Ambassadors International, Inc. Announces Extension of Exchange Offer for
3.75% Convertible Senior Notes Due 2027 and Announces Third Quarter 2009
Results
SEATTLE, Nov. 4 /PRNewswire-FirstCall/ -- Ambassadors International, Inc. (the
"Company") (Nasdaq: AMIE) announced today that it is extending its previously
announced exchange offer (the "Exchange Offer") for any and all of the
Company's $97 million of outstanding 3.75% Convertible Senior Notes due 2027,
CUSIP Nos. 023178AA4 and 023178AB2 (the "Convert Notes"). The Company also
announced its financial results for the third quarter ended September 30,
2009.
Extension of Exchange Offer
The new expiration date for the Exchange Offer is 5:00 p.m., New York City
time, on Thursday, November 12, 2009, unless further extended or earlier
terminated by the Company at its discretion. Tenders of Convert Notes must be
made before the Exchange Offer expires and may be withdrawn at any time before
the Exchange Offer expires. To receive the consideration in the Exchange
Offer, holders must validly tender and not withdraw their Convert Notes prior
to the expiration date.
Concurrently with the Exchange Offer, the Company is also soliciting consents
(the "Consent Solicitation") to remove certain covenants and make certain
other amendments to the indenture for the Convert Notes. The Company is also
extending the expiration date for the Consent Solicitation so that it is
concurrent with the expiration date for the Exchange Offer.
To date, the Company has received tenders and consents from holders of
approximately $66 million in aggregate principal amount (or approximately 68%)
of the outstanding Convert Notes.
The terms of the Exchange Offer are amended as set forth in this press
release. The Company reserves the right to terminate, withdraw or amend the
Exchange Offer and Consent Solicitation at any time, subject to applicable
law.
Further details about the terms, conditions, risk factors, tax considerations
and other factors that should be considered in evaluating the Exchange Offer
and Consent Solicitation are set forth in a Schedule TO, which includes an
Offer to Exchange and Consent Solicitation (the "Offer to Exchange") and
related materials which were filed with the SEC on September 25, 2009 and
distributed to holders of the Convert Notes. The Schedule TO is amended by the
Amendment No. 1 to Schedule TO, filed with the SEC on October 23, 2009 and the
Amendment No. 2 to Schedule TO filed with the SEC on November 4, 2009. Before
any holder tenders Convert Notes or otherwise makes any decision with respect
to the Exchange Offer and Consent Solicitation, such holder is urged to read
the Schedule TO, including the Offer to Exchange and the related materials,
and any amendments to such documents, when they become available, and the
documents that are incorporated by reference into such documents, because they
contain important information. These materials are available free of charge at
the SEC's website -- www.sec.gov. In addition, copies of the Offer to Exchange
and the related Letter of Transmittal and Consent and other documents are
available free of charge to holders of the Company's outstanding Convert Notes
from the information agent (the "Information Agent") for the Exchange Offer
and Consent Solicitation, Globic Advisors at (212) 227-9699.
The Exchange Offer and Consent Solicitation are being made solely by means of
the above referenced documents. This press release is for informational
purposes only and is neither an offer to sell or purchase, nor a solicitation
of an offer to buy or sell, any securities of the Company. The shares of
Common Stock and New Notes issuable in the Exchange Offer have not been and
will not be registered under the Securities Act of 1933, as amended (the
"Securities Act"), or any state securities law and, unless so registered, may
not be offered or sold except pursuant to an exemption from, or in a
transaction not subject to, the registration requirements of the Securities
Act and applicable state securities laws. None of the Company or its
affiliates, the Information Agent or any other person or entity is making any
recommendation as to whether or not holders should tender their Convert Notes
in connection with the Exchange Offer.
