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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): November 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 November 2, 2018, the Company issued a press release announcing its financial results for its third quarter ended September 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 November 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)
   
November 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 NOVEMBER 2, 2018)

Exhibit 99.1

 

 

 

Lindblad Expeditions Holdings, Inc. Reports

2018 Third Quarter Financial Results

 

Third Quarter 2018 Highlights:

 

Tour revenues of $87.2 million

 

Net income available to common stockholders of $5.1 million

 

Adjusted EBITDA of $17.1 million

 

Lindblad segment Net Yield of $983 and Occupancy of 92%

 

NEW YORK, November 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 September 30, 2018.

 

Sven-Olof Lindblad, President and Chief Executive Officer, said “Lindblad continues to generate strong operating momentum across our fleet with expanding capacity being met by the growing demand for high quality and authentic expedition travel. Bookings for future travel have been robust throughout 2018 and have accelerated over the past few months as we are generating strong demand for our existing inventory, as well as our three new builds. The National Geographic Quest just completed her first year of operations and we are excited to welcome guests on her sister ship, the National Geographic Venture, next month. At the same time, we are well underway on the construction of our state-of-the-art polar ice class vessel, the National Geographic Endurance, scheduled for delivery in 2020. While our financial results in the current quarter reflect the impact of the timing of drydocks versus a year ago, our revenues are up 18% year to date and we are generating real operating leverage with Adjusted EBITDA up 31%. Looking ahead, this strong growth is poised to continue as we further increase our fleet size and build upon the sustained booking strength we are generating today.”

 

THIRD QUARTER RESULTS

 

Tour Revenues

 

Third quarter tour revenues of $87.2 million increased $2.7 million, or 3%, as compared to the same period in 2017. The increase was driven by growth of $5.6 million at Natural Habitat, partially offset by a $2.9 million decrease at the Lindblad segment.

 

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Lindblad segment tour revenues of $64.5 million decreased $2.9 million, or 4%, compared to the third quarter a year ago as an increase in Occupancy to 92% due to higher demand across the fleet was more than offset by a decrease in Available Guest Nights and Net Yield. Available Guest Nights were 1% lower than the third quarter a year ago primarily due to the timing of planned drydock days, mostly offset by the launch of the National Geographic Quest in late July 2017. Net Yield declined 6% to $983 due primarily to changes in itineraries, most notably on the National Geographic Orion. The third quarter a year ago also included the cancellation of four highly booked voyages on the National Geographic Quest due to a delay in the launch of the vessel.

 

Natural Habitat revenues of $22.7 million increased $5.6 million, or 33%, compared to the third 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 third quarter was $5.1 million, $0.11 per diluted share, as compared with net income available to common stockholders of $9.3 million, $0.20 per diluted share, in the third quarter of 2017. The $4.2 million decrease primarily reflects the lower operating results and a $0.7 million increase in depreciation and amortization, primarily due to the addition of the National Geographic Quest to the fleet in July 2017, partially offset by $1.8 million of lower stock-based compensation expense in the current year.

 

Adjusted EBITDA

 

Third quarter Adjusted EBITDA of $17.1 million decreased $6.0 million, or 26%, as compared to the same period in 2017 as growth of $0.6 million at Natural Habitat was more than offset by a $6.6 million decrease at the Lindblad segment.

 

Lindblad segment Adjusted EBITDA of $14.7 million decreased $6.6 million, or 31%, as compared to the third quarter a year ago due to the decreased tour revenues and increased operating costs primarily related to higher drydock expenses associated with the timing of drydocks versus a year ago. The third quarter of 2018 also included increased fuel and personnel expenses as well as a full quarter of costs on the National Geographic Quest, which launched late in July 2017.

 

Natural Habitat Adjusted EBITDA of $2.5 million increased $0.6 million, or 33%, compared to the third quarter a year ago as the revenue growth was partially offset by increased operating costs related to additional departures and higher marketing and personnel costs to drive long-term growth initiatives.

