This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Ambassadors Group, Inc. Reports Fourth Quarter 2012 Results

Stocks in this article: EPAX

Outlook for 2013

As of February 3, 2013, enrolled revenue for 2013 travel programs was $127.2 million, down 19.2 percent from the same point last year, based on enrolled travelers of 20,846 compared to 24,881. Enrolled revenue for the Company's core product, Student Ambassadors, is down 21.7 percent to $115.7 million compared to $147.9 million at the same date last year, based on enrolled travelers of 16,886 compared to 21,476.

Enrolled revenue consists of estimated gross receipts to be recognized upon travel of an enrolled participant and revenue recognized for any delegates who have completed travel for the travel year referenced. Reported net enrollments consist of all participants who have enrolled in the Company's programs less those that have already withdrawn, including travel that has been completed. Enrolled revenue may not result in actual gross receipts eventually recognized by the Company due to both withdrawals from the Company's programs and expected future enrollments.

Based on current visibility for the balance of the year, the Company is providing guidance as follows:

  • Consolidated gross revenues for all programs and operations to be between $125 and $135 million;  
  • Consolidated gross margin as a percentage of gross revenue for all programs and operations of 36 percent to 37 percent; and   
  • Net income before any special items of between $0 million and $2 million.

Conference Call and Webcast Information

The Company will host a conference call to discuss fourth quarter and full year 2012 results of operations on Thursday, February 7, 2013, at 11:30 a.m. Eastern Time (8:30 a.m. Pacific Time).  Participants can access the call via the internet at www.ambassadorsgroup.com/EPAX. The call can also be accessed by dialing 888-715-1397 or 913-312-0855 (international) and providing the passcode: 9875414. Approximately 24 hours following the call, a webcast will be available through April 5, 2013 at www.ambassadorsgroup.com/EPAX. A replay of the call will also be available through February 12, 2013 and can be accessed by dialing 888-203-1112 or 719-457-0820 (international) and providing the pass code: 9875414.  

About Ambassadors Group, Inc.

Ambassadors Group, Inc. (Nasdaq:EPAX) is an education company located in Spokane, Washington. Ambassadors Group, Inc. is the parent company of Ambassador Programs, Inc., World Adventures Unlimited, Inc. and BookRags, Inc., an educational research website. The Company also oversees the Washington School of World Studies, an accredited travel study and distance learning school. Additional information about Ambassadors Group, Inc. and its subsidiaries is available at www.ambassadorsgroup.com . In this press release, "Company", "we", "us", and "our" refer to Ambassadors Group, Inc. and its subsidiaries.

The Ambassadors Group, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=3541

Forward-Looking Statements

This press release contains forward-looking statements regarding actual and expected financial performance and the reasons for variances between period-to-period results. Forward-looking statements, which are included per the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, may involve known and unknown risks, uncertainties and other factors that may cause actual results and performance in future periods to be materially different from any future results or performance suggested by the forward-looking statements in this release. Such forward-looking statements speak only as of the date of this release and may not reflect risks related to international unrest, outbreak of disease, conditions in the travel industry, the direct marketing environment, changes in economic conditions and changes in the competitive environment. We expressly disclaim any obligation to provide public updates or revisions to any forward-looking statements found herein to reflect any changes in expectations or any change in events. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be met. For a more complete discussion of certain risks and uncertainties that could cause actual results to differ materially from anticipated results, please refer to the Ambassadors Group, Inc. 10-K filed March 12, 2012, and its proxy statement filed May 9, 2012.

AMBASSADORS GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)
         
  UNAUDITED
  Quarter ended December 31,
  2012 2011 $ Change % Change
Net revenue, non-directly delivered programs (1)  $ 248   $ 713   $ (465) -65%
Gross revenue, directly delivered programs (2)  --   70  (70) -100%
Internet content and advertising revenue  1,101  1,195  (94) -8%
Total revenue  1,349  1,978  (629) -32%
Cost of sales, directly delivered programs (2)  (65)  (90)  25 28%
Cost of sales, internet content and advertising  133  169  (36) -21%
Gross margin (3)  1,281  1,899  (618) -33%
         
