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Lindblad Expeditions Holdings, Inc. Reports 2019 First Quarter Financial Results

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NEW YORK, May 2, 2019 /PRNewswire/ --

First Quarter 2019 Highlights:

  • Tour Revenues increased 9% to $89.7 million
  • Net income available to common stockholders increased $3.9 million to $14.7 million
  • Adjusted EBITDA decreased $0.1 million to $22.0 million
  • Lindblad segment Net Yield of $1,099 and Occupancy of 91%
  • Signed contract to build a second new polar ice class vessel for delivery in September 2021

 

 

Lindblad Expeditions Holdings, Inc. (NASDAQ:LIND, the ", Company", or ", Lindblad", )), a global provider of expedition cruises and adventure travel experiences, today reported financial results for the quarter ended March 31, 2019.

Sven-Olof Lindblad, President and Chief Executive Officer, said, "Lindblad is off to another great start in 2019 as the strong momentum we generated throughout the last year and a half continued into the first quarter. The addition of our second new build vessel, the National Geographic Venture, in December of 2018, has further increased our overall capacity and as we have expanded our inventory we continue to maintain high yields and occupancy levels. Demand for expedition travel has never been greater and with a proven track record of delivering high quality and immersive experiences, along with our long-standing partnership with National Geographic, we are generating booking strength from both loyal guests as well as those experiencing this type of travel for the first time. Reservations for departures later this year and beyond remain strong as we continue to see broad based demand at higher yields for our new builds as well as our existing fleet. With further capacity expansion, including two new polar vessels scheduled to join our fleet over the next two years, and the ability to sustain pricing and occupancy levels, we remain uniquely positioned to generate continued strong growth and build additional shareholder value for years to come."

FIRST QUARTER RESULTS

Tour Revenues

First quarter tour revenues of $89.7 million increased $7.2 million, or 9%, as compared to the same period in 2018. The increase was driven by growth of $5.6 million at the Lindblad segment and a $1.7 million increase at Natural Habitat.

Lindblad segment tour revenue of $76.0 million increased $5.6 million, or 8%, compared to the first quarter a year ago primarily due to a 9% increase in Available Guest Nights, mostly from the launch of the National Geographic Venture in December 2018. The growth in Available Guest Nights, as well as a slight increase in Occupancy to 91%, was partially offset by a 2% decrease in Net Yield to $1,099 as increased pricing was offset by itinerary changes.

Natural Habitat revenues of $13.6 million increased $1.7 million, or 14%, compared to the first quarter a year ago due primarily to higher ticket revenue from additional departures and increased pricing.

Net Income

Net income available to common stockholders for the first quarter was $14.7 million, $0.31 per diluted share, as compared with net income available to common stockholders of $10.8 million, $0.24 per diluted share, in the first quarter of 2018. The $3.9 million increase primarily reflects a $3.1 million tax benefit during the first quarter of 2019 versus tax expense of $0.3 million during the same period a year ago.  The year on year increase also includes $0.7 million in foreign currency gains in the current year as compared with $0.5 million in foreign currency losses in the first quarter of 2018, as well as the absence of $1.0 million in costs related to refinancing the Company's credit facility during the first quarter a year ago. These increases were partially offset by $1.1 million in higher depreciation and amortization primarily due to the addition of the National Geographic Venture to the fleet in December 2018. 

Adjusted EBITDA

First quarter Adjusted EBITDA of $22.0 million decreased $0.1 million, or 1%, as compared to the same period in 2018 with a slight increase at the Lindblad segment more than offset by a $0.2 million decrease at Natural Habitat.

Lindblad segment Adjusted EBITDA of $20.9 million increased slightly as compared to the first quarter a year ago as the tour revenue growth and lower drydock and land costs were mostly offset by operating costs on the National Geographic Venture. The first quarter of 2019 also included higher marketing spend to drive long-term growth initiatives, increased commission expense related to the revenue growth and higher personnel costs.

Natural Habitat Adjusted EBITDA of $1.1 million decreased $0.2 million compared to the first quarter a year ago as the revenue growth was more than offset by higher operating costs related to the additional departures and increased marketing and personnel costs to drive long-term growth initiatives.



