Ambassadors Group, Inc. Reports Fourth Quarter and Full Year 2013 Results

Ambassadors Group, Inc. Reports Fourth Quarter and Full Year 2013 Results

SPOKANE, Wash., Feb. 5, 2014 (GLOBE NEWSWIRE) -- Ambassadors Group, Inc.
(Nasdaq:EPAX), a leading provider of educational travel experiences and online
education research materials, today announced its results for the fourth
quarter and full year ended December 31, 2013.

Overview

  *Gross revenue, from all sources including non-directly delivered programs,
    of $116.2 million for the year ended December 31, 2013 compared to $139.9
    million in 2012. Traveled 18,251 delegates compared to 21,252 delegates in
    2012.
    
  *2013 gross margin of 37.5 percent compared to 36.7 percent in 2012.
    
  *Special items totaled $7.2 million, net of tax, including $5.1 million of
    non-cash expenses recorded for asset impairments, restructuring charges
    and separation costs in 2013.
    
  *2013 operating expenses, excluding the impact of special items of $11.4
    million, declined $5.4 million year-over-year.
    
  *Net loss of $7.1 million in 2013 compared to net income of $1.7 million in
    2012; Net income before special items of $0.1 million compared to $3.2
    million last year.
    
  *Cash and cash equivalents and available-for-sale securities balance of
    $46.4 million; deployable cash, as defined, of $22.6 million and no debt
    outstanding.
    
  *Enrolled revenue for 2014 programs down 3.2 percent year-over-year for all
    programs and 4.0 percent year-over-year for core Student Ambassador
    Programs. Prior year enrolled travelers for Discovery Student Adventures
    and People to People China programs have been excluded for year-over-year
    comparability given the Company's decision to no longer operate these
    programs in 2014. Enrolled revenue has been adversely impacted by
    increased withdrawal rates since last quarter, which we are actively
    addressing.

Financial Highlights

(in thousands except percent and per share data)

                           UNAUDITED
                           Quarter ended December 31, Year ended December 31,
                           2013         2012          2013        2012
Gross revenue, all travel   $1,980       $1,179       $112,244   $135,742
programs
Internet content and        $1,037      $1,101       $3,975     $4,207
advertising revenue
Gross revenue, all sources  $3,017      $2,280       $116,219   $139,949
Gross margin, all travel    $513        $313         $40,174    $47,738
programs
Gross margin, internet      $904        $968         $3,462     $3,653
content and advertising
Gross margin, all sources   $1,417      $1,281       $43,636    $51,391
Gross margin percentage     47.0%        56.2%         37.5%       36.7%
Operating expense           $10,320     $12,497      $55,419    $51,069
Operating expense, before   $9,707      $12,531      $43,975    $49,357
special items
Operating income, internet  $344        $269         $1,302     $1,327
content and advertising
Net Income (loss)           $(5,496)    $(10,033)    $(7,077)   $1,744
Net Income (loss) before    $(5,110)    $(10,064)    $136       $3,208
special items
Income (loss) per diluted   $(0.32)     $(0.58)      $(0.42)    $0.10
share
Income (loss) per diluted   $(0.30)     $(0.58)      $0.01      $0.18
share before special items

Commenting on the Company's results, Anthony Dombrowik, Ambassadors Group
Interim Chief Executive Officer said, "We are making headway in our turnaround
efforts by staying focused on our three core short term goals outlined in
previous quarters: shifting to a multi-channel model to stabilize and then
improve our delegate counts, right sizing our cost structure to protect
profitability and staying close to our customer. In a challenging environment,
we made solid progress in 2013 and our results were in line with our financial
guidance for the year. We furthered our evolution to a true year-round,
integrated multi-channel marketing and sales strategy that we intend to push
forward even further in 2014. Concurrently, we reduced our operating expense
before special items by over $5 million, which exceeded the high end of our
expectations. We also took the steps necessary to dissolve our China and
Discovery Student Adventures product lines to put the Company on a firmer
financial footing going forward and to create the flexibility needed to focus
on our core People to People programs. We traveled 18,251 delegates during
2013 and we are proud to have achieved the highest consolidated Net Promoter
customer satisfaction scores in our history."

