10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ QUARTERLY report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended June 30, 2015

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 0-33347

Ambassadors Group, Inc.

(Exact name of registrant as specified in its charter)

 

Delaware	91-1957010
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

157 S. Howard, Suite 601 Spokane, WA	99201
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s Telephone Number, Including Area Code: (509) 568-7800

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
☐	No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

☑	Yes
☐	No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

☐	Large accelerated  filer
☐	Accelerated filer
☐	Non-accelerated filer (Do not check if a smaller reporting company)
☑	Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐	Yes
☑	No

The number of shares outstanding of the registrant’s Common Stock, $0.01 par value, as of August 10, 2015 was 17,139,091.

AMBASSADORS GROUP, INC.

FORM 10-Q QUARTERLY REPORT

TABLE OF CONTENTS

		Page
PART I – FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)
	Consolidated Balance Sheets	1
	Consolidated Statements of Operations	2
	Consolidated Statements of Comprehensive Income (Loss)	3
	Consolidated Statements of Cash Flows	4
	Notes to Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	15
Item 4.	Controls and Procedures	19
PART II – OTHER INFORMATION
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	20
Item 6.	Exhibits	20
SIGNATURES		21
EXHIBIT INDEX

PART I

FINANCIAL INFORMATION

Item1. FINANCIAL STATEMENTS

AMBASSADORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of June 30, 2015 and December 31, 2014

(in thousands, except share and per share data)

	UNAUDITED			AUDITED
	June 30 2015			December 31 2014
ASSETS
Current assets:
Cash and cash equivalents	$	6,929		$	2,002
Restricted cash		-			400
Available-for-sale securities		63,962			59,502
Foreign currency exchange contracts		2			-
Prepaid program costs and expenses		12,203			1,335
Accounts receivable		405			666
Total current assets		83,501			63,905
Property and equipment, net		1,442			2,429
Goodwill		70			70
Other long-term assets		37			81
Total assets	$	85,050		$	66,485
LIABILITIES
Current liabilities:
Accounts payable and accrued expenses	$	4,431		$	2,794
Participants’ deposits		33,219			23,161
Foreign currency exchange contracts		326			1,345
Deferred tax liabilities		17			18
Other liabilities		187			1
Total current liabilities		38,180			27,319
Participants’ deposits		87			-
Deferred tax liabilities		6			6
Total liabilities		38,273			27,325
Commitments and Contingencies (Note 11)
STOCKHOLDERS’ EQUITY
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued and outstanding		-			-
Common stock, $.01 par value; 50,000,000 shares authorized; 17,067,907 and 16,944,812 shares issued and outstanding, respectively		173			173
Additional paid-in capital		2,045			1,630
Retained earnings		44,936			38,334
Accumulated other comprehensive loss		(377	)		(977	)
Stockholders’ equity		46,777			39,160
Total liabilities and stockholders’ equity	$	85,050		$	66,485

The accompanying notes are an integral part of the consolidated financial statements.

1

AMBASSADORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

For the three and six months ended June 30, 2015 and 2014

(in thousands, except per share amounts)

	Three months ended June 30						Six months ended June 30
	2015			2014			2015			2014
Net revenue, non-directly delivered programs	$	16,525		$	18,092		$	16,619		$	18,208
Gross revenue, directly delivered programs		2,956			3,565			3,132			3,838
Total revenue		19,481			21,657			19,751			22,046
Cost of sales, directly delivered programs		1,826			2,234			1,954			2,443
Cost of sales, program merchandise markdown		-			554			-			554
Gross margin		17,655			18,869			17,797			19,049
Operating expenses:
Selling and marketing		3,064			5,827			7,593			12,500
General and administrative		1,429			3,307			3,746			6,228
Restructuring costs		-			1,431			-			1,539
Asset impairments		45			2,000			45			2,000
Total operating expenses		4,538			12,565			11,384			22,267
Operating income (loss)		13,117			6,304			6,413			(3,218	)
Other income:
Interest and dividend income		157			141			286			273
Foreign currency and other income (expense)		(60	)		5			(97	)		8
Total other income		97			146			189			281
Income (loss) before income tax provision from continuing operations		13,214			6,450			6,602			(2,937	)
Income tax provision		-			(1,815	)		-			(259	)
Net income (loss) from continuing operations		13,214			4,635			6,602			(3,196	)
Discontinued operations:
Loss from discontinued segment		-			(9,830	)		-			(9,494	)
Income tax benefit		-			1,010			-			954
Net loss from discontinued operations		-			(8,820	)		-			(8,540	)
Net Income (Loss)	$	13,214		$	(4,185	)	$	6,602		$	(11,736	)
Weighted-average common shares outstanding - basic		17,298			17,047			17,291			16,789
Weighted-average common shares outstanding - diluted		17,377			17,159			17,423			16,789
Discontinued operations weighted-average common shares outstanding - basic and diluted		n/	a		16,823			n/	a		16,789
Net income (loss) from continuing operations per share - basic	$	0.76		$	0.27		$	0.38		$	(0.19	)
Net income (loss) from continuing operations per share - diluted	$	0.76		$	0.27		$	0.38		$	(0.19	)
Net loss from discontinued operations per share - basic and diluted	$	-		$	(0.52	)	$	-		$	(0.51	)
Total net income (loss) per share - basic and diluted	$	0.76		$	(0.25	)	$	0.38		$	(0.70	)

The accompanying notes are an integral part of the consolidated financial statements.

2

AMBASSADORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)

For the three and six months ended June 30, 2015 and 2014

(in thousands)

	Three months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Net income (loss)	$	13,214		$	(4,185	)	$	6,602		$	(11,736	)
Unrealized gain on foreign currency exchange contracts, net of income tax provision of $0, ($69), $0 and $0		1,814			229			922			357
Unrealized gain (loss) on available-for-sale securities, net of income tax benefit of $0, $62, $0 and $0		(252	)		153			(322	)		267
Comprehensive income (loss)	$	14,776		$	(3,803	)	$	7,202		$	(11,112	)

The accompanying notes are an integral part of the consolidated financial statements.

3

AMBASSADORS GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

For the six months ended June 30, 2015 and 2014

(in thousands)

	Six months ended June 30,
	2015			2014
Cash flows from operating activities:
Net income (loss)	$	6,602		$	(11,736	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization		1,100			2,977
Stock-based compensation		466			1,168
Deferred income tax benefit		-			(805	)
Gain on foreign currency exchange contracts		(99	)		-
Impairment and loss on sale of discontinued operations		-			9,711
Loss on disposition and impairment of property and equipment, other assets		390			2,000
Program merchandise writedown		-			554
Excess tax shortfall from stock-based compensation		-			109
Change in assets and liabilities:
Accounts receivable and other assets		261			368
Prepaid program costs and expenses		(10,868	)		(11,403	)
Accounts payable, accrued expenses, and other current liabilities		1,822			3,542
Participants’ deposits		10,145			16,503
Net cash provided by operating activities		9,819			12,988
Cash flows from investing activities:
Purchase of available-for-sale securities		(14,783	)		(24,517	)
Proceeds from sale of available-for-sale securities		10,000			13,861
Purchase of property and equipment		(488	)		(952	)
Proceeds from sale of property and equipment		30			-
Purchase of intangibles		-			(146	)
Proceeds from sale of BookRags, Inc.		400			-
Net cash used in investing activities		(4,841	)		(11,754	)
Cash flows from financing activities:
Repurchase of common stock		(51	)		(186	)
Excess tax shortfall from stock-based compensation		-			(109	)
Net cash used in financing activities		(51	)		(295	)
Net increase in cash and cash equivalents		4,927			939
Cash and cash equivalents, beginning of period		2,002			9,473
Cash and cash equivalents, end of period	$	6,929		$	10,412

The accompanying notes are an integral part of the consolidated financial statements.

4

AMBASSADORS GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. The Company

Ambassadors Group, Inc. (the “Company”, “we”, “us” or “our”) is an educational company primarily engaged in organizing and promoting differentiated worldwide travel programs for students and professionals.  On July 13, 2015, we announced our plan to cease operations and close our student and adult travel business by the end of 2015. On August 11, 2015, our board of directors reached the conclusion that it is in the best interests of the shareholders to dissolve and liquidate the Company, subject to shareholder approval. For additional information, see Note 12 of Notes to Consolidated Financial Statements.

These consolidated financial statements include the accounts of Ambassadors Group, Inc., and our wholly owned subsidiaries, Ambassador Programs, Inc., and Ambassadors Unlimited, LLC. All significant intercompany accounts and transactions, which are of a normal recurring nature, are eliminated in consolidation.

Through September 2014, we operated an education oriented research website, BookRags.com, which provided study guides, lesson plans, and other educational resources to students and teachers.  This business was operated by BookRags, Inc. (“BookRags”) our then wholly-owned subsidiary.  In September 2014, we consummated the sale of the BookRags subsidiary.  All activities related to BookRags have been reflected as discontinued operations for all periods presented.  For additional information, see Note 8 of Notes to Consolidated Financial Statements.

2. Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being materially misleading. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2015 are not indicative of the results that may be expected for the year ending December 31, 2015.

It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014.

As noted above, on July 13, 2015, we announced our plan to cease operations and close our student and adult travel business by the end of 2015, and on August 11, 2015, our board of directors approved dissolution of the Company, subject to shareholder approval .  Assuming our plan of liquidation is approved by our shareholders in the third quarter of 2015, we will apply liquidation accounting.  For additional information, see Note 12 of Notes to Consolidated Financial Statements.

3. Recent Accounting Pronouncements

Management has assessed the impact of recently issued, but not yet effective, accounting standards and determined that the provisions are either not applicable to us, or are not anticipated to have a material impact on our consolidated financial statements.

4. Investments and Fair Value Measurements

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, we consider the principal or most advantageous market, and we consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance.

Our financial instruments are measured and recorded at fair value. Our non-financial assets, including property and equipment and goodwill, are measured at fair value upon acquisition, reviewed at least annually for impairment, and are fully assessed if there is an indicator of impairment. An adjustment would be made to the fair value of non-financial assets if an impairment charge is recognized.

5

AMBASSADORS GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – (Continued)

Fair value is determined for assets and liabilities using a three-tiered hierarchy, based upon significant levels of inputs as follows:

- Level 1 – Quoted prices in active markets for identical assets or liabilities.

- Level 2 – Observable inputs, other than Level 1 prices, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

- Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The below tables summarize the composition of our investments at June 30, 2015 and December 31, 2014 (in thousands).  For both periods, all investments have been recorded to short-term available-for-sale securities on the consolidated balance sheet.

June 30, 2015	Amortized Cost		Unrealized  Losses			Aggregate Fair Value
Short term municipal securities funds1	$	64,302	$	(340	)	$	63,962
Total	$	64,302	$	(340	)	$	63,962

December 31, 2014	Amortized Cost		Unrealized Losses			Aggregate  Fair Value
Short term municipal securities funds1	$	59,520	$	(18	)	$	59,502
Total	$	59,520	$	(18	)	$	59,502

¹ Do not have a set maturity date.

6

AMBASSADORS GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following tables detail the fair value measurements of assets and liabilities within the three levels of the fair value hierarchy at June 30, 2015 and December 31, 2014 (in thousands):

			Fair Value Measurements at Reporting Date Using
June 30, 2015	Fair Market Value		Level 1		Level 2		Level 3
Financial assets:
Municipal securities1		63,962		63,962		-		-
Foreign currency exchange contracts		2		-		2		-
Total financial assets	$	63,964	$	63,962	$	2	$	-
Financial liabilities:
Foreign currency exchange contracts		326		-		326		-
Total financial liabilities	$	326	$	-	$	326	$	-

December 31, 2014	Fair Market Value		Level 1		Level 2		Level 3
Financial assets:
Municipal securities1		59,502		59,502		-		-
Foreign currency exchange contracts		14		-		14		-
Total financial assets	$	59,516	$	59,502	$	14	$	-
Financial liabilities:
Foreign currency exchange contracts		1,359		-		1,359		-
Total financial liabilities	$	1,359	$	-	$	1,359	$	-

¹ At June 30, 2015 and December 31, 2014, municipal securities consisted solely of holdings in short-term municipal security funds.

