UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from to
-------- --------
Commission file number 0-26420
-------
AMBASSADORS INTERNATIONAL, INC.
-------------------------------
(Exact name of registrant as specified in its charter)
Delaware 91-1688605
------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
Dwight D. Eisenhower Building
110 South Ferrall Street
Spokane, Washington 99202
------------------------------- -----------------
(Address of principal (Zip code)
executive offices)
Registrant's telephone number, including area code: (509) 534-6200
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
----- -----
Indicate number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practical date:
Common shares outstanding as of July 31, 1996: 6,615,030
This report, including all exhibits and attachments, contains 19 pages.
<PAGE>
AMBASSADORS INTERNATIONAL, INC.
FORM 10-QSB QUARTERLY REPORT
Table of Contents
PART I FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (unaudited)
Consolidated Balance Sheets at June 30, 1996 and
December 31, 1995
Consolidated Statements of Income for the Three
and Six Months Ended June 30, 1996 and 1995
Consolidated Statements of Cash Flows for the Six
Months Ended June 30, 1996 and 1995
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis or Plan of
Operation
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
Ambassadors International, Inc.
Consolidated Balance Sheets (Unaudited)
June 30, 1996 and December 31, 1995
June 30, December 31,
1996 1995
----------- ------------
ASSETS
Current assets:
Cash and cash equivalents $25,224,918 $12,974,252
Restricted cash equivalents 55,000 45,000
Investments 136,290 275,488
Accounts receivable (including
$30,849 and $33,218 from officers
and employees) 188,160 679,600
Notes receivable, due within one
year 2,050 2,334
Prepaid program costs and expenses 4,818,933 425,530
Deferred income taxes 454,666
----------- -----------
Total current assets 30,425,351 14,856,870
Property, plant and equipment, net 1,384,824 1,122,494
Investment in joint venture 262,500
Notes receivable, due after one year 35,573 36,447
Goodwill and covenant not to compete,
net 1,018,410
Other assets 4,496
----------- -----------
Total assets $33,131,154 $16,015,811
=========== ===========
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
Ambassadors International, Inc.
Consolidated Balance Sheets (Unaudited), Continued
June 30, 1996 and December 31, 1995
June 30, December 31,
1996 1995
----------- ------------
LIABILITIES AND
STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
expenses $ 993,178 $ 1,287,559
Participants' deposits 15,785,472 3,462,350
Income taxes payable 1,235,116
Long-term debt, due within one year 12,636 11,138
----------- -----------
Total current liabilities 18,026,402 4,761,047
Deferred income taxes 113,958 113,958
Long-term debt, due after one year 5,760
----------- -----------
Total liabilities 18,140,360 4,880,765
----------- -----------
Stockholders' equity:
Preferred stock, $.01 par value;
2,000,000 shares authorized;
none issued and outstanding
Common stock, $.01 par value;
authorized, 20,000,000 shares;
issued and outstanding, 6,615,030
and 6,535,030 shares 66,150 65,350
Additional paid-in capital 12,501,668 11,926,468
Retained earnings (accumulated
deficit) 2,422,976 (856,772)
---------- -----------
Total stockholders' equity 14,990,794 11,135,046
---------- -----------
Total liabilities and stock-
holders' equity $33,131,154 $16,015,811
=========== ===========
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
Ambassadors International, Inc.
Consolidated Statements of Income (Unaudited)
for the three and six months ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
------------------------ ------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue $10,549,677 $ 8,336,293 $ 9,955,496 $ 8,154,382
----------- ----------- ----------- -----------
Operating expenses:
Selling and tour promotion 3,536,643 2,584,314 1,624,983 1,289,169
General and administrative 2,816,226 2,081,329 1,478,986 1,040,748
----------- ----------- ----------- -----------
6,352,869 4,665,643 3,103,969 2,329,917
----------- ----------- ----------- -----------
Operating income 4,196,808 3,670,650 6,851,527 5,824,465
----------- ----------- ----------- -----------
Other income (expense):
Interest expense (780) (1,226) (364) (580)
Interest and dividend income 574,292 363,443 378,933 294,232
Realized and unrealized gain (loss)
on investments and other 253,252 7,746 31,381 (17,637)
Other, net (54,043) 4,208 (54,116) 1,540
----------- ----------- ----------- -----------
772,721 374,171 355,834 277,555
----------- ----------- ----------- -----------
Income before income taxes 4,969,529 4,044,821 7,207,361 6,102,020
Provision for income taxes 1,689,781 -- 2,450,503 --
----------- ----------- ----------- -----------
Net income $ 3,279,748 $ 4,044,821 $ 4,756,858 $ 6,102,020
=========== =========== =========== ===========
Net income per share $ 0.50 $ 0.81 $ 0.72 $ 1.22
=========== =========== =========== ===========
Weighted average common shares outstanding 6,615,030 4,995,030 6,615,030 4,995,030
=========== =========== =========== ===========
</TABLE>
<PAGE>
Ambassadors International, Inc.