Dombrowik continued, "Looking toward the 2014 travel season, initial gross
enrollments are approaching our expected level, though we are facing some
unfavorable retention trends compared to last year that we are working hard to
overcome. Families are withdrawing at a slightly higher rate, about three
percentage points above last year and closer to the rates we saw at this point
in 2012.Financial constraints are still the number one reason given for
withdrawal. However, we continue to see positive results from our
high-engagement sales and marketing approach, which we are looking to further
bolster with our consecutive winter and spring marketing campaigns.We are
targeting enrollments for both the 2014 and 2015 travel seasons; the first
time in Company history that we will be selling two seasons within a single
campaign cycle. We expect to gain efficiencies from this combined process
while further empowering choice for our consumers. With approximately four
months until the 2014 summer travel season commences, we are highly focused on
capturing incremental enrollments and improving retention. We are encouraged
by our progress year-over-year in developing the insights, capabilities and
marketing and sales tactics necessary to continue capturing enrollments well
beyond our traditional fall peak enrollment cycle."

Dombrowik concluded, "We are pushing hard to make 2014 a year of steady
performance on the top-line.Notwithstanding these efforts, we expect
year-over-year growth in net income before any special items in 2014 as a
result of the modifications we have made to our cost structure resulting in a
lower operating cost per delegate, as well as the insights and efficiencies we
are gaining in our evolving marketing and sales processes. We will continue to
focus on delivering improved financial performance while carrying out our
mission of creating global citizens and providing life-changing educational
travel experiences for our delegates."

Fourth Quarter 2013 Results

During the fourth quarter of 2013, the Company traveled 311 delegates,
compared to 162 delegates during the prior year quarter primarily due to the
slate of winter Student Ambassadors programs offered in December 2013.Total
revenue of $1.5 million increased 14 percent from $1.3 million in the prior
year quarter. Gross margin for the quarter was $1.4 million compared to $1.3
million in the fourth quarter of 2012. Gross margin percentage decreased to
47.0 percent from 56.2 percent in the prior year period due primarily to a
lower mix of revenue contribution from BookRags, the Company's online
education research business, given increased travel related revenue during the
2013 period. Gross margin is calculated as the sum of gross revenue from
non-directly delivered programs, gross revenue from directly delivered
programs and internet content and advertising revenue less cost of sales from
non-directly delivered programs, costs of sales from directly delivered
programs and cost of sales from internet content and advertising.

Fourth quarter operating expenses were $10.3 million, down 17 percent from
$12.5 million in the prior year period.Excluding special items, fourth
quarter 2013 operating expenses declined $2.8 million, or 23 percent,
reflecting both lower selling and marketing expenses and general and
administration costs.

Net loss for the fourth quarter of 2013 was $5.5 million, or $0.32 per diluted
share, compared to net loss of $10.0 million, or $0.58 per diluted share, in
the prior year period. Fourth quarter 2013 net loss before special items was
$5.1 million compared to $10.1 million in 2012.

Full Year 2013 Results

During the year ended December 31, 2013, the Company traveled 18,251 delegates
compared to 21,252 delegates during 2012. Total revenue of $51.2 million
declined 12 percent from $58.1 million in 2012, driven by a 17 percent decline
in travel-related revenue and a 6 percent decline in internet content and
advertising revenue related to BookRags.Net loss for 2013 was $7.1 million,
or $0.42 per diluted share, compared to net income of $1.7 million, or $0.10
per diluted share, in 2012.Net income before special items was $0.1 million
compared to $3.2 million in 2012.

Gross margin for 2013 was $43.6 million, down from $51.4 million in 2012;
however, gross margin percentage increased to 37.5 percent from 36.7 percent.

During 2013, operating expenses excluding special items declined $5.4 million,
or 11 percent, reflecting the Company's successful cost cutting initiatives.

Balance Sheet and Liquidity

Total assets at December 31, 2013 were $88.4 million including cash, cash
equivalents and short-term available-for-sale securities of $45.6 million.
Long-term assets totaled $32.6 million primarily reflecting goodwill and
intangible assets of the BookRags business, technology, hardware and systems
used to deliver services, and the Company's office building, which has been
listed for sale. Total liabilities were $32.5 million, including $26.4 million
in participant deposits for future travel.

The Company had no debt outstanding and deployable cash of $22.6 million at
December 31, 2013.Deployable cash is a non-GAAP measure defined in the
attached schedules.

