UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM 10-Q
(Mark One)
[X] QUARTERLY report pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1999
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 April 30, 1999: 9,652,060
<PAGE>
AMBASSADORS INTERNATIONAL, INC.
FORM 10-Q QUARTERLY REPORT
Table of Contents
PART I FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements (unaudited)
Consolidated Balance Sheets
Consolidated Statements of Operations
Consolidated Statements of Comprehensive Loss
Consolidated Statements of Cash Flows
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
AMBASSADORS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
March 31, 1999 and December 31, 1998
March 31, December 31,
1999 1998
------------ ------------
ASSETS
Current assets:
Cash and cash equivalents $ 57,688,581 $ 55,289,580
Restricted cash equivalents 152,000 152,000
Investments 49,130,499 37,659,994
Accounts receivable 6,130,294 4,371,898
Prepaid program costs and expenses 8,756,849 4,637,121
Other assets 88,730 159,158
------------ ------------
Total current assets 121,946,953 102,269,751
Property and equipment, net 4,497,789 4,199,889
Other investments 3,156,806 462,500
Goodwill, net of $1,532,584 and
$1,285,950 of accumulated amortization 20,130,824 20,401,794
Covenants-not-to-compete, net of
$423,239 and $370,047 of accumu-
lated amortization 251,761 254,953
Other assets 141,717 142,897
------------ ------------
Total assets $150,125,850 $127,731,784
============ ============
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
AMBASSADORS INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS (UNAUDITED), CONTINUED
March 31, 1999 and December 31, 1998
March 31, December 31,
1999 1998
------------ ------------
LIABILITIES AND STOCKOLDERS' EQUITY
Current liabilities:
Accounts payable $ 4,561,202 $ 2,348,759
Accrued expenses 1,252,471 942,047
Participants' deposits 40,242,209 15,742,697
Customer advances 691,824 744,077
Note payable, current portion 188,826 185,851
Foreign currency exchange contracts 461,003 289,322
Deferred income taxes 224,500 284,957
------------ ------------
Total current liabilities 47,622,035 20,537,710
Note payable due after one year 136,434 145,243
------------ ------------
Total liabilities 47,758,469 20,682,953
------------ ------------
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, 9,690,521
and 9,915,534 shares 96,905 99,155
Additional paid-in capital 86,657,036 90,043,060
Retained earnings 15,906,498 17,088,888
Accumulated other comprehensive loss (293,058) (182,272)
------------ ------------
Total stockholders' equity 102,367,381 107,048,831
------------ ------------
Total liabilities and stock-
holders' equity $150,125,850 $127,731,784
============ ============
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
AMBASSADORS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)
for the three months ended March 31, 1999 and 1998
1999 1998
----------- -----------
Revenues $ 4,980,000 $ 3,020,714
----------- -----------
Operating expenses:
Selling and tour promotion 3,942,474 2,745,125
General and administrative 4,406,807 2,806,352
----------- -----------
8,349,281 5,551,477
----------- -----------
Operating loss (3,369,281) (2,530,763)
----------- -----------
Other income (expense):
Interest expense (323) (5,367)
Interest and dividend income 954,981 315,372
Realized and unrealized gain
(loss) on investments (1,251) 162,817
Other, net 594,010 747
------------ -----------
1,547,417 473,569
----------- -----------
Loss before income taxes (1,821,864) (2,057,194)
Income tax benefit 639,474 761,162
----------- -----------
Net loss $(1,182,390) $(1,296,032)
=========== ===========
Net loss per share - basic and diluted $ (0.12) $ (0.19)
=========== ===========
Weighted-average common shares out-
standing - basic and diluted 9,830,833 6,888,501
=========== ===========
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
AMBASSADORS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
for the three months ended March 31, 1999 and 1998
1999 1998
----------- -----------
Net loss $(1,182,390) $(1,296,032)
Unrealized losses on available-for-
sale investments (110,786) --
----------- -----------
Comprehensive loss $(1,293,176) $(1,296,032)
=========== ===========
The accompanying notes are an integral part of the consolidated
financial statements.