For the three months ended

March 31,




2019



2018



Change



%


(In thousands)


(unaudited)



(unaudited)










Tour revenues:

















Lindblad


$

76,038



$

70,453



$

5,585




8%


Natural Habitat



13,616




11,957




1,659




14%


Total tour revenues


$

89,654



$

82,410



$

7,244




9%


Operating Income:

















Lindblad


$

13,641



$

13,439



$

202




2%


Natural Habitat



724




932




(208)




(22%)


Total operating income


$

14,365



$

14,371



$

(6)




(0%)


Adjusted EBITDA:

















Lindblad


$

20,930



$

20,889



$

41




0%


Natural Habitat



1,118




1,293




(175)




(14%)


Total adjusted EBITDA


$

22,048



$

22,182



$

(134)




(1%)


 

Liquidity

The Company's cash, cash equivalents and restricted cash were $100.6 million as of March 31, 2019, as compared with $122.2 million as of December 31, 2018. The decrease primarily reflects purchases of property and equipment of $35.1 million, predominantly related to the two new polar vessels, partially offset by $15.3 million in net cash provided by operating activities due primarily to the strong operating performance and increased bookings for future travel.

Free cash flow use was $19.8 million for the first quarter of 2019 as compared with $4.0 million in the first quarter of 2018 due primarily to higher capital expenditures for the new vessels partially offset by increased bookings for future travel. Free cash flow is defined as net cash provided by operating activities less purchases of property and equipment.

Following the quarter, the Company entered into a senior secured credit agreement to make available, at the Company's option, a loan in an aggregate principal amount not to exceed $122.8 million for the purpose of providing financing for up to 80% of the purchase price of the Company's new expedition ice-class cruise vessel.  At the Company's election, the loan will bear interest either at a fixed interest rate effectively equal to 6.36% or a floating interest rate equal to three-month LIBOR plus a margin of 3.00% per annum.

LINDBLAD FLEET ACTIVITIES

The Company expanded its travel offerings in December 2018 with the launch of the National Geographic Venture, which sailed in Baja during the winter season before heading to Alaska for the summer months.

The Company is currently building two new state-of-the-art polar ice class vessels to further capitalize on the growth in high quality adventure travel and broaden the immersive and authentic itineraries we offer to our guests. The National Geographic Endurance is scheduled for delivery in January 2020 and, in February 2019, we signed a contract for her sister ship, scheduled for delivery in September 2021. These two vessels will join the National Geographic Explorer and the National Geographic Orion to dramatically increase the polar capacity of the Lindblad National Geographic fleet. They will be capable of exploring deep into the Antarctic and Arctic waters and will be built with the Ulstein X-BOW® design, allowing for greater comfort and speed through rough waters.

STOCK AND WARRANT REPURCHASE PLAN

Pursuant to its existing $35 million stock and warrant repurchase plan, during the first quarter the Company repurchased 1,895 shares of common stock for twenty three thousand dollars at an average price of $11.99. As of April 30, 2019, the Company had repurchased 6.0 million warrants and 866,701 shares under the plan for a total of $22.9 million and had $12.1 million remaining under the plan. As of April 30, 2019, there were 45.8 million shares common stock and 10.1 million warrants outstanding.

FINANCIAL OUTLOOK 

The Company's current expectations for the full year 2019 are as follows:

  • Tour revenues of $350 - $358 million (13 – 16% growth)
  • Adjusted EBITDA of $67 - $70 million (22 – 28% growth)

As of April 30, 2019, Lindblad segment bookings for travel during 2019 have increased 11% as compared with bookings for 2018 as of the same date a year ago. Additionally, the Lindblad segment had 94% of full year 2019 projected guest ticket revenues on the books versus 95% of full year 2018 revenue at the same time last year.

NON-GAAP FINANCIAL MEASURES

The Company uses a variety of operational and financial metrics, including non-GAAP financial measures such as Adjusted EBITDA, Occupancy, Net Yields and Net Cruise Costs, to enable it to analyze its performance and financial condition. The Company utilizes these financial measures to manage its business on a day-to-day basis and believes 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. The Company believes 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. The definitions of non-GAAP financial measures along with a reconciliation of non-GAAP financial information to GAAP are included in the supplemental financial schedules.

