Delaware
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No. 0-33347
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91-1957010
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(State or Other Jurisdiction
of Incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.)
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¨
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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AM AMBASSADORS GROUP, INC.
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Date: October 26, 2011
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By: By:
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Anthony F. Dombrowik
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||||||
ChJ.Anthony F. Dombrowik
Senior Vice President, Chief Financial Officer
(Principal financial officer)
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Exhibit
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Number
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Description
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99.1
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Press Release, dated October 26, 2011
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NEWS FOR IMMEDIATE RELEASE
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October 26, 2011
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(509) 568-7800
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Investor Relations:
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Stacy Feit
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Financial Relations Board
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(213) 486-6549
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·
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Year-to-date net income of $10.8 million, or $0.60 per diluted share, compared to $14.8 million, or $0.77 per diluted share, in the same period last year.
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·
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Gross revenue, from all sources including non-directly delivered programs, for the nine months ended September 30, 2011 of $150.2 million compared to $152.0 in the prior year period.
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·
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Year-to-date reported total revenue of $64.5 million compared to $71.3 million in the same period last year.
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·
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Year-to-date gross margin of 38.0 percent compared to 40.6 percent in the same period last year.
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·
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Maintained strong balance sheet and liquidity position; Cash and cash equivalents and available-for-sale securities balance of $52.6 million and no debt outstanding.
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·
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Repurchased approximately 216,000 shares of common stock for $1.5 million during the third quarter and paid quarterly dividend of $0.06 per share.
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·
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Enrolled revenue for 2012 programs is down 14 percent year-over-year; enrolled revenue for the core Student Ambassadors Programs is down 13 percent year-over-year.
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UNAUDITED | ||||||||||||||||
Quarter ended September 30,
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Nine months ended September 30,
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|||||||||||||||
2011
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2010
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2011
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2010
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|||||||||||||
Gross revenue, all travel programs
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$ | 60,318 | $ | 65,105 | $ | 147,354 | $ | 149,831 | ||||||||
Internet content and advertising revenue
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$ | 934 | $ | 638 | $ | 2,851 | $ | 2,153 | ||||||||
Gross margin, all travel programs
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$ | 22,461 | $ | 25,111 | $ | 54,697 | $ | 59,915 | ||||||||
Gross margin, internet content and advertising
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$ | 790 | $ | 524 | $ | 2,445 | $ | 1,822 | ||||||||
Gross margin percentage
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38.0 | % | 39.0 | % | 38.0 | % | 40.6 | % | ||||||||
Operating expense
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$ | 15,796 | $ | 15,682 | $ | 43,833 | $ | 41,171 | ||||||||
Net income before special items
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$ | 6,466 | $ | 7,460 | $ | 11,929 | $ | 15,462 | ||||||||
Net income
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$ | 6,052 | $ | 7,142 | $ | 10,754 | $ | 14,836 | ||||||||
Income per diluted share
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$ | 0.34 | $ | 0.37 | $ | 0.60 | $ | 0.77 |
UNAUDITED
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||||||||
Nine months ended September 30,
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||||||||
2011
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2010
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|||||||
Cash flow from operations
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$ | (14,685 | ) | $ | 8,896 | |||
Purchases of property, equipment and intangibles
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(2,893 | ) | (4,259 | ) | ||||
Free cash flow
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(17,578 | ) | 4,637 | |||||
Net sale (purchase) of available-for-sale securities
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26,447 | (1,601 | ) | |||||
Dividend payments to shareholders
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(3,203 | ) | (3,452 | ) | ||||
Repurchase of common stock
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(7,590 | ) | (4,830 | ) | ||||
Other cash flows, net
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303 | 809 | ||||||
Net change in cash and cash equivalents
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$ | (1,621 | ) | $ | (4,437 | ) |
·
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Consolidated gross revenues for all programs and operations to be down 4 percent to 5 percent compared to 2010;
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·
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Consolidated gross margin as a percentage of gross revenue for all programs and operations of 38.0 percent to 39.0 percent; and
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·
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Net income before any special items of between $4.0 million and $5.0 million.
