Ambassadors Group Reports $0.68 Per Share in Q3 2005 Compared to $0.43 for Q3 2004.SPOKANE Spokane, city, United States Spokane (spōkăn`), city (1990 pop. 177,196), seat of Spokane co., E Wash., at the spectacular falls of the Spokane River; inc. 1881. , Wash. -- Ambassadors Group The Ambassadors Group was originally an operating division of Ambassadors International, Inc., but was divested into a separate corporation in 2002 to form the company under its current name. Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on :EPAX EPAX Electronic Private Automatic Exchange ), a leading provider of educational travel experiences, announced third quarter fully diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of of $0.68 for the quarter ended September September: see month. 30, 2005, an increase of 58 percent from $0.43 fully diluted earnings per share for the same period one year ago. Net income for the third quarter of 2005 was $14.6 million in comparison to $8.9 million for the third quarter of 2004. For the nine months ended September 30, 2005, fully diluted earnings per share increased 35 percent, to $1.28 in 2005, compared to $0.95 for the first nine months of 2004. Net income for the nine months ended September 30, 2005 was $27.2 million, an increase of 37 percent from $19.8 million for the same period in the prior year. (Please note: On September 15, 2005, the Company implemented a two for one stock split in the form of a 100 percent stock dividend. The earnings per share calculations for all periods presented reflect the increase in the number of common shares outstanding.) Quarter Ended September 30, 2005 Gross program receipts increased 34 percent in the third quarter of 2005 to $82.2 million from $61.2 million in the third quarter of 2004. Net revenue increased 42 percent in the third quarter of 2005 to $30.4 million from $21.4 million in the same period of 2004. These results were driven by an increase in the gross margin from 35 percent for the third quarter of 2004 to 37 percent for the third quarter of 2005, as well as an increase in the number of delegates traveled, from 13,000 in the third quarter one year ago to 16,500 in the third quarter of 2005. Operating expenses Operating expenses The amount paid for asset maintenance or the cost of doing business, excluding depreciation. Earnings are distributed after operating expenses are deducted. were $9.7 million in the third quarter of 2005 compared to $8.1 million in the comparable quarter of 2004. This $1.6 million increase is attributable attributable emanating from or pertaining to attribute. attributable proportion see attributable risk (below). attributable risk to expenses supporting a greater number of delegates traveling and increased selling and tour promotion expenses quarter over quarter. As a percent of gross receipts the total of the receipts, before they are diminished by any deduction, as for expenses; - distinguished from net profits. - Bouvier. See under Gross, a. os> See also: Gross Receipt , operating expenses decreased in the third quarter of 2005 to 12 percent compared to 13 percent in the third quarter of 2004. Other income increased $0.5 million in the third quarter of 2005, to $0.8 million from $0.3 million in the third quarter 2004, due to higher interest rates and higher cash and short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. investment balances during the quarter ended September 30, 2005. Nine Months Ended September 30, 2005 For the nine months ended September 30, 2005, gross program receipts increased 23 percent to $169.7 million from $138.0 million for the same period in 2004. Net revenue increased 28 percent, to $62.3 million from $48.5 million for the nine months ended September 30, 2005 and 2004, respectively. The increased gross program receipts and net revenue resulted from 21 percent growth in the number of delegates traveled year to date. In addition, the improvement from 35 percent gross margin in the first nine months of 2004 to 37 percent gross margin for the first nine months of 2005 benefited the Company's results. Operating expenses for the nine months ended September 30, 2005 and 2004 were $24.0 and $19.3 million, respectively. The $4.7 million increase was due primarily to additional selling and tour promotion costs associated with the increased number of delegates traveling, as well as higher expense levels associated with plans for continued growth in 2006. As a percent of gross receipts, operating expenses remained consistent at 14 percent for each of the nine months ended September 30, 2005 and 2004. Other income increased $1.2 million, to $2.0 million for the nine months ended September 30, 2005 from $0.8 million for the nine months ended September 30, 2004, due to higher interest rates and higher cash and short-term investment balances during the nine months ended September 30, 2005. Cash provided by operations increased $7.9 million during the nine months ended September 30, 2005 in comparison to the same time period one year ago, as a result of increased net income and increased program activity. Cash