Lindblad reports increased revenues

2022-08-12T16:52:24+00:00 August 12th, 2022|Finance|

Lindblad Expeditions Holdings second quarter 2022 tour revenues were $90.9 mill an increase of $75.6 mill, compared to the same period in 2021.

The increase was driven by a $57.3 mill rise at the Lindblad segment and a $18.3 mill hike at the Land Experiences segment, primarily due to the ramp up in expeditions and trips, compared with 2Q21.

The Land Experiences segment also includes a full quarter of results for Classic Journeys, which was acquired during 4Q21.

However, the group reported a net loss of $30 mill for 2Q22, $0.59 per diluted share, compared with a net loss of $36.6 mill, $0.71 per diluted share, in 2Q21.

The $6.6 mill improvement primarily reflects the ramp up in operations, partially offset by a $3.7 mill increase in interest expense, due to additional borrowings and higher rates, a $3 mill increase in depreciation and amortisation, primarily due to the addition of the ’National Geographic Resolution’ to the fleet in September, 2021, and $1.4 mill lower income tax benefit, due to the improved operating results.

Second quarter adjusted EBITDA was a loss of $6.2 mill, an improvement of $16.8 mill, compared to the same period in 2021. This increase was driven by a $14.4 mill improvement at the Lindblad segment and a $2.4 mill increase at the Land Experiences segment.

Lindblad segment adjusted EBITDA loss of $7.5 mill was an improvement of $14.4 mill, 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 up in operations, higher commissions related to the revenue and bookings growth, plus increased marketing spend to drive future growth.

Land Experiences segment adjusted EBITDA of $1.3 mill was an increase of $2.4 mill, compared to 2021, mainly due to additional trips, partially offset by higher cost of tours and increased personnel costs again related to the ramp up in operations and increased marketing costs to drive future bookings.

CEO Dolf Berle (pictured), said “We are very excited to have all 10 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 up 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,” he said.

Lindblad continued to increase its operations during 2Q22, providing expeditions across all 10 of its owned vessels, including trips to Alaska, the Arctic, the Galápagos Islands, Greenland, Iceland, Norway and the Baltic and North Seas.

Due to the spread of the COVID-19 virus and the effects of travel restrictions worldwide, the company suspended or rescheduled the majority of its expeditions departing between 16th March, 2020 through 31st May, 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 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.

Lindblad said that it believed 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 pax, allowing for a highly controlled environment that includes stringent cleaning protocols.

The small nature of the company’s ships also allows it to efficiently and effectively test its guests and crew prior to boarding, or as otherwise needed. In addition, all guests are required to be fully vaccinated, and the majority of expeditions take place in remote locations where human interactions are limited, so there is less opportunity for external influences.

The company claimed 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 30th June, 2022, the company had $126.9 mill in unrestricted cash and $48.8 mill in restricted cash, primarily related to deposits on future travel originating from US ports and credit card reserves.

Lindblad had a total debt position of $578.2 mill 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 31st December, 2022.

During February, 2022, the company issued $360 mill of 6.75% senior secured notes, maturing 2027 and entered into a new $45 mill revolving credit facility, including a letter of credit sub-facility in an aggregate principal amount of up to $5 mill.

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 notes are guaranteed on a senior secured basis by the company and certain of its subsidiaries and are collateralised by certain of the company’s assets.

As the company continues to ramp up operations, its monthly cash usage will increase, as it 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, Lindblad warned.