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UNAUDITED
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||||||||||||||||
Quarter ended September 30,
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||||||||||||||||
2011
|
2010
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$ Change
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% Change
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|||||||||||||
Net revenue, non-directly delivered programs (1)
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$ | 20,673 | $ | 21,991 | $ | (1,318 | ) | -6 | % | |||||||
Gross revenue, directly delivered programs (2)
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5,135 | 7,307 | (2,172 | ) | -30 | % | ||||||||||
Internet content and advertising revenue
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934 | 638 | 296 | 46 | % | |||||||||||
Total revenue
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26,742 | 29,936 | (3,194 | ) | -11 | % | ||||||||||
Cost of sales, directly delivered programs (2)
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3,347 | 4,187 | (840 | ) | -20 | % | ||||||||||
Cost of sales, internet content and advertising
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144 | 114 | 30 | 26 | % | |||||||||||
Gross margin (3)
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23,251 | 25,635 | (2,384 | ) | -9 | % | ||||||||||
Operating expenses:
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||||||||||||||||
Selling and marketing
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11,872 | 11,811 | 61 | 1 | % | |||||||||||
General and administration
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3,924 | 3,871 | 53 | 1 | % | |||||||||||
Total operating expenses
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15,796 | 15,682 | 114 | 1 | % | |||||||||||
Operating income
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7,455 | 9,953 | (2,498 | ) | -25 | % | ||||||||||
Other income (expense)
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||||||||||||||||
Interest and dividend income
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339 | 362 | (23 | ) | -6 | % | ||||||||||
Foreign currency expense and other
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(15 | ) | 15 | (30 | ) | -200 | % | |||||||||
Total other income
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324 | 377 | (53 | ) | -14 | % | ||||||||||
Income before income tax provision
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7,779 | 10,330 | (2,551 | ) | -25 | % | ||||||||||
Income tax provision
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(1,727 | ) | (3,188 | ) | 1,461 | -46 | % | |||||||||
Net income
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$ | 6,052 | $ | 7,142 | $ | (1,090 | ) | -15 | % | |||||||
Weighted average shares outstanding – basic
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17,611 | 18,979 | (1,368 | ) | -7 | % | ||||||||||
Weighted average shares outstanding – diluted
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17,693 | 19,185 | (1,492 | ) | -8 | % | ||||||||||
Net income per share — basic
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$ | 0.34 | $ | 0.38 | $ | (0.04 | ) | -11 | % | |||||||
Net income per share — diluted
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$ | 0.34 | $ | 0.37 | $ | (0.03 | ) | -8 | % |
(1)
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Net revenue, non-directly delivered programs consists of gross revenue, less program pass-through expenses for non-directly delivered programs because we primarily engage third-party operators to perform these services.
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UNAUDITED | ||||||||||||
Quarter ended September 30,
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||||||||||||
2011
|
2010
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% Change
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||||||||||
Gross revenue
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$ | 55,183 | $ | 57,798 | -5 | % | ||||||
Cost of sales
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34,510 | 35,807 | -4 | % | ||||||||
Net revenue
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$ | 20,673 | $ | 21,991 | -6 | % |
(2)
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Gross revenue and cost of sales for directly delivered programs are reported as separate items because we plan, organize and operate all activities, including speakers, facilitators, events, accommodations and transportation.
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(3)
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Gross margin is calculated as the sum of gross revenue non-directly delivered programs, gross revenue directly delivered programs and internet content and advertising revenue less cost of sales non-directly delivered programs, costs of sales directly delivered programs and cost of sales internet content and advertising. Gross margin percentage is calculated as gross margin divided by the sum of gross revenue non-directly delivered programs, gross revenue directly delivered programs and internet content and advertising revenue.
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UNAUDITED
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||||||||||||||||
Nine months ended September 30,
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||||||||||||||||
2011
|
2010
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$ Change
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% Change
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|||||||||||||
Net revenue, non-directly delivered programs (1)
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$ | 51,253 | $ | 53,227 | $ | (1,974 | ) | -4 | % | |||||||
Gross revenue, directly delivered programs (2)
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10,357 | 15,956 | (5,599 | ) | -35 | % | ||||||||||
Internet content and advertising revenue
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2,851 | 2,153 | 698 | 32 | % | |||||||||||
Total revenue
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64,461 | 71,336 | (6,875 | ) | -10 | % | ||||||||||
Cost of sales, directly delivered programs (2)
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6,913 | 9,268 | (2,355 | ) | -25 | % | ||||||||||
Cost of sales, internet content and advertising
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406 | 331 | 75 | 23 | % | |||||||||||
Gross margin (3)
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57,142 | 61,737 | (4,595 | ) | -7 | % | ||||||||||
Operating expenses:
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||||||||||||||||
Selling and marketing
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31,406 | 30,194 | 1,212 | 4 | % | |||||||||||
General and administration
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12,427 | 10,977 | 1,450 | 13 | % | |||||||||||
Total operating expenses
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43,833 | 41,171 | 2,662 | 6 | % | |||||||||||
Operating income
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13,309 | 20,566 | (7,257 | ) | -35 | % | ||||||||||
Other income (expense)
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||||||||||||||||
Interest and dividend income
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1,090 | 1,236 | (146 | ) | -12 | % | ||||||||||
Foreign currency expense and other
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156 | 1 | 155 | 15500 | % | |||||||||||
Total other income
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1,246 | 1,237 | 9 | 1 | % | |||||||||||
Income before income tax provision
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14,555 | 21,803 | (7,248 | ) | -33 | % | ||||||||||
Income tax provision
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(3,801 | ) | (6,967 | ) | 3,166 | -45 | % | |||||||||
Net income
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$ | 10,754 | $ | 14,836 | $ | (4,082 | ) | -28 | % | |||||||
Weighted average shares outstanding – basic
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17,750 | 19,069 | (1,319 | ) | -7 | % | ||||||||||
Weighted average shares outstanding – diluted
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17,896 | 19,294 | (1,398 | ) | -7 | % | ||||||||||
Net income per share — basic
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$ | 0.61 | $ | 0.78 | $ | (0.17 | ) | -22 | % | |||||||
Net income per share — diluted
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$ | 0.60 | $ | 0.77 | $ | (0.17 | ) | -22 | % |
(1)
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Net revenue, non-directly delivered programs consists of gross revenue, less program pass-through expenses for non-directly delivered programs because we primarily engage third-party operators to perform these services.
