Lindblad Expeditions Holdings today reported financial results for the first quarter ended March 31, 2022.
Dolf Berle, Chief Executive Officer, said: “Lindblad is well on its way to returning to full operations, having already provided unforgettable experiences to our guests across nine of our ten owned ships in some of the world’s most amazing geographies. As our guests return with us to destinations we have been operating in for decades, the desire to get out and explore has never been more evident from both returning guests, and new travelers who are searching for unique and authentic experiences after being limited in that opportunity over the last several years.
“There will continue to be some short-term headwinds as we emerge from the pandemic and as we reschedule several upcoming itineraries due to the Russia-Ukraine conflict. However, with guest demand accelerating and expanded earnings power from a growing fleet that includes our two new polar ships already receiving rave reviews from our guests, and a diverse product portfolio that has expanded our addressable market, we are very well situated to deliver results well ahead of pre-pandemic levels in the years ahead.”
Ramp in Operations
Lindblad said it continued to ramp its operations during the first quarter of 2022, providing expeditions to guests on nine of its ten owned vessels including trips to Antarctica, Baja California’s Sea of Cortez, Bahamas, Belize, Costa Rica and Panama, and the Galápagos.
Where travel restrictions remain, which now also includes a limited number of itineraries impacted by the Russia-Ukraine conflict, the company is working with guests to reschedule travel plans and refund payments or issue future travel certificates, as appropriate.
The company believes there are a variety of strategic advantages that enable it to deploy its ships safely and quickly, while mitigating the risk of COVID-19 as travel restrictions are lifted. The most notable is the size of its owned and operated vessels which range from 48 to 148 passengers, allowing for a highly controlled environment that includes stringent cleaning protocols.
The company has substantial advance reservations for future travel despite some continued short-term impact from the COVID-19 virus, including elevated cancellations and softness in near-term demand, as well as itinerary changes on a few upcoming voyages due to the Russia-Ukraine conflict.
Bookings for the second half of 2022 are 50% ahead of the bookings for the second half of 2019 and bookings for 2023 are 32% ahead of the bookings for the full year 2020 at the same point in 2019, which was prior to the pandemic.
FIRST QUARTER RESULTS
First quarter tour revenues of $67.8 million increased $66.0 million as compared to the same period in 2021. The increase was driven by a $49.8 million increase at the Lindblad segment and a $16.3 million increase at the Land Experiences segment primarily due to the ramp in expeditions and trips compared with rescheduling nearly all expeditions and trips in the first quarter a year ago due to COVID-19. The Land Experiences segment also includes a full quarter of results for Off the Beaten Path LLC (“Off the Beaten Path”) and DuVine Cycling + Adventure Co. (“DuVine”), which were acquired during the first quarter of 2021, and Classic Journeys, LLC (“Classic Journeys”) which was acquired during the fourth quarter of 2021.
Net loss available to stockholders for the first quarter was $43.0 million, $0.85 per diluted share, as compared with net loss available to stockholders of $34.6 million, $0.66 per diluted share, in the first quarter of 2021. The $8.5 million decrease primarily reflects the ramp in operations, which was more than offset by investments in future growth, a $3.0 million increase in interest expense due to additional borrowings and higher rates and a $3.0 million increase in depreciation and amortization primarily due to the addition of the National Geographic Resolution to the fleet in September 2021. The quarter also included an $11.6 million increase in other income mainly due to the utilization of the CERTS grant for covered expenses, mostly offset by $10.9 million of costs related to refinancing the company’s term loan and revolving credit facilities.
First quarter Adjusted EBITDA loss of $21.2 million decreased $0.4 million as compared to the same period in 2021 as a $3.0 million decline at the Lindblad segment was mostly offset by a $2.6 million increase at the Land Experiences segment.
Lindblad segment Adjusted EBITDA loss of $21.0 million was $3.0 million greater than 2021, as increased tour revenues were more than offset by higher cost of tours and increased personnel costs related to the ramp in operations, increased commissions related to the revenue and bookings growth and higher marketing spend to drive future growth.
Land Experiences segment Adjusted EBITDA loss of $0.2 million improved $2.6 million as compared to 2021, primarily due to additional trips, partially offset by higher cost of tours and increased personnel costs related to the ramp in operations and increased marketing costs to drive future bookings. The Land Experiences segment also includes a full quarter of results for Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021, and Classic Journeys which was acquired during the fourth quarter of 2021.
Balance Sheet and Liquidity
On February 4, 2022, the company issued $360.0 million of 6.75% senior secured notes, maturing 2027 and entered into a new $45.0 million revolving credit facility, including a letter of credit sub-facility in an aggregate principal amount of up to $5.0 million. Proceeds from the senior secured notes were used primarily to pay the outstanding borrowings under the company’s previously existing credit agreement, including the term facility, Main Street Loan and revolving credit facility. The senior secured notes are guaranteed on a senior secured basis by the company and certain of the company’s subsidiaries and are collateralized by certain of the company’s assets.
As of March 31, 2022, the company had $154.8 million in unrestricted cash and $30.0 million in restricted cash primarily related to deposits on future travel originating from U.S. ports and credit card reserves. As of March 31, 2022, the company had a total debt position of $584.1 million and was in compliance with all of its debt covenants.
As the company continues to ramp up operations, its monthly cash usage will increase as the company incurs costs in operating expeditions, prepares additional ships for return to service and spends to advertise upcoming expeditions and trips. The company also anticipates a significant increase in guest payments as it receives final payments for upcoming expeditions and trips as well as deposits for new reservations for future travel. However, there can be no assurance that cash flows from operations will be available to fund future obligations or that it will not experience delays or cancellations with respect to the resumption of our operations.