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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
For the transition period from to
Commission file number
LINDBLAD EXPEDITIONS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
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The
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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. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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Large accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
As of November 4, 2024,
LINDBLAD EXPEDITIONS HOLDINGS, INC.
Quarterly Report On Form 10-Q
For The Quarter Ended September 30, 2024
Table of Contents
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Page(s) |
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PART I. FINANCIAL INFORMATION |
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ITEM 1. |
Financial Statements (Unaudited) |
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Condensed Consolidated Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 2023 |
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Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited) |
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Condensed Consolidated Statements of Comprehensive (Loss) Income for the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited) |
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Condensed Consolidated Statements of Stockholders’ Deficit for the Three and N ine Months Ended September 30, 2024 and 2023 (Unaudited) |
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Condensed Consolidated Statements of Cash Flows for the N ine Months Ended September 30, 2024 and 2023 (Unaudited) |
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Notes to the Condensed Consolidated Financial Statements (Unaudited) |
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ITEM 2. |
Management ’ s Discussion and Analysis of Financial Condition and Results of Operations |
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ITEM 3. |
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ITEM 4. |
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PART II. OTHER INFORMATION |
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ITEM 1. |
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ITEM 1A. |
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ITEM 2. |
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ITEM 3. |
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ITEM 4. |
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ITEM 5. |
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ITEM 6. |
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PART 1. |
FINANCIAL INFORMATION |
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ITEM 1. |
FINANCIAL STATEMENTS |
LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
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As of September 30, 2024 |
As of December 31, 2023 |
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(unaudited) |
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ASSETS |
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Current Assets: |
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Cash and cash equivalents |
$ |
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$ |
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Restricted cash |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Goodwill |
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Intangibles, net |
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Other long-term assets |
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Total assets |
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$ |
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LIABILITIES |
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Current Liabilities: |
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Unearned passenger revenues |
$ |
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$ |
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Accounts payable and accrued expenses |
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Lease liabilities - current |
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Long-term debt - current |
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Total current liabilities |
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Long-term debt, less current portion |
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Deferred tax liabilities |
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Other long-term liabilities |
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Total liabilities |
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Commitments and contingencies |
- | - | ||||||
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Series A redeemable convertible preferred stock, shares authorized; shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively |
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Redeemable noncontrolling interests |
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STOCKHOLDERS’ DEFICIT |
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Preferred stock, $ par value, shares authorized; Series A shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively |
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Common stock, $ par value, shares authorized; and issued, and outstanding as of September 30, 2024 and December 31, 2023, respectively |
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Additional paid-in capital |
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Accumulated deficit |
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Total stockholders' deficit |
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(
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Total liabilities, mezzanine equity and stockholders' deficit |
$ |
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$ |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(unaudited)
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For the three months ended September 30, |
For the nine months ended September 30, |
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2024 |
2023 |
2024 |
2023 |
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Tour revenues |
$ |
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$ |
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$ |
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$ |
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Operating expenses: |
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Cost of tours |
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General and administrative |
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Selling and marketing |
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Depreciation and amortization |
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Total operating expenses |
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Operating income |
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Other (expense) income: |
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Interest expense, net |
(
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(
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Gain (loss) on foreign currency |
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Other income (expense) |
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Total other expense |
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(
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Income (loss) before income taxes |
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Income tax (benefit) expense |
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(
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Net income (loss) |
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Net income attributable to noncontrolling interest |
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Net income (loss) attributable to Lindblad Expeditions Holdings, Inc. |
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Series A redeemable convertible preferred stock dividend |
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Net income (loss) available to stockholders |
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Weighted average shares outstanding |
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Basic |
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Diluted |
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Undistributed income (loss) per share available to stockholders: |
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Basic |
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Diluted |
$ |
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$ |
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$ |
(
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The accompanying notes are an integral part of these condensed consolidated financial statements.
LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
(unaudited)
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For the three months ended September 30, |
For the nine months ended September 30, |
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2024 |
2023 |
2024 |
2023 |
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Net income (loss) |
$ |
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$ |
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$ |
(
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(
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Other comprehensive income: |
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Total other comprehensive income |
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Total comprehensive income (loss) |
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Less: comprehensive income attributive to non-controlling interest |
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Comprehensive income (loss) attributable to Lindblad Expeditions Holdings, Inc. |
$ |
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$ |
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$ |
(
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(
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The accompanying notes are an integral part of these condensed consolidated financial statements.
LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders ’ Deficit
(In thousands, except share data)
(unaudited)
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Common Stock |
Additional Paid-In |
Accumulated |
Total Stockholders' |
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Shares |
Amount |
Capital |
Deficit |
Deficit |
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Balance as of June 30, 2024 |
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$ |
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$ |
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$ |
(
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(
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Stock-based compensation |
- |
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- |
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Net activity related to equity compensation plans |
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(
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(
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Issuance of stock for acquisition |
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Redeemable noncontrolling interest |
- |
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(
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(
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Series A preferred stock dividend |
- | - | - |
(
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(
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Net income attributable to Lindblad Expeditions Holdings, Inc |
- |
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Balance as of September 30, 2024 |
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$ |
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$ |
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$ |
(
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(
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| Common Stock | Additional Paid-In | Accumulated | Total Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
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Balance as of December 31, 2023 |
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$ |
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$ |
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$ |
(
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(
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Stock-based compensation |
- |
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Net activity related to equity compensation plans |
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(
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(
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Issuance of stock for acquisition |
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Redeemable noncontrolling interest |
- |
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(
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(
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(
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Series A preferred stock dividend |
- |
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(
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(
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Net loss attributable to Lindblad Expeditions Holdings, Inc |
- |
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(
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(
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Balance as of September 30, 2024 |
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$ |
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$ |
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$ |
(
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) | $ |
(
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LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders ’ Deficit
(In thousands, except share data)
(unaudited)
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Common Stock |
Additional Paid-In |
Accumulated |
Total Stockholders' |
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Shares |
Amount |
Capital |
Deficit |
Deficit |
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Balance as of June 30, 2023 |
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$ |
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$ |
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$ |
(
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) | $ |
(
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Stock-based compensation |
- |
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Net activity related to equity compensation plans |
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(
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(
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Redeemable noncontrolling interest |
- |
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(
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(
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Series A preferred shares dividend |
- |
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(
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(
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Net income attributable to Lindblad Expeditions Holdings, Inc. |
- |
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Balance as of September 30, 2023 |
$ |
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$ |
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$ |
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$ |
(
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) | $ |
(
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) | ||||||||
| Common Stock | Additional Paid-In | Accumulated | Total Stockholders' | |||||||||||||||||
| Shares | Amount | Capital | Deficit | Deficit | ||||||||||||||||
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Balance as of December 31, 2022 |
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$ |
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$ |
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$ |
(
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) | $ |
(
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Stock-based compensation |
- |
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- |
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Net activity related to equity compensation plans |
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(
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(
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Redeemable noncontrolling interest |
- |
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(
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(
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Series A preferred shares dividend |
- |
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(
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(
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Net loss attributable to Lindblad Expeditions Holdings, Inc. |
- |
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(
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(
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Balance as of September 30, 2023 |
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$ |
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$ |
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$ |
(
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) | $ |
(
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The accompanying notes are an integral part of these condensed consolidated financial statements.
LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
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For the nine months ended September 30, |
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2024 |
2023 |
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Cash Flows From Operating Activities |
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Net loss |
$ |
(
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(
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Adjustments to reconcile net loss to net cash provided by operating activities: |
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Depreciation and amortization |
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Amortization of deferred financing costs and other, net |
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Amortization of right-to-use lease assets |
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Stock-based compensation |
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Deferred income taxes |
(
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Loss (gain) on foreign currency |
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(
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Write-off of unamortized issuance costs related to debt refinancing |
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Changes in operating assets and liabilities |
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Prepaid expenses and other current assets |
(
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(
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Unearned passenger revenues |
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Other long-term assets |
(
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(
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Accounts payable and accrued expenses |
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(
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Operating lease liabilities |
(
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(
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Net cash provided by operating activities |
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Cash Flows From Investing Activities |
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Purchases of property and equipment |
(
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(
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Acquisition (net of cash acquired) |
(
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Sale of securities |
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Net cash used in investing activities |
(
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(
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Cash Flows From Financing Activities |
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Purchase of redeemable noncontrolling interest |
(
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Proceeds from long-term debt |
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Repayments of long-term debt |
(
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) |
(
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Payment of deferred financing costs |
(
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(
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Repurchase under stock-based compensation plans and related tax impacts |
(
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(
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Net cash (used in) provided by financing activities |
(
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) |
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Net increase in cash, cash equivalents and restricted cash |
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Cash, cash equivalents and restricted cash at beginning of period |
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Cash, cash equivalents and restricted cash at end of period |
$ |
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$ |
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Supplemental disclosures of cash flow information: |
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Cash paid during the period: |
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Interest |
$ |
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$ |
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Income taxes |
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Non-cash investing and financing activities: |
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Non-cash preferred stock dividend |
$ |
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$ |
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Shares issued in connection with acquisition |
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Additional paid-in capital exercise proceeds of option shares |
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Additional paid-in capital exchange proceeds used for option shares |
(
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) |
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The accompanying notes are an integral part of these condensed consolidated financial statements.
Lindblad Expeditions Holdings, Inc.
Notes to the Unaudited Condensed Consolidated Financial Statements
(Unaudited)
NOTE 1 — BUSINESS AND BASIS OF PRESENTATION
Business
Lindblad Expeditions Holdings, Inc.’s and its consolidated subsidiaries’ (collectively, the “Company” or “Lindblad”) mission is offering life-changing adventures around the world and pioneering innovative ways to allow its guests to connect with exotic and remote places.
The Company’s common stock is listed on the NASDAQ Capital Market under the symbol “LIND”.
The Company operates the following
Lindblad Segment. The Lindblad segment currently operates a fleet of owned expedition ships and seasonal charter vessels, and primarily provides ship-based expeditions aboard these customized, nimble and intimately-scaled vessels that are able to venture where larger cruise ships cannot, thus allowing Lindblad to offer up-close experiences in the planet’s wild and remote places and capitals of culture. Each expedition ship is fully equipped with state-of-the-art tools for in-depth exploration and the majority of expeditions involve travel to remote places with limited infrastructure and ports, such as Antarctica and the Arctic, or places that are best accessed by a ship, such as the Galápagos Islands, Alaska, Baja California’s Sea of Cortez and Panama, and foster active engagement by guests. The Company has a brand license agreement with National Geographic Partners, LLC (“National Geographic”), where the Company’s voyages are marketed under the National Geographic-Lindblad Expeditions brand, and provides for lecturers and National Geographic experts, including photographers, writers, marine biologists, naturalists, field researchers and film crews, to join many of the Company’s expeditions.
