Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - AMBASSADORS GROUP INC | form8_k.htm |
| EX-10.1 - EXHIBIT 10.1 - AMBASSADORS GROUP INC | ex10-1_.htm |
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The accompanying unaudited pro forma condensed consolidated financial statements of Ambassadors Group, Inc. and subsidiaries (the “Company”) were derived from the Company’s historical consolidated financial statements. The unaudited pro forma balance sheet as of June 30, 2014, was adjusted to reflect the disposition of its educational website business www.bookrags.com (“BookRags”) on September 5, 2014, as though the disposition occurred on June 30, 2014. The unaudited pro forma condensed consolidated statements of operations for the six months ended June 30, 2014 and 2013, and for the years ended December 31, 2013 and 2012, include pro forma adjustments that reflect the disposition of BookRags. These financial statements were prepared as though the disposition occurred at the beginning of each period presented.
The unaudited pro forma condensed consolidated financial statements are furnished for informational purposes only and do not purport to reflect the Company’s financial position and results of operations had the dispositions occurred on the dates as indicated above. Further, these financial statements are not necessarily indicative of the Company’s future financial position and future results of operations and should be read in conjunction with the historical financial statements of the Company included in its Annual Report on Form 10-K for the year ended December 31, 2013, and its Quarterly Report on Form 10-Q for the six months ended June 30, 2014.
-1-
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET (UNAUDITED)
As of June 30, 2014
(in thousands, except share data)
|
As Reported
|
Pro Forma
Adjustments
|
Pro Forma
|
|||||||
|
Assets
|
|||||||||
|
Current assets:
|
|||||||||
|
Cash and cash equivalents
|
$
|
10,412
|
$
|
4,577
|
(a,b)
|
$
|
14,989
|
||
|
Available-for-sale securities
|
47,088
|
-
|
47,088
|
||||||
|
Foreign currency exchange contracts
|
60
|
-
|
60
|
||||||
|
Prepaid program cost and expenses
|
17,918
|
(8)
|
(b)
|
17,910
|
|||||
|
Accounts receivable
|
1,421
|
(57)
|
(b)
|
1,364
|
|||||
|
Deferred tax assets
|
-
|
-
|
-
|
||||||
|
Total current assets
|
76,899
|
4,512
|
81,411
|
||||||
|
Property and equipment, net
|
14,633
|
(803)
|
(b) |
13,830
|
|||||
|
Available-for-sale securities
|
729
|
-
|
729
|
||||||
|
Intangibles
|
3,462
|
(3,462)
|
(b) |
-
|
|||||
|
Goodwill
|
70
|
-
|
70
|
||||||
|
Other long-term assets
|
85
|
400
|
(a)
|
485
|
|||||
|
Total assets
|
$
|
95,878
|
$
|
647
|
$
|
96,525
|
|||
|
Liabilities and Stockholders’ Equity
|
|||||||||
|
Current liabilities:
|
|||||||||
|
Accounts payable and accrued expenses
|
$
|
7,145
|
$
|
895
|
(b,c)
|
$
|
8,040
|
||
|
Participants’ deposits
|
41,043
|
-
|
41,043
|
||||||
|
Deferred tax liabilities
|
77
|
-
|
77
|
||||||
|
Other liabilities
|
103
|
-
|
103
|
||||||
|
Total current liabilities
|
48,368
|
895
|
49,263
|
||||||
|
Participants’ deposits
|
1,822
|
-
|
1,822
|
||||||
|
Deferred tax liabilities
|
19
|
-
|
19
|
||||||
|
Total liabilities
|
50,209
|
895
|
51,104
|
||||||
|
Preferred stock, $.01 par value; 2,000,000 shares authorized; none issued and outstanding
|
-
|
-
|
-
|
||||||
|
Common stock, $.01 par value; 50,000,000 shares authorized; 17,038,508 and 17,040,724 shares issued and outstanding, respectively
|
170
|
-
|
170
|
||||||
|
Additional paid-in capital
|
1,284
|
-
|
1,284
|
||||||
|
Retained earnings
|
44,140
|
(248)
|
(d)
|
43,892
|
|||||
|
Accumulated other comprehensive gain (loss)
|
75
|
-
|
75
|
||||||
|
Stockholders’ equity
|
45,669
|
(248)
|
|
45,421