The following table summarizes the cash flows as further disclosed in the
accompanying financial statements.Free cash flow, a non-GAAP measure, which
is defined as cash flow from operations less purchases of property, equipment
and intangibles, is also noted (in thousands):

                                             UNAUDITED
                                             Twelve months ended December 31,
                                             2013            2012
Net cash provided by operating activities     $14,754       $2,219
Purchases of property, equipment and          (3,454)        (5,672)
intangibles
Free cash flow                                11,300         (3,453)
                                                            
Net proceeds from sale (purchase) of          (4,320)        6,499
available-for-sale securities
Dividend payments to shareholders            (1,017)        (13,012)
Repurchase of common stock                    (509)          (3,056)
Other cash flows, net                         (2,131)        (347)
Net increase (decrease) in cash and cash      $3,323        $(13,369)
equivalents

Outlook for 2014

As of February 2, 2014, enrolled revenue for 2014 travel programs was $120.2
million, down 3.2 percent from the same point last year, based on enrolled
travelers of 19,162 compared to 20,139. Enrolled revenue for the Company's
core product, Student Ambassadors, is down 4.0 percent to $111.1 million
compared to $115.7 million at the same date last year, based on enrolled
travelers of 15,743 compared to 16,874. Prior year data excludes the impact
of enrolled travelers for Discovery Student Adventures and China programs as
of this time last year to reflect year-over-year comparability given the
Company's decision to no longer operate these programs in 2014.

Enrolled revenue consists of estimated gross receipts to be recognized upon
travel of an enrolled participant and revenue recognized for any delegates who
have completed travel for the travel year referenced. Reported net enrollments
consist of all participants who have enrolled in the Company's programs less
those that have already withdrawn, including travel that has been
completed.Enrolled revenue may not result in actual gross receipts eventually
recognized by the Company due to both withdrawals from the Company's programs
and expected future enrollments.

Based on current visibility for the balance of the year, the Company is
providing guidance as follows:

  *Consolidated gross revenues for all programs and operations to be between
    $110.0 million and $120.0 million;
    
  *Consolidated gross margin as a percentage of gross revenue for all
    programs and operations of 36 percent to 37 percent; and
    
  *Net income before any special items of between $1 million and $3 million.

Conference Call and Webcast Information

The Company will host a conference call to discuss fourth quarter and full
year 2013 results of operations on Thursday, February 6, 2014, at 11:30 a.m.
Eastern Time (8:30 a.m. Pacific Time).Participants can access the callvia
the internet at www.ambassadorsgroup.com/EPAX. The call can also be
accessedbydialing 888-438-5491 or 719-325-2464 (international) and providing
the passcode: 9067100.Approximately 24 hours following the call,a webcast
will be available through April 6, 2014 at www.ambassadorsgroup.com/EPAX. A
replay of the call will alsobe available through February 11, 2014 and can be
accessed by dialing 888-203-1112 or 719-457-0820 (international) and providing
the pass code: 9067100.

About Ambassadors Group, Inc.

Ambassadors Group, Inc. (Nasdaq:EPAX) is an education company located in
Spokane, Washington. Ambassadors Group, Inc. is the parent Company of
Ambassador Programs, Inc., World Adventures Unlimited, Inc. and BookRags,
Inc., an educational research website. The Company also oversees the
Washington School of World Studies, an accredited travel study and distance
learning school. Additional information about Ambassadors Group, Inc. and its
subsidiaries is available at www.ambassadorsgroup.com. In this press release,
"Company", "we", "us", and "our" refer to Ambassadors Group, Inc. and its
subsidiaries.

Forward-Looking Statements

This press release contains forward-looking statements regarding actual and
expected financial performance and the reasons for variances between
period-to-period results. Forward-looking statements, which are included per
the "safe harbor" provisions of the Private Securities Litigation Reform Act
of 1995, may involve known and unknown risks, uncertainties and other factors
that may cause actual results and performance in future periods to be
materially different from any future results or performance suggested by the
forward-looking statements in this release. Such forward-looking statements
speak only as of the date of this release and may not reflect risks related to
international unrest, outbreak of disease, conditions in the travel industry,
the direct marketing environment, changes in economic conditions and changes
in the competitive environment. We expressly disclaim any obligation to
provide public updates or revisions to any forward-looking statements found
herein to reflect any changes in expectations or any change in events.
Although we believe the expectations reflected in such forward-looking
statements are based upon reasonable assumptions, we can give no assurance
that our expectations will be met. For a more complete discussion of certain
risks and uncertainties that could cause actual results to differ materially
from anticipated results, please refer to the Ambassadors Group, Inc. 10-K
filed March 11, 2013, and its proxy statement filed May 6, 2013.