Consolidated Statements of Operations, Continued (Unaudited)
for the three and six months ended June 30, 1996 and 1995
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
June 30, June 30,
------------------------ ------------------------
1996 1995 1996 1995
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Pro forma information:
Income before income taxes $ 4,044,821 $ 6,102,020
Pro forma adjustment to record
provision for income taxes 1,375,239 2,074,687
----------- ----------- ----------- -----------
Net income $ 3,279,748 $ 2,669,582 $ 4,756,858 $ 4,027,333
=========== =========== =========== ===========
Net income per share $ 0.50 $ 0.53 $ 0.72 $ 0.81
=========== =========== =========== ===========
Shares used in pro forma calculation 6,615,030 4,995,030 6,615,030 4,995,030
=========== =========== =========== ===========
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
<PAGE>
Ambassadors International, Inc.
Consolidated Statements of Cash Flows (Unaudited)
for the six months ended June 30, 1996 and 1995
1996 1995
----------- -----------
Cash flows from operating activities:
Net income $ 3,279,748 $ 4,044,821
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 191,282 105,452
Deferred income tax provision 454,666
Gain on investments (253,252) (7,746)
Loss on sale of property, plant
and equipment 880
Change in assets and liabilities,
net of effects of purchases of
subsidiaries:
Restricted cash (10,000)
Accounts receivable 820,515 (707,500)
Stockholder receivable (1,907,986)
Prepaid program costs and
expenses (3,941,573) (5,941,963)
Proceeds from maturity of for-
ward foreign exchange contracts 386,521
Purchase of investment (1,000,000)
Proceeds from sale of investment 76,408
Accounts payable and accrued
expenses (917,367) 1,021,884
Participants' deposits 11,331,534 14,368,984
Income taxes payable 1,235,116
Accrued compensation (2,403,600)
----------- -----------
Net cash provided by
operating activities 12,578,070 7,648,754
----------- -----------
Cash flows from investing activities:
Purchase of property, plant and
equipment (215,333) (193,597)
Proceeds from sale of property, plant
and equipment 1,220
Investment in joint venture (262,500)
Cash received from acquisitions of
subsidiaries, net of cash paid 147,314
Maturity (acquisition) of investment 5,000
Payments received on notes receivable 88,657 1,058
Payments on sale of building 896,063
Origination of notes receivable (87,500)
----------- -----------
Net cash provided by (used
in) investing activities (323,142) 703,524
----------- -----------
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
Ambassadors International, Inc.
Consolidated Statements of Cash Flows (Unaudited), Continued
for the three months ended June 30, 1996 and 1995
1996 1995
----------- -----------
Cash flows from financing activities:
Deferred offering costs $ (133,003)
Stockholder notes payable payments (76,690)
Origination of receivables from
stockholders (1,820,000)
Notes receivable issued to stockholder (2,000,000)
Payments received on stockholder note
receivable 2,000,000
Payments of long-term debt $ (4,262) (4,774)
----------- -----------
Net cash used in financing
activities (4,262) (2,034,467)
----------- -----------
Net increase in cash and cash
equivalents 12,250,666 6,317,811
Cash and cash equivalents, beginning
of period 12,974,252 6,633,578
----------- -----------
Cash and cash equivalents, end of
period $25,224,918 $12,951,389
=========== ===========
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
AMBASSADORS INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The consolidated financial statements included herein have been
prepared by Ambassadors International, Inc. (the Company), without
audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote
disclosures, normally included in financial statements prepared in
accordance with generally accepted accounting principles, have
been condensed or omitted as permitted by such rules and
regulations. The Company believes the disclosures included herein
are adequate; however, these consolidated statements should be
read in conjunction with the financial statements and the notes
thereto for the year ended December 31, 1995 previously filed with
the Securities and Exchange Commission on Form 10-KSB.