Municipal securities are classified as Level 1 assets because market prices are readily available for these investments. Level 2 financial assets and liabilities represent the fair value of our foreign currency exchange contracts that were valued using pricing models that take into account the contract terms, as well as multiple inputs where applicable, such as currency rates.

7

5. Derivative Financial Instruments

The majority of our travel programs take place outside of the United States, and most foreign suppliers require payment in currency other than the U.S. dollar. Accordingly, we are exposed to foreign currency risk relative to changes in foreign currency exchange rates between those currencies and the U.S. dollar for our non-directly delivered programs. We use forward contracts that allow us to acquire foreign currency at a fixed price for a specified point in time to provide a hedge against foreign currency risk. All of our derivatives are cash flow hedges and at June 30, 2015, all contracts qualified for cash flow hedge accounting.

For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income or loss and reclassified into earnings in the same period during which the hedged transaction is recognized in earnings; this is primarily during the second and third quarters of the year when our student travel programs occur. Gains or losses representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

At June 30, 2015, the following forward contracts were outstanding (in thousands):

	Notional Amount	Matures
Forward contracts:
Australian dollar	700	July 2015
Euro	1,705	July 2015
British pound	420	July 2015
New Zealand dollar	50	July 2015

The fair value of our forward contracts were as follows (in thousands):

	June 30, 2015
	Derivatives designated as hedging instruments				Total Net
	Assets		Liabilities		Liabilities
Forward contracts	$	2	$	326	$	324

	December 31, 2014
	Derivatives designated as hedging instruments				Total Net
	Assets		Liabilities		Liabilities
Forward contracts	$	14	$	1,359	$	1,345

The net asset and liability derivatives at June 30, 2015 and December 31, 2014 are reported in the consolidated balance sheets as current and long-term foreign currency exchange contracts.

6. Accumulated Other Comprehensive Income (Loss)

Unrealized gains or losses related to derivative securities are recorded in accumulated other comprehensive income (loss) (“AOCI”). The change in unrealized gains or losses related to derivative securities are recorded in other comprehensive income (loss) net of income taxes in the period the change occurred. When derivative securities designated as cash flow hedges are used to pay vendors, the effective portion of the hedge is reclassified into the statement of operations and recorded in net revenue, non-directly delivered programs.

8

Unrealized gains or losses related to available-for-sale securities are recorded in AOCI. The change in unrealized gains or losses related to available-for-sale securities are recorded in other comprehensive income net of income taxes in the period the change occurred. When securities are sold and a realized gain or loss is recognized, the amount is reclassified from AOCI to the statement of operations and recorded in interest and dividend income. During the six months ended June 30, 2015 and 2014, there were no realized gains or losses recognized in the statement of operations for the sale of investments.

For the three and six months ended June 30, 2015 and 2014, a summary of AOCI balances and gains (losses) recognized in OCI are as follows (in thousands):

	Accumulated Other Comprehensive Income (Loss)
	Derivative Securities						Available-for-sale securities
	Three months ended June 30,						Three months ended June 30,
	2015			2014			2015			2014
Balance, beginning of period	$	(2,034	)	$	(65	)	$	95		$	(243	)
Change before reclassification		1,814			185			(252	)		83
Reclassification into net revenue, non-directly delivered programs		-			(24	)		-			-
Reclassification into interest and dividend income											8
Effect of incomes taxes		-			69			-			62
Other comprehensive income (loss), net of income taxes		1,814			230			(252	)		153
Balance, end of period	$	(220	)	$	165		$	(157	)	$	(90	)

	Accumulated Other Comprehensive Income (Loss)
	Derivative Securities						Available-for-sale securities
	Six months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Balance, beginning of period	$	(1,142	)	$	(192	)	$	165		$	(357	)
Change before reclassification		1,021			381			(322	)		259
Reclassification into net revenue, non-directly delivered programs		(99	)		(24	)		-			-
Reclassification into interest and dividend income		-			-			-			8
Effect of incomes taxes		-			-			-			-
Other comprehensive income (loss), net of income taxes		922			357			(322	)		267
Balance, end of period	$	(220	)	$	165		$	(157	)	$	(90	)

7. Stock-Based Compensation

Under our Stock Incentive Plan (the “Plan”), we may grant stock-based incentive compensation awards to eligible employees and non-employee directors in the form of distribution equivalent rights, incentive stock options, non-qualified stock options, performance share awards, performance unit awards, restricted stock awards, restricted stock units awards, stock appreciation rights, tandem stock appreciation rights, unrestricted stock awards or any combination of the foregoing, as may be best suited to the circumstances of the particular employee, director or consultant. As of June 30, 2015, we had 1,622,590 shares authorized under the Plan available for future stock-based compensation.

9

Stock Options

Under the terms of the Plan, options to purchase shares of our common stock are granted at a price set by the Compensation Committee of the Board of Directors (the “Compensation Committee”). The Compensation Committee establishes the vesting period of the awards, which is generally set at 25 percent per year for four years. Options may be exercised any time after they vest for a period up to 10 years from the grant date.

The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option-pricing model.  Option valuation models require the input of highly subjective assumptions, particularly for the expected term and stock price volatility. The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and our experience. Our employee stock options do not trade on a secondary exchange; therefore, employees do not derive a benefit from holding stock options unless there is an appreciation in the market price of our stock above the grant price. Such an increase in stock price would benefit all shareholders commensurately.  No stock options were granted during the first six months of 2015.

A summary of option activity under the Plan as of June 30, 2015, and the changes during the six months then ended is presented below:

	Stock Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (years)
Outstanding at December 31, 2014		551,409		$	6.05
Granted		-			-
Forfeited / Expired		(178,589	)		5.75
Exercised		-			-
Outstanding at June 30, 2015		372,820		$	6.20		7.26
Exercisable at June 30, 2015		227,969		$	7.47		6.53

During the three and six months ended June 30, 2015, the total intrinsic value of stock options exercised was zero and the total fair value of options which vested was zero. During the three and six months ended June 30, 2014, the total intrinsic value of stock options exercised was zero and the total fair value of options which vested was $0.7 million. The aggregate intrinsic value of outstanding and exercisable stock options was zero, based on our $2.44 closing stock price at June 30, 2015.

Compensation expense recognized in the consolidated statement of operations for stock options was $40 thousand and $0.3 million for the three months ended June 30, 2015 and 2014, respectively, before the effect of income taxes. Compensation expense recognized in the consolidated statement of operations for stock options was $77 thousand and $0.4 million for the six months ended June 30, 2015 and 2014, respectively, before the effect of income taxes.

As of June 30, 2015, total unrecognized stock-based compensation expense related to non-vested stock options was approximately $0.1 million.

10

Restricted Stock Grants

Under the terms of the Plan, restricted stock awards and restricted stock units are granted by the Compensation Committee on the same terms as options. The Compensation Committee also establishes the vesting period of the awards.  The fair value of restricted stock awards and restricted stock units are based on the market price of our shares on the grant date.

A summary of the activity of non-vested restricted stock awards and restricted stock units under the Plan as of June 30, 2015, and the changes during the six months then ended is presented below:

	Restricted Stock Awards						Restricted Stock Units
	Restricted Stock Awards			Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Contractual Life (years)	Restricted Stock Units			Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Contractual Life (years)
Balance at December 31, 2014		341,637		$	2.83			82,572		$	4.17
Granted		31,251			-			165,000			2.55
Forfeited		(97,210	)		5.21			(95,836	)		3.22
Vested		(32,294	)		2.72			(35,726	)		3.08
Balance at June 30, 2015		243,384		$	2.60	1.24		116,010		$	2.98	1.83

At June 30, 2015, the aggregate value of non-vested restricted stock awards and restricted stock units was $0.6 million and $0.3 million, respectively, before applicable income taxes, based on a $2.44 closing stock price.  During the six months ended June 30, 2015 and 2014, the weighted-average grant date fair value of restricted stock awards which vested was $0.1 million and $0.9 million, respectively. Compensation expense recognized in the consolidated statement of operations for restricted stock awards and units was $0.3 million and $0.5 million for the six months ended June 30, 2015 and 2014, respectively, before the effect of income taxes.

As of June 30, 2015, total unrecognized stock-based compensation expense related to restricted stock awards and restricted stock units was approximately $0.5 million and $0.3 million, respectively.

Performance Stock Awards

Under the terms of the Plan, performance stock awards are granted by the Compensation Committee to key executive employees. Performance stock awards are based on achieving key internal metrics measured at the end of each fiscal year over a three year performance period. If performance objectives are achieved as determined by the Compensation Committee, common stock is granted. The fair value of these awards is determined on the date of grant based on our share price.

A summary of the activity of performance stock units under the Plan as of June 30, 2015, and the changes during the six months then ended is presented below:

	Performance Stock Units			Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Contractual Life (years)
Balance at December 31, 2014		229,315		$	2.50
Granted		165,000			2.55
Forfeited		(90,798	)		2.77
Vested		-			-
Balance at June 30, 2015		303,517		$	2.40	2.42

Performance stock units outstanding on June 30, 2015 are payable upon the achievement of certain internal metrics over various performance periods. Compensation expense recognized on the consolidated statement of operations for performance stock awards was $0.1 million for the six months ended June 30, 2015.  No compensation expense was recorded during the comparable 2014 period.  As of June 30, 2015, there was $0.5 million of unrecognized compensation expense related to unvested performance share unit awards.

11

8. Discontinued Operations

In September 2014, we consummated the sale of BookRags for $5.0 million.  All activities related to BookRags have been reflected as discontinued operations on our consolidated financial statements for the period ended June 30, 2014.  There were no discontinued operations for the three or six month periods ending June 30, 2015.

The following table summarizes the results of discontinued operations for the periods indicated (in thousands):

	Three months ended					Six months ended
	June 30, 2015		June 30, 2014			June 30, 2015		June 30, 2014
Total revenue	$	-	$	1,055		$	-	$	2,063
Gross margin	$	-	$	937		$	-	$	1,813
Selling & marketing expenses	$	-	$	332		$	-	$	653
General & administrative expenses	$	-	$	203		$	-	$	422
Restructuring costs	$	-	$	10,233		$	-	$	10,233
Operating loss from discontinued operations	$	-	$	(9,830	)	$	-	$	(9,494	)
Income tax benefit on discontinued operations	$	-	$	1,010		$	-	$	984
Net loss from discontinued operations	$	-	$	(8,820	)	$	-	$	(8,540	)

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9. Net Income (Loss) and Income (Loss) per Share

The following table presents a reconciliation of basic and diluted income (loss) per share computations (in thousands, except per share data):

	Three months ended June 30,					Six months ended June 30,
	2015		2014			2015		2014
Numerator:
Income (loss) from continuing operations	$	13,214	$	4,635			6,602		(3,196	)
Loss from discontinued operations		-		(8,820	)		-		(8,540	)
Net income (loss)	$	13,214	$	(4,185	)	$	6,602	$	(11,736	)
Denominator:
Weighted-average shares outstanding		17,028		16,823			16,990		16,789
Effect of unvested restricted stock awards considered participating securities		270		224			301		-
Weighted-average shares outstanding - basic		17,298		17,047			17,291		16,789
Effect of diluted restricted stock and performance share awards		79		112			132		-
Weighted-average shares outstanding – diluted		17,377		17,159			17,423		16,789
Income (loss) from continuing operations - basic		0.76		0.27			0.38		(0.19	)
Loss from discontinued operations - basic		-		(0.52	)		-		(0.51	)
Net income (loss) per share - basic	$	0.76	$	(0.25	)	$	0.38	$	(0.70	)
Income (loss) from continuing operations - diluted		0.76		0.27			0.38		(0.19	)
Loss from discontinued operations - diluted		-		(0.52	)		-		(0.51	)
Net income (loss) per share - diluted	$	0.76	$	(0.25	)	$	0.38	$	(0.70	)
Stock options, restricted stock units, restricted stock awards, and performance share awards excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive		443		774			447		799

10. Supplemental Disclosures of Consolidated Statements of Cash Flows

Our non-cash investing and financing activities during the six months ended June 30, 2015 and 2014 were as follows (in thousands):

	June 30, 2015			June 30, 2014
Unrealized gain on foreign currency exchange contracts	$	1,021		$	357
Unrealized gain (loss) on available-for-sale securities	$	(322	)	$	267

11.  Commitments and Contingencies

We are not a party to any material pending legal proceedings other than ordinary routine litigation incidental to our business, the outcome of which we believe will not have a material adverse effect on our business, financial condition, cash flows or results of operations.

