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: February 8, 2012
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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 February 8, 2012
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NEWS FOR IMMEDIATE RELEASE
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February 8, 2012
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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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Full year 2011 net income of $3.0 million, or $0.17 per diluted share, compared to $8.1 million, or $0.42 per diluted share, in 2010. Net income before special items of $4.6 million for 2011.
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·
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2011 gross revenue, from all sources including non-directly delivered travel programs, of $155.1 million compared to $162.0 million in 2010, down 4.3 percent year-over-year.
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·
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Full year total revenue reported of $66.4 million compared to $76.1 million last year.
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·
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2011 gross margin of 38.1 percent compared to 40.8 percent in 2010.
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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 $58.6 million and no debt outstanding.
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·
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Traveled 23,928 delegates during 2011 compared to 26,657 delegates last year.
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·
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Enrolled revenue for 2012 programs is down 10.5 percent year-over-year; enrolled revenue for the core Student Ambassadors Programs is down 9.6 percent year-over-year.
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UNAUDITED
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||||||||||||||||
Quarter ended December 31,
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Year ended December 31,
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|||||||||||||||
2011
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2010
|
2011
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2010
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|||||||||||||
Gross revenue, all travel programs
|
$ | 3,679 | $ | 9,091 | $ | 151,035 | $ | 158,922 | ||||||||
Internet content and advertising revenue
|
$ | 1,195 | $ | 952 | $ | 4,046 | $ | 3,105 | ||||||||
Gross revenue, all sources
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$ | 4,874 | $ | 10,043 | $ | 155,081 | $ | 162,027 | ||||||||
Gross margin, all travel programs
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$ | 873 | $ | 3,535 | $ | 55,570 | $ | 63,450 | ||||||||
Gross margin, internet content and advertising
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$ | 1,026 | $ | 829 | $ | 3,471 | $ | 2,651 | ||||||||
Gross margin percentage
|
39.0 | % | 43.5 | % | 38.1 | % | 40.8 | % | ||||||||
Operating expense
|
$ | 13,098 | $ | 14,834 | $ | 56,931 | $ | 56,005 | ||||||||
Net income (loss) before special items
|
$ | (7,488 | ) | $ | (6,014 | ) | $ | 4,565 | $ | 9,519 | ||||||
Net income (loss)
|
$ | (7,798 | ) | $ | (6,720 | ) | $ | 2,956 | $ | 8,116 | ||||||
Income (loss) per diluted share
|
$ | (0.45 | ) | $ | (0.36 | ) | $ | 0.17 | $ | 0.42 |
UNAUDITED
|
||||||||
Year ended December 31,
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||||||||
2011
|
2010
|
|||||||
Cash flow from operations
|
$ | (6,655 | ) | $ | 21,639 | |||
Purchases of property, equipment and intangibles
|
(3,594 | ) | (5,402 | ) | ||||
Free cash flow
|
(10,249 | ) | 16,237 | |||||
Net sale of available-for-sale securities
|
34,342 | 433 | ||||||
Dividend payments to shareholders
|
(4,258 | ) | (4,594 | ) | ||||
Repurchase of common stock
|
(7,590 | ) | (13,406 | ) | ||||
Other cash flows, net
|
436 | 512 | ||||||
Net change in cash and cash equivalents
|
$ | 12,681 | $ | (818 | ) |
·
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Consolidated gross revenues for all programs and operations to be between $135 million and $145 million
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·
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Consolidated gross margin as a percentage of gross revenue for all programs and operations of 36 percent to 38 percent; and
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·
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Net income before any special items of between $3 million and $5 million.
