1
================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
---------------------------
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
COMMISSION FILE NUMBER: 0-9264
AMERICAN CLASSIC VOYAGES CO.
(Exact name of registrant as specified in its charter)
DELAWARE 31-0303330
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) identification No.)
TWO NORTH RIVERSIDE PLAZA, CHICAGO, IL 60606
(Address of principal executive offices) (Zip Code)
(312) 258-1890
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]
As of April 30, 2001 there were 21,050,308 shares of Common Stock outstanding.
================================================================================
2
AMERICAN CLASSIC VOYAGES CO.
FORM 10-Q
MARCH 31, 2001
INDEX
ITEM DESCRIPTION PAGE
---------------- ----
Part I. Financial Information:
Item 1. Consolidated Financial Statements (Unaudited)
Consolidated Balance Sheets at March 31, 2001 and December
31, 2000 3
Consolidated Statements of Operations for the Three Months
Ended March 31, 2001 and 2000 4
Consolidated Statements of Cash Flows for the Three Months
Ended March 31, 2001 and 2000 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 11
Item 3. Quantitative and Qualitative Disclosures About Market Risk 16
Part II. Other Information:
Item 1. Legal Proceedings 17
Item 6. Exhibits and Reports on Form 8-K 17
RISK FACTORS AND FACTORS CONCERNING FORWARD LOOKING STATEMENTS
Certain statements contained in "Management's Discussion and Analysis of
Financial Condition and Results of Operations" and elsewhere in this Quarterly
Report on Form 10-Q, in the Company's press releases and in oral statements and
presentations made by or with the approval of an authorized executive officer of
the Company constitute "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known and unknown risks, uncertainties and other factors
which may cause the actual results, performance or achievements to be materially
different from any future results, performance or achievements expressed or
implied by such forward-looking statements. These forward-looking statements are
not guarantees of future performance and are subject to certain risks,
uncertainties, assumptions and other factors. Such factors include, among other
things, the following: general economic and business conditions which may impact
levels of disposable income of consumers and demand for the Company's cruise
products; increases in cruise industry capacity; cruise and other vacation
industry competition; changes to the U.S. Flag Cruise Ship Pilot Project Statute
and related U.S. laws; the ability of the Company to implement its shipbuilding
program; unscheduled ship repairs and dry-docking; and the Company's ability to
obtain adequate financing at commercially acceptable levels to support its
expansion plans.
2
3
AMERICAN CLASSIC VOYAGES CO.
CONSOLIDATED BALANCE SHEETS
(In Thousands, except share information)
March 31, December 31,
2001 2000
---------- ------------
(Unaudited) (Audited)
ASSETS
Cash and cash equivalents $ 17,517 $ 52,073
Restricted short-term investments 39,118 62,954
Marketable securities 4,450 7,843
Accounts receivable 3,800 4,552
Inventory 6,044 5,417
Prepaid air tickets 5,405 3,646
Prepaid expenses and other current assets 5,026 4,814
--------- ---------
Total current assets 81,360 141,299
Property and equipment, net 324,206 320,657
Vessels under construction 311,922 258,467
Deferred income taxes, net 29,514 19,744
Other assets 12,065 12,448
--------- ---------
Total Assets $ 759,067 $ 752,615
========= =========
LIABILITIES
Accounts payable $ 33,463 $ 41,930
Short-term notes payable 150,000 100,000
Other accrued liabilities 26,580 28,581
Current portion of long-term debt 14,998 15,768
Unearned passenger revenues 59,431 49,413
--------- ---------
Total current liabilities 284,472 235,692
Notes payable, non-current portion -- 25,000
Long-term debt, less current portion 212,908 218,420
--------- ---------
Total liabilities $ 497,380 $ 479,112
Convertible preferred securities of a subsidiary trust holding solely
7% convertible subordinated debentures of the Company $ 100,000 $ 100,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value (10,000,000 shares authorized;
none issued and outstanding at March 31, 2001 and December 31, 2000) $ -- $ --
Common stock, $.01 par value (100,000,000 shares authorized;
21,032,715 and 20,969,183 shares issued and outstanding at
March 31, 2001 and December 31, 2000 respectively) 211 210
Additional paid-in capital 205,346 204,555
Accumulated deficit (42,341) (29,645)
Treasury stock, at cost (51,000 shares) (757) (757)
Unearned restricted stock and stock units (772) (860)
--------- ---------
Total stockholders' equity 161,687 173,503
--------- ---------
Total liabilities and stockholders' equity $ 759,067 $ 752,615
========= =========
The accompanying notes are an integral part of these
consolidated financial statements.
3
4
AMERICAN CLASSIC VOYAGES CO.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Thousands, except share and per share information)
(Unaudited)
For the Three Months
Ended March 31,
----------------------------
2001 2000
------------ ------------
Revenues $ 64,153 $ 40,687
Cost of operations (exclusive of depreciation expense) 55,320 29,962
------------ ------------
Gross profit 8,833 10,725
Selling, general and administrative expenses 23,987 16,364
Depreciation expense 5,015 3,941
------------ ------------
Operating loss (20,169) (9,580)
Interest income 1,629 1,263
Interest expense and other financing costs 2,052 1,004
Accrued distributions on convertible preferred securities
and related financing costs 1,797 798
Other (income) expense 4 --
------------ ------------
Loss before income taxes (22,393) (10,119)
Income tax benefit (9,697) (3,739)
------------ ------------
Net loss $ (12,696) $ (6,380)
============ ============
PER SHARE INFORMATION
Basic:
Weighted-average shares outstanding 21,088,749 19,562,353
Loss per share $ (0.60) $ (0.33)
Diluted:
Weighted-average shares outstanding 21,088,749 19,562,353
Loss per share $ (0.60) $ (0.33)
The accompanying notes are an integral part of these
consolidated financial statements.