Land Experiences Segment. The Land Experiences segment operates land-based, eco-conscious expeditions and active nature focused tours, and includes the five primarily land-based brands, Natural Habitat, Inc. (“Natural Habitat”), Off the Beaten Path, LLC (“Off the Beaten Path”), DuVine Cycling + Adventure Company (“DuVine”), Classic Journeys, LLC (“Classic Journeys”), and Wineland-Thomson Adventures comprised of Wineland-Thomson Adventures, LLC (“Thomson Safaris”), Nature Discovery Ltd (“Nature Discovery”), and the Ngorongoro lodge and farm under the Ngorongoro Safari Lodge Ltd (“Gibb’s Farm”).
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● |
Natural Habitat offers over 100 different expedition itineraries in more than 45 countries spanning all seven continents, with eco-conscious expeditions and nature-focused, small-group tours that include polar bear tours in Churchill, Canada, Alaskan grizzly bear adventures, small-group Galápagos Islands tours and African safaris. Natural Habitat has partnered with World Wildlife Fund (“WWF”) to offer conservation travel, which is sustainable travel that contributes to the protection of nature and wildlife. |
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● |
Off the Beaten Path offers active small-group adventures, led by local, experienced guides, with distinct focus on wildlife, hiking national parks and culture. Off the Beaten Path offerings include insider national park experiences in the Rocky Mountains, Desert Southwest, and Alaska, as well as unique trips across Central and South America, Oceania, Europe and Africa. |
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● |
DuVine offers intimate group cycling and adventure tours around the world with local cycling experts as guides, immersive in local cultural, cuisine and high-quality accommodations. International cycling tours include the exotic Costa Rican rainforests, the rocky coasts of Ireland and the vineyards of Spain, while cycling adventures in the United States include cycling beneath the California redwoods, pedaling through Vermont farmland, and wine tastings in the world-class vineyards of Napa and Sonoma. |
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Classic Journeys offers highly curated active small-group and private custom journeys centered around cinematic walks led by expert local guides in over 50 countries around the world. These walking tours are highlighted by expert local guides, luxury boutique accommodations, and handcrafted itineraries that immerse guests into the history and culture of the places they are exploring and the people who live there. |
| ● | Wineland-Thomson Adventures offers socially responsible and positively impactful light-treading Tanzanian safaris, industry-leading Kilimanjaro treks, global custom and private tours, and family travel experiences. Wineland-Thomson Adventures also operates the historic award-winning Gibb’s Farm, an 80 -acre sanctuary and high-end lodge located near the Ngorongoro Crater. |
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements and notes to the unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding unaudited interim financial information and include the accounts and transactions of the Company. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial statements for the periods presented. Operating results for the periods presented are not necessarily indicative of the results of operations to be expected for the full year due to seasonality and other factors. Certain information and note disclosures normally included in the consolidated financial statements in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC for interim reporting. All intercompany balances and transactions have been eliminated in these unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto for the year ended December 31, 2023 contained in the Company’s Annual Report on Form 10 -K filed with the SEC on March 6, 2024 ( the “2023 Annual Report”).
There have been no significant changes to the Company’s accounting policies from those disclosed in the 2023 Annual Report.
Recently Adopted Accounting Pronouncements
During November 2023, Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023 - 07 ― Segment Reporting (Topic 280 ) — Improvements to Reportable Segment Disclosures. The amendments in this ASU are intended to improve and enhance disclosures about reportable segments’ significant segment expenses. ASU 2023 - 07 is effective for fiscal years beginning after December 15, 2023 and interim periods beginning after December 15, 2024. The Company adopted this guidance January 1, 2024 for its annual reporting, as required, and for its interim reporting will adopt January 1, 2025, as required. These amendments require the Company to disclose significant segment expenses that are regularly provided to the chief operating decision maker and are included within each reported measure of segment operating results. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.
Recent Accounting Pronouncements
During December 2023, FASB issued ASU 2023 - 09 ― Income Taxes (Topic 740 ) — Improvements to Income Tax Disclosures. The amendments in this ASU are intended to enhance the transparency and decision usefulness of income tax disclosures. ASU 2023 - 09 is effective for fiscal years beginning after December 15, 2024. The Company will adopt this guidance January 1, 2025 for its annual reporting, as required. These amendments will increase the Company’s disclosures related to income taxes. The Company is currently evaluating the impact of the new guidance on its consolidated financial statements and related disclosures.
During March 2024, FASB issued ASU 2024 - 01 ― Compensation—Stock Compensation (Topic 718 ) — Scope Application of Profits Interest and Similar Awards. The amendments in this ASU add illustrative examples to help demonstrate how an entity should apply the scope guidance in paragraph ASU 718 - 10 - 15 - 3 to determine whether profits interest and similar awards should be accounted for in accordance with Topic 718, Compensation—Stock Compensation. ASU 2024 - 01 is effective for fiscal years beginning after December 15, 2024. The Company will adopt this guidance January 1, 2025, as required, and does not believe it will have a material impact the Company's financial statements.
NOTE 2 — EARNINGS PER SHARE
Earnings (loss) per Common Share
Earnings (loss) per common share is computed using the
two
-class method related to its Series A Redeemable Convertible Preferred Stock, par value of $
Diluted earnings per share is computed using the weighted average number of common shares outstanding and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the dilutive incremental common shares associated with restricted stock awards and shares issuable upon the exercise of stock options, using the treasury stock method, and the potential common shares that could be issued from conversion of the Preferred Stock, using the if-converted method. When a net loss occurs, potential common shares have an anti-dilutive effect on earnings per share and such shares are excluded from the diluted earnings per share calculation.
For the
nine
months ended
September 30, 2024
and
2023,
the Company incurred net losses available to stockholders, therefore basic and diluted net loss per share are the same in each respective period. For the
nine
months ended
September 30, 2024,
Loss per share was calculated as follows:
|
For the three months ended September 30, |
For the nine months ended September 30, |
|||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
|||||||||||||
|
(unaudited) |
(unaudited) |
|||||||||||||||
|
(In thousands, except share and per share data) |
||||||||||||||||
|
Net income (loss) attributable to Lindblad Expeditions Holdings, Inc. |
$ |
|
$ |
|
$ |
(
|
) | $ |
(
|
) | ||||||
|
Series A redeemable convertible preferred stock dividend |
|
|
|
|
||||||||||||
|
Undistributed income (loss) available to stockholders |
$ |
|
$ |
|
$ |
(
|
) | $ |
(
|
) | ||||||
|
Weighted average shares outstanding: |
||||||||||||||||
|
Total weighted average shares outstanding, basic |
|
|
|
|
||||||||||||
|
Dilutive potential common shares |
|
|
|
|
||||||||||||
|
Dilutive potential options |
|
|
|
|
||||||||||||
|
Dilutive potential redeemable convertible preferred shares |
|
|
|
|
||||||||||||
|
Total weighted average shares outstanding, diluted |
|
|
|
|
||||||||||||
|
Undistributed income (loss) per share available to stockholders: |
||||||||||||||||
|
Basic |
$ |
|
$ |
|
$ |
(
|
) | $ |
(
|
) | ||||||
|
Diluted |
$ |
|
$ |
|
$ |
(
|
) | $ |
(
|
) | ||||||
NOTE 3 — REVENUES
Customer Deposits and Contract Liabilities
The Company’s guests remit deposits in advance of tour embarkation. Guest deposits consist of guest ticket revenues as well as revenues from the sale of pre- and post-expedition excursions, hotel accommodations, land-based expeditions and certain air transportation. Guest deposits represent unearned revenues and are reported as unearned passenger revenues when received and are subsequently recognized as tour revenue over the duration of the expedition. Contract liabilities represent the Company's obligation to transfer goods or services to a customer for which the Company has received consideration from the customer. The Company does not consider guest deposits to be a contract liability until the guest no longer has the right, resulting from the passage
of time, to cancel their reservation and receive a full refund. In conjunction with the previous suspension or rescheduling of expeditions, the Company provided guests an option of either a refund or future travel certificates, which in some instances the future travel credit exceeded the original cash deposit. The value of future travel certificates in excess of cash received is being recognized as a discount to tour revenues at the time the related expedition occurs. Future travel certificates are valued based on the Company’s expectation that a guest will travel again. As of
September 30, 2024
and
December 31, 2023,
the Company has $
The change in contract liabilities within unearned passenger revenues presented in the Company's consolidated balance sheets are as follows:
|
Contract Liabilities |
||||
|
(In thousands) |
||||
|
Balance as of December 31, 2023 |
$ |
|
||
|
Recognized in tour revenues during the period |
(
|
) | ||
|
Additional contract liabilities in period |
|
|||
|
Balance as of September 30, 2024 |
$ |
|
||
The following tables disaggregate each reportable segment’s tour revenues by the sales channel it was derived from:
|
For the three months ended September 30, |
For the nine months ended September 30, |
|||||||||||||||
|
Lindblad Segment |
2024 | 2023 | 2024 | 2023 | ||||||||||||
|
(unaudited) |
(unaudited) |
|||||||||||||||
|
Guest ticket revenue: |
||||||||||||||||
|
Direct (a) |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
Agencies |
|
|
|
|
||||||||||||
|
Affinity |
|
|
|
|
||||||||||||
|
Guest ticket revenue |
|
|
|
|
||||||||||||
|
Other tour revenue |
|
|
|
|
||||||||||||
|
Tour revenues |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
| For the three months ended September 30, | For the nine months ended September 30, | |||||||||||||||
|
Land Experiences Segment |
2024 | 2023 | 2024 | 2023 | ||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
|
Guest ticket revenue: |
||||||||||||||||
|
Direct |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
Agencies |
|
|
|
|
||||||||||||
|
Affinity |
|
|
|
|
||||||||||||
|
Guest ticket revenue |
|
|
|
|
||||||||||||
|
Other tour revenue |
|
|
|
|
||||||||||||
|
Tour revenues |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
| (a) |
Under the brand license agreement between the Company and National Geographic, effective
January 1, 2024,
National Geographic
no
longer receives commissions on sales bookings through the former National Geographic sales channel as the co-selling arrangement operates as direct sales through the Company’s booking system. In the
three
and
nine
months ended
September 30, 2023,
the National Geographic sales channel accounted for $
|
NOTE 4 — FINANCIAL STATEMENT DETAILS
The following is a reconciliation of cash, cash equivalents and restricted cash to the statement of cash flows:
|
As of September 30, |
||||||||
|
2024 |
2023 |
|||||||
|
(In thousands) |
(unaudited) | |||||||
|
Cash and cash equivalents |
$ |
|
$ |
|
||||
|
Restricted cash |
|
|
||||||
|
Total cash, cash equivalents and restricted cash as presented in the statement of cash flows |
$ |
|
$ |
|
||||
Restricted cash consists of the following:
|
As of September 30, 2024 |
As of December 31, 2023 |
|||||||
|
(In thousands) |
(unaudited) |
|||||||
|
Credit card processor reserves |
$ |
|
$ |
|
||||
|
Federal Maritime Commission and other escrow |
|
|
||||||
|
Certificates of deposit and other restricted securities |