Third Quarter 2009 Results
For the three months ended September 30, 2009, operating revenues totaled
$17.4 million, a reduction of $41.3 million, from $58.7 million reported
during the three months ended September 30, 2008. Operating expenses were
$12.6 million for the three months ended September 30, 2009, a reduction of
$26.8 million, from $39.4 million during the 2008 prior period. The majority
of the decrease in revenue and operating expenses is related to Majestic
America Line, which has not operated during 2009, and the wind down of the
Travel and Events segment of the Company.
Operating income (loss) from continuing operations totaled $(31.9) million for
the third quarter of 2009 compared to $9.0 million for the comparable period
last year. The current quarter includes previously announced non-cash
impairment charges of approximately $32.0 million for the quarter ended
September 30, 2009, of which $27.7 million relate to the Company's Windstar
Cruises vessels and $4.3 million relate to its Majestic America Line vessels.
Management concluded that the Exchange Offer and other developments during the
quarter qualified as a triggering event under Financial Accounting Standards
Board, Accounting Standards Codification 360-10, Property, Plant, and
Equipment, which provides that a long-lived asset (asset group) should be
tested for recoverability whenever events or changes in circumstances
(triggering events) indicate that its carrying amount may not be recoverable.
As a result of this determination, the Company conducted an impairment
analysis of its long-lived assets including its Windstar Cruises and Majestic
America Line assets in the quarter ended September 30, 2009. Operating income
during the current quarter also includes a $1.2 million settlement under a
business interruption insurance claim related to a prior period Majestic
incident.
Net loss for the third quarter was $34.7 million as compared to net income of
$9.0 million during the third quarter of 2008.
Nine Months 2009 Results
For the nine months ended September 30, 2009, revenue was $48.8 million, down
$86.6 million, from revenue of $135.4 million for the comparable period last
year. Operating expenses for the nine months ended September 30, 2009 were
$37.1 million, down $59.4 million, from $96.5 million for the comparable
period last year. The majority of the decrease in revenue and operating
expenses was related to Majestic America Line which was not in operation
during the current year.
Operating income (loss) from continuing operations totaled $(57.3) million for
the nine months ended September 30, 2009 compared to $(4.9) million for the
comparable period last year. The current year includes non-cash impairment
charges of $27.7 million for the Company's Windstar Cruises vessels and $18.3
million related to the Company's Majestic America Line. Year to date results
also reflect a $2.7 million write down related to our Travel and Events
segment during the first quarter of 2009. The Company is currently in a wind
down stage for the Travel and Events segment.
Net loss was $68.2 million for the nine months ended September 30, 2009 as
compared to a net loss of $6.4 million for the nine months ended September 30,
2008. Summary of business segment information (unaudited) is as follows:
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2009 2008 2009 2008
---- ---- ---- ----
(in thousands) (restated) (restated)
Revenue from continuing
operations:
Cruise $16,961 $54,308 $46,415 $122,746
Travel and events 476 4,356 2,424 12,690
--- ----- ----- ------
Revenue from continuing
operations $17,437 $58,664 $48,839 $135,436
------- ------- ------- --------
Operating income
(loss) from
continuing operations:
Cruise $493 $5,394 $(6,124) $(7,838)
Windstar and Majestic vessel
impairment/disposal (31,992) 3,100 (45,992) 3,100
Travel and events 385 1,600 (2,734) 3,012
Corporate and other (776) (1,059) (2,469) (3,181)
------ ------- ------- -------
Operating income
(loss) from continuing
operations $(31,890) $9,035 $(57,319) $(4,907)
-------- ------ -------- -------
Selected Windstar Cruises operations statistical information is as
follows:
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2009 2008 2009 2008
---- ---- ---- ----
Passengers Carried 7,273 7,482 18,892 20,320
Occupancy Percentage 92.0% 94.7% 83.9% 88.6%
Passenger Cruise Days 50,911 52,374 133,828 145,269
Available Passenger Cruise Days 55,328 55,328 159,544 163,912
Restatement of 2008 Statement of Operations
The Company has restated its consolidated statement of operations for the year
ended December 31, 2008. The loss on the disposal of two Majestic America
Line vessels was previously reported as outside of operating expenses in other
income and expense within the statement of operations. Following the
restatement, the $7.0 million loss is included within cost and operating
expenses within the operating loss from continuing operations. This
restatement resulted in no changes in loss from continuing operations or net
loss for the period.
