Ambassadors Group Reports 19 Percent Growth in Q2 2006 Per Share Earnings of $0.86 Compared to $0.72 for Q2 2005.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 $0.86 fully diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. second quarter per share earnings for the quarter ended June June: see month. 30, 2006, a 19 percent increase over $0.72 fully diluted second quarter per share earnings for the same period one year ago. Net income for the second quarter 2006 was $18.5 million, compared to $15.2 million for the second quarter 2005. Comparing the six months ended June 30, 2006 and 2005, fully diluted per share earnings increased 19 percent to $0.70 in 2006 from $0.59 in 2005, and net income increased to $15.0 million in 2006 from $12.6 million in 2005. 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 are pleased to report our results for the first of our two most significant revenue quarters of the year. We generated an additional $3.2 million in net income this quarter compared to the same quarter one year ago. This was primarily the result of increasing our delegate A person who is appointed, authorized, delegated, or commissioned to act in the place of another. Transfer of authority from one to another. A person to whom affairs are committed by another. A person elected or appointed to be a member of a representative assembly. count from 16,500 to 19,200 quarter over quarter and overcoming some of the impact of challenging global conditions, such as the price of fuel. We have continued to deploy capital to benefit our shareowners. Operationally, we have increased our selling and tour promotion expenses $2.3 million year to date, the majority of which to continue implementation of our long term, organic growth plan. In addition, we have returned $5.0 million to shareowners in the form of cash dividends and stock repurchases Stock repurchase A firm's repurchase of outstanding shares of its common stock. . At this point, we are approximately halfway through our summer travel season. We continue to deliver high quality programs that now explore 34 countries on all 7 continents. For the past 50 years People to People has offered cultural exchange and personal growth opportunities for thousands of delegates. For the first time ever, the prestigious Cavaliere per las Pace (Knight of Peace) award was presented to an organization rather than an individual. On June 22, 2006 People to People Ambassador Programs was presented with the award in Assisi Assisi (äs-sē`zē), town (1991 pop. 24,626), Umbria, central Italy. A religious and tourist center, it stands on a hill in the Apennines with an expansive view of the plains below. , Italy Italy (ĭt`əlē), Ital. Italia, officially Italian Republic, republic (2005 est. pop. 58,103,000), 116,303 sq mi (301,225 sq km), S Europe. . Mary Jean Eisenhower MARY JEAN EISENHOWER, the granddaughter of Dwight D Eisenhower has worked to develop and expand the mission of People to People International [PTPI]. Eisenhower became the Chief Executive Officer of PTPI in January 2000 and still holds this title. , granddaughter of People to People founder President Dwight Dwight , Timothy 1752-1817. American clergyman, author, and educator who was a leading supporter of Federalism and served as president of Yale University (1795-1817). His grandson Timothy (1828-1916) was also president of Yale (1886-1899). D. Eisenhower and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of People to People International, traveled to Assisi to accept the esteemed es·teem tr.v. es·teemed, es·teem·ing, es·teems 1. To regard with respect; prize. See Synonyms at appreciate. 2. To regard as; consider: esteemed it an honor to help them. award. Mother Teresa Teresa of Ávila, St. religious contemplation brought her spiritual ecstasy. [Christian Hagiog.: Attwater, 318] See : Mysticism , Mikhail Gorbachev and Pope John Paul II Pope John Paul II (Latin: Ioannes Paulus PP. II, Italian: Giovanni Paolo II, Polish: Jan Paweł II) born Karol Józef Wojtyła are previous recipients of the Knight of Peace award, considered one of the most important titles for the curriculum vitae curriculum vitae CV, resume Medical practice A formal listing of a person's professional education, objectives, work history, including location and dates of service at a particular hospital, health care facility, university, the role filled at the time of service, of the Nobel Peace Prize The Nobel Peace Prize (Swedish and Norwegian: Nobels fredspris) is the name of one of five Nobel Prizes bequeathed by the Swedish industrialist and inventor Alfred Nobel. ." Quarter Ended June 30, 2006 Gross program receipts increased 21 percent, to $98.7 million, in the second quarter 2006 from $81.5 million in the second quarter 2005. Net revenue increased 18 percent, to $35.2 million, in the second quarter 2006 from $29.7 million in the same period of 2005. The increases in gross program receipts and net revenue are due to traveling more delegates in the second quarter of 2006 in comparison to the same quarter a year ago. 