used in investing activities decreased by $6.4 million in the corresponding periods primarily due to the timing of the purchase of available-for-sale securities. Cash used in financing activities increased to $4.9 million from $4.6 million in the nine months ended September 30, 2005 and 2004, as a result of our dividend and common stock repurchase Stock repurchase A firm's repurchase of outstanding shares of its common stock. activity. During the nine months ended September 30, 2005 and 2004, we distributed $4.0 million and $3.3 million in cash dividends to our shareholders, and repurchased $2.9 million and $2.2 million of common stock, respectively. Cash, cash equivalents and available-for-sale securities increased 38 percent to $99.3 million from $72.1 million at September 30, 2005 and 2004, respectively. Deployable cash increased 40 percent over the last year to $65.8 million from $46.8 million at September 30, 2005 and 2004, respectively (see definition and table on final page of this press release). Jeff Thomas (language) Thomas - A language compatible with the language Dylan(TM). Thomas is NOT Dylan(TM). The first public release of a translator to Scheme by Matt Birkholz, Jim Miller, and Ron Weiss, written at Digital Equipment Corporation's Cambridge Research Laboratory runs , president and chief executive officer of Ambassadors Group, Inc. stated, "We continue to focus on two areas of our Company: operating results and capital deployment Installing, setting up, testing and running. This military term, which means the placement of troops and equipment in the field, is widely used with computers as an alternate to the word "implementation. . Our operating results continue to be driven by an emphasis on our brand, operational excellence in all that we do, and continuously developing new marketing efficiencies. "Capital deployment programs have been strengthened. This quarter we implemented a 2 for 1 stock split, an expansion of our share repurchase plan share repurchase plan A corporation's plan for buying back a predetermined number of its own shares in the open market. Institution of a share repurchase plan derives from management's view that the company has limited outside investment opportunities and , and a continuation continuation - continuation passing style of our dividend policy. We are pleased that we have been able to undertake a set of actions that enhance our returns to shareowners through multiple channels. In fact, this year we have returned $6.9 million to shareowners through the combination of our buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may program ($2.9 million) and the dividend program ($4.0 million)." We will host a conference call to discuss results of operations and the outlook for 2005, Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , October October: see month. 14 at 8:30 a.m. Pacific Time. Interested parties may join the call by dialing 800-798-2864, then entering the pass code: 77708818. The conference call may also be joined via the Internet Internet Publicly accessible computer network connecting many smaller networks from around the world. It grew out of a U.S. Defense Department program called ARPANET (Advanced Research Projects Agency Network), established in 1969 with connections between computers at the at www.AmbassadorsGroup.com/EPAX. For replay access, parties may dial 888-286-8010 with the pass code 58668971 and follow the prompts, or visit the www.AmbassadorsGroup.com/EPAX website. Replay access will be available beginning October 14 at 1:00 p.m. through October 21, 2005. Post-view web cast access will be available following the conference call through December December: see month. 22, 2005. Ambassadors Group, Inc. is a leading educational travel organization that organizes and promotes international and domestic programs for students, athletes, and professionals. These programs provide the opportunities for grade school, junior, and senior high school students to visit foreign and domestic destinations to learn about the history, government, economy and culture of such areas, as well as for junior and senior high school athletes to participate in international sports challenges Sports Challenge was a sports-centered game show that aired in weekly syndication from 1971 to 1979, with a separate version airing briefly on CBS in 1973. Dick Enberg was host. Johnny Gilbert, Art James, and John Harlan announced. . Our professional programs emphasize meetings and seminars between participants and persons in similar professions abroad. We are headquartered in Spokane, Washington Spokane (pronounced [spoʊ̯ˈkæn]) is a city located in Eastern Washington. The seat of Spokane County, Spokane is the metropolitan center of the Inland Northwest, the second largest city in Washington state, and , with associates also in Denver Denver, city (1990 pop. 467,610), alt. 5,280 ft (1,609 m), state capital, coextensive with Denver co., N central Colo., on a plateau at the foot of the Front Range of the Rocky Mts., along the South Platte River where Cherry Creek meets it; inc. 1861. , Colorado Colorado, state, United States Colorado (kŏlərăd`ə, –răd`ō, –rä`dō), state, W central United States, one of the Rocky Mt. states. and Washington Washington, town, England Washington, town (1991 pop. 48,856), Sunderland metropolitan district, NE England. Washington was designated one of the new towns in 1964 to alleviate overpopulation in the Tyneside-Wearside area. , D.C. In this press release, "Company," "we," "us," and "our" refer to Ambassadors Group, Inc. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. This press release contains forward-looking statements regarding our 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 Safe Harbor 1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated. 2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. " provisions of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995, may involve known and unknown risks, uncertainties and other factors that may cause our 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 the conflict in the Middle East and international unrest Unrest is a sociological phenomenon, for instance:
see epidemic. of disease, conditions in the travel industry, direct marketing environment, changes in economic conditions and changes in the competitive environment. We expressly disclaim dis·claim v. dis·claimed, dis·claim·ing, dis·claims v.tr. 1. To deny or renounce any claim to or connection with; disown. 2. To deny the validity of; repudiate. 3. any obligation to provide public updates or revisions ReVisions is a 2004 anthology of alternate history short-stories. It is edited by Julie E. Czerneda and Isaac Szpindel. Contents Title Author The Resonance of Light James Alan Gardner Out of China Julie E. to any forward-looking statements found herein to reflect any changes in our 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 attained at·tain v. at·tained, at·tain·ing, at·tains v.tr. 1. To gain as an objective; achieve: attain a diploma by hard work. 2. . For a more complete discussion of these and other factors, please refer to the Ambassadors Group, Inc. 10K filed March 14, 2005, proxy See proxy server. (networking) proxy - A process that accepts requests for some service and passes them on to the real server. A proxy may run on dedicated hardware or may be purely software. filed April 14, 2005, and 10Q filed August 9, 2005.
The following summarizes our statements of operations for the quarters
ended September 30, 2005 and 2004 (in thousands, except per share
amounts):
UNAUDITED
--------------------
Quarter ended
September 30
--------------------
2005 2004
---------- ---------
Gross program receipts $ 82,161 $ 61,173
========== =========
Net revenue $ 30,447 $ 21,391
Operating expenses:
Selling and tour promotion 7,991 6,927
General and administration 1,754 1,203
---------- ---------
Total operating expenses 9,745 8,130
Operating income 20,702 13,261
Other income, net 765 250
---------- ---------
Income before tax 21,467 13,511
Income tax provision 6,855 4,593
---------- ---------
Net income $ 14,612 $ 8,918
========== =========
Earnings per share - basic $ 0.72 $ 0.44
---------- ---------
Weighted average shares outstanding - basic 20,336 20,094
Earnings per share - diluted $ 0.68 $ 0.43
---------- ---------
Weighted average shares outstanding - diluted 21,379 20,886
(Please note: On September 15, 2005, the Company implemented a two for
one stock split in the form of a 100 percent stock dividend. The
earnings per share calculations for all periods presented reflect the
increase in the number of common shares outstanding.)
The following summarizes our statements of operations for the nine
months ended September 30, 2005 and 2004 (in thousands, except per
share amounts):
UNAUDITED
---------------------
Nine months ended
September 30
---------------------
2005 2004
----------- ---------
Gross program receipts $ 169,665 $ 138,033
=========== =========
Net revenue $ 62,318 $ 48,505
Operating expenses:
Selling and tour promotion 19,421 15,742
General and administration 4,545 3,524
----------- ---------
Total operating expenses 23,966 19,266
Operating income 38,352 29,239
Other income, net 2,010 755
----------- ---------
Income before tax 40,362 29,994
Income tax provision 13,138 10,198
----------- ---------
Net income $ 27,224 $ 19,796
=========== =========
Earnings per share - basic $ 1.34 $ 0.99
----------- ---------
Weighted average shares outstanding - basic 20,258 20,076
Earnings per share - diluted $ 1.28 $ 0.95
----------- ---------
Weighted average shares outstanding - diluted 21,303 20,842
(Please note: On September 15, 2005, the Company implemented a two for
one stock split in the form of a 100 percent stock dividend. The
earnings per share calculations for all periods presented reflect the
increase in the number of common shares outstanding.)
We have a single operating segment consisting of the educational
travel and sports programs for students, athletes and professionals.
These programs have similar economic characteristics and offer
comparable products to participants, as well as utilize similar
processes for the program marketing.