We are subject to the possibility of various loss contingencies, including claims, suits and complaints, arising in the ordinary course of business. We consider the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted and whether new accruals are required.

13

Our directors and officers have certain rights to indemnification by us against certain liabilities that may arise by reason of their status or service as directors or officers. We maintain director and officer insurance, which covers certain liabilities arising from our obligation to indemnify our directors and officers and former directors in certain circumstances. No material indemnification liabilities were accrued at June 30, 2015.

12.  Subsequent Events

On July 13, 2015, we announced our plan to cease operations and close our student and adult travel business by the end of 2015. On August 11, 2015, our board of directors reached the conclusion that it is in the best interests of the shareholders to dissolve and liquidate the Company, subject to shareholder approval. The dissolution was unanimously approved by the board of directors and is subject to shareholder approval.

Over the past several years, we have experienced declining revenues and declining travelers and have explored strategic alternatives and alternative marketing models.  We have also been engaged in a lengthy and intensive evaluation of potential strategic alternatives in order to preserve and maximize shareholder value.  Those potential alternatives included pursuing a strategic transaction with a third party, such as a merger or sale, and dissolving the Company, winding down our remaining operations and distributing net assets to shareholders after making appropriate reserves for liabilities and expenses. 

In connection with the dissolution, we intend to distribute to shareholders all available cash other than as may be required to pay expenses and pay or make reasonable provision for known and potential claims and obligations as required by applicable law.

In a Form 8-K filed with the SEC on July 23, 2015, we disclosed our estimates of various cash and non-cash exit costs, including for severance and related compensation benefits, rent and other contract termination fees, acceleration of depreciation and other prepaid costs, and other associated costs related to its closing.  These amounts are estimated below and are not audited:

· Approximately $1.3 million to $2.4 million in severance costs, including $0.3 million in non-cash charges for the acceleration of equity awards under the terms of existing separation agreements;

· Non-cash charge of approximately $2.0 million in property and equipment and other asset write-downs;

· Estimated $0.6 million to $1.3 million in various contract termination fees, ongoing maintenance expenditures, and facility and business closure expenses; and

· Approximately $0.4 million to $0.8 million in estimated legal and other professional fees including estimated ongoing insurance costs.

We expect to recognize the majority of the charges in the third and fourth quarters of 2015, and no cost or expense associated with the business closure has been recognized in the current period financial statements.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our consolidated financial statements and the notes thereto included in this Quarterly Report on Form 10-Q.

Certain statements in this report, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act and Section 21E of the Securities Exchange Act. Forward-looking statements may appear throughout this report, including without limitation, statements in Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions that are subject to risks and uncertainties which may cause actual results to differ materially from the forward-looking statements. For a detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements, please refer to Item 1A Risk Factors disclosure in our Annual Report on Form 10-K filed on March 25, 2015. We undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise.

Ambassadors Group, Inc. is a provider of educational travel experiences engaged in the organization and promotion of worldwide educational travel programs. On July 13, 2015, we announced our plan to cease operations and close our student and adult travel business by the end of 2015, and on August 11, 2015, our board of directors approved dissolution of the Company, subject to shareholder approval.

Results of Operations

Comparison of the Three and Six Months Ended June 30, 2015 with the Three and Six Months Ended June 30, 2014

Consolidated financial results for the three and six months ended June 30, 2015 and 2014 were as follows (in thousands):

	Three Months Ended June 30,
	2015		2014			$ Change			% Change
Total revenue	$	19,481	$	21,657		$	(2,176	)		-10	%
Cost of goods sold		1,826		2,788			(962	)		-35	%
Gross margin		17,655		18,869			(1,214	)		-6	%
Selling and marketing expenses		3,064		5,827			(2,763	)		-47	%
General and administrative expenses		1,429		3,307			(1,878	)		-57	%
Restructuring costs		-		1,431			(1,431	)		-100	%
Asset impairments		45		2,000			(1,955	)		-98	%
Operating income		13,117		6,304			6,813			108	%
Other income		97		146			(49	)		-34	%
Income before income tax provision		13,214		6,450			6,764			105	%
Income tax provision		-		(1,815	)		1,815			100	%
Net income from continuing operations	$	13,214	$	4,635		$	8,579			185	%
Net loss from discontinued operations	$	-	$	(8,820	)		8,820			100	%

15

	Six Months Ended June 30,
	2015		2014			$ Change			% Change
Total revenue	$	19,751	$	22,046		$	(2,295	)		-10	%
Cost of goods sold		1,954		2,997			(1,043	)		-35	%
Gross margin		17,797		19,049			(1,252	)		-7	%
Selling and marketing expenses		7,593		12,500			(4,907	)		-39	%
General and administrative expenses		3,746		6,228			(2,482	)		-40	%
Restructuring costs		-		1,539			(1,539	)		-100	%
Asset impairments		45		2,000			(1,955	)		-98	%
Operating income (loss)		6,413		(3,218	)		9,631			299	%
Other income		189		281			(92	)		-33	%
Income (loss) before income tax provision		6,602		(2,937	)		9,539			325	%
Income tax provision		-		(259	)		259			100	%
Net income (loss) from continuing operations	$	6,602	$	(3,196	)	$	9,798			307	%
Net loss from discontinued operations	$	-	$	(8,540	)		8,540			100	%

During the second quarter of 2015, we traveled 7,142 delegates compared to 8,720 delegates during the prior year quarter primarily due to lower delegates traveled on our core Student Ambassadors programs.  In total, we anticipate travelling approximately 13,300 delegates during 2015, with 95% of the total traveled by the end of July.

Total revenue from continuing operations was $19.5 million compared to $21.7 million in the prior year quarter. Gross margin from continuing operations during the quarter was $17.7 million compared to $18.9 million in the second quarter of 2014, and gross margin percentage was 37.7 percent compared to 33.2 percent in the prior year period.  The improved gross margin percentage was primarily due to stronger foreign exchange rates compared to the prior year.  The prior year margin was also impacted negatively by an inventory write-down of $0.6 million.

During the six months ended June 30, 2015, we traveled 7,256 delegates compared to 8,903 delegates during the same period in the prior year.  Total revenue from continuing operations was $19.8 million compared to $22.0 million in the same period last year driven by the decline in travelers year-over-year.  Gross margin from continuing operations for the six months ended June 30, 2015 was $17.8 million from $19.0 million in the same period last year, with gross margin percentage at 37.7 percent compared to the prior year at 33.2 percent. The improved gross margin was due to the same factors described for the second quarter.

Second quarter operating expenses from continuing operations were $4.5 million compared to $12.6 million in the prior year period, an improvement of $8.1 million year-over-year.  The prior year period included a $2.0 million asset impairment charge and $2.1 million in restructuring costs from work force reductions and associated severance and separation expenses.  Operating expenditures during the comparable six month periods decreased $10.9 million year-over-year to $11.4 million recorded during the first six months of 2015.  Current period expenditures are lower due to less marketing spend, lower personnel expense based on headcount reductions, and lower overall spend across the organization year-over-year.

During the current three and six month periods, we did not record income tax expense as we have sufficient net operating loss carryforwards to offset against taxable income and we do not anticipate generating taxable income in excess of the amount of our available carryforwards.  The prior year periods include income tax provisions of $1.8 million for the three months ended June 30, 2014 and $0.3 million during the six month period ended June 30, 2014, respectively.

Prior to September 2014, we operated BookRags, an education oriented research website, which provided study guides, lesson plans and other educational resources to students and teachers. This wholly-owned subsidiary was sold in September 2014, and results of operations have been reflected as discontinued operations for all periods presented.

16

During the second quarter of 2015, we reported net income of $13.2 million, or $0.76 per diluted share, compared to a net loss of $4.2 million, or $0.25 per share, during the second quarter of 2014.  During the first six months of 2015, we reported net income of $6.6 million, or $0.38 per diluted share, compared to a net loss of $11.7 million, or $0.70 per share, in the same period in 2014.

Key Performance Non-GAAP Financial Indicators

We analyze our performance on a net income, cash flow and liquidity basis in accordance with GAAP as well as on a non-GAAP operating, cash flow and liquidity basis referred to below as “non-GAAP operating results” or “non-GAAP cash flows and liquidity measures.” These measures and related discussions are presented as supplementary information in this analysis to enhance the readers’ understanding of, and highlight trends in, our core financial results. Any non-GAAP financial measure used by us should not be considered in isolation or as a substitute for measures of performance or liquidity prepared in accordance with GAAP.

Deployable Cash

We use deployable cash as a liquidity measure calculated as the sum of cash, cash equivalents, short-term available-for-sale securities and prepaid program costs and expenses, less the sum of accounts payable, accrued expenses and other short-term liabilities (excluding deferred taxes) and participant deposits. We believe the deployable cash measurement is useful in understanding cash available to deploy for current and future business opportunities, as it represents an estimate of excess cash available for capital deployment. This non-GAAP measure is based on conservative assumptions, such as all participants’ deposits being forfeited, and should not be construed as the maximum amount of cash sources available to run our business.

Deployable Cash Reconciliation (in thousands)	Six months ended June 30,						December 31, 2014
Cash, cash equivalents and short-term available-for-sale securities	$	70,891		$	57,500		$	61,504
Prepaid program cost and expenses		12,203			17,918			1,335
Less: Participants’ deposits		(33,306	)		(42,865	)		(23,161	)
Less: Accounts payable / accruals / other liabilities		(4,618	)		(7,248	)		(2,794	)
Deployable cash	$	45,170		$	25,305		$	36,884

Free Cash Flow

Free cash flow is calculated as cash flow from operations less the purchase of property, equipment and intangible assets. Management believes this non-GAAP measure is useful to investors in understanding the cash generated or distributed within the current period for future use in operations.

Free Cash Flow Reconciliation (in thousands)	Six months ended June 30,
	2015				2014				$ Change
Net cash provided by operating activities			9,819				12,988				(3,169	)
Purchase of property, equipment and intangibles			(488	)			(1,098	)			610
Free cash flow		$	9,331			$	11,890			$	(2,559	)

Liquidity and Capital Resources

Total assets at June 30, 2015 were $85.1 million compared to $95.9 million at June 30, 2014.  Cash, cash equivalents and short-term available-for-sale securities increased $13.4 million to $70.9 million at June 30, 2015 compared to the balance at June 30, 2014.  Long-term assets totaled $1.5 million at June 30, 2015 compared to $19.0 million at June 30, 2014, a decrease driven primarily by the sale of our corporate headquarters building during the fourth quarter of 2014 and the sale of BookRags during the third quarter of 2014.  Total liabilities were $38.3 million, including $33.3 million in participant deposits for upcoming travel.