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UNAUDITED
|
||||||||||||||||
Quarter ended December 31,
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||||||||||||||||
2011
|
2010
|
$ Change
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% Change
|
|||||||||||||
Net revenue, non-directly delivered programs (1)
|
$ | 713 | $ | 3,391 | $ | (2,678 | ) | -79 | % | |||||||
Gross revenue, directly delivered programs (2)
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70 | 467 | (397 | ) | -85 | % | ||||||||||
Internet content and advertising revenue
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1,195 | 952 | 243 | 26 | % | |||||||||||
Total revenue
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1,978 | 4,810 | (2,832 | ) | -59 | % | ||||||||||
Cost of sales, directly delivered programs (2)
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(90 | ) | 323 | (413 | ) | -128 | % | |||||||||
Cost of sales, internet content and advertising
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169 | 123 | 46 | 37 | % | |||||||||||
Gross margin (3)
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1,899 | 4,364 | (2,465 | ) | -56 | % | ||||||||||
Operating expenses:
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||||||||||||||||
Selling and marketing
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8,961 | 11,686 | (2,725 | ) | -23 | % | ||||||||||
General and administration
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4,137 | 3,148 | 989 | 31 | % | |||||||||||
Total operating expenses
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13,098 | 14,834 | (1,736 | ) | -12 | % | ||||||||||
Operating loss
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(11,199 | ) | (10,470 | ) | (729 | ) | -7 | % | ||||||||
Other income (expense)
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||||||||||||||||
Interest and dividend income
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250 | 265 | (15 | ) | -6 | % | ||||||||||
Foreign currency expense and other
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(1 | ) | (1 | ) | - | 0 | % | |||||||||
Total other income
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249 | 264 | (15 | ) | -6 | % | ||||||||||
Loss before income tax benefit
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(10,950 | ) | (10,206 | ) | (744 | ) | -7 | % | ||||||||
Income tax benefit
|
3,152 | 3,486 | (334 | ) | -9 | % | ||||||||||
Net loss
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$ | (7,798 | ) | $ | (6,720 | ) | $ | (1,078 | ) | -16 | % | |||||
Weighted average shares outstanding – basic
|
17,493 | 18,920 | (1,427 | ) | -8 | % | ||||||||||
Weighted average shares outstanding – diluted
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17,493 | 18,920 | (1,427 | ) | -8 | % | ||||||||||
Net loss per share — basic
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$ | (0.45 | ) | $ | (0.36 | ) | $ | (0.09 | ) | -25 | % | |||||
Net loss per share — diluted
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$ | (0.45 | ) | $ | (0.36 | ) | $ | (0.09 | ) | -25 | % |
(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
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||||||||||||
Quarter ended December 31,
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||||||||||||
2011
|
2010
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% Change
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||||||||||
Gross revenue
|
$ | 3,610 | $ | 8,624 | -58 | % | ||||||
Cost of sales
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2,897 | 5,233 | -45 | % | ||||||||
Net revenue
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$ | 713 | $ | 3,391 | -79 | % |
(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
|
||||||||||||||||
Year ended December 31,
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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)
|
$ | 51,966 | $ | 56,618 | $ | (4,652 | ) | -8 | % | |||||||
Gross revenue, directly delivered programs (2)
|
10,426 | 16,423 | (5,997 | ) | -37 | % | ||||||||||
Internet content and advertising revenue
|
4,046 | 3,105 | 941 | 30 | % | |||||||||||
Total revenue
|
66,438 | 76,146 | (9,708 | ) | -13 | % | ||||||||||
Cost of sales, directly delivered programs (2)
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6,822 | 9,591 | (2,769 | ) | -29 | % | ||||||||||
Cost of sales, internet content and advertising
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575 | 454 | 121 | 27 | % | |||||||||||
Gross margin (3)
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59,041 | 66,101 | (7,060 | ) | -11 | % | ||||||||||
Operating expenses:
|
||||||||||||||||
Selling and marketing
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40,367 | 41,880 | (1,513 | ) | -4 | % | ||||||||||
General and administration
|
16,564 | 14,125 | 2,439 | 17 | % | |||||||||||
Total operating expenses
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56,931 | 56,005 | 926 | 2 | % | |||||||||||
Operating income
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2,110 | 10,096 | (7,986 | ) | -79 | % | ||||||||||
Other income (expense)
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||||||||||||||||
Interest and dividend income
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1,340 | 1,501 | (161 | ) | -11 | % | ||||||||||
Foreign currency expense and other
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155 | - | 155 | 100 | % | |||||||||||
Total other income
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1,495 | 1,501 | (6 | ) | 0 | % | ||||||||||
Income before income tax provision
|
3,605 | 11,597 | (7,992 | ) | -69 | % | ||||||||||
Income tax provision
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(649 | ) | (3,481 | ) | 2,832 | -81 | % | |||||||||
Net income
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$ | 2,956 | $ | 8,116 | $ | (5,160 | ) | -64 | % | |||||||
Weighted average shares outstanding – basic
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17,746 | 19,085 | (1,339 | ) | -7 | % | ||||||||||
Weighted average shares outstanding – diluted
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17,869 | 19,303 | (1,434 | ) | -7 | % | ||||||||||
Net income per share — basic
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$ | 0.17 | $ | 0.43 | $ | (0.26 | ) | -60 | % | |||||||
Net income per share — diluted
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$ | 0.17 | $ | 0.42 | $ | (0.25 | ) | -60 | % |
(1)
|
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.