AMBASSADORS GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

                                     UNAUDITED
                                     Quarter ended December 31,
                                     2013       2012        $ Change % Change
Net revenue, non-directly delivered   $498     $248      $250   101%
programs (1)
Gross revenue, directly delivered     8         --        8       100%
programs(2)
Internet content and advertising      1,037     1,101      (64)    -6%
revenue
Total revenue                         1,543     1,349      194     14%
Cost of sales, directly delivered     (7)       (65)       58      89%
programs (2)
Cost of sales, internet content and   133       133        --     0%
advertising
Gross margin (3)                      1,417     1,281      136     11%
                                                                  
Operating expenses:                                                
Selling and marketing                6,887     8,386      (1,499) -18%
General and administration            2,972     4,111      (1,139) -28%
Restructuring costs                   456       --        456     100%
Asset impairments                     5         --        5       100%
Total operating expenses              10,320    12,497     (2,177) -17%
                                                                  
Operating loss                        (8,903)   (11,216)   2,313   21%
                                                                  
Other income (expense):                                            
Interest and dividend income         174       276        (102)   -37%
Foreign currency and other income    1         (8)        9       113%
Total other income                    175       268        (93)    -35%
Loss before income tax benefit        (8,728)   (10,948)   2,220   20%
Income tax benefit                    3,232     915        2,317   253%
Net loss                              $(5,496) $(10,033) $4,537 45%
                                                                  
Weighted average shares outstanding – 17,000    17,333     (333)   -2%
basic
Weighted average shares outstanding – 17,000    17,333     (333)   -2%
diluted
                                                                  
Net loss per share — basic           $(0.32)  $(0.58)   $0.26  45%
Net loss per share — diluted          $(0.32)  $(0.58)   $0.26  45%
                                                                  

(1)Net revenue, non-directly delivered programs consists of gross revenue,
less program pass-through expenses for non-directly delivered programs because
we primarily engage third-party operators to perform these services.

              UNAUDITED
              Quarter ended December 31,
              2013     2012     % Change
Gross revenue $1,972 $1,178 67%
Cost of sales  1,474   930     58%
Net revenue   $498   $248   101%

(2)Gross revenue and cost of sales for directly delivered programs are
reported as separate items because we plan, organize and operate all
activities, including speakers, facilitators, events, accommodations and
transportation.

(3)Gross margin is calculated as the sum of gross revenue non-directly
delivered programs, gross revenue directly delivered programs and internet
content and advertising revenue less cost of sales non-directly delivered
programs, costs of sales directly delivered programs and cost of sales
internet content and advertising.Gross margin percentage is calculated as
gross margin divided by the sum of gross revenue non-directly delivered
programs, gross revenue directly delivered programs and internet content and
advertising revenue.

AMBASSADORS GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
                                                                  
                                        UNAUDITED
                                        Twelve months ended December 31,
                                        2013      2012     $ Change  % Change
Net revenue, non-directly delivered      $36,752  $44,837 $(8,085) -18%
programs (1)
Gross revenue, directly delivered        10,468   9,008   1,460    16%
programs(2)
Internet content and advertising revenue 3,975    4,207   (232)    -6%
Total revenue                            51,195   58,052  (6,857)  -12%
Cost of sales, directly delivered        7,046    6,107   939      15%
programs (2)
Cost of sales, internet content and      513      554     (41)     -7%
advertising
Gross margin (3)                         43,636   51,391  (7,755)  -15%
                                                                  
Operating expenses:                                                
Selling and marketing                  32,318   34,845  (2,527)  -7%
General and administration              14,423   16,224  (1,801)  -11%
Restructuring costs                     2,212    --     2,212    100%
Asset impairments                       6,466    --     6,466    100%
Total operating expenses                 55,419   51,069  4,350    9%
                                                                  
Operating income (loss)                  (11,783) 322     (12,105) -3759%
                                                                  
Other income (expense):                                            
Interest and dividend income            532      1,730   (1,198)  -69%
Foreign currency and other income       23       (13)    36       277%
Total other income                       555      1,717   (1,162)  -68%
Income (loss) before income tax benefit  (11,228) 2,039   (13,267) -651%
(provision)
Income tax benefit (provision)           4,151    (295)   4,446    1507%
Net income (loss)                        $(7,077) $1,744  $(8,821) -506%
                                                                  
Weighted average shares outstanding –    16,986   17,530  (544)    -3%
basic
Weighted average shares outstanding –    16,986   17,530  (544)    -3%
diluted
                                                                  
Net income (loss) per share — basic     $(0.42)  $0.10   $(0.52)  -520%
Net income (loss) per share — diluted    $(0.42)  $0.10   $(0.52)  -520%
                                                                  

(1)Net revenue, non-directly delivered programs consists of gross revenue,
less program pass-through expenses for non-directly delivered programs because
we primarily engage third-party operators to perform these services.