|
|
||||||
|
Total restricted cash |
$ |
|
$ |
|
||||
Prepaid expenses and other current assets are as follows:
|
As of September 30, 2024 |
As of December 31, 2023 |
|||||||
|
(In thousands) |
(unaudited) | |||||||
|
Prepaid tour expenses |
$ |
|
$ |
|
||||
|
Other |
|
|
||||||
|
Total prepaid expenses and other current assets |
$ |
|
$ |
|
||||
Accounts payable and accrued expenses are as follows:
|
As of September 30, 2024 |
As of December 31, 2023 |
|||||||
|
(In thousands) |
(unaudited) | |||||||
|
Accrued other expense |
$ |
|
$ |
|
||||
|
Accounts payable |
|
|
||||||
|
Total accounts payable and accrued expenses |
$ |
|
$ |
|
||||
Change in goodwill:
|
(In thousands) |
Land Experiences Segment |
|||
|
Balance as of December 31, 2023 |
$ |
|
||
|
Acquisitions (a) |
|
|||
|
Balance as of September 30, 2024 |
$ |
|
||
| (a) | Increase to goodwill relates to the Company's July 31, 2024 acquisition of Wineland-Thomson Adventures. For additional information, see Note 11—Acquisition. |
NOTE 5 — LONG-TERM DEBT
|
As of September 30, 2024 |
As of December 31, 2023 |
|||||||||||||||||||||||
|
(unaudited) |
||||||||||||||||||||||||
|
(In thousands) |
Principal |
Deferred Financing Costs, net |
Balance |
Principal |
Deferred Financing Costs, net |
Balance |
||||||||||||||||||
|
6.75% Notes |
$ |
|
$ |
(
|
) | $ |
|
$ |
|
$ |
(
|
) | $ |
|
||||||||||
|
9.00% Notes |
|
(
|
) |
|
|
(
|
) |
|
||||||||||||||||
|
Other |
|
|
|
|
|
|
||||||||||||||||||
|
Total long-term debt |
|
(
|
) |
|
|
(
|
) |
|
||||||||||||||||
|
Less current portion |
|
|
|
(
|
) |
|
(
|
) | ||||||||||||||||
|
Total long-term debt, non-current |
$ |
|
$ |
(
|
) | $ |
|
$ |
|
$ |
(
|
) | $ |
|
||||||||||
For the
three
and
nine
months ended
September 30, 2024,
$
6.75% Notes
On
February 4, 2022,
the Company issued $
Revolving Credit Facility
On
February 4, 2022,
the Company entered into a senior secured revolving credit facility (the “Revolving Credit Facility”), which provides for an aggregate principal amount of commitments of $
9.00% Notes
On
May 2, 2023,
the Company issued $
Covenants
The Company’s 6.75% Notes, Revolving Credit Facility and 9.00% Notes contain covenants that include, among others, limits on additional indebtedness and make certain dividend payments, distributions, investments and other restricted payments.
These covenants are subject to a number of important exceptions and qualifications. The Company was in compliance with its covenants in effect as of September 30, 2024.
NOTE 6 — FAIR VALUE MEASUREMENTS
The carrying amounts of cash and cash equivalents, accounts payable and accrued expenses, approximate fair value due to the short-term nature of these instruments. The Company estimates the approximate fair value of its long-term debt as of
September 30, 2024
to be $
NOTE 7 — STOCKHOLDERS ’ EQUITY
Stock Repurchase Plan
The Company’s Board of Directors approved a stock and warrant repurchase plan (“Repurchase Plan”) in
November 2015
and increased the Repurchase Plan to $
Preferred Stock
In
August 2020,
the Company issued and sold
NOTE 8 — STOCK BASED COMPENSATION
The Company is authorized to issue up to
The Company recorded stock-based compensation expense of $
Long-Term Incentive Compensation
During the
nine
months ended
September 30, 2024,
the Company awarded
During the
nine
months ended
September 30, 2024,
the Company awarded
Options
Stock option information for the nine months ended September 30, 2024 is below.
|
Stock Option Grants |
||||
|
2024 |
||||
| Number of options awarded |
|
|||
|
Exercise price |
$ |
|
||
|
Dividend yield |
|
% | ||
|
Expected Volatility |
|
% | ||
|
Risk-free interest rate |
|
% | ||
|
Expected term (in years) |
|
|||
As of
September 30, 2024
and
December 31, 2023,
options to purchase an aggregate of
In connection with the
2016
acquisition of Natural Habitat, Mr. Bressler’s employment agreement, as amended, provides Mr. Bressler, Founder and Chief Executive Officer of Natural Habitat, with an equity incentive opportunity to earn an award of options based on the future financial performance of Natural Habitat, where if the final year equity value of Natural Habitat, as defined in Mr. Bressler's employment agreement, as amended, exceeds $
NOTE 9 — INCOME TAXES
As of
September 30, 2024
and
December 31, 2023,
the Company had
NOTE 10 — COMMITMENTS AND CONTINGENCIES
Redeemable Non-Controlling Interest
The Company has controlling interests in its Natural Habitat, Off the Beaten Path, DuVine and Classic Journeys consolidated subsidiaries. The noncontrolling interests are subject to put/call agreements. The put options enable the minority holders, but do not obligate them, to sell the remaining interests to the Company. The Company has call options which enable it, but do not obligate it, to acquire the remaining interests in the subsidiaries, subject to certain dates, expirations and similar redemption value purchase measurements as the put options.
Since the redemption of the noncontrolling interests are not solely in the Company’s control, the Company is required to record the redeemable noncontrolling interest outside of stockholders’ equity but after its total liabilities. In addition, if it is probable that the instrument will become redeemable, solely due to the passage of time, the redeemable noncontrollable interest should be adjusted to the redemption value via one of two measurement methods. The Company elected the income classification-excess adjustment and accretion methods for recognizing changes in the redemption value of the put options. Under this methodology, a calculation of the present value of the redemption value is compared to the carrying value of the redeemable noncontrolling interest, and the carrying value of the redeemable noncontrolling interest is adjusted to the redemption value’s present value. Any adjustments to the carrying value of the redeemable noncontrolling interest, up to the redemption value of the noncontrolling interest, are classified to retained earnings. Adjustments in excess of the redemption value of the noncontrolling interest are treated as a decrease to net income available to common stockholders.
During
April 2024,
Mr. Bressler exercised a portion of the put option on Natural Habitat, allowing the Company to acquire an additional
The redemption value of the put options were determined using a discounted cash flow model. The redemption values were adjusted to their present value using the Company’s weighted average cost of capital.
The following is a rollforward of redeemable non-controlling interest:
|
For the three months ended September 30, |
For the nine months ended September 30, |
|||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
|||||||||||||
|
(In thousands) |
(unaudited) |
(unaudited) |
||||||||||||||
|
Beginning balance |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
Net income attributable to noncontrolling interest |
|
|
|
|
||||||||||||
|
Redemption value adjustment of put option |
|
|
|
|
||||||||||||
|
Distribution |
(
|
) |
|
(
|
) |
(
|
) | |||||||||
|
Redemption of put and/or call options |
|
|
(
|
) |
|
|||||||||||
|
Ending balance |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
Brand License Agreement – National Geographic
The Company is party to a brand license agreement with National Geographic, effective January 1, 2024, which includes a co-selling and co-marketing arrangement through which National Geographic promotes the Company’s offerings in its marketing campaigns across web-based, email, print and other marketing platforms and distributes the Company’s expeditions through the Disney Signature Experiences platform and also allows the Company to use the National Geographic name and logo. In return for these rights, the Company is charged a royalty fee, which is included within selling and marketing expense. The fee is calculated based upon a percentage of substantially all ticket revenues, less travel agent commission, including the revenues received from cancellation fees and any revenues received from the sale of pre- and post-expedition extensions. Beginning in 2026, the agreement has minimum royalties that increase annually through the end of the agreement term, which based on current performance are expected to be exceeded. In 2023, the Company operated under its former alliance and license agreement with National Geographic, where National Geographic sold the Company’s expeditions through its internal travel division in return for a commission fee and also allowed the Company to use the National Geographic name and logo in return for a royalty fee. Both the commission and royalty fees were recorded within selling and marketing expense.
Charter Commitments
From time to time, the Company enters into agreements to charter vessels onto which it holds its tours and expeditions. Future minimum payments on its charter agreements as of September 30, 2024 are as follows:
|
For the years ended December 31, |
Amount |
|||
|
(In thousands) |
||||
|
2024 (three months) |
$ |
|
||
|
2025 |
|
|||
|
2026 |
|
|||
|
Total |
$ |
|
||
Other
The Company has an agreement for the acquisition of Torcatt Enterprises Limitada, a holding company that operates
two
vessels in the Galápagos Islands, for $
NOTE 11 — ACQUISITION
On
July 31, 2024
, the Company, through its land-based subsidiary Natural Habitat, acquired Wineland-Thomson Adventures group of companies to further expand its land-based experiential travel offerings and increase its addressable market. Wineland-Thomson Adventures consists of
The acquisition was accounted for under purchase accounting and is included in the consolidated results from the acquisition date. Acquisition related costs were $
|
For the three months ended September 30, |
For the nine months ended September 30, |
|||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
|||||||||||||
|
(In thousands) |
||||||||||||||||
|
Revenue |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
Net income (loss) available to stockholders |
|
|
(
|
) |
(
|
) | ||||||||||
NOTE 12 — SEGMENT INFORMATION
The Company is primarily a specialty cruise and experiential travel operator with operations in
The Company evaluates the performance of its business segments based largely on tour revenues and operating income without allocating other income and expenses, net, income taxes and interest expense, net. Operating results for the Company’s reportable segments were as follows:
|
For the three months ended September 30, |
For the nine months ended September 30, |
|||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
|||||||||||||
|
(In thousands) |
(unaudited) |
(unaudited) |
||||||||||||||
|
Tour revenues: |
||||||||||||||||
|
Lindblad |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
Land Experiences |
|
|
|
|
||||||||||||
|
Total tour revenues |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
Operating income: |
||||||||||||||||
|
Lindblad |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
Land Experiences |
|
|
|
|
||||||||||||
|
Operating income |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
For the
three
and
nine
months ended
September 30, 2024,
there was $
Depreciation and amortization are included in segment operating income as shown below:
|
For the three months ended September 30, |
For the nine months ended September 30, |
|||||||||||||||
|
2024 |
2023 |
2024 |
2023 |
|||||||||||||
|
(In thousands) |
(unaudited) |
(unaudited) |
||||||||||||||
|
Depreciation and amortization: |
||||||||||||||||
|
Lindblad |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
|
Land Experiences |
|
|
|
|
||||||||||||
|
Total depreciation and amortization |
$ |
|
$ |
|
$ |
|
$ |
|
||||||||
The following table presents total assets, intangibles, net and goodwill by segment:
| As of September 30, 2024 | As of December 31, 2023 | |||||||
|
(In thousands) |
(unaudited) |
|||||||
|
Total Assets: |
||||||||
|
Lindblad |
$ |
|
$ |
|
||||
|
Land Experiences |
|
|
||||||
|
Total assets |
$ |
|
$ |
|
||||
|
Intangibles, net: |
||||||||
|
Lindblad |
$ |
|
$ |
|
||||
|
Land Experiences |
|
|
||||||
|
Total intangibles, net |
$ |
|
$ |
|
||||
|
Goodwill: |
||||||||
|
Lindblad |
$ |
|
$ |
|
||||
|
Land Experiences |
|
|
||||||
|
Total goodwill |
$ |
|
$ |
|
||||
NOTE 13 — SUBSEQUENT EVENTS
On October 8, 2024, the Workers’ Committee of Navilusal Cia. Ltda. filed an action (the “Complaint”) with the Ministry of Labor in the Republic of Ecuador against Navilusal Cia. Ltda. (“Navilusal”), a subsidiary of the Company. The Complaint asserts, among other things, Navilusal’s failure to pay a surcharge on gross sales and a percent of net profits of Ecuadorian subsidiary companies Metrohotel and Marventura, and monetary damages related thereto. The Company believes that it has substantial legal and factual defenses to the claims and intends to defend the Company against such claims.