In the opinion of management, these unaudited, consolidated
financial statements contain all of the adjustments (normal and
recurring in nature) necessary to present fairly the consolidated
financial position of the Company at June 30, 1996, the
consolidated results of operations for the three- and six-month
periods ended June 30, 1996 and 1995 and the consolidated cash
flows for the six-month periods ended June 30, 1996 and 1995. The
results of operations for the periods presented may not be
indicative of those which may be expected for the full year.
2. PRINCIPLES OF CONSOLIDATION
The Company was incorporated in the state of Washington in 1967
and was reincorporated on August 4, 1995 in the state of Delaware.
The consolidated financial statements include the accounts of
Ambassadors International, Inc., its subsidiary, Ambassador
Programs, Inc. (API) and in 1996, the Company's or API's
subsidiaries, The Helin Organization and American People
Ambassador Programs. All significant intercompany accounts and
transactions are eliminated in consolidation.
3. INCOME TAXES
From January 1, 1994 through August 4, 1995, Ambassadors
International, Inc., was treated for federal income tax purposes
as an S corporation under Subchapter S of the Internal Revenue
Code. As a result, the Company's earnings for such period were
taxed at the stockholder level. Beginning August 5, 1995, the
Company's earnings have been taxed as a C corporation and
provisions for income taxes have been provided in the Company's
consolidated financial statements.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
3. INCOME TAXES, CONTINUED
For the three and six months ended June 30, 1996, the Company
recorded the following income tax provisions:
Six Months Ended Three Months Ended
June 30, 1996 June 30, 1996
---------------- ------------------
Current $1,235,115 $1,235,115
Deferred 454,666 1,215,388
---------- ----------
$1,689,781 $2,450,503
========== ==========
The Company's income tax provision is provided at the estimated
annual effective income tax rate.
4. PRO FORMA STATEMENT OF INCOME INFORMATION
The pro forma statements of income for the three- and six-month
periods ended June 30, 1995 present the pro forma effects on the
historical information to record income taxes. An income tax
provision has been recorded to reflect income taxes at statutory
rates applied to the pro forma income before income taxes as if
the Company were taxed as a C corporation rather than an S
corporation.
5. 1996 ACQUISITIONS
On January 29, 1996, the Company acquired all of the outstanding
common stock of The Helin Organization, which is located in
Newport Beach, California. The Helin Organization is a meeting
management and incentive travel company and has become a separate
division of the Company.
On February 7, 1996, API acquired the assets of American People
Ambassador Programs (APAP). APAP has offices in Winnebago,
Illinois and Birmingham, Alabama and provides adult travel
programs that are very similar to the Company's adult programs.
The former president of APAP has entered into an employment
agreement with API and will continue to market the APAP programs.
These companies were acquired for $200,000 cash, shares of the
Company's common stock and contingent consideration. The
contingent consideration is dependent upon the success of one of
the subsidiary's travel programs. These acquisitions have been
accounted for using the purchase method of accounting. The
Company recorded goodwill of approximately $973,000 in connection
with these acquisitions. The goodwill is being amortized over 10
years on a straight-line basis. A portion of the contingent
consideration will be accounted for as goodwill and will be
amortized accordingly when, and if, the contingency is removed and
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
5. 1996 ACQUISITIONS, CONTINUED
additional consideration is paid. Another portion of the
contingent consideration will be accounted for as compensation
expense when, and if, paid. The results of operations of the
acquired companies is included in the 1996 operations from the
respective dates of their acquisitions. Assuming the companies
had been acquired on January 1, 1995, revenue of the Company
would have been approximately $18.5 million for the year ended
December 31, 1995. Net income and pro forma earnings per share
would not have been materially different than as previously
reported by the Company for 1995.
