OneSpaWorld Holdings Limited (OSW) Earnings Call Transcript & Summary

Good afternoon and welcome to the 2020 Annual Meeting of Shareholders of OneSpaWorld Holdings Limited. I'm the Executive Chairman of OneSpaworld and the Chair of this meeting. It is my pleasure to welcome you here today for this meeting. At this time, I'd like to introduce Glenn Fusfield, our President and Chief Executive Officer and a Director.

Thank you, Leonard, and welcome, everyone. Thank you for joining us today. We're excited to be hosting our Virtual Annual Meeting, which allows us to be more inclusive and reach a greater number of our shareholders, especially during these challenging times presented by the COVID-19 pandemic. We have shareholders attending via the web portal. We will conduct the business portion of our meeting first and answer questions after the end of the formal portion of the meeting. Though we may not be able to answer every question, we will do our best to provide a response to as many as possible. In keeping with the digital approach to this year's meeting, it is now shortly after 12:30 p.m. Eastern Standard Time on June 10, and this meeting is officially called to order. And now I would like to introduce the other members of the Board of Directors. Steven J. Heyer has served as one of our directors since March 2019. Mr. Heyer has held a variety of leadership positions across diverse industry groups, including broadcast media, consumer products and hotel and leisure companies. Mr. Heyer is a nominee of the Board of Directors of the company as a Class A Director. Andrew R. Heyer has served as one of our directors since March 2019 and as our Lead Director since July 2019. Mr. Heyer is the Chief Executive Officer and Founder of Mistral Equity Partners, a private equity fund manager founded in 2007 that invests in the consumer industry. Mr. Heyer is a nominee of the Board of Directors of the company as a Class A Director. Leonard Fluxman has served as one of our directors since March 2019 and is our Executive Chairman. Mr. Fluxman is a nominee of the Board of Directors of the company as a Class A Director. Maryam Banikarim has served as one of our directors since April 2019. Ms. Banikarim is currently the Head of Marketing at Nextdoor. Michael J. Dolan has served as one of our directors since March 2019. Mr. Dolan has served in various leadership roles in various industries, most recently as Chief Executive Officer of Bacardi Limited, the largest privately held spirits company in the world. Marc Magliacano has served as one of our directors since March 2019. Mr. Magliacano currently serves as a Managing Partner for L Catterton's Flagship Buyout Fund. Walter McLallen has served as one of our directors since March 2019. Mr. McLallen is the Managing Member of Meritage Capital Advisors, a boutique advisory firm focused on debt and private equity transaction origination, structuring and consulting. Stephen W. Powell has served as one of our directors since March 2019. Mr. Powell currently invests in and advises private companies focusing on health and wellness, fitness, nutrition, personal care services and consumer technology sectors. Jeffrey E. Stiefler has served as one of our directors since March 2019. Mr. Stiefler has spent 45 years leading a wide range of consumer and business service companies across multiple industry sectors, including financial services, financial technology, real estate, advertising, computer software and services, private equity and Internet start-ups. Now I would like to introduce OneSpaWorld's General Counsel, Inga Fyodorova. Inga will act as Secretary of the meeting, and I will turn it to her with any procedural issues that may arise.