4
5
AMERICAN CLASSIC VOYAGES CO.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands, except per share information)
(Unaudited)
For the Three Months
Ended March 31,
-----------------------
2001 2000
---------- ---------
OPERATING ACTIVITIES
Net loss $ (12,696) $ (6,380)
Adjustments to reconcile net loss to net cash (used in) provided by
operating activities:
Depreciation expense 5,015 3,941
Changes in working capital:
Accounts receivable 752 (287)
Accounts payable (1,255) 2,004
Other accrued liabilities (1,761) (5,488)
Deferred taxes (9,695) (3,700)
Other assets 339 84
Unearned passenger revenues 10,018 16,638
Stock based compensation expense 126 119
Prepaid expenses and other current assets (2,546) (1,931)
--------- ---------
Net cash (used in) provided by operating activities (11,703) 5,000
INVESTING ACTIVITIES
(Increase) decrease in restricted investments 23,836 (55,000)
Capital expenditures (69,231) (53,960)
Sale (purchase) of marketable securities 3,393 (13,326)
--------- ---------
Net cash used in investing activities (42,002) (122,286)
FINANCING ACTIVITIES
Proceeds from borrowings 50,000 25,000
Net repayments under line of credit agreements -- (7,175)
Principal payments on long term debt and notes payable (31,282) (1,212)
Issuance of trust preferred securities -- 100,000
Issuance of common stock -- 47,140
Cash received from the exercise of stock options and
Employee Stock Purchase Plan 439 1,677
Deferred financing fees (8) (3,482)
--------- ---------
Net cash provided by financing activities 19,149 161,948
Increase (decrease) in cash and cash equivalents (34,556) 44,662
Cash and cash equivalents, beginning of period 52,073 42,399
--------- ---------
Cash and cash equivalents, end of period $ 17,517 $ 87,061
========= =========
SUPPLEMENTAL CASH FLOW INFORMATION
Cash paid during the period for:
Interest (net of capitalized interest) $ 786 $ 949
Income taxes $ 51 $ 7
The accompanying notes are an integral part of
these consolidated financial statements.
5
6
AMERICAN CLASSIC VOYAGES CO.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 2001
(Unaudited)
1. NATURE OF OPERATIONS AND BASIS OF PRESENTATION
American Classic Voyages Co. and its subsidiaries ("the Company") operates four
cruise lines under the names of The Delta Queen Steamboat Co., American Hawaii
Cruises, United States Lines and Delta Queen Coastal Voyages. The Delta Queen
Steamboat Co., through its subsidiaries, owns and operates the American Queen,
Mississippi Queen, Delta Queen and Columbia Queen riverboats, which conduct
overnight cruise operations on certain U.S. inland waterways. Great Hawaiian
Cruise Line, Inc., doing business as American Hawaii Cruises, through its
subsidiaries, owns and operates the ss Independence steamship providing
overnight cruises among the Hawaiian Islands. Project America Inc., doing
business as United States Lines, through its subsidiaries, owns and operates the
ms Patriot, which also provides overnight cruises among the Hawaiian Islands.
United States Lines will also operate the new Hawaii vessels currently under
construction. Delta Queen Coastal Voyages operates the Cape May Light,
introduced in early May, and will operate the Cape Cod Light, currently
scheduled to be introduced in the fourth quarter of 2001. These new vessels will
offer cruises along U.S. coastal waterways. Ocean Development Company, a wholly
owned subsidiary of Project America Inc., oversees the design and construction
of new vessels.
The accompanying interim financial statements include the accounts of the
Company and its subsidiaries and have been prepared pursuant to Securities and
Exchange Commission ("SEC") rules and regulations and should be read in
conjunction with the Consolidated Financial Statements and Notes thereto
included in the Company's Annual Report on Form 10-K for the year ended December
31, 2000. The following notes to the financial statements highlight significant
changes to the notes included in the Form 10-K and such interim disclosures as
required by the SEC. These interim financial statements reflect, in the opinion
of management, all adjustments necessary for a fair presentation of the interim
financial statements.
Effective January 1, 2001, the Company reclassified certain items within its
Statement of Operations from reductions of revenue to increases in operating
costs. Specifically, the cost of override commissions paid to travel agents,
which pertain to incentive-based commissions paid incremental to the standard
commission, as well as the cost of port charges, cancellation insurance premiums
and bad debt expense, are currently reflected within the Cost of Operations
section of the Company's Statement of Operations. These costs had previously
been reflected as reductions within total Revenues. The revenue and cost of
operations amounts for all periods presented have been reclassified to conform
to the current presentation. The effects of this reclassification increased both
Revenues and Cost of Operations by $2.1 million and $1.7 million in 2001 and
2000 respectively, with no effect on Gross Profit or Operating Income. In
addition, other previously reported amounts have been reclassified to conform to
the current 2001 presentation.
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
certain estimates and assumptions that affect the reported amounts of assets,
liabilities, revenues and expenses, and the disclosure of contingent assets and
liabilities to prepare these consolidated financial statements. Actual results
could differ from those estimates.
In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standard (SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities". This statement establishes accounting and
reporting standards for derivative instruments and for hedging activities. It
requires that derivatives be recognized in the balance sheet at fair value and
specifies the accounting for changes in fair value. In June 1999, the FASB
issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133" to defer
the effective date of SFAS No. 133, until fiscal years beginning after June 15,
2000. At December 31, 2000 and March 31, 2001 the Company had no derivative
financial instruments, nor did it engage in any hedging activities. Therefore,
adoption of SFAS No. 133 did not impact the Company's results of operations or
financial position. Should the Company elect to engage in derivative and hedging
activities in the future, the impact of SFAS No. 133 on the consolidated
financial statements would depend on a variety of factors including the level of
future hedging activities, the types of hedging instruments used and the
effectiveness of such instruments.
6
7
2. NOTES PAYABLE
At various times during 2000 the Company issued short-term notes guaranteed by
the Maritime Administration ("MARAD") pertaining to the construction of the
first Hawaii vessel (see note 5) in the aggregate amount of $125 million. The
notes pay interest at rates ranging from LIBOR minus 0.05% to LIBOR minus 0.10%.
