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Section 1: 8-K (CURRENT REPORT)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 2, 2018

 

LINDBLAD EXPEDITIONS HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   001-35898   27-4749725
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (IRS Employer
Identification No.)

 

96 Morton Street, 9th Floor, New York, New York   10014
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number including area code: (212) 261-9000

 

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230 .425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company   

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   

 

 

 

 

 

Item 2.02 Results of Operations and Financial Condition.

 

On August 2, 2018, the Company issued a press release announcing its financial results for its first quarter ended June 30, 2018.

 

This Item 2.02 and the press release attached hereto are being furnished by the Company pursuant to Item 2.02 “Results of Operations and Financial Condition.” In accordance with General Instruction B.2 of Form 8-K, the information contained in this Item 2.02, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section or Sections 11 and 12(a)(2) of the Securities Act of 1933, as amended. In addition, this information shall not be deemed incorporated by reference into any of the Company’s filings with the Securities and Exchange Commission, except as shall be expressly set forth by specific reference in any such filing.

 

Item 9.01 Financial Statements and Exhibits.

 

(d)    Exhibits  

 

Exhibit 99.1   Press release issued August 2, 2018.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. 

 

  LINDBLAD EXPEDITIONS HOLDINGS, INC.
(registrant)
   
August 2, 2018       By: /s/ Craig I. Felenstein
    Craig I. Felenstein, Chief Financial Officer

 

 

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Section 2: EX-99.1 (PRESS RELEASE ISSUED AUGUST 2, 2018)

Exhibit 99.1 

 

 

 

Lindblad Expeditions Holdings, Inc. Reports

2018 Second Quarter Financial Results

 

Second Quarter 2018 Highlights:

 

Tour revenues increased 25% to $69.5 million

 

Net income available to common stockholders increased $2.7 million to $0.1 million

 

Adjusted EBITDA increased 117% to $11.5 million

 

Lindblad segment Net Yield increased 6% to $1,002 and Occupancy increased to 90%

 

Board of Directors authorized building of an additional blue water vessel

 

NEW YORK, August 2, 2018 – 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 June 30, 2018.

 

Sven-Olof Lindblad, President and Chief Executive Officer, said “Lindblad delivered another quarter of strong financial results during the second quarter as the strategic investments we have made to expand capacity and develop our sales and marketing infrastructure continue to deliver significant returns. As we have added inventory, we have also been able to increase our occupancy and yields from increased demand across our existing loyal customer base and a growing population of new guests who are seeking high quality and immersive expedition experiences. Given the robust demand for authentic adventure travel, we announced last month that we will be building an additional new polar ice class vessel. This will be the fourth new build for Lindblad and allow us to add to our proven track record of delivering unparalleled expeditions to the world’s most remarkable destinations.”

 

SECOND QUARTER RESULTS

 

Tour Revenues

 

Second quarter tour revenues of $69.5 million increased $13.9 million, or 25%, as compared to the same period in 2017. The increase was driven by growth of $12.3 million at the Lindblad segment and a $1.6 million increase at Natural Habitat.

 

Lindblad segment tour revenues of $59.6 million increased $12.3 million, or 26%, compared to the second quarter a year ago primarily due to an 18% increase in Available Guest Nights, mostly from the launch of the National Geographic Quest in July 2017 and fewer planned drydock days in the second quarter of 2018 due to timing. The year on year growth also reflects an increase in Occupancy from 85% to 90% due to higher demand across the fleet and a 6% increase in Net Yield to $1,002 due to increased prices and changes in itineraries.

 

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Natural Habitat revenues of $9.9 million increased $1.6 million, or 19%, compared to the second 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 second quarter was $0.1 million, $0.00 per diluted share, as compared with net loss available to common stockholders of $2.5 million, $0.06 per diluted share, in the second quarter of 2017. The $2.7 million improvement primarily reflects the higher operating results and $1.1 million of lower stock-based compensation expense in the current year, partially offset by a $1.1 million loss on foreign currency, a $1.1 million increase in depreciation and amortization, primarily due to the addition of the National Geographic Quest to the fleet in July 2017, and a $0.8 million increase in interest expense primarily related to refinancing the Company’s credit facility during the first quarter of 2018.

 

Adjusted EBITDA

 

Second quarter Adjusted EBITDA of $11.5 million increased $6.2 million, or 117%, as compared to the same period in 2017. The increase was driven by growth of $6.3 million at the Lindblad segment slightly offset by a $0.2 million decrease at Natural Habitat.