|
|||||
|
Total liabilities and stockholders’ equity
|
$
|
95,878
|
$
|
647
|
$
|
96,525
|
|||
-2-
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the six months ended June 30, 2014
(in thousands, except per share amounts)
|
As Reported
|
Disposition
|
Pro Forma
|
||||||
|
Net revenue, non-directly delivered programs
|
$
|
18,208
|
$
|
-
|
$
|
18,208
|
||
|
Gross revenue, directly delivered programs
|
3,838
|
-
|
3,838
|
|||||
|
Internet content and advertising revenue
|
2,063
|
(2,063)
|
(e)
|
-
|
||||
|
Total revenue
|
24,109
|
(2,063)
|
22,046
|
|||||
|
Cost of sales, directly delivered programs
|
2,443
|
-
|
2,443
|
|||||
|
Cost of sales, internet content and advertising
|
250
|
(250)
|
(e)
|
-
|
||||
|
Cost of sales, program merchandise markdown
|
554
|
-
|
554
|
|||||
|
Gross margin
|
20,862
|
(1,813)
|
19,049
|
|||||
|
Operating expenses:
|
||||||||
|
Selling and marketing
|
13,152
|
(653)
|
(e)
|
12,499
|
||||
|
General and administration
|
6,650
|
(422)
|
(e)
|
6,228
|
||||
|
Restructuring costs
|
11,772
|
(10,233)
|
(e)
|
1,539
|
||||
|
Asset impairments
|
2,000
|
-
|
2,000
|
|||||
|
Total operating expenses
|
33,574
|
(11,308)
|
22,266
|
|||||
|
Operating loss
|
(12,712)
|
9,495
|
(3,217)
|
|||||
|
Other income (expense):
|
||||||||
|
Interest and dividend income
|
273
|
-
|
273
|
|||||
|
Foreign currency and other income
|
8
|
-
|
8
|
|||||
|
Total other income
|
281
|
-
|
281
|
|||||
|
Loss before income tax benefit
|
(12,431)
|
9,495
|
(2,936)
|
|||||
|
Income tax benefit/provision
|
695
|
(954)
|
(e)
|
(259)
|
||||
|
Net loss
|
$
|
(11,736)
|
$
|
8,541
|
$
|
(3,195)
|
||
|
Weighted average shares outstanding – basic
|
16,789
|
16,789
|
16,789
|
|||||
|
Weighted average shares outstanding – diluted
|
16,789
|
16,789
|
16,789
|
|||||
|
Net loss per share — basic
|
$
|
(0.70)
|
$
|
0.51
|
$
|
(0.19)
|
||
|
Net loss per share — diluted
|
$
|
(0.70)
|
$
|
0.51
|
$
|
(0.19)
|
||
See notes to the unaudited pro forma condensed consolidated financial statements.
-3-
AMBASSADORS GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the six months ended June 30, 2013
(in thousands, except per share amounts)
|
As Reported
|
Disposition
|
Pro Forma
|
||||||
|
Net revenue, non-directly delivered programs
|
$
|
21,183
|
$
|
-
|
$
|
21,183
|
||
|
Gross revenue, directly delivered programs
|
4,164
|
-
|
4,164
|
|||||
|
Internet content and advertising revenue
|
2,028
|
(2,028)
|
(e)
|
-
|
||||
|
Total revenue
|
27,375
|
(2,028)
|
25,347
|
|||||
|
Cost of sales, directly delivered programs
|
2,925
|
-
|
2,925
|
|||||
|
Cost of sales, internet content and advertising
|
255
|
(255)
|
(e)
|
-
|
||||
|
Gross margin
|
24,195
|
(1,773)
|
22,422
|
|||||
|
Operating expenses:
|
||||||||
|
Selling and marketing
|
15,842
|
(791)
|
(e)
|
15,051
|
||||
|
General and administration
|
8,604
|
(273)
|
(e)
|
8,331
|
||||
|
Total operating expenses
|
24,446
|
(1,064)
|
23,382
|
|||||
|
Operating loss/income
|
(251)
|
(709)
|
(960)
|
|||||
|
Other income (expense):
|
||||||||
|
Interest and dividend income
|
287
|
-
|
287
|
|||||
|
Foreign currency and other income
|
21
|
-
|
21
|
|||||
|
Total other income
|
308
|
-
|
308
|
|||||
|
Income/loss before income tax provision
|
57
|
(709)
|
(652)
|
|||||
|
Income tax provision
|
(24)
|
289
|
(e)
|
265
|
||||
|
Net income
|
$
|
33
|
$
|
(420)
|
$
|
(387)
|
||
|
Weighted average shares outstanding – basic
|
16,980
|
16,980
|
16,980
|
|||||
|
Weighted average shares outstanding – diluted
|
16,980
|
16,980
|
16,980
|
|||||
|
Net income per share — basic
|
$
|
-
|
$
|
(0.02)
|
$
|
(0.02)
|
||
|
Net income per share — diluted
|
$
|
-
|
$
|
(0.02)
|
$
|
(0.02)
|
||
See notes to the unaudited pro forma condensed consolidated financial statements.
