What changed in this filing

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Item 1. Financial Statements

2021-11-02 compared with 2021-08-04 · 395 added, 407 removed, 1117 unchanged (42% of the section changed)

4 unchanged sentences

(In thousands, except share and per share data)

As of June 30, 2021

As of September 30, 2021

As of December 31, 2020

21 unchanged sentences

Deferred tax asset

10,697  

Right-to-use lease assets

12 unchanged sentences

20,260  

11,255  

Total current liabilities

11 unchanged sentences

Series A redeemable convertible preferred stock, 165,000 shares authorized;

85,000 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

85,000 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

87,785  

6 unchanged sentences

Preferred stock, $0.0001 par value, 1,000,000 shares authorized;

85,000 Series A shares issued and outstanding as of June 30, 2021 and December 31, 2020

85,000 Series A shares issued and outstanding as of September 30, 2021 and December 31, 2020

Common stock, $0.0001 par value, 200,000,000 shares authorized;

50,139,831 and 49,905,512 issued, 50,071,623 and 49,818,676 outstanding as of June 30, 2021 and December 31, 2020, respectively

50,191,647 and 49,905,512 issued, 50,146,407 and 49,818,676 outstanding as of September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

5 unchanged sentences

( 741 )  

Total stockholders' equity

Total stockholders' (deficit) / equity

( 57,001 )  

8 unchanged sentences

(In thousands, except share and per share data)

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

Tour revenues

8 unchanged sentences

62,988  

54,913  

General and administrative

4 unchanged sentences

10,213  

17,680  

18,413  

Depreciation and amortization

15 unchanged sentences

( 17,436 )  

Gain (loss) on foreign currency

(Loss) gain on foreign currency

( 1,434 )  

( 1,165 )  

Other income (expense)

8 unchanged sentences

( 95,542 )  

Income tax benefit

( 2,357 )  

( 2,943 )  

Income tax expense (benefit)

( 2,893 )  

2 unchanged sentences

( 27,535 )  

Net loss attributable to noncontrolling interest

( 92,894 )  

Net income (loss) attributable to noncontrolling interest

( 156 )  

30 unchanged sentences

(In thousands)

For the three months ended June 30,

For the six months ended June 30,

$ ( 35,735 )  

$ ( 39,923 )  

$ ( 69,595 )  

For the three months ended September 30,

For the nine months ended September 30,

Other comprehensive income (loss):

Cash flow hedges:

Net unrealized gain (loss)

Net unrealized (loss) gain

Reclassification adjustment, net of tax

1 unchanged sentence

Total comprehensive loss

( 35,570 )  

( 30,667 )  

( 68,936 )  

comprehensive loss attributive to non-controlling interest

( 437 )  

( 265 )  

( 1,056 )  

comprehensive income (loss) attributive to non-controlling interest

Comprehensive loss attributable to stockholders

$ ( 35,133 )  

$ ( 30,402 )  

$ ( 67,880 )  

The accompanying notes are an integral part of these condensed consolidated financial statements.

6 unchanged sentences

Total Stockholders'

Balance as of March 31, 2021

50,126,926  

Balance as of June 30, 2021

50,139,831  

9 unchanged sentences

( 1,340 )  

Net loss available to stockholders

Net loss attributable to Lindblad Expeditions Holdings, Inc

( 24,338 )  

Balance as of June 30, 2021

Balance as of September 30, 2021

50,191,647  

20 unchanged sentences

( 3,962 )  

Net loss available to stockholders

Net loss attributable to Lindblad Expeditions Holdings, Inc.

( 92,877 )  

Balance as of June 30, 2021

Balance as of September 30, 2021

50,191,647  

11 unchanged sentences

Total Stockholders'

Balance as of March 31, 2020

Balance as of June 30, 2020

49,822,955  

$ 47,394  

$ 45,403  

$ ( 8,824 )  

$ 83,978  

Stock-based compensation

Issuance of stock for equity compensation plans, net

52,231  

( 42 )  

Other comprehensive income, net

Redeemable noncontrolling interest

Net loss available to common stockholders

Balance as of June 30, 2020

Series A preferred shares dividend

( 425 )  

Net loss attributable to Lindblad Expeditions Holdings, Inc.

( 27,379 )  

Balance as of September 30, 2020

49,875,186  

$ 47,662  

$ 19,473  

$ ( 7,079 )  

$ 60,061  

Additional Paid-In

2 unchanged sentences

Balance as of January 1, 2020

49,717,522  

$ 46,271  

$ 81,655  

( 4,681 )  

$ 123,250  

Stock-based compensation

Issuance of stock for equity compensation plans, net

166,181  

( 393 )  

Repurchase of shares and warrants

( 8,517 )  

( 127 )  

Other comprehensive loss, net

( 2,398 )  

Redeemable noncontrolling interest

Net loss available to common stockholders

Balance as of June 30, 2020

Series A preferred shares dividend

( 425 )  

Net loss attributable to Lindblad Expeditions Holdings, Inc.

( 68,973 )  

Balance as of September 30, 2020

49,875,186  

$ 47,662  

$ 19,473  

$ ( 7,079 )  

$ 60,061  

The accompanying notes are an integral part of these condensed consolidated financial statements.

3 unchanged sentences

(In thousands)

For the six months ended June 30,

For the nine months ended September 30,

Cash Flows From Operating Activities

10 unchanged sentences

( 2,648 )  

(Gain) loss on foreign currency

( 269 )  

Loss on foreign currency

Changes in operating assets and liabilities

8 unchanged sentences

Accounts payable and accrued expenses

24,438  

Net cash provided by (used in) operating activities

17 unchanged sentences

( 1,763 )  

Proceeds from Series A preferred stock issuance

85,000  

Repurchase of warrants and common stock

1 unchanged sentence

55,292  

Net decrease in cash, cash equivalents and restricted cash

261,442  

Net (decrease) increase in cash, cash equivalents and restricted cash

( 19,479 )  

36,912  

Cash, cash equivalents and restricted cash at beginning of period

10 unchanged sentences

Non-cash preferred share dividend

$ 3,962  

Shares issued for acquisition

$ 1,770  

The accompanying notes are an integral part of these condensed consolidated financial statements.

7 unchanged sentences

or “Lindblad”) mission is offering life-changing adventures around the world and pioneering innovative ways to allow its guests to connect with exotic and remote places.

The Company currently operates a fleet of nine owned expedition ships and five seasonal charter vessels under the Lindblad brand, operates land-based eco-conscious expeditions and active nature focused tours under the Natural Habitat, Inc.

The Company currently operates a fleet of ten owned expedition ships and five seasonal charter vessels under the Lindblad brand, operates land-based eco-conscious expeditions and active nature focused tours under the Natural Habitat, Inc.

(“Natural Habitat”) and Off the Beaten Path, LLC (“Off the Beaten Path”) brands and operates luxury cycling and adventure tours under the DuVine Cycling + Adventure Company (“DuVine”) brand.

2 unchanged sentences

  The Lindblad segment consists primarily of ship-based expeditions aboard customized, nimble and intimately-scaled vessels that are able to venture where larger cruise ships cannot, thereby allowing Lindblad to offer up-close experiences in the planet’s wild and remote places and capitals of culture.

Many of these expeditions involve travel to remote places with limited infrastructure and ports, such as Antarctica and the Arctic, or places that are best accessed by a ship, such as the Galápagos, Alaska, Baja’s Sea of Cortez and Panama and foster active engagement by guests.

Many of these expeditions involve travel to remote places with limited infrastructure and ports, such as Antarctica and the Arctic, or places that are best accessed by a ship, such as the Galápagos, Alaska and Baja’s Sea of Cortez and foster active engagement by guests.

Each expedition ship is designed to be comfortable and inviting, while being fully equipped with state-of-the-art tools for in-depth exploration.

The Company has an alliance with National Geographic Partners (“National Geographic”), which provides for lecturers and National Geographic experts, including photographers, writers, marine biologists, naturalists, field researchers and film crews, to join many of the Company’s expeditions.

The Company has an alliance with National Geographic Partners (“National Geographic”), which provides for National Geographic experts, including photographers, writers, marine biologists, naturalists, field researchers and film crews, to join many of the Company’s expeditions.

Land Experiences Segment.

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Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding unaudited interim financial information and include the accounts and

transactions of the Company.

In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial statements for the periods presented.

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There have been no significant changes to the Company’s accounting policies from those disclosed in the 2020 Annual Report.

Return to Fleet Operations and COVID- 19 Business Update

The Company resumed ship operations in June 2021 and as of July 31, 2021 had eight of its nine vessels providing expeditions to guests.

During June 2021, the Company launched three ships in Alaska and another in the Galapagos and following the quarter, the Company resumed operations on the majority of its remaining vessels with additional ships launching in Alaska and the Galapagos, as well as Iceland.

The Company continues to work with local authorities on plans to operate in additional geographies during the second half of the year.

As the COVID- 19 virus effects travel restrictions in various locations around the world, the Company also continues to work with its guests to reschedule travel plans and refund payments, as applicable, for those expeditions and trips that the Company is not able to operate.

Return to Fleet Operations 

The Company resumed ship operations in June 2021 and as of November 2, 2021 had eight of its ten vessels providing expeditions to guests.

During June 2021, the Company launched three ships in Alaska and another in the Galapagos, and during the third quarter the Company resumed operations on the majority of its remaining vessels with additional ships operating in Alaska, the Galapagos, Iceland and the Pacific Northwest. The Company continues to work with local authorities on plans to operate in additional geographies, such as Antarctica, during the remainder of the year and early 2022.

As the COVID- 19 virus effects travel restrictions in various locations around the world, the Company also continues to work with its guests to reschedule travel plans and refund payments or issue future travel certificates, as applicable, for those expeditions and trips that the Company is not able to operate.

The Company believes there are a variety of strategic advantages that enable it to deploy its ships safely and quickly, while mitigating the risk of COVID- 19 as travel restrictions are lifted.

The most notable is the size of its owned and operated vessels which range from 48 to 148 passengers, allowing for a highly controlled environment that includes stringent cleaning protocols.

The small nature of the Company’s ships also allows it to efficiently and effectively test its guests and crew prior to boarding.

All ship crew and staff have been fully vaccinated.

Additionally, the majority of expeditions take place in remote locations where human interactions are limited, so there is less opportunity for external influence.

While the Company’s ships were not in operations, the majority of the fleet was being maintained with minimally required crew on-board to ensure they complied with all necessary regulations and could be fully put back into service quickly as needed. Ahead of launching each ship, crew levels were increased as necessary to prepare each vessel for operations as well as for crew training and vaccinations. The Company offices primarily remain closed, and most employees are working remotely to maintain general business operations, provide assistance to existing and potential guests and maintain information technology systems.