 

Lindblad segment Adjusted EBITDA of $12.0 million increased $6.3 million, or 112%, as compared to the second quarter a year ago as the increased tour revenues were partially offset by operating costs on the National Geographic Quest. The second quarter also included higher operating costs due to the additional guest nights, increased fuel costs across the fleet due to higher pricing, increased commission expense related to the revenue growth and higher personnel costs.

 

Natural Habitat Adjusted EBITDA was a loss of $0.5 million, a $0.2 million or 45% decrease compared to the second quarter a year ago as the revenue growth was more than offset by increased operating costs related to additional departures and higher marketing and personnel costs to drive long-term growth initiatives.

 

   For the three months ended
June 30,
   For the six months ended
June 30,
 
(In thousands)  2018   2017   Change   %   2018   2017   Change   % 
Tour revenues:                                
Lindblad  $59,556   $47,238   $12,318    26%  $130,009   $100,440   $29,569    29%
Natural Habitat   9,917    8,333    1,584    19%   21,874    18,259    3,615    20%
Total tour revenues   69,473    55,571    13,902    25%   151,883    118,699    33,184    28%
Impact of voyage cancellations   -    -    -     NA     -    9,140    (9,140)   NM 
Total tour revenues excluding voyage cancellations  $69,473   $55,571   $13,902    25%  $151,883   $127,839   $24,044    19%
Operating income (loss):                                        
Lindblad  $5,107   $(948)  $6,055    NM   $18,547   $316   $18,231    NM 
Natural Habitat   (900)   (705)   (195)   (28%)   32    (605)   637    105%
Total operating income   4,207    (1,653)   5,860    NM    18,579    (289)   18,868    NM 
Impact of voyage cancellations   -    -    -    NA    -    6,464    (6,464)   NM 
Total operating income excluding voyage cancellations  $4,207   $(1,653)  $5,860    NM   $18,579   $6,175   $12,404    NM 
Adjusted EBITDA:                                        
Lindblad  $11,982   $5,651   $6,331    112%  $32,871   $15,490   $17,381    112%
Natural Habitat   (532)   (366)   (166)   (45%)   761    58    703    NM 
Total adjusted EBITDA   11,450    5,285    6,165    117%   33,632    15,548    18,084    116%
Impact of voyage cancellations   -    -    -    NA    -    6,464    (6,464)   NM 
Total adjusted EBITDA excluding voyage cancellations  $11,450   $5,285   $6,165    117%  $33,632   $22,012   $11,620    53%

 

The impact of the cancelled voyages in the prior year on tour revenues was calculated as booked tour revenue at the time of cancellation less insurance proceeds. The impact of the cancelled voyages on operating income and Adjusted EBITDA was calculated as booked tour revenue at the time of cancellation less insurance proceeds and estimated operating costs.

  

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Liquidity

 

The Company’s cash and cash equivalents were $91.6 million as of June 30, 2018, as compared with $96.4 million as of December 31, 2017. The decrease primarily reflects purchases of property and equipment of $31.5 million, mostly related to the construction of two new vessels, and a $15.7 million increase in restricted cash related to higher deposits for travel on the Company’s U.S. flagged vessels. These decreases were mostly offset by $24.8 million in net cash provided by operating activities due to the improved operating performance and $17.6 million in net cash provided by financing activities primarily due to the increase in long-term debt associated with refinancing our credit facility.

 

Free cash flow use was $6.7 million for the six months ended June 30, 2018 as compared with a use of $15.5 million in the same period of 2017. The $8.8 million improvement is primarily due to the strong operating performance and lower capital expenditures for the construction of new vessels. Free cash flow is defined as net cash provided by operating activities less purchases of property and equipment.

 

LINDBLAD FLEET ACTIVITIES

 

The Company expanded its travel offerings in July 2017 with the launch of the National Geographic Quest. A second new-build coastal vessel, the National Geographic Venture, is currently expected to launch in the fourth quarter of 2018.

 

The Company is also building a polar ice class vessel, the National Geographic Endurance, for delivery in January 2020. This state-of-the-art vessel will join the National Geographic Explorer and the National Geographic Orion as the third polar ice class vessel in the Lindblad National Geographic fleet, with the ability to voyage anywhere around the globe and specializing in polar travel.  The vessel 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.

 

Following the quarter, the Company announced that its Board of Directors has authorized the building of an additional polar ice class vessel for delivery in 2021.

