OneSpaWorld Announces Completion of Warrant Conversion and Further Enhancements to its Capital Structure

Rhea-AI Summary

OneSpaWorld Holdings (OSW) announced the conversion of all remaining public warrants into common shares, generating $52.1 million in new cash proceeds. The company's Executive Chairman highlighted the milestone achieved, emphasizing the successful period post de-SPAC and the strategic steps taken to enhance growth and shareholder value.

Financial Analyst

The conversion of warrants into common shares, as reported by OneSpaWorld Holdings Limited, represents a notable liquidity event for the company. The infusion of $52.1 million in new cash proceeds can have a significant impact on the company's financial flexibility. This capital increase is particularly beneficial as it strengthens the balance sheet, potentially improving credit ratings and investor confidence. Moreover, the reduction of outstanding warrants simplifies the capital structure, which could lead to a more straightforward valuation process for analysts and investors alike.

From a financial standpoint, the company's ability to reduce debt and repurchase shares using free cash flow indicates a robust operational performance, likely translating into a healthier financial position. The exit of the private equity investor, Steiner Leisure Limited, suggests a strategic shift towards a more public-centric ownership model, which can result in increased trading liquidity and a larger public float. This transition could attract a broader investor base and enhance stock market performance in the long term.

Market Research Analyst

OneSpaWorld's milestone of converting public warrants and celebrating their five-year anniversary as a public company coincides with a record fiscal year in 2023, highlighting the company's operational success. The health and wellness sector, particularly within the cruise ship and destination resort markets, has shown resilience and growth potential. The company's focus on building upon strengths and capabilities indicates a strategic approach to leveraging its market position to drive future growth.

It's important to consider the broader market implications of these financial maneuvers. The company's enhanced cash position may allow for strategic investments in innovative services or expansion into new markets, which can be a catalyst for future revenue streams. Additionally, the increased public float could potentially improve stock liquidity, making it more attractive to institutional investors and potentially leading to more stable stock prices.

Debt Market Analyst

The ability to utilize free cash flow to significantly reduce debt is a commendable achievement for OneSpaWorld. A lower debt burden often leads to reduced interest expenses and a decreased risk of financial distress, which are positive signals for creditors and bondholders. The company's proactive approach to managing its liabilities can lead to more favorable borrowing terms in the future, which is essential for long-term financial sustainability.

Investors in the debt market should note that the simplification of the capital structure, through the warrant conversion, can result in a more transparent assessment of the company's leverage and interest coverage ratios. This transparency is key for assessing the company's creditworthiness. Additionally, the exit of a major private equity investor could indicate a shift towards a more conservative financial strategy, potentially leading to a lower risk profile for the company's debt instruments.

Net Proceeds from Warrant Conversion Generate $52.1 Million in New Cash Proceeds

NASSAU, Bahamas--(BUSINESS WIRE)-- OneSpaWorld Holdings Limited, (NASDAQ: OSW), the pre-eminent global provider of health and wellness products and services on board cruise ships and in destination resorts around the world, announced today that all remaining public warrants have been converted into common shares and exercised or canceled, generating $52.1 million in new cash proceeds for the Company.

Leonard Fluxman, Executive Chairman, Chief Executive Officer and President of OneSpaWorld, commented, “March 19^th marked an important milestone for the Company, as we celebrated our five-year anniversary as a public Company and concluded a highly successful period for OneSpaWorld. Indeed, since the time of our de-SPAC, we not only demonstrated our power to operate a complex business model in all types of environments, culminating in a record fiscal year in 2023, we also built upon our strengths and capabilities to provide for our future growth while utilizing our free cash flow generation to significantly reduce debt, complete a warrant exchange and repurchase our common shares. Today, we announced the completion of our public warrant conversion, yet another key accomplishment for our Company. These actions combined with the exit of ownership by our private equity investor, Steiner Leisure Limited allows us to move forward with a simplified capital structure, increased trading liquidity and increased public float for the benefit of our shareholders.”