              UNAUDITED
              Twelve months ended December 31,
              2013        2012        % Change
Gross revenue $101,779  $126,734  -20%
Cost of sales  65,027     81,897     -21%
Net revenue    $36,752   $44,837   -18%

(2)Gross revenue and cost of sales for directly delivered programs are
reported as separate items because we plan, organize and operate all
activities, including speakers, facilitators, events, accommodations and
transportation.

(3)Gross margin is calculated as the sum of gross revenue non-directly
delivered programs, gross revenue directly delivered programs and internet
content and advertising revenue less cost of sales non-directly delivered
programs, costs of sales directly delivered programs and cost of sales
internet content and advertising.Gross margin percentage is calculated as
gross margin divided by the sum of gross revenue non-directly delivered
programs, gross revenue directly delivered programs and internet content and
advertising revenue.

AMBASSADORS GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
                                                            
                                          UNAUDITED AUDITED   
                                          2013      2012      % Change
Assets                                                      
Current assets:                                              
Cash and cash equivalents                 $9,473  $6,150  54%
Available-for-sale securities             36,174   32,122   13%
Foreign currency exchange contracts       --      837      -100%
Prepaid program cost and expenses         7,069    17,217   -59%
Accounts receivable                       1,792    850      111%
Deferred tax assets                        1,295    221      486%
Total current assets                      55,803   57,397   -3%
Property and equipment, net               18,452   26,344   -30%
Available-for-sale securities             719      723      -1%
Intangibles                                3,522    3,565    -1%
Goodwill                                  9,781    9,781    0%
Other long-term assets                     82       85       -4%
Total assets                              $88,359 $97,895 -10%
                                                            
Liabilities and Stockholders' Equity                        
Current liabilities:                                         
Accounts payable and accrued expenses     $3,587  $4,238  -15%
Participants' deposits                    26,362   25,735    2%
Foreign currency exchange contracts       244      --      100%
Other liabilities                          119      111       7%
Total current liabilities                 30,312   30,084   1%
Foreign currency exchange contracts       52       --      100%
Deferred tax liabilities                   2,087    2,688     -22%
Total liabilities                         32,451   32,772   -1%
Stockholders' equity                      55,908   65,123    -14%
Total liabilities and stockholders' equity $88,359 $97,895 -10%
                                                            

AMBASSADORS GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                                                                   
                                                         UNAUDITED
                                                         December 31,
                                                         2013       2012
Cash flows from operating activities:                               
Net income (loss)                                         $(7,077) $1,744
Adjustments to reconcile net income (loss) to net cash              
provided by operating activities:
Depreciation and amortization                             5,368     5,273
Stock-based compensation                                  2,432     1,455
Deferred income tax provision (benefit)                   (3,319)   387
Loss on disposition and impairment of property and        6,466     24
equipment
Excess tax shortfall from stock-based compensation        2,136     347
Change in assets and liabilities:                                   
Accounts receivable and other assets                      (939)     545
Prepaid program costs and expenses                        9,673     (3,918)
Accounts payable, accrued expenses, and other current     (613)     (1,977)
liabilities
Participants' deposits                                    627       (1,661)
Net cash provided by operating activities                 14,754    2,219
                                                                   
Cash flows from investing activities:                               
Purchase of available-for-sale securities                 (27,448)  (74,022)
Proceeds from sale of available-for-sale securities       23,128    80,521
Purchase of property and equipment                        (3,110)   (5,139)
Purchase of intangibles                                   (344)     (533)
Net cash provided by (used in) investing activities       (7,774)   827
                                                                   
Cash flows from financing activities:                               
Repurchase of common stock                                (509)     (3,056)
Dividend payment to shareholders                          (1,017)   (13,012)
Proceeds from exercise of stock options                   5         --
Excess tax shortfall from stock-based compensation        (2,136)   (347)
Net cash used in financing activities                     (3,657)   (16,415)
                                                                   
Net increase (decrease) in cash and cash equivalents      3,323     (13,369)
Cash and cash equivalents, beginning of period            6,150     19,519
Cash and cash equivalents, end of period                  $9,473   $6,150
                                                                   

                                Special Items

During the third quarter of 2013, the Company announced its decision to
restructure two of its travel programs believed to be no longer financially
viable in their current form – Discovery Student Adventures and China.The
cost of those restructurings, including the $1.6 million termination fee paid
to Discovery Education to terminate its agreement, totaled $2.2 million as of
December 31, 2013.

