Lindblad Expeditions (LIND) - 2021 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements (Unaudited) This section presents the unaudited condensed consolidated financial statements, reflecting performance for the three and six months ended June 30, 2021, amidst operations resumption and acquisitions Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheets (In thousands) | Item | As of June 30, 2021 | As of December 31, 2020 | Change | % Change | | :-------------------------------- | :------------------- | :-------------------- | :----- | :------- | | Total Assets | $799,297 | $757,449 | $41,848 | 5.5% | | Total Liabilities | $735,710 | $631,172 | $104,538 | 16.6% | | Unearned passenger revenues | $203,466 | $120,737 | $82,729 | 68.5% | | Total Stockholders' Equity | $(32,894) | $34,958 | $(67,852) | -194.1% | - The company's total assets increased by $41.8 million, or 5.5%, from December 31, 2020, to June 30, 2021, primarily driven by an increase in restricted cash and property and equipment, net[10] - Total liabilities saw a significant increase of $104.5 million, or 16.6%, largely due to a substantial rise in unearned passenger revenues, reflecting increased bookings for future travel as operations resumed[10] - Stockholders' equity decreased significantly from $34.9 million to a deficit of $(32.9) million, primarily due to accumulated deficit from net losses[10] Condensed Consolidated Statements of Operations Condensed Consolidated Statements of Operations (In thousands, except per share data) | Item | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------- | :--------------- | | Tour revenues | $15,266 | $(268) | $15,534 | NM | | Operating loss | $(32,588) | $(34,746) | $2,158 | 6.2% | | Net loss | $(35,735) | $(39,923) | $4,188 | 10.5% | | Basic EPS | $(0.71) | $(0.80) | $0.09 | 11.3% | | Diluted EPS | $(0.71) | $(0.80) | $0.09 | 11.3% | | Item | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :--------------------------------------- | :----------------------------- | :----------------------------- | :----------- | :--------------- | | Tour revenues | $17,047 | $80,971 | $(63,924) | -78.9% | | Operating loss | $(63,652) | $(32,495) | $(31,157) | -96.0% | | Net loss | $(69,595) | $(42,394) | $(27,201) | -64.2% | | Basic EPS | $(1.38) | $(0.84) | $(0.54) | -64.3% | | Diluted EPS | $(1.38) | $(0.84) | $(0.54) | -64.3% | - For the three months ended June 30, 2021, tour revenues significantly increased to $15.3 million from a negative $(0.3) million in the prior year, reflecting the restart of expeditions and recent acquisitions[13] - Operating loss improved by $2.2 million (6.2%) for the three months ended June 30, 2021, compared to the same period in 2020, while net loss also improved by $4.2 million (10.5%)[13] - For the six months ended June 30, 2021, tour revenues decreased by $63.9 million (78.9%) to $17.0 million, and net loss increased by $27.2 million (64.2%) to $(69.6) million, primarily due to widespread cancellations in early 2021 compared to partial operations in early 2020[13] Condensed Consolidated Statements of Comprehensive Loss Condensed Consolidated Statements of Comprehensive Loss (In thousands) | Item | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------- | :--------------- | | Net loss | $(35,735) | $(39,923) | $4,188 | 10.5% | | Total other comprehensive income (loss) | $165 | $9,256 | $(9,091) | -98.2% | | Total comprehensive loss | $(35,570) | $(30,667) | $(4,903) | -16.0% | | Item | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :--------------------------------------- | :----------------------------- | :----------------------------- | :----------- | :--------------- | | Net loss | $(69,595) | $(42,394) | $(27,201) | -64.2% | | Total other comprehensive income (loss) | $659 | $(4,143) | $4,802 | NM | | Total comprehensive loss | $(68,936) | $(46,537) | $(22,399) | -48.1% | - For the three months ended June 30, 2021, total other comprehensive income decreased significantly by $9.1 million (98.2%) compared to the prior year, primarily due to lower net unrealized gains from cash flow hedges[15] - For the six months ended June 30, 2021, total other comprehensive income shifted from a loss of $(4.1) million in 2020 to a gain of $0.7 million, driven by net