On January 31, 2001 the Company issued an additional $50 million of notes
guaranteed by MARAD bearing interest at LIBOR minus 0.10%. Interest is payable
quarterly and the principal amount is due on January 31, 2002. A portion of the
proceeds from this issuance was used to pay down $25 million of previously
issued notes due January 31, 2001. The Company intends to refinance all of these
notes on or before their maturity dates. Proceeds from MARAD-guaranteed debt
issuances are deposited into escrow accounts and released periodically to
satisfy construction costs related to the Company's shipbuilding program. The
dollar amounts contained in such escrow accounts are classified in the Company's
balance sheet as Restricted Short-Term Investments. On May 8, 2001 the Company
issued an additional $35 million of notes at LIBOR minus 0.10% due April 30,
2002.
3. LONG-TERM DEBT
Long-term debt consisted of (in thousands):
March 31, December 31,
2001 2000
--------- ------------
Ship Financing Note, American Queen Series, floating rate notes $ 10,749 $ 11,961
Ship Financing Bond, American Queen Series, 7.68% sinking fund bonds 36,198 36,198
Ship Financing Note, Independence Series A, floating rate notes 6,604 6,604
Ship Financing Bond, Independence Series A, 6.84% sinking fund bonds 13,215 13,215
Ship Financing Note, Independence Series B, floating rate notes due 1,770 1,770
Ship Financing Bond, Independence Series B, 7.46% sinking fund bonds 3,540 3,540
Ship Financing Bond, Cape May Series, 7.25% sinking fund bonds 37,900 37,900
Ship Financing Bond, Cape Cod Series, 7.25% sinking fund bonds 38,500 38,500
Patriot promissory note 79,430 84,500
Revolving credit facility (maximum availability of $30 million at March 31, 2001
and December 31, 2000) -- --
-------- ---------
227,906 234,188
Less current portion 14,998 15,768
-------- ---------
$212,908 $ 218,420
======== =========
The American Queen Series, the Independence Series A and B, Cape May Series and
Cape Cod Series debt are guaranteed by the U.S. Government through MARAD and are
secured by first mortgages on the American Queen, the ss Independence, the Cape
May Light and the Cape Cod Light respectively. These Series contain various
covenants which, among other things, require the maintenance of certain
financial ratios measured at the end of each year.
On October 16, 2000 the Company issued $37.9 million and $38.5 million of
long-term bonds to finance construction of the Cape May Light and Cape Cod Light
respectively. Semi-annual principal payments commence six months after delivery
of the ships. The bonds are guaranteed by MARAD pursuant to a commitment
received by the Company from MARAD on March 31, 2000 for financing guarantees
pertaining to the two ships.
On October 18, 2000 the Company acquired the ms Nieuw Amsterdam from Holland
America Line ("HAL") for $114.5 million (see Note 5). In connection with the
purchase, the Company issued to HAL an $84.5 million promissory note. The
promissory note bears interest at a floating rate equal to the prevailing prime
rate, which was 9.5% at the time of purchase, and is payable monthly in arrears.
Principal paydowns of $5.1 million are
7
8
scheduled for each March 31st and September 30th, beginning with March 31, 2001,
with a final payment of $23.7 million due on January 18, 2007.
In the third quarter of 2000 The Delta Queen Steamboat Co. ("DQSC"), as
borrower, amended its credit facility with The Chase Manhattan Bank ("Chase"),
as agent, and several participant banks (the "Chase Facility"). The Company has
a maximum of $30 million available to it in the form of revolving credit loans
until the maturity date of the facility, which is September 13, 2001. Any loans
outstanding on the maturity date are converted to non-amortizing term loans
which mature September 13, 2002. The amended facility is guaranteed by AMCV and
secured by all of the assets of DQSC except the American Queen, Cape May Light
and Cape Cod Light and has various limitations and restrictions on investments,
additional indebtedness, the construction costs of the new vessels, and other
capital expenditures. DQSC is required to comply with certain financial
covenants, including maintenance of minimum interest coverage ratios and maximum
leverage ratios, as defined. The Company is currently working to obtain
MARAD-guaranteed financing for the Columbia Queen. In the event the Company is
successful in obtaining such financing, the Columbia Queen vessel would be
removed from the facility's collateral base and could affect the amount
available to the Company under the facility.
4. VESSELS UNDER CONSTRUCTION
The Vessels under Construction balance includes payments to shipyards, design
and engineering fees, construction management and oversight costs, various
owner-supplied items and capitalized interest. There were four vessels under
construction as of March 31, 2001. See Note 5 for further information.
Vessels under construction consists of the following (in thousands):
March 31, December 31,
2001 2000
--------- -----------
New Hawaii Ship #1 $ 211,557 $ 175,223
New Hawaii Ship #2 39,528 27,624
Cape May Light 34,147 30,479
Cape Cod Light 26,690 25,141
--------- ---------
$ 311,922 $ 258,467
========= =========
Capitalized interest on the vessels under construction amounted to $5.1 million
and $2.0 million for the three months ended March 31, 2001 and 2000
respectively.
5. COMMITMENTS AND CONTINGENCIES
STOCK APPRECIATION UNITS
In 1999, the Company finalized an agreement with HAL to purchase the ms Nieuw
Amsterdam for $114.5 million. The purchase agreement required the Company to
make an earnest money deposit of $30 million by January 17, 2000. The Company
arranged for an unsecured letter of credit facility with Chase for up to $30
million and satisfied the deposit requirement by posting a letter of credit for
$30 million.
Persons and entities affiliated with Equity Group Investments, Inc. ("Equity"),
the Company's largest stockholder, guaranteed the letter of credit facility for
the Company with Chase for up to $30 million. Under an agreement dated October
15, 1999, as consideration for issuance of the guarantee, the Company paid
Equity a commitment fee of $500,000 in 1999 and agreed to pay Equity additional
compensation in the form of stock appreciation units contingent, in part, upon
appreciation in the Company's common stock above $21.90 per share. Equity's
rights to receive this additional compensation vested, on a monthly basis,
during the period that the guarantee remained outstanding. On February 22, 2000,
the Company deposited $30 million into a cash collateral account with Chase from
proceeds received by the Company from the issuance of convertible preferred
securities of a subsidiary trust, thereby terminating the Equity guarantee. The
Company has the right to retire Equity's stock appreciation units by paying a
per unit price, which escalates each year, during the first three years after
issuance. The price of the Company's right to retire Equity's stock appreciation
units was $11 per unit if the Company retired the units by October 15, 2000, $13
per unit if the Company retires the units by October 15, 2001, and $15 per unit
if the Company retires the units by October 15, 2002. If the Company does not
retire Equity's stock appreciation units during the first three years after
issuance, Equity may exercise, during the fourth and fifth years after issuance,
its right to receive payment based upon the market value of the Company's common
stock at such time.