Although the Company is pursuing additional acquisitions, no
definitive agreements have been reached. The Company expects to
complete one or more acquisitions before the end of this fiscal
year; however, there can be no assurance that any such
acquisitions will be consummated, and if consummated, there can be
no assurance that any acquisition will result in profits to the
Company.
6. INVESTMENT IN JOINT VENTURE
During the second quarter of 1996, the Company acquired a 15%
interest in a joint venture for $262,500. The joint venture's
purpose is the acquisition of preferred stock (which represents
18.4% of the total outstanding stock) of a private company. The
Company's president is the joint venture's representative on the
board of directors of the private company.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of Operation
This Quarterly Report on Form 10-QSB contains forward-looking
statements. A forward-looking statement may contain words such as
"will continue to be," "will be," "continue to," "expect to,"
"anticipates that," "to be" or "can impact." Management cautions that
forward-looking statements are subject to risks and uncertainties that
could cause the Company's actual results to differ materially from
those projected in forward-looking statements.
COMPARISON OF THREE MONTHS ENDED JUNE 30, 1996 TO THE THREE MONTHS
ENDED JUNE 30, 1995
During the first quarter of 1996, the Company and its subsidiary
acquired two other companies which operate travel programs. Although
these companies contributed to the gross program receipts and revenue
of the consolidated group in the first six months of 1996, due to the
timing of the acquisitions and future changes which management plans
to make to the operations of these companies, management believes that
the future contribution of these two acquisitions will increase.
GROSS PROGRAM RECEIPTS AND REVENUES
-----------------------------------
Gross program receipts increased from $23.3 million in the second
quarter of 1995 to $27.9 million in the second quarter of 1996. This
increase can be principally attributed to a 27% increase in the number
of API program participants and the acquisitions of the Helin
Organization (Helin) and American People Ambassador Programs (APAP) in
the first quarter of 1996. The number of program participants
traveling during the second quarter of 1996 was 7,622 compared to
5,895 in the comparable 1995 period. A core business of the Company
is the Student Ambassador Programs which primarily travel in June.
During 1996, 6,148 students traveled under these programs compared to
5,394 students in 1995. This increase in program participants was the
principal reason for the increase in gross program receipts for the
second quarter of 1996 in comparison to the second quarter of 1995.
The 19% increase in gross program receipts, coupled with a slightly
lower proportional increase in program costs, resulted in a 22%
increase in revenues from $8.2 million in 1995 to $10.0 million in
1996.
SELLING AND TOUR PROMOTION EXPENSES
-----------------------------------
The Company's policy is to expense all selling and tour promotion
costs as they are incurred.
For the second quarter of 1996, selling and tour promotion expenses
were $1.6 million compared to $1.3 million in the prior year. This
increase is principally the result of the Helin and APAP acquisitions
and the assumption of their marketing costs, as well as modest
increases in marketing efforts for API programs.
<PAGE>
GENERAL AND ADMINISTRATIVE EXPENSES
-----------------------------------
General and administrative expenses increased from $1.0 million in
1995 to $1.5 million in 1996. This increase is primarily due to costs
associated with the aforementioned companies and increased
professional fees related to being a publicly-held company versus a
privately-held company.
OTHER INCOME/EXPENSE
--------------------
Other income primarily consists of foreign currency gains or losses
and interest income. Other income and expense increased $0.1 million
in the second quarter of 1996 in comparison to the second quarter of
1995. The majority of this increase can be attributed to increased
interest income earned on cash received from the initial public
offering in August 1995.
INCOME TAXES
------------
Due to the change in status from an S Corporation to a C Corporation
in August 1995, the Company has recorded an income tax provision of
approximately $2.5 million for the quarter ended June 30, 1996 in
comparison to no income tax provision for the quarter ended June 30,
1995. The 1996 income tax provision is based on the estimated annual
effective tax rate. The pro forma income tax provision for the second
quarter of 1995 assumes the Company was a C Corporation during the
quarter and reflects the federal statutory tax rate of 34% is applied
to income before income taxes.
