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TheStreet Open House

Ambassadors Group, Inc. Reports Fourth Quarter And Full Year 2013 Results

SPOKANE, Wash., Feb. 5, 2014 (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 fourth quarter and full year ended December 31, 2013.

Overview

  • Gross revenue, from all sources including non-directly delivered programs, of $116.2 million for the year ended December 31, 2013 compared to $139.9 million in 2012. Traveled 18,251 delegates compared to 21,252 delegates in 2012.  
  • 2013 gross margin of 37.5 percent compared to 36.7 percent in 2012.  
  • Special items totaled $7.2 million, net of tax, including $5.1 million of non-cash expenses recorded for asset impairments, restructuring charges and separation costs in 2013.  
  • 2013 operating expenses, excluding the impact of special items of $11.4 million, declined $5.4 million year-over-year.   
  • Net loss of $7.1 million in 2013 compared to net income of $1.7 million in 2012; Net income before special items of $0.1 million compared to $3.2 million last year.  
  • Cash and cash equivalents and available-for-sale securities balance of $46.4 million; deployable cash, as defined, of $22.6 million and no debt outstanding.  
  • Enrolled revenue for 2014 programs down 3.2 percent year-over-year for all programs and 4.0 percent year-over-year for core Student Ambassador Programs. Prior year enrolled travelers for Discovery Student Adventures and People to People China programs have been excluded for year-over-year comparability given the Company's decision to no longer operate these programs in 2014. Enrolled revenue has been adversely impacted by increased withdrawal rates since last quarter, which we are actively addressing.

Financial Highlights

( in thousands except percent and per share data)

  UNAUDITED
  Quarter ended December 31, Year ended December 31,
  2013 2012 2013 2012
Gross revenue, all travel programs $1,980  $1,179  $112,244  $135,742
Internet content and advertising revenue  $1,037  $1,101  $3,975  $4,207
Gross revenue, all sources  $3,017  $2,280  $116,219  $139,949
Gross margin, all travel programs  $513  $313  $40,174  $47,738
Gross margin, internet content and advertising  $904  $968  $3,462  $3,653
Gross margin, all sources  $1,417  $1,281  $43,636  $51,391
Gross margin percentage 47.0% 56.2% 37.5% 36.7%
Operating expense  $10,320  $12,497  $55,419  $51,069
Operating expense, before special items  $9,707  $12,531  $43,975  $49,357
Operating income, internet content and advertising  $344  $269  $1,302  $1,327
Net Income (loss)  $(5,496)  $(10,033)  $(7,077)  $1,744
Net Income (loss) before special items  $(5,110)  $(10,064)  $136  $3,208
Income (loss) per diluted share  $(0.32)  $(0.58)  $(0.42)  $0.10
Income (loss) per diluted share before special items  $(0.30)  $(0.58)  $0.01  $0.18

Commenting on the Company's results, Anthony Dombrowik, Ambassadors Group Interim Chief Executive Officer said, "We are making headway in our turnaround efforts by staying focused on our three core short term goals outlined in previous quarters: shifting to a multi-channel model to stabilize and then improve our delegate counts, right sizing our cost structure to protect profitability and staying close to our customer. In a challenging environment, we made solid progress in 2013 and our results were in line with our financial guidance for the year. We furthered our evolution to a true year-round, integrated multi-channel marketing and sales strategy that we intend to push forward even further in 2014. Concurrently, we reduced our operating expense before special items by over $5 million, which exceeded the high end of our expectations. We also took the steps necessary to dissolve our China and Discovery Student Adventures product lines to put the Company on a firmer financial footing going forward and to create the flexibility needed to focus on our core People to People programs. We traveled 18,251 delegates during 2013 and we are proud to have achieved the highest consolidated Net Promoter customer satisfaction scores in our history."

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