 

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   For the three months ended
September 30,
   For the nine months ended
September 30,
 
(In thousands)  2018   2017   Change   %   2018   2017   Change   % 
Tour revenues:                                        
Lindblad  $64,507   $67,451   $(2,944)   (4)%  $194,516   $167,891   $26,625    16%
Natural Habitat   22,735    17,133    5,602    33%   44,609    35,392    9,217    26%
Total tour revenues  $87,242   $84,584   $2,658    3%  $239,125   $203,283   $35,842    18%
Operating income:                                        
Lindblad  $8,209   $12,070   $(3,861)   (32)%  $26,755   $12,386   $14,369    116%
Natural Habitat   2,072    1,478    594    40%   2,105    873    1,232    141%
Total operating income  $10,281   $13,548   $(3,267)   (24)%  $28,860   $13,259   $15,601    118%
Adjusted EBITDA:                                        
Lindblad  $14,668   $21,277   $(6,609)   (31)%  $47,538   $36,766   $10,771    29%
Natural Habitat   2,451    1,838    613    33%   3,213    1,896    1,317    69%
Total adjusted EBITDA  $17,119   $23,115   $(5,996)   (26)%  $50,751   $38,662   $12,088    31%

 

Liquidity

 

The Company’s cash and cash equivalents were $105.7 million as of September 30, 2018, as compared with $96.4 million as of December 31, 2017. The $9.3 million increase primarily reflects $39.3 million in net cash provided by operating activities due to the strong operating performance year to date and $17.0 million in net cash provided by financing activities, primarily due to the increase in long-term debt associated with refinancing our credit facility. These increases were mostly offset by purchases of property and equipment of $45.5 million, primarily related to the construction of two new vessels.

 

Free cash flow use was $6.2 million for the nine months ended September 30, 2018 as compared with a use of $14.6 million in the same period of 2017. The $8.4 million improvement is primarily due to the strong operating performance in the current year. 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 scheduled for delivery in the fourth quarter of 2018 and is expected to have its first voyage with passengers during December 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.

 

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In July 2018, 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 $35.0 million stock and warrant repurchase plan in place. As of October 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 October 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 October 31, 2018, the Lindblad segment had 100% of full year 2018 projected guest ticket revenues on the books versus 100% 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.

 

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 9.

 

Conference Call Information

 

The Company has scheduled a conference call at 8:30 a.m. Eastern Time on November 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.

 

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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
September 30,
   As of
December 31,
 
   2018   2017 
ASSETS  (unaudited)     
Current Assets:        
Cash and cash equivalents  $105,688   $96,443 
Restricted cash and marketable securities   8,593    7,057 
Marine operating supplies   5,024    5,045 
Inventories   1,646    1,794 
Prepaid expenses and other current assets   21,917    21,351 
Total current assets   142,868    131,690 
           
Property and equipment, net   282,455    250,952 
Goodwill   22,105    22,105 
Intangibles, net   8,370    9,554 
Other long-term assets   9,017    10,047 
Total assets  $464,815   $424,348 
         - 
LIABILITIES          
Current Liabilities:          
Unearned passenger revenues  $112,694   $112,238 
Accounts payable and accrued expenses   29,305    30,422 
Long-term debt - current   2,000    1,750 
    143,999    144,410 
           
Long-term debt, less current portion   188,161    164,186 
Deferred tax liabilties   5,097    2,444 
Other long-term liabilities   706    684 
Total liabilities   337,963    311,724 
           
COMMITMENTS AND CONTINGENCIES          
           
REDEEMABLE NONCONTROLLING INTEREST   6,409    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; 45,815,425 and 45,427,030 issued, 45,442,728 and 44,787,608 outstanding as of September 30, 2018 and December 31, 2017, respectively   5    5 
Additional paid-in capital   40,391    42,498 
Retained earnings   79,817    63,819 
Accumulated other comprehensive income   230    - 
Total stockholders’ equity   120,443    106,322 
Total liabilities and stockholders’ equity  $464,815   $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
 September 30,
   For the nine months ended
September 30,
 
   2018   2017   2018   2017 
                 
Tour revenues  $87,242   $84,584   $239,125   $203,283 
Cost of tours   44,964    38,480    114,645    99,780 
Gross profit   42,278    46,104    124,480    103,503 
                     
Operating expenses:                    
General and administrative   14,718    16,526    45,647    46,710 
Selling and marketing   12,255    11,676    34,911    31,521 
Depreciation and amortization   5,024    4,354    15,062    12,012 
Total operating expenses   31,997    32,556    95,620    90,243 
                     
Operating income   10,281    13,548    28,860    13,260 
                     
Other (expense) income:                    
Interest expense, net   (2,409)   (2,802)   (8,013)   (7,192)
Gain (loss) on foreign currency   163    224    (1,430)   1,047 
Other income (expense)   1    59    (118)   (97)
Total other expense   (2,245)   (2,519)   (9,561)   (6,242)
                     