The following summarizes our balance sheets as of September 30, 2005,
September 30, 2004 and December 31, 2004 (in thousands):
UNAUDITED
---------------------------------
September 30, December 31,
------------------- -------------
2005 2004 2004
---------- -------- -------------
Assets
------
Cash and cash equivalents $ 22,670 $ 9,490 $ 11,036
Available-for-sale securities 76,649 62,610 76,521
Foreign currency exchange contracts - 503 2,609
Prepaid program costs and expenses 3,656 4,821 2,461
Other current assets 1,208 589 123
---------- -------- -------------
Total current assets 104,183 78,013 92,750
Property and equipment, net 5,032 3,857 3,911
Deferred tax asset 660 1,589 735
Other assets 161 116 120
---------- -------- -------------
Total assets $ 110,036 $ 83,575 $ 97,516
========== ======== =============
Liabilities and Stockholders' Equity
------------------------------------
Accounts payable and accruals $ 13,821 $ 12,131 $ 4,277
Other liabilities 2,646 3,535 3,806
Foreign currency exchange contracts 1,142 - -
Participants' deposits 20,568 14,264 38,608
Deferred tax liability - 60 723
Current portion of long-term
capital lease 183 146 147
---------- -------- -------------
Total current liabilities 38,360 30,136 47,561
Capital lease, long term 401 491 454
---------- -------- -------------
Total liabilities 38,761 30,627 48,015
---------- -------- -------------
Stockholders' equity 71,275 52,948 49,501
---------- -------- -------------
Total liabilities and
stockholders' equity $ 110,036 $ 83,575 $ 97,516
========== ======== =============
The following summarizes our statements of cash flows for the nine
months ended September 30, 2005 and 2004 (in thousands):
UNAUDITED
-----------------------
Nine months ended
September 30
-----------------------
2005 2004
------------ ----------
Cash flows from operating activities:
Net income $ 27,224 $ 19,796
Adjustments to reconcile net income:
Depreciation & amortization 781 714
Amortization of unearned compensation 307 -
Deferred income tax provision - 75
Changes in:
Prepaid program costs and expenses (1,195) (3,213)
Accounts payable and accrued expenses 10,096 7,807
Participants' deposits (18,040) (13,956)
Other current assets (454) (356)
------------ ----------
Net cash provided by operating activities 18,719 10,867
Cash flows from investing activities:
Net cash change in available-for-sale
securities (193) (6,956)
Purchase of investment (41) -
Purchase of property and equipment (1,902) (1,605)
------------ ----------
Net cash used in investing activities (2,136) (8,561)
Cash flows from financing activities:
Dividend payment to shareholders (3,971) (3,314)
Repurchase of common stock (2,865) (2,204)
Proceeds from exercise of stock options 1,904 1,023
Capital lease payments (17) (106)
------------ ---------
Net cash used in financing activities (4,949) (4,601)
Net increase (decrease) in cash and cash
equivalents 11,634 (2,295)
Cash and cash equivalents, beginning of
period 11,036 11,785
------------ ----------
Cash and cash equivalents, end of period $ 22,670 $ 9,490
============ ==========
Certain prior-year amounts have been reclassified to conform with
current year financial statement presentation. Such reclassifications
had no impact on previously reported net income, operating cash flows
or stockholders' equity.
The following summarizes our deployable cash as of September 30, 2005,
September 30, 2004 and December 31, 2004 (in thousands):
UNAUDITED
----------------------------------------
September 30, September 30, December 31,
2005 2004 2004
------------- ------------- ------------
Cash, cash equivalents and
available-for-sale securities $99,319 $72,100 $87,557
Prepaid program cost and
expenses 3,656 4,821 2,461
Less: Participants' deposits (20,568) (14,264) (38,608)
Less: Accounts payable,
accruals, and other
liabilities (16,650) (15,812) (8,230)
------------- ------------- ------------
Deployable cash $65,757 $46,845 $43,180
============= ============= ============
Deployable cash is a non-GAAP liquidity measure. Deployable cash is
calculated as the sum of cash and cash equivalents, available for sale
securities and prepaid program costs and expenses less the sum of
accounts payable, accrued expenses and other short-term liabilities
(excluding deferred taxes and foreign exchange currency contracts),
participant deposits and the current portion of long-term capital
lease. We believe this non-GAAP measure is useful to investors in
understanding the cash available to deploy for future business
opportunities.
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