<PAGE>
AMBASSADORS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
for the three months ended March 31, 1999 and 1998
1999 1998
----------- -----------
Cash flows from operating activities:
Net loss $(1,182,390) $(1,296,032)
Adjustments to reconcile net loss
to net cash provided by operating
activities:
Depreciation and amortization 616,762 343,815
(Gain) loss on investments 1,251 (162,817)
Loss on disposal of property and
equipment 20,035 --
Change in assets and liabilities,
net of effects of purchases of
subsidiaries:
Accounts receivable (1,758,396) 959,819
Prepaid program costs and
expenses (4,119,728) (2,980,567)
Other assets 70,428 (4,292)
Accounts payable and accrued
expenses 2,522,867 (547,395)
Participants' deposits 24,499,512 16,556,626
Customer advances (52,253) (88,692)
----------- -----------
Net cash provided by
operating activities 20,618,088 12,780,465
----------- -----------
Cash flows from investing activities:
Purchase of property and equipment (634,871) (162,960)
Purchase of available-for-sale
securities (17,789,281) --
Proceeds from sale of available-for-
sale securities 6,317,963
Purchase of other investments (2,655,035) --
Net cash paid for acquisition of
subsidiaries (273,607) (5,375,264)
Payment for covenant-not-to-compete
agreement (50,000) (50,000)
Change in other assets 1,180 --
----------- -----------
Net cash used in investing
activities (15,083,651) (5,588,224)
----------- -----------
<PAGE>
AMBASSADORS INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED), CONTINUED
for the three months ended March 31, 1999 and 1998
1999 1998
----------- -----------
Cash flows from financing activities:
Payments on long-term debt $ (5,834) $ (48,872)
Proceeds from exercise of stock
options 62,898 13,751
Purchase and retirement of common
stock (3,192,500) --
----------- -----------
Net cash used in financing
activities (3,135,436) (35,121)
----------- -----------
Net increase in cash and cash
equivalents 2,399,001 7,157,120
Cash and cash equivalents, beginning
of period 55,289,580 22,870,546
----------- -----------
Cash and cash equivalents, end of
period $57,688,581 $30,027,666
=========== ===========
Noncash investing and financing
activities:
Estimated market value of common
shares issued for acquisition of
subsidiaries $ -- $ 3,443,438
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, 1998 previously filed with
the Securities and Exchange Commission on Form 10-K.
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 March 31, 1999 and the
consolidated results of operations, comprehensive loss and cash
flows for the three-month periods ended March 31, 1999 and 1998.
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 founded in 1967 and was reincorporated in Delaware
in 1995. The Company's Education Group represented the entire
operations of the Company until 1996 when the Performance Group
commenced operations.
The consolidated financial statements include the accounts of
Ambassadors International, Inc. (the Company) and its
subsidiaries. All significant intercompany accounts and
transactions are eliminated in consolidation.
3. INCOME TAXES
For the three months ended March 31, 1999 and 1998, the Company
recorded an income tax benefit of approximately $639,000 and
$761,000, respectively, to reflect the benefit of the net
operating loss at the estimated effective income tax rate.
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
4. LOSS PER SHARE:
Net loss per share - basic is computed by dividing net loss by the
weighted-average number of common shares outstanding during the
period. Net loss per share - diluted is computed by increasing
the weighted-average number of common shares outstanding by the
additional common shares that would have been outstanding if the
dilutive potential common shares had been issued.
The following table presents a reconciliation of basic and diluted
earnings per share (EPS) computations and the number of dilutive
securities (stock options) that were not included in the dilutive
EPS computation because they were antidilutive.
March 31,
-------------------------
1999 1998
----------- -----------
Numerator:
Net loss for basic and diluted
earnings per share $(1,182,390) $(1,296,032)
=========== ===========
Denominator:
Weighted-average shares outstanding -
basic 9,830,833 6,888,501
Effect of dilutive common stock
options (A) (A)
----------- -----------
Weighted-average shares outstanding -
diluted 9,830,833 6,888,501
=========== ===========
Net loss per share - basic and
diluted $ (0.12) $ (0.19)
=========== ===========
(A) For the three months ended March 31, 1999 and 1998,
respectively, the effects of 111,388 and 224,859 stock
options have been excluded from the calculation of diluted
loss per share because their effects would be anti-dilutive.