The Company continues to adhere to the comprehensive plan implemented in March 2020 to mitigate the impact of COVID- 19 and preserve and enhance its liquidity position. Prior to resuming operations, this plan employed a variety of cost reduction and cash preservation measures including significantly reducing ship and land-based expedition costs such as capital expenditures, crew payroll, land costs, fuel and food, and meaningfully reducing general and administrative expenses through reduced payroll and the elimination of all non-essential travel, office expenses and discretionary spending.

The Company also accessed available capital under existing debt facilities and through the issuance of preferred stock, while continuing to explore additional sources of capital and liquidity.

The small nature of the Company’s ships also allows it to efficiently and effectively test its guests and crew prior to boarding. Additionally, all guests age 12 and older, crew and staff are required to be fully vaccinated and the majority of expeditions take place in remote locations where human interactions are limited, so there is less opportunity for external influence.

Ahead of launching each ship, crew levels were increased as necessary to prepare each vessel for operations as well as for crew training and vaccinations.

The Company’s offices primarily remain closed, and most employees are working remotely to maintain general business operations, to provide assistance to existing and potential guests and to maintain information technology systems.

The Company continues to adhere to the comprehensive plan it implemented in March 2020 to mitigate the impact of COVID- 19 and preserve and enhance its liquidity position. Prior to resuming operations, this plan employed a variety of cost reduction and cash preservation measures including significantly reducing ship and land-based expedition costs such as capital expenditures, crew payroll, land costs, fuel and food, and meaningfully reducing general and administrative expenses through reduced payroll and the elimination of all non-essential travel, office expenses and discretionary spending.

The Company also accessed available capital under existing debt facilities and through the issuance of preferred stock.

With the majority of operations resuming, operating costs are ramping back up, but given the continued uncertainty around COVID- 19 and given that guest counts have not yet returned to traditional levels, the Company continues to minimize expenditures as appropriate.

Balance Sheet and Liquidity

As of June 30, 2021, the Company had $ 160.1  million in unrestricted cash and $ 43.5  million in restricted cash primarily related to deposits on future travel originating from U.S.

As of September 30, 2021, the Company had $ 155.6  million in unrestricted cash and $ 29.5  million in restricted cash primarily related to deposits on future travel originating from U.S.

ports and credit card reserves.

As of June 30, 2021, the Company had a total debt position of $ 514.7  million and was in compliance with all of its debt covenants.

Since the beginning of the COVID- 19 pandemic, the Company has taken a variety of steps to strengthen its balance sheet and increase liquidity including:

In April 2020 the Company drew down $ 30.6 million and in April 2021 the Company drew down $ 15.5 million under its second export credit agreement in conjunction with its third and fourth installment payments on the National Geographic Resolution, scheduled for delivery in the fourth quarter of 2021.

In May 2020, the Company amended its $ 2.5 million promissory note, changing the maturity date of the principal payments to be due in three equal installments, with the first payment on December 22, 2020, the second due on December 22, 2021 and the final payment due on December 22, 2022.

In June 2020, the Company amended its export credit agreements to defer scheduled amortization payments from June 2020 through March 2021 and suspend the total net leverage ratio covenant from June 2020 through June 2021. 

During June 2021, the Company further amended its export credit agreements to, among other things, extend the deferral of scheduled amortization payments of the first export credit facility through December 2021 in the aggregate amount of $ 15.7 million, extend the waiver of its total net leverage ratio covenant through March 31, 2022, increase the interest rate spreads of the export credit facilities by 50 basis points and annualize EBITDA used in its covenant calculation through December 31, 2022.

During August 2021, the Company received a $ 21.0 million grant under the Coronavirus Economic Relief for Transportation Services (“CERTS”) Act, which provided grants to eligible motorcoach, school bus, passenger vessel, and pilotage companies, see Note 4 —

Financial Statement Details for additional information.

As of September 30, 2021, the Company had a total debt position of $ 561.8  million and was in compliance with all of its debt covenants.

During September 2021, the Company drew down $ 46.2 million under its second export credit agreement in conjunction with its final payment upon delivery of the National Geographic Resolution.

In April 2021 the Company drew down $ 15.5 million under the second export credit agreement in conjunction with its fourth installment payment for the vessel. 

During June 2021, the Company amended its export credit agreements to, among other things, extend the deferral of scheduled amortization payments of the first export credit facility through December 2021 in the aggregate amount of $ 15.7 million, extend the waiver of its total net leverage ratio covenant through March 31, 2022, increase the interest rate spreads of the export credit facilities by 50 basis points and annualize EBITDA used in its covenant calculation through December 31, 2022.

The deferred principal payments will amortize quarterly over three years starting in March 2022.

Certain other covenants continue to be more restrictive during the extended covenant waiver period.

In August 2020, the Company amended its term loan and revolving credit facilities to waive the application of the total net leverage ratio covenant through June 2021.

In connection with the amendment, the interest rate of the term loan was increased by 125 basis points, to be paid-in-kind at maturity, a LIBOR floor of 75 basis points was added to the term loan and certain covenants were amended to be more restrictive. During April 2021, the Company further amended its term loan and revolving credit facilities to, among other things, extend the waiver of its total net leverage ratio covenant through March 31, 2022, annualize EBITDA used in its covenant calculation through December 31, 2022 and increase the interest rate spreads of the term loan, excluding the Main Street Loan, and the revolving credit facility by an additional 50 basis points.

During April 2021, the Company amended its term loan and revolving credit facilities to, among other things, extend the waiver of its total net leverage ratio covenant through March 31, 2022, annualize EBITDA used in its covenant calculation through December 31, 2022 and increase the interest rate spreads of the term loan, excluding the Main Street Loan, and the revolving credit facility by an additional 50 basis points.

Certain other covenants continue to be more restrictive during the extended covenant waiver period.

2020, the Company raised $ 85.0 million in gross proceeds through the private placement issuance of Redeemable Convertible Series A Preferred Stock that carries a 6 % annual dividend, which is payable in kind for two years and, thereafter, in cash or in-kind at the Company’s option. The preferred stock is convertible into shares of Lindblad common stock at a conversion price of $ 9.50 per share, representing a premium of 23 % to Lindblad’s 30 -day trading volume weighted average price on the date of issuance.

In December 2020, the Company amended its term loan and revolving credit facilities and borrowed an incremental $ 85.0 million under the amended term loan facility through the Main Street Expanded Loan Facility program established by the Board of Governors of the Federal Reserve System.

The incremental borrowing carries an interest rate of LIBOR plus 3.0 %, without any LIBOR floor, and matures December 2025 with no early payment restrictions. 

As the Company continues to ramp up operations, its monthly cash usage will increase as it incurs costs in operating expeditions, preparing additional ships for return to service, spending to market and advertise upcoming expeditions and trips and reinstating remaining furloughed and part-time office staff as needed.

The Company also anticipates a significant increase in guest payments as it receives final payments for upcoming expeditions and trips, as well as deposits for new reservations for future travel.

Given the dynamic nature of the COVID- 19 pandemic, the Company cannot reasonably estimate the potential impacts the pandemic will have on its financial condition, results of operations, cash flows, plans and growth for the foreseeable future.

It is unknown when travel restrictions and various border closures will be lifted and what the demand for expedition travel will be once restrictions are no longer in place.

Based on the actions taken to date by the Company, its planned and anticipated actions and its current forecast, the Company believes that it can meet its obligations for the next 12 months from August 4, 2021,

 the date of this Quarterly Report on Form

Valuation of Long-lived Assets 

The effects of COVID- 19 on the Company’s expected future operating cash flows was a potential indicator that the carrying value of the Company's long-lived assets may not be recoverable.

As a result, the Company performed an undiscounted cash flow analysis of its long-lived assets for potential impairment as of June 30, 2021.

Based on this analysis, there was 

no impairment to the Company's long-lived assets.

Given the dynamic and unpredictable nature of the COVID- 19 pandemic, the Company cannot reasonably estimate the potential impacts the pandemic will have on its financial condition, results of operations, cash flows, plans and growth for the foreseeable future.

It is unknown when full travel restrictions and various remaining border closures will be lifted and what the demand for expedition travel will be once restrictions are no longer in place.

Recently Adopted Accounting Pronouncements

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The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance.

This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and early adoption is permitted.

This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020.

The Company adopted this ASU as required, and it has not had, nor is it expected to have, a material impact to the Company’s financial statements.

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The amendments reduce the number of accounting models for convertible debt instruments and convertible preferred stock, and address convertible instruments with conversion features, as well as other items.

This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021, early adoption is permitted for fiscal years beginning after December 15, 2020, and must be adopted at the beginning of an entities’

This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021.

The Company will adopt this ASU as required and does not expect it to have a material impact to the Company’s financial statements.

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Earnings per Common Share

Earnings (loss) per common share is computed using the two -class method related to its Preferred Stock.

Under the two -class method, undistributed earnings available to stockholders for the period are allocated on a pro rata basis to the common stockholders and to the holders of convertible preferred shares based on the weighted average number of common shares outstanding and number of shares that could be issued upon conversion of the Preferred Stock.

Earnings (loss) per common share is computed using the two -class method related to its Series A Redeemable Convertible Preferred Stock, par value of $ 0.0001 , (“Preferred Stock”).

Under the two -class method, undistributed earnings available to stockholders for the period are allocated on a pro rata basis to the common stockholders and to the holders of the Preferred Stock based on the weighted average number of common shares outstanding and number of shares that could be issued upon

conversion of the Preferred Stock.

Diluted earnings per share is computed using the weighted average number of common shares outstanding and, if dilutive, potential common shares outstanding during the period.

Potential common shares consist of the dilutive incremental common shares associated with restricted stock awards, shares issuable upon the exercise of stock options and previously outstanding warrants, using the treasury stock method, and the potential common shares that could be issued from conversion of the Preferred Stock, using the if-converted method.

Potential common shares consist of the dilutive incremental common shares associated with restricted stock awards and shares issuable upon the exercise of stock options, using the treasury stock method, and the potential common shares that could be issued from conversion of the Preferred Stock, using the if-converted method.

When a net loss occurs, potential common shares have an anti-dilutive effect on earnings per share and such shares are excluded from the diluted earnings per share calculation.

For the three and six months ended June 30, 2021 and 2020, the Company incurred a net loss from operations, therefore basic and diluted net loss per share are the same for the periods.

For the three and six months ended June 30, 2021, 

approximately 0.8 million restricted shares, 1.5 million options and 9.4 million common shares issuable upon the conversion of the Preferred Stock were excluded from dilutive potential common shares for the periods as they were anti-dilutive.

For the three and nine months ended September 30, 2021 and 2020, the Company incurred a net loss from operations, therefore basic and diluted net loss per share are the same for the periods.