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Net cash provided by operations was $9.8 million during the six months ended June 30, 2015 compared to net cash provided by operations of $13.0 million during the six months ended June 30, 2014. This $3.2 million decrease was primarily due to lower participant deposits due to a lower delegate count compared to 2014, partially offset by improved profitability year-over-year. Net cash used in investing activities was $4.8 million during the first six months of 2015 compared to $11.8 million during the first six months of 2014.

On July 13, 2015, we announced our plan to cease operations and close our student and adult travel business by the end of 2015, and on August 11, 2015, our board of directors approved dissolution of the Company, subject to shareholder approval.  Over the past several years, we have experienced declining revenues and declining travelers and have explored strategic alternatives and alternative marketing models.  We have also been engaged in a lengthy and intensive evaluation of potential strategic alternatives in order to preserve and maximize shareholder value.

In connection with the dissolution, we intend to distribute to shareholders all available cash other than as may be required to pay expenses and pay or make reasonable provision for known and potential claims and obligations as required by applicable law.  If the proposal is approved by shareholders, we currently anticipate to make an initial liquidating distribution to shareholders of approximately $44.0 million up to $50.0 million, or between $2.50 and $2.85 per share.  We anticipate to make this initial liquidating distribution as soon as practicable following receipt of shareholder approval and filing of a certificate of dissolution.

Delaware law requires that, in connection with dissolution, our board of directors make reasonable provision for known and potential claims and obligations and maintain those reserves until resolution of such matters.  In a Form 8-K filed with the SEC on July 23, 2015, we disclosed our estimates of various cash and non-cash exit costs, including for severance and related compensation benefits, rent and other contract termination fees, acceleration of depreciation and other prepaid costs, and other associated costs related to closing.  These amounts are estimated below and are not audited:

· Approximately $1.3 million to $2.4 million in severance costs, including $0.3 million in non-cash charges for the acceleration of equity awards under the terms of existing separation agreements;

· Non-cash charge of approximately $2.0 million in property and equipment and other asset write-downs;

· Estimated $0.6 million to $1.3 million in various contract termination fees, ongoing maintenance expenditures, and facility and business closure expenses; and

· Approximately $0.4 million to $0.8 million in estimated legal and other professional fees including estimated ongoing insurance costs.

Insofar as the reserves required by applicable law exceed, in the view of the board of directors, the ultimate amounts we will likely be required to pay creditors, the board of directors believes it possible that a portion of the reserves will ultimately be distributed to shareholders.  The board of directors currently believes total aggregate distributions to shareholders could range between $44.0 million and $53.0 million, $2.50 and $3.00 per share.  The board of directors will evaluate our cash reserves on a periodic basis and will approve liquidating distributions when and as it deems appropriate.  Additional liquidating distributions will be made to the extent the required contingency reserves are released and upon non-cash assets being monetized, which would likely span a multi-year period.  Further details regarding anticipated future distributions will be disclosed in the proxy materials to be filed in connection with the special meeting.

The amount distributable to shareholders, both initially and in total, may vary substantially from the amounts currently estimated based on many factors, including the resolution of outstanding known claims and obligations, the possible assertion of claims that are currently unknown, the ability to receive reasonable value when selling or otherwise monetizing its assets, and costs incurred to wind down the business.  Further, if additional amounts are ultimately determined to be necessary to satisfy or make provision for any of these obligations, shareholders may receive substantially less than the current estimates.

18

Critical Accounting Policies and Estimates

The preparation of our consolidated financial statements requires us to make estimates and assumptions that affect the reported disclosures of assets, liabilities, revenue and expenses. Our estimates are based on our experience and our interpretation of economic, political, regulatory, and other factors that affect our business.  We consider that our most critical accounting estimates are related to the valuation of available-for-sale securities, foreign currency exchange contracts, revenue recognition, and contingencies and litigation as they require us to make assumptions that may be highly uncertain at the time the accounting estimates were made and changes in them are reasonably likely to occur from period to period.  There are other items within our consolidated financial statements that require estimation but are not deemed to be critical.  Changes in estimates used in these and other items could have a material impact on our consolidated financial statements. For a more complete discussion, please refer to our consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K filed on March 25, 2015.

Item 4. Controls and Procedures

(a) Evaluation of disclosure controls and procedures

As of June 30, 2015, the end of the period covered by this report, our chief executive officer and principal finance and accounting officer reviewed, evaluated and concluded that our disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e) and 15d-15(e)) were effective.  These controls and procedures are designed to ensure information required to be disclosed in our Form 10-Q filed or submitted under the Exchange Act is recorded, processed, summarized, and reported on a timely basis, and has been accumulated and communicated to our management including our interim chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.

(b) Changes in internal control over financial reporting

In the six months ended June 30, 2015, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

19

PART II

OTHER INFORMATION

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On various dates between May 2004 and May 2011, our Board of Directors authorized the repurchase of shares of our Common Stock in the open market or through private transactions (the “Repurchase Plan”). During the quarter ended June 30, 2015, there were no shares repurchased under the Repurchase Plan. As of June 30, 2015, approximately $13.1 million was available to repurchase shares of our Common Stock under the Repurchase Plan.

Item 6. Exhibits

31.1 Certification under Section 302 of the Sarbanes-Oxley Act of 2002. (1)

31.2 Certification under Section 302 of the Sarbanes-Oxley Act of 2002. (1)

32.1 Certification under Section 906 of the Sarbanes-Oxley Act of 2002. (2)

(1) Filed herewith.

(2) This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section.  Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

20

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 GROUP, INC.
Date: August 14, 2015	By:	/s/ PHILIP B. LIVINGSTON
		Philip B. Livingston
		Chief Executive Officer
		(Principal Executive Officer)

21

EXHIBIT INDEX

31.1 Certification under Section 302 of the Sarbanes-Oxley Act of 2002. (1)

31.2 Certification under Section 302 of the Sarbanes-Oxley Act of 2002. (1)

32.1 Certification under Section 906 of the Sarbanes-Oxley Act of 2002. (2)

(1) Filed herewith.

(2) This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section.  Such exhibit shall not be deemed incorporated into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

22

EX-31.1

EXHIBIT 31.1

Certification required by Rule 13a-14(a) or Rule 15d-14(a) and under Section 302 of the Sarbanes-Oxley Act of 2002.

I, Philip B. Livingston, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 of Ambassadors Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 14, 2015
	/s/ Philip B. Livingston
	Philip B. Livingston
	Chief Executive Officer
	(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

Certification required by Rule 13a-14(a) or Rule 15d-14(a) and under Section 302 of the Sarbanes-Oxley Act of 2002.

I, Lisa N. Netz, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 of Ambassadors Group, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a – 15(f) and 15d – 15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 14, 2015
	/s/ Lisa N. Netz
	Lisa N. Netz
	Vice President, Finance
	(Principal Financial and Accounting Officer)

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Ambassadors Group, Inc., (the "Company") on Form 10-Q for the period ending June 30, 2015, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, Philip B. Livingston, chief executive officer, and Lisa N. Netz, vice president, finance of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2015
	/s/ Philip B. Livingston
	Philip B. Livingston
	Chief Executive Officer
	(Principal Executive Officer)

/s/ Lisa N. Netz

Lisa N. Netz

Vice President, Finance

(Principal Financial and Accounting Officer)

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Supplemental Disclosures of Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Non-cash financing and investing activities [Abstract]
Unrealized gain on foreign currency exchange contracts	$ 1,021	$ 357
Unrealized gain (loss) on available-for-sale securities	$ (322)	$ 267

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Net Income (Loss) and Income (Loss) per Share (Tables)

6 Months Ended

Jun. 30, 2015

Net Income (Loss) and Income (Loss) per Share [Abstract]

Reconciliation of basic and diluted income per share computations

The following table presents a reconciliation of basic and diluted income (loss) per share computations (in thousands, except per share data):

	Three months ended June 30,					Six months ended June 30,
	2015		2014			2015		2014
Numerator:
Income (loss) from continuing operations	$	13,214	$	4,635			6,602		(3,196	)
Loss from discontinued operations		-		(8,820	)		-		(8,540	)
Net income (loss)	$	13,214	$	(4,185	)	$	6,602	$	(11,736	)
Denominator:
Weighted-average shares outstanding		17,028		16,823			16,990		16,789
Effect of unvested restricted stock awards considered participating securities		270		224			301		-
Weighted-average shares outstanding - basic		17,298		17,047			17,291		16,789
Effect of diluted restricted stock and performance share awards		79		112			132		-
Weighted-average shares outstanding – diluted		17,377		17,159			17,423		16,789
Income (loss) from continuing operations - basic		0.76		0.27			0.38		(0.19	)
Loss from discontinued operations - basic		-		(0.52	)		-		(0.51	)
Net income (loss) per share - basic	$	0.76	$	(0.25	)	$	0.38	$	(0.70	)
Income (loss) from continuing operations - diluted		0.76		0.27			0.38		(0.19	)
Loss from discontinued operations - diluted		-		(0.52	)		-		(0.51	)
Net income (loss) per share - diluted	$	0.76	$	(0.25	)	$	0.38	$	(0.70	)
Stock options, restricted stock units, restricted stock awards, and performance share awards excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive		443		774			447		799

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Basis of Presentation

6 Months Ended

Jun. 30, 2015

Basis of Presentation [Abstract]

Basis of Presentation

2. Basis of Presentation

The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”), have been condensed or omitted in accordance with such rules and regulations, although management believes the disclosures are adequate to prevent the information presented from being materially misleading. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2015 are not indicative of the results that may be expected for the year ending December 31, 2015.

It is suggested that these financial statements be read in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2014.

As noted above, on July 13, 2015, we announced our plan to cease operations and close our student and adult travel business by the end of 2015, and on August 11, 2015, our board of directors approved dissolution of the Company, subject to shareholder approval.  Assuming our plan of liquidation is approved by our shareholders in the third quarter of 2015, we will apply liquidation accounting.  For additional information, see Note 12 of Notes to Consolidated Financial Statements.

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Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning of period			$ (977)
Reclassification into net revenue, non-directly delivered programs	$ 16,525	$ 18,092	16,619	$ 18,208
Reclassification into interest and dividend income	157	141	286	273
Effect of incomes taxes, Derivative Securities	0	69	0	0
Effect of income taxes, Available-for-sale securities	0	62	0	0
Balance, end of period	(377)		(377)
Realized gain (loss) on sale of investments			0	0
Derivative Securities [Member] | Foreign Currency Exchange Contracts [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning of period	(2,034)	(65)	(1,142)	(192)
Change before reclassification	1,814	185	1,021	381
Reclassification into net revenue, non-directly delivered programs	0	(24)	(99)	(24)
Reclassification into interest and dividend income	0	0	0	0
Effect of incomes taxes, Derivative Securities	0	69	0	0
Other comprehensive income (loss), net of income taxes	1,814	230	922	357
Balance, end of period	(220)	165	(220)	165
Available-for-sale securities [Member] | Foreign Currency Exchange Contracts [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance, beginning of period	95	(243)	165	(357)
Change before reclassification	(252)	83	(322)	259
Reclassification into net revenue, non-directly delivered programs	0	0	0	0
Reclassification into interest and dividend income	0	8	0	8
Effect of income taxes, Available-for-sale securities	0	62	0	0
Other comprehensive income (loss), net of income taxes	(252)	153	(322)	267
Balance, end of period	$ (157)	$ (90)	$ (157)	$ (90)

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Derivative Financial Instruments (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Designated as Hedging Instrument [Member]
Derivatives, Fair Value [Line Items]
Forward contracts, assets	$ 2	$ 14
Forward contracts, liabilities	326	1,359
Forward contracts, total net liabilities	324	$ 1,345
Australian Dollar [Member]
Derivative [Line Items]
Notional amount of foreign currency forward contracts	$ 700
Derivative maturity date	Jul. 01, 2015
Euro [Member]
Derivative [Line Items]
Notional amount of foreign currency forward contracts	$ 1,705
Derivative maturity date	Jul. 01, 2015
British Pound [Member]
Derivative [Line Items]
Notional amount of foreign currency forward contracts	$ 420
Derivative maturity date	Jul. 01, 2015
New Zealand Dollar [Member]
Derivative [Line Items]
Notional amount of foreign currency forward contracts	$ 50
Derivative maturity date	Jul. 01, 2015

