NEWPORT BEACH, Calif., May 7, 2007 -- Ambassadors International, Inc., which owns Windstar and Majestic America Line, reported a net loss of $8.6 million for the first quarter of 2007.

The company's release follows.

Ambassadors International, Inc., today reported revenue of $32.9 million for the three months ended March 31, 2007, up from $8.3 million for the three months ended March 31, 2006. In addition, the Company reported a net loss of $8.6 million, or $0.77 per share, for the three months ended March 31, 2007, compared to net loss of $1.7 million, or $0.16 per share, for the three months ended March 31, 2006.

Our revenues increased $24.6 million in the first quarter of 2007 compared to 2006. For the quarter ended March 31, 2007, the increase in revenue was primarily related to the increase in our marine revenue of $23.3 million related to the acquired operations of Bellingham Marine in July 2006 and our shipyard operations which commenced in April 2006. Our cruise-related revenue also increased $3.8 million due to operations acquired in 2006. These increases were partially offset by decreased revenue in our travel, incentive and event related revenue, as well as lower net insurance premiums earned.

Our costs and operating expenses increased $35.0 million in the first quarter of 2007 compared to 2006. This increase was primarily due to $19.4 million in cost of marine revenue related to revenues generated from our new construction and shipyard operations which commenced during 2006. In addition, cruise operating expenses and other selling, general and administration and depreciation expenses associated with our new cruise segment increased $12.7 million.

We reported other expense for the three months ended March 31, 2007 of $0.6 million, compared to other income of $0.5 million for the three months ended March 31, 2006. The decrease was a result of interest expense of $1.0 million incurred on vessel debt combined with lower investment income resulting from a decrease in invested assets for the quarter ended March 31, 2007.

Recent News

On April 2, 2007, we completed our acquisition of Windstar Cruises. On April 3, 2007, we completed a private placement of $97 million aggregate principal amount of 3.75% Convertible Senior Notes due 2027.

Conference Call

Ambassadors International, Inc. will host a conference call to discuss the results of operations on Tuesday, May 8, 2007 at 8:30 a.m. Pacific Daylight Time. Interested parties may join the call by dialing 866-632-2359, conference ID #: ANALYST. The conference call may also be joined via the Internet at www.ambassadors.com . For conference replay access, parties may dial 800-642-1687, conference ID #: 6498304 and follow the prompts or visit www.ambassadors.com . Post-call replay will be available two hours following the completion of our call.

About Ambassadors International, Inc.

Ambassadors International, Inc. is a cruise, marine, and travel and event company. The Company operates Windstar Cruises, an international, luxury cruise line and Majestic America Line, a North American river and coastal cruising company. The Company is also a global provider of construction and consulting services to marina owners. In addition, the Company provides travel and event services. The Company is headquartered in Newport Beach, California. In this press release, any reference to "Company," "Ambassadors," "management," "we," "us" and "our" refers to Ambassadors International, Inc. and its management team.

Forward-Looking Statements

This press release contains forward-looking statements that involve various risks and uncertainties. The forward-looking statements contained in this release are based on our current expectations and entail various risks and uncertainties that could cause our actual results to differ materially from those suggested in our forward-looking statements. We believe that such risks and uncertainties include, among others, general economic and business conditions; overall conditions in the cruise, marine, travel and insurance industries; potential claims related to our reinsurance business; further declines in the fair market value of our investments; lower investment yields; unexpected events that disrupt the operations of our cruise operations; environmental related factors; our ability to successfully integrate the operations of companies or businesses we acquire and realize the expected benefits of our acquisitions; our ability to successfully and efficiently operate the businesses that we acquire; our ability to compete effectively in the U.S. and international cruise markets; our ability to compete effectively in the U.S. and international marina construction markets, including our ability to obtain construction contracts; our ability to effectively and efficiently manage our rapid growth; our ability to continue to identify attractive acquisition targets and consummate future acquisitions on favorable terms; our ability to accurately estimate contract risks; our ability to service our debt and other factors discussed more specifically in our annual, quarterly and periodic filings with the Securities and Exchange Commission on Form 10-K, 10-Q and 8-K. Any projections provided in this release are based on limited information currently available to management and are subject to change. We are providing this information as of the date of this release and do not undertake any obligation to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.

Additional Information

For further information please contact: Brian Schaefgen of Ambassadors International, Inc. at (949) 759-5900.

    Summary financial information is as follows (in thousands, except per
share amounts):



                                                          Three Months
                                                         Ended March 31,
                                                       2007           2006
                                                           (unaudited)
    Revenues:
      Passenger ticket revenue                        $4,668         $1,286
      Onboard and other cruise revenue                   547            109
      Marine revenue                                  23,484            170
      Travel, incentive and event related              3,524          4,269
      Net insurance premiums earned                      654          2,484
                                                      32,877          8,318

    Costs and operating expenses:
      Cruise operating expenses                        6,770          2,329
      Cost of marine revenue                          19,444             --
      Selling and tour promotion                       6,768          1,539
      General and administrative                      11,320          4,844
      Depreciation and amortization                    1,560            470
      Loss and loss adjustment expenses                  378          1,365
      Insurance acquisition costs and
       other operating expenses                          337          1,043
                                                      46,577         11,590

    Operating loss                                   (13,700)        (3,272)

    Other income (expense):
      Interest and dividend income                       692            941
      Interest expense                                (1,005)          (367)
      Realized gains (loss) on sale of
       available-for-sale securities                     (48)            12
      Other, net                                        (190)           (74)
                                                        (551)           512

    Loss before benefit for income taxes             (14,251)        (2,760)
    Benefit for income taxes                          (5,689)        (1,040)

    Net loss                                         $(8,562)       $(1,720)

    Loss per share:
      Basic                                           $(0.77)        $(0.16)
      Diluted                                         $(0.77)        $(0.16)

    Weighted-average common shares outstanding:
      Basic                                           11,089         10,545
      Diluted                                         11,089         10,545


   

In January 2007, the Company realigned its business segments. As of January 2007, the Company will report the following business segments: (i) Cruise, which will include the operations of ACG (ii) Marine, which will include the operations of AMG, (iii) Travel and Events, which will include the operations of Ambassadors, and (iv) Corporate and Other, which will consist of general corporate assets (primarily cash and cash equivalents and investments), the operations of Cypress Re and other activities which are not directly related to our operating segments.

    Summary of business segment information is as follows (in thousands):



                                                        Three Months Ended
                                                             March 31,
                                                        2007          2006
                                                           (unaudited)
    Revenue:
      Cruise                                          $5,215         $1,395
      Marine                                          23,484            170
      Travel and Events                                3,524          4,269
      Corporate and Other                                654          2,484
        Total revenue                                $32,877         $8,318

    Operating income (loss):
      Cruise                                        $(12,542)       $(3,674)
      Marine                                             226            (67)
      Travel and Events                                  361          1,428
      Corporate and Other                             (1,745)          (959)
        Total operating loss                        $(13,700)       $(3,272)



    Summary balance sheet information is as follows (in thousands):



                                                    March 31,   December 31,
                                                      2007           2006
                                                   (unaudited)
    Assets:
      Current assets:
        Cash and cash equivalents                    $25,976         $8,246
        Restricted cash                               22,815         11,127
        Available-for-sale securities                  7,498         37,807
        Accounts and other receivables                26,439         25,077
        Costs in excess of billings on
         construction contracts                        7,869          7,061
        Premiums receivable                           12,982         14,549
        Deferred policy acquisition costs                 91            330
        Reinsurance recoverable                        1,628          2,152
        Prepaid reinsurance premiums                      70            252
        Inventory                                      4,081          3,383
        Deferred income taxes                          1,614          1,606
        Prepaid program costs and
         other current assets                         19,578          9,018
          Total current assets                       130,641        120,608
      Property and equipment, net                    122,879        118,630
      Goodwill                                         9,181          9,181
      Other intangibles                                3,382          3,409
      Deferred income taxes                              297            297
      Other assets                                     4,192          3,795
          Total assets                              $270,572       $255,920

    Liabilities:
    Current liabilities:
    Accounts payable                                 $20,119        $18,270
    Passenger and participant deposits                42,606         17,622
    Accrued and other expenses                         8,650         10,656
    Billings in excess of costs
     on construction contracts                         7,762          4,334
    Loss and loss adjustment expense reserves         10,034         11,826
    Unearned premiums                                    334          1,220
    Deferred gain on retroactive reinsurance               7             19
    Current portion of long term debt                  4,399          4,417
    Total current liabilities                         93,911         68,364
    Long-term passenger and participant deposits          --             40
    Long term debt, net of current portion            69,676         71,779
    Total liabilities                                163,587        140,183

    Stockholders' equity                             106,985        115,737
    Total liabilities and stockholders' equity      $270,572       $255,920

   

SOURCE Ambassadors International, Inc.