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Ambassadors International posted a first quarter loss
of $11.4m, or $1.01 per share, compared to a year-ago loss of
$12.5m, or $1.15 per share. The loss from continuing operations was
narrowed to 63 cents per share, down from $1.27.
With Majestic America Line not operating and
Windstar Cruises carrying fewer passengers due to the economy,
revenues fell to $17.2m, down from $27.7m a year ago. The year over
year drop in revenue for Windstar was $4m, according to a 10-Q
filing.
Occupancy for the sail-cruise line fell 10 points, to 85%. Ticket
revenue was off more than $6m, and on-board and other cruise revenue
was $2m lower.
Cruise operating expenses were $12.5m, down from $20.8m, mainly due
to the lay-up of the Majestic America ships but also the fewer
passengers carried by Windstar.
Ambassadors is in the process of paring divisions to focus on
Windstar. One month ago the company sold assets of the housing
portion of its travel and events segment, recording a net loss of
$2.7m, and last week it sold the stock of its marine group for $5m
in cash and a consideration of 75 Windstar cruises to be used over a
three-year period.
Proceeds of that sale went to cure a default on the $1.8m interest
payment related to Ambassadors’ 3.75% senior convertible notes. The
company recorded the marine group sale as an impairment loss.
In its filing late Friday, Ambassadors reiterated its intention to
exit the Majestic America business in an orderly fashion. The
company said it is talking with prospective buyers but has no
completed funding transactions or sales commitments.
Restating a cautionary note, Ambassadors said that not being able to
sell assets, raise additional funding or renegotiate debt may force
it to seek extended payment terms with vendors, curtail areas of
operations and possibly to seek bankruptcy protection.
At March 31, total assets were $197.3m and total liabilities were
$148.7m. After curing the default in the semi-annual interest on its
senior convertible notes several days ago, the company is now in
compliance with covenants related to the notes.
For 2009, the focus is on Windstar. Ambassadors plans to increase
sales and marketing efficiencies, boost on-board margins and
customer satisfaction by replacing and/or directly managing key
on-board services, and trim costs by renegotiating key vendor
contracts or eliminating certain third party relationships.
Some $2.5m in capital expenditures and drydock projects are
envisioned for Windstar this year. |
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