Fluxman added, “We continue to be excited about our business outlook as the robust trends we experienced in 2023 have continued into 2024. The momentum for cruising remains strong, and we continue to add new health and wellness centers to our fold and forge new and extended agreements with our partners, most recently with Royal Caribbean and Celebrity Cruises. We believe our strategies have us poised to take our superior guest experiences to a higher level of performance to drive continued increases in key operating metrics at our health and wellness centers. We continue to expect fiscal 2024 to represent another record year for OneSpaWorld, and importantly, increase value for our stakeholders. We remain confident in our ability to deliver consistent and sustained long term revenue and profit growth.”

On March 19, 2019, OneSpaWorld Holdings Limited (the “Company”) issued 24,499,999 warrants to purchase common shares, par value $0.0001 per share, of the Company, at an exercise price of $11.50 per share (the “Warrants”). On March 19, 2024, the five-year exercise period for the Warrants (the “Exercise Period”) expired and the remaining 465,689 unexercised Warrants were cancelled. Over the Exercise Period, a total of 24,034,310 Warrants were exercised, generating net proceeds to the Company (after deducting applicable fees) of approximately $54.1 million. As previously announced, a total of 19,270,733 Warrants were exchanged for the Company’s common shares pursuant to privately negotiated warrant exchange agreements with certain holders of the Warrants. As most of the warrants were converted for cash, the diluted share count is now approximately 106.0 million.

This communication is for informational purposes only and is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy, any securities, nor shall there be any sale, issuance or transfer or securities in any jurisdiction in contravention of applicable law.

About OneSpaWorld

Headquartered in Nassau, Bahamas, OneSpaWorld is one of the largest health and wellness services companies in the world. OneSpaWorld's distinguished health and wellness centers offer guests a comprehensive suite of premium health, wellness, fitness and beauty services, treatments, and products currently onboard 193 cruise ships and at 51 destination resorts around the world. OneSpaWorld holds the leading market position within the cruise line industry of the historically fast-growing international leisure market and has been built upon its exceptional service standards, expansive global recruitment, training and logistics platforms, irreplicable operating infrastructure, extraordinary team and a history of service and product innovation that has enhanced its guests' personal care experiences while vacationing for over 65 years.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. The expectations, estimates, and projections of the Company may differ from its actual results and consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," or the negative or other variations thereof and similar expressions are intended to identify such forward looking statements. These forward-looking statements include, without limitation, expectations with respect to future performance of the Company, including projected financial information (which is not audited or reviewed by the Company’s auditors), and the future plans, operations and opportunities for the Company and other statements that are not historical facts. These statements are based on the current expectations of the Company’s management and are not predictions of actual performance. These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Factors that may cause such differences include, but are not limited to: the demand for the Company’s services together with the possibility that the Company may be adversely affected by other economic, business, and/or competitive factors or changes in the business environment in which the Company operates; changes in consumer preferences or the market for the Company’s services; changes in applicable laws or regulations; the availability or competition for opportunities for expansion of the Company’s business; difficulties of managing growth profitably; the loss of one or more members of the Company’s management team; loss of a major customer and other risks and uncertainties included from time to time in the Company’s reports (including all amendments to those reports) filed with the SEC. The Company cautions that the foregoing list of factors is not exclusive. You should not place undue reliance upon any forward-looking statements, which speak only as of the date made. The Company does not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in its expectations or any change in events, conditions, or circumstances on which any such statement is based, except as required by law. These forward-looking statements should not be relied upon as representing the Company’s assessments as of any date subsequent to the date of this communication.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240326867015/en/

ICR:

Investors:

Allison Malkin 203-682-8225

allison.malkin@icrinc.com

Source: OneSpaWorld Holdings Limited

FAQ

How much new cash proceeds were generated from the warrant conversion?

OneSpaWorld Holdings generated $52.1 million in new cash proceeds from the warrant conversion.

Who is the Executive Chairman, Chief Executive Officer, and President of OneSpaWorld?

Leonard Fluxman holds the positions of Executive Chairman, Chief Executive Officer, and President of OneSpaWorld.

What milestone did the company celebrate on March 19th?

On March 19th, the company celebrated its five-year anniversary as a public company.

What benefits did the company mention from the public warrant conversion?

The company highlighted benefits such as a simplified capital structure, increased trading liquidity, and increased public float for the benefit of shareholders.