5. BUSINESS SEGMENTS:
The Company operates the Education Group segment and the
Performance Group segment. Corporate and other consists of
general corporate and other activities which are not directly
related to the Education or Performance Groups. Selected
financial information related to these segments is as follows:
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS, CONTINUED
5. BUSINESS SEGMENTS, CONTINUED:
<TABLE>
<CAPTION>
Education Performance Corporate
Group Group and Other Total
---------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
March 31, 1999
-------------------
Revenue $ 259,160 $ 4,698,814 $ 22,026 $ 4,980,000
=========== =========== =========== ===========
Operating income (loss) $(2,935,821) $ 309,238 $ (742,698) $(3,369,281)
=========== =========== =========== ===========
March 31, 1998
-------------------
Revenue $ 801,556 $ 2,219,158 $ -- $ 3,020,714
=========== =========== =========== ===========
Operating income (loss) $(1,985,697) $ 15,249 $ (560,315) $(2,530,763)
=========== =========== =========== ===========
</TABLE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
This Quarterly Report on Form 10-Q 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 MARCH 31, 1999 TO THE THREE MONTHS
ENDED MARCH 31, 1998
In 1998, the Company acquired five companies. In February 1998,
Ambassadors Performance Group (APG or the Performance Group) acquired
certain of the assets of Rogal America Co. and also merged with Travel
Incentives, Inc. APG and Incentive Associates, Inc. merged in April
1998, and APG also acquired the assets of Destination, Inc. in July
1998. All of these acquisitions were included in the Performance
Group's results of operations as of their respective dates of
acquisition.
In May 1998, Ambassadors Specialty Group acquired the assets of
International Golf Safaris and included the acquisition in the
Company's results of operations as of the date of acquisition.
GROSS PROGRAM RECEIPTS
----------------------
Gross program receipts increased to $16.5 million in the first quarter
of 1999 from $9.4 million in the first quarter of 1998. This $7.1
million increase is the result of a number of acquisitions the
Performance Group made in 1998. This resulted in a number of new
customers and programs, which lead to this higher volume of sales.
NET REVENUE
-----------
Net revenue increased to $5.0 million in the first quarter of 1999
from $3.0 million in 1998. This $2.0 million increase is due to the
effect of increased programs and revenue from the Company's
acquisitions during 1998, combined with maintaining consistently
strong gross margins of 30% of net revenues.
SELLING AND TOUR PROMOTION EXPENSES
-----------------------------------
The Company's policy is to expense all selling and tour promotion
costs as they are incurred.
Selling and tour promotion expenses increased to $3.9 million in the
quarter ended March 31, 1999 from $2.7 million in the comparable
quarter of 1998. This increase is the result of the 1998 acquisitions
and the assumption of the marketing and selling expenses of those
companies to support an increased customer and revenue base.
<PAGE>
GENERAL AND ADMINISTRATIVE EXPENSES
-----------------------------------
General and administrative expenses increased to $4.4 million in the
first quarter of 1999 from $2.8 million during the quarter ended
March 31, 1998. This increase is primarily due to the acquisitions in
1998 and the assumption of the related general and administrative
expenses associated with supporting an increased number of programs.
OTHER INCOME/EXPENSE
--------------------
Other income in 1999 consisted primarily of interest income generated
by cash and cash equivalents. As of March 31, 1999, the Company had
$106.8 million in cash, cash equivalents and short term investments.
These interest earning assets are primarily attributable to the
Company's secondary offering of common stock in April 1998, in which
the Company realized net proceeds of $70.3 million. As a result, the
Company realized interest income of $0.9 million in the first quarter
of 1999, compared to $0.3 million in the comparable quarter of 1998,
an increase of $0.6 million.
Other income also included unrealized foreign currency gains or losses
during 1998. 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. Beginning July 1, 1998, the Company
adopted the provisions of Statement of Financial Accounting Standards
No. 133 (SFAS 133), "Accounting for Derivative Instruments and Hedging
Activities." Therefore, the effective portion of any unrealized gains
or losses on foreign exchange contracts are no longer recorded in
other income, but are recorded as other comprehensive income and are
accumulated as a component of stockholders' equity. Realized gains
and losses on these contracts are recorded as a cost of the related
travel program when the contracts mature and are utilized. Prior to
July 1, 1998, all unrealized gains and losses on foreign exchange
contracts and options were recorded in the statement of operations as
other income or expense.
In the first quarter of 1999, the Company purchased a minority
interest in connection with the acquisition by a group of investors of
all of the capital stock of Scheduled Airlines Traffic Offices, Inc.
The Company received a consulting fee related to this transaction.
The Company also entered into a management agreement as part of this
purchase, whereby the Company receives quarterly management consulting
fees. The consulting fee and quarterly management consulting fee have
been included in other income.
