Lindblad Expeditions (US:LIND)2024-08-08 18:20Financial Data and Key Metrics - Total revenue for Q2 2024 was $136.5 million, a 9% increase compared to Q2 2023 [20] - Lindblad segment tour revenues increased by 6% to $93.1 million, driven by a 4% increase in available guest nights, a 6% increase in net yield per available guest night to $1,094, and an increase in occupancy to 78% from 74% [20] - Land Experience segment revenues grew by 16% to $43.4 million, driven by higher guest counts and pricing across various destinations [21] - Adjusted EBITDA for Q2 2024 was $10.4 million, up $4.2 million year-over-year, with Lindblad segment adjusted EBITDA increasing by $3.9 million and Land Experience segment adjusted EBITDA increasing by $300,000 [22] - Total cash as of June 30, 2024, was $217.7 million, up from $187.3 million at the end of 2023, primarily due to increased bookings for future travel [25] Business Line Performance - Lindblad segment occupancy increased to 78% in Q2 2024, up from 74% in Q2 2023, with each percentage point increase adding $4-5 billion in additional EBITDA annually [6] - Land Experience sector revenue grew by 16% year-over-year, with Natural Habitat bookings up over 20% compared to the same period in 2023 [14] - The company acquired two additional ships for the Galapagos, increasing inventory by 45% and expected to accelerate first-time travelers by 3,000 annually [13] Market Performance - Bookings for future travel were up 17% compared to the same period in 2023, with in-year bookings expanding by 6% [5] - The Middle East conflict impacted the Egypt program and led to the cancellation of two Mediterranean voyages, while instability in mainland Ecuador briefly affected Galapagos voyages [7][20] - The company is launching sales in Great Britain this quarter and plans further expansions into Europe later in 2024 [10] Strategic Direction and Industry Competition - The company is focused on returning to historical occupancy levels by rebuilding its past guest base, which is critical for longer and more esoteric itineraries [6] - A partnership with National Geographic and Disney aims to leverage brand strength, distribution, and execution capabilities to drive growth through at least 2040 [8][9] - The company is updating its consumer brand to "National Geographic Lindblad Expeditions" to increase consumer intent, search efficiency, and conversion, especially in international markets [9] Management Commentary on Operating Environment and Future Outlook - Management remains optimistic about 2024, expecting total revenue between $610 million and $630 million and adjusted EBITDA between $88 million and $98 million [27] - External influences, such as geopolitical conflicts and regional instability, are expected to continue impacting operations, but the business model is designed to account for such disruptions [7] - The company is investing in technology to improve efficiency and reduce costs, with recent IT system upgrades already streamlining internal processes and enhancing the guest experience [14][24] Other Important Information - The company added two new board members, Annette Reavis and Andy Stuart, bringing diverse experience in human resources and the cruise industry, respectively [4][5] - The acquisition of Thomson Safaris, focusing on Tanzania, is expected to create synergies with Natural Habitat's East African operations [17] - The company is exploring new charter products, including potential expansion into river cruising, to diversify its offerings [10][48] Q&A Session Summary Question: Confidence in achieving EBITDA guidance for 2024 - The company is confident in achieving its EBITDA guidance due to strong bookings, with 98% of Lindblad segment projected ticket revenues already booked for 2024 [31] - Land business bookings are also strong, with Natural Habitat bookings up 20% year-over-year [31] Question: Progress and impact of the Disney partnership - The partnership with Disney and National Geographic is progressing well, with significant collaboration expected to drive growth starting in 2025 [33][35] - The company is leveraging Disney's distribution capabilities and National Geographic's brand strength to expand its reach and attract new travelers [34][38] Question: Impact of new Galapagos ships on market share and pricing - The acquisition of two additional ships in the Galapagos increases the company's inventory by 45% and is expected to attract first-time guests, with conservative occupancy assumptions for 2025 [42] - The company holds a significant market share in the Galapagos, with 206 beds out of approximately 600 total beds in the region [45] Question: Potential expansion into river cruising - The company is considering expanding its river cruising offerings on a charter basis, leveraging its existing expertise in river-based expeditions [48] - Chartering ships allows the company to test new markets without committing to long-term ownership [49] Question: Long-term margin profile and operating leverage - The company aims to return to historical occupancy levels and improve efficiency, which should provide significant operating leverage and margin expansion in the coming years [50] - The mix of land versus marine businesses will influence the overall margin profile, with land businesses typically carrying different margin structures [50]