Conference Call Information

The Company has scheduled a conference call at 8:30 a.m. Eastern Time on May 2, 2019 to discuss the earnings of the Company. The conference call can be accessed by dialing (844) 378-6487 (United States), (855) 669-9657 (Canada) or (412) 542-4182 (outside the U.S.). A replay of the call will be available at the Company's investor relations website, investors.expeditions.com.

About Lindblad Expeditions Holdings, Inc.

Lindblad Expeditions Holdings, Inc. is an expedition travel company that focuses on ship-based voyages through its Lindblad Expeditions brand and on land-based travel through its subsidiary, Natural Habitat Adventures, an adventure travel and ecotourism company with a focus on responsible nature travel.

Lindblad Expeditions works in partnership with National Geographic to inspire people to explore and care about the planet. The organizations work in tandem to produce innovative marine expedition programs and to promote conservation and sustainable tourism around the world. The partnership's educationally oriented voyages allow guests to interact with and learn from leading scientists, naturalists and researchers while discovering stunning natural environments, above and below the sea, through state-of-the-art exploration tools.

Natural Habitat partners with the World Wildlife Fund to offer and promote conservation and sustainable travel that directly protects nature. Natural Habitat's adventures include polar bear tours in Churchill, Canada, Alaskan grizzly bear adventures and African safaris.

Forward Looking Statements

Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include the Company's financial projections and may also generally be identified as such because the context of such statements will include words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "will," "would" or words of similar import. Similarly, statements that describe the Company's financial guidance or future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause results to differ materially from those expected, including, but not limited to, the following: (i) changes adversely affecting the business in which the Company is engaged; (ii) management of the Company's growth and its ability to execute on its planned growth; (iii) general economic conditions; (iv) our ability to maintain our relationship with National Geographic (v) the Company's business strategy and plans; (vi) unscheduled disruptions in our business due to weather events, mechanical failures, or other events; (vii) compliance with laws and regulations; (viii) compliance with the financial and/or operating covenants in the Company's credit agreements; (ix) adverse publicity regarding the cruise industry in general; (x) loss of business due to competition; (xi) the result of future financing efforts; (xii) the inability to meet revenue and Adjusted EBITDA projections; (xiii) delays and costs overruns with respect to the construction and delivery of newly constructed vessels; and (xiv) those risks described in the Company's filings with the SEC. Stockholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this press release and the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about factors that may affect the Company's performance may be found in its filings with the SEC, which are available at http://www.sec.gov or at http://www.expeditions.com in the Investor Relations section of the Company's website.

 

LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)





As of
March 31,

2019



As of
December 31,
2018


ASSETS


(unaudited)






Current Assets:









Cash and cash equivalents


$

70,103



$

113,396


Restricted cash



30,537




8,755


Marine operating supplies



5,465




5,165


Inventories



1,523




1,604


Prepaid expenses and other current assets



27,963




21,263


Total current assets



135,591




150,183











Property and equipment, net



315,330




285,979


Goodwill



22,105




22,105


Intangibles, net



7,580




7,975


Deferred tax asset



1,078




-


Right-to-use lease assets



6,027




-


Other long-term assets



6,096




7,167


Total assets


$

493,807



$

473,409











LIABILITIES









Current Liabilities:









Unearned passenger revenues


$

129,505



$

123,489


Accounts payable and accrued expenses



31,176




33,944


Lease liabilities - current



1,166




-


Long-term debt - current



2,000




2,000


Total current liabilities



163,847




159,433











Long-term debt, less current portion



188,005




188,089


Deferred tax liabilities



-




2,787


Lease liabilities



5,026




-


Other long-term liabilities



1,379




554


Total liabilities



358,257




350,863











COMMITMENTS AND CONTINGENCIES


















REDEEMABLE NONCONTROLLING INTEREST



6,908




6,502











STOCKHOLDERS' EQUITY









Preferred stock, $0.0001 par value, 1,000,000 shares authorized; no shares issued and
outstanding



-




-


Common stock, $0.0001 par value, 200,000,000 shares authorized; 45,768,715 and 45,814,925 issued, 45,608,143 and 45,442,728 outstanding as of March 31, 2019 and December 31, 2018, respectively



5




5


Additional paid-in capital



41,102




41,539


Retained earnings



89,844




75,171


Accumulated other comprehensive income



(2,309)




(671)


