Ambassadors Group: Stock Up 68.9% - Earnings
Jump 40%
07/24/2004
Ambassadors Group (ticker: EPAX) reported a 40% increase in
quarterly earnings on Monday. In the time since we recommended
buying EPAX, the company's stock has jumped 68.9%.
Following Monday's earnings announcement,
the company's stock rose 14.6% on Tuesday. Then, on Wednesday,
research firm DA Davidson upgraded EPAX to "buy."
Following is an excerpt from the company's
earnings announcement:
SPOKANE, Wash.--(BUSINESS WIRE)--July 19,
2004--Ambassadors Group, Inc. (Nasdaq:EPAX), a leading provider
of educational travel experiences, announced an increase in
fully diluted second quarter earnings ended June 30, 2004,
of 40 percent. Earnings per share for the second quarter of
2004 were $1.26 per share compared to $0.90 in the second
quarter of 2003. For the six months ended June 30, 2004, fully
diluted earnings increased 42 percent, from $0.73 per share
in 2003 to $1.04 in 2004.
Gross program receipts increased 36 percent
in the second quarter of 2004, from $53.7 million in 2003
to $72.8 million in 2004. Net revenue increased 42 percent
in the second quarter of 2004, an increase from $18.2 million
in 2003 to $25.9 million in 2004. The overall increase of
gross program receipts and net revenue resulted from an increased
number of delegates traveling during 2004.
The Company's gross margin was 36 percent
for the quarter ended June 30, 2004, compared to 34 percent
for the same period of 2003. This increase was a direct result
of cost management and program quality enhancements.
Operating expenses were $6.3 million in
the second quarter of 2004, from $4.8 million in the comparable
quarter of 2003. The increase of $1.5 million for the second
quarter ended June 30, 2004, is primarily due to higher selling
and tour promotion costs. These higher costs are the result
of planned increases in marketing expenses associated with
new and existing programs and additional personnel to support
the increased number of delegates traveling in 2004.
The Company's cash, cash equivalents and
available-for-sale securities balances at June 30, 2004, and
June 30, 2003, were $98.9 million and $69.1 million, respectively.
The Company's deployable cash at June 30, 2004, and June 30,
2003, was $40.1 million and $30.8 million, respectively (see
definition on final page of the press release).
Ambassadors Group, Inc. is a leading educational
travel company that organizes and promotes international and
domestic programs for students, athletes, and professionals.
These programs provide opportunities for grade school, junior,
and senior high school students to visit foreign and domestic
destinations to learn about the history, government, economy
and culture of such areas, as well as for junior and senior
high school athletes to participate in international sports
challenges. The Company's professional programs emphasize
meetings and seminars between participants and persons in
similar professions abroad.
Contact:
Ambassadors Group, Inc.
Colleen McCann-Lillie, 509-534-6200
Source: Ambassadors Group, Inc.
The complete announcement can be found at
www.ambassadorsgroup.com.
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