unrealized gains on cash flow hedges[15] Condensed Consolidated Statements of Stockholders' Equity Condensed Consolidated Statements of Stockholders' Equity (In thousands) | Item | Balance as of January 1, 2021 | Balance as of June 30, 2021 | Change | | :--------------------------------------- | :---------------------------- | :-------------------------- | :----- | | Common Stock (Shares) | 49,905,512 | 50,139,831 | 234,319 | | Common Stock (Amount) | $5 | $5 | $0 | | Additional Paid-In Capital | $48,127 | $50,777 | $2,650 | | Accumulated Deficit | $(11,572) | $(82,733) | $(71,161) | | Accumulated Other Comprehensive Loss | $(1,602) | $(943) | $659 | | Total Stockholders' Equity | $34,958 | $(32,894) | $(67,852) | - Total stockholders' equity decreased by $67.9 million from January 1, 2021, to June 30, 2021, primarily due to a significant increase in accumulated deficit from net losses and Series A preferred stock dividends[18] - Additional paid-in capital increased by $2.7 million, driven by stock-based compensation and shares issued for acquisition, partially offset by issuance of stock for equity compensation plans[18] Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows (In thousands) | Item | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :--------------------------------------- | :----------------------------- | :----------------------------- | :----------- | :--------------- | | Net cash provided by (used in) operating activities | $21,838 | $(36,762) | $58,600 | NM | | Net cash used in investing activities | $(32,416) | $(152,031) | $119,615 | 78.7% | | Net cash provided by financing activities | $9,609 | $181,765 | $(172,156) | -94.7% | | Net decrease in cash, cash equivalents and restricted cash | $(969) | $(7,028) | $6,059 | 86.2% | - Net cash provided by operating activities significantly improved to $21.8 million for the six months ended June 30, 2021, compared to a net cash outflow of $(36.8) million in the prior year, primarily due to increased guest deposits as operations resumed[22] - Net cash used in investing activities decreased by $119.6 million (78.7%) to $(32.4) million, mainly due to lower payments for vessel construction compared to the completion of the National Geographic Endurance in 2020, partially offset by acquisitions[22] - Net cash provided by financing activities decreased by $172.2 million (94.7%) to $9.6 million, as 2020 included significant borrowings for vessel payments and revolving credit facility drawdowns not repeated in 2021[22] Notes to the Condensed Consolidated Financial Statements (Unaudited) NOTE 1 — BUSINESS AND BASIS OF PRESENTATION - Lindblad Expeditions Holdings, Inc. operates two reportable business segments: the Lindblad Segment (ship-based expeditions) and the Land Experiences Segment (Natural Habitat, DuVine, Off the Beaten Path brands)[24][25][26] - The Company resumed ship operations in June 2021, with eight of nine vessels providing expeditions by July 31, 2021, following COVID-19 related suspensions[32] - As of June 30, 2021, the Company had $160.1 million in unrestricted cash and $43.5 million in restricted cash, with a total debt position of $514.7 million, and was in compliance with all debt covenants[36] - The Company amended export credit agreements and term loan facilities in June and April 2021, respectively, to extend deferrals of amortization payments and waivers of total net leverage ratio covenants through March 2022, and increased interest rate spreads[39][40] NOTE 2 — EARNINGS PER SHARE - For the three and six months ended June 30, 2021 and 2020, basic and diluted net loss per share were the same due to net losses from operations, which made potential common shares anti-dilutive[49] Undistributed Loss Per Share Available to Stockholders (In thousands, except share and per share data) | Item | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to Lindblad Expeditions Holdings, Inc. | $(35,298) | $(39,658) | $(68,539) | $(41,593) | | Series A redeemable convertible preferred stock dividend | $1,318 | $- | $2,622 | $- | | Undistributed loss available to stockholders | $(36,616) | $(39,658) | $(71,161) | $(41,593) | | Basic EPS | $(0.71) | $(0.80) | $(1.38) | $(0.84) | | Diluted EPS | $(0.71) | $(0.80) | $(1.38) | $(0.84) | - Approximately 