8
9
After giving consideration to the Company's then current stock price and other
factors, the Company decided not to exercise its right to retire Equity's vested
stock appreciation units by October 15, 2000. Accordingly, the Company accrued
an additional $2 per vested unit, or $0.6 million, which was charged to other
financing costs on that date. On or before the next two anniversary dates of the
issuance of Equity's stock appreciation units, the Company will evaluate whether
to exercise its right to retire the units based on the Company's then current
stock price, its liquidity and other factors. It is currently the Company's
intent to retire Equity's stock appreciation units prior to October 15, 2002.
HAWAII VESSELS
On March 9, 1999 the Company executed definitive agreements with Ingalls
Shipbuilding, Inc. to construct at least two new vessels for the Hawaii cruise
market. The new Hawaii cruise ships will have the capacity to accommodate
approximately 1,900 passengers each. The contract provides that Ingalls
Shipbuilding deliver the first new ship in January 2003 and the second ship in
January 2004. We currently estimate the new Hawaii cruise ships to cost
approximately $495 million each, including the cost of furnishings, fixtures and
equipment, as well as design, engineering and architectural fees, but excluding
capitalized interest. Ingalls Shipbuilding is claiming that the Company should
pay additional sums beyond the contract price for certain interior finish work
and has requested a delay in the delivery schedule. The Company believes that
the claims made by the shipyard for additional payments and a delay in the
delivery of the ships are unwarranted, and the Company intends to assert its
rights under the original provisions of the contract. Moreover, the Company
believes that it has meritorious claims against Ingalls arising under the
express terms of the contract. The shipbuilding contract provides the Company an
option to build up to four additional vessels. Ingalls Shipbuilding will provide
a limited warranty for the design, material and workmanship of each vessel for
one year after delivery.
COASTAL VESSELS
The Company has been constructing two new coastal cruise vessels for our Delta
Queen Coastal Voyages line at Atlantic Marine, Inc. of Jacksonville, Florida.
The first vessel, the Cape May Light, was delivered on April 12, 2001. The
second vessel, the Cape Cod Light, is expected to be delivered in the third
quarter of 2001. Each vessel is expected to have a total project cost, including
furnishing, fixtures and equipment and design and architectural fees, of
approximately $40 million to $42 million. The coastal cruise vessels will be
approximately 300 feet long and provide accommodations for up to 224 passengers.
Atlantic Marine will provide a limited warranty for the work, parts, and
components of each vessel fabricated by the yard for one year after delivery.
6. STOCKHOLDERS' EQUITY
ACCUMULATED DEFICIT
Changes in accumulated deficit for the three months ended March 31, 2001 were
(in thousands):
Accumulated deficit at December 31, 2000............. $(29,645)
Net loss............................................. (12,696)
--------
Accumulated deficit at March 31, 2001................ $(42,341)
========
7. EARNINGS PER SHARE
As the Company reported losses for the quarters ended March 31, 2001 and 2000,
diluted earnings per share was computed in the same manner as basic earnings per
share. Conversion of convertible preferred securities is not assumed, as the
result would be antidilutive to the loss per share.
8. HEADQUARTERS RELOCATION
On September 8, 2000 the Company announced its intention to relocate its
corporate and operational headquarters, from Chicago, Illinois and New Orleans,
Louisiana respectively, to a new leased facility which is being constructed in
Sunrise, Florida. Construction of the new facility is expected to be completed
in November 2001 and the relocation is expected to be largely complete by early
2002. The Company has offered to relocate most employees to the new location but
the number of employees intending to relocate was largely undetermined as of
March 31, 2001. The Company will incur severance and retention costs pertaining
to those employees choosing not to relocate. At December 31, 2000 the Company
had accrued $0.6 million to recognize severance expenses for employees that had
communicated to the Company in writing their intention not to relocate. For the
three-month period ending March 31, 2001 the Company accrued an additional $0.1
million of
9
10
severance expenses and made payments of $0.5 million against the accrual. Also
during the three-month period ending March 31, 2001 the Company charged to
expense $0.4 million in retention bonuses that were paid to employees. The
Company may also incur lease termination expenses or a write-off of leasehold
improvements if it elects to vacate its Chicago or New Orleans facilities. At
this time the Company has not determined whether it will completely vacate these
facilities and therefore is unable to determine the potential costs, if any, it
will incur in connection with terminating the leases or writing off the
leasehold improvements.
9. SUBSEQUENT EVENT
On May 8, 2001 the Company issued an additional $35 million of MARAD-guaranteed
short-term notes in connection with the construction of the first Hawaii vessel.
The notes mature April 30, 2002 and pay interest at LIBOR minus 0.10%.
10
11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
American Classic Voyages Co. is a holding company which owns and controls The
Delta Queen Steamboat Co., Great Hawaiian Cruise Line, Inc. and Project America,
Inc. Through our various subsidiaries, we currently operate four cruise lines:
Delta Queen Steamboat Co., which owns and operates the American Queen,
Mississippi Queen and Delta Queen steamboats and the Columbia Queen riverboat;
Delta Queen Coastal Voyages, which owns and will operate the Cape May Light and
Cape Cod Light; American Hawaii, which owns and operates the ss Independence
steamship; and United States Lines, which owns and operates the ms Patriot.
Our revenues are comprised of:
1. cruise fares;
2. onboard revenues, such as those from gift shops and shore excursions;
3. trip cancellation insurance and pre- and post-cruise hotel packages; and
4. the sale of airplane tickets to and from points of embarkation and
disembarkation.
