Despite notable improvements in its first-quarter balance sheet, Ambassadors International said it was time to let go of its U.S. coastal and river cruising business, Majestic America Line.
"Ambassadors as a company reached a crossroads," Joe Ueberroth, chairman and CEO of Ambassadors, said during the company's first-quarter conference call. "Do we invest all our capital and resources on the promise of Majestic America Line, or do we invest in our businesses that are currently succeeding and appear to have more long-term growth potential? Being a public company with limited resources in a difficult market of low share prices and significant debt, we made the decision to sell Majestic America Line."
Ambassadors narrowed its net loss before taxes for the first quarter to $12.1 million from $14.3 million. The company reported first-quarter revenue of $56.8 million, compared to $32.9 million for the same period last year.
But the quarter was not without its challenges, most notably for Majestic.
During the first few months of the 2008 season, an engine fire broke out on the Queen of the West; river levels on the Mississippi made several destinations unreachable for the American Queen; the company was forced to use a tug to get the Delta Queen upriver to arrive on time for the Kentucky Derby; and Congress voted by a narrow margin not to pass the operating extension of the Delta Queen, Ueberroth said.
Despite the line's setbacks, Ueberroth said "there is significant interest from numerous parties in some and/or all the assets of Majestic America Line."
Majestic's revenue for the first quarter was $4.4 million, compared with $5.2 million for the first quarter of 2007. Operating income loss for the line was $11.7 million, compared with $12.5 million a year ago.
Ambassadors is not taking Majestic bookings for the 2009 season and said it is hoping to sell the line soon.
In the meantime, Ambassadors said it will focus its efforts on Windstar Cruises, the luxury yacht business it acquired last April, and its other businesses: marine services and meeting/event management.
To contact reporter Michelle Baran, send e-mail to [email protected].