For the three and nine months ended September 30, 2021, 

approximately 0.8 million restricted shares, 1.5 million shares issuable upon exercise of options and 9.5 million common shares issuable upon the conversion of the Preferred Stock were excluded from dilutive potential common shares for the periods as they were anti-dilutive.

For the 

three  and 

six  months ended 

June 30, 2020, 

0.3  million restricted shares and 

0.2  million options were excluded from dilutive potential common shares for the periods as they are anti-dilutive.

For the three and six months ended June 30, 2021 and 2020, the Company calculated earnings (loss) per share as follows:

For the three months ended June 30,

For the six months ended June 30,

(unaudited)  

three and nine months ended September 30, 2020, 

0.3  million restricted shares, 0.2  million shares issuable upon exercise of options and 8.9 million common shares issuable upon conversion of the Preferred Stock were excluded from dilutive potential common shares for the periods as they are anti-dilutive.

For the three and nine months ended September 30, 2021 and 2020, the Company calculated earnings (loss) per share as follows:

For the three months ended September 30,

For the nine months ended September 30,

(In thousands, except share and per share data)

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as an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration from the customer.

The change in contract liabilities within unearned passenger revenues presented in our condensed consolidated balance sheets are as follows:

The Company does not consider guest deposits to be a contract liability until the guest no longer has the right, resulting from the passage of time, to cancel their reservation and receive a full refund. In conjunction with the suspension or rescheduling of expeditions, the Company provided guests an option of either a refund or future travel certificates, which in some instances exceeded the original cash deposit.

The Company has recorded liabilities up to the amount of cash deposits and additional value of any future travel certificates are being recognized as a discount when applied to future expeditions. The change in contract liabilities within unearned passenger revenues presented in our condensed consolidated balance sheets are as follows:

Contract Liabilities

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125,525  

Balance as of June 30, 2021

Balance as of September 30, 2021

$ 120,976  

The following table disaggregates our tour revenues by the sales channel it was derived from:

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

Guest ticket revenue:

(unaudited)  

National Geographic

5 unchanged sentences

The following is a reconciliation of cash, cash equivalents and restricted cash to the statement of cash flows:

For the six months ended June 30,

For the nine months ended September 30,

(In thousands)

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Restricted cash consists of the following:

June 30, 2021

December 31, 2020

As of September 30, 2021

As of December 31, 2020

(In thousands)

3 unchanged sentences

Credit card processor reserves

11,021  

Certificates of deposit and other restricted securities

3 unchanged sentences

The Company’s prepaid expenses and other current assets consist of the following:

As of June 30, 2021

As of September 30, 2021

As of December 31, 2020

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The Company’s accounts payable and accrued expenses consist of the following:

As of June 30, 2021

As of September 30, 2021

As of December 31, 2020

(In thousands)

Accounts payable

$ 16,677  

$ 5,285  

Accrued other expense

Employee liability

10,150  

Accounts payable

Bonus compensation liability

Employee liability

Refunds and commissions payable

Foreign currency forward contract liability

Travel certificate liability

Accrued travel insurance expense

Royalty payable

Accrued travel insurance expense

Income tax liabilities

Foreign currency forward contract liability

Total accounts payable and accrued expenses

1 unchanged sentence

$ 22,341  

During August 2021, the Company received a $ 21.0 million grant under the CERTS Act, which provided grants to eligible motorcoach, school bus, passenger vessel, and pilotage companies that have experienced annual revenue losses of 25 percent or more as result of COVID- 19.

The priority use of grant funds must be for payroll costs, though grants may be used for operating expenses and the repayment of debt accrued to maintain payroll.

The Company is accounting for the grant as a current liability on its balance sheet, as any amounts not appropriately used within one year of the grant date must be returned to the U.S.

Treasury and will recognize the grant in other income on the income statement as permitted expenses for the grant are incurred.

During the three and nine months ended September 30, 2021, the Company recognized $ 4.4  million of the CERTS grant in other income for permitted payroll costs and ship operating expenses.

The Company’s loan receivable is recorded at amortized cost within other long-term assets.

The Company reviewed its loan receivable for credit losses in connection with the preparation of its condensed consolidated financial statements for the period ended 

June 30, 2021. 

The Company reviewed its loan receivable for credit losses in connection with the preparation of its condensed consolidated financial statements for the period ended September 30, 2021. 

In evaluating the allowance for loan losses, the Company considered factors such as historical loss experience, the type and amount of loan, adverse situations that 

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three  or 

six  months ended 

June 30, 2021.

nine months ended September 30, 2021.

The following is a rollforward of the loan receivable balance:

For the six months ended June 30, 2021

For the nine months ended September 30, 2021

(In thousands)

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Amortization of deferred costs

Balance as of June 30, 2021

Balance as of September 30, 2021

$ 3,937  

1 unchanged sentence

LONG-TERM DEBT

As of June 30, 2021

As of December 31, 2020

September 30, 2021

December 31, 2020

(In thousands)

47 unchanged sentences

$ 471,359  

For the three and six months ended June 30, 2021, deferred financing costs charged to interest expense were $ 0.8  million and $ 1.5 million, respectively.

For the three and six months ended June 30, 2020, deferred financing costs charged to interest expense were $ 0.5  million and $ 1.0 million, respectively.

For the three and nine months ended September 30, 2021, deferred financing costs charged to interest expense were $ 0.8  million and $ 2.3  million, respectively.

For the three and nine months ended September 30, 2020, deferred financing costs charged to interest expense were $ 0.5  million and $ 1.5 million, respectively.

Credit Facility

2 unchanged sentences

In August 2020, the Company amended the Amended Credit Agreement to waive the application of the total net leverage ratio covenant through June 2021.

In connection with the amendment, the interest rate of the Term Facility was increased 125 basis points, to be paid-in-kind at maturity, a LIBOR minimum of 0.75 % was added to the Term Facility and certain covenants were amended to be more restrictive. During April 2021, the Company further amended its Amended Credit Agreement to, among other things, extend the waiver of its total net leverage ratio covenant through March 2022, annualize EBITDA used in its covenant calculation through December 31, 2022 and increase the interest rate spreads of the Term Facility, excluding the Main Street Loan, and the Revolving Facility by 50 basis points.

Certain other covenants under the Amended Credit Agreement continue to be more restrictive during the extended covenant waiver period.

In December 2020, the Company amended the Amended Credit Agreement to provide for the borrowing of a new tranche of incremental term loans under the Amended Credit Agreement in an amount of $ 85.0 million, maturing December 2025, made under the Main Street Expanded Loan Facility (the “Main Street Loan”). Interest on the Main Street Loan shall be paid-in-kind for the first year and the principal shall amortize at a rate of 15 % in each of the third and fourth years, with the remaining amounts to be paid at maturity.

The Company may voluntarily prepay the Main Street Loan at any time and from time to time, without premium or penalty, other than customary “breakage costs”

and fees for LIBOR-based loans.

The Term Facility, as amended, bears interest at an adjusted Intercontinental Exchange (“ICE”) Benchmark administration LIBOR with a minimum of 0.75 %, plus a spread of 5.25 %, for an aggregated rate of 6.00 % as of June 30, 2021.

and fees for LIBOR-based loans.

During April 2021, the Company further amended its Amended Credit Agreement to, among other things, extend the waiver of its total net leverage ratio covenant through March 2022, annualize EBITDA used in its covenant calculation through December 31, 2022 and increase the interest rate spreads of the Term Facility, excluding the Main Street Loan, and the Revolving Facility by 50 basis points.

Certain other covenants under the Amended Credit Agreement continue to be more restrictive during the extended covenant waiver period.

125 basis points of the spread are to be paid-in-kind at maturity.

Borrowings under the Revolving Facility as amended, bears interest at an adjusted ICE Benchmark administration LIBOR, plus a spread of 3.50 %, for an aggregated rate of 3.60 % as of June 30, 2021.

The Main Street Loan bears interest at a rate per annum adjusted ICE Benchmark administration LIBOR for an interest period of 3 -months plus 3.00 %, for an aggregated rate of 3.15 % as of June 30, 2021. 

Borrowings under the Revolving Facility as amended, bears interest at an adjusted ICE Benchmark administration LIBOR, plus a spread of 3.50 %, for an aggregated rate of 3.58 % as of September 30, 2021.

The Main Street Loan bears interest at a rate per annum adjusted ICE Benchmark administration LIBOR for an interest period of 3 -months plus 3.00 %, for an aggregated rate of 3.13 % as of September 30, 2021.

Senior Secured Credit Agreement

In January 2018, the Company entered into a senior secured credit agreement (the “Export Credit Agreement”) with Citibank, N.A., London Branch and Eksportkreditt Norge AS, to make available to the Company a loan in an aggregate principal amount not to exceed $ 107.7 million for the purpose of providing financing for up to 80 % of the purchase price of the Company’s new ice class vessel, the National Geographic Endurance .

During March 2020, the Company took possession of the National Geographic Endurance and borrowed $ 107.7 million under the Export Credit Agreement for final payment .

The Export Credit Agreement, as amended, bears interest at a floating interest rate equal to three -month LIBOR plus a margin of 3.50 % per annum, for an aggregated rate of 3.62 % over the borrowing period covering June 30, 2021. 

In April 2019, the Company entered into a senior secured credit agreement (the “Second Export Credit Agreement”) with Citibank, N.A., London Branch and Eksportkreditt Norge AS, to make available to the Company, at the Company's option and subject to certain conditions, a loan in an aggregate principal amount not to exceed $ 122.8 million for the purpose of providing pre- and post-delivery financing for up to 80 % of the purchase price of the Company’s new expedition ice-class cruise vessel, the 

National Geographic Resolution , scheduled to be delivered in the fourth quarter of 2021.

In September 2019, 

April 2020 and April 2021, the Company drew approximately $ 30.5 million, $ 30.6 million and $ 15.5 million, respectively, against the Second Export Credit Agreement for contracted installment payments on the 

National Geographic Resolution . The Second Export Credit Agreement, as amended, bears a variable interest rate equal to three -month LIBOR plus a margin of 3.50 % per annum, or 3.62 % over the borrowing period covering June 30, 2021.

After completion of the vessel, the Second Export Credit Agreement, at the Company’s option, will bear an interest rate of either a fixed rate of 6.36 % or a variable rate equal to three -month LIBOR plus a margin of 3.00 % per annum.

In June 2020, the Company amended its export credit agreements to defer scheduled amortization payments from June 2020 through March 2021 and to suspend the total net leverage ratio covenant from June 2020 through June 2021.

In January 2018, the Company entered into a senior secured credit agreement (the “First Export Credit Agreement”) with Citibank, N.A., London Branch and Eksportkreditt Norge AS, to make available to the Company a loan in an aggregate principal amount not to exceed $ 107.7 million for the purpose of providing financing for up to 80 % of the purchase price of the Company’s new ice class vessel, the National Geographic Endurance .