Our cost of operations is comprised of:
1. passenger expenses, such as employee payroll and benefits and the cost of
food and beverages;
2. vessel operating costs including lay-up and dry-docking costs for our
vessels;
3. insurance costs;
4. commissions paid to travel agents; and
5. airplane tickets and hotel costs.
When we receive deposits from passengers for cruises, we establish a liability
for unearned passenger revenue. We recognize these deposits as revenue on a
pro-rata basis during the associated cruise. Operations data expressed as a
percentage of total revenue for the periods indicated is as follows:
For the three months ended March 31,
2001 2000
---------------- ----------------
Revenues 100% 100%
Costs and expenses:
Operating expenses 86 74
Selling, general and administrative 37 40
Depreciation 8 10
Operating loss (31) (24)
Net loss (20) (16)
11
12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONT'D.)
Selected operating statistics for the periods indicated are as follows:
Three Months
Ended March 31,
---------------------
2001 2000
--------- ---------
Fare revenue per passenger night $ 186 $ 224
Total revenue per passenger night $ 294 $ 325
Weighted average operating days (1):
Delta Queen 57 63
American Hawaii 83 73
United States Lines 90 --
Vessels capacity per day (berths) (2):
Delta Queen 1,187 1,026
American Hawaii 860 860
United States Lines 1,212 --
Passenger nights (3)
218,203 125,105
Physical occupancy percentage (berths) (4) 88% 98%
- ---------------
(1) Weighted average operating days for each cruise line is determined by
dividing capacity passenger nights for each cruise line by the cruise
line's total vessel capacity per day. Capacity passenger nights is
determined by multiplying, for the respective period, the actual operating
days of each vessel by each vessel's capacity per day.
(2) Vessel capacity per day represents the number of passengers each cruise
line can carry assuming double occupancy for cabins which accommodate two
or more passengers. Some cabins on the Patriot, Independence and the
American Queen can accommodate three or four passengers.
(3) A passenger night represents one passenger spending one night on a vessel;
for example, one passenger taking a three-night cruise would generate three
passenger nights.
(4) Physical occupancy percentage is passenger nights divided by capacity
passenger nights.
Delta Queen's operations are seasonal. Historically, we have had greater
passenger interest and higher yields in the spring and fall months of the year.
The vessels typically undergo their annual lay-ups in December or January, and
the Columbia Queen does not operate during the first three months of the year.
While American Hawaii has historically experienced greater passenger interest in
the summer and fall months of the year, quarterly variations in its revenues
have been significantly less than those of Delta Queen. As United States Lines
operates in the same market as American Hawaii, we expect the seasonal trends
for United States Lines eventually to be similar to those historically
experienced by American Hawaii.
Effective January 1, 2001, we reclassified certain items within our Statement of
Operations from reductions of revenue to increases in operating costs.
Specifically, the cost of override commissions paid to travel agents, which
pertain to incentive-based commissions paid incremental to the standard
commission, as well as the cost of port charges, cancellation insurance premiums
and bad debt expense, are currently reflected within the Cost of Operations
section of the Statement of Operations. These costs had previously been
reflected as reductions within total revenues. The revenue and cost of
operations amounts for all periods presented have been reclassified to conform
to the current presentation. The effects of this reclassification increased both
Revenues and Cost of Operations by $2.1 million and $1.7 million in 2001 and
2000 respectively, with no effect on Gross Profit or Operating Income.
RESULTS OF OPERATIONS - QUARTER ENDED MARCH 31, 2001 COMPARED TO QUARTER ENDED
MARCH 31, 2000
Revenues for the first quarter were $64.2 million, an increase of
$23.5 million, or 58%, over the first quarter of 2000. The total revenues
increase is comprised of a $12.7 million increase in fare revenues for the
quarter and a $10.8 million increase in other revenue, primarily passenger air
and onboard revenues. The increase in fare revenues for the quarter was
attributable to the $18.4 million generated by the ms Patriot, introduced into
12
13
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONT'D.)
service in December 2000, partially offset by declines in occupancy and fare per
diems (which are defined as total fare revenues per passenger night) at American
Hawaii's ss Independence and the Delta Queen steamboats. Fare revenues at
American Hawaii decreased by $4.5 million in the first quarter of 2001 as
compared to the first quarter of 2000, as fare per diems fell from $214 in 2000
to $174 in 2001 and occupancy levels declined from 103% in 2000 to 76% in 2001.
These decreases in occupancy and fare per diems are primarily the result of a
140% increase in berth capacity in the 7 day Hawaii cruise market, brought about
by the introduction of the Patriot. Fare revenues for the Delta Queen steamboats
decreased by $1.2 million in the first quarter of 2001 as compared to the first
quarter of 2000, as occupancy levels were at 86% as compared to 93% in the prior
year, and fare per diems declined by 6% from $235 in 2000 to $221 in 2001. The
decline in fare per diems and occupancy levels were a function of the downturn
in the overall economy and its effects on discretionary consumer spending, as
well as competitive pricing in the leisure industry and the Hawaii tourism
market. Revenues were also adversely impacted by the lack of a strong base of
group sales for 2001. While plans are in place to reestablish the group sales
base for 2002, we expect our yields, which are a function of fare per diems and
occupancy levels, to decline further as 2001 progresses.
On February 20, 2001, the ms Patriot returned to its home port so that a
thruster bearing in the vessel's generator drive train could be replaced. This
resulted in refunds issued to passengers of $1.6 million, which was recorded in
the first quarter, and travel discounts for a future cruise expected to cost
approximately $0.5 million, which will be expensed as incurred. On March 24, the
ss Independence underwent an unscheduled dry-dock to repair its bow thruster.
The vessel was out of service for a period of seven days, and the cost of the
repairs was approximately $0.5 million.
Cost of Operations increased by $25.4 million, or 85%, due primarily to the
introduction of the ms Patriot, which was placed into service in December 2000.
Unscheduled repairs to the ss Independence in March of approximately $0.5
million, and fixed vessel operation costs pertaining to the Columbia Queen,
which was not in service during the first quarter of 2000, also contributed to
this increase.