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 $9.5 million and $7.6 million in the second quarters 2006 and 2005, respectively. The $1.9 million increase was attributable to expenses supporting a greater number of delegates traveling and increased marketing expenses for our 2006 and 2007 travel programs. Other income increased 83 percent in the second quarter 2006, to $1.4 million from $0.8 million in the second quarter 2005. The increased interest income was earned through increased rates of return on higher cash, cash equivalents and available-for-sale security balances held during the quarter ended June 30, 2006. Six Months Ended June 30, 2006 Comparing the six months ended June 30, 2006 and 2005, gross program receipts increased 19 percent to $104.1 million from $87.5 million, and net revenue increased 18 percent to $37.7 million from $31.9 million, respectively. The increased gross program receipts and net revenue resulted from increased delegates traveling in the first six months of 2006 compared to the first six months of 2005. Operating expenses for the six months ended June 30, 2006 and 2005 were $18.1 and $14.2 million, respectively. The $3.9 million increase was due primarily to additional selling and tour promotion costs associated with the increased number of delegates traveling, as well as increased marketing expenses associated with our 2006 and 2007 travel programs. Other income in the six month period ended June 30, 2006 increased 90 percent to $2.4 million from $1.2 million in the six months ended June 30, 2005. This $1.2 million increase resulted from increased average cash, cash equivalents and available-for-sale security investment balances. Cashflow and Balance Sheet Total assets at June 30 were $208.7 million, of which 72 percent, or $150.5 million, were cash and investments. Our deployable cash (see definition on final page of the press release) has increased 37 percent to $71.4 million while participant deposits increased 28 percent to $111.8 million year on year. Cash provided by operations during the six months ended June 30, 2006 increased $3.1 million to $40.9 million in comparison to the six months ended June 30, 2005, resulting from increased participant deposits collected in 2006. Cash used in investing activities increased $9.9 million in the corresponding periods primarily due to the timing of 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. purchases. Cash used in financing activities increased to $3.9 million from $2.9 million as a net result of increased quarterly dividends, our common stock repurchase plan stock repurchase plan 1. See buyback. 2. See self-tender. , and stock option exercises. During the six months ended June 30, 2006 and 2005, we distributed $3.5 million and $2.6 million in cash dividends to our shareholders, repurchased $1.5 million and $1.7 million of common stock, and received $0.5 million and $1.4 million from the exercise of stock options, respectively. To date, we have repurchased $7.7 million of our stock. The following summarizes our statements of operations for the quarters ended and the six months ended June 30, 2006 and 2005 (in thousands, except per share amounts).
UNAUDITED
-----------------------------------
Six months ended Quarter ended
June 30 June 30
----------------- -----------------
2006 2005 2006 2005
Gross program receipts $104,119 $ 87,504 $ 98,712 $ 81,527
Net revenue $ 37,685 $ 31,871 $ 35,180 $ 29,693
Operating expenses:
Selling and tour promotion 13,749 11,430 7,234 5,918
General and administration 4,308 2,791 2,295 1,654
-------- -------- -------- --------
Total operating expenses 18,057 14,221 9,529 7,572
Operating income 19,628 17,650 25,651 22,121
Other income, net 2,363 1,245 1,408 770
-------- -------- -------- --------
Income before tax 21,991 18,895 27,059 22,891
Income tax provision 6,972 6,283 8,592 7,642
-------- -------- -------- --------
Net income $ 15,019 $ 12,612 $ 18,467 $ 15,249
======== ======== ======== ========
Earnings per share - basic $ 0.73 $ 0.62 $ 0.90 $ 0.75
Weighted average shares
outstanding - basic 20,534 20,218 20,528 20,252
Earnings per share - diluted $ 0.70 $ 0.59 $ 0.86 $ 0.72
Weighted average shares
outstanding - diluted 21,393 21,242 21,394 21,242
Gross program revenue reflects total payments received by us for directly delivered and non-directly delivered programs. Gross program revenue less program pass-through pass-through n. 1. An opening between two rooms, especially a shelved space between a kitchen and dining room that is used for passing food. 2. A route through which something is permitted to pass. 3. expenses for non-directly delivered programs and cost of sales for directly delivered programs constitute our net revenues. For non-directly delivered programs, we do not actively deliver the operations of each program. For directly delivered programs, however, we organize and operate all activities including speakers, facilitators, events, accommodations and transportation. 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 program marketing. The following summarizes our balance sheets as of June 30, 2006, June 30, 2005 and December December: see month. 31, 2005 (in thousands):
UNAUDITED
---------------------------------
June 30, December 31,
-------------------- ------------
2006 2005 2005
---------- --------- ------------
Assets
------
Cash and cash equivalents $ 42,144 $ 34,092 $ 26,916
Available-for-sale securities 108,361 86,990 89,688
Foreign currency exchange contracts 726 -- --
Prepaid program cost and expenses 48,547 41,063 1,596
Other current assets 521 1,044 955
---------- --------- ------------