Income before income taxes   8,036    11,029    19,299    7,018 
Income tax expense (benefit)   2,690    1,586    3,194    (473)
                     
Net income  $5,346   $9,443   $16,105   $7,491 
Net income attributable to noncontrolling interest   279    165    107    149 
                     
Net income available to common stockholders  $5,067   $9,278   $15,998   $7,342 
                     
Weighted average shares outstanding                    
Basic   45,423,127    44,457,656    45,356,438    44,528,878 
Diluted   47,690,395    45,718,513    45,963,669    45,609,560 
                     
Net income per share available to common stockholders                    
Basic  $0.11   $0.21   $0.35   $0.16 
Diluted  $0.11   $0.20   $0.35   $0.16 

 

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LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(In thousands)

(unaudited)

 

   For the nine months ended
September 30,
 
   2018   2017 
Cash Flows From Operating Activities        
Net income  $16,105   $7,491 
Adjustments to reconcile net income to net cash provided by operating activities:          
Depreciation and amortization   15,062    12,012 
Amortization of National Geographic fee   2,181    2,180 
Amortization of deferred financing costs and other, net   1,477    1,662 
Stock-based compensation   3,256    9,464 
Deferred income taxes   2,653    (2,017)
Loss (gain) on foreign currency   1,430    (1,047)
Loss on write-off of assets   129    - 
Changes in operating assets and liabilities          
Marine operating supplies and inventories   169    (516)
Prepaid expenses and other current assets   (1,806)   (1,087)
Unearned passenger revenues   449    8,062 
Write-off of unamortized issuance costs related to debt refinancing   359    - 
Other long-term assets   (1,981)   192 
Other long-term liabilities   22    14 
Accounts payable and accrued expenses   (247)   (6,964)
Net cash provided by operating activities   39,258    29,446 
           
Cash Flows From Investing Activities          
Purchases of property and equipment   (45,510)   (44,089)
Transfer to restricted cash and marketable securities   (1,536)   311 
Net cash used in investing activities   (47,046)   (43,778)
           
Cash Flows From Financing Activities          
Proceeds from long-term debt   200,000    - 
Repayments of long-term debt   (171,125)   (1,312)
Payment of deferred financing costs   (6,486)   (312)
Repurchase under stock-based compensation plans and related tax impacts   (4,509)   (1,182)
Repurchase of warrants and common stock   (854)   (6,166)
Net cash provided by (used in) financing activities   17,026    (8,972)
Effect of exchange rate changes on cash   7    204 
           
Net increase (decrease) in cash and cash equivalents   9,245    (23,100)
           
Cash and cash equivalents at beginning of period   96,443    135,416 
           
Cash and cash equivalents at end of period  $105,688   $112,316 
           
Supplemental disclosures of cash flow information:          
Cash paid during the period:          
Interest  $9,952   $7,841 
Income taxes, net  $468   $965 
           
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
 September 30,
   For the nine months ended
 September 30,
 
(In thousands)  2018   2017   2018   2017 
Net income  $5,346   $9,443   $16,105   $7,491 
Interest expense, net   2,409    2,802    8,013    7,192 
Income tax expense (benefit)   2,690    1,586    3,194    (473)
Depreciation and amortization   5,024    4,354    15,062    12,012 
(Gain) loss on foreign currency   (163)   (224)   1,430    (1,047)
Other (income) expense, net   (1)   (59)   118    97 
Stock-based compensation   1,271    3,057    3,256    9,464 
National Geographic fee amortization   727    727    2,181    2,180 
Reorganization costs   31    29    324    346 
Debt refinancing costs   -    -    997    - 
Executive severance costs   (215)   1,400    71    1,400 
Adjusted EBITDA  $17,119   $23,115   $50,751   $38,662 

 

Reconciliation of Operating Income to Adjusted EBITDA

Lindblad Segment

 

   For the three months ended
 September 30,
   For the nine months ended
 September 30,
 
(In thousands)  2018   2017   2018   2017 
Operating income  $8,209   $12,070   $26,755   $12,387 
Depreciation and amortization   4,645    3,994    13,954    10,989 
Stock-based compensation   1,271    3,057    3,256    9,464 
National Geographic fee amortization   727    727    2,181    2,180 
Reorganization costs   31    29    324    346 
Debt refinancing costs   -    -    997    - 
Executive severance costs   (215)   1,400    71    1,400 
Adjusted EBITDA  $14,668   $21,277   $47,538   $36,766 