During March 2020, the Company took possession of the National

Geographic Endurance and borrowed $ 107.7 million under the First Export Credit Agreement for final payment .

In June 2020, the Company amended its First Export Credit Agreement to defer scheduled amortization payments from June 2020 through March 2021 and to suspend the total net leverage ratio covenant from June 2020 through June 2021.

During June 2021, the Company further amended its First Export Credit Agreement to, among other things, extend the deferral of scheduled amortization payments through December 2021 in the aggregate amount of $ 15.7 million, extend the waiver of its total net leverage ratio covenants through March 31, 2022, increase the interest rate spread by 50 basis points and annualize EBITDA used in its covenant calculation through December 31, 2022.

The deferred principal payments will amortize quarterly over three years starting in March 2022.

Certain other covenants continue to be more restrictive during the extended covenant waiver period. The First Export Credit Agreement, as amended, bears interest at a floating interest rate equal to three -month LIBOR plus a margin of 3.50 % per annum, for an aggregated rate of 3.62 % over the borrowing period covering September 30, 2021. 

National Geographic Resolution .

During September 2021, the Company took possession of the 

National Geographic Resolution and as of September 30, 2021 

had borrowed $ 122.8 million under the Second Export Credit Agreement, drawing approximately $ 30.5 million in 2019,  $ 30.6 million in 2020 and $ 61.7 million in 2021.

In June 2020, the Company amended its Second Export Credit Agreement to suspend the total net leverage ratio covenant from June 2020 through June 2021.

During June 2021, the Company further amended its Second Export Credit Agreement to, among other things, extend the waiver of its total net leverage ratio covenants through March 31, 2022, increase the interest rate spread by 50 basis points and annualize EBITDA used in its covenant calculation through December 31, 2022.

Certain other covenants continue to be more restrictive during the extended covenant waiver period.

The Second Export Credit Agreement, as amended, bears a variable interest rate equal to three -month LIBOR plus a margin of 3.50 % per annum, or 3.63 % over the borrowing period covering September 30, 2021.

Notes Payable

In connection with the Natural Habitat acquisition in May 2016, Natural Habitat issued a $ 2.5 million unsecured promissory note, amended in May 2020, to Benjamin L.

Bressler, the founder of Natural Habitat, with an outstanding principal amount of $ 1.7 million as of June 30, 2021. 

Bressler, the founder of Natural Habitat, with an outstanding principal amount of $ 1.7 million as of September 30, 2021. 

The promissory note accrues interest at a rate of 1.44 % annually, with interest payable every six months and the remaining principal payments to be due in equal installments on December 22, 2021 and 2022.

The Company’s Amended Credit Agreement, Export Credit Agreement and Second Export Credit Agreement contain financial and restrictive covenants that include among others, net leverage ratios, limits on additional indebtedness and limits on certain investments.

As of June 30, 2021, the net leverage ratio covenant of the Company’s Amended Credit Agreement has been waived through March 2022.

The Company was in compliance with its covenants in effect as of June 30, 2021.

The Company’s Amended Credit Agreement, First Export Credit Agreement and Second Export Credit Agreement contain financial and restrictive covenants that include among others, net leverage ratios, limits on additional indebtedness and limits on certain investments.

As of September 30, 2021, the net leverage ratio covenant of the Company’s Amended Credit Agreement, First Export Credit Agreement and Second Export Credit Agreement have been waived through March 2022.

The Company was in compliance with its covenants in effect as of September 30, 2021.

NOTE 6  — 

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The fluctuations in the value of these forward contracts largely offset the impact of changes in the value of the underlying risk they economically hedge.

In March 2019, the Company entered into foreign exchange forward contracts, designated as cash flow hedges, to hedge its exposure to Norwegian Kroner ("NOK"), related to the Company’s contract to purchase the new polar ice-class vessel (see Note 12  —

Commitments and Contingencies).

The cost of the foreign exchange forward contracts will be amortized to interest expense over their lives, from the effective date through settlement dates.

Interest Rate Risk .

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Any changes in fair values of hedges that are determined to be ineffective are immediately reclassified from accumulated other comprehensive income (loss) into earnings.

No gains or losses of the Company’s cash flow hedges were considered to be ineffective and reclassified from other comprehensive income (loss) to earnings for the period ended June 30, 2021.

The Company reclassified $ 0.1 million from other comprehensive income (loss) to earnings for the period ended June 30, 2020 due to the maturity of a cash flow hedge and the hedged item.

The Company estimates that approximately $ 0.1 million of losses currently recorded in accumulated other comprehensive income (loss) will be recognized in earnings over the next 12 months due to maturity of the cash flow hedge and the hedged item.

No gains or losses of the Company’s cash flow hedges were considered to be ineffective and reclassified from other comprehensive income (loss) to earnings for the period ended September 30, 2021.

The Company reclassified $ 2.7 million from other comprehensive income (loss) to earnings for the period ended September 30, 2021 

due to the maturity of a cash flow hedge and the hedged item.

The Company estimates that it will not recognize any losses currently recorded in accumulated other comprehensive income (loss) in earnings over the next 12 months.

The Company will continue to assess the effectiveness of the hedges on an ongoing basis.

The Company held the following derivative instruments with absolute notional values as of June 30, 2021:

The Company held the following derivative instruments with absolute notional values as of September 30, 2021:

(In thousands)

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Estimated fair values (Level 2 ) of derivative instruments were as follows:

June 30, 2021

December 31, 2020

As of September 30, 2021

As of December 31, 2020

(In thousands)

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$ 2,008  

$ 1,673  

$ 2,008  

Derivative instruments not designated as cash flow hedging instruments:

Foreign exchange forward (b)

$ 1,033  

Recorded in accounts payable and accrued expenses.

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 The effects of derivatives recognized in the Company’s condensed consolidated financial statements were as follows:

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

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$ 1,390  

$ ( 739 )  

$ 2,147  

For the three and six months ended June 30, 2021, $ 0.1 million was recognized as a loss on foreign currency in the condensed consolidated statements of income, and a $ 0.0  million and a $ 0.4  million gain, respectively, was recognized, net of tax, as a component of other comprehensive income (loss) within stockholders’ equity.

For the three and six months ended June 30, 2020, $ 5.3 million was recognized as a loss on foreign currency in the condensed consolidated statements of income, and a $ 3.9 million gain and a $ 9.3 million loss, respectively, was recognized, net of tax, as a component of other comprehensive income (loss) within stockholders’ equity.

For the three and nine months ended September 30, 2021, $ 0.9 million and $ 1.0 million, respectively, was recognized as a loss on foreign currency in the condensed consolidated statements of income, and $ 2.4  million and $ 2.0  million losses, respectively, were recognized, net of tax, as a component of other comprehensive income (loss) within stockholders’ equity.

For the three and nine months ended September 30, 2020, $ 5.3 million was recognized as a loss on foreign currency in the condensed consolidated statements of income, and a $ 1.7 million gain and a $ 7.6 million loss, respectively, was recognized, net of tax, as a component of other comprehensive income (loss) within stockholders’ equity.

Recognized, net of tax, as a component of other comprehensive income (loss) within stockholders’ equity.

Gains (losses) related to derivative instruments are expected to be largely offset by (losses) gains on the underlying exposures being hedged.

During the three and six months ended June 30, 2021, a loss of $ 0.0  million and $ 0.1  million, respectively, were recognized in gain (loss) on foreign currency.

During the three and six months ended June 30, 2020, a gain of $ 1.4 million and a loss of $ 2.0 million was recognized in gain (loss) on foreign currency.

During the three and nine months ended September 30, 2021, a gain of $ 0.3  million and $ 0.2  million, respectively, were recognized in gain (loss) on foreign currency.

During the three and nine months ended September 30, 2020, a gain of $ 1.0 million and a loss of $ 1.0 million was recognized in gain (loss) on foreign currency.

Fair Value Measurements

The carrying amounts of cash and cash equivalents, accounts payable and accrued expenses, approximate fair value due to the short-term nature of these instruments.

The carrying value of long-term debt approximates fair value given that the terms of the agreements were comparable to the market as of June 30, 2021.

As of June 30, 2021 and December 31, 2020, the Company had no other significant liabilities that were measured at fair value on a recurring basis.

The carrying value of long-term debt approximates fair value given that the terms of the agreements were comparable to the market as of September 30, 2021.

As of September 30, 2021 and December 31, 2020, the Company had no other significant liabilities that were measured at fair value on a recurring basis.

NOTE 7 —

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These repurchases exclude shares repurchased to settle statutory employee tax withholding related to the exercise of stock options and vesting of stock awards.

All repurchases were made using cash resources.

In March 2020, the Repurchase Plan was suspended due to the uncertain impact of the COVID- 19 pandemic and our borrowings through the Main Street Expanded Loan Facility program places restrictions on stock repurchases. The Company has cumulatively repurchased 875,218  shares of common stock for $ 8.3  million and 6,011,926 warrants for $ 14.7 million, since plan inception.

The remaining balance for the Repurchase Plan was $ 12.0  million as of June 30, 2021.

In March 2020, the Repurchase Plan was suspended due to the uncertain impact of the COVID- 19 pandemic and borrowings through the Main Street Expanded Loan Facility program restricts stock repurchases. The Company has cumulatively repurchased 875,218  shares of common stock for $ 8.3  million and 6,011,926 warrants for $ 14.7 million, since plan inception.

The remaining balance for the Repurchase Plan was $ 12.0  million as of September 30, 2021.

Preferred Stock

On August 31, 2020, the Company issued and sold 85,000 shares of Series A Redeemable Convertible Preferred Stock, par value of $ 0.0001 , (“Preferred Stock”) for $ 1,000 per share for gross proceeds of $ 85.0 million.

On August 31, 2020, the Company issued and sold 85,000 shares of Preferred Stock for $ 1,000 per share for gross proceeds of $ 85.0 million.

The Preferred Stock has senior and preferential ranking to the Company’s common stock.

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At the six -year anniversary of the closing date, each investor has the right to require the Company to repurchase their Preferred Stock and any Preferred Stock not requested to be repurchased shall be converted into common shares of the Company equal to the quotient obtained by dividing the then-current accrued value by the conversion price.

The Preferred Stock deferred issuance costs was approximately $ 2.9  million as of June 30, 2021.

For the three and six months ended June 30, 2021, the Company recorded $ 1.3 million and $ 2.6 million, respectively, in accrued dividends for Preferred Stock.

As of June 30, 2021, the Preferred Stock could be converted at the option of the holders into approximately 9.4 million shares of the Company’s common stock.

The Preferred Stock deferred issuance costs were approximately $ 2.9  million as of September 30, 2021.