|
UNAUDITED
|
||||||||||
Year ended December 31,
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||||||||||
2011
|
2010
|
% Change
|
||||||||
Gross revenue
|
$ | 140,609 | $ | 142,499 | -1 | % | ||||
Cost of sales
|
88,643 | 85,881 | 3 | % | ||||||
Net revenue
|
$ | 51,966 | $ | 56,618 | -8 | % |
(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.
|
(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
|
AUDITED
|
|||||||||||
2011
|
2010
|
% Change
|
||||||||||
Assets
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||||||||||||
Current assets:
|
||||||||||||
Cash and cash equivalents
|
$ | 19,519 | $ | 6,838 | 185 | % | ||||||
Available-for-sale securities
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39,128 | 72,540 | -46 | % | ||||||||
Foreign currency exchange contracts
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- | 1,864 | -100 | % | ||||||||
Prepaid program cost and expenses
|
13,299 | 3,230 | 312 | % | ||||||||
Accounts receivable
|
1,395 | 1,976 | -29 | % | ||||||||
Deferred tax asset
|
668 | - | 100 | % | ||||||||
Total current assets
|
74,009 | 86,448 | -14 | % | ||||||||
Property and equipment, net
|
26,104 | 27,625 | -6 | % | ||||||||
Available-for-sale securities
|
700 | 1,250 | -44 | % | ||||||||
Intangibles
|
3,421 | 3,367 | 2 | % | ||||||||
Goodwill
|
9,781 | 9,781 | 0 | % | ||||||||
Other long-term assets
|
85 | 85 | 0 | % | ||||||||
Total assets
|
$ | 114,100 | $ | 128,556 | -11 | % | ||||||
Liabilities and Stockholders’ Equity
|
||||||||||||
Current liabilities:
|
||||||||||||
Accounts payable and accrued expenses
|
$ | 5,858 | $ | 5,954 | -2 | % | ||||||
Participants’ deposits
|
27,396 | 34,436 | -20 | % | ||||||||
Foreign currency exchange contracts
|
1,671 | - | 100 | % | ||||||||
Deferred tax liability
|
- | 668 | -100 | % | ||||||||
Other liabilities
|
112 | 107 | 5 | % | ||||||||
Total current liabilities
|
35,037 | 41,165 | -15 | % | ||||||||
Foreign currency exchange contracts
|
102 | - | 100 | % | ||||||||
Deferred tax liability
|
2,004 | 1,353 | 48 | % | ||||||||
Total liabilities
|
37,143 | 42,518 | -13 | % | ||||||||
Stockholders’ equity
|
76,957 | 86,038 | -11 | % | ||||||||
Total liabilities and stockholders’ equity
|
$ | 114,100 | $ | 128,556 | -11 | % |
UNAUDITED
|
|||||||
2011
|
2010
|
||||||
Cash flows from operating activities:
|
|||||||
Net income
|
$ | 2,956 | $ | 8,116 | |||
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
|
|||||||
Depreciation and amortization
|
4,742 | 4,646 | |||||
Stock-based compensation
|
1,475 | 2,022 | |||||
Deferred income tax benefit
|
420 | 1,399 | |||||
Loss on disposition and impairment of property and equipment
|
246 | 1,480 | |||||
Excess (shortfall) tax benefit from stock-based compensation
|
(160 | ) | 441 | ||||
Change in assets and liabilities:
|
|||||||
Accounts receivable and other assets
|
581 | 68 | |||||
Prepaid program costs and expenses
|
(10,069 | ) | (55 | ) | |||
Accounts payable, accrued expenses, and other current liabilities