0.8 million restricted shares, 1.5 million options, and 9.4 million common shares issuable upon conversion of Preferred Stock were excluded from diluted EPS calculations for the three and six months ended June 30, 2021, as they were anti-dilutive[49] NOTE 3 — REVENUES - Unearned passenger revenues, representing guest deposits, increased from $73.3 million as of January 1, 2021, to $140.8 million as of June 30, 2021, with $71.1 million in additional contract liabilities during the period[52] Disaggregation of Tour Revenues by Sales Channel (Unaudited) | Sales Channel | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | | :-------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Direct | 59% | 0% | 58% | 42% | | National Geographic | 11% | 0% | 10% | 18% | | Agencies | 19% | 0% | 19% | 24% | | Affinity | 2% | 0% | 2% | 5% | | Guest ticket revenue | 91% | 0% | 89% | 89% | | Other tour revenue | 9% | 0% | 11% | 11% | | Total Tour Revenues | 100% | 0% | 100% | 100% | - For the three and six months ended June 30, 2021, direct sales accounted for 59% and 58% of guest ticket revenue, respectively, a significant shift from 0% in the prior year due to the resumption of operations[52] NOTE 4 — FINANCIAL STATEMENT DETAILS Restricted Cash (In thousands) | Item | As of June 30, 2021 | As of December 31, 2020 | Change | % Change | | :--------------------------------------- | :------------------ | :-------------------- | :----- | :------- | | Federal Maritime Commission escrow | $32,277 | $13,856 | $18,421 | 133.0% | | Credit card processor reserves | $9,992 | $1,945 | $8,047 | 413.7% | | Total restricted cash | $43,465 | $16,984 | $26,481 | 155.9% | - Restricted cash increased by $26.5 million (155.9%) from December 31, 2020, to June 30, 2021, primarily due to higher Federal Maritime Commission escrow and credit card processor reserves[53] Prepaid Expenses and Other Current Assets (In thousands) | Item | As of June 30, 2021 | As of December 31, 2020 | Change | % Change | | :--------------------------------------- | :------------------ | :-------------------- | :----- | :------- | | Prepaid tour expenses | $14,591 | $5,630 | $8,961 | 159.2% | | Total prepaid expenses | $27,819 | $17,014 | $10,805 | 63.5% | - Prepaid expenses and other current assets increased by $10.8 million (63.5%), largely driven by a 159.2% rise in prepaid tour expenses, indicating preparation for resumed operations[54] Accounts Payable and Accrued Expenses (In thousands) | Item | As of June 30, 2021 | As of December 31, 2020 | Change | % Change | | :--------------------------------------- | :------------------ | :-------------------- | :----- | :------- | | Accounts payable | $9,115 | $5,285 | $3,830 | 72.5% | | Refunds and commissions payable | $2,568 | $1,803 | $765 | 42.4% | | Total accounts payable and accrued expenses | $28,093 | $22,341 | $5,752 | 25.7% | - Accounts payable and accrued expenses increased by $5.8 million (25.7%), with accounts payable rising by 72.5% and refunds and commissions payable by 42.4%[54] NOTE 5 — LONG-TERM DEBT Total Long-Term Debt (In thousands) | Item | As of June 30, 2021 | As of December 31, 2020 | Change | % Change | | :--------------------------------------- | :------------------ | :-------------------- | :----- | :------- | | Total long-term debt (Principal) | $514,722 | $496,492 | $18,230 | 3.7% | | Total long-term debt, non-current | $489,880 | $471,359 | $18,521 | 3.9% | | Deferred financing costs charged to interest expense (6 months) | $1,500 | $1,000 | $500 | 50.0% | - Total long-term debt increased by $18.2 million (3.7%) to $514.7 million as of June 30, 2021, primarily due to additional drawdowns under the Second Export Credit Agreement[56][63] - The Company amended its credit agreements in April and June 2021 to extend the waiver of the total net leverage ratio covenant through March 31, 2022, and defer scheduled amortization payments for the first export credit facility through December 2021[58][64] - Interest rates on the Term Facility (excluding Main Street Loan) and Revolving Facility increased by 50 basis points in April 2021, and export credit facilities also saw a 50 basis point increase in June 2021[58][60][64] NOTE 6 — FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS - The Company uses foreign exchange forward contracts to manage currency risk and interest rate caps to manage floating rate corporate debt risk, designating them as cash flow hedges[68][70] Estimated Fair Values of Derivative Instruments (In thousands) | Item | As of June 30, 2021 (Liability) | As of December 31, 2020 (Liability) | Change | | :--------------------------------------- | :------------------------------ | :-------------------------------- | :----- | | Foreign exchange forward (cash flow hedging) | $1,673 | $2,008 | $(335) | | Foreign exchange forward (not cash flow hedging) | $- | $- | $0 | | Item | As of June 30, 2021 (Asset) | As of December 31, 2020 (Asset) | Change | | :--------------------------------------- | :---------------------------- | :------------------------------ | :----- | | Foreign exchange forward (not cash flow hedging) | $1,033 | $953 | $80 | - For the six months ended June 30, 2021, a loss of $(496) thousand was recognized for foreign exchange forward cash flow hedges, compared to a gain of $4.0 million in the prior year[73] NOTE 7 — STOCKHOLDERS' EQUITY - The stock and warrant repurchase plan was suspended in March 2020 due to COVID-19 and restrictions from the Main Street Expanded Loan Facility program. The remaining balance for the plan was $12.0 million as of June 30, 2021[75] - The Company issued 85,000 shares of Series A Redeemable Convertible Preferred Stock in August 2020 for $85.0 million, carrying a 6.00% annual dividend payable in-kind for the first two years[76] - As of June 30, 2021, the Preferred Stock could be converted into approximately 9.4 million shares of common stock at a conversion price of $9.50 per share[76] NOTE 8 — STOCK BASED COMPENSATION - Stock-based compensation expense was $1.1 million for the three months and $2.6 million for the six months ended June 30, 2021, an increase from $0.7 million and $1.6 million, respectively, in the prior year[79] - During the six months ended June 30, 2021, the Company granted 170,870 restricted stock units (RSUs) and 50,072 market performance share units (MSUs)[80][81] - The new CEO, Mr. Berle, was granted 1.0 million options and 58,452 RSUs in May and June 2021, respectively, as part of his compensation agreement[82] NOTE 9 — RELATED PARTY TRANSACTIONS - The Company has a related party transaction with Mr. Bressler, founder of Natural Habitat, through an unsecured promissory note issued in connection with the Natural Habitat acquisition[85] NOTE 10 — INCOME TAXES - The Company's effective tax rate for the three and six months ended June 30, 2021, was a benefit of 6.2% and 6.9%, respectively, compared to 6.9% and 10.1% for the same periods in 2020[88] - The change in effective tax rate is primarily due to the timing of losses in the first quarter and the expected amount of income for the full year 2021 compared to 2020, influenced by the COVID-19 pandemic[88] - As of June 30, 2021, and December 31, 2020, the Company had no liability for unrecognized tax benefits[88] NOTE 11 — ACQUISITIONS - In Q1 2021, the Company acquired 90.1% of Off the Beaten Path and 70% of DuVine Cycling + Adventure LLC for an aggregate purchase price of $10.6 million, including $1.8 million in Company stock[90][91] - These acquisitions contributed aggregate revenue of $3.2 million for the three months and $3.5 million for the six months ended June 30, 2021[91] - The Company preliminarily recorded approximately $6.5 million in intangible assets (tradenames and customer lists) and $11.5 million in goodwill related to these acquisitions, subject to final valuations[91] NOTE 12 — COMMITMENTS AND CONTINGENCIES - The Company is constructing a second polar ice class vessel, the National Geographic Resolution, with a total purchase price of 1,291.0 million NOK (locked in at $153.5 million), scheduled for delivery in Q4 2021[93] - Redeemable noncontrolling interests exist for Natural Habitat (19.9% held by Mr. Bressler), Off the Beaten Path (19.9% held by Mr. Lawrence), and DuVine (30% held by Mr. Levine), each with put/call arrangements[94][95][96] Future Minimum Payments on Charter Agreements (In thousands) | Year | Amount | | :----------------------------- | :----- | | 2021 | $1,748 | | 2022 | $6,142 | | Total | $7,890 | NOTE 13 — SEGMENT