Total current assets 200,299 163,189 119,155
Property and equipment, net 7,355 4,765 5,140
Deferred income tax 866 685 584
Other assets 167 125 167
---------- --------- ------------
Total assets $208,687 $168,764 $125,046
========== ========= ========
Liabilities and Stockholders' Equity
------------------------------------
Accounts payable and accruals $ 13,812 $ 19,229 $ 6,022
Foreign currency exchange contracts -- 1,536 1,896
Other liabilities 1,856 3,303 2,596
Participants' deposits 111,770 87,473 47,463
Current portion of long-term capital
lease 185 175 180
---------- --------- ------------
Total current liabilities 127,623 111,716 58,157
Capital Lease, long term 293 478 387
---------- --------- ------------
Total liabilities 127,916 112,194 58,544
---------- --------- ------------
Stockholders' equity 80,771 56,570 66,502
---------- --------- ------------
Total liabilities and stockholders'
equity $208,687 $168,764 $125,046
========== ========= ============
The following summarizes our statements of cash flows for the six months ended June 30, 2006 and 2005 (in thousands):
UNAUDITED
-------------------
Six months ended
June 30
-------------------
2006 2005
--------- ---------
Cash flows from operating activities:
Net income $ 15,019 $ 12,612
Adjustments:
Depreciation 717 495
Amortization of unearned compensation 371 193
Excess tax benefit from stock based compensation 645 --
Stock option expense 703 --
Change in assets and liabilities:
Prepaid program costs and expenses (46,951) (38,602)
Accounts payable and accrued expenses 6,435 14,449
Participants' deposits 64,307 48,865
Other current assets (393) (186)
--------- ---------
Net cash provided by operating activities 40,853 37,826
--------- ---------
Cash flows from investing activities:
Net change in available-for-sale securities (18,782) (10,469)
Purchase of property and equipment and other (2,932) (1,354)
--------- ---------
Net cash used in investing activities (21,714) (11,823)
--------- ---------
Cash flows from financing activities:
Dividend payment to shareholders (3,514) (2,641)
Repurchase of common stock (1,471) (1,747)
Proceeds from exercise of stock options 518 1,389
Excess tax benefit from stock based compensation 645 --
Capital lease payments and other (89) 52
--------- ---------
Net cash used in financing activities (3,911) (2,947)
--------- ---------
Net increase in cash and cash equivalents 15,228 23,056
--------- ---------
Cash and cash equivalents, beginning of period 26,916 11,036
--------- ---------
Cash and cash equivalents, end of period $ 42,144 $ 34,092
========= =========
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 pre·pay tr.v. pre·paid, pre·pay·ing, pre·pays To pay or pay for beforehand. pre·pay  ment n. program costs and expenses less the sum of
accounts payable, accrued expenses Accrued ExpenseAn accounting expense recognized in the books before it is paid for. It is a liability, usually current. These expenses are typically periodic and documented upon a company's balance sheet due to the high probability of collection. and other short-term liabilities (excluding deferred taxes and foreign exchange currency contracts), participant deposits and the current portion of long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. capital lease. We believe this non-GAAP measure is useful to investors in understanding the cash available to deploy for future business opportunities. The following summarizes our deployable cash as of June 30, 2006, June 30, 2005 and December 31, 2005 (in thousands):
UNAUDITED
----------------------------------
June 30, December 31,
2006 2005 2005
---------- ---------- ------------
Cash, cash equivalents and
available-for-sale securities $ 150,505 $ 121,082 $ 116,604
Prepaid program cost and expenses 48,547 41,063 1,596
Less: Participants' deposits (111,770) (87,473) (47,463)
Less: Accounts payable / accruals /
other liabilities (15,853) (22,707) (8,798)
---------- ---------- ------------
Deployable cash $ 71,429 $ 51,965 $ 61,939
========== ========== ============
Quarterly conference call and webcast We will host a conference call to discuss second quarter 2006 results of operations on Thursday Thursday: see week. , July July: see month. 20, 2006 at 8:30 a.m. Pacific Time. You may join the call by dialing 866-578-5788 then entering the pass code: Ambassadors Group. Or, you may also join the call 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 post-view access, you may dial 888-286-8010 with the pass code 64351509 and follow the prompts, or visit www.ambassadorsgroup.com/EPAX. Post-view dial-in access will be available beginning July 20, 2006 at 1:30 p.m. until September Until September is a 1984 romantic drama set in France. It stars Karen Allen as an American tourist in Paris who falls in love with a married Frenchman (Thierry Lhermitte). External links 20, 2006. Post-view Webcast access will be available following the conference call through September September: see month. 20, 2006. Business overview 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 and Washington, 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:
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 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 9, 2006 and proxy filed April 7, 2006. |
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