|
MANAGEMENT ’ S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
The following discussion and analysis addresses material changes in the financial condition and results of operations of the Company for the periods presented. This discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q ( “ Form 10-Q ” ), as well as the audited consolidated financial statements and related notes included in the Company ’ s Annual Report on Form 10-K filed with the Securities and Exchange Commission ( “ SEC ” ) on March 6, 2024 (the “ 2023 Annual Report ” ). Unless the context otherwise requires, in this Form 10-Q, “ Company, ” “ Lindblad, ” “ we, ” “ us, ” “ our, ” and “ ours ” refer to Lindblad Expeditions Holdings, Inc., and its subsidiaries.
Cautionary Note Regarding Forward-Looking Statements
Any statements in this Form 10-Q about our expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance are not historical facts and are “forward-looking statements” as that term is defined under the federal securities laws. These statements are often, but not always, made through the use of words or phrases such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expects,” “estimates,” “projects,” “positioned,” “strategy,” “outlook” and similar words. You should read the statements that contain these types of words carefully. Such forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from what is expressed or implied in such forward-looking statements. There may be events in the future that we are not able to predict accurately or over which we have no control. Potential risks and uncertainties include, but are not limited to:
|
● |
adverse general economic factors, such as fluctuating or increasing levels of interest rates, taxes, inflation, unemployment and perceptions of these and similar conditions that decrease the level of disposable income of consumers or consumer confidence that negatively impact the ability or desire of people to travel; |
|
|
● |
suspended operations, cancelling or rescheduling of voyages and other potential disruptions to our business and operations related to potential health pandemics, the civil unrest in Ecuador, the Israel-Hamas war, the Russia-Ukraine conflict, political unrest, terrorism, war, the impact of the November 2024 U.S. Presidential election, the denial and/or unavailability of ports of call, or another unexpected event in destinations we visit; |
|
|
● |
events and conditions around the world, including war and other military actions, such as the civil unrest in Ecuador, the Israel-Hamas war, the current conflict between Russia and Ukraine, inflation, higher fuel prices, higher interest rates and other general concerns about the state of the economy or other events impacting the ability or desire of people to travel; |
|
|
● |
increases in fuel prices, changes in fuels consumed and availability of fuel supply in the geographies in which we operate or in general; |
|
|
● |
the loss of key employees, our inability to recruit or retain qualified shoreside and shipboard employees and increased labor costs; |
|
|
● |
the impact of delays or cost overruns with respect to anticipated or unanticipated drydock, maintenance, modifications or other required construction related to any of our vessels; |
|
|
● |
unscheduled disruptions in our business due to civil unrest, travel restrictions, weather events, mechanical failures, pandemics or other events; |
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changes adversely affecting the business in which we are engaged; |
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management of our growth and our ability to execute on our planned growth, including our ability to successfully close merger and acquisition transactions and integrate acquisitions; |
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our business strategy and plans; |
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our ability to maintain our relationships with National Geographic and/or World Wildlife Fund; |
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compliance with new and existing laws and regulations, including environmental regulations and travel advisories and restrictions; |
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our substantial indebtedness and our ability to remain in compliance with the financial and/or operating covenants in such arrangements; |
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the impact of severe or unusual weather conditions, including climate change, on our business; |
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adverse publicity regarding the travel and cruise industry in general; |
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loss of business due to competition; |
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the inability to meet or achieve our sustainability related goals, aspirations, initiatives, and our public statements and disclosures regarding them; |
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the result of future financing efforts; |
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our common stock ranks junior to our Series A Convertible Preferred Stock with respect to dividends and amounts payable in the event of our liquidation, dissolution or winding-up of our affairs; and |
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those risks discussed in Item 1A. Risk Factors in our 2023 Annual Report. |
We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this Form 10-Q. We do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or uncertainties after the date hereof or to reflect the occurrence of unanticipated events.
Business Overview
We provide expedition cruising and land-based adventure travel fostering a spirit of exploration and discovery, using itineraries featuring up-close encounters with wildlife and nature, history and culture and promote guest empowerment, human connections and interactivity. Our mission is to offer life-changing adventures around the world and pioneer innovative ways to allow our guests to connect with exotic and remote places.
We currently operate a fleet of ten owned expedition ships and operate six seasonal charter vessels. Each expedition ship is fully equipped with state-of-the-art tools for in-depth exploration, and the majority of our expeditions involve travel to remote places, such as voyages to Alaska, the Arctic, Antarctic, the Galápagos Islands, Baja’s Sea of Cortez, the South Pacific, Costa Rica and Panama. We have a longstanding relationship with the National Geographic Society dating back to 2004, which is based on a shared interest in exploration, research, technology and conservation. This relationship, which was recently expanded and extended in November 2023 to the end of 2040 through a Brand License Agreement with National Geographic Partners, LLC (“National Geographic”), includes a co-selling, co-marketing and global branding arrangement whereby National Geographic promotes our offerings in its marketing campaigns across web-based, email, print and other marketing platforms and distributes our expeditions through the Disney Signature Experiences platform under the National Geographic-Lindblad Expeditions brand, and our owned vessels carry the National Geographic name. We collaborate with National Geographic on voyage planning to enhance the guest experience by having National Geographic experts, including photographers, writers, marine biologists, naturalists, field researchers and film crews, join our expeditions. Guests are able to interact with these experts through lectures, excursions, dining and other experiences throughout their voyage.
We operate land-based nature adventure travel expeditions around the globe, with unique itineraries designed to offer intimate encounters with nature and the planet’s wild destinations and the animals and people who live there.
Natural Habitat, Inc. (“Natural Habitat”) provides eco-conscious expeditions and nature-focused, small-group experiences that include polar bear tours in Churchill, Canada, Alaskan grizzly bear adventures, small-group Galápagos Islands tours and African safaris. Natural Habitat has partnered with World Wildlife Fund (“WWF”) to offer conservation travel, which is sustainable travel that contributes to the protection of nature and wildlife.
Off the Beaten Path, LLC (“Off the Beaten Path”) provides small group travel, led by local, experienced guides, with distinct focus on wildlife, hiking national parks and culture. Off the Beaten Path offerings include insider national park experiences in the Rocky Mountains, Desert Southwest, and Alaska, as well as unique trips across Central and South America, Oceania, Europe and Africa.
DuVine Cycling + Adventure Company (“DuVine”) provides intimate cycling adventures and travel experiences, led by expert guides, with a focus on connecting with local character and culture, including high-quality local cuisine and accommodations. International cycling tours include the exotic Costa Rican rainforests, the rocky coasts of Ireland and the vineyards of Spain, while cycling adventures in the United States include cycling beneath the California redwoods, pedaling through Vermont farmland and wine tastings in the world-class vineyards of Napa and Sonoma.
Classic Journeys, LLC (“Classic Journeys”) offers highly curated active small-group and private custom journeys centered around cinematic walks led by expert local guides in over 50 countries around the world. These walking tours are highlighted by luxury boutique accommodations, and handcrafted itineraries that immerse guests into the history and culture of the places they are exploring and the people who live there.
Wineland-Thomson Adventures, consisting of Wineland-Thomson Adventures, LLC (“Thomson Safaris”), Nature Discovery Ltd (“Nature Discovery”) and the Ngorongoro Safari Lodge Ltd (“Gibb’s Farm”), provides global custom and private tours, family travel experiences, socially responsible and positively impactful light-treading Tanzanian safaris with expert local wildlife guides providing exceptional insight, treks to the summit of Kilimanjaro, the Roof of Africa, with 30 years of experience and a commitment to environmental and social responsibility, and high-end lodging at the award-winning Gibb’s Farm, an 80-acre sanctuary located near the Ngorongoro Crater.
We operate two segments consisting of (i) the Lindblad segment, which consists of the operations of our Lindblad brand, and (ii) the Land Experiences segment, consisting of our Natural Habitat, DuVine, Off the Beaten Path, Classic Journeys and Wineland-Thomson Adventures brands.
2024 Highlights
During the nine months ended September 30, 2024, we provided immersive expeditions to our guests across all our ships including voyages to Alaska, Antarctica, the Arctic, Baja California’s Sea of Cortez, British Columbia, the Channel Islands, the Galápagos Islands, Greece, Greenland, Iceland, the Northwest Passage, the Pacific Northwest, Patagonia, Spain, South Georgia and the Falkland Islands, Central America, Australia, New Zealand, the South Pacific and elsewhere. Our Land Experiences guests traveled on adventures to locations such as our Alaska Bear Camps, Costa Rica, the Amazon, Brazil’s Pantanal, Mexico, China, Iceland, India, Sri Lanka, Borneo, Bhutan, Africa including Kenya, Tanzania, Botswana, South Africa and Madagascar, Portugal, Italy, the Cotswold’s, Croatia, France, Spain, Alaska, Yellowstone National Park and Canyons Southwest USA.