Operating expenses:        
Selling and marketing  8,386  8,961  (575) -6%
General and administration  4,111  4,137  (26) -1%
Total operating expenses  12,497  13,098  (601) -5%
         
Operating loss  (11,216)  (11,199)  (17) 0%
         
Other income (expense)        
Interest and dividend income  276  250  26 10%
Foreign currency expense and other  (8)  (1)  (7) -700%
Total other income  268  249  19 8%
Loss before income tax benefit  (10,948)  (10,950)  2 0%
Income tax benefit  915  3,152  (2,237) -71%
Net loss   $ (10,033)   $ (7,798)   $ (2,235) -29%
         
Weighted average shares outstanding – basic  17,333  17,493  (160) -1%
Weighted average shares outstanding – diluted  17,333  17,493  (160) -1%
         
Net loss per share — basic   $ (0.58)   $ (0.45)   $ (0.13) -29%
Net loss per share — diluted   $ (0.58)   $ (0.45)   $ (0.13) -29%
         
 
(1) Net revenue, non-directly delivered programs consists of gross revenue, less program pass-through expenses for non-directly delivered programs because we primarily engage third-party operators to perform these services.
  UNAUDITED
  Quarter ended December 31,
  2012 2011 % Change
Gross revenue   $ 1,178  $ 3,610 -67%
Cost of sales  930  2,897 -68%
Net revenue   $ 248  $ 713 -65%
 
(2) Gross revenue and cost of sales for directly delivered programs are reported as separate items because we plan, organize and operate all activities, including speakers, facilitators, events, accommodations and transportation. 
       
(3) Gross margin is calculated as the sum of gross revenue non-directly delivered programs, gross revenue directly delivered programs and internet content and advertising revenue less cost of sales non-directly delivered programs, costs of sales directly delivered programs and cost of sales internet content and advertising. Gross margin percentage is calculated as gross margin divided by the sum of gross revenue non-directly delivered programs, gross revenue directly delivered programs and internet content and advertising revenue.
 
 
 
AMBASSADORS GROUP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data)
         
  UNAUDITED
  Twelve months ended December 31,
  2012 2011 $ Change % Change
Net revenue, non-directly delivered programs (1)  $ 44,837   $ 51,966   $ (7,129) -14%
Gross revenue, directly delivered programs (2)  9,008  10,426  (1,418) -14%
Internet content and advertising revenue  4,207  4,046  161 4%
Total revenue  58,052  66,438  (8,386) -13%
Cost of sales, directly delivered programs (2)  6,107  6,822  (715) -10%
Cost of sales, internet content and advertising  554  575  (21) -4%
Gross margin (3)  51,391  59,041  (7,650) -13%
         
Operating expenses:        
Selling and marketing  34,845  40,367  (5,522) -14%
General and administration  16,224  16,564  (340) -2%
Total operating expenses  51,069  56,931  (5,862) -10%
         
Operating income  322  2,110  (1,788) -85%
         
Other income (expense)        
Interest and dividend income  1,730  1,340  390 29%
Foreign currency expense and other  (13)  155  (168) -108%
Total other income  1,717  1,495  222 15%
Income before income tax provision  2,039  3,605  (1,566) -43%
Income tax provision  (295)  (649)  354 55%
Net income   $ 1,744   $ 2,956   $ (1,212) -41%
         
Weighted average shares outstanding – basic  17,530  17,746  (216) -1%
Weighted average shares outstanding – diluted  17,530  17,869  (339) -2%
         
Net income per share — basic   $ 0.10  $ 0.17   $ (0.07) -41%
Net income per share — diluted   $ 0.10   $ 0.17   $ (0.07) -41%
 
(1) Net revenue, non-directly delivered programs consists of gross revenue, less program pass-through expenses for non-directly delivered programs because we primarily engage third-party operators to perform these services.
         
 
  UNAUDITED
  Twelve months ended December 31, 
  2012 2011 % Change
Gross revenue   $ 126,734  $ 140,609 -10%
Cost of sales  81,897  88,643 -8%
Net revenue  $ 44,837  $ 51,966 -14%
 
(2) Gross revenue and cost of sales for directly delivered programs are reported as separate items because we plan, organize and operate all activities, including speakers, facilitators, events, accommodations and transportation. 
       
