Lindblad Expeditions Holdings today reported financial results for the second quarter ended June 30, 2022.
Dolf Berle, Chief Executive Officer, said: “We are very excited to have all ten of our owned ships once again immersing guests in the amazing geographies Lindblad has been visiting for decades. The nature of our ships and the remote locations we explore has enabled us to ramp our operations quickly, and the response from our guests as they return to experiencing the thrill of exploration has never been more rewarding. At the same time, our land businesses have also swiftly returned to operations and the strategic investments we have made to expand our product offerings is already resulting in positive earnings contributions from these businesses. The demand for unique and authentic travel experiences remains strong, and we certainly expect it to grow even further as we continue to emerge from the pandemic. While some short-term headwinds remain, we are poised to begin delivering on the increased earnings power of the company and deliver additional shareholder value in the months and years ahead.”
Lindblad continued to ramp its operations during the second quarter of 2022, providing immersive expeditions across all ten of its owned vessels including trips to Alaska, the Arctic, the Galápagos Islands, Greenland, Iceland, Norway and the Baltic and North Seas., according to a press release.
Due to the spread of the COVID-19 virus and the effects of travel restrictions around the world, the company suspended or rescheduled the majority of its expeditions departing between March 16, 2020 through May 31, 2021. Travel restrictions related to COVID-19 have diminished dramatically, and the company continues to work with local authorities on plans to operate itineraries in additional geographies during 2022 and 2023. 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 said 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 2023 are 26% ahead of the bookings for the full year 2020 at the same point in 2019, which was prior to the pandemic.
As of June 30, 2022, the company had $126.9 million in unrestricted cash and $48.8 million in restricted cash, primarily related to deposits on future travel originating from U.S. ports and credit card reserves.
As of June 30, 2022, the company had a total debt position of $578.2 million and was in compliance with all of its applicable debt covenants. During May 2022, the company further amended its export credit agreements to extend the waiver of its net leverage coverage ratio from March 2022 through December 31, 2022.
During February 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 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 operations, the company said in its earnings release.
SECOND QUARTER RESULTS
Tour Revenues
Second quarter tour revenues of $90.9 million increased $75.6 million as compared to the same period in 2021. The increase was driven by a $57.3 million increase at the Lindblad segment and a $18.3 million increase at the Land Experiences segment, primarily due to the ramp in expeditions and trips compared with the second quarter a year ago. The Land Experiences segment also includes a full quarter of results for Classic Journeys, LLC (“Classic Journeys”) which was acquired during the fourth quarter of 2021.
Net Income
Net loss available to stockholders for the second quarter was $30.0 million, $0.59 per diluted share, as compared with net loss available to stockholders of $36.6 million, $0.71 per diluted share, in the second quarter of 2021. The $6.6 million improvement primarily reflects the ramp in operations, partially offset by a $3.7 million increase in interest expense due to additional borrowings and higher rates, 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, and $1.4 million lower income tax benefit due to the improved operating results.
Adjusted EBITDA
Second quarter Adjusted EBITDA loss of $6.2 million improved $16.8 million as compared to the same period in 2021. The increase was driven by a $14.4 million improvement at the Lindblad segment and a $2.4 million increase at the Land Experiences segment.
Lindblad segment Adjusted EBITDA loss of $7.5 million improved $14.4 million as compared to the same period in 2021, as increased tour revenues were partially offset by higher cost of tours and increased personnel costs from the ramp in operations, higher commissions related to the revenue and bookings growth and increased marketing spend to drive future growth.
Land Experiences segment Adjusted EBITDA of $1.3 million increased $2.4 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 Classic Journeys which was acquired during the fourth quarter of 2021.
