Analysts appeared to be frustrated during Ambassadors International’s second-quarter earnings call Wednesday, when the company remained relatively mum about finalizing the sale of Majestic America Line and the company’s future.
At the end of April, Ambassadors announced it was putting Majestic, its U.S. river and coastal cruising business, on the block after numerous setbacks.
During Wednesday’s call, Ambassadors CEO Joe Ueberroth said the company was still unprepared to reveal the scope of the sale, the possible number of transactions or when the divestment would be completed. Ueberroth did reveal that the company wants to fully divest Majestic sometime this quarter.
Ueberroth also said that Ambassadors has stopped making its monthly payments on the Empress of the North, which has been sailing in Alaska. The ship’s last sailing will be in August, after which it will likely be handed over to the U.S. Department of Transportation’s Maritime Division upon the ship’s return to Portland, Ore.
Analysts appeared to be losing patience with Ambassadors because of a lack of information about the Majestic sale and a perceived unrealistic outlook following the sale.
“Job No. 1 is to get through the sale of Majestic,” Ambassadors CFO Blake Barnett said during the call. “At this point, that’s the single and best way we’re going to get shareholder value. Once that transaction is completed, we look at how do we take advantage of the stock or the debt, in terms of reengineering the balance sheet, because we think there’s real opportunity there. ... We’ll be in a much better position to figure out on a go-forward basis what we do with our remaining assets. There is so much variability between here and those first two big strategic steps that we really need to get through those two first.”
In assessing Ambassadors’ balance sheet, at least one analyst suggested the financial benefits of liquidation following the Majestic sale.
In addition to Majestic, Ambassadors owns yachting line Windstar; a marine division specializing in marina and boatyard planning, design, construction and operation; and a travel and events division.
Ueberroth estimated that revenue for the three remaining divisions will be approximately $211 million in 2009.
Ambassadors’ stock price fell to the $2.50 range on Wednesday, down from $7.48 at the start of the third quarter. One year ago, Ambassadors was trading at $28.01.
Ambassadors International reported a second-quarter net loss of $2.4 million, compared with net income of $5.8 million for the same period last year. Revenue for the quarter ended June 30 inched up to $80.6 million compared with $80.3 million a year ago.