Ambassadors International, Inc.
Condensed Consolidated Balance Sheets (in thousands, except share
and per share data)
September 30, December 31,
2009 2008
---- ----
(unaudited)
Assets:
Current assets:
Cash and cash equivalents $6,645 $10,105
Restricted cash 9,486 16,625
Accounts and other receivables,
net of allowance of $42 at
September 30, 2009 and $20 at
December 31, 2008 2,450 2,367
Inventory 5,828 3,522
Prepaid costs and other current assets 1,509 1,839
Assets held for sale 4,750 28,593
----- ------
Total current assets 30,668 63,051
Property, vessels and equipment, net 71,649 130,461
Goodwill - 6,275
Other intangibles, net 7,282 7,282
Deferred income taxes 746 746
Other assets 978 541
--- ---
Total assets $111,323 $208,356
======== ========
Liabilities:
Current liabilities:
Accounts payable $9,697 $15,664
Passenger and participant deposits 4,956 11,186
Accrued expenses 13,616 17,221
Current portion of long term debt 948 948
Deferred income taxes 746 746
Liabilities related to assets
held for sale - 14,978
--- ------
Total current liabilities 29,963 60,743
Passenger deposits 485 -
Long term debt net of discount
of $8,107 at September 30, 2009
and $12,436 at December 31,
2008, respectively 88,893 86,679
------ ------
Total liabilities 119,341 147,422
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value;
2,000,000 shares authorized;
none issued - -
Common stock, $.01 par value;
40,000,000 shares authorized;
11,173,267 shares issued and
outstanding at September 30,
2009 and December 31, 2008,
respectively 109 108
Additional paid-in capital 110,938 111,245
Accumulated other comprehensive income 1 453
Accumulated deficit (119,066) (50,872)
-------- -------
Total stockholders' equity (deficit) (8,018) 60,934
------- ------
Total liabilities and
stockholders' equity $111,323 $208,356
======== ========
Ambassadors International, Inc.
Condensed Consolidated Statements of Operations (unaudited)
(in thousands, except per share data)
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2009 2008 2009 2008
---- ---- ---- ----
(restated) (restated)
Revenues:
Passenger ticket revenue $13,551 $45,884 $37,532 $102,649
Onboard and other cruise
revenue 3,410 8,424 8,883 20,097
Travel, incentive and event
related 476 4,356 2,424 12,690
--- ----- ----- ------
17,437 58,664 48,839 135,436
Costs and operating expenses:
Cruise operating expenses:
Compensation and benefits 2,111 8,402 6,293 21,652
Passenger expenses 932 3,191 2,706 7,554
Materials and services 6,158 19,381 18,588 46,499
Repairs and maintenance 1,750 3,892 5,581 9,842
Commissions and other cruise
operating expenses 1,641 4,553 3,964 10,908
----- ----- ----- ------
12,592 39,419 37,132 96,455
Selling and tour promotion 1,448 1,798 5,646 10,832
General and administrative 2,010 7,979 7,959 25,743
Impairment charge 31,992 - 48,675 -
Business interruption
insurance claim (1,175) - (1,175) -
Gain on disposal of vessel - (3,100) - (3,100)
Depreciation and amortization 2,460 3,533 7,921 10,413
----- ----- ----- ------
49,327 49,629 106,158 140,343
------ ------ ------- -------
Operating income
(loss) from continuing
operations (31,890) 9,035 (57,319) (4,907)
Other income (expense):
Interest and dividend income 3 109 47 649
Interest expense (1,670) (2,114) (5,004) (6,782)
Other, net (110) 1,068 296 1,603
----- ----- --- -----
(1,777) (937) (4,661) (4,530)
------ ----- ------- -------
Income (loss) from continuing
operations before income
taxes (33,667) 8,098 (61,980) (9,437)
Income tax provision
(benefit) - 22 (191) (1,412)
--- --- ----- -------
Income (loss) from
continuing operations (33,667) 8,076 (61,789) (8,025)
Income (loss) from
discontinued operations,
net of tax (1,067) 959 (6,404) 1,628
------- --- ------- -----
Net income (loss) $(34,734) $9,035 $(68,193) $(6,397)
======== ====== ======== =======
Ambassadors International, Inc.