During April 2024, we increased our ownership of Natural Habitat to 90.1% for $15.2 million, as Mr. Bressler, President of Natural Habitat, exercised a portion of his put option, and we exercised a portion of our call option on DuVine, increasing our ownership to 75% for $1.5 million.
During June 2024, we announced an agreement for the acquisition of Torcatt Enterprises Limitada, a holding company that operates two vessels in the Galápagos Islands, for $17.0 million. The acquisition will expand our vessels and guest capacity in one of our core markets. We expect the acquisition to close in January 2025.
On July 31, 2024, we acquired Wineland-Thomson Adventures, Inc., and other related entities, (“Wineland-Thomson Adventures”) to further expand our land-based experiential travel offerings and increase our addressable market, for $24.0 million in cash and $6.0 million in Lindblad common stock, representing 682,593 shares. Wineland-Thomson Adventures consists of four adventure travel brands, including the respected Tanzania safari specialists Thomson Safaris, with more than 40 years of experience in the country, was founded on the principles of quality and integrity, with the goal of leading socially responsible and positively impactful light-treading safari tours. In addition to its adventure travel brands, the acquisition includes three leading Tanzania tour operators, the historic award-winning Gibb’s Farm lodge, an 80-acre sanctuary for the senses located near the Ngorongoro Crater, the industry-leading operator of Kilimanjaro treks Nature Discovery, Limited, which has more than 30 years of experience and is the recommended Tanzanian partner for over 20 specialist trekking and safari travel agents around the world, and Thomson Safaris Limited.
Bookings to date for future travel increased 26% vs the same period in 2023.
The discussion and analysis of our results of operations and financial condition are organized as follows :
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a description of certain line items and operational and financial metrics we utilize to assist us in managing our business; |
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results and a comparable discussion of our consolidated and segment results of operations; |
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a discussion of our liquidity and capital resources, including future capital and contractual commitments and potential funding sources; and |
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a review of our critical accounting policies. |
Financial Presentation
Description of Certain Line Items
Tour revenues
Tour revenues consist of the following:
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Guest ticket revenues recognized from the sale of guest tickets and hotel lodgings; and |
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Other tour revenues from the sale of pre- or post-expedition excursions, hotel accommodations, air transportation to and from the ships and excursions, goods and services rendered onboard that are not included in guest ticket prices, trip insurance, and cancellation fees. |
Cost of tours
Cost of tours includes the following:
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Direct costs associated with revenues, including cost of pre- or post-expedition excursions, hotel accommodations, and land-based expeditions, air and other transportation expenses, and cost of goods and services rendered onboard; |
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Payroll costs and related expenses for shipboard and expedition personnel; |
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Food costs for guests and crew, including complimentary food and beverage amenities for guests; |
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Fuel costs and related costs of delivery, storage and safe disposal of waste; and |
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Other tour expenses, such as land costs, port costs, repairs and maintenance, equipment expense, drydock, ship insurance, and charter hire costs. |
Selling and marketing
Selling and marketing expenses include commissions, royalties and a broad range of advertising and promotional expenses.
General and administrative
General and administrative expenses include the cost of shoreside vessel support, reservations and other administrative functions, including salaries and related benefits, credit card commissions, professional fees and rent.
Operational and Financial Metrics
We use a variety of operational and financial metrics, including non-GAAP financial measures, such as Adjusted EBITDA, Net Yields, Occupancy and Net Cruise Costs, to enable us to analyze our performance and financial condition. We utilize these financial measures to manage our business on a day-to-day basis and believe that they are the most relevant measures of performance. Some of these measures are commonly used in the cruise and tourism industry to evaluate performance. We believe these non-GAAP measures provide expanded insight to assess revenue and cost performance, in addition to the standard GAAP-based financial measures. There are no specific rules or regulations for determining non-GAAP measures, and as such, they may not be comparable to measures used by other companies within the industry.
The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. You should read this discussion and analysis of our financial condition and results of operations together with the condensed consolidated financial statements and the related notes thereto also included within.
Adjusted EBITDA is net income (loss) excluding depreciation and amortization, net interest expense, other income (expense), income tax (expense) benefit, (gain) loss on foreign currency, (gain) loss on transfer of assets, reorganization costs, and other supplemental adjustments. Other supplemental adjustments include certain non-operating items such as stock-based compensation, executive severance costs, the debt refinancing costs, acquisition-related expenses and other non-recurring charges. We believe Adjusted EBITDA, when considered along with other performance measures, is a useful measure as it reflects certain operating drivers of the business, such as sales growth, operating costs, selling and administrative expense, and other operating income and expense. We believe Adjusted EBITDA helps provide a more complete understanding of the underlying operating results and trends and an enhanced overall understanding of our financial performance and prospects for the future. Adjusted EBITDA is not intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income as it does not take into account certain requirements, such as unearned passenger revenues, capital expenditures and related depreciation, principal and interest payments, and tax payments. Our use of Adjusted EBITDA may not be comparable to other companies within the industry.
The following metrics apply to our Lindblad segment:
Adjusted Net Cruise Cost represents Net Cruise Cost adjusted for non-GAAP other supplemental adjustments which include certain non-operating items such as stock-based compensation, the National Geographic fee amortization, and acquisition-related expenses.
Available Guest Nights is a measurement of capacity and represents double occupancy per cabin (except single occupancy for a single capacity cabin) multiplied by the number of cruise days for the period. We also record the number of guest nights available on our limited land programs in this definition.
Gross Cruise Cost represents the sum of cost of tours plus, selling and marketing expenses, and general and administrative expenses.
Gross Yield per Available Guest Night represents tour revenues less insurance proceeds divided by Available Guest Nights.
Guest Nights Sold represents the number of guests carried for the period multiplied by the number of nights sailed within the period.
Maximum Guests is a measure of capacity and represents the maximum number of guests in a period and is based on double occupancy per cabin (except single occupancy for a single capacity cabin).
Net Cruise Cost represents Gross Cruise Cost excluding commissions and certain other direct costs of guest ticket revenues and other tour revenues.
Net Cruise Cost Excluding Fuel represents Net Cruise Cost excluding fuel costs.
Net Yield represents tour revenues less insurance proceeds, commissions and direct costs of other tour revenues.
Net Yield per Available Guest Night represents Net Yield divided by Available Guest Nights.
Number of Guests represents the number of guests that travel with us in a period.
Occupancy is calculated by dividing Guest Nights Sold by Available Guest Nights.
Voyages represent the number of ship expeditions completed during the period.
Foreign Currency Translation
The U.S. dollar and Tanzanian shilling are the functional currencies in our foreign operations and re-measurement adjustments and gains or losses resulting from foreign currency transactions are recorded as foreign exchange gains or losses in the condensed consolidated statements of operations.
Seasonality
Traditionally, our Lindblad brand tour revenues are mildly seasonal, historically larger in the first and third quarters. The seasonality of our operating results fluctuates due primarily to our vessels being taken out of service for scheduled maintenance or drydocking, which is typically during nonpeak demand periods, in the second and fourth quarters. Our drydock schedules are subject to cost and timing differences from year-to-year due to the availability of shipyards for certain work, drydock locations based on
ship itineraries, operating conditions experienced especially in the polar regions and the applicable regulations of class societies in the maritime industry, which require periodically more extensive reviews. Drydocking impacts operating results by reducing tour revenues and increasing cost of tours. Our Natural Habitat, Off the Beaten Path, DuVine, Classic Journeys and Wineland-Thomson Adventures brands are seasonal businesses, with the majority of Natural Habitat’s tour revenue recorded in the third and fourth quarters from its summer season departures and polar bear tours, while the majority of Off the Beaten Path, DuVine and Classic Journeys’ revenues recorded during the second and third quarters from their spring and summer season departures, and the majority of Wineland-Thomson Adventures’ revenues being recorded during the third quarter from the height of their safari season tours.
Results of Operations — Consolidated
Our consolidated results for the three and nine months ended September 30, 2024 and 2023 are set forth below.
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For the three months ended September 30, |
For the nine months ended September 30, |
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(In thousands) |
2024 |
2023 |
Change |
% |
2024 |
2023 |
Change |
% | ||||||||||||||||||||||||
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Tour revenues |
$ | 206,005 | $ | 175,989 | $ | 30,016 | 17 | % | $ | 496,118 | $ | 444,183 | $ | 51,935 | 12 | % | ||||||||||||||||
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Cost of tours |
104,488 | 95,590 | 8,898 | 9 | % | 262,430 | 245,293 | 17,137 | 7 | % | ||||||||||||||||||||||
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General and administrative |
34,300 | 30,015 | 4,285 | 14 | % | 100,835 | 85,589 | 15,246 | 18 | % | ||||||||||||||||||||||
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Selling and marketing |
25,003 | 19,387 | 5,616 | 29 | % | 66,042 | 55,197 | 10,845 | 20 | % | ||||||||||||||||||||||
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Depreciation and amortization |
12,733 | 10,521 | 2,212 | 21 | % | 37,687 | 33,660 | 4,027 | 12 | % | ||||||||||||||||||||||
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Operating income |
$ | 29,481 | $ | 20,476 | $ | 9,005 | 44 | % | $ | 29,124 | $ | 24,444 | $ | 4,680 | 19 | % | ||||||||||||||||
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Net income (loss) |
$ | 25,198 | $ | 8,459 | $ | 16,739 | 198 | % | $ | (3,005 | ) | $ | (14,463 | ) | $ | 11,458 | 79 | % | ||||||||||||||
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Undistributed income (loss) per share available to stockholders: |
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Basic |
$ | 0.39 | $ | 0.08 | $ | 0.30 | $ | (0.18 | ) | $ | (0.40 | ) | $ | 0.22 | ||||||||||||||||||
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Diluted |
$ | 0.36 | $ | 0.08 | $ | 0.29 | $ | (0.18 | ) | $ | (0.40 | ) | $ | 0.22 | ||||||||||||||||||
Comparison of the Three and Nine Months Ended September 30, 2024 and 2023 — Consolidated
Tour Revenues
Tour revenues for the three months ended September 30, 2024 increased $30.0 million, or 17%, to $206.0 million, compared to $176.0 million for the three months ended September 30, 2023. Of the $30.0 million increase, $12.5 million is due to a 7% increase in guest nights sold and a 2% increase in guests traveled, $8.7 million is due to an increase in pricing, and includes the results of Wineland-Thomson Adventures since its acquisition on July 31, 2024. The Lindblad segment tour revenues increased by $12.5 million, or 12%, and the Land Experiences segment increased $17.5 million, or 26%.