INFORMATION Segment Tour Revenues (In thousands) | Segment | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :-------------------- | :------------------------------- | :------------------------------- | :----------- | :--------------- | | Lindblad | $6,680 | $(22) | $6,702 | NM | | Land Experiences | $8,586 | $(246) | $8,832 | NM | | Total | $15,266 | $(268) | $15,534 | NM | | Segment | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :-------------------- | :----------------------------- | :----------------------------- | :----------- | :--------------- | | Lindblad | $7,164 | $69,517 | $(62,353) | -89.7% | | Land Experiences | $9,883 | $11,454 | $(1,571) | -13.7% | | Total | $17,047 | $80,971 | $(63,924) | -78.9% | Segment Operating (Loss) Income (In thousands) | Segment | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :-------------------- | :------------------------------- | :------------------------------- | :----------- | :--------------- | | Lindblad | $(31,038) | $(31,641) | $603 | 1.9% | | Land Experiences | $(1,550) | $(3,105) | $1,555 | 50.1% | | Total | $(32,588) | $(34,746) | $2,158 | 6.2% | | Segment | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :-------------------- | :----------------------------- | :----------------------------- | :----------- | :--------------- | | Lindblad | $(58,335) | $(29,452) | $(28,883) | -98.1% | | Land Experiences | $(5,317) | $(3,043) | $(2,274) | -74.7% | | Total | $(63,652) | $(32,495) | $(31,157) | -96.0% | - For the three months ended June 30, 2021, both Lindblad and Land Experiences segments showed significant increases in tour revenues compared to the prior year, reflecting the restart of operations and recent acquisitions[106] - For the six months ended June 30, 2021, the Lindblad segment's tour revenues decreased by $62.4 million (89.7%), while the Land Experiences segment's tour revenues decreased by $1.6 million (13.7%), both impacted by COVID-19 related cancellations[106] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides a detailed analysis of the Company's financial condition and results for the three and six months ended June 30, 2021, highlighting COVID-19 impacts, operations resumption, acquisitions, and liquidity Business Overview - The Company provides expedition cruising (Lindblad brand) and land-based adventure travel (Natural Habitat, DuVine, Off the Beaten Path brands), focusing on immersive experiences with wildlife, nature, history, and culture[112][113][114][115][116][117] - The Lindblad segment operates a fleet of nine owned expedition ships and five seasonal charter vessels, with a new polar ice class vessel, the National Geographic Resolution, scheduled for Q4 2021 delivery[113] - The Company maintains a longstanding alliance with National Geographic, involving co-selling, co-marketing, branding, and expert participation in expeditions[113] 2021 Highlights - Ship operations resumed in June 2021, with eight of nine vessels providing expeditions by July 31, 2021, including launches in Alaska, Galapagos, and Iceland[119] - Export credit facilities were amended in June 2021 to defer $15.7 million in amortization payments through December 2021 and extend the waiver of the total net leverage ratio covenant through March 2022[120] - The Company completed the acquisitions of Off the Beaten Path and DuVine in Q1 2021, expanding its land-based travel offerings[122] Return to Fleet Operations and COVID-19 Business Update - The Company resumed ship operations in June 2021, with 8 of 9 vessels active by July 31, 2021, focusing on Alaska, Galapagos, and Iceland, while continuing to work with local authorities for other geographies[123] - Strategic advantages for safe deployment include small vessel size (48-148 passengers) allowing for controlled environments, efficient guest/crew testing, fully vaccinated crew, and remote expedition locations[124] - Cost reduction and cash preservation measures implemented in March 2020, such as reduced capital expenditures, payroll, and discretionary spending, continue to be applied as operating costs ramp up with resumed operations[126] Bookings Trends - Despite COVID-19 impacts, bookings for full year 2022 are 36% ahead of 2021 bookings (as of same date a year ago) and 37% ahead of 2020 