The Company recorded accrued dividends for Preferred Stock of $ 1.3 million and $ 4.0 million for the three and nine months ended September 30, 2021, respectively, and $ 0.4 million for the three and nine months ended September 30, 2020.

As of September 30, 2021, the Preferred Stock could be converted at the option of the holders into approximately 9.5 million shares of the Company’s common stock.

NOTE 8 —

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The Company is authorized to issue up to 4.7 million shares of common stock under the 2021 Long-Term Incentive Plan (“the Plan”) which was approved by shareholders in June 2021.

As of June 30, 2021, approximately 3.9  million shares were available to be granted under the Plan.

As of June 30, 2021 and December 31, 2020, options to purchase an aggregate of 1.5 million and 510,000 shares of the Company’s common stock, respectively, with a weighted average exercise price of $ 14.37 and $ 10.30 , respectively, were outstanding.

As of June 30, 2021, 188,000  options were exercisable.

The Company recorded stock-based compensation expense of $ 1.1  million and $ 2.6 million during the three and six months ended 

June 30, 2021, respectively, and $ 0.7  million and $ 1.6 million during the three and six months ended 

June 30, 2020, respectively.

As of September 30, 2021, approximately 3.9  million shares were available to be granted under the Plan.

As of September 30, 2021 and December 31, 2020, options to purchase an aggregate of 1.5 million and 510,000 shares of the Company’s common stock, respectively, with a weighted average exercise price of $ 14.37 and $ 10.30 , respectively, were outstanding.

As of September 30, 2021, 188,000  options were exercisable.

The Company recorded stock-based compensation expense of $ 1.4  million and $ 4.1  million during the three and nine months ended September 30, 2021, respectively, and $ 0.3  million and $ 1.9 million during the three and nine months ended September 30, 2020, respectively.

Long-Term Incentive Compensation

During the six months ended June 30, 2021, the Company granted 170,870 restricted stock units ("RSUs") with a weighted average grant price of $ 18.22 .

During the nine months ended September 30, 2021, the Company granted 224,506  restricted stock units ("RSUs") with a weighted average grant price of $ 17.45 .

The RSUs will primarily vest equally over three years on the anniversary of the grant date, subject to the recipient’s continued employment or service with the Company on the applicable vesting date. The number of shares were determined based upon the closing price of our common stock on the date of the award.

During the six months ended June 30, 2021, the Company awarded 50,072  market performance share units (“MSUs”) with a weighted average grant price of $ 18.90 .

During the nine months ended September 30, 2021, the Company awarded 50,072  market performance share units (“MSUs”) with a weighted average grant price of $ 18.90 .

The MSUs are market-based equity incentive awards based on a performance-multiplier of change in the stock price of the Company’s common stock between the grant date and March 31, 2024.

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Berle, the Company’s new Chief Executive Officer, 1.0 million options on May 10, 2021 and, after Mr.

Berle purchased a required amount of the Company’s common stock in the open market, as specified in this compensation agreement, granted 58,452 RSUs on June 3, 2021.

The options were granted with an exercise price of $ 16.38 , and vest ratably over five years.

The RSUs were granted with a weighted average grant price of $ 17.33 and vest ratably over five years.

Berle purchased a required amount of the Company’s common stock in the open market, as specified in this compensation agreement, granted 58,452 RSUs to him on June 3, 2021.

The options were granted with an exercise price of $ 16.38 , and vest ratably over five years and the RSUs were granted with a weighted average grant price of $ 17.33 and vest ratably over five years.

Natural Habitat Contingent Arrangement

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The profit interest units had a $ 132.86 per share grant date fair value and are considered vested upon issuance.

The Company recorded $ 0.1 million in stock-based compensation expense related to the value of these profit units for the six months ended June 30, 2021, included in the Company’s total stock-based compensation disclosed above.

The Company recorded $ 0.1 million in stock-based compensation expense related to the value of these profit units for the nine months ended September 30, 2021, included in the Company’s total stock-based compensation disclosed above.

NOTE 9  —

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The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recoverable or settled.

The Company recognizes the effect on deferred taxes of a change in tax rates in income in the period that includes the enactment date.

The Company recognizes the effect on deferred taxes of a change in tax rates

in income in the period that includes the enactment date.

The Company provides a valuation allowance against deferred tax assets if, based upon the weight of available evidence, the Company does not believe it is “more-likely-than- not”

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While the Company believes that the amount of the recorded financial statement benefits and tax reserves reflect the more-likely-than- not criteria, it is possible that the ultimate outcome of current or future examinations may result in a reduction to the tax benefits previously recorded on its condensed consolidated financial statements or may exceed the current income tax reserves in amounts that could be material.

As of June 30, 2021, and December 31, 2020, the Company had a liability for unrecognized tax benefits of $ 0.0 million.

The Company’s policy is to record interest and penalties on uncertain tax positions as a component of income tax expense. During the three and six months ended June 30, 2021 and 2020, interest and penalties related to uncertain tax positions included in income tax expense are not significant.

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, versus a benefit of 6.9 % and 10.1 % for the three and six months ended June 31, 2020, respectively, primarily due to the timing of losses in the 

first quarter and the expected amount of income for the full year 2021 as compared to 2020 due to the impact of the COVID- 19 pandemic on the Company's operations.

As of September 30, 2021, and December 31, 2020, the Company had a liability for unrecognized tax benefits of $ 0.0 million.

The Company’s policy is to record interest and penalties on uncertain tax positions as a component of income tax expense. During the three and nine months ended September 30, 2021 and 2020, interest and penalties related to uncertain tax positions included in income tax expense are not significant.

The Company's effective tax rate for the three and nine months ended September 30, 2021 was an expense of 12.1 % and benefit of 2.8 %, respectively, primarily due to lower losses in the third quarter then forecast and the amount of losses expected for the full year 2021.

The effective tax rates for the three and nine months ended September 30, 2020 were a benefit of 9.5 % and 9.9 %, respectively, due to the impact of the COVID- 19 pandemic on the Company's operations.

The Company is subject to tax audits in all jurisdictions for which it files tax returns.

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The acquisitions were accounted for under purchase accounting and are included in our consolidated results from the acquisition dates.

Acquisition related cost were approximately $ 0.4 million and are included in general and administrative expenses in the condensed consolidated statements of operations for the six months ended June 30, 2021.

The purchase accounting valuations for the acquisitions are ongoing and have not been completed as of this report date and is subject to change as third -party valuations are finalized. The Company preliminarily recorded approximately $ 6.5 million in intangible assets related to tradenames and customer lists and approximately $ 11.5  million in goodwill related to these acquisitions, which could be subject to possible adjustment when the valuations have been completed.

The acquired businesses contributed aggregate revenue of $ 3.2 million and $ 3.5 million during the three and six months ended June 30, 2021, respectively, while their aggregate net loss contributed for the three and six months ended June 30, 2021 was immaterial to the Company's financial statements.

Following are pro forma revenue and net loss available to stockholders for the three and six months ended June 30, 2021 and 2020, assuming the Company had completed the acquisitions on January 1, 2020: 

For the three months ended June 30,

For the six months ended June 30,

The Company recorded approximately $ 6.5 million in intangible assets related to tradenames and customer lists and approximately $ 10.7  million in goodwill related to these acquisitions.

The acquired businesses contributed aggregate revenue of $ 10.5  million and $ 14.0  million during the three and nine months ended September 30, 2021, respectively, while their aggregate net income contributed for the three and nine months ended September 30, 2021 was immaterial to the Company's financial statements.

Following are pro forma revenue and net loss available to stockholders for the three and nine months ended September 30, 2021 and 2020, assuming the Company had completed the acquisitions on January 1, 2020: 

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

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( 97,142 )  

In addition to the businesses acquired above, during September 2021, the Company acquired the Crystal Esprit yacht for $ 13.3 million.

The Company expects to modify the vessel to a capacity of 48 guest, along with other changes, and replace the National Geographic Islander with it in the Galapagos.

NOTE 12  —

COMMITMENTS AND CONTINGENCIES

Fleet Expansion

In February 2019, the Company entered into an agreement, which was amended in December 2019, 

with Ulstein Verft, to construct a second polar ice class vessel, the National Geographic Resolution , with a total purchase price of 1,291.0  million NOK.

The purchase price is subject to potential adjustments from contract specifications for variations in speed, dead weight, fuel consumption and delivery date. In March 2019, the Company entered into foreign exchange forward contracts to lock in a purchase price for the second polar ice class vessel of $ 153.5 million, subject to potential contract specification adjustments.

The purchase price is due in installments, with 20 % paid shortly after execution of the agreement, 20 % paid in September 2019, 20 % paid in April 2020 and 10 % paid in April 2021.

The final 30% is due upon delivery and acceptance of the vessel.

In December 2019, the Company and Ulstein Verft amended the National Geographic Resolution construction agreement, providing for an expedited delivery schedule for the vessel and a loan agreement for which all or a portion may be considered as a delivery bonus and forgiven, as determined by the expedited delivery schedule per the agreement. The vessel is scheduled to be delivered in the fourth quarter of 2021.

Redeemable Non-Controlling Interest  

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Bressler has a put option that under certain conditions, and subject to providing notice by January 31, 2024, that enables him, but does not obligate him, to sell his remaining interest in Natural Habitat to the Company, valued as of December 31, 2023.

The Company has a call option, but not an obligation, with an expiration of March 31, 2029, under which it can buy Mr.

The Company has a call option, but not an obligation, on or after January 31, 2024, with an expiration of March 31, 2029, under which it can buy Mr.

Bressler’s remaining interest at a similar fair value measure as Mr.

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Lawrence has a put option, that under certain conditions and subject to providing notice by October 31, 2025, that enables him, but does not obligate him, to sell his remaining interest in Off the Beaten Path to the Company on December 31, 2025.

The Company has a call option, but not an obligation, with an expiration of December 31, 2030, under which it can buy Mr.

The Company has a call option, but not an obligation, on or after October 31, 2025, with an expiration of December 31, 2030, under which it can buy Mr.

Lawrence’s remaining interest at a similar fair value measure as Mr.

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Levine has a put option, that under certain conditions and subject to providing notice by January 31, 2026, that enables him, but does not obligate him, to sell his remaining interest in DuVine to the Company as of December 31, 2025.

The Company has call options, but not an obligation, with a first call option to on or after December 31, 2023, expiring December 31, 2025, acquire an additional 10 % of DuVine from Mr.

Levine, and a second call option with an expiration of December 31, 2030, under which it can buy Mr.

The Company has a first call option, but not an obligation, on or after December 31, 2023, expiring December 31, 2025, to acquire an additional 10 % of DuVine from Mr.

Levine, and a second call option, but not an obligation, on or after December 31, 2025, 

with an expiration of December 31, 2030, under which it can buy Mr.