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Stock-Based Compensation (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares authorized under the plan available for future stock-based compensation (in shares)	1,622,590		1,622,590
Stock Options [Roll Forward]
Stock Options, Beginning Balance (in shares)			551,409
Stock Options, Granted in Period (in shares)			0
Stock Options, Forfeited / Expired (in shares)			(178,589)
Stock Options, Exercised (in shares)			0
Stock Options, Ending Balance (in shares)	372,820		372,820
Stock Options, Exercisable Ending Balance (in shares)	227,969		227,969
Stock Options, Weighted-Average Exercise Price [Roll Forward]
Stock Options, Weighted-Average Exercise Price, Beginning Balance (in dollars per share)			$ 6.05
Stock Options, Granted, Weighted-Average Exercise Price (in dollars per share)			0
Stock Options, Forfeited / Expired, Weighted Average Exercise Price (in dollars per share)			5.75
Stock Options, Exercised, Weighted Average Exercise Price (in dollars per share)			0
Stock Options, Weighted Average Exercise Price, Ending Balance (in dollars per share)	$ 6.20		6.20
Stock Options Exercisable, Weighted Average Exercise Price, Ending Balance (in dollars per share)	$ 7.47		$ 7.47
Outstanding, Weighted-Average Remaining Contractual Life			7 years 3 months 4 days
Exercisable, Weighted-Average Remaining Contractual Life			6 years 6 months 11 days
Stock-based compensation			$ 466	$ 1,168
Stock Options [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Percentage that can vest per year (in hundredths)			25.00%
Vesting period			4 years
Stock Options, Weighted-Average Exercise Price [Roll Forward]
Total intrinsic value of stock options exercised	$ 0	$ 0	$ 0	0
Total fair value of options vested	0	700	0	700
Option outstanding, intrinsic value	0		0
Options exercisable, intrinsic value	$ 0		$ 0
Valuation assumptions			based on our $2.44 closing stock price
Stock price (in dollars per share)	$ 2.44		$ 2.44
Stock-based compensation	$ 40	$ 300	$ 77	400
Unrecognized stock-based compensation expense	100		$ 100
Stock Options [Member] | Maximum [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Exercised period for vest from grant date			10 years
Restricted Stock Award [Member]
Stock Options, Weighted-Average Exercise Price [Roll Forward]
Option outstanding, intrinsic value	$ 600		$ 600
Valuation assumptions			based on a $2.44 closing stock price
Stock price (in dollars per share)	$ 2.44		$ 2.44
Weighted-average grant date fair value of restricted stock awards vested			$ 100	900
Stock-based compensation			300	500
Unrecognized stock-based compensation expense	$ 500		$ 500
Restricted Stock and Performance Stock Awards [Abstract]
Restricted Stock and Performance Stock Awards, Beginning Balance (in shares)			341,637
Restricted Stock and Performance Stock Awards, Shares Granted (in shares)			31,251
Restricted Stock and Performance Stock Awards, Forfeitures (in shares)			(97,210)
Restricted Stock Awarded Performance Stock Awards, Vested (in shares)			(32,294)
Restricted Stock and Performance Stock Awards, Ending Balance (in shares)	243,384		243,384
Restricted Stock and Performance Stock Awards, weighted average grant date fair value [Abstract]
Restricted Stock and Performance Stock Awards, Beginning Balance (in dollars per share)			$ 2.83
Restricted Stock and Performance Stock Awards, Granted, Weighted-Average Grant Date Fair Value (in dollars per share)			0
Restricted Stock and Performance Stock Awards, Forfeited, Weighted-Average Grant Date Fair Value (in dollars per share)			5.21
Restricted Stock and Performance Stock Awards, Vested, Weighted-Average Grant Date Fair Value (in dollars per share)			2.72
Restricted Stock and Performance Stock Awards, Weighted-Average Grant Date Fair Value, Ending Balance (in dollars per share)	$ 2.60		$ 2.60
Weighted-Average Remaining Contractual Life			1 year 2 months 26 days
Restricted Stock Units [Member]
Stock Options, Weighted-Average Exercise Price [Roll Forward]
Option outstanding, intrinsic value	$ 300		$ 300
Valuation assumptions			based on a $2.44 closing stock price
Stock price (in dollars per share)	$ 2.44		$ 2.44
Unrecognized stock-based compensation expense	$ 300		$ 300
Restricted Stock and Performance Stock Awards [Abstract]
Restricted Stock and Performance Stock Awards, Beginning Balance (in shares)			82,572
Restricted Stock and Performance Stock Awards, Shares Granted (in shares)			165,000
Restricted Stock and Performance Stock Awards, Forfeitures (in shares)			(95,836)
Restricted Stock Awarded Performance Stock Awards, Vested (in shares)			(35,726)
Restricted Stock and Performance Stock Awards, Ending Balance (in shares)	116,010		116,010
Restricted Stock and Performance Stock Awards, weighted average grant date fair value [Abstract]
Restricted Stock and Performance Stock Awards, Beginning Balance (in dollars per share)			$ 4.17
Restricted Stock and Performance Stock Awards, Granted, Weighted-Average Grant Date Fair Value (in dollars per share)			2.55
Restricted Stock and Performance Stock Awards, Forfeited, Weighted-Average Grant Date Fair Value (in dollars per share)			3.22
Restricted Stock and Performance Stock Awards, Vested, Weighted-Average Grant Date Fair Value (in dollars per share)			3.08
Restricted Stock and Performance Stock Awards, Weighted-Average Grant Date Fair Value, Ending Balance (in dollars per share)	$ 2.98		$ 2.98
Weighted-Average Remaining Contractual Life			1 year 9 months 29 days
Performance Stock Awards [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period			3 years
Stock Options, Weighted-Average Exercise Price [Roll Forward]
Stock-based compensation			$ 100	$ 0
Restricted Stock and Performance Stock Awards [Abstract]
Restricted Stock and Performance Stock Awards, Beginning Balance (in shares)			229,315
Restricted Stock and Performance Stock Awards, Shares Granted (in shares)			165,000
Restricted Stock and Performance Stock Awards, Forfeitures (in shares)			(90,798)
Restricted Stock Awarded Performance Stock Awards, Vested (in shares)			0
Restricted Stock and Performance Stock Awards, Ending Balance (in shares)	303,517		303,517
Restricted Stock and Performance Stock Awards, weighted average grant date fair value [Abstract]
Restricted Stock and Performance Stock Awards, Beginning Balance (in dollars per share)			$ 2.50
Restricted Stock and Performance Stock Awards, Granted, Weighted-Average Grant Date Fair Value (in dollars per share)			2.55
Restricted Stock and Performance Stock Awards, Forfeited, Weighted-Average Grant Date Fair Value (in dollars per share)			2.77
Restricted Stock and Performance Stock Awards, Vested, Weighted-Average Grant Date Fair Value (in dollars per share)			0
Restricted Stock and Performance Stock Awards, Weighted-Average Grant Date Fair Value, Ending Balance (in dollars per share)	$ 2.40		$ 2.40
Weighted-Average Remaining Contractual Life			2 years 5 months 1 day
Unvested Performance Stock Awards [Member]
Stock Options, Weighted-Average Exercise Price [Roll Forward]
Unrecognized stock-based compensation expense	$ 500		$ 500

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Discontinued Operations (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		6 Months Ended
	Sep. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Total revenue		$ 0	$ 1,055	$ 0	$ 2,063
Gross margin		0	937	0	1,813
Selling & marketing expenses		0	332	0	653
General & administrative expenses		0	203	0	422
Restructuring costs		0	10,233	0	10,233
Operating loss from discontinued operations		0	(9,830)	0	(9,494)
Income tax benefit on discontinued operations		0	1,010	0	984
Net loss from discontinued operations		$ 0	$ (8,820)	$ 0	$ (8,540)
BookRags [Member]
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract]
Gross proceeds from sale of BookRags	$ 5,000

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The Company

6 Months Ended

Jun. 30, 2015

The Company [Abstract]

The Company

1. The Company

Ambassadors Group, Inc. (the “Company”, “we”, “us” or “our”) is an educational company primarily engaged in organizing and promoting differentiated worldwide travel programs for students and professionals.  On July 13, 2015, we announced our plan to cease operations and close our student and adult travel business by the end of 2015.  On August 11, 2015, our board of directors reached the conclusion that it is in the best interests of the shareholders to dissolve and liquidate the Company, subject to shareholder approval.  For additional information, see Note 12 of Notes to Consolidated Financial Statements.

These consolidated financial statements include the accounts of Ambassadors Group, Inc., and our wholly owned subsidiaries, Ambassador Programs, Inc., and Ambassadors Unlimited, LLC. All significant intercompany accounts and transactions, which are of a normal recurring nature, are eliminated in consolidation.

Through September 2014, we operated an education oriented research website, BookRags.com, which provided study guides, lesson plans, and other educational resources to students and teachers.  This business was operated by BookRags, Inc. (“BookRags”) our then wholly-owned subsidiary.  In September 2014, we consummated the sale of the BookRags subsidiary.  All activities related to BookRags have been reflected as discontinued operations for all periods presented.  For additional information, see Note 8 of Notes to Consolidated Financial Statements.

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Net Income (Loss) and Income (Loss) per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Numerator [Abstract]
Income (loss) from continuing operations	$ 13,214	$ 4,635	$ 6,602	$ (3,196)
Loss from discontinued operations	0	(8,820)	0	(8,540)
Net Income (Loss)	$ 13,214	$ (4,185)	$ 6,602	$ (11,736)
Denominator [Abstract]
Weighted-average shares outstanding (in shares)	17,028,000	16,823,000	16,990,000	16,789,000
Effect of unvested restricted stock awards considered participating securities (in shares)	270,000	224,000	301,000	0
Weighted-average shares outstanding - basic (in shares)	17,298,000	17,047,000	17,291,000	16,789,000
Effect of diluted restricted stock and performance share awards (in shares)	79,000	112,000	132,000	0
Weighted-average shares outstanding - diluted (in shares)	17,377,000	17,159,000	17,423,000	16,789,000
Income (loss) from continuing operations - basic (in dollars per share)	$ 0.76	$ 0.27	$ 0.38	$ (0.19)
Loss from discontinued operations - basic (in dollars per share)	0	(0.52)	0	(0.51)
Net income (loss) per share - basic (in dollars per share)	0.76	(0.25)	0.38	(0.70)
Income (loss) from continuing operations - diluted (in dollars per share)	0.76	0.27	0.38	(0.19)
Loss from discontinued operations - diluted (in dollars per share)	0	(0.52)	0	(0.51)
Net income (loss) per share - diluted (in dollars per share)	$ 0.76	$ (0.25)	$ 0.38	$ (0.70)
Stock Options, Restricted Stock Units, Restricted Stock Awards and Performance Share Awards [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options, restricted stock units, restricted stock awards, and performance share awards excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive (in shares)	443	774	447	799