Tour revenues for the nine months ended September 30, 2024 increased $51.9 million, or 12%, to $496.1 million, compared to $444.2 million for the nine months ended September 30, 2023. Of the $51.9 million increase, $22.1 million is due to a 4% increase in guest nights sold and a 6% increase in guests traveled, $21.0 million of the increase is due to an increase in pricing, and includes the results of Wineland-Thomson Adventures since its acquisition on July 31, 2024. The Lindblad segment tour revenues increased by $20.9 million, or 7%, and the Land Experiences segment increased $31.0 million, or 23%.
Cost of Tours
Total cost of tours for the three months ended September 30, 2024 increased $8.9 million, or 9%, to $104.5 million, compared to $95.6 million for the three months ended September 30, 2023, primarily due to the inclusion of Wineland-Thomson Adventures within our Land Experiences segment, operating additional expeditions and trips, and higher operating costs . The Lindblad segment cost of tours increased by $0.6 million, or 1% and the Land Experiences segment increased $8.2 million, or 20% .
Total cost of tours for the nine months ended September 30, 2024 increased $17.1 million, or 7%, to $262.4 million, compared to $245.3 million for the nine months ended September 30, 2023, primarily due to the inclusion of Wineland-Thomson Adventures within our Land Experiences segment, operating additional trips, and higher operating costs . The Lindblad segment cost of tours increased by $0.1 million and the Land Experiences segment increased $17.0 million, or 22%.
General and Administrative
General and administrative expenses for the three months ended September 30, 2024 increased $4.3 million, or 14%, to $34.3 million, compared to $30.0 million for the three months ended September 30, 2023, primarily due to higher personnel expense, credit card commissions due to a strong booking environment, transaction-related costs and the inclusion of the results of Wineland-Thomson Adventures. At the Lindblad segment, general and administrative expenses increased $1.5 million, or 7%, from the prior year period, and the Land Experiences segment increased $2.8 million, or 31%.
General and administrative expenses for the nine months ended September 30, 2024 increased $15.2 million, or 18%, to $100.8 million, compared to $85.6 million for the nine months ended September 30, 2023, primarily due to higher personnel expense, credit card commissions due to a strong booking environment, transaction-related costs and the inclusion of the results of Wineland-Thomson Adventures. At the Lindblad segment, general and administrative expenses increased $7.1 million, or 12%, and the Land Experiences segment increased $8.2 million, or 32%.
Selling and Marketing
Selling and marketing expenses for the three months ended September 30, 2024 increased $5.6 million, or 29%, to $25.0 million, compared to $19.4 million for the three months ended September 30, 2023, primarily due to higher royalties associated with the new National Geographic agreement, increased marketing spend to support future growth, and the inclusion of the results of Wineland-Thomson Adventures. At the Lindblad segment, selling and marketing expenses increased $4.1 million, or 26%, and the Land Experiences segment increased $1.5 million, or 39%.
Selling and marketing expenses for the nine months ended September 30, 2024 increased $10.8 million, or 20%, to $66.0 million, compared to $55.2 million for the nine months ended September 30, 2023, primarily due to higher royalties associated with the new National Geographic agreement, increased marketing spend to support future growth, and the inclusion of the results of Wineland-Thomson Adventures. At the Lindblad segment, selling and marketing expenses increased $8.4 million, or 19%, and the Land Experiences segment increased $2.4 million, or 22%.
Depreciation and Amortization
Depreciation and amortization expenses for the three months ended September 30, 2024 increased $2.2 million, or 21%, to $12.7 million, compared to $10.5 million for the three months ended September 30, 2023.
Depreciation and amortization expenses for the nine months ended September 30, 2024 increased $4.0 million, or 12%, to $37.7 million, compared to $33.7 million for the nine months ended September 30, 2023.
Other Income (Expense)
Other expense for the three months ended September 30, 2024, decreased $1.0 million to $11.0 million from $12.0 million for the three months ended September 30, 2023, due primarily to a $0.2 million gain on foreign exchange in 2024 compared to a $0.5 million loss in 2023, and $0.2 million lower interest expense.
Other expense for the nine months ended September 30, 2024, decreased $3.1 million to $34.2 million from $37.3 million for the nine months ended September 30, 2023, due primarily to the May 2023 write-off of $3.9 million of deferred financing costs, fees and other expenses related to the repayment of our prior Export Credit Agreements, partially offset by a $0.5 million increase in interest expense.
Results of Operations — Segments
Selected information for our reportable segments is below. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
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For the three months ended September 30, |
For the nine months ended September 30, |
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(In thousands) |
2024 |
2023 |
Change |
% |
2024 |
2023 |
Change |
% | ||||||||||||||||||||||||
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Tour revenues: |
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Lindblad |
$ | 121,268 | $ | 108,750 | $ | 12,518 | 12 | % | $ | 332,624 | $ | 311,660 | $ | 20,964 | 7 | % | ||||||||||||||||
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Land Experiences |
84,737 | 67,239 | 17,498 | 26 | % | 163,494 | 132,523 | 30,971 | 23 | % | ||||||||||||||||||||||
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Total tour revenues |
$ | 206,005 | $ | 175,989 | $ | 30,016 | 17 | % | $ | 496,118 | $ | 444,183 | $ | 51,935 | 12 | % | ||||||||||||||||
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Operating income: |
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Lindblad |
$ | 11,680 | $ | 7,501 | $ | 4,179 | 56 | % | $ | 10,092 | $ | 8,576 | $ | 1,516 | 18 | % | ||||||||||||||||
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Land Experiences |
17,801 | 12,975 | 4,826 | 37 | % | 19,032 | 15,868 | 3,164 | 20 | % | ||||||||||||||||||||||
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Operating income |
$ | 29,481 | $ | 20,476 | $ | 9,005 | 44 | % | $ | 29,124 | $ | 24,444 | $ | 4,680 | 19 | % | ||||||||||||||||
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Adjusted EBITDA: |
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Lindblad |
$ | 26,238 | $ | 20,119 | $ | 6,119 | 30 | % | $ | 53,429 | $ | 48,887 | $ | 4,542 | 9 | % | ||||||||||||||||
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Land Experiences |
19,574 | 13,831 | 5,743 | 42 | % | 24,373 | 18,472 | 5,901 | 32 | % | ||||||||||||||||||||||
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Total adjusted EBITDA |
$ | 45,812 | $ | 33,950 | $ | 11,862 | 35 | % | $ | 77,802 | $ | 67,359 | $ | 10,443 | 16 | % | ||||||||||||||||
Guest Metrics — Lindblad Segment
The following table sets forth our Available Guest Nights, Guest Nights Sold, Occupancy, Maximum Guests, Number of Guests and Voyages:
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For the three months ended September 30, |
For the nine months ended September 30, |
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2024 |
2023 |
2024 |
2023 |
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Available Guest Nights |
91,293 | 85,959 | 254,651 | 243,329 | ||||||||||||
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Guest Nights Sold |
74,845 | 69,903 | 199,982 | 192,052 | ||||||||||||
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Occupancy |
82 | % | 81 | % | 79 | % | 79 | % | ||||||||
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Maximum Guests |
11,225 | 10,613 | 30,501 | 29,113 | ||||||||||||
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Number of Guests |
9,414 | 8,910 | 24,695 | 23,648 | ||||||||||||
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Voyages |
137 | 129 | 380 | 359 | ||||||||||||
The following table shows the calculations of Gross and Net Yield. Gross Yield is calculated by dividing Tour Revenues by Available Guest Nights and Net Yield is calculated by dividing Net Revenue by Available Guest Nights:
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Calculation of Gross and Net Yield per Available Guest Night |
For the three months ended September 30, |
For the nine months ended September 30, |
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(In thousands, except for Available Guest Nights, Gross and Net Yield per Available Guest Night) |
2024 |
2023 |
2024 |
2023 |
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Guest ticket revenues |
$ | 109,140 | $ | 94,751 | $ | 295,727 | $ | 273,653 | ||||||||
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Other tour revenue |
12,128 | 13,999 | 36,897 | 38,007 | ||||||||||||
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Tour Revenues |
121,268 | 108,750 | 332,624 | 311,660 | ||||||||||||
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Less: Commissions |
(5,212 | ) | (6,732 | ) | (13,791 | ) | (19,996 | ) | ||||||||
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Less: Other tour expenses |
(6,060 | ) | (6,569 | ) | (19,417 | ) | (19,296 | ) | ||||||||
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Net Yield |
$ | 109,996 | $ | 95,449 | $ | 299,416 | $ | 272,368 | ||||||||
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Available Guest Nights |
91,293 | 85,959 | 254,651 | 243,329 | ||||||||||||
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Gross Yield per Available Guest Night |
$ | 1,328 | $ | 1,265 | $ | 1,306 | $ | 1,281 | ||||||||
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Net Yield per Available Guest Night |
1,205 | 1,110 | 1,176 | 1,119 | ||||||||||||
The following table reconciles operating income to our Net Yield Guest Metric for the Lindblad Segment:
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For the three months ended September 30, |
For the nine months ended September 30, |
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(In thousands) |
2024 |
2023 |
2024 |
2023 |
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Operating income |
$ | 11,680 | $ | 7,501 | $ | 10,092 | $ | 8,576 | ||||||||
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Cost of tours |
55,663 | 55,021 | 167,506 | 167,392 | ||||||||||||
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General and administrative |
22,628 | 21,122 | 67,428 | 60,374 | ||||||||||||
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Selling and marketing |
19,536 | 15,441 | 52,606 | 44,163 | ||||||||||||
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Depreciation and amortization |
11,761 | 9,665 | 34,992 | 31,155 | ||||||||||||
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Less: Commissions |
(5,212 | ) | (6,732 | ) | (13,791 | ) | (19,996 | ) | ||||||||
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Less: Other tour expenses |
(6,060 | ) | (6,569 | ) | (19,417 | ) | (19,296 | ) | ||||||||
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Net Yield |
$ | 109,996 | $ | 95,449 | $ | 299,416 | $ | 272,368 | ||||||||
The following table shows the calculations of Gross and Net Cruise Costs:
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Calculation of Gross and Net Cruise Cost |
For the three months ended September 30, |
For the nine months ended September 30, |
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(In thousands, except for Available Guest Nights, Gross and Net Cruise Cost per Avail. Guest Night) |
2024 |
2023 |
2024 |
2023 |
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Cost of tours |
$ | 55,663 | $ | 55,021 | $ | 167,506 | $ | 167,392 | ||||||||
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Plus: Selling and marketing |
19,536 | 15,441 | 52,606 | 44,163 | ||||||||||||
|
Plus: General and administrative |
22,628 | 21,122 | 67,428 | 60,374 | ||||||||||||
|
Gross Cruise Cost |
97,827 | 91,584 | 287,540 | 271,929 | ||||||||||||
|
Less: Commissions |
(5,212 | ) | (6,732 | ) | (13,791 | ) | (19,996 | ) | ||||||||
|
Less: Other tour expenses |
(6,060 | ) | (6,569 | ) | (19,417 | ) | (19,296 | ) | ||||||||
|
Net Cruise Cost |
86,555 | 78,283 | 254,332 | 232,637 | ||||||||||||
|
Less: Fuel Expense |
(5,460 | ) | (5,434 | ) | (19,895 | ) | (19,939 | ) | ||||||||
|
Net Cruise Cost Excluding Fuel |
81,095 | 72,849 | 234,437 | 212,698 | ||||||||||||
|
Non-GAAP Adjustments: |
||||||||||||||||
|
Stock-based compensation |
(2,352 | ) | (2,953 | ) | (7,185 | ) | (9,146 | ) | ||||||||
|
Transaction-related costs |
(445 | ) | - | (789 | ) | - | ||||||||||
|
Reorganization costs |
- | - | (371 | ) | - | |||||||||||
|
Other |
- | - | - | (10 | ) | |||||||||||
|
Adjusted Net Cruise Cost Excluding Fuel |
$ | 78,298 | $ | 69,896 | $ | 226,092 | $ | 203,542 | ||||||||
|
Adjusted Net Cruise Cost |
$ | 83,758 | $ | 75,330 | $ | 245,987 | $ | 223,481 | ||||||||
|
Available Guest Nights |
91,293 | 85,959 | 254,651 | 243,329 | ||||||||||||
|
Gross Cruise Cost per Available Guest Night |
$ | 1,072 | $ | 1,065 | $ | 1,129 | $ | 1,118 | ||||||||
|
Net Cruise Cost per Available Guest Night |
948 | 911 | 999 | 956 | ||||||||||||
|
Net Cruise Cost Excluding Fuel per Available Guest Night |
888 | 847 | 921 | 874 | ||||||||||||
|
Adjusted Net Cruise Cost Excluding Fuel per Available Guest Night |
858 | 813 | 888 | 836 | ||||||||||||
|
Adjusted Net Cruise Cost per Available Guest Night |
917 | 876 | 966 | 918 | ||||||||||||
Comparison of the Three and Nine Months Ended September 30, 2024 and 2023 at the Lindblad Segment
Tour Revenues
Tour revenues for the three months ended September 30, 2024 increased $12.5 million, or 12%, to $121.3 million, compared to $108.7 million for the three months ended September 30, 2023. Of the $12.5 million increase, $8.0 million is related to a 7% increase in guest nights sold and $4.5 million is related to a 4% increase in revenue per guest nights sold as compared to the prior year period.