 

STOCK AND WARRANT REPURCHASE PLAN

 

The Company currently has a $35 million stock and warrant repurchase plan in place. As of July 31, 2018, the Company had repurchased 6.0 million warrants and 864,806 shares under the plan for a total of $22.9 million and had $12.1 million remaining under the plan. As of July 31, 2018, there were 45.8 million shares of common stock and 10.1 million warrants outstanding.

 

FINANCIAL OUTLOOK

 

The Company’s current expectations for the full year 2018 are as follows:

 

Tour revenues of $308 - $315 million (16-18% growth)

 

Adjusted EBITDA of $54 - $57 million (24-31% growth)

 

As of July 31, 2018, the Lindblad segment had 99% of full year 2018 projected guest ticket revenues on the books versus 99% of full year 2017 guest ticket 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.

 

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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 beginning on page 10.

 

Conference Call Information

 

The Company has scheduled a conference call at 8:30 a.m. Eastern Time on August 2, 2018 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) the Company’s business strategy and plans; (v) unscheduled disruptions in our business due to weather events, mechanical failures, or other events; (vi) compliance with laws and regulations; (vii) compliance with the financial and/or operating covenants in the Company’s credit agreements; (viii) adverse publicity regarding the cruise industry in general; (ix) loss of business due to competition; (x) the result of future financing efforts; (xi) the inability to meet revenue and Adjusted EBITDA projections; (xii) delays and costs overruns with respect to the construction and delivery of newly constructed vessels; and (xiii) 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.

 

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LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(In thousands, except share and per share data)

 

   As of
June 30,
   As of
December 31,
 
   2018   2017 
  (unaudited)     
ASSETS        
Current Assets:        
Cash and cash equivalents  $91,561   $96,443 
Restricted cash and marketable securities   22,803    7,057 
Marine operating supplies   5,086    5,045 
Inventories   1,792    1,794 
Prepaid expenses and other current assets   26,791    21,351 
Total current assets   148,033    131,690 
           
Property and equipment, net   273,075    250,952 
Goodwill   22,105    22,105 
Intangibles, net   8,764    9,554 
Other long-term assets   9,785    10,047 
Total assets  $461,762   $424,348 
           
LIABILITIES          
Current Liabilities:          
Unearned passenger revenues  $122,161   $112,238 
Accounts payable and accrued expenses   25,947    30,422 
Long-term debt - current   2,000    1,750 
Total current liabilities   150,108    144,410 
           
Long-term debt, less current portion   188,229    164,186 
Deferred tax liabilties   2,596    2,444 
Other long-term liabilities   698    684 
Total liabilities   341,631    311,724 
           
COMMITMENTS AND CONTINGENCIES          
           
REDEEMABLE NONCONTROLLING INTEREST   6,130    6,302 
           
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;45,775,648 and 45,427,030 issued, 45,401,323 and 44,787,608 outstanding as of June 30, 2018 and December 31, 2017, respectively   5    5 
Additional paid-in capital   39,172    42,498 
Retained earnings   74,751    63,819 
Accumulated other comprehensive income   73    - 
Total stockholders’ equity   114,001    106,322 
Total liabilities and stockholders’ equity  $461,762   $424,348 

 

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LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)

(unaudited)

 

   For the three months ended
June 30,
   For the six months ended
June 30,
 
   2018   2017   2018   2017 
                 
Tour revenues  $69,473   $55,571   $151,883   $118,699 
Cost of tours   33,810    28,697    69,681    61,300 
Gross profit   35,663    26,874    82,202    57,399 
                     
Operating expenses:                    
General and administrative   15,879    15,082    30,929    30,184 
Selling and marketing   10,583    9,550    22,656    19,846 
Depreciation and amortization   4,994    3,895    10,038    7,658 
Total operating expenses   31,456    28,527    63,623    57,688 
                     
Operating income (loss)   4,207    (1,653)   18,579    (289)
                     
Other (expense) income:                    
Interest expense, net   (2,870)   (2,076)   (5,604)   (4,390)
(Loss) gain on foreign currency   (1,141)   577    (1,592)   823 
Other income (expense)   (128)   107    (120)   (156)
Total other expense   (4,139)   (1,392)   (7,316)   (3,723)
                     
Income (loss) before income taxes   68    (3,045)   11,263    (4,012)
Income tax expense (benefit)   227    (467)   503    (2,060)
                     
