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Ambassadors Group, Inc. Reports Third Quarter 2013 Results

Stocks in this article: EPAX

SPOKANE, Wash., Oct. 30, 2013 (GLOBE NEWSWIRE) -- Ambassadors Group, Inc. (Nasdaq:EPAX), a leading provider of educational travel experiences and online education research materials, today announced its results for the third quarter ended September 30, 2013.

Overview

  • Gross revenue, from all sources including non-directly delivered programs, of $113.2 million during the first nine months of 2013 compared to $137.7 million in the prior year period. Traveled 17,940 delegates compared to 21,089 delegates in the same period in 2012.
  • Year-to-date gross margin of 37.3 percent compared to 36.4 percent in the 2012 period.
  • Restructuring Discovery Student Adventures product line and China operations, with pre-tax charges totaling $1.8 million. Also recorded $6.5 million in pre-tax asset impairments related primarily to the corporate headquarters building during the third quarter.
  • Year-to-date, special items totaled $6.9 million, net of tax, including $5.1 million of non-cash expenses, for asset impairments, restructuring charges and separation costs.
  • Operating expenses year-to-date, excluding the impact of special items, declined $2.6 million year-over-year.
  • Year-to-date net loss of $1.6 million compared to $11.8 million of net income in the prior year period; $5.3 million of net income before special items compared to $13.4 million in the 2012 period.
  • Cash and cash equivalents and available-for-sale securities balance of $41.0 million; no debt outstanding.
  • Recent operational changes made to improve conversion, family engagement and digital lead generation via multi-channel marketing model showing initial signs of positive impact.
  • Enrolled revenue for 2014 programs up 5.9 percent year-over-year for all programs and 5.8 percent year-over-year for core Student Ambassador Programs.
Financial Highlights
(in thousands except percent and per share data)
         
  UNAUDITED
  Quarter ended September 30, Nine months ended September 30,
  2013 2012 2013 2012
Gross revenue, all travel programs  $ 46,894  $ 52,713  $ 110,264  $ 134,563
Internet content and advertising revenue  $ 910  $ 903  $ 2,938  $ 3,106
Gross revenue, all sources  $ 47,804  $ 53,616  $ 113,202  $ 137,669
Gross margin, all travel programs  $ 17,239  $ 18,256  $ 39,661  $ 47,425
Gross margin, internet content and advertising  $ 785  $ 785  $ 2,558  $ 2,685
Gross margin, all sources  $ 18,024  $ 19,041  $ 42,219  $ 50,110
Gross margin percentage 37.7% 35.5% 37.3% 36.4%
Operating expense  $ 20,653  $ 14,811  $ 45,099  $ 38,572
Operating expense, before special items  $ 12,015  $ 14,781  $ 34,268  $ 36,826
Operating income, internet content and advertising  $ 249  $ 239  $ 958  $ 1,058
Net Income (loss)  $ (1,614)  $ 5,485  $ (1,581)  $ 11,777
Net Income before special items  $ 3,838  $ 5,519  $ 5,269  $ 13,359
Income (loss) per diluted share  $ (0.10)  $ 0.31  $ (0.09)  $ 0.67
Income per diluted share before special items  $ 0.23  $ 0.31  $ 0.31  $ 0.76

Commenting on the Company's results, Anthony Dombrowik, Ambassadors Group Interim Chief Executive Officer said, "We remain committed to our stated core goals: shifting to a multi-channel model to improve our delegate counts, right sizing our cost structure, and staying close to our customer to enhance our product and brand relevance. Our peak selling season for 2014 travel began in earnest in August, generating positive results via our integrated multi-channel approach. Our early look at enrolled revenue for 2014 is showing some improvement, and we believe we are seeing success in our efforts to reverse the downward trend in enrollments that we have experienced the last few years." 

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