bookings (as of same date two years ago)[127] - The Company has received over $174.0 million in new bookings for future travel since the beginning of 2021[127] - For cancelled or rescheduled 2021 voyages, the majority of guests have opted for future travel credits over full refunds[128] Balance Sheet and Liquidity - As of June 30, 2021, the Company held $160.1 million in unrestricted cash and $43.5 million in restricted cash, with a total debt of $514.7 million, and was in compliance with all debt covenants[129] - Key liquidity actions include drawing $15.5 million under the second export credit agreement in April 2021 and amending debt facilities to extend covenant waivers and defer amortization payments[130][132][133] - The Company raised $85.0 million in gross proceeds through the private placement of Redeemable Convertible Series A Preferred Stock in August 2020 and borrowed an incremental $85.0 million via the Main Street Expanded Loan Facility in December 2020[134][135] - The Company anticipates increased monthly cash usage as operations ramp up, but expects to meet obligations for the next 12 months based on current forecasts and actions[136][137] Financial Presentation - Tour revenues include guest ticket revenues and other tour revenues from excursions, accommodations, air transportation, and onboard services[143] - Cost of tours encompasses direct costs associated with revenues, payroll for shipboard/expedition personnel, food costs, fuel costs, and other tour expenses like land costs, port costs, and maintenance[143] - The Company uses non-GAAP financial measures like Adjusted EBITDA, Net Yields, Occupancy, and Net Cruise Costs to analyze performance, acknowledging they may not be comparable to other companies[141] - Lindblad brand tour revenues are mildly seasonal, typically larger in Q1 and Q3, while Natural Habitat, DuVine, and Off the Beaten Path are seasonal, with most revenues recorded in Q2 and Q3 (for DuVine/Off the Beaten Path) or Q3 and Q4 (for Natural Habitat)[156][158] Results of Operations - Consolidated Consolidated Results of Operations (In thousands) | Item | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------- | :--------------- | | Tour revenues | $15,266 | $(268) | $15,534 | NM | | Cost of tours | $19,391 | $12,721 | $6,670 | 52% | | General and administrative | $15,288 | $9,798 | $5,490 | 56% | | Selling and marketing | $4,962 | $3,406 | $1,556 | 46% | | Operating loss | $(32,588) | $(34,746) | $2,158 | 6% | | Net loss | $(35,735) | $(39,923) | $4,188 | 10% | | Item | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :--------------------------------------- | :----------------------------- | :----------------------------- | :----------- | :--------------- | | Tour revenues | $17,047 | $80,971 | $(63,924) | -79% | | Cost of tours | $27,670 | $54,913 | $(27,243) | -50% | | General and administrative | $29,100 | $27,025 | $2,075 | 8% | | Selling and marketing | $7,467 | $16,285 | $(8,818) | -54% | | Operating loss | $(63,652) | $(32,495) | $(31,157) | -96% | | Net loss | $(69,595) | $(42,394) | $(27,201) | -64% | - Consolidated tour revenues for the three months ended June 30, 2021, increased by $15.5 million, driven by the restart of expeditions and the inclusion of Off the Beaten Path and DuVine acquisitions[161] - For the six months ended June 30, 2021, consolidated tour revenues decreased by $63.9 million, primarily due to widespread cancellations in early 2021 compared to partial operations in early 2020[162] - Operating loss for the three months ended June 30, 2021, improved by $2.2 million, while for the six months, it worsened by $31.2 million, reflecting the uneven recovery from COVID-19 impacts[159] Results of Operations – Segments Segment Tour Revenues (In thousands) | Segment | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :-------------------- | :------------------------------- | :------------------------------- | :----------- | :--------------- | | Lindblad | $6,680 | $(22) | $6,702 | NM | | Land Experiences | $8,586 | $(246) | $8,832 | NM | | Segment | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :-------------------- | :----------------------------- | :----------------------------- | :----------- | :--------------- | | Lindblad | $7,164 | $69,517 | $(62,353) | -89.7% | | Land Experiences | $9,883 | $11,454 | $(1,571) | -13.7% | Segment Operating (Loss) Income (In thousands) | Segment | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :-------------------- | :------------------------------- | :------------------------------- | :----------- | :--------------- | | Lindblad | $(31,038) | $(31,641) | $603 | 1.9% | | Land Experiences | $(1,550) | $(3,105) | $1,555 | 50.1% | | Segment | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :-------------------- | :----------------------------- | :----------------------------- | :----------- | :--------------- | | Lindblad | $(58,335) | $(29,452) | $(28,883) | -98.1% | | Land Experiences | $(5,317) | $(3,043) | $(2,274) | -74.7% | - The Lindblad segment's tour revenues for the three months ended June 30, 2021, increased by $6.7 million due to the restart of expeditions, while for the six months, they decreased by $62.4 million due to earlier cancellations[177][178] - The Land Experiences segment's tour revenues for the three months ended June 30, 2021, increased by $8.8 million, benefiting from additional trips and the Off the Beaten Path and DuVine acquisitions[181] Adjusted EBITDA – Consolidated Consolidated Adjusted EBITDA (In thousands) | Item | Three Months Ended June 30, 2021 | Three Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :-------------------- | :------------------------------- | :------------------------------- | :----------- | :--------------- | | Net loss | $(35,735) | $(39,923) | $4,188 | 10% | | Adjusted EBITDA | $(22,953) | $(25,477) | $2,524 | 10% | | Item | Six Months Ended June 30, 2021 | Six Months Ended June 30, 2020 | Change (YoY) | % Change (YoY) | | :-------------------- | :----------------------------- | :----------------------------- | :----------- | :--------------- | | Net loss | $(69,595) | $(42,394) | $(27,201) | -64% | | Adjusted EBITDA | $(43,770) | $(14,899) | $(28,871) | -194% | - Consolidated Adjusted EBITDA improved by $2.5 million (10%) for the three months ended June 30, 2021, reaching $(23.0) million, compared to $(25.5) million in the prior year[186] - For the six months ended June 30, 2021, Consolidated Adjusted EBITDA decreased by $28.9 million (194%) to $(43.8) million, reflecting the prolonged impact of COVID-19 on operations[186] Liquidity and Capital Resources - Net cash provided by operating activities was $21.8 million for the six months ended June 30, 2021, a $58.6 million increase from the prior year, primarily due to cash received from guest deposits[192] - Net cash used in investing activities decreased by $119.6 million to $32.4 million, mainly due to lower payments for the National Geographic Endurance completion in 2020, partially offset by 2021 acquisitions[193] - Net cash provided by financing activities decreased by $172.3 million to $9.6 million, as 2020 included significant debt borrowings not repeated in 2021[194] Future Financing Activities Obligations (In thousands) | Item | Total | Current | 1-2 years | 3-4 years | Thereafter | | :--------------------------------------- | :------ | :------ | :-------- | :-------- | :--------- | | Export Credit Agreement | $107,695 | $6,450 | $25,802 | $39,320 | $36,123 | | Second Export Credit Agreement | $76,604 | $3,192 | $12,767 | $12,767 | $47,878 | | Total | $184,299 | $9,642 | $38,569 | $52,087 | $84,001 | ITEM 3. Quantitative and Qualitative Disclosures about Market Risk This section details the Company's exposure to market risks, primarily interest rate risk on variable rate debt and foreign currency exchange rate risk on ship construction contracts - The Company is exposed to interest rate risk on its variable rate debt instruments; a hypothetical 100 basis point increase in LIBOR would impact annual interest expense by approximately $3.8 million[214] - Interest rate cap agreements hedge $100.0 million of outstanding variable rate debt as of June 30, 2021[214] - Foreign currency forward contracts hedge exposure to Norwegian Kroner (NOK) for ship construction contracts. A hypothetical 10% strengthening of NOK would result in a $5.0 million gain in other comprehensive income, while a 10% weakening would result in a $4.1 million loss[215] ITEM 4. Controls and Procedures This section