an update on our key priorities. Then Steven will provide more details on the financials and our guidance. I would now like to turn the call over to Leonard.

Thank you, Alison. Good morning, and welcome to One Spa World first quarter 2024 results conference call. I'm very pleased to report another strong start to the year with our first quarter generating record results. We delivered robust double digit growth in total revenue, income from operations, and adjusted EBITDA, all of which were at record setting levels. We also achieved significant accomplishments towards our strategic priorities, which provide for our ongoing growth in the current year and well into the future. In fact, the ongoing strong momentum of our business from fiscal 2023 into early 2024 resulted in the best first quarter in history of our company. The resounding success across all fronts is a testament to the superior execution of our strategy by our exceptionally talented team. Their relentless dedication to innovation, enhancement of partnerships, leveraging of our category dominance, and adept navigation of our intricate business model have yielded extraordinary guest experience and outstanding service. to our esteemed cruise line and destination resort partners that is translating into increased value to our shareholders. As we look ahead, the second quarter is off to a positive start and we expect the continued superior execution of our strategy combined with our ongoing ability to provide extraordinary service levels to our cruise and resort partners through a differentiated luxury experience for guests and will position the company for continued success. Based on the continued strong execution by talented team, new partnerships, and new initiatives which continue to drive organic growth, we have raised our annual outlook beyond the outperformance achieved in the first quarter. We currently expect total revenues to increase by 10% and adjusted EBITDA to increase by 12% at the midpoint of our guidance ranges from fiscal 2023. Additionally, in further demonstration of the confidence in our strategy, our near and long-term business prospects, and our strong balance sheet, our board of directors approved a $50 million share repurchase authorization. Turning now to the highlights of the quarter. Total revenue was $211.2 million, increasing 16% from $182.5 million in the first quarter of 2023. Income from operations increased 52%, to $17 million from $11.2 million a year ago and adjusted EBITDA rose 31% to $25.3 million from $19.3 million last year. The expansion in our ship count continued during the period. At quarter end, we had health and wellness centers on 193 ships and an average ship count of 188 for the quarter compared with 179 ships and an average ship count of 173 ships at the first quarter of 2023. Also at quarter end, we had 4,082 cruise ship personnel and vessels compared with 3,665 at the end of the first quarter of 2023. We also saw strength across key operating metrics, recording increases in average weekly revenue per ship and average weekly revenue per shipboard staff per day above the levels achieved in the first quarter of 2023. Keep in mind that the first quarter fiscal 2023 cruise ship personnel was below full count levels as passenger load factors were still returning to normalization post-COVID-19. Notably, in the first quarter, we continued to surpass the level of experienced staff members in 2019, reflecting the success of our ongoing initiative to retain onboard staff members. These experienced staff members contribute to the delivery of double digit growth across certain key operating metrics as compared to fiscal 2023 and 2019. The quarter also marked a key milestone for our company as we reached the fifth year anniversary of our D-SPAC public listing. As Steven will comment momentarily, in addition to our robust revenue and profit growth, notably once far world warrant holders expressed their support for the company with 98 percent of all outstanding warrants converted. The remaining warrants were canceled. Importantly, we also eliminated the overhang of our private equity investor, which sold its final tranche of shares, simplifying our capital structure while increasing trading liquidity and our public float. The quarter included progress towards our four strategic priorities. Let me share some highlights. First, we captured highly visible new ship growth with current cruise line partners and added new cruise line partnerships to our fold. To this end, in the first quarter, we entered into a new exclusive agreement with Royal Caribbean and Celebrity Cruises for their 40 ships currently in service and future ships entering service during the agreement term. In addition, at quarter end, we added Arroyo Cruises to our list of partners where we operate all health and wellness facilities beginning late 2024, thereby strengthening our market leading competitive position and providing further evidence of our best in class operating capabilities. We expect to end fiscal 2024 operating on about 198 vessels. Second, we continue to launch high value services and products. Our innovation pipeline is robust this year with introductions of cryotherapy body services and new cryotherapy and LED facial services to complement the new technology driven by Elemis Biotech 2.0 facial. Additionally, we continue to introduce light stem therapy, augmenting other acupuncture services, which has dramatically improved acupuncture revenue on the vessels where we have introduced this protocol. Third, we focused on enhancing health and wellness center productivity. We grew key maritime operating metrics at double-digit rates, supported by a sustained pipeline of strategic initiatives to increase pre-booking, the number of treatments to the client, and the number of passengers utilizing the spa. As we previously discussed, pre-booking guests spend on average 30% more than those who book on board, while allowing us to better optimize staffing facilities and service capacities to drive higher health and wellness center economics. We also continue to drive higher revenue services by simplified service menus and modified treatment lengths, which contribute to growth in average spend per guest. Average guest spend also benefit from refinement in length of service and pricing architecture of certain services, which resulted in increases in service frequency and a mix towards higher-priced services and products. We also increased our MediSpar offering with services on 142 ships at the end of the first quarter of 2024, up from 122 ships in 2023. We continue to expand our MediSpar offering to 148 ships this year. Fourth, we further enhanced our financial position flexibility. In addition to the simplification of our capital structure, we utilized our strong cash flow to repurchase our common shares and repaid $20 million of our first lien term loan during the quarter. This brought total debt reduction to $94.1 million since the second quarter of 2022, which has substantially lowered ongoing interest expense. And fifth, our board of directors approved a $50 million share repurchase program further demonstrating the confidence in our strategy and long-term growth opportunities. Overall, we remain excited about our business outlook. We expect a strong start to the year, coupled with visible growth opportunities made possible by the advantages we possess in the operation of health and wellness centers at sea and a destination response on land. Further buoyed by highly favorable market dynamics across the cruise line industry, to position us for another record-setting year in 2024. With that, I will turn you over to Stephen, who will comment on our first quarter financial results.