(3) Gross margin is calculated as the sum of gross revenue non-directly delivered programs, gross revenue directly delivered programs and internet content and advertising revenue less cost of sales non-directly delivered programs, costs of sales directly delivered programs and cost of sales internet content and advertising. Gross margin percentage is calculated as gross margin divided by the sum of gross revenue non-directly delivered programs, gross revenue directly delivered programs and internet content and advertising revenue.
 
 
AMBASSADORS GROUP, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except per share data)
     
  UNAUDITED AUDITED  
  2012 2011 % Change
Assets      
Current assets:      
Cash and cash equivalents  $ 6,150  $ 19,519 -68%
Available-for-sale securities  32,122  39,128 -18%
Foreign currency exchange contracts  837  --  100%
Prepaid program cost and expenses  17,217  13,299 29%
Accounts receivable  850  1,395 -39%
Deferred tax asset  221  668 -67%
Total current assets  57,397  74,009 -22%
Property and equipment, net  26,344  26,104 1%
Available-for-sale securities  723  700 3%
Foreign currency exchange contracts  --   --  0%
Deferred tax asset  --   --  -100%
Intangibles  3,565  3,421 4%
Goodwill  9,781  9,781 0%
Other long-term assets  85  85 0%
Total assets  $ 97,895  $ 114,100 -14%
       
Liabilities and Stockholders' Equity      
Current liabilities:      
Accounts payable and accrued expenses  $ 4,238 $ 5,858 -28%
Participants' deposits  25,735 27,396 -6%
Foreign currency exchange contracts  --   1,671 -100%
Deferred tax liability  --   --  100%
Other liabilities  111 112 -1%
Total current liabilities  30,084  35,037 -14%
Participants' deposits  --   --  0%
Foreign currency exchange contracts  --   102 -100%
Deferred tax liabilities  2,688 2,004 34%
Total liabilities  32,772  37,143 -12%
Stockholders' equity  65,123 76,957 -15%
Total liabilities and stockholders' equity  $ 97,895  $ 114,100 -14%
 
 
AMBASSADORS GROUP, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands)
     
  UNAUDITED
  December 31,
  2012 2011
Cash flows from operating activities:    
Net Income  $ 1,744  $ 2,956
Adjustments to reconcile net income to net cash provided by (used in) operating activities:    
Depreciation and amortization  5,273  4,742
Stock-based compensation  1,455  1,475
Deferred income taxes  387  420
Gain on foreign currency exchange contracts  --   -- 
Loss on disposition and impairment of property and equipment  24  246
Excess tax benefit (shortfall) from stock-based compensation  347  (160)
Change in assets and liabilities:    
Accounts receivable and other assets  545  581
Prepaid program costs and expenses  (3,918)  (10,069)
     
Accounts payable, accrued expenses, and other current liabilities  (1,977)  194
Participants' deposits  (1,661)  (7,040)
Net cash provided by (used in) operating activities  2,219  (6,655)
     
Cash flows from investing activities:    
Purchase of available for sale securities  (74,022)  (48,693)
Proceeds from sale of available-for-sale securities  80,521  83,035
Purchase of property and equipment  (5,139)  (3,101)
Proceeds from sale of property and equipment  --   49
Purchase of intangibles  (533)  (493)
Net cash provided by investing activities  827  30,797
     
Cash flows from financing activities:    
Repurchase of common stock  (3,056)  (7,590)
Dividend payment to shareholders  (13,012)  (4,258)
Proceeds from exercise of stock options  --   227
Excess tax shortfall (benefit) from stock-based compensation  (347)  160
Net cash used in financing activities  (16,415)  (11,461)
     
Net increase (decrease) in cash and cash equivalents  (13,369)  12,681
Cash and cash equivalents, beginning of period  19,519  6,838
Cash and cash equivalents, end of period  $ 6,150  $ 19,519
     
     

Special Items

Due to cost cutting initiatives, the Company incurred charges throughout 2012 related to severance payments made as the workforce was reduced. The company also incurred legal and other fees relating to a proxy contest. 

5 of 7

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,959.44 +154.64 0.87%
S&P 500 2,078.54 +7.89 0.38%
NASDAQ 4,781.4240 +16.0440 0.34%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs