NEWPORT BEACH, Calif., Nov. 6, 2007 -- Ambassadors International, Inc. (NASDAQ:AMIE) (the "Company") reported revenue of $95.6 million for the third quarter ended September 30, 2007, up from $57.6 million for the third quarter ended September 30, 2006.

In addition, the Company reported pretax income of $4.6 million and net income of $0.4 million, or $0.03 per diluted share, for the third quarter ended September 30, 2007, compared to pretax income of $8.7 million and net income of $7.6 million, or $0.66 per diluted share, for the third quarter ended September 30, 2006.

For the nine months ended September 30, 2007, the Company reported revenue of $208.9 million, up from $95.6 million for the nine months ended September 30, 2006. In addition, the Company reported a net loss of $2.4 million, or $0.22 per diluted share, for the nine months ended September 30, 2007, compared to net income of $7.5 million, or $0.66 per diluted share, for the nine months ended September 30, 2006.

Comparison of Third Quarter Results

Revenues increased $38.1 million in the third quarter of 2007 compared to the third quarter of 2006, primarily due to increases in revenues from the Company's cruise and marine operations. Cruise revenues increased $25.2 million related to the acquisition of Windstar Cruises in April 2007. During the quarter ended September 30, 2007, we operated nine ships compared to four ships during the quarter ended September 30, 2006. Marine revenues increased $15.3 million due to a longer period of operations and increased business in 2007 for Bellingham Marine, which we acquired in July 2006.

Our costs and operating expenses increased $41.1 million in the third quarter of 2007 compared to the same period in 2006. Our cruise operating expenses and other selling, general and administrative and depreciation expenses associated with our cruise segment increased $30.3 million as a result of the increase in number of ships operated. In addition, cost of marine revenue increased $9.8 million related to revenues generated from our marine construction and shipyard operations which commenced during 2006.

For the third quarter ended September 30, 2007, we recorded other expense of $0.9 million, compared to other income of $0.2 million for the third quarter ended September 30, 2006. The increase in other expense was mainly the result of approximately $1.1 million of additional interest expense on our convertible notes issued in April 2007. In the third quarter of 2006, we were favorably impacted by realized gains of $0.3 million resulting from sales of available-for-sale securities; no comparable activity was completed in the third quarter of 2007. These decreases in other income were offset by a $0.4 million increase in interest income.

Comparison of Year-to-Date Results

Revenues for the nine months ended September 30, 2007 increased $113.4 million from the nine months ended September 30, 2006, primarily due to increases in revenues from the Company's cruise and marine operations. Cruise revenues increased $54.4 million due to the acquisition of Windstar Cruises in April 2007 and marine revenues increased $64.9 million due to the acquired operations of Bellingham Marine in July 2006. Travel, incentive and events related revenues increased $0.5 million during the nine months ended September 30, 2007 compared to the same period in the prior year. These increases were offset by a decrease of $6.5 million in net insurance premiums earned.

Our costs and operating expenses increased $129.8 million during the first nine months of 2007 compared to the same period in 2006. Our cruise operating expenses and other selling, general and administrative and depreciation expenses associated with our cruise segment increased $73.6 million during the nine months ended September 2007 compared to the prior year period as a result of the increase in the number of ships operated during this period. In addition, cost of marine revenue related to revenues generated from our marine construction and shipyard operations which commenced during 2006 increased $50.2 million during the first nine months of 2007.

For the nine months ended September 30, 2007, we recorded other expense of $2.0 million, compared to other income of $1.8 million for the comparable period in the prior year. The increase in other expense was primarily due to approximately $3.2 million of additional interest expense related to long-term debt assumed in our cruise acquisitions consummated in the first and second quarters of 2006 and our convertible notes issued in April 2007. The results of the nine months ended September 30, 2006, were favorably impacted by realized gains of $1.1 million resulting from sales of available-for-sale securities compared to a realized loss of $48,000 during the nine months ended 2007. These increases in other expense were offset by $0.3 million increase in interest income due to higher yields on invested assets and $0.3 million increase in other income related to the insurance proceeds received in 2007 related to prior year insurance claims.

On May 14, 2007, the Empress of the North ran aground in Southeast Alaska. No passengers or crew were injured during the incident. The ship was in drydock for damage inspection and repairs for approximately seven initial weeks. In September 2007, the ship re-entered drydock for additional repairs for a total of four additional non-consecutive weeks. The ship ended her season on October 27, 2007 to enter her scheduled drydock operation of the remaining layup period early in order to complete work on her propulsion system. The Queen of West will assume published itineraries of the Empress of the North. As of September 30, 2007, we recorded in cruise operating expenses approximately $6.1 million in costs associated with ship repairs, passenger relocation and crew expenses incurred as a result of the incident. These expenses were offset by estimated insurance recoveries of $4.1 million. As of September 30, 2007, the estimated impact of this incident is $5.3 million.

We recorded an income tax provision of $4.2 million and an income tax benefit of $9.2 million for the three and nine months ended September 30, 2007, respectively, compared to an income tax provision of $1.1 million and $1.0 million for the three and nine months ended September 30, 2006, respectively. Commencing in the second quarter of 2007, our effective tax rate changed from 39.9% to 82.7% due to the projected losses in our domestic cruise division combined with the introduction and projected earnings of our international cruise division. As mandated, in the second quarter we realized a tax benefit of $7.7 million in order to move to an effective annualized tax rate of 82.7%. The significant difference between domestic and international cruise effective tax rates has created and will continue to create fluctuations in the overall effective rate. Based on current projections, our year-to-date effective tax rate is 79.2%. Our tax rate for the three and nine months ended September 30, 2006 was lower than the statutory rate due to the reversal of approximately $2.3 million in valuation allowance on our deferred tax assets during the third quarter of 2006.

3rd Quarter and Nine Month Results and Statistics by Segment

  Cruise
                                 Three Months              Nine Months
                               Ended September 30,      Ended September 30,
                               2007         2006          2007        2006
                                  (unaudited)               (unaudited)

  Statistical Information:
   Passengers Carried        21,123       11,789        48,807      19,786
   Occupancy Percentage       88.6%        87.7%         88.9%       84.6%
   Passenger Cruise Days    146,198       79,062       336,119     134,621
   APCD                     165,076       90,122       377,918     159,147



                                Three Months                Three Months
                           Ended September 30, 2007 Ended September 30, 2006
                           Majestic     Windstar      Majestic      Windstar
                                 (unaudited)                 (unaudited)

   Revenue                  $33,096      $27,151       $35,046         N/A
   Operating Income (Loss)   (6,032)       9,703         8,717         N/A
   Pretax Income (Loss)      (6,361)       9,640         7,797         N/A
   Occupancy Percentage       83.8%        97.5%         87.7%         N/A
   APCD                     107,564       57,512        90,122         N/A

Notes:

For the three months ended September 30, 2007, Majestic drydock
amortization was $6.3 million compared to $0.3 million for the three
months ended September 30, 2006.

For the three months ended September 30, 2007, Windstar drydock
amortization was $0.2 million.

                             As of October 31, 2007   As of October 31, 2006
                              Majestic    Windstar      Majestic    Windstar
                                   (unaudited)               (unaudited)
  Cruise Booking Trend:
  Sold Inventory                26%          48%           13%         46%



  Marine
                                  Three Months
                              Ended September 30,
                               2007         2006
                                  (unaudited)

  Revenue                   $31,984      $16,725
  Operating Income            3,500        1,021
  Pretax Income               3,412          968



                               As of October 31,
                              2007         2006
                                 (unaudited)

  Marine Backlog            $96,720      $75,582



  Travel and Events
                               Three Months Ended
                                 September 30,
                              2007          2006
                                  (unaudited)

  Revenue                    $3,330       $3,467
  Operating Income               30          624
  Pretax Income                 145          750

Recent News

On October 24, 2007, Majestic America Line announced the extension of the 2007 cruise season for the 142-passenger Queen of the West, which operates on the Columbia River. Beginning November 3, 2007, the Queen of the West will assume operation of the nine remaining published itineraries of the Empress of the North, which will enter into her scheduled drydock lay up period early to complete work on her propulsion system.

On October 25, 2007, the Company announced that David Giersdorf resigned from his position as President of Ambassadors Cruise Group, LLC effective December 31, 2007 and Joe Ueberroth, Ambassadors' Chairman and CEO, assumed the position of Interim President of Ambassadors Cruise Group, LLC, effective immediately. Nico Corbijn and Diane Moore were each promoted to Executive Vice President of Ambassadors Cruise Group, LLC and assumed additional responsibilities. Nico Corbijn, in addition to Marine Operations, assumed responsibility for Hotel Operations, Human Resources and Administration. Diane Moore, in addition to Marketing and Sales, assumed responsibility for Reservations/Guest Services and Customer Relations.

Cruise Related Terminology
Available Passenger Cruise Days ("APCD")

APCD's are our measurement of capacity and represent double occupancy per cabin multiplied by the number of cruise days for the period.

Occupancy Percentage

Occupancy percentage, in accordance with the cruise vacation industry practice, is calculated by dividing Passenger Cruise Days by APCD. A percentage in excess of 100% indicates that three or more passengers occupied some cabins.

Passenger Cruise Days

Passenger Cruise Days represent the number of passengers carried for the period multiplied by the number of days in their respective cruises.

Conference Call

Ambassadors International, Inc. will host a conference call to discuss the results of operations on Wednesday, November 7, 2007 at 8:30 a.m. Pacific Standard 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 http://www.ambassadors.com/. For conference replay access, parties may dial 800-642-1687, conference ID #: 216197909 and follow the prompts or visit http://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, including without limitation, statements regarding anticipated U.S. tax exemptions and potential insurance recoveries 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: Laura Tuthill of Ambassadors International, Inc. at (949) 759-5900.

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

                                       Three Months           Nine Months
                                   Ended September 30,   Ended September 30,
                                     2007       2006        2007      2006
                                       (unaudited)            (unaudited)
  Revenues:
    Passenger ticket revenue        $52,717    $30,272     $97,185  $50,647
    Onboard and other cruise
     revenue                          7,530      4,774      15,468    7,563
    Marine revenue                   31,984     16,725      84,033   19,145
    Travel, incentive and
     event related                    3,330      3,467      11,330   10,844
    Net insurance premiums earned        84      2,341         906    7,361
                                     95,645     57,579     208,922   95,560

  Costs and operating expenses:
    Cruise operating expenses        37,889     16,455      77,545   31,012
    Cost of marine revenue           22,806     12,965      64,257   14,047
    Selling and tour promotion       12,230      4,656      28,178    9,849
    General and administrative       13,825     11,323      39,428   23,882
    Depreciation and amortization     3,234      1,309       7,922    2,701
    Loss and loss adjustment expenses    49      1,470         523    4,327
    Insurance acquisition costs
     and other operating expenses       135        891         653    2,924
                                     90,168     49,069     218,506   88,742

  Operating income (loss)             5,477      8,510      (9,584)   6,818

  Other income (expense):
    Interest and dividend income      1,210        860       2,969    2,695
    Interest expense                 (2,082)      (998)     (5,277)  (2,093)
    Realized gains (losses) on
     sale of available-for-sale
     securities                          --        338         (48)   1,085
    Other, net                          (24)        (3)        360       69
                                       (896)       197      (1,996)   1,756

  Income (loss) before provision
   (benefit) for income taxes         4,581      8,707     (11,580)   8,574
  Provision (benefit) for income
   taxes                              4,199      1,109      (9,170)   1,036

  Net income (loss)                    $382     $7,598     $(2,410)  $7,538

  Earnings (loss) per share:
    Basic                             $0.03      $0.69      $(0.22)   $0.71
    Diluted                           $0.03      $0.66      $(0.22)   $0.66

  Weighted-average common shares
   outstanding:
    Basic                            11,058     10,936      11,085   10,631
    Diluted                          11,529     11,490      11,085   11,358

Summary of selected financial information is as follows:

                                  Three Months            Nine Months
                               Ended September 30,    Ended September 30,
                                2007         2006       2007         2006
                                  (unaudited)              (unaudited)
  Segment Information
   (in thousands):
    Revenue:
      Cruise                 $60,247      $35,046     $112,653      $58,210
      Marine                  31,984       16,725       84,033       19,145
      Travel and Events        3,330        3,467       11,330       10,844
      Corporate and Other         84        2,341          906        7,361
                             $95,645      $57,579     $208,922      $95,560

    Operating Income (Loss):
      Cruise                  $3,671       $8,717    $(11,853)       $7,284
      Marine                   3,500        1,021        5,321        1,202
      Travel and Events           30          624        1,663        2,184
      Corporate and Other     (1,724)      (1,852)      (4,715)      (3,852)
                              $5,477       $8,510      $(9,584)      $6,818

    Pre-tax Income (Loss):
      Cruise                  $3,279       $7,797    $(13,570)       $5,270
      Marine                   3,412          968        4,818        1,059
      Travel and Events          145          750        2,036        2,745
      Corporate and Other     (2,255)        (808)      (4,864)        (500)
                              $4,581       $8,707     $(11,580)      $8,574

In January 2007, we realigned our business segments as:(i) Cruise, which
includes the operations of Ambassadors Cruise Group, LLC (ii) Marine,
which includes the operations of Ambassadors Marine Group, LLC, (iii)
Travel and Events, which includes the operations of Ambassadors, LLC, and
(iv) Corporate and Other, which consists of general corporate assets
(primarily cash and cash equivalents and investments), the operations of
Cypress Reinsurance, Ltd and other activities which are not directly
related to our operating segments.

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

                                                September 30,   December 31,
                                                     2007           2006
                                                 (unaudited)
  Assets:
    Current assets:
      Cash and cash equivalents                    $18,915         $8,246
      Restricted cash                               46,361         11,127
      Available-for-sale securities                  2,947         37,807
      Accounts receivables and other
       receivables, net                             40,887         25,077
      Costs in excess of billings on
       construction contracts                        8,897          7,061
      Premiums receivable                           11,076         14,549
      Deferred policy acquisition costs                 --            330
      Reinsurance recoverable                        1,210          2,152
      Prepaid reinsurance premiums                      --            252
      Inventory                                      5,887          3,383
      Deferred income taxes                            864          1,606
      Prepaid costs and other current assets        17,842          9,018
        Total current assets                       154,886        120,608
    Property and equipment, net                    220,728        118,630
    Goodwill                                         9,181          9,181
    Other intangibles                                2,879          3,409
    Deferred income taxes                           10,346            297
    Other assets                                     5,506          3,795
        Total assets                              $403,526       $255,920

  Liabilities:
    Current liabilities:
      Accounts payable                             $36,567        $18,270
      Participant and passenger deposits            49,493         17,622
      Accrued and other expenses                    17,029         10,656
      Billings in excess of costs
       on construction contracts                    13,229          4,334
      Loss and loss adjustment expense reserves      7,609         11,826
      Current portion of long term debt              5,689          4,417
      Unearned premiums                                 --          1,220
      Deferred gain on retroactive reinsurance          --             19
        Total current liabilities                  129,616         68,364
    Long term debt, net of current
     portion and discount                          161,656         71,779
    Long-term passenger and
      participant deposits                               5             40
        Total liabilities                          291,277        140,183

  Stockholders' equity                             112,249        115,737
      Total liabilities
        and stockholders' equity                  $403,526       $255,920

Source: Ambassadors International, Inc.