NET INCOME AND EARNINGS PER SHARE
---------------------------------
The above factors resulted in the Company reporting net income of $4.8
million or $0.72 per share for the second quarter of 1996 compared to
pro forma net income of $4.0 million or $0.81 per share in the
comparable 1995 quarter.
SEASONALITY
-----------
Due to the seasonality of the core business of Ambassadors
International, Inc., the first and fourth quarters of the fiscal year
have significantly fewer programs traveling than the second and third
quarters of the year. Thus, the net income reported in the second
quarter of 1996 may not be representative of future quarters.
COMPARISON OF SIX MONTHS ENDED JUNE 30, 1996 TO THE SIX MONTHS ENDED
JUNE 30, 1995
GROSS PROGRAM RECEIPTS AND REVENUES
-----------------------------------
Gross program receipts increased from $23.9 million in 1995 to $ 30.1
million in 1996. This increase can be principally attributed to the
increase in the number of program participants and the acquisition of
Helin and APAP in the first quarter of 1996.
<PAGE>
The number of program participants traveling during the six months
increased from 6,019 in 1995 to 8,526 in 1996. This 42% increase in
program participants was the principal cause of the 27% increase in
revenues for the first six months of 1996 in comparison to the same
period in 1995.
SELLING AND TOUR PROMOTION EXPENSES
-----------------------------------
Selling and tour promotion expenses for the first six months of 1996
increased from 1995 by $1.0 million. This increase can be primarily
attributed to additional expenses incurred by Helin and APAP.
GENERAL AND ADMINISTRATIVE EXPENSES
-----------------------------------
General and administrative expenses increased from $2.1 million for
the first six months of 1995 to $2.8 million for the first six months
of 1996. This increase is principally due to costs associated with
the aforementioned companies and increased professional fees related
to being a publicly-held company versus a privately-held company.
OTHER INCOME/EXPENSE
--------------------
Other income primarily includes foreign currency gains or losses and
interest income. Other income increased $0.4 million for the first
six months of 1996 in comparison to the same period in 1995. The
majority of this increase can be attributed to the interest income
earned on cash received from the initial public offering.
Additionally, the Company recognized a $0.3 million gain on its
foreign currency financial instruments in the first half of 1996.
The Company enters into forward foreign exchange contracts and foreign
currency option contracts to offset certain operational exposures from
changes in foreign currency exchange rates. These foreign exchange
contracts and options are entered into to support normal recurring
purchases, and accordingly, are not entered into for speculative
purposes. Forward foreign exchange contracts are utilized to manage
the risk associated with currency fluctuations on certain purchase
commitments. The Company is exposed to credit risk under the forward
contracts and options to the extent that the counterparty is unable to
perform under the agreement. The Company anticipates hedging the
majority of its foreign currency risk in future periods. There can be
no assurance that the Company s hedging strategies will be successful
in mitigating the impact of foreign currency fluctuations. Most of
the Company's forward contracts and options matured prior to June 30,
1996 as funds were needed for summer travel programs. The face amount
of forward foreign exchange contracts outstanding at June 30, 1996 was
$2.1 million.
<PAGE>
INCOME TAXES
------------
Due to the change in status from an S Corporation to a C Corporation
in 1995, the Company has recorded an income tax provision of
approximately $1.7 million for the six months ended June 30, 1996 in
comparison to no income tax provision for the six months ended
June 30, 1995. The 1996 income tax liability is based on the
estimated annual effective tax rate. Pro forma income tax expense for
1995 assumes the Company was a C Corporation during the quarter and
reflects the federal statutory tax rate of 34% applied to income
before income taxes.
NET INCOME AND EARNINGS PER SHARE
---------------------------------
The above factors resulted in the Company reporting net income of $3.3
million or $0.50 per share for the six months ended June 30, 1996
compared to pro forma net income of $2.7 million or $0.53 per share
for the comparable 1995 period.
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
The Company s business is not capital intensive. However, the Company
does retain funds for operating purposes in order to conduct sales and
marketing efforts for future programs and to facilitate acquisitions
of other companies.
Net cash provided by operations for the six months ended June 30, 1995
and 1996, respectively, was approximately $7.6 million and $12.6
million. The increase in cash flows from 1995 to 1996 can be
attributed to the timing of cash receipts from participants and the
elimination of approximately $2.4 million of incentive compensation
which was paid in 1995 and did not recur in 1996.