Selling, General and Administrative (SG&A) Expenses, increased in the first
quarter by $7.6 million to $24.0 million in 2001. The increase is due primarily
to a $4.7 million increase in marketing expenses for the quarter, $2.0 million
of which is attributable to the Delta Queen coastal vessels not in service
during the quarter and the remainder of which is attributable to the ms Patriot,
which is in its first full year of operations. In addition, we incurred $0.9
million in start-up expenses during the quarter related to the introduction of
the two Delta Queen Coastal vessels. No start-up expenses were incurred during
the prior year. We also wrote off $0.2 million during the quarter for brochures
that are no longer in use. The remaining SG&A increase is due to increased
expenses associated with our expansion plans. Excluding the start-up expenses,
SG&A decreased as a percentage of net revenues SG&A from 40.2% in 2000 to 35.9%
in 2001.
Operating loss increased by $10.6 million, from $9.6 million in 2000 to $20.2
million in 2001, as the growth in operating costs and SG&A outpaced the growth
in revenues. During the next few months we will undertake various initiatives to
reduce SG&A expenses in response to our current revenue outlook.
Interest expense increased from $1.0 million in to 2000 to $2.1 million in 2001.
The increase is due to higher debt levels in connection with our shipbuilding
programs, partially offset by $5.1 million of capitalized interest in the first
quarter of 2001 as compared to $2.0 million in the first quarter of 2000.
Income tax benefit increased by $6.0 million in 2001 due to higher pre-tax
losses and a higher estimated effective tax rate for 2001.
LIQUIDITY, CAPITAL RESOURCES AND FINANCIAL CONDITION
For the three months ended March 31, cash used in operations, before changes in
unearned passenger revenue, was $21.7 million in 2001 as compared to $11.6
million in 2000. The increase in 2001 is mainly due to a $10.6 million increase
in operating loss for the first quarter, resulting from higher SG&A and vessel
operations expenses. The increase in unearned passenger revenues was $10.0
million in 2001 as compared to $16.6 million in 2000, primarily due to declining
yields and lower advance reservations at American Hawaii and United States Lines
in 2001.
Cash used in investing activities totaled $42.0 million in 2001 as compared to
$122.3 million in 2000. In 2000, we placed $55.0 million of debt proceeds into
escrow accounts in connection with our shipbuilding programs and purchased $13.3
million of marketable securities, as compared to 2001 when a net of $23.8
million was released from
13
14
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONT'D.)
escrow accounts (see note 2 to the Consolidated Financial Statements) and we
sold $3.4 million of marketable securities. Capital expenditures increased $15.3
million in 2001, mainly due to higher spending for the construction of new
vessels. We spent $54.2 million in 2001 for the new Hawaii cruise ships under
construction as compared to $25.2 million during 2000, and $6.5 million on the
Delta Queen coastal vessels in 2001 as compared to $9.0 million spent in 2000.
We also spent $14.9 million in 2000 for renovation and refurbishment of the
Columbia Queen with no comparable amount in 2001. Other capital expenditures of
$8.5 million in 2001, as compared to $4.9 million in 2000, were mainly related
to capital improvements on existing vessels.
Cash received from financing activities was $19.1 million in 2001 as compared to
$161.9 million in 2000, as we raised $96.3 million from an offering of
convertible preferred securities of a subsidiary trust and $46.8 million from a
common stock offering in the first quarter of 2000, as discussed below.
On February 22, 2000 we completed an offering of 2,000,000 trust convertible
preferred securities. Each $50 security bears interest at 7% and is convertible
at the holder's election into 1.6207 shares of common stock. The net proceeds,
after underwriting fees and other expenses, were $96.3 million. A portion of the
proceeds were used to fund the letter of credit facility related to the ms Nieuw
Amsterdam purchase and to pay outstanding amounts on the Chase credit facility.
On February 22, 2000 we also completed an offering of an additional 2,000,000
shares of common stock. The net proceeds, after underwriting commissions and
other expenses, were $46.8 million and are being used for construction of the
second Hawaii vessel.
For the Hawaii cruise market, we are constructing two new cruise ships over the
next several years. On March 9, 1999 we signed a definitive agreement with
Ingalls Shipbuilding to construct two passenger ships, each containing
approximately 1,900 passenger berths, with options to build up to four
additional vessels. The contract provides that Ingalls Shipbuilding deliver the
first new ship in January 2003 and the second ship in January 2004. We currently
estimate the new Hawaii cruise ships to cost approximately $495 million each,
including the cost of furnishings, fixtures and equipment, as well as design,
engineering and architectural fees, but excluding capitalized interest. Ingalls
Shipbuilding is claiming that we should pay additional sums beyond the contract
price for certain interior finish work and has requested a delay in the delivery
schedule. We believe that the claims made by the shipyard for additional
payments and a delay in the delivery of the ships are unwarranted, and we intend
to assert our rights under the original provisions of the contract. Moreover, we
believe that we have meritorious claims against Ingalls arising under the
express terms of the contract. In the first quarter of 2001 we spent $42.1
million on construction of the first Hawaii vessel and $12.0 million on
construction of the second vessel, including capitalized interest. For the
balance of 2001, we expect to spend approximately $229 million, excluding
capitalized interest, on building the two new Hawaii cruise vessels and
completing construction of the Cape May Light and Cape Cod Light.
We intend to finance a significant portion of the construction cost of the
Hawaii cruise ships through the Maritime Administration ("MARAD"), which
provides guarantees of private financing for new vessel construction projects
conducted in U.S. shipyards. In April 1999 we received commitments from MARAD
for financing guarantees for debt of up to 87.5% of the cost of the vessels.
During the 12 months ending December 31, 2000 we placed three separate
issuances of short-term notes guaranteed by MARAD totaling $125 million. These
notes bear interest ranging from the London Interbank Offer Rate, or LIBOR,
minus 0.05% to LIBOR minus 0.10%. On January 31, 2001 we issued $50 million of
notes guaranteed by MARAD bearing interest at LIBOR minus 0.10% and due on
January 31, 2002. A portion of the proceeds from this issuance was used to pay
down $25 million of notes issued in 2000 that were due January 31, 2001. On May
8, 2001 we issued an additional $35 million notes due April 30, 2002 at LIBOR
minus 0.10%.