<PAGE>
INCOME TAXES
------------
The Company has recorded an income tax benefit of approximately $0.6
million for the quarter ended March 31, 1999 in comparison to a $0.8
million tax benefit for the quarter ended March 31, 1998. Income tax
benefits have been recorded based upon the estimated effective income
tax rate applied to the pre-tax loss.
SEASONALITY
-----------
Due to the seasonality of Ambassadors Education Group's (AEG's or the
Education Group's) business, the first quarter of the fiscal year has
significantly fewer programs traveling than the other quarters of the
year. Thus, the Company budgeted and incurred a net loss of
approximately $1.2 million or $0.12 per share in the first quarter of
1999 compared to a $1.3 million net loss or $0.19 per share in the
comparable 1998 quarter.
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 quarters ended March 31, 1999
and 1998 was approximately $20.6 million and $12.8 million,
respectively. The increase in operating cash flows from 1998 to 1999
can be attributed to the advanced timing and increased volume of cash
receipts from Education Group participants and the increase in program
participation from companies which the Performance Group acquired in
1998.
Net cash used in investing activities for the quarters ended March 31,
1999 and 1998 was $15.1 million and $5.6 million, respectively. The
net cash used in investing activities increased in 1999 primarily due
to the net increase in investments. The Company does not have any
material capital expenditure commitments for 1999. However, the terms
of the Company's acquisitions of certain businesses include contingent
consideration. Additionally, the Company is continuing to pursue
further acquisitions of related travel and performance improvement
businesses that may require the use of cash and cash equivalents. No
such acquisitions are currently pending and no assurance can be given
that definitive agreements for any such acquisitions will be entered
into, or, if they are entered into, that they will be on terms
favorable to the Company.
The Company has a credit facility available with Seafirst Bank, with a
current limit of up to $50.0 million for foreign currency purchases
and forward contracts. This credit facility is renewable annually.
<PAGE>
In November 1998, the Board of Directors of the Company authorized the
repurchase of the Company's common stock (up to an approved amount) in
the open market or through private transactions. This repurchase
program is ongoing. The Company does not believe that any such
repurchases will have a significant impact on the Company's liquidity.
At March 31, 1999, the Company had approximately $57.7 million of cash
and cash equivalents, including program participant funds of $40.2
million. Under the Company's cancellation policy, a program
participant may be entitled to a refund of a portion of his or her
deposit, less certain fees, depending on the time of cancellation.
Management believes that existing cash and cash equivalents and cash
flows from operations will be sufficient to fund the Company's
anticipated operating needs, capital expenditures, stock repurchases
and acquisitions at least for the ensuing year.
FOREIGN CURRENCY; HEDGING POLICY
---------------------------------
The substantial majority of the Company's travel programs take place
outside the United States and most foreign suppliers require payment
in currency other than the U.S. dollar. Accordingly, the Company is
exposed to foreign currency risk relative to changes in foreign
currency exchange rates between those currencies and the U.S. dollar.
The Company has a program to provide a hedge against certain of these
foreign currency risks. The Company uses forward contracts which
allow the Company to acquire the foreign currency at a fixed price for
a specified period of time. Additionally, the Company 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. Concurrently 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. The Company also purchases futures contracts to
similarly hedge its foreign currency risk. The Company is exposed to
credit risk under the foreign currency contracts and options to the
extent that the counterparty is unable to perform under the agreement.
The fair value of foreign currency exchange contracts is based on
quoted market prices and the spot rate of the foreign currencies
subject to contracts at year end. The fair value of the foreign
currency options is based on the estimated amount to terminate the put
and call contracts with the counterparties at period end.
YEAR 2000 COMPLIANCE
--------------------
The Company has a comprehensive Year 2000 project designed to identify
and assess the risks associated with its information systems,
products, operations and infrastructure, suppliers, and customers that
are not Year 2000 compliant, and to develop, implement, and test
remediation and contingency plans to mitigate these risks. The
project comprises four phases: (1) identification of risks, (2)
assessment of risks, (3) development of remediation and contingency
<PAGE>
plans, and (4) implementation and testing. The Company's Year 2000
project is currently in the development of remediation and remediation
phases. The Company has been storing years as a four-digit field in
all mission critical databases since 1995 and believes that its
internal master records are Year 2000 compliant. Most of the software
which the Company uses, including all of its finance software, has
been certified as Year 2000 compliant. In addition, the Company is in
the process of obtaining Year 2000 compliance statements from the
manufacturers of the Company's hardware and software products. These
compliance statements are expected to be obtained by September 1999.