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UNAUDITED | ||||||||||||
Quarter ended September 30,
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||||||||||||
2011
|
2010
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% Change
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||||||||||
Gross revenue
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$ | 136,997 | $ | 133,875 | 2 | % | ||||||
Cost of sales
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85,744 | 80,648 | 6 | % | ||||||||
Net revenue
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$ | 51,253 | $ | 53,227 | -4 | % |
(2)
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Gross revenue and cost of sales for directly delivered programs are reported as separate items because we plan, organize and operate all activities, including speakers, facilitators, events, accommodations and transportation.
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(3)
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Gross margin is calculated as the sum of gross revenue non-directly delivered programs, gross revenue directly delivered programs and internet content and advertising revenue less cost of sales non-directly delivered programs, costs of sales directly delivered programs and cost of sales internet content and advertising. Gross margin percentage is calculated as gross margin divided by the sum of gross revenue non-directly delivered programs, gross revenue directly delivered programs and internet content and advertising revenue.
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UNAUDITED
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AUDITED
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||||||||||
September 30,
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December 31,
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||||||||||
2011
|
2010
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2010
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|||||||||
Assets
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|||||||||||
Current assets:
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|||||||||||
Cash and cash equivalents
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$ | 5,217 | $ | 3,219 | $ | 6,838 | |||||
Available-for-sale securities
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47,398 | 74,615 | 72,540 | ||||||||
Foreign currency exchange contracts
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- | 1,340 | 1,864 | ||||||||
Prepaid program cost and expenses
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13,946 | 6,053 | 3,230 | ||||||||
Accounts receivable
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1,140 | 956 | 1,976 | ||||||||
Deferred tax asset
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597 | - | - | ||||||||
Total current assets
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68,298 | 86,183 | 86,448 | ||||||||
Property and equipment, net
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26,652 | 28,912 | 27,625 | ||||||||
Available-for-sale securities
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703 | 1,263 | 1,250 | ||||||||
Intangibles
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3,398 | 3,253 | 3,367 | ||||||||
Goodwill
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9,781 | 9,781 | 9,781 | ||||||||
Other long-term assets
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85 | 110 | 85 | ||||||||
Total assets
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$ | 108,917 | $ | 129,502 | $ | 128,556 | |||||
Liabilities and Stockholders’ Equity
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|||||||||||
Current liabilities:
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|||||||||||
Accounts payable and accrued expenses
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$ | 11,375 | $ | 11,556 | $ | 5,954 | |||||
Participants’ deposits
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9,014 | 15,219 | 34,436 | ||||||||
Foreign currency exchange contracts
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1,225 | - | - | ||||||||
Deferred tax liability
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- | 109 | 668 | ||||||||
Other liabilities
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105 | 114 | 107 | ||||||||
Total current liabilities
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21,719 | 26,998 | 41,165 | ||||||||
Deferred tax liability
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1,177 | 54 | 1,353 | ||||||||
Total liabilities
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22,896 | 27,052 | 42,518 | ||||||||
Stockholders’ equity
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86,021 | 102,450 | 86,038 | ||||||||
Total liabilities and stockholders’ equity
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$ | 108,917 | $ | 129,502 | $ | 128,556 |
UNAUDITED