During the six months ended June 30, 1996, the Company invested
$262,500 in a joint venture (see Note 6 to the consolidated financial
statements).
Capital expenditures, of approximately $0.2 million were funded from
operations. The Company does not have any material capital
expenditure commitments for the ensuing year. However, the Company is
continuing to pursue further acquisitions of related travel businesses
that will require some of its available cash and cash equivalents.
The Company had no significant long- or short-term debt as of
June 30, 1996. The Company has a credit facility available with
Seafirst Bank for $12.0 million (U.S.) for foreign currency purchases
and forward contracts.
At June 30, 1996, the Company had approximately $25.3 million of cash
and cash equivalents. Management believes cash flows from operations
will be sufficient to fund the Company s anticipated operating needs,
capital expenditures and acquisitions for the ensuing year.
<PAGE>
FOREIGN CURRENCY; HEDGING POLICY
---------------------------------
The substantial majority of the Company s programs take place outside
of the United States and most foreign suppliers require payment in
their own currency rather than U.S. dollars. Accordingly, the Company
is exposed to foreign currency risks in certain countries as foreign
currency exchange rates between those currencies and the U.S. dollar
fluctuate. In 1993, the Company initiated a program to hedge against
these foreign currency risks in the currencies of countries in which
the largest amount of program pass-through expenses are denominated in
foreign currency. To hedge against foreign currency risks, the
Company has used forward contracts which allow the Company to acquire
the foreign currency at a fixed price for a specified period of time.
The Company also uses foreign currency call options which provide the
Company with the option to acquire certain foreign currencies at a
fixed exchange rate and time period. Concurrent with the purchase of
a foreign currency call option, the Company sells a foreign currency
put option to minimize the net premium paid for the call option. The
strike prices on these options generally straddle the exchange rate at
the time the options are purchased and sold. Additionally, the
Company purchases futures contracts to similarly hedge its foreign
currency risk. The Company is exposed to credit risk under the
forward contracts and options to the extent that the counterparty is
unable to perform under the agreement. The Company anticipates
hedging the majority of its foreign currency risk in future periods.
There can be no assurance that the Company s hedging strategies will
be successful in mitigating the impact of foreign currency
fluctuations.
NEW ACCOUNTING PRONOUNCEMENT
----------------------------
In October 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 123 (SFAS No. 123),
"Accounting for Stock-Based Compensation." The Statement establishes
financial accounting and reporting standards for stock-based employee
compensation plans. The Statement encourages all entities to adopt a
fair value based method of accounting, but allows an entity to
continue to measure compensation cost for those plans using the
intrinsic value method of accounting prescribed by APB Opinion No. 25,
"Accounting for Stock Issued to Employees." The Company adopted the
disclosure requirements only of SFAS No. 123 on January 1, 1996.
Items 1, 2, 3 and 5 are not presented as they are not applicable.
Item 4. Submission of Matters to a Vote of Security Holders
At the annual meeting of shareholders on May 3, 1996, the shareholders
elected the following directors:
For Against
--------- -------
Rafer Johnson 4,450,777 100
John C. Spence 4,450,777 100
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
Exhibits: 27 - Financial Data Schedule
Reports on Form 8-K:
NONE
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
AMBASSADORS INTERNATIONAL, INC.
Date: August 12, 1996 By:
----------------------------------
Jeffrey D. Thomas,
Chief Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 25280
<SECURITIES> 137
<RECEIVABLES> 188
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 30425
<PP&E> 3158
<DEPRECIATION> (1773)
<TOTAL-ASSETS> 33131
<CURRENT-LIABILITIES> 18026
<BONDS> 0
0
0
<COMMON> 66
<OTHER-SE> 14925
<TOTAL-LIABILITY-AND-EQUITY> 33131
<SALES> 0
<TOTAL-REVENUES> 10550
<CGS> 0
<TOTAL-COSTS> 6353
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4970
<INCOME-TAX> (1690)
<INCOME-CONTINUING> 3280
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3280
<EPS-PRIMARY> 0.5
<EPS-DILUTED> 0
</TABLE>