AEG's internally generated client databases are Year 2000 compliant.
APG's hardware, operating systems, applications software and
internally-generated data requires additional assessment and
remediation for Year 2000 compliance. The assessment phase has been
completed. It is expected that APG's remediation efforts will be
greater than those required by AEG, including the replacement of
certain APG hardware,operating system upgrades and a small amount of
applications software upgrades. This remediation is expected to be
completed by June 1999. The Company's voicemail software is not Year
2000 complaint. The Company intends to upgrade this software to a
Year 2000 compliant version by the end of 1999. The cost of this
upgrade is not expected to be material.
The Company believes that its greatest potential risks are associated
with (i) its information systems and systems embedded in its
operations and infrastructure; and (ii) its reliance on Year 2000
compliance by the Company's vendors and suppliers. The Company is at
the beginning stage of assessments for its operations and
infrastructure and cannot predict whether significant problems will be
identified. The Company is asking its vendors and suppliers to
complete a Year 2000 survey by the end of May 1999, to assess the
status of their compliance in order to assess the effect it could have
on the Company. The Company has not yet determined the full extent of
contingency planning that may be required. Based on the status of the
assessments made and remediation plans developed to date, the Company
is not in a position to state the total costs of remediation of all
Year 2000 issues. Costs identified to date have not been material.
The Company does not currently expect costs to be material, and it
expects to be able to fund the total costs through operating cash
flows. However, the Company has not yet completed its assessments,
developed remediation for all problems, developed any contingency
plans, or completely implemented or tested any of its remediation
plans.
Based on the Company's current analysis and assessment of the state of
its Year 2000 compliance, the Company's reasonably likely worst case
scenario involves booking delays of AEG and APG programs that would
take place later in 2000, and the more remote possibility of travel
interruptions for a small number of adult program participants
actually travelling on AEG millennium programs on and immediately
<PAGE>
after January 1, 2000. Both of these types of delays and
interruptions would arise as a result of third-party Year 2000
noncompliance (e.g., computerized airline and hotel booking systems),
rather than because of the Company's internal Year 2000 compliance.
As the Year 2000 project continues, the Company may discover
additional Year 2000 problems, may not be able to develop, implement,
or test remediation or contingency plans, or may find that the costs
of these activities exceed current expectations and become material.
In many cases, the Company is relying on assurances from suppliers
that new and upgraded information systems and other products will be
Year 2000 compliant. The Company plans to test such third-party
products by June 30, 1999, but cannot be sure that its tests will be
adequate or that, if problems are identified, they will be addressed
in a timely and satisfactory way. Because the Company uses a variety
of informational systems and has additional systems embedded in its
operations and infrastructure, the Company cannot be sure that all of
its systems will work together in a Year 2000 compliant fashion.
Furthermore, the Company cannot be sure that it will not suffer
business interruptions, either because of its own Year 2000 problems
or those of its customers or suppliers whose Year 2000 problems may
make it difficult or impossible for them to fulfill their commitments
to the Company. If the Company fails to satisfactorily resolve the
Year 2000 issues related to its products in a timely manner, it could
be exposed to liability to third parties. The Company is continuing
to evaluate Year 2000-related risks and will take such further
corrective actions as may be required.
PART II - OTHER INFORMATION
Items 1, 2, 3, 4 and 5 are not presented as they are not applicable.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits: 27 - Financial Data Schedule
(b) Reports on Form 8-K:
No reports on Form 8-K were filed for the three months
ended March 31, 1999.
<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: May 14, 1999 By: /s/Jeffrey D. Thomas
------------------------------------
Jeffrey D. Thomas,
Chief Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-1999
<CASH> 57689
<SECURITIES> 49130
<RECEIVABLES> 6130
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 121947
<PP&E> 7606
<DEPRECIATION> (3108)
<TOTAL-ASSETS> 150126
<CURRENT-LIABILITIES> 47622
<BONDS> 136
0
0
<COMMON> 97
<OTHER-SE> 102270
<TOTAL-LIABILITY-AND-EQUITY> 150126
<SALES> 4980
<TOTAL-REVENUES> 4980
<CGS> 8349
<TOTAL-COSTS> 8349
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1822)
<INCOME-TAX> (639)
<INCOME-CONTINUING> (1182)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1182)
<EPS-PRIMARY> (0.12)
<EPS-DILUTED> (0.12)
</TABLE>