Levine’s remaining interest at a similar fair value measure as Mr.

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The following is a rollforward of redeemable non-controlling interest:

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

(unaudited)  

Beginning balance

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$ 16,112  

Net loss attributable to noncontrolling interest

( 437 )  

Net income (loss) attributable to noncontrolling interest

( 156 )  

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Acquired businesses' noncontrolling interest

( 941 )  

Fair value adjustment of put option

( 1,874 )  

Balance June 30,

Balance September 30,

$ 10,134  

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In return for these rights, the Company is charged a royalty fee.

The royalty fee is included within selling and marketing expense on the accompanying condensed consolidated statements of operations.

The royalty fee is included

within selling and marketing expense on the accompanying condensed consolidated statements of operations.

The amount is calculated based upon a percentage of certain ticket revenues less travel agent commission, including the revenues received from cancellation fees and any revenues received from the sale of pre- and post-expedition extensions.

Royalty expense for the three and six months ended June 30, 2021 was $ 0.1  million and $ 0.1  million, respectively, and $ 0.1  million and $ 1.3 million for the three and six months ended June 30, 2020, respectively.

The royalty balance payable to National Geographic as of June 30, 2021 and December 31, 2020 was $ 0.1 and $ 0.0  million, respectively, and are included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets.

Royalty expense for the three and nine months ended September 30, 2021 was $ 0.7  million and $ 0.9  million, respectively, and $ 0.0  million and $ 1.3 million for the three and nine months ended September 30, 2020, respectively.

The royalty balance payable to National Geographic as of September 30, 2021 and December 31, 2020 was $ 0.7  and $ 0.0  million, respectively, and are included in accounts payable and accrued expenses on the accompanying condensed consolidated balance sheets.

Royalty Agreement –

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The fees are included within selling and marketing expense on the accompanying condensed consolidated statements of operations.

This royalty fee expense was $ 0.0  million and $ 0.1  million for the three and six months ended June 30, 2021, respectively, and for the three and six months ended June 30, 2020 was $ 0.1 million and $ 0.2 million, respectively.

This royalty fee expense was $ 0.2  million and $ 0.3  million for the three and nine months ended September 30, 2021, respectively, and for the three and nine months ended September 30, 2020 was $ 0.1 million and $ 0.1 million, respectively.

Charter Commitments

From time to time, the Company enters into agreements to charter vessels onto which it holds its tours and expeditions.

Future minimum payments on its charter agreements as of June 30, 2021 are as follows:

Future minimum payments on its charter agreements as of September 30, 2021 are as follows:

For the years ended December 31,

(In thousands)

$ 1,748  

2021 (three months)

$ 9,659  

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The Company evaluates the performance of its business segments based largely on tour revenues and operating income, without allocating other income and expenses, net, income taxes and interest expense, net.

For the three and six months ended June 30, 2021 and 2020, operating results for the Company’s reportable segments were as follows:

For the three months ended June 30,

For the six months ended June 30,

For the three and nine months ended September 30, 2021 and 2020, operating results for the Company’s reportable segments were as follows:

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

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$ ( 29,269 )  

$ ( 62,353 )  

Land Experiences

2 unchanged sentences

41,291  

12,458  

28,833  

Total tour revenues

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$ ( 54,287 )  

Land Experiences

$ ( 26,330 )  

( 3,105 )  

Land Experiences

( 1,979 )  

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Depreciation and amortization are included in segment operating income as shown below:

For the three months ended June 30,

For the six months ended June 30,

For the three months ended

September 30,

For the nine months ended

September 30,

(In thousands)

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$ 2,543  

$ 1,502  

Land Experiences

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$ 2,057  

$ 15,243  

$ 1,219  

The following table presents our total assets, intangibles, net and goodwill by segment:

(In thousands)

As of June 30, 2021

As of September 30, 2021

As of December 31, 2020

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$ 22,105  

For the three and six months ended June 30, 2021 there were no intercompany tour revenues between the Lindblad and Land Experiences reportable segments eliminated in consolidation.

For the three and nine months ended September 30, 2021 there was $ 1.0 million and $ 1.1 million, respectively, in intercompany tour revenues between the Lindblad and Land Experiences reportable segments eliminated in consolidation.

For the 

three  and 

six  months ended 

June 30, 2020, 

there were $ 0.0  million and $ 2.2  million in intercompany tour revenues between the Lindblad and Land Experiences 

reportable segments eliminated in consolidation, respectively.

three and nine months ended September 30, 2020, 

there were $ 0.0  million and $ 2.2  million, respectively in intercompany tour revenues between the Lindblad and Land Experiences reportable segments eliminated in consolidation.

NOTE 14  —

SUBSEQUENT EVENTS

On October 8, 2021, the Company received $ 6.0 million, representing the remainder of its grant, under the US Treasury’s Coronavirus Economic Relief for Transportation Services (“CERTS”) Act.

The CERTS Act, provided grants to eligible motorcoach, school bus, passenger vessel, and pilotage companies that have experienced annual revenue losses of 25 percent or more as result of COVID- 19.

The priority use of grant funds must be for payroll costs, though grants may be used for operating expenses and the repayment of debt accrued to maintain payroll.

The Company anticipates using the granted funds primarily for permitted payroll costs and ship operating expenses.

On October 14, 2021, to further expand its land-based experiential travel offerings, the Company acquired 80.1 % of the outstanding ownership interests in Classic Journeys, LLC for $ 12.8 million in cash.

Classic Journeys, LLC is a leading luxury walking tour company that offers highly curated active small-group and private custom journeys that are centered around cinematic walks led by expert local guides in over 50 countries around the world. 

MANAGEMENT ’

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Potential risks and uncertainties include, but are not limited to:

suspended operations and disruptions to our business and operations related to the novel corona virus COVID-19;

suspended operations, cancelling or rescheduling of voyages and other potential disruptions to our business and operations related to the novel coronavirus COVID-19;

the impacts of the novel coronavirus COVID-19 on our financial condition, liquidity, results of operations, cash flows, employees, plans and growth;

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changes adversely affecting the business in which we are engaged;

management of our growth and our ability to execute on our planned growth;

management of our growth and our ability to execute on our planned growth, including our ability to successfully integrate acquisitions;

our business strategy and plans;

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Our mission is offering life-changing adventures around the world and pioneering innovative ways to allow our guests to connect with exotic and remote places. 

We currently operate a fleet of nine owned expedition ships and have contracted for a new polar ice class vessel, the National Geographic Resolution , scheduled to be delivered in the fourth quarter of 2021, and operate five seasonal charter vessels under the Lindblad Expeditions Holdings, Inc.

We currently operate a fleet of ten owned expedition ships, having taken possession of our new polar ice class vessel, the National Geographic Resolution , in September 2021, and operate five seasonal charter vessels under the Lindblad Expeditions Holdings, Inc.

(“Lindblad”) brand.

Additionally, during September 2021, we purchased the Crystal Esprit yacht and expect to begin operating it in 2022.

Our voyages include destinations such as the Arctic, Antarctic, the Galápagos, Alaska and Baja's Sea of Cortez.

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Natural Habitat has partnered with World Wildlife Fund (“WWF”) to offer conservation travel, which is sustainable travel that contributes to the protection of nature and wildlife. 

Cycling tours include in the United States, from cycling beneath the California redwoods to pedaling through farmland on a Vermont bike tour, wine tastings in the world-class vineyards of Napa and Sonoma or farm-to-table renaissance dining, cycling through exotic Costa Rican rainforests, the rocky coasts of Ireland, deep in the vineyards of Spain, or high in the Swiss Alps, exploring the roads of ancient cities and trek the Atlas desert by camel, to bamboo forests and Buddhist temples or pedaling past tea plantations in Kyoto.

DuVine Cycling + Adventure Company (“DuVine”) provides international cycling adventures and unforgettable travel experiences, connecting with local character and culture on small, intimate group cycling tours around the world with cycling experts as guides, immersion in local cuisine, accommodations and history. International cycling tours include the exotic Costa Rican rainforests, the rocky coasts of Ireland, deep in the vineyards of Spain, or high in the Swiss Alps.

Cycling adventures in the United States vary from cycling beneath the California redwoods to pedaling through Vermont farmland, wine tastings in the world-class vineyards of Napa and Sonoma or farm-to-table renaissance dining.

Off the Beaten Path, LLC (“Off the Beaten Path”) provides small group travel, led by local, experienced guides, with distinct focus on wildlife, hiking national parks and culture, to change people's lives through exceptional travel.

Off the Beaten Path is known for providing distinctive insider national park experiences in the Rocky Mountains, Desert Southwest, and Alaska, and includes unique trips across Europe, Africa, Australia, Central and South America and the South Pacific, for connecting the heart of the traveler with the soul of the place.

The Company operates two segments including the Lindblad segment, which consists of the operations of our Lindblad brand, and the Land Experiences segment, consisting of our Natural Habitat, DuVine and Off the Beaten Path brands.

We operate two segments including the Lindblad segment, which consists of the operations of our Lindblad brand, and the Land Experiences segment, consisting of our Natural Habitat, DuVine and Off the Beaten Path brands.

2021 Highlights

We resumed ship operations in June 2021 and as of July 31, 2021 had eight of our nine vessels providing expeditions to guests.

During June 2021, we launched three ships in Alaska and another in the Galapagos and, following the quarter, we resumed operations on the majority of our remaining vessels with additional ships launching in Alaska and the Galapagos, as well as Iceland.

During June 2021, we amended our export credit facilities to, among other things, extend the deferral of scheduled amortization payments of the first export credit facility through December 2021 in the aggregate amount of $15.7 million, extend the effective suspension of the total net leverage ratio covenant through March 2022, increase the interest rate spreads for the export credit facilities by 50 basis points and annualize EBITDA used in its covenant calculation through December 31, 2022.

The deferred tranches will amortize quarterly over three years starting in March 2022.

During April 2021, we further amended our amended credit agreement to, among other things, extend the waiver of its total net leverage ratio covenant through March 31, 2022, annualize EBITDA used in its covenant calculation through December 31, 2022 and increase the interest rate spreads of the Term Facility, excluding the Main Street Loan, and the Revolving Facility by 50 basis points, such additional interest to be paid in cash.

Certain other covenants under the amended credit agreement continue to be more restrictive during the extended covenant waiver period.

We resumed ship operations in June 2021 and as of November 2, 2021 had eight of our ten vessels providing expeditions to guests.

During June 2021, we launched three ships in Alaska and another in the Galapagos and during the third quarter the Company resumed operations on the majority of its remaining vessels with additional ships operating in Alaska, the Galapagos, Iceland and the Pacific Northwest. 