We intend to refinance all of these notes on or before their maturity dates by
issuing long-term bonds. In the current market, this type of debt generally
bears interest at a rate of 100 to 175 basis points over the comparable U.S.
government obligations and can have a term of up to 25 years from the date of
delivery of the vessel. The loans generally amortize on either a straight-line
basis or on a mortgage-style basis over the term of the loan, commencing after
the delivery date.
We have been constructing two new coastal cruise vessels for our Delta Queen
Coastal Voyages line at Atlantic Marine, Inc. of Jacksonville, Florida. The
first vessel, the Cape May Light, was delivered April 12, 2001. The second
vessel, the Cape Cod Light, is expected to be delivered in the third quarter of
2001. Each 224-passenger vessel is expected to have a total project cost,
including furnishing, fixtures and equipment, as well as design and
architectural fees, but excluding capitalized interest, of approximately $40
million to $42 million. On October 16, 2000 we issued
14
15
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONT'D.)
$37.9 million and $38.5 million of 7.25% long-term bonds to finance construction
of the Cape May Light and Cape Cod Light respectively. Semi-annual principal
payments commence six months after delivery of the ships. The bonds are
guaranteed by MARAD pursuant to a commitment we received from MARAD on March 31,
2000 for financing guarantees pertaining to the two ships.
Under the terms of an agreement finalized on October 15, 1999, we acquired the
ms Nieuw Amsterdam from Holland America Line ("HAL") on October 18, 2000 for
$114.5 million. Upon taking delivery of the vessel, we renamed it the ms Patriot
and we are operating it as a 1,212-passenger U.S.-flagged vessel serving the
Hawaiian market. This is the first ship that we intend to operate under the
United States Lines brand name. The purchase price was financed with $30 million
of proceeds from the issuance of convertible preferred securities of a
subsidiary trust and an $84.5 million promissory note issued to HAL by us. The
promissory note bears interest at a floating rate equal to the prevailing prime
rate, which was 9.5% at the time of purchase, and is payable monthly in arrears.
Principal paydowns of $5.1 million are scheduled for each March 31st and
September 30th, beginning with March 31, 2001, with a final payment of $23.7
million due on January 18, 2007. We also incurred $20.4 million in
refurbishment, renovation and other capital expenditures necessary to ready the
vessel for service. This amount was funded from operating cash flow. The vessel
was placed into service on December 9, 2000.
The 1999 purchase contract with HAL required us to make an earnest money deposit
of $30 million by January 17, 2000. Persons and entities affiliated with Equity
Group Investments, Inc. ("Equity"), our largest stockholder, guaranteed our
letter of credit facility with The Chase Manhattan Bank ("Chase") for up to $30
million, thereby allowing us to obtain the facility from its inception until
February 22, 2000. Under an agreement dated October 15, 1999, as consideration
for issuance of the guarantee, we paid Equity a commitment fee of $0.5 million
in 1999 and agreed to pay Equity additional compensation in the form of stock
appreciation units. Equity's rights to receive this additional compensation
vested, on a monthly basis, during the period that the guarantee remained
outstanding. On February 22, 2000, we deposited $30 million into a cash
collateral account with Chase from proceeds received from the issuance of
convertible preferred securities of a subsidiary trust, thereby terminating the
Equity guarantee. Equity may exercise its right to receive payment during the
two years following the third anniversary of the date of the agreement, subject
to our right to retire Equity's stock appreciation units, at escalating prices,
prior to the third anniversary of the agreement. (See Note 5 to the Consolidated
Financial Statements for further information).
In February 1999 The Delta Queen Steamboat Co. ("DQSC") entered into a credit
agreement with a group of lenders, with Chase as agent. This agreement provided
for a revolving credit facility of up to $70 million to fund the expansion of
the Delta Queen line. Upon the completion of MARAD financing for the two Delta
Queen coastal vessels, this facility was amended in the third quarter of 2000
whereby DQSC has a maximum of $30 million available to it in the amount of
revolving credit loans until the maturity date of the facility, which is
September 13, 2001. Any amounts outstanding on the maturity date will be
converted to a non-amortizing term loan which matures on September 13, 2002.
Borrowings under the facility bear interest at either (1) the greater of Chase's
prime rate or alternative base rates plus a margin ranging from 0.50% to 0.75%,
or (2) LIBOR plus a margin ranging from 1.50% to 1.75%. We are also required to
pay an unused commitment fee of 0.50% per annum. The facility is secured by all
of the assets of DQSC, except for the American Queen, Cape May Light and Cape
Cod Light. The terms of the facility require DQSC to maintain certain financial
performance ratios and contain limitations on investments, additional
indebtedness, construction costs of new vessels and other capital expenditures.
We are currently working to obtain MARAD-guaranteed financing for the Columbia
Queen. In the event we are successful in obtaining such financing, the Columbia
Queen vessel would be removed from the facility's collateral base and could
affect the amount available to us under the facility.
In the first quarter of 2001 the regularly scheduled dry-docking of the
Mississippi Queen and lay-ups of the other Delta Queen riverboats were completed
at a cost of approximately $7.8 million, including capital expenditures, repairs
and maintenance and was funded from cash on hand.
We believe we will have adequate access to capital resources, both internally
and externally, to meet our current short-term and long-term capital commitments
and working capital needs. Such resources may include cash on hand, new
borrowings from lenders, and the ability to secure additional financing through
the capital markets. However, in the event that we are unable to reduce our
operating expenses or increase our revenues from operations in order to reduce
our operating losses, we may need to secure additional financing to fund our
expansion plans. In the event that we need additional funding and are unable to
obtain new financing on terms acceptable to us or at all, we may be forced to
postpone, curtail or terminate some of our expansion plans. See the "Risk
Factors" section of our Form 10-K for a more complete discussion regarding our
expansion plans.