Tour revenues for the nine months ended September 30, 2024 increased $21.0 million, or 7%, to $332.6 million, compared to $311.7 million for the nine months ended September 30, 2023. Of the $21.0 million increase, $13.2 million is related to a 4% increase in guest nights sold and $7.8 million is related to a 2% increase in revenue per guest nights sold as compared to the prior year period.
Operating Income
Operating income of $11.7 million for the three months ended September 30, 2024 increased $4.2 million compared to income of $7.5 million for the three months ended September 30, 2023, as the increase in tour revenues was partially offset by higher operating expenses. The increase in operating expenses was primarily due to expenses associated with increased revenue, including higher sales and marketing costs, driven by increased royalties associated with the new National Geographic agreement, and higher general and administrative costs, driven by higher credit card commissions, increased information technology costs and transaction-related costs.
Operating income of $10.1 million for the three months ended September 30, 2024 increased $1.5 million compared to income of $8.6 million for the three months ended September 30, 2023. Increased revenue was partially offset by higher operating expenses, primarily due to expenses associated with increased revenue, including higher sales and marketing costs, driven by increased royalties associated with the new National Geographic agreement and marketing spend to drive future booking growth, and higher general and administrative costs, driven by increased personnel costs, higher credit card commissions due to the revenue and bookings growth, increased costs related to consulting, information technology and transaction-related costs.
Comparison of Three and Nine Months Ended September 30, 2024 and 2023 at the Land Experiences Segment
Tour Revenues
Tour revenues for the three months ended September 30, 2024 increased $17.5 million, or 26%, to $84.7 million compared to $67.2 million for the three months ended September 30, 2023. Of the $17.5 million increase, $7.4 million is due to an 11% increase in average revenue per customer, $1.3 million is related to a 2% increase in guests traveled during the third quarter 2024, and includes the results of Wineland-Thomson Adventures since its acquisition on July 31, 2024.
Tour revenues for the nine months ended September 30, 2024 increased $31.0 million, or 23%, to $163.5 million compared to $132.5 million for the nine months ended September 30, 2023. Of the $31.0 million increase, $13.3 million is due to a 10% increase in average revenue per customer, $8.9 million is related to a 6% increase in guests traveled during 2024, and includes the results of Wineland-Thomson Adventures since its acquisition on July 31, 2024.
Operating Income
Operating income of $17.8 million for the three months ended September 30, 2024 increased $4.8 million compared to $13.0 million for the three months ended September 30, 2023. The increase was driven by higher revenues from the existing businesses and the inclusion of the results of Wineland-Thomson Adventures since its acquisition, partially offset by higher operating and personnel costs due to operating additional tours, higher marketing spend to drive future growth, and transaction-related costs.
Operating income of $19.0 million for the nine months ended September 30, 2024 increased $3.1 million compared to $15.9 million for the nine months ended September 30, 2023. The increase was driven by higher revenues from the existing businesses and the inclusion of the results of Wineland-Thomson Adventures since its acquisition, partially offset by higher operating and personnel costs related to operating additional departures, higher marketing spend to drive future growth, and transaction-related costs.
Adjusted EBITDA — Consolidated
The following table outlines the reconciliation of net income (loss) to consolidated Adjusted EBITDA. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.
Reconciliation of Net (Loss) Income to Adjusted EBITDA Consolidated
|
Consolidated |
For the three months ended September 30, |
For the nine months ended September 30, |
||||||||||||||
|
(In thousands) |
2024 |
2023 |
2024 |
2023 |
||||||||||||
|
Net income (loss) |
$ | 25,198 | $ | 8,459 | $ | (3,005 | ) | $ | (14,463 | ) | ||||||
|
Interest expense, net |
11,234 | 11,482 | 34,140 | 33,593 | ||||||||||||
|
Income tax (benefit) expense |
(6,747 | ) | 3 | (2,050 | ) | 1,587 | ||||||||||
|
Depreciation and amortization |
12,733 | 10,521 | 37,687 | 33,660 | ||||||||||||
|
(Gain) loss on foreign currency |
(203 | ) | 455 | 48 | (46 | ) | ||||||||||
|
Other (income) expense |
(1 | ) | 77 | (9 | ) | 3,773 | ||||||||||
|
Stock-based compensation |
2,529 | 2,953 | 7,362 | 9,245 | ||||||||||||
|
Transaction-related costs |
1,069 | - | 3,258 | - | ||||||||||||
|
Reorganization costs |
- | - | 371 | - | ||||||||||||
|
Other |
- | - | - | 10 | ||||||||||||
|
Adjusted EBITDA |
$ | 45,812 | $ | 33,950 | $ | 77,802 | $ | 67,359 | ||||||||
The following tables outline the reconciliation for each reportable segment from operating income to Adjusted EBITDA.
Reconciliation of Operating Income to Adjusted EBITDA Lindblad Segment
|
Lindblad Segment |
For the three months ended September 30, |
For the nine months ended September 30, |
||||||||||||||
|
(In thousands) |
2024 |
2023 |
2024 |
2023 |
||||||||||||
|
Operating income |
$ | 11,680 | $ | 7,501 | $ | 10,092 | $ | 8,576 | ||||||||
|
Depreciation and amortization |
11,761 | 9,665 | 34,992 | 31,155 | ||||||||||||
|
Stock-based compensation |
2,352 | 2,953 | 7,185 | 9,146 | ||||||||||||
|
Transaction-related costs |
445 | - | 789 | - | ||||||||||||
|
Reorganization costs |
- | - | 371 | - | ||||||||||||
|
Other |
- | - | - | 10 | ||||||||||||
|
Adjusted EBITDA |
$ | 26,238 | $ | 20,119 | $ | 53,429 | $ | 48,887 | ||||||||
|
Land Experiences Segment |
For the three months ended September 30, |
For the nine months ended September 30, |
||||||||||||||
|
(In thousands) |
2024 |
2023 |
2024 |
2023 |
||||||||||||
|
Operating income |
$ | 17,801 | $ | 12,975 | $ | 19,032 | $ | 15,868 | ||||||||
|
Depreciation and amortization |
972 | 856 | 2,695 | 2,505 | ||||||||||||
|
Stock-based compensation |
177 | - | 177 | 99 | ||||||||||||
|
Transaction-related costs |
624 | - | 2,469 | - | ||||||||||||
|
Adjusted EBITDA |
$ | 19,574 | $ | 13,831 | $ | 24,373 | $ | 18,472 | ||||||||
Liquidity and Capital Resources
As of September 30, 2024, the Company had $193.9 million in unrestricted cash and cash equivalents and $30.7 million in restricted cash primarily related to deposits on future travel originating from U.S. ports and credit card reserves.
As of September 30, 2024, we had $635.0 million in long-term debt obligations, including the current portion of long-term debt. We believe that our cash on hand and expected future operating cash inflows will be sufficient to fund operations, debt service requirements, and necessary capital expenditures for at least the next 12 months.
Sources and Uses of Cash for the Nine Months Ended September 30, 2024 and 2023
Net cash provided by operating activities was $90.7 million for the nine months ended September 30, 2024 compared to $35.3 million for the same period in 2023. The $55.4 million increase is primarily due to increased cash received from guests for future travel.
Net cash used in investing activities was $34.4 million for the nine months ended September 30, 2024 compared to $7.6 million in cash provided by investing activities during the same period in 2023. 2024 primarily included the acquisition of Wineland-Thomson Adventures and capital expenditures on our vessels, while 2023 primarily included capital expenditures on our vessels and our digital transformation initiatives, partially offset by divesting of marketable securities.
Net cash used in financing activities was $19.1 million for the nine months ended September 30, 2024 compared to $61.0 million provided by financing activities for the same period in 2023. 2024 primarily included expenditures for the acquisition of an additional 9.95% of Natural Habitat and 5% of DuVine related to the respective puts and calls of the redeemable non-controlling interests, and income tax withholdings for stock-based compensation, while 2023 primarily included the issuance of $275.0 million of new senior notes which were used primarily to repay our prior export credit agreements .