Net income (loss)  $(159)  $(2,578)  $10,760   $(1,952)
Net income (loss) attributable to noncontrolling interest   (293)   (45)   (172)   (16)
                     
Net income (loss) available to common stockholders  $134   $(2,533)  $10,932   $(1,936)
                     
Weighted average shares outstanding                    
Basic   45,894,155    44,428,947    45,322,541    44,567,588 
Diluted   46,442,611    44,428,947    45,594,980    44,567,588 
                     
Net income (loss) per share available to common stockholders                    
Basic  $-   $(0.06)  $0.24   $(0.04)
Diluted  $-   $(0.06)  $0.24   $(0.04)

 

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LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(unaudited)

 

   For the three months ended June 30, 
   2018   2017 
Cash Flows From Operating Activities        
Net income (loss)  $10,760   $(1,952)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:          
Depreciation and amortization   10,038    7,658 
Amortization of National Geographic fee   1,454    1,454 
Amortization of deferred financing costs and other, net   1,045    1,096 
Stock-based compensation   1,985    6,407 
Deferred income taxes   152    (2,836)
Loss (gain) on foreign currency   1,592    (106)
Loss on write-off of assets   129    - 
Changes in operating assets and liabilities          
Marine operating supplies and inventories   (39)   (153)
Prepaid expenses and other current assets   (7,048)   (4,674)
Unearned passenger revenues   9,915    25,470 
Write-off of unamortized issuance costs related to debt refinancing   359    - 
Other long-term assets   (1,120)   117 
Other long-term liabilities   15    14 
Accounts payable and accrued expenses   (4,457)   (9,293)
Net cash provided by operating activities   24,780    23,202 
           
Cash Flows From Investing Activities          
Purchases of property and equipment   (31,502)   (38,705)
Transfer to restricted cash and marketable securities   (15,746)   (12,246)
Net cash used in investing activities   (47,248)   (50,951)
           
Cash Flows From Financing Activities          
Proceeds from long-term debt   200,000    - 
Repayments of long-term debt   (170,625)   (875)
Payment of deferred financing costs   (6,486)   (298)
Repurchase under stock-based compensation plans and related tax impacts   (4,457)   (1,182)
Repurchase of warrants and common stock   (854)   (6,166)
Net cash provided by (used in) financing activities   17,578    (8,521)
Effect of exchange rate changes on cash   8    169 
           
Net decrease in cash and cash equivalents   (4,882)   (36,101)
           
Cash and cash equivalents at beginning of period   96,443    135,416 
           
Cash and cash equivalents at end of period  $91,561   $99,315 
           
Supplemental disclosures of cash flow information:          
Cash paid during the period:          
Interest  $6,534   $5,195 
Income taxes  $776   $748 
           
Non-cash investing and financing activities:          
Additional paid-in capital exercise proceeds of option shares  $1,682   $168 
Additional paid-in capital exchange proceeds used for option shares  $(1,682)  $(168)

 

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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
June 30,
   For the six months ended
June 30,
 
(In thousands)  2018   2017   2018   2017 
Net income (loss)  $(159)  $(2,578)  $10,760   $(1,952)
Interest expense, net   2,870    2,075    5,604    4,390 
Income tax expense (benefit)   227    (467)   503    (2,060)
Depreciation and amortization   4,994    3,895    10,038    7,658 
Loss (gain) on foreign currency   1,141    (577)   1,592    (823)
Other (income) expense, net   128    (107)   120    156 
Stock-based compensation   1,119    2,205    1,985    6,407 
National Geographic fee amortization   727    727    1,454    1,454 
Executive severance costs   287    -    287    - 
Reorganization costs   113    112    293    318 
Debt refinancing costs   3    -    997    - 
Adjusted EBITDA   11,450    5,285    33,632    15,548 
Impact of voyage cancellations   -    -    -    6,464 
Adjusted EBITDA excluding impact of voyage cancellations  $11,450   $5,285   $33,632   $22,012 

 

Reconciliation of Operating Income to Adjusted EBITDA

Lindblad Segment

 

   For the three months ended
June 30,
   For the six months ended
June 30,
 
(In thousands)  2018   2017   2018   2017 
Operating income (loss)  $5,107   $(948)  $18,547   $316 
Depreciation and amortization   4,626    3,555    9,309    6,995 
Stock-based compensation   1,119    2,205    1,985    6,407 
National Geographic fee amortization   727    727    1,454    1,454 
Executive severance costs   287    -    287    - 
Reorganization costs   113    112    293    318 
Debt refinancing costs   3    -    997    - 
Adjusted EBITDA   11,982    5,651    32,871    15,490 
Impact of voyage cancellations   -    -    -    6,464 
Adjusted EBITDA excluding impact of voyage cancellations  $11,982   $5,651   $32,871   $21,954 