Total stockholders' equity



128,642




116,044


Total liabilities, stockholders' equity and redeemable noncontrolling interest


$

493,807



$

473,409


 

 

LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income

(In thousands, except share and per share data)

(unaudited)





For the three months ended
March 31,




2019



2018











Tour revenues


$

89,654



$

82,410




















Operating expenses:









Cost of tours



39,017




35,871


General and administrative



16,082




15,050


Selling and marketing



14,002




12,073


Depreciation and amortization



6,188




5,045


Total operating expenses



75,289




68,039











Operating income



14,365




14,371











Other expense:









Interest expense, net



(2,989)




(2,734)


Gain (loss) on foreign currency



656




(451)


Other (expense) income



(19)




8


Total other expense



(2,352)




(3,177)











Income before income taxes



12,013




11,194


Income tax (benefit) expense



(3,066)




277











Net income



15,079




10,917


Net income attributable to noncontrolling interest



406




121











Net income available to common stockholders


$

14,673



$

10,796











Weighted average shares outstanding









Basic



45,565,381




45,274,540


Diluted



47,429,343




45,667,565











Net income per share available to common stockholders









Basic


$

0.32



$

0.24


Diluted


$

0.31



$

0.24


      

 

LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(unaudited)





For the three months ended

March 31,




2019



2018


Cash Flows From Operating Activities









Net income


$

15,079



$

10,917


Adjustments to reconcile net income to net cash provided by operating activities:









Depreciation and amortization



6,188




5,045


Amortization of National Geographic fee



727




727


Amortization of deferred financing costs and other, net



434




608


Stock-based compensation



753




866


Deferred income taxes



(3,865)




347


(Gain) loss on foreign currency



(656)




451


Write-off of unamortized issuance costs related to debt refinancing



-




359


Changes in operating assets and liabilities









Marine operating supplies and inventories



(219)




(400)


Prepaid expenses and other current assets



(6,699)




(1,754)


Right-to-use lease assets



(6,027)




-


Lease liabilities



6,192




-


Unearned passenger revenues



6,016




(939)


Other long-term assets



(1,294)




10


Other long-term liabilities



825




8


Accounts payable and accrued expenses



(2,112)




(5,727)


Net cash provided by operating activities



15,342




10,518











Cash Flows From Investing Activities









Purchases of property and equipment



(35,144)




(14,502)


Net cash used in investing activities



(35,144)




(14,502)











Cash Flows From Financing Activities









Proceeds from long-term debt



-




200,000


Repayments of long-term debt



(500)




(170,625)


Payment of deferred financing costs



(18)




(6,297)


Repurchase under stock-based compensation plans and related tax impacts



(1,167)




(4,179)


Repurchase of warrants and common stock



(23)




(854)


Net cash (used in) provided by financing activities



(1,708)




18,045


Effect of exchange rate changes on cash



-




(40)


Net (decrease) increase in cash, cash equivalents and restricted cash



(21,510)




14,021


Cash, cash equivalents and restricted cash at beginning of period



122,150




103,500











Cash, cash equivalents and restricted cash at end of period


$

100,640



$

117,521











Supplemental disclosures of cash flow information:









Cash paid during the period:









Interest


$

3,377



$

3,012


Income taxes


$

23



$

45


Non-cash investing and financing activities:









Additional paid-in capital exercise proceeds of option shares


$

-



$

1,682


Additional paid-in capital exchange proceeds used for option shares


$

-



$

(1,682)


 

 

LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES

Supplemental Financial Schedules

(In thousands)

(unaudited)











Reconciliation of Net Income to Adjusted EBITDA - Consolidated











For the three months ended
March 31,




2019



2018


Net income


$

15,079



$

10,917


Interest expense, net



2,989




2,734


Income tax (benefit) expense



(3,066)




277


Depreciation and amortization



6,188




5,045


(Gain) loss on foreign currency



(656)




451


Other expense (income), net



19




(8)