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|||||||
September 30,
|
|||||||
2011
|
2010
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||||||
Cash flows from operating activities:
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|||||||
Net income
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$ | 10,754 | $ | 14,836 | |||
Adjustments to reconcile net income to net cash provided by operating activities:
|
|||||||
Depreciation and amortization
|
3,573 | 3,500 | |||||
Stock-based compensation
|
1,294 | 1,551 | |||||
Deferred income tax benefit
|
(619 | ) | (321 | ) | |||
Loss on disposition of property and equipment
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123 | 419 | |||||
Excess tax benefit from stock-based compensation
|
(27 | ) | (77 | ) | |||
Change in assets and liabilities:
|
|||||||
Accounts receivable and other assets
|
836 | 1,064 | |||||
Prepaid program costs and expenses
|
(10,716 | ) | (2,878 | ) | |||
Accounts payable, accrued expenses, and other current liabilities
|
5,519 | 6,721 | |||||
Participants’ deposits
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(25,422 | ) | (15,919 | ) | |||
Net cash provided (used) by operating activities
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(14,685 | ) | 8,896 | ||||
Cash flows from investing activities:
|
|||||||
Purchase of available for sale securities
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(48,674 | ) | (52,961 | ) | |||
Proceeds from sale of available-for-sale securities
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75,121 | 51,360 | |||||
Purchase and construction of property and equipment
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(2,536 | ) | (3,534 | ) | |||
Proceeds from sale of property and equipment
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49 | 75 | |||||
Purchase of intangibles
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(357 | ) | (725 | ) | |||
Net cash provided (used) in investing activities
|
23,603 | (5,785 | ) | ||||
Cash flows from financing activities:
|
|||||||
Repurchase of Common Stock
|
(7,590 | ) | (4,830 | ) | |||
Dividend payment to shareholders
|
(3,203 | ) | (3,452 | ) | |||
Proceeds from exercise of stock options
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227 | 657 | |||||
Excess tax benefit from stock-based compensation
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27 | 77 | |||||
Net cash used in financing activities
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(10,539 | ) | (7,548 | ) | |||
Net decrease in cash and cash equivalents
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(1,621 | ) | (4,437 | ) | |||
Cash and cash equivalents, beginning of period
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6,838 | 7,656 | |||||
Cash and cash equivalents, end of period
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$ | 5,217 | $ | 3,219 |
UNAUDITED
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||||||||||||
September 30,
|
December 31,
|
|||||||||||
2011
|
2010
|
2010
|
||||||||||
Cash, cash equivalents and short-term available-for-sale securities
|
$ | 52,615 | $ | 77,834 | $ | 79,378 | ||||||
Prepaid program cost and expenses
|
13,946 | 6,053 | 3,230 | |||||||||
Less: Participants’ deposits
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(9,014 | ) | (15,219 | ) | (34,436 | ) | ||||||
Less: Accounts payable / accruals / other liabilities
|
(11,480 | ) | (11,670 | ) | (6,061 | ) | ||||||
Deployable cash
|
$ | 46,067 | $ | 56,998 | $ | 42,111 |
UNAUDITED
|
||||||||||||||||
Net Income
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EPS
|
|||||||||||||||
Three months ended September 30,
|
Three months ended
September 30,
|
|||||||||||||||
2011
|
2010
|
2011
|
2010
|
|||||||||||||
Amount before special items
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$ | 6,466 | $ | 7,460 | $ | 0.36 | $ | 0.39 | ||||||||
Asset impairments and loss on sale
|
(56 | ) | (146 | ) | - | (0.01 | ) | |||||||||
Legal fees – class action and SEC, net
|
(476 | ) | (314 | ) | (0.03 | ) | (0.02 | ) | ||||||||
Tax impact
|
118 | 142 | 0.01 | 0.01 | ||||||||||||
Amount per consolidated statement of operations
|
$ | 6,052 | $ | 7,142 | $ | 0.34 | $ | 0.37 | ||||||||
UNAUDITED
|
||||||||||||||||
Net Income
|
EPS
|
|||||||||||||||
Nine months ended
September 30,
|
Nine months ended
September 30,
|
|||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Amount before special items
|
$ | 11,929 | $ | 15,462 | $ | 0.67 | $ | 0.80 | ||||||||
Asset impairments and loss on sale
|
(122 | ) | (389 | ) | (0.01 | ) | (0.02 | ) | ||||||||
Foreign currency de-designation gain
|
183 | - | 0.01 | - | ||||||||||||
Legal fees – class action and SEC, net
|
(1,651 | ) | (531 | ) | (0.09 | ) | (0.03 | ) | ||||||||
Tax impact
|
415 | 294 | 0.02 | 0.02 | ||||||||||||
Amount per consolidated statement of operations
|
$ | 10,754 | $ | 14,836 | $ | 0.60 | $ | 0.77 |