 

Reconciliation of Operating Income to Adjusted EBITDA

Natural Habitat Segment

 

   For the three months ended
June 30,
   For the six months ended
June 30,
 
(In thousands)  2018   2017   2018   2017 
Operating income (loss)  $(900)  $(706)  $32   $(605)
Depreciation and amortization   368    340    729    663 
Adjusted EBITDA  $(532)  $(366)  $761   $58 

 

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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 six months ended
June 30,
 
   2018   2017 
Net cash provided by operating activities  $24,780   $23,202 
Less: purchases of property and equipment   (31,502)   (38,705)
Free Cash Flow  $(6,722)  $(15,503)

 

Guest Metrics - Lindblad Segment

 

   For the three months ended
June 30,
   For the six months ended
June 30,
 
   2018   2017   2018   2017 
Available Guest Nights   50,917    43,171    104,834    85,893 
Guest Nights Sold   45,786    36,765    94,721    73,829 
Occupancy   89.9%   85.2%   90.4%   86.0%
Maximum Guests   6,242    4,941    13,047    10,209 
Number of Guests   5,684    4,311    11,767    8,912 
Voyages   81    66    176    147 

 

Calculation of Gross Yield and Net Yield

Lindblad Segment

 

   For the three months ended
June 30,
   For the six months ended
June 30,
 
   2018   2017   2018   2017 
Guest ticket revenues  $53,832   $40,745   $116,512   $85,790 
Other tour revenues   5,724    6,493    13,497    14,650 
Tour Revenues   59,556    47,238    130,009    100,440 
Less: Orion Insurance Proceeds   -    -    -    (1,900)
Adjusted Tour Revenues   59,556    47,238    130,009    98,540 
Less: Commissions   (4,369)   (3,659)   (9,923)   (7,761)
Less: Other tour expenses   (4,161)   (2,972)   (8,279)   (7,090)
Net Revenue  $51,026   $40,607   $111,807   $83,689 
Available Guest Nights   50,917    43,171    104,834    85,893 
Gross Yield  $1,170   $1,094   $1,240   $1,147 
Net Yield   1,002    941    1,067    974 

  

 9 

 

 

LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES

Supplemental Financial Schedules

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

(unaudited)

 

   For the three months ended
June 30,
   For the six months ended
June 30,
 
   2018   2017   2018   2017 
Cost of tours  $27,510   $23,168   $56,190   $49,541 
Plus: Selling and marketing   9,683    8,960    20,945    18,272 
Plus: General and administrative   12,630    12,503    25,018    25,316 
Gross Cruise Cost   49,823    44,631    102,153    93,129 
Less: Commission expense   (4,369)   (3,659)   (9,923)   (7,761)
Less: Other tour expenses   (4,161)   (2,972)   (8,279)   (7,090)
Net Cruise Cost   41,293    38,000    83,951    78,278 
Less: Fuel expense   (2,599)   (1,296)   (4,709)   (2,964)
Net Cruise Cost Excluding Fuel   38,694    36,704    79,242    75,314 
Non-GAAP Adjustments:                    
Stock-based compensation   (1,119)   (2,205)   (1,985)   (6,407)
National Geographic fee amortization   (727)   (727)   (1,454)   (1,454)
Executive severance costs   (287)   -    (287)   - 
Reorganization costs   (113)   (112)   (293)   (318)
Debt refinancing costs   (3)   -    (997)   - 
Adjusted Net Cruise Cost Excluding Fuel  $36,445   $33,660   $74,227   $67,135 
Adjusted Net Cruise Cost  $39,044   $34,956   $78,936   $70,099 
Available Guest Nights   50,917    43,171    104,834    85,893 
Gross Cruise Cost per Available Guest Night  $979   $1,034   $974   $1,084 
Net Cruise Cost per Available Guest Night   811    880    801    911 
Net Cruise Cost Excl. Fuel per Available Guest Night   760    850    756    877 
Adj. Net Cruise Cost Excl. Fuel per Avail. Guest Night   716    780    708    782 
Adjusted Net Cruise Cost per Available Guest Night   767    810    753    816 

 

 10 

 

 

 

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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