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Five analysts and top management from sixteen sector firms examine the Leisure Goods & Services sector in this special 89-page issue from The Wall Street Transcript, available at (212/952-7433) or http://www.twst.com/info/info384.htm

TWST: What challenges does the industry face over the next six months or a year?

Mr. Hovorka: Certainly the macroeconomy is a large factor at this point. On the cruise side, we’re also seeing quite a bit of capacity coming online in the industry, not only this year but for the next three or four years. We’re expecting part of that capacity to be moderated somewhat by ships being moved outside of the North American market into secondary markets like Europe and Asia, which will reduce that growth rate in the North American market.

TWST: Is there anything else investors should be concerned with?

Mr. Hovorka: The most unpredictable risk is weather. Motor sports events are held outdoors and poor weather can greatly impact ticket sales. Walk-up ticket buyers on the weekend of the event can be dissuaded from buying tickets because of a forecast for rain. Not only is the ticket revenue lost, but so is the spending inside the facility on concessions and souvenirs. Safety is also an issue. Dale Earnhardt’s tragic accident at Daytona early this year has had a profound impact on many fans. Demand could be impacted by such events. Racing facilities could also be required in the future to make investments to improve the safety on tracks. Race facilities get their races from sanctioning bodies such as NASCAR, Championship Auto Racing Teams, and the Indy Racing League, so something that we’re always monitoring is the relationships between the tracks and the sanctioning bodies. NASCAR has been very consistent in awarding their Winston Cup and Busch events to tracks, although each race is just a one-year contract. Other sanctioning bodies have contracts of various lengths but have been more likely to move their racing dates than NASCAR.

TWST: Within the leisure industry, you also cover cruises. Are there any companies that you would like to highlight here?

Mr. Hovorka: We follow four cruise companies and Steiner Leisure (Nasdaq:STNR), which is a supplier to the cruise companies. They do all of the spas on the cruise lines. Our outlook for the cruise industry has been cautious in the near term, but in the long term we think there are tremendous opportunities for the industry to continue to grow. We’re looking for a turn in pricing, and to get that I think we’re going to need to see a couple of things. One, we’re going to need to see a better macroeconomy in the United States, and two, some rationalization of capacity going forward.

TWST: Are there any other companies that you would like to highlight?

Mr. Hovorka: Steiner Leisure has made a very interesting move recently. They have announced the acquisition of 60% of their largest competitor in the spas-at-sea business, Mandara Spa. In the last two years, Steiner has experienced substantial margin pressure on contract renewals with the cruise lines and the two companies have competed against each other. The acquisition should improve the outlook for margins over the next several years. Additionally, the acquisition will give Steiner a substantial position in land-based spas. Mandara Spa operates 50 land-based spas, while Steiner will be opening one land-based spa later this year.

This special issue includes:

1) Leisure Goods & Services - In an in-depth (4,100 words) Analyst Interview, Timothy Conder, Vice President at A.G. Edwards & Sons, Inc., examines the outlook for the sector and shares specific stock recommendations.

2) Leisure Industry Overview - In an in-depth (3,700 words) Analyst Interview, Hayley Kissel, Director of Merrill Lynch's Global Securities Research and Economics Division, examines the outlook for the sector and shares specific stock recommendations.

3) Outlook for Leisure Stocks - In an in-depth (3,900 words) Analyst Interview, Scott Barry, Director in Credit Suisse First Boston's Equity Research group, examines the outlook for the sector and shares specific stock recommendations.

4) Cruise Lines & Motor Sports - In an in-depth (2,600 words) Analyst Interview, Joseph Hovorka, Senior Analyst at Raymond James & Associates, examines the outlook for the sector and shares specific stock recommendations.

5) Outlook for Cruise Lines - In an in-depth (4,100 words) Analyst Interview, Robin Farley, Executive Director in the equity research division of UBS Warburg, examines the outlook for the sector and shares specific stock recommendations.

6) CEO interviews (average 2,500 words). Top management of sixteen sector firms examine the outlook for their firm and the sector.