Stock-based compensation



753




866


National Geographic fee amortization



727




727


Reorganization costs



15




180


Debt refinancing costs



-




993


Adjusted EBITDA


$

22,048



$

22,182




















Reconciliation of Operating Income to Adjusted EBITDA - Lindblad Segment











For the three months ended
March 31,




2019



2018


Operating income


$

13,641



$

13,439


Depreciation and amortization



5,794




4,684


Stock-based compensation



753




866


National Geographic fee amortization



727




727


Reorganization costs



15




180


Debt refinancing costs



-




993


Adjusted EBITDA


$

20,930



$

20,889




















Reconciliation of Operating Income to Adjusted EBITDA - Natural Habitat Segment











For the three months ended
March 31,




2019



2018


Operating income


$

724



$

932


Depreciation and amortization



394




361


Adjusted EBITDA


$

1,118



$

1,293


 

 

LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES

Supplemental Financial Schedules

(In thousands, except for Available Guest Nights,
Gross Yield, Net Yield and guest metrics)

(unaudited)



Reconciliation of Free cash Flow to Net Cash Provided by Operating Activities


For the three months ended
March 31,




2019



2018


Net cash provided by operating activities


$

15,342



$

10,518


Less: purchases of property and equipment



(35,144)




(14,502)


Free Cash Flow


$

(19,802)



$

(3,984)








For the three months ended
March 31,




2019



2018


Available Guest Nights



58,669




53,917


Guest Nights Sold



53,613




48,935


Occupancy



91%




91%


Maximum Guests



7,313




6,899


Number of Guests



6,532




6,177


Voyages



93




95




















Calculation of Gross Yield and Net Yield Lindblad Segment


For the three months ended
March 31,




2019



2018


Guest ticket revenues


$

67,110



$

62,681


Other tour revenue



8,928




7,772


Tour Revenues



76,038




70,453


Less: Commissions



(5,851)




(5,554)


Less: Other tour expenses



(5,687)




(4,118)


Net Revenue


$

64,500



$

60,781


Available Guest Nights



58,669




53,917


Gross Yield


$

1,296



$

1,307


Net Yield



1,099




1,127


 

 

LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES

Supplemental Financial Schedules

(In thousands, except for Available Guest Nights,
Gross and Net Cruise cost Per Available Guest Night and guest metrics)

(unaudited)



Calculation of Gross Cruise Cost and Net Cruise Cost Lindblad Segment


For the three months ended
March 31,




2019



2018


Cost of tours


$

31,321



$

28,680


Plus: Selling and marketing



12,641




11,262


Plus: General and administrative



12,641




12,388


Gross Cruise Cost



56,603




52,330


Less: Commissions



(5,851)




(5,554)


Less: Other tour expenses



(5,687)




(4,118)


Net Cruise Cost



45,065




42,658


Less: Fuel Expense



(2,688)




(2,110)


Net Cruise Cost Excluding Fuel



42,377




40,548


Non-GAAP Adjustments:









Stock-based compensation



(753)




(866)


National Geographic fee amortization



(727)




(727)


Reorganization costs



(15)




(180)


Debt refinancing costs



-




(993)


Adjusted Net Cruise Cost Excluding Fuel


$

40,882



$

37,782


Adjusted Net Cruise Cost


$

43,570



$

39,892


Available Guest Nights



58,669




53,917


Gross Cruise Cost per Available Guest Night


$

965



$

971


Net Cruise Cost per Available Guest Night



768




791


Net Cruise Cost Excluding Fuel per Available Guest Night



722




752


Adjusted Net Cruise Cost Excluding Fuel per Available Guest Night



697




701


Adjusted Net Cruise Cost per Available Guest Night



743




740


 

Operational and Financial Metrics

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 National Geographic fee amortization, merger-related expenses, debt refinancing fees and acquisition-related expenses. The Company believes 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. The Company believes Adjusted EBITDA helps provide a more complete understanding of the underlying operating results and trends and an enhanced overall understanding of the Company's 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. The Company's use of Adjusted EBITDA may not be comparable to other companies within the industry.

The following metrics apply to the 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, merger-related expenses 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. The Company also records the number of guest nights available on its limited land programs in this definition.

Gross Cruise Cost represents the sum of cost of tours plus merger-related expenses, selling and marketing expense, and general and administrative expense.

Gross Yield 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 Revenue represents tour revenues less insurance proceeds, commissions and direct costs of other tour revenues.

Net Yield represents Net Revenue divided by Available Guest Nights.

Number of Guests represents the number of guests that travel with the Company 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.

  

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SOURCE Lindblad Expeditions Holdings, Inc.

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