-4-
AMBASSADORS GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the twelve months ended December 31, 2013
(in thousands, except per share amounts)
|
As Reported
|
Disposition
|
Pro Forma
|
||||||
|
Net revenue, non-directly delivered programs
|
$
|
36,752
|
$
|
-
|
$
|
36,752
|
||
|
Gross revenue, directly delivered programs
|
10,468
|
-
|
10,468
|
|||||
|
Internet content and advertising revenue
|
3,975
|
(3,975)
|
(e)
|
-
|
||||
|
Total revenue
|
51,195
|
(3,975)
|
47,220
|
|||||
|
Cost of sales, directly delivered programs
|
7,046
|
-
|
7,046
|
|||||
|
Cost of sales, internet content and advertising
|
513
|
(513)
|
-
|
|||||
|
Gross margin
|
43,636
|
(3,462)
|
40,174
|
|||||
|
Operating expenses:
|
||||||||
|
Selling and marketing
|
32,318
|
(1,499)
|
(e)
|
30,819
|
||||
|
General and administration
|
14,423
|
(661)
|
(e)
|
13,762
|
||||
|
Restructuring costs
|
2,212
|
-
|
2,212
|
|||||
|
Asset impairments
|
6,466
|
-
|
6,466
|
|||||
|
Total operating expenses
|
55,419
|
(2,160)
|
53,259
|
|||||
|
Operating income/loss
|
(11,783)
|
(1,302)
|
(13,085)
|
|||||
|
Other income (expense):
|
||||||||
|
Interest and dividend income
|
532
|
-
|
532
|
|||||
|
Foreign currency and other income
|
23
|
-
|
23
|
|||||
|
Total other income
|
555
|
-
|
555
|
|||||
|
Income/loss before income tax provision/benefit
|
(11,228)
|
(1,302)
|
(12,530)
|
|||||
|
Income tax provision/benefit
|
4,151
|
468
|
(e)
|
4,619
|
||||
|
Net income/loss
|
$
|
(7,077)
|
$
|
(834)
|
$
|
(7,911)
|
||
|
Weighted average shares outstanding – basic
|
16,713
|
16,713
|
16,713
|
|||||
|
Weighted average shares outstanding – diluted
|
16,713
|
16,713
|
16,713
|
|||||
|
Net income/loss per share — basic
|
$
|
(0.42)
|
$
|
(0.05)
|
$
|
(0.47)
|
||
|
Net income/loss per share — diluted
|
$
|
(0.42)
|
$
|
(0.05)
|
$
|
(0.47)
|
||
See notes to the unaudited pro forma condensed consolidated financial statements.
-5-
AMBASSADORS GROUP, INC.
PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
For the twelve months ended December 31, 2012
(in thousands, except per share amounts)
|
As Reported
|
Disposition
|
Pro Forma
|
||||||
|
Net revenue, non-directly delivered programs
|
$
|
44,837
|
$
|
-
|
$
|
44,837
|
||
|
Gross revenue, directly delivered programs
|
9,008
|
-
|
9,008
|
|||||
|
Internet content and advertising revenue
|
4,207
|
(4,207)
|
(e)
|
-
|
||||
|
Total revenue
|
58,052
|
(4,207)
|
53,845
|
|||||
|
Cost of sales, directly delivered programs
|
6,107
|
-
|
6,107
|
|||||
|
Cost of sales, internet content and advertising
|
554
|
(554)
|
-
|
|||||
|
Gross margin
|
51,391
|
(3,653)
|
47,738
|
|||||
|
Operating expenses:
|
||||||||
|
Selling and marketing
|
34,845
|
(1,461)
|
(e)
|
33,384
|
||||
|
General and administration
|
16,224
|
(865)
|
(e)
|
15,359
|
||||
|
Total operating expenses
|
51,069
|
(2,326)
|
48,743
|
|||||
|
Operating income
|
322
|
(1,327)
|
(1,005)
|
|||||
|
Other income (expense):
|
||||||||
|
Interest and dividend income
|
1,730
|
(60)
|
(e)
|
1,670
|
||||
|
Foreign currency and other income
|
(13)
|
-
|
(13)
|
|||||
|
Total other income (expense)
|
1,717
|
(60)
|
1,657
|
|||||
|
Income before income tax provision
|
2,039
|
(1,387)
|
652
|
|||||
|
Income tax provision
|
(295)
|
487
|
(e)
|
192
|
||||
|
Net income
|
$
|
1,744
|
$
|
(900)
|
$
|
844
|
||
|
Weighted average shares outstanding – basic
|
17,530
|
17,530
|
17,530
|
|||||
|
Weighted average shares outstanding – diluted
|
17,530
|
17,530
|
17,530
|
|||||
|
Net income per share — basic
|
$
|
0.10
|
$
|
(0.05)
|
$
|
0.05
|
||
|
Net income per share — diluted
|
$
|
0.10
|
$
|
(0.05)
|
$
|
0.05
|
||
See notes to the unaudited pro forma condensed consolidated financial statements.
-6-
AMBASSADORS GROUP, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
1. Unaudited Pro Forma Condensed Consolidated Balance Sheet
|
|
(a) The cash adjustment amount consists of gross proceeds of $5.0 million received from the sale of BookRags on September 5, 2014, less the $0.4 million held in escrow to secure the Company’s indemnification obligations under the Stock Purchase Agreement. The Escrow receivable is included in other long-term assets.
(b) The assets and liabilities of BookRags assumed by the acquier.
(c) Other accrued expense adjustment includes $1.0 million for estimated costs related to the sale of BookRags including severance, investment bank and legal fees, less liabilities assumed by GradeSaver LLC.
(d) Stockholders’ equity was adjusted as a result of adjustments (a) through (c), and represents the anticipated loss on sale to be recorded during the third quarter of 2014.
|
|
2. Pro Forma Condensed Consolidated Statement of Operations
(e) To remove the operating results of BookRags as if sold at the beginning of each period presented.
|