Lindblad Expeditions (LIND) - 2023 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Financial Statements (Unaudited) Unaudited Q1 2023 financial statements reflect a significant turnaround with net income, positive operating cash flow, and detailed segment performance Condensed Consolidated Balance Sheets As of March 31, 2023, total assets were $774.3 million, total liabilities $856.5 million, resulting in a $178.1 million stockholders' deficit Condensed Consolidated Balance Sheet Highlights (in thousands) | Balance Sheet Item | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $83,984 | $87,177 | | Total current assets | $175,926 | $183,319 | | Total assets | $774,268 | $787,975 | | Unearned passenger revenues | $249,633 | $245,101 | | Total current liabilities | $328,012 | $341,120 | | Total liabilities | $856,501 | $873,621 | | Total stockholders' deficit | $(178,142) | $(182,675) | Condensed Consolidated Statements of Operations Q1 2023 saw a significant financial turnaround with net income of $0.8 million, a 111% increase in tour revenues, and positive operating income Q1 2023 vs Q1 2022 Performance (in thousands, except per share data) | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Tour revenues | $143,395 | $67,846 | | Operating income (loss) | $12,466 | $(34,245) | | Net income (loss) | $778 | $(42,148) | | Basic & Diluted Loss Per Share | $(0.01) | $(0.85) | Condensed Consolidated Statements of Cash Flows Q1 2023 net cash from operations was $2.1 million, with $8.7 million from investing activities and $6.1 million used in financing activities Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net cash provided by operating activities | $2,058 | $5,162 | | Net cash provided by (used in) investing activities | $8,738 | $(7,522) | | Net cash (used in) provided by financing activities | $(6,096) | $14,529 | Notes to the Condensed Consolidated Financial Statements Notes detail two operating segments, Lindblad and Land Experiences, $547.6 million in long-term debt, and a May 2023 debt refinancing - The company operates two reportable business segments: Lindblad (ship-based expeditions) and Land Experiences (land-based tours through brands like Natural Habitat, DuVine, Off the Beaten Path, and Classic Journeys)[21][22] Segment Tour Revenues (in thousands) | Segment | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Lindblad | $115,498 | $50,274 | | Land Experiences | $27,897 | $17,572 | | Total | $143,395 | $67,846 | - As of March 31, 2023, total long-term debt stood at $547.6 million, primarily composed of 6.75% Notes and two Export Credit Agreements[35] - In May 2023, the company issued $275.0 million of 9.00% senior secured notes due 2028, with proceeds used to prepay outstanding borrowings under its export credit facilities[76] Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes strong Q1 2023 performance to increased tour revenues and Adjusted EBITDA, with robust future bookings and sufficient liquidity - In Q1 2023, the company generated $143.4 million in revenue, $12.5 million in operating income, and $27.2 million in Adjusted EBITDA[92] - Bookings for the full year 2023 are 45% ahead of bookings for 2019 at the same point in 2019, indicating strong future demand[93] Consolidated Results Summary (in thousands) | Metric | Q1 2023 | Q1 2022 | Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Tour revenues | $143,395 | $67,846 | $75,549 | 111% | | Operating income (loss) | $12,466 | $(34,245) | $46,711 | 136% | | Net income (loss) | $778 | $(42,148) | $42,926 | 102% | Results of Operations — Segments Both Lindblad and Land Experiences segments achieved significant revenue growth and swung to operating income in Q1 2023 Segment Operating Performance (in thousands) | Segment | Q1 2023 Revenue | Q1 2022 Revenue | Q1 2023 Operating Income (Loss) | Q1 2022 Operating Income (Loss) | | :--- | :--- | :--- | :--- | :--- | | Lindblad | $115,498 | $50,274 | $12,118 | $(33,569) | | Land Experiences | $27,897 | $17,572 | $348 | $(676) | Lindblad Segment Guest Metrics | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Available Guest Nights | 83,184 | 48,546 | | Occupancy | 81% | 66% | | Net Yield per Available Guest Night | $1,205 | $739 | Adjusted EBITDA — Consolidated Consolidated Adjusted EBITDA for Q1 2023 significantly improved to $27.2 million from a negative $21.2 million in Q1 2022 Adjusted EBITDA Reconciliation (in thousands) | Line Item | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Net income (loss) | $778 | $(42,148) | | Adjustments (Interest, Tax, D&A, etc.) | $26,408 | $20,928 | | Adjusted EBITDA | $27,186 | $(21,220) | Liquidity and Capital Resources As of March 31, 2023, the company held $84.0 million in unrestricted cash and refinanced debt with $275.0 million in new notes - As of March 31, 2023, the Company had $84.0 million in unrestricted cash and cash equivalents and $36.7 million in restricted cash[132] - In February 2022, the company issued $360.0 million of 6.75% senior secured notes due 2027 and entered into a new $45.0 million revolving credit facility[137][139] - In April 2023, the company issued $275.0 million of 9.00% senior secured notes due 2028, using the proceeds to pay down borrowings under its First and Second Export Credit Agreements[144] Quantitative and Qualitative Disclosures about Market Risk The company's primary market risk is interest rate exposure, with a 100 basis point LIBOR increase impacting annual interest expense by $2.0 million - A hypothetical 100 basis point increase in LIBOR interest rates would impact annual interest expense by approximately $2.0 million[152] Controls and Procedures Management confirmed effective disclosure controls and procedures as of March 31, 2023, with no material changes to internal controls - The Company's principal executive officer and principal financial officer concluded that disclosure controls and procedures were effective as of March 31, 2023[153] - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[154] PART II. OTHER INFORMATION Legal Proceedings The company is involved in ordinary course legal claims, maintaining insurance coverage for potential damages - The Company is involved in various claims and legal actions in the ordinary course of business and has insurance coverage for potential damages[155] Risk Factors No material changes to the company's risk factors have occurred since the 2022 Annual Report disclosure - The risks and uncertainties discussed in the 2022 Annual Report remain the most important for consideration[156] Unregistered Sale of Equity Securities and Use of Proceeds No unregistered equity sales occurred; the stock repurchase plan has a remaining authorized amount of $12.0 million - The company's stock repurchase plan has a remaining balance of $12.0 million for future repurchases as of March 31, 2023[158] - No unregistered sales of equity securities occurred during the quarter ended March 31, 2023[157] Defaults Upon Senior Securities This section is not applicable for the current reporting period Mine Safety Disclosures This section is not applicable for the current reporting period Other Information This section is not applicable for the current reporting period Exhibits This section lists all exhibits filed with the Form 10-Q, including supplemental indentures and officer certifications