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CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 6,929	$ 2,002
Restricted cash	0	400
Available-for-sale securities	63,962	59,502
Foreign currency exchange contracts	2	0
Prepaid program costs and expenses	12,203	1,335
Accounts receivable	405	666
Total current assets	83,501	63,905
Property and equipment, net	1,442	2,429
Goodwill	70	70
Other long-term assets	37	81
Total assets	85,050	66,485
Current liabilities:
Accounts payable and accrued expenses	4,431	2,794
Participants' deposits	33,219	23,161
Foreign currency exchange contracts	326	1,345
Deferred tax liabilities	17	18
Other liabilities	187	1
Total current liabilities	38,180	27,319
Participants' deposits	87	0
Deferred tax liabilities	6	6
Total liabilities	$ 38,273	$ 27,325
Commitments and Contingencies (Note 11)
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued and outstanding	$ 0	$ 0
Common stock, $.01 par value; 50,000,000 shares authorized; 17,067,907 and 16,944,812 shares issued and outstanding, respectively	173	173
Additional paid-in capital	2,045	1,630
Retained earnings	44,936	38,334
Accumulated other comprehensive loss	(377)	(977)
Stockholders' equity	46,777	39,160
Total liabilities and stockholders' equity	$ 85,050	$ 66,485

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) [Abstract]
Unrealized gain on foreign currency exchange contracts, income tax provision	$ 0	$ (69)	$ 0	$ 0
Unrealized gain (loss) on available-for-sale securities, income tax benefit	$ 0	$ (62)	$ 0	$ 0

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2015

Accumulated Other Comprehensive Income (Loss) [Abstract]

Summary of AOCI balances and gains (losses) recognized in OCI

For the three and six months ended June 30, 2015 and 2014, a summary of AOCI balances and gains (losses) recognized in OCI are as follows (in thousands):

	Accumulated Other Comprehensive Income (Loss)
	Derivative Securities						Available-for-sale securities
	Three months ended June 30,						Three months ended June 30,
	2015			2014			2015			2014
Balance, beginning of period	$	(2,034	)	$	(65	)	$	95		$	(243	)
Change before reclassification		1,814			185			(252	)		83
Reclassification into net revenue, non-directly delivered programs		-			(24	)		-			-
Reclassification into interest and dividend income											8
Effect of incomes taxes		-			69			-			62
Other comprehensive income (loss), net of income taxes		1,814			230			(252	)		153
Balance, end of period	$	(220	)	$	165		$	(157	)	$	(90	)

	Accumulated Other Comprehensive Income (Loss)
	Derivative Securities						Available-for-sale securities
	Six months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Balance, beginning of period	$	(1,142	)	$	(192	)	$	165		$	(357	)
Change before reclassification		1,021			381			(322	)		259
Reclassification into net revenue, non-directly delivered programs		(99	)		(24	)		-			-
Reclassification into interest and dividend income		-			-			-			8
Effect of incomes taxes		-			-			-			-
Other comprehensive income (loss), net of income taxes		922			357			(322	)		267
Balance, end of period	$	(220	)	$	165		$	(157	)	$	(90	)

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Discontinued Operations (Tables)

6 Months Ended

Jun. 30, 2015

Discontinued Operations [Abstract]

Schedule of disposal groups, including discontinued operations, income statement, balance sheet and additional disclosures

The following table summarizes the results of discontinued operations for the periods indicated (in thousands):

	Three months ended					Six months ended
	June 30, 2015		June 30, 2014			June 30, 2015		June 30, 2014
Total revenue	$	-	$	1,055		$	-	$	2,063
Gross margin	$	-	$	937		$	-	$	1,813
Selling & marketing expenses	$	-	$	332		$	-	$	653
General & administrative expenses	$	-	$	203		$	-	$	422
Restructuring costs	$	-	$	10,233		$	-	$	10,233
Operating loss from discontinued operations	$	-	$	(9,830	)	$	-	$	(9,494	)
Income tax benefit on discontinued operations	$	-	$	1,010		$	-	$	984
Net loss from discontinued operations	$	-	$	(8,820	)	$	-	$	(8,540	)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net income (loss)	$ 6,602	$ (11,736)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	1,100	2,977
Stock-based compensation	466	1,168
Deferred income tax benefit	0	(805)
Gain on foreign currency exchange contracts	(99)	0
Impairment and loss on sale of discontinued operations	0	9,711
Loss on disposition and impairment of property and equipment, other assets	390	2,000
Program merchandise writedown	0	554
Excess tax shortfall from stock-based compensation	0	109
Change in assets and liabilities:
Accounts receivable and other assets	261	368
Prepaid program costs and expenses	(10,868)	(11,403)
Accounts payable, accrued expenses, and other current liabilities	1,822	3,542
Participants' deposits	10,145	16,503
Net cash provided by operating activities	9,819	12,988
Cash flows from investing activities:
Purchase of available-for-sale securities	(14,783)	(24,517)
Proceeds from sale of available-for-sale securities	10,000	13,861
Purchase of property and equipment	(488)	(952)
Proceeds from sale of property and equipment	30	0
Purchase of intangibles	0	(146)
Proceeds from sale of BookRags, Inc.	400	0
Net cash used in investing activities	(4,841)	(11,754)
Cash flows from financing activities:
Repurchase of common stock	(51)	(186)
Excess tax shortfall from stock-based compensation	0	(109)
Net cash used in financing activities	(51)	(295)
Net increase in cash and cash equivalents	4,927	939
Cash and cash equivalents, beginning of period	2,002	9,473
Cash and cash equivalents, end of period	$ 6,929	$ 10,412

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CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares	Jun. 30, 2015	Dec. 31, 2014
STOCKHOLDERS' EQUITY
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	2,000,000	2,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	50,000,000	50,000,000
Common stock, shares issued (in shares)	17,067,907	16,944,812
Common stock, shares outstanding (in shares)	17,067,907	16,944,812

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Supplemental Disclosures of Consolidated Statements of Cash Flows

6 Months Ended

Jun. 30, 2015

Supplemental Disclosures of Consolidated Statements of Cash Flows [Abstract]

Supplemental Disclosures of Consolidated Statements of Cash Flows

10.  Supplemental Disclosures of Consolidated Statements of Cash Flows

Our non-cash investing and financing activities during the six months ended June 30, 2015 and 2014 were as follows (in thousands):

	June 30, 2015			June 30, 2014
Unrealized gain on foreign currency exchange contracts	$	1,021		$	357
Unrealized gain (loss) on available-for-sale securities	$	(322	)	$	267

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Aug. 10, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	AMBASSADORS GROUP INC
Entity Central Index Key	0001162315
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		17,139,091
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2015

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2015

Commitments and Contingencies [Abstract]

Commitments and Contingencies

11.  Commitments and Contingencies

We are not a party to any material pending legal proceedings other than ordinary routine litigation incidental to our business, the outcome of which we believe will not have a material adverse effect on our business, financial condition, cash flows or results of operations.

We are subject to the possibility of various loss contingencies, including claims, suits and complaints, arising in the ordinary course of business. We consider the likelihood of loss or impairment of an asset or the incurrence of a liability, as well as our ability to reasonably estimate the amount of loss, in determining loss contingencies. An estimated loss contingency is accrued when it is probable that an asset has been impaired or a liability has been incurred and the amount of loss can be reasonably estimated. We regularly evaluate current information available to us to determine whether such accruals should be adjusted and whether new accruals are required.

Our directors and officers have certain rights to indemnification by us against certain liabilities that may arise by reason of their status or service as directors or officers. We maintain director and officer insurance, which covers certain liabilities arising from our obligation to indemnify our directors and officers and former directors in certain circumstances. No material indemnification liabilities were accrued at June 30, 2015.

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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) [Abstract]
Net revenue, non-directly delivered programs	$ 16,525	$ 18,092	$ 16,619	$ 18,208
Gross revenue, directly delivered programs	2,956	3,565	3,132	3,838
Total revenue	19,481	21,657	19,751	22,046
Cost of sales, directly delivered programs	1,826	2,234	1,954	2,443
Cost of sales, program merchandise markdown	0	554	0	554
Gross margin	17,655	18,869	17,797	19,049
Operating expenses:
Selling and marketing	3,064	5,827	7,593	12,500
General and administrative	1,429	3,307	3,746	6,228
Restructuring costs	0	1,431	0	1,539
Asset impairments	45	2,000	45	2,000
Total operating expenses	4,538	12,565	11,384	22,267
Operating income (loss)	13,117	6,304	6,413	(3,218)
Other income:
Interest and dividend income	157	141	286	273
Foreign currency and other income (expense)	(60)	5	(97)	8
Total other income	97	146	189	281
Income (loss) before income tax provision from continuing operations	13,214	6,450	6,602	(2,937)
Income tax provision	0	(1,815)	0	(259)
Net income (loss) from continuing operations	13,214	4,635	6,602	(3,196)
Discontinued operations:
Loss from discontinued segment	0	(9,830)	0	(9,494)
Income tax benefit	0	1,010	0	954
Net loss from discontinued operations	0	(8,820)	0	(8,540)
Net Income (Loss)	$ 13,214	$ (4,185)	$ 6,602	$ (11,736)
Weighted-average common shares outstanding - basic (in shares)	17,298	17,047	17,291	16,789
Weighted-average common shares outstanding - diluted (in shares)	17,377	17,159	17,423	16,789
Discontinued operations weighted-average common shares outstanding - basic and diluted (in shares)		16,823		16,789
Net income (loss) from continuing operations per share - basic (in dollars per share)	$ 0.76	$ 0.27	$ 0.38	$ (0.19)
Net income (loss) from continuing operations per share - diluted (in dollars per share)	0.76	0.27	0.38	(0.19)
Net loss from discontinued operations per share - basic and diluted (in dollars per share)	0	(0.52)	0	(0.51)
Total net income (loss) per share - basic and diluted (in dollars per share)	$ 0.76	$ (0.25)	$ 0.38	$ (0.70)

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Derivative Financial Instruments

6 Months Ended

Jun. 30, 2015

Derivative Financial Instruments [Abstract]

Derivative Financial Instruments

5. Derivative Financial Instruments

The majority of our travel programs take place outside of the United States, and most foreign suppliers require payment in currency other than the U.S. dollar. Accordingly, we are exposed to foreign currency risk relative to changes in foreign currency exchange rates between those currencies and the U.S. dollar for our non-directly delivered programs. We use forward contracts that allow us to acquire foreign currency at a fixed price for a specified point in time to provide a hedge against foreign currency risk. All of our derivatives are cash flow hedges and at June 30, 2015, all contracts qualified for cash flow hedge accounting.

For derivative instruments that are designated and qualify as a cash flow hedge, the effective portion of the gain or loss on the derivative is reported as a component of other comprehensive income or loss and reclassified into earnings in the same period during which the hedged transaction is recognized in earnings; this is primarily during the second and third quarters of the year when our student travel programs occur. Gains or losses representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.

At June 30, 2015, the following forward contracts were outstanding (in thousands):

	Notional Amount	Matures
Forward contracts:
Australian dollar	700	July 2015
Euro	1,705	July 2015
British pound	420	July 2015
New Zealand dollar	50	July 2015

The fair value of our forward contracts were as follows (in thousands):

	June 30, 2015
	Derivatives designated as hedging instruments				Total Net
	Assets		Liabilities		Liabilities
Forward contracts	$	2	$	326	$	324

	December 31, 2014
	Derivatives designated as hedging instruments				Total Net
	Assets		Liabilities		Liabilities
Forward contracts	$	14	$	1,359	$	1,345

The net asset and liability derivatives at June 30, 2015 and December 31, 2014 are reported in the consolidated balance sheets as current and long-term foreign currency exchange contracts.

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Investments and Fair Value Measurements

6 Months Ended

Jun. 30, 2015

Investments and Fair Value Measurements [Abstract]

Investments and Fair Value Measurements

4. Investments and Fair Value Measurements

Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining fair value, we consider the principal or most advantageous market, and we consider assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of non-performance.

Our financial instruments are measured and recorded at fair value. Our non-financial assets, including property and equipment and goodwill, are measured at fair value upon acquisition, reviewed at least annually for impairment, and are fully assessed if there is an indicator of impairment. An adjustment would be made to the fair value of non-financial assets if an impairment charge is recognized.