Condensed Consolidated Statements of Operations (unaudited)
(in thousands, except per share data)
Three Months Nine Months
Ended September 30, Ended September 30,
------------------- -------------------
2009 2008 2009 2008
---- ---- ---- ----
(restated) (restated)
Earnings (loss) per share
from continuing operations:
Basic $(3.08) $0.74 $(5.53) $(0.74)
Diluted $(3.08) $0.64 $(5.53) $(0.74)
Weighted-average common
shares outstanding:
Basic 10,918 10,888 11,184 10,889
Diluted 10,918 12,622 11,184 10,889
Earnings (loss) per share
from discontinued operations:
Basic $(0.10) $0.09 $(0.57) $0.15
Diluted $(0.10) $0.08 $(0.57) $0.15
Weighted-average common
shares outstanding:
Basic 10,918 10,888 11,184 10,889
Diluted 10,918 12,622 11,184 10,889
Earnings (loss) per share:
Basic $(3.18) $0.83 $(6.10) $(0.59)
Diluted $(3.18) $0.72 $(6.10) $(0.59)
Weighted-average common
shares outstanding:
Basic 10,918 10,888 11,184 10,889
Diluted 10,918 12,622 11,184 10,889
About Ambassadors International, Inc.
Ambassadors International, Inc. is primarily a cruise company. The Company
operates Windstar Cruises, an international, luxury cruise line. The Company
is transitioning its headquarters from Newport Beach, California to Seattle,
Washington. In this press release, any reference to "Company," "Ambassadors,"
"management," "we," "us" and "our" refers to Ambassadors International, Inc.
and its management team.
Forward-Looking Statements
This press release contains forward-looking statements, including, without
limitation, statements regarding the timing and terms of the Exchange Offer
and Consent Solicitation and similar matters, and the Company's business that
involve various risks and uncertainties. The forward-looking statements
contained in this release are based on our current expectations and entail
various risks and uncertainties that could cause our actual results to differ
materially from those suggested in our forward-looking statements. We believe
that such risks and uncertainties include, among others, failure to consummate
successfully the Exchange Offer and Consent Solicitation or otherwise
restructure our outstanding debt; adverse conditions in the capital markets;
our ability to obtain stockholder approval in connection with the Exchange
Offer and Consent Solicitation; changes in federal or state securities laws;
our ability to effectively divest our non-strategic divisions; general
economic and business conditions; overall conditions in the cruise, travel and
insurance industries; potential claims related to our reinsurance business;
further declines in the fair market value of our investments; lower investment
yields; unexpected events that disrupt the operations of our cruise
operations; environmental related factors; our ability to compete effectively
in the U.S. and international cruise markets; our ability to identify
attractive acquisition targets and consummate future acquisitions on favorable
terms; our ability to estimate accurately contract risks; our ability to
service our debt and other factors discussed more specifically in our annual,
quarterly and current reports filed with the SEC on Forms 10-K, 10-Q and 8-K.
We are providing this information as of the date of this release and do not
undertake any obligation to update any forward-looking statements contained in
this document as a result of new information, future events or otherwise.
Additional Information
For further information, please contact Tammy Smolkowski of Ambassadors
International, Inc. at (206) 292-9606.
SOURCE Ambassadors International, Inc.
Tammy Smolkowski of Ambassadors International, Inc., +1-206-292-9606