|
194 | 223 | |||||
Participants’ deposits
|
(7,040 | ) | 3,299 | ||||
Net cash provided by (used in) operating activities
|
(6,655 | ) | 21,639 | ||||
Cash flows from investing activities:
|
|||||||
Purchase of available for sale securities
|
(48,693 | ) | (59,331 | ) | |||
Proceeds from sale of available-for-sale securities
|
83,035 | 59,764 | |||||
Purchase and construction of property and equipment
|
(3,101 | ) | (4,461 | ) | |||
Proceeds from sale of property and equipment
|
49 | 253 | |||||
Purchase of intangibles
|
(493 | ) | (941 | ) | |||
Net cash provided by (used in) investing activities
|
30,797 | (4,716 | ) | ||||
Cash flows from financing activities:
|
|||||||
Repurchase of common stock
|
(7,590 | ) | (13,406 | ) | |||
Dividend payment to shareholders
|
(4,258 | ) | (4,594 | ) | |||
Proceeds from exercise of stock options
|
227 | 700 | |||||
Excess (shortfall) tax benefit from stock-based compensation
|
160 | (441 | ) | ||||
Net cash used in financing activities
|
(11,461 | ) | (17,741 | ) | |||
Net increase (decrease) in cash and cash equivalents
|
12,681 | (818 | ) | ||||
Cash and cash equivalents, beginning of period
|
6,838 | 7,656 | |||||
Cash and cash equivalents, end of period
|
$ | 19,519 | $ | 6,838 |
UNAUDITED
|
||||||||
December 31,
|
||||||||
2011
|
2010
|
|||||||
Cash, cash equivalents and short-term available-for-sale securities
|
$ | 58,647 | $ | 79,378 | ||||
Prepaid program cost and expenses
|
13,299 | 3,230 | ||||||
Less: Participants’ deposits
|
(27,396 | ) | (34,436 | ) | ||||
Less: Accounts payable / accruals / other liabilities
|
(5,970 | ) | (6,061 | ) | ||||
Deployable cash
|
$ | 38,580 | $ | 42,111 |
UNAUDITED
|
|||||||||||
Net Loss
|
EPS
|
||||||||||
Three months ended December 31,
|
Three months ended December 31,
|
||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||
Amount before special items
|
$
|
(7,488)
|
$
|
(6,014)
|
$
|
(0.43)
|
$
|
(0.32)
|
|||
Asset impairments and loss on sale
|
(114)
|
(1,062)
|
(0.01)
|
(0.06)
|
|||||||
Legal fees – class action and SEC, net
|
(258)
|
329
|
(0.01)
|
0.02
|
|||||||
Separation Payments
|
-
|
(339)
|
-
|
(0.02)
|
|||||||
Tax impact
|
62
|
366
|
-
|
0.02
|
|||||||
Amount per consolidated statement of operations
|
$
|
(7,798)
|
$
|
(6,720)
|
$
|
(0.45)
|
$
|
(0.36)
|
|||
UNAUDITED
|
|||||||||||
Net Income
|
EPS
|
||||||||||
Year ended December,
|
Year ended December 31,
|
||||||||||
2011
|
2010
|
2011
|
2010
|
||||||||
Amount before special items
|
$
|
4,565
|
$
|
9,519
|
$
|
0.26
|
$
|
0.50
|
|||
Asset impairments and loss on sale
|
(236)
|
(1,462)
|
(0.01)
|
(0.08)
|
|||||||
Foreign currency de-designation gain
|
183
|
-
|
0.01
|
-
|
|||||||
Legal fees – class action and SEC, net
|
(1,909)
|
(202)
|
(0.11)
|
(0.01)
|
|||||||
Separation Payments
|
-
|
(339)
|
-
|
(0.02)
|
|||||||
Tax impact
|
353
|
600
|
0.02
|
0.03
|
|||||||
Amount per consolidated statement of operations
|
$
|
2,956
|
$
|
8,116
|
$
|
0.17
|
$
|
0.42
|