Fair value is determined for assets and liabilities using a three-tiered hierarchy, based upon significant levels of inputs as follows:

- Level 1 – Quoted prices in active markets for identical assets or liabilities.

- Level 2 – Observable inputs, other than Level 1 prices, such as quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

- Level 3 – Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

The below tables summarize the composition of our investments at June 30, 2015 and December 31, 2014 (in thousands).  For both periods, all investments have been recorded to short-term available-for-sale securities on the consolidated balance sheet.

June 30, 2015	Amortized Cost		Unrealized  Losses			Aggregate Fair Value
Short term municipal securities funds1	$	64,302	$	(340	)	$	63,962
Total	$	64,302	$	(340	)	$	63,962

December 31, 2014	Amortized Cost		Unrealized Losses			Aggregate  Fair Value
Short term municipal securities funds1	$	59,520	$	(18	)	$	59,502
Total	$	59,520	$	(18	)	$	59,502

¹ Do not have a set maturity date.

The following tables detail the fair value measurements of assets and liabilities within the three levels of the fair value hierarchy at June 30, 2015 and December 31, 2014 (in thousands):

			Fair Value Measurements at Reporting Date Using
June 30, 2015	Fair Market Value		Level 1		Level 2		Level 3
Financial assets:
Municipal securities1		63,962		63,962		-		-
Foreign currency exchange contracts		2		-		2		-
Total financial assets	$	63,964	$	63,962	$	2	$	-
Financial liabilities:
Foreign currency exchange contracts		326		-		326		-
Total financial liabilities	$	326	$	-	$	326	$	-

December 31, 2014	Fair Market Value		Level 1		Level 2		Level 3
Financial assets:
Municipal securities1		59,502		59,502		-		-
Foreign currency exchange contracts		14		-		14		-
Total financial assets	$	59,516	$	59,502	$	14	$	-
Financial liabilities:
Foreign currency exchange contracts		1,359		-		1,359		-
Total financial liabilities	$	1,359	$	-	$	1,359	$	-

¹ At June 30, 2015 and December 31, 2014, municipal securities consisted solely of holdings in short-term municipal security funds.

Municipal securities are classified as Level 1 assets because market prices are readily available for these investments. Level 2 financial assets and liabilities represent the fair value of our foreign currency exchange contracts that were valued using pricing models that take into account the contract terms, as well as multiple inputs where applicable, such as currency rates.

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2015

Stock-Based Compensation [Abstract]

Summary of stock option activity

A summary of option activity under the Plan as of June 30, 2015, and the changes during the six months then ended is presented below:

	Stock Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (years)
Outstanding at December 31, 2014		551,409		$	6.05
Granted		-			-
Forfeited / Expired		(178,589	)		5.75
Exercised		-			-
Outstanding at June 30, 2015		372,820		$	6.20		7.26
Exercisable at June 30, 2015		227,969		$	7.47		6.53

Summary of activity of non-vested restricted stock awards and restricted stock units

A summary of the activity of non-vested restricted stock awards and restricted stock units under the Plan as of June 30, 2015, and the changes during the six months then ended is presented below:

	Restricted Stock Awards						Restricted Stock Units
	Restricted Stock Awards			Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Contractual Life (years)	Restricted Stock Units			Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Contractual Life (years)
Balance at December 31, 2014		341,637		$	2.83			82,572		$	4.17
Granted		31,251			-			165,000			2.55
Forfeited		(97,210	)		5.21			(95,836	)		3.22
Vested		(32,294	)		2.72			(35,726	)		3.08
Balance at June 30, 2015		243,384		$	2.60	1.24		116,010		$	2.98	1.83

Summary of activity of performance stock units under the Plan

A summary of the activity of performance stock units under the Plan as of June 30, 2015, and the changes during the six months then ended is presented below:

	Performance Stock Units			Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Contractual Life (years)
Balance at December 31, 2014		229,315		$	2.50
Granted		165,000			2.55
Forfeited		(90,798	)		2.77
Vested		-			-
Balance at June 30, 2015		303,517		$	2.40	2.42

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Subsequent Events

6 Months Ended

Jun. 30, 2015

Subsequent Events [Abstract]

Subsequent Events

12.  Subsequent Events

On July 13, 2015, we announced our plan to cease operations and close our student and adult travel business by the end of 2015.  On August 11, 2015, our board of directors reached the conclusion that it is in the best interests of the shareholders to dissolve and liquidate the Company.  The dissolution was unanimously approved by the board of directors and is subject to shareholder approval.  Over the past several years, we have experienced declining revenues and declining travelers and have explored strategic alternatives and alternative marketing models.  We have also been engaged in a lengthy and intensive evaluation of potential strategic alternatives in order to preserve and maximize shareholder value.  Those potential alternatives included pursuing a strategic transaction with a third party, such as a merger or sale, and dissolving the Company, winding down our remaining operations and distributing net assets to shareholders after making appropriate reserves for liabilities and expenses.

In connection with the dissolution, we intend to distribute to shareholders all available cash other than as may be required to pay expenses and pay or make reasonable provision for known and potential claims and obligations as required by applicable law.

In a Form 8-K filed with the SEC on July 23, 2015, we disclosed our estimates of various cash and non-cash exit costs, including for severance and related compensation benefits, rent and other contract termination fees, acceleration of depreciation and other prepaid costs, and other associated costs related to its closing.  These amounts are estimated below and are not audited:

· Approximately $1.3 million to $2.4 million in severance costs, including $0.3 million in non-cash charges for the acceleration of equity awards under the terms of existing separation agreements;

· Non-cash charge of approximately $2.0 million in property and equipment and other asset write-downs;

· Estimated $0.6 million to $1.3 million in various contract termination fees, ongoing maintenance expenditures, and facility and business closure expenses; and

· Approximately $0.4 million to $0.8 million in estimated legal and other professional fees including estimated ongoing insurance costs.

We expect to recognize the majority of the charges in the third and fourth quarters of 2015, and no cost or expense associated with the business closure has been recognized in the current period financial statements.

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Discontinued Operations

6 Months Ended

Jun. 30, 2015

Discontinued Operations [Abstract]

Discontinued Operations

8. Discontinued Operations

In September 2014, we consummated the sale of BookRags for $5.0 million.  All activities related to BookRags have been reflected as discontinued operations on our consolidated financial statements for the period ended June 30, 2014.  There were no discontinued operations for the three or six month periods ending June 30, 2015.

The following table summarizes the results of discontinued operations for the periods indicated (in thousands):

	Three months ended					Six months ended
	June 30, 2015		June 30, 2014			June 30, 2015		June 30, 2014
Total revenue	$	-	$	1,055		$	-	$	2,063
Gross margin	$	-	$	937		$	-	$	1,813
Selling & marketing expenses	$	-	$	332		$	-	$	653
General & administrative expenses	$	-	$	203		$	-	$	422
Restructuring costs	$	-	$	10,233		$	-	$	10,233
Operating loss from discontinued operations	$	-	$	(9,830	)	$	-	$	(9,494	)
Income tax benefit on discontinued operations	$	-	$	1,010		$	-	$	984
Net loss from discontinued operations	$	-	$	(8,820	)	$	-	$	(8,540	)

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2015

Accumulated Other Comprehensive Income (Loss) [Abstract]

Accumulated Other Comprehensive Income (Loss)

6. Accumulated Other Comprehensive Income (Loss)

Unrealized gains or losses related to derivative securities are recorded in accumulated other comprehensive income (loss) (“AOCI”). The change in unrealized gains or losses related to derivative securities are recorded in other comprehensive income (loss) net of income taxes in the period the change occurred. When derivative securities designated as cash flow hedges are used to pay vendors, the effective portion of the hedge is reclassified into the statement of operations and recorded in net revenue, non-directly delivered programs.

Unrealized gains or losses related to available-for-sale securities are recorded in AOCI. The change in unrealized gains or losses related to available-for-sale securities are recorded in other comprehensive income net of income taxes in the period the change occurred. When securities are sold and a realized gain or loss is recognized, the amount is reclassified from AOCI to the statement of operations and recorded in interest and dividend income. During the six months ended June 30, 2015 and 2014, there were no realized gains or losses recognized in the statement of operations for the sale of investments.

For the three and six months ended June 30, 2015 and 2014, a summary of AOCI balances and gains (losses) recognized in OCI are as follows (in thousands):

	Accumulated Other Comprehensive Income (Loss)
	Derivative Securities						Available-for-sale securities
	Three months ended June 30,						Three months ended June 30,
	2015			2014			2015			2014
Balance, beginning of period	$	(2,034	)	$	(65	)	$	95		$	(243	)
Change before reclassification		1,814			185			(252	)		83
Reclassification into net revenue, non-directly delivered programs		-			(24	)		-			-
Reclassification into interest and dividend income											8
Effect of incomes taxes		-			69			-			62
Other comprehensive income (loss), net of income taxes		1,814			230			(252	)		153
Balance, end of period	$	(220	)	$	165		$	(157	)	$	(90	)

	Accumulated Other Comprehensive Income (Loss)
	Derivative Securities						Available-for-sale securities
	Six months ended June 30,						Six months ended June 30,
	2015			2014			2015			2014
Balance, beginning of period	$	(1,142	)	$	(192	)	$	165		$	(357	)
Change before reclassification		1,021			381			(322	)		259
Reclassification into net revenue, non-directly delivered programs		(99	)		(24	)		-			-
Reclassification into interest and dividend income		-			-			-			8
Effect of incomes taxes		-			-			-			-
Other comprehensive income (loss), net of income taxes		922			357			(322	)		267
Balance, end of period	$	(220	)	$	165		$	(157	)	$	(90	)

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2015

Stock-Based Compensation [Abstract]

Stock-Based Compensation

7. Stock-Based Compensation

Under our Stock Incentive Plan (the “Plan”), we may grant stock-based incentive compensation awards to eligible employees and non-employee directors in the form of distribution equivalent rights, incentive stock options, non-qualified stock options, performance share awards, performance unit awards, restricted stock awards, restricted stock units awards, stock appreciation rights, tandem stock appreciation rights, unrestricted stock awards or any combination of the foregoing, as may be best suited to the circumstances of the particular employee, director or consultant. As of June 30, 2015, we had 1,622,590 shares authorized under the Plan available for future stock-based compensation.

Stock Options

Under the terms of the Plan, options to purchase shares of our common stock are granted at a price set by the Compensation Committee of the Board of Directors (the “Compensation Committee”). The Compensation Committee establishes the vesting period of the awards, which is generally set at 25 percent per year for four years. Options may be exercised any time after they vest for a period up to 10 years from the grant date.

The fair value of each stock option granted is estimated on the date of grant using the Black-Scholes option-pricing model.  Option valuation models require the input of highly subjective assumptions, particularly for the expected term and stock price volatility. The assumptions used to calculate the fair value of options granted are evaluated and revised, as necessary, to reflect market conditions and our experience. Our employee stock options do not trade on a secondary exchange; therefore, employees do not derive a benefit from holding stock options unless there is an appreciation in the market price of our stock above the grant price. Such an increase in stock price would benefit all shareholders commensurately.  No stock options were granted during the first six months of 2015.

A summary of option activity under the Plan as of June 30, 2015, and the changes during the six months then ended is presented below:

	Stock Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Life (years)
Outstanding at December 31, 2014		551,409		$	6.05
Granted		-			-
Forfeited / Expired		(178,589	)		5.75
Exercised		-			-
Outstanding at June 30, 2015		372,820		$	6.20		7.26
Exercisable at June 30, 2015		227,969		$	7.47		6.53

During the three and six months ended June 30, 2015, the total intrinsic value of stock options exercised was zero and the total fair value of options which vested was zero. During the three and six months ended June 30, 2014, the total intrinsic value of stock options exercised was zero and the total fair value of options which vested was $0.7 million. The aggregate intrinsic value of outstanding and exercisable stock options was zero, based on our $2.44 closing stock price at June 30, 2015.