Thank you, Glenn. I will now cover certain procedures for the meeting. Under the meeting information section of the web portal, you will find the rules of conduct for the meeting. The rules of conduct were prepared to facilitate an orderly and informative meeting, and we ask that all participants observe and abide by these rules. We are also joined here today by Ernst & Young, our independent auditors. They will be available during the question-and-answer session after the meeting to respond to appropriate questions. And finally, the company has appointed Continental Stock Transfer to act as the inspector of election. Ms. Erica Young from Continental is with us today and has taken the oath of inspector of election earlier today. After the formal meeting has been adjourned, we will provide time for general questions. [Operator Instructions] Please note that this meeting is being recorded. However, no one attending via the webcast is permitted to use any audio recording device. The Board of Directors fixed May 5, 2020, as the record date for determining shareholders entitled to vote at this meeting. An affidavit has been delivered attesting to the fact that the notice of Annual Meeting of Shareholders, the proxy statements and the 2019 annual report to shareholders were mailed on or about May 26, 2020, to all shareholders as of the record date, and will be incorporated into the minutes of this meeting. The shareholder list shows that as of the record date, there were 61,218,151 shares of common stock outstanding and entitled to vote at this meeting. We are informed by the inspector of election that they are represented in person or by proxy, shares of common stock representing 53,703,942 votes or approximately 87.73% of the voting power on the record date. Since this represents more than a majority of the voting power of all issued and outstanding shares entitled to vote on the record date, a quorum is present for purposes of transacting business. Now I will present the matters to be voted upon. Proposal 1 is the election of directors. The current Board has nominated Steven J. Heyer, Andrew R. Heyer and Leonard Fluxman for election as directors to hold office until the 2023 Annual Meeting of Shareholders or until their successors are duly elected and qualified. Proposal 2 is the ratification of the appointment of Ernst & Young LLP as the company's independent registered public accounting firm for the year ending December 31, 2020. Proposal 3 is the approval of the private placement for purposes of NASDAQ Listing Rule 5635. Proposal 4 is the approval of the adoption of our amended articles to, among other things, authorize a new class of non-voting common shares.

It is now 12:37 p.m. Eastern Time on June 10, 2020, and the polls for voting at the Annual Meeting of Shareholders are now open. We will now take a minute to allow voting to conclude before the polls close. Any shareholder who has not yet voted or wishes to change their vote may do so by clicking on the voting button on the web portal and following the instructions there. Shareholders who have sent in proxies or voted via telephone or Internet do not need to take any further action unless you wish to change your vote. [Voting]

Now that everyone has had the opportunity to vote, I now declare the polls for the 2020 OneSpaWorld Holdings Limited Annual Meeting of Shareholders closed at 12:39 p.m. Eastern Time on June 10, 2020. Inga, do we have preliminary voting results?

We do. We have been informed by the inspector of election that the preliminary vote report shows that the nominees for election to the Board have been duly elected, appointment of Ernst & Young LLP as the company's independent registered public accounting firm for the year ending December 31, 2020, has been ratified, the private placement for purposes of NASDAQ Listing Rule 5635 has been approved and the adoption of our amended articles to, among other things, authorize a new class of non-voting common shares has been approved. We will be reporting the final vote results in a Form 8-K to be filed within 4 business days of this meeting.

Thank you, Inga. There being no further business to come before the meeting, the 2020 Annual Meeting of Shareholders of OneSpaWorld Holdings Limited is now adjourned. Now we would like to open things up for shareholder questions and comments. We will take shareholder questions that are being entered on the web portal. [Operator Instructions]

Thank you, Glenn. This is Stephen Lazarus speaking. I will answer the first 2 questions that we have received from shareholders. The first question a shareholder has asked is how much money does OneSpaWorld have without business activity occurring and how long will we continue to survive? Now that the pipe has been approved, the company is able to continue surviving for up to 24 months with limited operations. The second question that we have received from an investor is whether or not OneSpaWorld is required to pay revenue share while no operations are occurring on board? And the answer to that is, no. While cruise operations have been suspended and therefore, our spas are closed, we are not required to have a revenue share payment. We have another question from a shareholder with regards to our 10-K filing, and the question specifically relates to the fact that the 10-K [indiscernible] issued an opinion that did not have any going concern language. And how -- why was that? And the answer to that is simply that at the point in time when our 10-K was filed, based upon the then communicated return to sailing days provided by the cruise lines, OneSpaWorld did not have a going concern issue.

Okay. I think that there are no more questions that we can see in the portal. So with that, we'll conclude the Q&A session. Thank you again for joining us today. Goodbye, and we'll talk soon. Thank you.