outlines management's assessment of the effectiveness of disclosure controls and procedures and internal control over financial reporting, addressing a previously identified material weakness - Management, with CEO and CFO participation, assessed the effectiveness of internal control over financial reporting as effective as of June 30, 2021, based on the COSO framework[220] - A material weakness identified at December 31, 2020, related to inadequate documentation of review over certain accounting journal entries and account reconciliations, has been remediated[223][225] - Remediation efforts included additional communications and training, enhanced documentation for journal entries and balance sheet reconciliations, and additional layers of examination[224][225] PART II. OTHER INFORMATION ITEM 1. Legal Proceedings This section states that the Company is involved in various claims, legal actions, and regulatory proceedings in the ordinary course of business, which are expected to be covered by protection and indemnity insurance - The Company is involved in various claims, legal actions, and regulatory proceedings arising in the ordinary course of business[227] - Protection and indemnity insurance is expected to cover any damages from these legal matters[227] ITEM 1A. Risk Factors This section refers readers to the 'Risk Factors' section in the Company's 2020 Annual Report on Form 10-K for a detailed discussion of risks that could materially affect the business - The Company operates in a rapidly changing environment with various risks that could materially affect its business, financial condition, or future results[228] - Readers are directed to Item 1A. Risk Factors in the 2020 Annual Report on Form 10-K for a comprehensive discussion of these risks[228] ITEM 2. Unregistered Sale of Equity Securities and Use of Proceeds This section reports that there were no unregistered sales of equity securities during the quarter ended June 30, 2021, and provides an update on the Company's stock and warrant repurchase plan - No unregistered sales of equity securities occurred during the quarter ended June 30, 2021[229] - The stock and warrant repurchase plan, with a remaining balance of $12.0 million as of June 30, 2021, was suspended in March 2020 due to COVID-19 and restrictions from the Main Street Expanded Loan Facility program[230] Shares of Common Stock Repurchased (April 1 - June 30, 2021) | Period | Total number of shares purchased | Average price paid per share | | :--------------------------------------- | :------------------------------- | :--------------------------- | | April 1 through April 30, 2021 | 2,754 | $17.56 | | June 1 through June 30, 2021 | 10,918 | $18.03 | | Total | 13,672 | - | - The repurchased shares (13,672 total for April-June 2021) relate to shares withheld from vesting of stock-based compensation awards for employee income tax withholding[231] ITEM 3. Defaults Upon Senior Securities This section states that there are no defaults upon senior securities to report ITEM 4. Mine Safety Disclosures This section states that mine safety disclosures are not applicable to the Company ITEM 5. Other Information This section indicates that there is no other information to report ITEM 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including the 2021 Long Term Incentive Plan, credit agreement amendments, and CEO/CFO certifications - Exhibits include the Lindblad Expeditions Holdings, Inc. 2021 Long Term Incentive Plan (Exhibit 10.1)[235] - Amendments to the Senior Secured Credit Agreements (Exhibits 10.2 and 10.3) dated January 8, 2018, and April 8, 2019, respectively, are filed[235] - Certifications of the Chief Executive Officer and Chief Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2) are included[235] - Inline XBRL Instance Document, Taxonomy Extension Schema, Calculation Linkbase, Definition Linkbase, Label Linkbase, and Presentation Linkbase Documents (Exhibits 101.INS to 101.PRE) are provided[235] SIGNATURES This section contains the registrant's signature by its Chief Executive Officer, Dolf Berle, certifying the report's filing on August 4, 2021 - The report was signed on behalf of Lindblad Expeditions Holdings, Inc. by Dolf Berle, Chief Executive Officer, on August 4, 2021[237]