 

Reconciliation of Operating Income to Adjusted EBITDA            

Natural Habitat Segment              

 

   For the three months ended
 September 30,
   For the nine months ended
 September 30,
 
(In thousands)  2018   2017   2018   2017 
Operating income  $2,072   $1,478   $2,105   $873 
Depreciation and amortization   379    360    1,108    1,023 
Adjusted EBITDA  $2,451   $1,838   $3,213   $1,896 

 

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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 nine months ended
September 30,
 
   2018   2017 
Net cash provided by operating activities  $39,258   $29,446 
Less: purchases of property and equipment   (45,510)   (44,089)
Free Cash Flow  $(6,252)  $(14,643)

 

Guest Metrics - Lindblad Segment                

 

   For the three months ended
September 30,
   For the nine months ended
September 30,
 
   2018   2017   2018   2017 
Available Guest Nights   55,741    56,398    160,575    142,291 
Guest Nights Sold   50,993    51,122    145,714    124,951 
Occupancy   91.5%   90.6%   90.7%   87.8%
Maximum Guests   7,137    7,518    20,388    17,727 
Number of Guests   6,582    6,846    18,553    15,758 
Voyages   93    97    269    244 

  

Calculation of Gross Yield and Net Yield              

Lindblad Segment              

 

   For the three months ended
September 30,
   For the nine months ended
September 30,
 
   2018   2017   2018   2017 
Guest ticket revenues  $58,187   $61,715   $174,699   $147,504 
Other tour revenues   6,320    5,736    19,817    20,387 
Tour Revenues   64,507    67,451    194,516    167,891 
Less: Orion Insurance Proceeds   -    (248)   -    (2,148)
Adjusted Tour Revenues   64,507    67,203    194,516    165,743 
Less: Commissions   (5,055)   (4,559)   (14,977)   (12,321)
Less: Other tour expenses   (4,673)   (3,532)   (12,952)   (10,622)
Net Revenue  $54,779   $59,112   $166,587   $142,800 
Available Guest Nights   55,741    56,398    160,575    142,291 
Gross Yield  $1,157   $1,192   $1,211   $1,165 
Net Yield   983    1,048    1,037    1,004 

 

10

 

 

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
September 30,
   For the nine months ended
September 30,
 
   2018   2017   2018   2017 
Cost of tours  $29,647   $27,374   $85,837   $76,915 
Plus: Selling and marketing   10,754    10,358    31,699    28,629 
Plus: General and administrative   11,252    13,656    36,271    38,972 
Gross Cruise Cost   51,653    51,388    153,807    144,516 
Less: Commission expense   (5,055)   (4,559)   (14,977)   (12,321)
Less: Other tour expenses   (4,673)   (3,532)   (12,952)   (10,622)
Net Cruise Cost   41,925    43,297    125,878    121,573 
Less: Fuel expense   (2,168)   (1,894)   (6,876)   (4,858)
Net Cruise Cost Excluding Fuel   39,757    41,403    119,002    116,715 
Non-GAAP Adjustments:                    
Stock-based compensation   (1,271)   (3,057)   (3,256)   (9,464)
National Geographic fee amortization   (727)   (727)   (2,181)   (2,180)
Reorganization costs   (31)   (29)   (324)   (346)
Debt refinancing costs   -    -    (997)   - 
Executive severance costs   215    (1,400)   (71)   (1,400)
Adjusted Net Cruise Cost Excluding Fuel  $37,943   $36,190   $112,173   $103,325 
Adjusted Net Cruise Cost  $40,111   $38,084   $119,050   $108,183 
Available Guest Nights   55,741    56,398    160,575    142,291 
Gross Cruise Cost per Available Guest Night  $927   $911   $958   $1,016 
Net Cruise Cost per Available Guest Night   752    768    784    854 
Net Cruise Cost Excl. Fuel per Available Guest Night   713    734    741    820 
Adj. Net Cruise Cost Excl. Fuel per Avail. Guest Night   681    642    699    726 
Adjusted Net Cruise Cost per Available Guest Night   720    675    741    760 

 

11

 

 

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, 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, 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 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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