Funding Sources
Debt Facilities
6.75% Notes
On February 4, 2022, we issued $360.0 million aggregate principal amount of 6.75% senior secured notes due 2027 (the “6.75% Notes”) in a private offering. The 6.75% Notes bear interest at a rate of 6.75% per year and is payable semiannually in arrears on February 15 and August 15 of each year. The 6.75% Notes will mature on February 15, 2027, subject to earlier repurchase or redemption. We used the net proceeds from the offering to prepay in full all outstanding borrowings under our prior credit agreement, including the term facility, Main Street Loan, and revolving credit facility, to pay any related premiums and to terminate in full our prior credit agreement and the commitments thereunder. The 6.75% Notes are senior secured obligations and are guaranteed on a senior secured basis by us and certain of our subsidiaries (collectively, the “Guarantors”) and secured by first-priority pari passu liens, subject to permitted liens and certain exceptions, on substantially all of our and the Guarantors’ assets. We may redeem the 6.75% Notes at set redemption prices and premiums, plus accrued and unpaid interest, if any.
Revolving Credit Facility
On February 4, 2022, we entered into a senior secured revolving credit facility (the “Revolving Credit Facility”), which provides for an aggregate principal amount of commitments of $45.0 million, maturing February 2027, including a letter of credit sub-facility in an aggregate principal amount of up to $5.0 million. The obligations under the Revolving Credit Facility are guaranteed by us and the Guarantors and are secured by first-priority pari passu liens, subject to permitted liens and certain exceptions, on substantially all the assets of the Company and the Guarantors. Borrowings under the Revolving Credit Facility, if any, will bear interest at a rate per annum equal to, at our option, an adjusted SOFR rate plus a spread or a base rate plus a spread. As of September 30, 2024, we had no borrowings under the Revolving Credit Facility.
9.00% Notes
On May 2, 2023, we issued $275.0 million aggregate principal amount of 9.00% senior secured notes due 2028 (the “9.00% Notes”) in a private offering. The 9.00% Notes bear interest at a rate of 9.00% per year and is payable semiannually in arrears on May 15 and November 15 of each year. The 9.00% Notes will mature on May 15, 2028, subject to earlier repurchase or redemption. The net proceeds from the offering were used to prepay in full all outstanding borrowings under our prior senior secured credit agreements, to pay any related premiums and to terminate in full the prior senior secured credit agreements and the commitments thereunder. The 9.00% Notes are senior unsecured obligations and are guaranteed (i) on a senior secured basis by certain of our subsidiaries (collectively, the “Secured Guarantors”) and secured by a first-priority lien, subject to permitted liens and certain exceptions, on the equity and substantially all the assets of the Secured Guarantors, and (ii) on a senior unsecured basis by certain of our other subsidiaries. We may redeem the 9.00% Notes at set redemption prices and premiums, plus accrued and unpaid interest, if any.
Covenants
The 6.75% Notes, Revolving Credit Facility and 9.00% Notes contain covenants that, among other things, restrict our ability and the ability of our restricted subsidiaries to incur certain additional indebtedness and make certain dividend payments, distributions, investments and other restricted payments. These covenants are subject to a number of important exceptions and qualifications. As of September 30, 2024, we were in compliance with the covenants currently in effect.
Equity
Preferred Stock
In August 2020, we issued and sold 85,000 shares of Series A Redeemable Convertible Preferred Stock, par value of $0.0001, (“Preferred Stock”) for $1,000 per share for gross proceeds of $85.0 million. As of March 31, 2024, 62,000 shares of Preferred Stock were outstanding. The Preferred Stock has senior and preferential ranking to our common stock. The Preferred Stock is entitled to cumulative dividends of 6.00% per annum, and for the first two years, the dividends were required to be paid-in-kind. After the second anniversary of the issuance date, the dividends may be paid-in-kind or be paid in cash at our option. During 2024, we have continued to pay Preferred Stock dividends in-kind. At any time, we may, at our option, convert all, but not less than all, of the Preferred Stock into common stock if the closing price of shares of common stock is at least 150% of the conversion price for 20 out of 30 consecutive trading days. The Preferred Stock is convertible at any time, at the holder’s election, into a number of shares of our common stock equal to the quotient obtained by dividing the then-current accrued value by the conversion price of $9.50. At the six-year anniversary of the closing date, each investor has the right to request that we repurchase their Preferred Stock, and any Preferred Stock not requested to be repurchased shall be converted into our common shares equal to the quotient obtained by dividing the then-current accrued value by the conversion price. As of September 30, 2024, the outstanding Preferred Stock and accumulated dividends could be converted into approximately 8.3 million shares of our common stock.
Funding Needs
We generally rely on a combination of cash flows provided by operations and the incurrence of additional debt to fund obligations. A vast majority of guest ticket receipts are collected in advance of the applicable expedition date. These advance passenger receipts remain a current liability until the expedition date, and the cash generated from these advance receipts is used interchangeably with cash on hand from other cash from operations. The cash received as advanced receipts can be used to fund operating expenses for the applicable future expeditions or otherwise, pay down debt, make long-term investments or any other use of cash. Traditionally we run a working capital deficit due primarily to a large balance of unearned passenger revenues. As of September 30, 2024, we had a working capital deficit of $98.3 million, and as of December 31, 2023, we had a working capital deficit of $74.7 million.
Critical Accounting Policies
Our preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. For a detailed discussion of our Critical Accounting Policies, please see our 2023 Annual Report, where we have discussed those policies and estimates that we believe are critical and require the use of complex judgment in their application. There have been no significant changes to our accounting policies from those disclosed in the 2023 Annual Report.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
We may be exposed to a market risk for interest rates related to our revolving credit facility. As of September 30, 2024, no amounts were outstanding under the revolving credit facility. There have otherwise been no other material changes in our exposure to market risks from the information set forth in the “Quantitative and Qualitative Disclosures About Market Risk” sections contained in our 2023 Annual Report.
|
CONTROLS AND PROCEDURES |
Evaluation of Disclosure Controls and Procedures
Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and interim principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) were effective as of September 30, 2024 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and interim principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during the quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
|
PART 2. |
OTHER INFORMATION |
|
LEGAL PROCEEDINGS |
The Company is involved in various claims, legal actions and regulatory proceedings arising from time to time in the ordinary course of business and it has protection and indemnity insurance that would be expected to cover any damages.
Unless stated otherwise, the matter discussed below, if decided adversely to or settled by the Company, individually or in the aggregate, may result in a liability material to the Company's financial position, results of operations, or cash flows. The Company can provide no assurance as to the scope and outcome of this matter and cannot reasonably estimate any loss or range of loss, beyond the amounts accrued, if any, that may arise from this matter.
On October 8, 2024, the Workers’ Committee of Navilusal Cia. Ltda. filed an action (the “Complaint”) with the Ministry of Labor in the Republic of Ecuador against Navilusal Cia. Ltda. (“Navilusal”), a subsidiary of the Company. The Complaint asserts, among other things, Navilusal’s failure to pay a surcharge on gross sales and a percent of net profits of Ecuadorian subsidiary companies Metrohotel and Marventura, and monetary damages related thereto. The Company believes that it has substantial legal and factual defenses to the claims and intends to defend the Company against such claims.
|
RISK FACTORS |
We operate in a rapidly changing environment that involves a number of risks that could materially affect our business, financial condition or future results, some of which are beyond our control. The risks and uncertainties that we believe are most important for you to consider are discussed under the heading “Risk Factors” in the 2023 Annual Report.
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
Recent Sales by the Company of Unregistered Securities
There were no unregistered sales of equity securities during the quarter ended September 30, 2024.
Stock Repurchase Plan
Our Board of Directors approved a stock and warrant repurchase plan (“Repurchase Plan”) in November 2015 and increased the Repurchase Plan to $35.0 million in November 2016. The Repurchase Plan authorizes us to purchase from time to time our outstanding common stock and our previously outstanding warrants. Any shares and warrants purchased will be retired. The Repurchase Plan has no time deadline and will continue until otherwise modified or terminated at the sole discretion of our Board of Directors. These repurchases exclude shares repurchased to settle statutory employee tax withholding related to the exercise of stock options and vesting of stock awards. No repurchases were made under the Repurchase Plan during the nine months ended September 30, 2024. We have cumulatively repurchased 875,218 shares of common stock for $8.3 million and 6,011,926 warrants for $14.7 million, since plan inception. All repurchases were made using cash resources. The balance for the Repurchase Plan was $12.0 million as of September 30, 2024.
Repurchases of Securities
The following table represents information with respect to shares of common stock withheld from vesting's of stock-based compensation awards for employee income tax withholding for the periods indicated:
|
Period |
Total number of shares purchased |
Average price paid per share |
Dollar value of shares purchased as part of publicly announced plans or programs |
Maximum dollar value of warrants and shares that may be purchased under approved plans or programs |
||||||||||||
|
July 1 through July 31, 2024 |
25,525 |
$ |
10.64 |
$ |
- |
$ |
11,974,787 |
|||||||||
|
August 1 through August 31, 2024 |
- |
- |
- |
11,974,787 |
||||||||||||
|
September 1 through September 30, 2024 |
291 |
9.22 |
- |
11,974,787 |
||||||||||||
|
Total |
25,816 |
$ |
- |
|||||||||||||
|
DEFAULTS UPON SENIOR SECURITIES |
Not applicable.
|
MINE SAFETY DISCLOSURES |
Not applicable.
|
OTHER INFORMATION |
During the three months ended September 30, 2024, director or Section 16 officer of the Company adopted, modified or terminated a “Rule 10b5 - 1 trading arrangement” or “non-Rule 10b5 - 1 trading arrangement,” as each term is defined in Item 408 (a) of Regulation S-K.
|
EXHIBITS |
|
Number |
Description |
Included |
Form |
Filing Date |
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|
31.1 |
Herewith |
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|
31.2 |
Herewith |
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|
32.1 |
Herewith |
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|
32.2 |
Herewith |
|
101.INS |
Inline XBRL Instance Document (the Instance Document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) |
Herewith |
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|
101.SCH |
Inline XBRL Taxonomy Extension Schema Document |
Herewith |
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|
101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
Herewith |
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|
101.DEF |
Inline XBRL Taxonomy Extension Definition Linkbase Document |
Herewith |
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|
101.LAB |
Inline XBRL Taxonomy Extension Label Linkbase Document |
Herewith |
||||||
|
101.PRE |
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
Herewith |
||||||
|
104 |
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
|||||||
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, on November 5, 2024.
|
LINDBLAD EXPEDITIONS HOLDINGS, INC. |
||
|
(Registrant) |
||
|
By |
/s/ Sven Lindblad |
|
|
Sven Lindblad |
||
|
Chief Executive Officer |
||
|
(Principal Executive Officer) |
||
|
By |
/s/ L. Dyson Dryden |
|
|
L. Dyson Dryden |
||
|
Interim Chief Financial Officer |
||
|
(Interim Principal Financial and Accounting Officer) |
||