During September 2021, we drew down $46.2 million under the second export credit agreement in conjunction with our final payment upon delivery of the National Geographic Resolution . In April 2021 we drew down $15.5 million under the second export credit agreement in conjunction with our fourth installment payment for the vessel. 

During the first quarter of 2021, we completed the acquisitions of Off the Beaten Path, a land-based travel operator specializing in authentic national park experiences, and DuVine, an international luxury cycling and adventure company focused on exceptional food and wine experiences.

Return to Fleet Operations and COVID-19 Business Update

We resumed ship operations in June 2021 and, as of July 31, 2021, had eight of our nine vessels providing expeditions to guests.

During June 2021, we launched three ships in Alaska and another in the Galapagos and, following the quarter, we resumed operations on the majority of our remaining vessels with additional ships launching in Alaska and the Galapagos, as well as Iceland.

We continue to work with local authorities on plans to operate in additional geographies during the second half of the year.

As the COVID-19 virus effects travel restrictions in various locations around the world, we also continue to work with our guests to reschedule travel plans and refund payments, as applicable, for those expeditions and trips that we are not able to operate due to local restrictions.

During September 2021, we acquired the Crystal Esprit yacht for $13.3 million.

We expect to modify the vessel to a capacity of 48 guest, along with other changes, and replace the National Geographic Islander in the Galapagos.

Return to Fleet Operations and COVID-19 Business Update 

We resumed ship operations in June 2021 and, as of November 2, 2021, had eight of our ten operating vessels providing expeditions to guests.

During June 2021, we launched three ships in Alaska and another in the Galapagos, and during the third quarter, we resumed operations on the majority of our remaining vessels with additional ships operating in Alaska, the Galapagos, Iceland and the Pacific Northwest.

We continue to work with local authorities on plans to operate in additional geographies during remainder of the year and in early 2022.

As the COVID-19 virus effects travel restrictions in various locations around the world, we also continue to work with our guests to reschedule travel plans and refund payments or issue future travel certificates, as applicable, for those expeditions and trips that we are not able to operate due to local restrictions.

We believe there are a variety of strategic advantages that enable us to deploy our ships safely and quickly, while mitigating the risk of COVID-19 as travel restrictions are lifted.

The most notable is the size of our owned and operated vessels which range from 48 to 148 passengers, allowing for a highly controlled environment that includes stringent cleaning protocols.

The small nature of our ships also allows us to efficiently and effectively test our guests and crew prior to boarding.

All ship crew and staff members have been fully vaccinated.

Additionally, the majority of expeditions take place in remote locations where human interactions are limited, so there is less opportunity for external influence.

The small nature of our ships also allows us to efficiently and effectively test our guests and crew prior to boarding. Additionally, all guests age 12 and older, crew and staff are required to be fully vaccinated and the majority of expeditions take place in remote locations where human interactions are limited, so there is less opportunity for external influence.

While our ships were not in operations, the majority of the fleet was being maintained with minimally required crew on-board to ensure they complied with all necessary regulations and could be fully put back into service quickly as needed.

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We have experienced a substantial negative impact from the COVID-19 virus including elevated cancellations and softness in near-term demand.

Despite the COVID-19 impact, we still have substantial advanced reservations for future travel.

Bookings for the full year 2022 are 36% ahead of the bookings for 2021 as of the same date a year ago and 37% ahead of the bookings for 2020 as of the same date two years ago.

We continue to see new bookings for future travel including over $174.0 million since the beginning of 2021 and are receiving significant deposits and final payments for future travel.

For 2021 voyages that have been cancelled or rescheduled, we are offering future travel credits or full refunds to our fully paid guests. As of August 3, 2021, the majority of guests have opted for future travel credits.   

Despite the COVID-19 impact, we continue to see significant new bookings across the fleet and have substantial advanced reservations for future travel.

Bookings for the full year 2022 are 51% ahead of the bookings for 2021 as of the same date a year ago and 25% ahead of the bookings for 2020 as of the same date two years ago.

For voyages that were cancelled or rescheduled, we offered guests future travel credits or full refunds and the majority of guests opted for future travel credits.   

Balance Sheet and Liquidity

As of June 30, 2021, we had $160.1 million in unrestricted cash and $43.5 million in restricted cash primarily related to deposits on future travel originating from U.S.

As of September 30, 2021, we had $155.6 million in unrestricted cash and $29.5 million in restricted cash primarily related to deposits on future travel originating from U.S.

ports and credit card reserves.

As of June 30, 2021, we had a total debt position of $514.7 million and were in compliance with all of our debt covenants.

Since the beginning of the COVID-19 pandemic, we have taken a variety of steps to strengthen our balance sheet and increase liquidity including:

In April 2020, we drew down $30.6 million and in April 2021 we drew down $15.5 million under our second export credit agreement in conjunction with our third and fourth installment payments on the National Geographic Resolution . 

In May 2020, we amended our $2.5 million promissory note, changing the maturity date of the principal payments to be due in three equal installments, with the first payment due on December 22, 2020, the second due on December 22, 2021 and the final payment due on December 22, 2022.

In June 2020, we amended our export credit agreements to defer scheduled amortization payments from June 2020 through March 2021 and to suspend the total net leverage ratio covenant from June 2020 through June 2021.

During August 2021, we received a $21.0 million grant under the Coronavirus Economic Relief for Transportation Services (“CERTS”) Act, which provided grants to eligible motorcoach, school bus, passenger vessel and pilotage companies that have experienced annual revenue losses of 25 percent or more as result of COVID-19.

The priority use of grant funds must be for payroll costs, though grants may also be used for permitted operating expenses and the repayment of debt accrued to maintain payroll.

As of September 30, 2021, we had a total debt position of $561.8 million and were in compliance with all of our debt covenants currently in effect.

In conjunction with the continuing economic risk of the COVID-19 pandemic, during 2021 we have taken a variety of steps to strengthen our balance sheet and increase liquidity including:

During June 2021, we further amended our export credit facilities to, among other things, extend the deferral of scheduled amortization payments of the first export credit facility through December 2021 in the aggregate amount of $15.7 million, extend the effective suspension of the total net leverage ratio covenant through March 2022, increase the interest rate for the export credit facilities by 50 basis points and annualize EBITDA used in the covenant calculation through December 31, 2022.

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Certain other covenants continue to be more restrictive during the extended covenant waiver period.

In August 2020, we amended our term loan and revolving credit facilities to waive the application of the total net leverage ratio covenant through June 2021.

In connection with the amendment, the interest rate of the term loan has been increased by 125 basis points, to be paid-in-kind at maturity, a LIBOR floor of 75 basis points has been added to the term loan facility and certain covenants were amended to be more restrictive.

During April 2021, we further amended our term loan and revolving credit agreement to, among other things, extend the waiver of its total net leverage ratio covenant through March 31, 2022, annualized EBITDA used in our covenant calculation through December 31, 2022 and increase the interest rate spreads of the Term Facility, excluding the Main Street Loan, and the Revolving Facility by 50 basis points, such additional interest to be paid in cash.

Certain other covenants continue to be more restrictive during the extended covenant waiver period.

In August 2020, we raised $85.0 million in gross proceeds through the private placement issuance of Redeemable Convertible Series A Preferred Stock that carries a 6% annual dividend, which is payable in kind for two years and, thereafter, in cash or in-kind at our option. The preferred stock is convertible into shares of Lindblad common stock at a conversion price of $9.50 per share, representing a premium of 23% to Lindblad’s 30-day trading volume weighted average price on the date of issuance.

In December 2020, we amended our term loan and revolving credit facilities and borrowed an incremental $85.0 million under the amended term loan facility through the Main Street Expanded Loan Facility program established by the Board of Governors of the Federal Reserve System.

The incremental borrowing carries an interest rate of LIBOR plus 3.0%, without any LIBOR floor, and matures December 2025 with no early payment restrictions. 

As we continue to ramp up operations, our monthly cash usage will increase as we incur costs in operating expeditions, preparing additional ships for return to service, spending to market and advertise upcoming expeditions and trips and instating remaining furloughed and part-time office staff as needed.

We also anticipate a significant increase in guest payments as we receive final payments for upcoming expeditions as well as deposits for new reservations for future travel.

However, there can be no assurance that cash flows from operations will be available to fund future obligations or that we will not experience delays or cancellations with respect to the resumption of our operations.

Given the dynamic nature of the COVID-19 pandemic, we cannot reasonably estimate the potential impacts the pandemic will have on our financial condition, results of operations, cash flows, plans and growth for the foreseeable future.

It is unknown when travel restrictions and various border closures will be lifted and what the demand for expedition travel will be once restrictions are no longer in place.

Based on our actions taken to date, our planned and anticipated actions and our current forecast, we believe that we can meet our obligations for the next 12 months from August 4, 2021, the date of this Quarterly Report on Form 10-Q.

The discussion and analysis of our results of operations and financial condition are organized as follows :

a description of certain line items and operational and financial metrics we utilize to assist us in managing our business;

results and a comparable discussion of our consolidated and segment results of operations for the three and six months ended June 30, 2021 and 2020;

results and a comparable discussion of our consolidated and segment results of operations for the three and nine months ended September 30, 2021 and 2020;

a discussion of our liquidity and capital resources, including future capital and contractual commitments and potential funding sources;

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Traditionally, our Lindblad brand tour revenues from the sale of guest tickets are mildly seasonal, historically larger in the first and third quarters.

The seasonality of our operating results fluctuates due to our vessels being taken out of service for scheduled maintenance or drydocking, which is typically during nonpeak demand periods, in the second and fourth quarters. Our drydock schedules are subject to cost and timing differences from year to year due to the availability of shipyards for certain work, drydock locations based on ship itineraries, operating conditions experienced especially in the polar regions and the applicable regulations

of class societies in the maritime industry, which require more extensive reviews periodically. Drydocking impacts operating results by reducing tour revenues and increasing cost of tours.

Natural Habitat, DuVine and Off the Beaten Path are seasonal businesses, with the majority of Natural Habitat’s tour revenue recorded in the third and fourth quarters from its summer season departures and polar bear tours, while the majority of Off the Beaten Path and DuVine’s revenues are recorded during the second and third quarters from their summer season tours and cycling adventures.

Results of Operations - Consolidated

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

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Undistributed loss per share available to stockholders:

Comparison of the Three and Six Months Ended June 30, 2021 to Three and Six Months Ended June 30, 2020 - Consolidated

Comparison of the Three and Nine Months Ended September 30, 2021 to Three and Nine Months Ended September 30, 2020 - Consolidated

Tour Revenues

Tour revenues for the three months ended June 30, 2021 increased $15.5 million to $15.3 million for the three months ended June 30, 2021.

The Lindblad segment tour revenues increased by $6.7 million, and the Land Experiences segment increased $8.8 million, primarily as a result of restarting certain expeditions and trips during the second quarter of 2021 and the inclusion of the operations of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021. 