15
16
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS (CONT'D.)
RESCISSION OF ACCOUNTING METHOD
On November 2, 1999 we announced that we had rescinded our prior adoption of the
American Institute of Certified Public Accountants Accounting Standards
Executive Committee's Statement of Position ("SOP") No. 93-7, "Reporting on
Advertising Costs", relating to the deferral of direct response advertising
costs. The deferral method provided for in SOP 93-7 was adopted in 1999, and
made effective as of January 1, 1999. Under SOP 93-7, we deferred recognition of
direct response advertising costs related to direct response advertising efforts
for future cruises. These deferred costs were recognized in the periods that the
cruises promoted by the efforts were completed, and the related cruise revenue
recognized. We rescinded our adoption of SOP 93-7 due to difficulties we
encountered in implementing the new method. In rescinding SOP 93-7, we returned
to our prior method of recognizing expenses for direct response advertising
costs when those costs are incurred. As a result of the rescission of SOP 93-7,
we restated our earnings for the first quarter of 1999 to reflect a loss of $6.3
million, or ($0.44) per share, compared to our previously reported loss of $4.5
million, or ($0.32) per share. We also restated our earnings for the second
quarter of 1999 to $2.5 million, or $0.14 per share, compared to our previously
reported earnings of $2.4 million, or $0.13 per share. As previously disclosed,
the Securities and Exchange Commission has been conducting an informal
investigation into our adopting and then rescinding the AICPA's Statement of
Position 93-7 relating to the deferral of direct response advertising costs.
While the SEC has not brought any formal proceedings against us, it is possible
that the SEC's informal inquiry or a subsequent formal inquiry or proceeding
could result in orders, sanctions or penalties against us. We cannot predict at
this time whether any such orders, sanctions or penalties would have a material
impact.
RECENT ACCOUNTING PRONOUNCEMENTS
In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standard (SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities". This statement establishes accounting and
reporting standards for derivative instruments and for hedging activities. It
requires that derivatives be recognized in the balance sheet at fair value and
specifies the accounting for changes in fair value. In June 1999, the FASB
issued SFAS No. 137, "Accounting for Derivative Instruments and Hedging
Activities - Deferral of the Effective Date of FASB Statement No. 133" to defer
the effective date of SFAS No. 133, until fiscal years beginning after June 15,
2000. At December 31, 2000 and March 31, 2001 we had no derivative financial
instruments, nor do we engage in any hedging activities. Therefore, adoption of
SFAS No. 133 did not impact our results of operations or financial position.
Should we elect to engage in derivative and hedging activities in the future,
the impact of SFAS No. 133 on the consolidated financial statements would depend
on a variety of factors including the level of future hedging activities, the
types of hedging instruments used and the effectiveness of such instruments.
OTHER MATTERS
On September 8, 2000 the Company announced its intention to relocate its
corporate and operational headquarters, from Chicago, Illinois and New Orleans,
Louisiana respectively, to a new leased facility which is being constructed in
Sunrise, Florida. In connection with the move, we are eligible to receive
economic incentives from the State of Florida, Broward County and the City of
Sunrise of up to $4.2 million once certain conditions are met. The economic
benefits we may receive include tax refunds beginning in 2002 under Florida's
Qualified Target Industry Tax (QTI) Refund Program, state job training funds and
certain cash grants approved by the local municipalities. These benefits will be
recognized as they are earned. Construction of the new facility is expected to
be completed in November 2001 and the relocation is expected to be largely
complete by early 2002. We have offered to relocate most employees to the new
location but the number of employees intending to relocate was largely
undetermined as of March 31, 2001. We will incur severance and retention costs
pertaining to those employees choosing not to relocate. We also expect to incur
employee relocation costs and additional relocation expenses to move equipment
and furniture, which will be expensed as incurred. As of March 31, 2001 we have
not recognized any expense for relocation of employees or Company assets. For
the three-month period ending March 31, 2001 we accrued an additional $0.1
million of severance expenses and made payments of $0.5 million against the
accrual. Also during the three-month period ending March 31, 2001 we charged to
expense $0.4 million in retention bonuses that were paid to employees. We may
also incur lease termination expenses or a write-off of leasehold improvements
if we elect to vacate our Chicago or New Orleans facilities. At this time we
have not determined whether we will completely vacate these facilities and are
therefore unable to determine the potential costs, if any, we will incur in
connection with terminating the leases or writing off the leasehold
improvements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For a discussion of certain market risks related to us, see Part I Item 7A
"Quantitative and Qualitative Disclosures About Market Risks" in our Annual
Report on Form 10-K for the fiscal year ended December 31, 2000. There have been
no significant developments with respect to exposure to market risk.
16
17
AMERICAN CLASSIC VOYAGES CO.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The SEC has been conducting an informal inquiry into our
accounting practices with respect to direct response advertising
costs. The informal inquiry relates to our adoption of a
particular methodology effective as of January 1, 1999 and our
subsequent rescission of that methodology in November 1999 due to
difficulties encountered implementing the new method. We restated
our financial statements for the first and second quarters of 1999
and we believe that we are cooperating with the SEC in their
informal inquiry. We are unable to predict the outcome or impact
of the SEC's informal investigation. However, it is possible that
the SEC's informal inquiry or a subsequent formal inquiry could
result in orders, penalties or sanctions against the Company.
Depending upon the resulting orders, penalties or sanctions, if
any, our financial performance could be adversely affected, our
ability to conduct our business could be impaired or we could be
required to make further adjustments to our financial statements.
There are no other material legal proceedings, to which the
Company is a party or of which any of its property is the subject,
other than ordinary routine litigation and claims incidental to
the business. The Company believes it maintains adequate insurance
coverage and reserves for such claims.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
AMERICAN CLASSIC VOYAGES CO.
By: /s/ Philip C. Calian
----------------------------------
Philip C. Calian
Chief Executive Officer
By: /s/ Randall L. Talcott
----------------------------------
Randall L. Talcott
Vice President-Finance and Treasurer
(Principal Financial and Accounting
Officer)
Dated: MAY 15, 2001
17