The Company continues to maintain its corporate headquarters, listed for sale
since April 2012, as an asset to be held and used in operations.However, as
part of its periodic assessment of the recoverability of long-lived assets,
the Company determined an impairment of its corporate headquarters existed.
Total asset impairment charges of $6.5 million were recorded during the third
quarter of 2013, relating primarily to the building itself as well as
impairments for the restructured operations noted above and for other
operating assets.

In connection with the February 2013 resignations of two executives, the
Company's President and Chief Executive Officer and the President and Chief
Operating Officer of the operating subsidiary Ambassador Programs, Inc., as
well as workforce reductions during 2012, the Company incurred separation
payments during both periods.

In addition, as previously disclosed, the Company incurred legal and other
fees in relation to a shareholder class action suit and to an inquiry by the
U.S. Securities and Exchange Commission ("SEC") more fully described in the
Company's filings with the SEC on Form 10-K and 10-Q available on the
Company's website www.ambassadorsgroup.com and at the SEC website www.sec.gov.
These two matters were settled in 2012, however, the recovery of funds from
insurance coverage on these matters have been recorded in the periods
received. The Company also incurred legal and other fees relating to a proxy
contest and shareholder actions.

As a result of these events, the operations as presented in the accompanying
financial statements for the three months and full year ended December 31,
2013 and 2012 do not necessarily reflect a meaningful comparison between
periods or in relation to the operational activities of the Company.In order
to provide more meaningful disclosure, the following table represents a
reconciliation of certain earnings measures before special items to those same
items after the impact of special items (in thousands except per share data):

                             UNAUDITED
                             Net Loss                     EPS
                             Three months ended December  Three months ended
                              31,                          December 31,
                             2013           2012          2013      2012
Amount before special items   $(5,110)     $(10,064)   $(0.30) $(0.58)
Asset impairments             (5)           --          --      --
Restructuring costs           (456)         --          (0.02)   --
Legal and other fees         (148)         74           (0.01)   --
Separation payments           (4)           (40)         --      --
Tax impact                    227           (3)          0.01     --
Amount per consolidated       $(5,496)     $(10,033)   $(0.32) $(0.58)
statement of operations
                                                                 
                             UNAUDITED
                             Net Income (Loss)            EPS
                             Twelve months ended December Twelve months ended
                              31,                          December 31,
                             2013           2012          2013      2012
Amount before special items   $136         $3,208      $0.01   $0.18
Asset impairments             (6,466)       --          (0.38)   --
Restructuring costs           (2,212)       --          (0.13)   --
Legal and other fees          23            (1,430)      --      (0.08)
Separation payments           (2,789)       (282)        (0.17)   (0.01)
Tax impact                    4,231         248          0.25     0.01
Amount per consolidated       $(7,077)     $1,744      $(0.42) $0.10
statement of operations

                               Deployable Cash

Deployable cash is a non-GAAP liquidity measurement and is calculated as the
sum of cash and cash equivalents, short-term available-for-sale securities,
and prepaid program costs and expenses, less the sum of accounts payable,
accrued expenses and other short-term liabilities (excluding deferred taxes)
and participant deposits. We believe this non-GAAP measurement is useful to
investors in understanding important characteristics of our business.

The following summarizes deployable cash at December 31, 2013 and 2012 (in
thousands):

                                                          UNAUDITED
                                                          December 31,
                                                          2013      2012
Cash, cash equivalents and short-term available-for-sale   $45,647  $38,272
securities
Prepaid program cost and expenses                         7,069    17,217
Less: Participants' deposits                              (26,362) (25,735)
Less: Accounts payable / accruals / other liabilities     (3,706)  (4,349)
Deployable cash                                           $22,648  $25,405

CONTACT: Investor Relations:
         Stacy Feit
         Financial Relations Board
         (213) 486-6549

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