Lindblad Expeditions today reported financial results for the quarter ended March 31, 2020.

First Quarter 2020 Highlights:

• Tour Revenues decreased 9% to $81.2 million
• Net loss available to common stockholders of $1.9 million
• Adjusted EBITDA decreased $11.5 million to $10.6 million
• Significantly expanded capacity with the delivery of the National Geographic Endurance in March 2020
• Net Yield increased 3% to $1,130 per night and Occupancy was 89%
• First quarter results were significantly impacted by voyage disruptions, cancellations and rescheduling of expeditions due to the COVID-19 virus
• Ended first quarter with $137 million in cash; implementing significant cost reduction measures to further increase liquidity profile
• Monthly cash burn expected to be approximately $10-15 million excluding the impact of guest payments and refunds

Sven-Olof Lindblad, President and Chief Executive Officer, said: “Lindblad was off to another great start in 2020 with the strong momentum we generated throughout the last few years continuing during the first two months of the year. Since that point, the spread of the COVID-19 virus and the related travel restrictions around the world have created unprecedented challenges. As always, the safety of our guests and crew remains our highest priority, and we are very pleased that we have had no reported cases of COVID-19 across our fleet and were able to safely disembark all guests from our ships in a timely fashion.

“Given the uncertainty that the virus has created around the timing and impact on future operations, we are taking all necessary steps to enhance our liquidity, while preparing further protocols, including testing, to put in place for when we can safely resume operations. We firmly believe that the smaller size of our ships, our advanced cleaning systems and robust operating protocols, along with the remote geographies we visit, and the profile of our guests, ideally situates us to be able to resume operations safely and effectively once travel restrictions have been lifted. Over the last forty years we had to overcome significant adversity from time to time and, in every instance, we have endured and then flourished due in large part to the resiliency of our employees and guests. We fully expect to do so again and look forward to returning to the world’s most remarkable locations.”

COVID-19 BUSINESS UPDATE

Due to the spread of the COVID-19 virus and the effects of travel restrictions around the world, the company has suspended or rescheduled the majority of expeditions departing March 16, 2020 through June 30, 2020 and has been working with guests to reschedule travel plans and refund payments, as applicable.

To date, the company has had no reported cases of COVID-19 across its fleet and all guests have safely disembarked its vessels. The majority of the company’s ships are currently being maintained with minimally required crew onboard to ensure they comply with all necessary regulations and can be fully put back into service quickly as needed. In accordance with local regulations, the company closed its offices and most employees are working remotely to maintain general business operations, to provide assistance to existing and potential guests and to maintain information technology systems.

“The company has moved quickly to implement a comprehensive plan to mitigate the impact of COVID-19 and preserve and enhance our liquidity position. We are employing a variety of cost reduction and cash preservation measures, while accessing available capital under our existing debt facilities and exploring additional sources of capital and liquidity,” Lindblad announced.

These measures include the following operating expense and capital expenditure reductions,

• Significantly reducing ship and land-based expedition costs including crew payroll, land costs, fuel and food. All ships have been safely laid up.
• Lowered expected annual maintenance capital expenditures by over $10 million, savings of more than 50% from originally planned levels.
• Meaningfully reduced general and administrative expenses through payroll reductions and the elimination of all non-essential travel, office expenses and discretionary spending.
• Suspended the majority of planned advertising and marketing spend.
• Deferred payment of the majority of bonuses earned for 2019 performance, as well as cash compensation for the Board of Directors.
• Suspended all repurchases of common stock under the stock repurchase plan..

Booking Trends

The company was off to a strong start to the year with Lindblad segment bookings at the end of February up 25% for the full year 2020 as compared to the same point a year ago for 2019 and we had sold 88% of original projected guest ticket revenues for the year.

“Since that point, the company has experienced a substantial impact from the COVID-19 virus including elevated cancellations and softness in near-term demand,” Lindblad said in its earnings release. “Lindblad segment bookings for travel in 2020 are now 27% below the same point a year ago for 2019 due primarily to the cancelled and rescheduled voyages, as well as cancellations for travel later this year. The company does still have substantial advanced bookings for future travel in 2020, including 8% more bookings for the second half of 2020 as compared with the second half of 2019 as of the same date a year ago. Additionally, the company continues to see new bookings for travel in 2020, 2021 and 2022, including over $15 million since March 1, 2020 and we are receiving deposits and final payments for future travel.”

Of note, export credit agencies, in conjunction with export credit lenders, are working to finalize an industry wide initiative to grant a 12-month debt holiday to provide interim debt service relief for amortization payments and financial covenants. 

Considering the cost reduction measures and the potential deferral of near-term export credit agreement amortization, the company estimated its monthly cash usage while its vessels are not in operations to be approximately $10-15 million including ship and office operating expenses, necessary capital expenditures and interest and principal payments.

FIRST QUARTER RESULTS

Tour Revenues

First quarter tour revenues of $81.2 million decreased $8.4 million, or 9%, as compared to the same period in 2019. The decline was driven by a $6.5 million decrease at the Lindblad segment and $1.9 million decrease at Natural Habitat.

Lindblad segment tour revenue of $69.5 million decreased $6.5 million, or 9%, compared to the first quarter a year ago primarily due to a 12% decrease in Available Guest Nights largely due to disrupted, cancelled and rescheduled voyages as a result of COVID-19. The decline in Available Guest Nights, as well as a decline in Occupancy to 89% due to additional shoulder season itineraries across the US fleet, was partially offset by a 3% increase in Net Yields due to price increases and itinerary changes.

Natural Habitat revenues of $11.7 million decreased $1.9 million, or 14%, compared to the first quarter a year ago primarily as a result of disrupted, cancelled and rescheduled departures due to COVID-19.

Net Income

Net loss available to common stockholders for the first quarter was $1.9 million, $0.04 per diluted share, as compared with net income available to common stockholders of $14.7 million, $0.31 per diluted share, in the first quarter of 2019. The $16.6 million decrease primarily reflects the impact of COVID-19 on operations, a $3.4 million loss on foreign currency in the current year versus a $0.7 million foreign currency gain in the first quarter of 2019 and a $1.2 million decrease in income tax benefit versus the same period a year ago.

Adjusted EBITDA

First quarter Adjusted EBITDA of $10.6 million decreased $11.5 million, or 52%, as compared to the same period in 2019. The decrease was driven by a $10.9 million decline at the Lindblad segment and a $0.6 million decrease at Natural Habitat.

Lindblad segment Adjusted EBITDA of $10.1 million decreased $10.9 million as compared to the first quarter a year ago due primarily to the lower tour revenue and costs associated with disrupted voyages as a result of COVID-19. The current quarter also included costs related to the launch of the National Geographic Endurance as well as higher drydocking and personnel costs, partially offset by lower operating costs due to cancelled voyages and a decrease in commission expense from the impact of COVID-19 on revenues.

Natural Habitat Adjusted EBITDA of $0.5 million decreased $0.6 million versus the first quarter a year ago primarily due to the lower revenue as a result of COVID-19, partially offset by lower operating costs related to fewer departures and a decline in marketing spend.