Compensation expense recognized in the consolidated statement of operations for stock options was $40 thousand and $0.3 million for the three months ended June 30, 2015 and 2014, respectively, before the effect of income taxes. Compensation expense recognized in the consolidated statement of operations for stock options was $77 thousand and $0.4 million for the six months ended June 30, 2015 and 2014, respectively, before the effect of income taxes.

As of June 30, 2015, total unrecognized stock-based compensation expense related to non-vested stock options was approximately $0.1 million.

Restricted Stock Grants

Under the terms of the Plan, restricted stock awards and restricted stock units are granted by the Compensation Committee on the same terms as options. The Compensation Committee also establishes the vesting period of the awards.  The fair value of restricted stock awards and restricted stock units are based on the market price of our shares on the grant date.

A summary of the activity of non-vested restricted stock awards and restricted stock units under the Plan as of June 30, 2015, and the changes during the six months then ended is presented below:

	Restricted Stock Awards						Restricted Stock Units
	Restricted Stock Awards			Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Contractual Life (years)	Restricted Stock Units			Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Contractual Life (years)
Balance at December 31, 2014		341,637		$	2.83			82,572		$	4.17
Granted		31,251			-			165,000			2.55
Forfeited		(97,210	)		5.21			(95,836	)		3.22
Vested		(32,294	)		2.72			(35,726	)		3.08
Balance at June 30, 2015		243,384		$	2.60	1.24		116,010		$	2.98	1.83

At June 30, 2015, the aggregate value of non-vested restricted stock awards and restricted stock units was $0.6 million and $0.3 million, respectively, before applicable income taxes, based on a $2.44 closing stock price.  During the six months ended June 30, 2015 and 2014, the weighted-average grant date fair value of restricted stock awards which vested was $0.1 million and $0.9 million, respectively. Compensation expense recognized in the consolidated statement of operations for restricted stock awards and units was $0.3 million and $0.5 million for the six months ended June 30, 2015 and 2014, respectively, before the effect of income taxes.

As of June 30, 2015, total unrecognized stock-based compensation expense related to restricted stock awards and restricted stock units was approximately $0.5 million and $0.3 million, respectively.

Performance Stock Awards

Under the terms of the Plan, performance stock awards are granted by the Compensation Committee to key executive employees. Performance stock awards are based on achieving key internal metrics measured at the end of each fiscal year over a three year performance period. If performance objectives are achieved as determined by the Compensation Committee, common stock is granted. The fair value of these awards is determined on the date of grant based on our share price.

A summary of the activity of performance stock units under the Plan as of June 30, 2015, and the changes during the six months then ended is presented below:

	Performance Stock Units			Weighted- Average Grant Date Fair Value		Weighted- Average Remaining Contractual Life (years)
Balance at December 31, 2014		229,315		$	2.50
Granted		165,000			2.55
Forfeited		(90,798	)		2.77
Vested		-			-
Balance at June 30, 2015		303,517		$	2.40	2.42

Performance stock units outstanding on June 30, 2015 are payable upon the achievement of certain internal metrics over various performance periods. Compensation expense recognized on the consolidated statement of operations for performance stock awards was $0.1 million for the six months ended June 30, 2015.  No compensation expense was recorded during the comparable 2014 period.  As of June 30, 2015, there was $0.5 million of unrecognized compensation expense related to unvested performance share unit awards.

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Net Income (Loss) and Income (Loss) per Share

6 Months Ended

Jun. 30, 2015

Net Income (Loss) and Income (Loss) per Share [Abstract]

Net Income (Loss) and Income (Loss) per Share

9. Net Income (Loss) and Income (Loss) per Share

The following table presents a reconciliation of basic and diluted income (loss) per share computations (in thousands, except per share data):

	Three months ended June 30,					Six months ended June 30,
	2015		2014			2015		2014
Numerator:
Income (loss) from continuing operations	$	13,214	$	4,635			6,602		(3,196	)
Loss from discontinued operations		-		(8,820	)		-		(8,540	)
Net income (loss)	$	13,214	$	(4,185	)	$	6,602	$	(11,736	)
Denominator:
Weighted-average shares outstanding		17,028		16,823			16,990		16,789
Effect of unvested restricted stock awards considered participating securities		270		224			301		-
Weighted-average shares outstanding - basic		17,298		17,047			17,291		16,789
Effect of diluted restricted stock and performance share awards		79		112			132		-
Weighted-average shares outstanding – diluted		17,377		17,159			17,423		16,789
Income (loss) from continuing operations - basic		0.76		0.27			0.38		(0.19	)
Loss from discontinued operations - basic		-		(0.52	)		-		(0.51	)
Net income (loss) per share - basic	$	0.76	$	(0.25	)	$	0.38	$	(0.70	)
Income (loss) from continuing operations - diluted		0.76		0.27			0.38		(0.19	)
Loss from discontinued operations - diluted		-		(0.52	)		-		(0.51	)
Net income (loss) per share - diluted	$	0.76	$	(0.25	)	$	0.38	$	(0.70	)
Stock options, restricted stock units, restricted stock awards, and performance share awards excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive		443		774			447		799

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Subsequent Events (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
	Jul. 13, 2015	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Subsequent Event [Line Items]
Property and equipment and other asset write-downs		$ 45	$ 2,000	$ 45	$ 2,000
Business closure cost or expense				$ 0
Subsequent Event [Member]
Subsequent Event [Line Items]
Property and equipment and other asset write-downs	$ 2,000
Subsequent Event [Member] | Maximum [Member]
Subsequent Event [Line Items]
Severance costs	2,400
Termination fees, ongoing maintenance expenditures, and facility and business closure expenses	1,300
Legal and other professional fees	800
Subsequent Event [Member] | Minimum [Member]
Subsequent Event [Line Items]
Severance costs	1,300
Termination fees, ongoing maintenance expenditures, and facility and business closure expenses	600
Legal and other professional fees	400
Subsequent Event [Member] | Equity Award [Member]
Subsequent Event [Line Items]
Severance costs	$ 300

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Derivative Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2015

Derivative Financial Instruments [Abstract]

Foreign currency contracts, by maturity

At June 30, 2015, the following forward contracts were outstanding (in thousands):

	Notional Amount	Matures
Forward contracts:
Australian dollar	700	July 2015
Euro	1,705	July 2015
British pound	420	July 2015
New Zealand dollar	50	July 2015

Forward contracts, by hedging designation

The fair value of our forward contracts were as follows (in thousands):

	June 30, 2015
	Derivatives designated as hedging instruments				Total Net
	Assets		Liabilities		Liabilities
Forward contracts	$	2	$	326	$	324

	December 31, 2014
	Derivatives designated as hedging instruments				Total Net
	Assets		Liabilities		Liabilities
Forward contracts	$	14	$	1,359	$	1,345

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Supplemental Disclosures of Consolidated Statements of Cash Flows (Tables)

6 Months Ended

Jun. 30, 2015

Supplemental Disclosures of Consolidated Statements of Cash Flows [Abstract]

Non-cash investing and financing activities

Our non-cash investing and financing activities during the six months ended June 30, 2015 and 2014 were as follows (in thousands):

	June 30, 2015			June 30, 2014
Unrealized gain on foreign currency exchange contracts	$	1,021		$	357
Unrealized gain (loss) on available-for-sale securities	$	(322	)	$	267

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) [Abstract]
Net income (loss)	$ 13,214	$ (4,185)	$ 6,602	$ (11,736)
Unrealized gain on foreign currency exchange contracts, net of income tax provision of $0, ($69), $0 and $0	1,814	229	922	357
Unrealized gain (loss) on available-for-sale securities, net of income tax benefit of $0, $62, $0 and $0	(252)	153	(322)	267
Comprehensive income (loss)	$ 14,776	$ (3,803)	$ 7,202	$ (11,112)

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2015

Recent Accounting Pronouncements [Abstract]

Recent Accounting Pronouncements

3. Recent Accounting Pronouncements

Management has assessed the impact of recently issued, but not yet effective, accounting standards and determined that the provisions are either not applicable to us, or are not anticipated to have a material impact on our consolidated financial statements.

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Investments and Fair Value Measurements (Details) - USD ($) $ in Thousands		Jun. 30, 2015	Dec. 31, 2014
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost		$ 64,302	$ 59,520
Unrealized Losses		(340)	(18)
Aggregate Fair Value		63,962	59,502
Financial assets [Abstract]
Municipal securities	[1]	63,962	59,502
Foreign currency exchange contracts		2	14
Total financial assets		63,964	59,516
Financial liabilities [Abstract]
Foreign currency exchange contracts		326	1,359
Total financial liabilities		326	1,359
Short Term Municipal Securities Funds [Member]
Schedule of Available-for-sale Securities [Line Items]
Amortized Cost	[2]	64,302	59,520
Unrealized Losses	[2]	(340)	(18)
Aggregate Fair Value	[2]	63,962	59,502
Level 1 [Member]
Financial assets [Abstract]
Municipal securities	[1]	63,962	59,502
Foreign currency exchange contracts		0	0
Total financial assets		63,962	59,502
Financial liabilities [Abstract]
Foreign currency exchange contracts		0	0
Total financial liabilities		0	0
Level 2 [Member]
Financial assets [Abstract]
Municipal securities	[1]	0	0
Foreign currency exchange contracts		2	14
Total financial assets		2	14
Financial liabilities [Abstract]
Foreign currency exchange contracts		326	1,359
Total financial liabilities		326	1,359
Level 3 [Member]
Financial assets [Abstract]
Municipal securities	[1]	0	0
Foreign currency exchange contracts		0	0
Total financial assets		0	0
Financial liabilities [Abstract]
Foreign currency exchange contracts		0	0
Total financial liabilities		$ 0	$ 0

[1] At June 30, 2015 and December 31, 2014, municipal securities consisted solely of holdings in short-term municipal security funds.

[2] Do not have a set maturity date.

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Investments and Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2015

Investments and Fair Value Measurements [Abstract]

Fair value of investments

The below tables summarize the composition of our investments at June 30, 2015 and December 31, 2014 (in thousands).  For both periods, all investments have been recorded to short-term available-for-sale securities on the consolidated balance sheet.

June 30, 2015	Amortized Cost		Unrealized  Losses			Aggregate Fair Value
Short term municipal securities funds1	$	64,302	$	(340	)	$	63,962
Total	$	64,302	$	(340	)	$	63,962

December 31, 2014	Amortized Cost		Unrealized Losses			Aggregate  Fair Value
Short term municipal securities funds1	$	59,520	$	(18	)	$	59,502
Total	$	59,520	$	(18	)	$	59,502

¹ Do not have a set maturity date.

Fair value by balance sheet grouping

The following tables detail the fair value measurements of assets and liabilities within the three levels of the fair value hierarchy at June 30, 2015 and December 31, 2014 (in thousands):

			Fair Value Measurements at Reporting Date Using
June 30, 2015	Fair Market Value		Level 1		Level 2		Level 3
Financial assets:
Municipal securities1		63,962		63,962		-		-
Foreign currency exchange contracts		2		-		2		-
Total financial assets	$	63,964	$	63,962	$	2	$	-
Financial liabilities:
Foreign currency exchange contracts		326		-		326		-
Total financial liabilities	$	326	$	-	$	326	$	-

December 31, 2014	Fair Market Value		Level 1		Level 2		Level 3
Financial assets:
Municipal securities1		59,502		59,502		-		-
Foreign currency exchange contracts		14		-		14		-
Total financial assets	$	59,516	$	59,502	$	14	$	-
Financial liabilities:
Foreign currency exchange contracts		1,359		-		1,359		-
Total financial liabilities	$	1,359	$	-	$	1,359	$	-

¹ At June 30, 2015 and December 31, 2014, municipal securities consisted solely of holdings in short-term municipal security funds.