Tour revenues for the six months ended June 30, 2021 decreased $63.9 million to $17.0 million, compared to $81.0 million for the six months ended June 30, 2020.

The Lindblad segment tour revenues decreased by $62.4 million, primarily as a result of cancelled, disrupted and rescheduled expeditions due to COVID-19 during 2020.

At the Land Experiences segment, tour revenues decreased $1.6 million over the prior year period, primarily related to cancelled, disrupted and rescheduled trips due to COVID-19, partially offset by the inclusion of the operations of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021.

Tour revenues for the three months ended September 30, 2021 increased $63.5 million, to $64.5 million, compared to $1.0 million for the three months ended September 30, 2020.

The Lindblad segment tour revenues increased by $33.1 million and the Land Experiences segment increased $30.4 million, primarily as a result of restarting expeditions and trips.

The Land Experiences segment also includes the results of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021. 

Tour revenues for the nine months ended September 30, 2021 decreased $0.4 million to $81.6 million, compared to $82.0 million for the nine months ended September 30, 2020.

The Lindblad segment tour revenues decreased by $29.3 million, primarily as a result of cancelled, disrupted and rescheduled expeditions due to COVID-19.

At the Land Experiences segment, tour revenues increased $28.8 million over the prior year period, primarily due to operating additional trips and from the inclusion of the results of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021.

Cost of Tours

Total cost of tours for the three months ended June 30, 2021 increased $6.7 million, or 52%, to $19.4 million compared to $12.7 million for the three months ended June 30, 2020.

At the Lindblad segment, cost of tours increased $2.7 million, due to the restart of certain expeditions during June 2021.

At the Land Experiences segment, cost of tours increased $4.0 million, due to operating additional trips during the second quarter of 2021 and the inclusion of the operations of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021.

Total cost of tours for the six months ended June 30, 2021 decreased $27.2 million, or 50%, to $27.7 million, compared to $54.9 million for the six months ended June 30, 2020.

At the Lindblad segment, cost of tours decreased $25.3 million, primarily related to cancelled, disrupted and rescheduled expeditions due to COVID-19, partially offset by costs associated with the addition of the National Geographic Endurance to our fleet in March 2020.

At the Land Experiences segment, cost of tours decreased $2.0 million, primarily due to cancelled, disrupted and rescheduled trips due to COVID-19, partially offset by the inclusion of the operations of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021.

Total cost of tours for the three months ended September 30, 2021 increased $37.5 million, to $45.6 million compared to $8.1 million for the three months ended September 30, 2020.

At the Lindblad segment, cost of tours increased $18.3 million, due to the restart of expeditions.

At the Land Experiences segment, cost of tours increased $19.2 million, due to operating additional trips during the third quarter of 2021 and the inclusion of the results of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021.

Total cost of tours for the nine months ended September 30, 2021 increased $10.3 million, or 16%, to $73.3 million, compared to $63.0 million for the nine months ended September 30, 2020.

At the Lindblad segment, cost of tours decreased $6.9 million, primarily related to cancelled, disrupted and rescheduled expeditions due to COVID-19.

At the Land Experiences segment, cost of tours increased $17.2 million, primarily due to operating additional trips and the inclusion of the results of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021.

General and Administrative

General and administrative expenses for the three months ended June 30, 2021 increased $5.5 million, or 56%, to $15.3 million compared to $9.8 million for the three months ended June 30, 2020.

At the Lindblad segment, general and administrative expenses increased $3.0 million from the prior year period primarily due to increased credit card commissions due to the strong booking environment, higher personnel costs associated with restarting operations and increased stock-based compensation expense.

At the Land Experiences segment, general and administrative expenses increased $2.3 million, primarily due to increased personnel costs related to operating additional trips and the inclusion of the operations of Off the Beaten Path and DuVine which were acquired during the first quarter of 2021. 

General and administrative expenses for the six months ended June 30, 2021 increased $2.1 million, or 8%, to $29.1 million compared to $27.0 million for the six months ended June 30, 2020.

At the Lindblad segment, general and administrative expenses were flat compared to prior year.

At the Land Experiences segment, general and administrative expenses increased $1.9 million, primarily due to the inclusion of the operations of Off the Beaten Path and DuVine which were acquired during the first quarter of 2021.

General and administrative expenses for the three months ended September 30, 2021 increased $7.9 million, or 86%, to $17.0 million compared to $9.1 million for the three months ended September 30, 2020.

At the Lindblad segment, general and administrative expenses increased $4.5 million from the prior year period primarily due to higher personnel costs associated with restarting operations, increased stock-based compensation expense and higher credit card commissions due to the strong booking environment.

At the Land Experiences segment, general and administrative expenses increased $3.4 million, primarily due to increased personnel costs related to operating additional trips, higher credit card commissions due to the strong booking environment and the inclusion of the results of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021. 

General and administrative expenses for the nine months ended September 30, 2021 increased $9.9 million, or 28%, to $46.1 million compared to $36.2 million for the nine months ended September 30, 2020.

At the Lindblad segment, general and administrative expenses increased $4.7 million from the prior year period primarily due higher personnel costs associated with restarting operations, increased stock-based compensation expense and increased credit card commissions due to a strong booking environment.

At the Land Experiences segment, general and administrative expenses increased $5.2 million, primarily due to increased personnel costs related to operating additional trips, higher credit card commissions due to a strong booking environment and the impact of the acquisitions of Off the Beaten Path and DuVine, which were completed during the first quarter of 2021.

Selling and Marketing

Selling and marketing expenses for the three months ended June 30, 2021 increased $1.6 million, or 46%, to $5.0 million, compared to $3.4 million for the three months ended June 30, 2020.

At the Lindblad segment, selling and marketing expenses increased $0.4 million as increased advertising spend was partially offset by lower commissions.

At the Land Experiences segment, selling and marketing expenses increased $1.2 million, primarily due to increased marketing spend related to the operating additional trips, and the inclusion of the operations of Off the Beaten Path and DuVine which were acquired during the first quarter of 2021.

Selling and marketing expenses for the six months ended June 30, 2021 decreased $8.8 million, or 54%, to $7.5 million, compared to $16.3 million for the six months ended June 30, 2020.

At the Lindblad segment, selling and marketing expenses decreased $9.9 million, primarily due to lower commission expenses related to the impact of COVID-19 on revenue.

At the Land Experiences segment, selling and marketing expenses increased $1.1 million, primarily due to increased advertising related to operating additional trips, and the inclusion of the operations of Off the Beaten Path and DuVine which were acquired during the first quarter of 2021.

Selling and marketing expenses for the three months ended September 30, 2021 increased $8.1 million to $10.2 million, compared to $2.1 million for the three months ended September 30, 2020.

At the Lindblad segment, selling and marketing expenses increased $6.7 million primarily due to higher commissions and increased advertising spend.

At the Land Experiences segment, selling and marketing expenses increased $1.4 million, primarily due to increased marketing spend and higher commissions associated with the ramp up in operations and the inclusion of the results of Off the Beaten Path and DuVine which were acquired during the first quarter of 2021.

Selling and marketing expenses for the nine months ended September 30, 2021 decreased $0.7 million, or 4%, to $17.7 million, compared to $18.4 million for the nine months ended September 30, 2020.

At the Lindblad segment, selling and

marketing expenses decreased $3.2 million, primarily due to lower commission expenses due to the cancellation, disruption and rescheduling of expeditions due to COVID-19 partially offset by increased marketing spend related to the ramp up in operations.

At the Land Experiences segment, selling and marketing expenses increased $2.5 million, primarily due to increased marketing spend and higher commissions associated with the ramp up in operations and the inclusion of the results of Off the Beaten Path and DuVine which were acquired during the first quarter of 2021.

Depreciation and Amortization

Depreciation and amortization expenses for the three months ended June 30, 2021 decreased $0.3 million, or 4%, to $8.2 million, compared to $8.6 million for the three months ended June 30, 2020.

Depreciation and amortization expenses for the six months ended June 30, 2021 increased $1.2 million, or 8%, to $16.5 million, compared to $15.2 million for the six months ended June 30, 2020, primarily due to a full six months of depreciation of the National Geographic Endurance  which was added to the fleet in March 2020.

Other Expense

Other expenses for the three months ended June 30, 2021, decreased $2.6 million to $5.5 million from $8.1 million for the three months ended June 30, 2020, primarily due to the following:

A $0.2 million gain in foreign currency translation in 2021, compared to a loss of $3.9 million in 2020 which was due primarily to $5.3 million loss on the maturity of a foreign currency hedge related to the installment payment for the 

National Geographic Resolution in 2020.

A $1.5 million increase in interest expense, net to $5.7 million in 2021, primarily due to increased borrowings under our term loan facility as part of the Main Street Lending Program, and the additional drawdowns under our export credit agreements related to the National Geographic Resolution , as well as higher rates on our term loan and revolving credit facilities. 

Other expenses, for the six months ended June 30, 2021, decreased $3.6 million to $11.1 million from $14.7 million for the six months ended June 30, 2020, primarily due to the following:

A $0.3 million gain in foreign currency translation in 2021, compared to a $7.3 million loss in foreign currency translation in 2020 which was primarily due to a loss of $5.3 million on the maturity of a foreign currency hedge related to the installment payment for the National Geographic Resolution in 2020.

A $4.1 million increase in interest expense, net to $11.4 million in 2021, primarily due to increased borrowings under our term loan facility as part of the Main Street Lending Program, the drawdown of our revolving credit facility and the additional drawdowns under our export credit agreements related to our new builds, the National Geographic Endurance  and the National Geographic Resolution , as well as higher rates on our term loan and revolving credit facilities. 

Depreciation and amortization expenses for the three months ended September 30, 2021 increased $0.8 million, or 10%, to $9.3 million, compared to $8.5 million for the three months ended September 30, 2020, primarily due to information technology assets placed into service, accelerated depreciation for the National Geographic Islander and the amortization of acquired intangibles.

Depreciation and amortization expenses for the nine months ended September 30, 2021 increased $2.1 million, or 9%, to $25.8 million, compared to $23.7 million for the nine months ended September 30, 2020, primarily due to a full nine months of depreciation of the National Geographic Endurance  which was added to the fleet in March 2020.

Other Income (Expense)

Other expenses for the three months ended September 30, 2021, decreased $0.5 million to $3.1 million from $3.6 million for the three months ended September 30, 2020, primarily due to the following:

A $1.4 million loss in foreign currency translation in 2021, compared to a gain of $1.0 million in 2020 which was due primarily to $2.5 million loss on the maturity of a foreign currency hedge related to the final payment for the 

National Geographic Resolution  upon its delivery in September 2021.

A $1.5 million increase in interest expense, net to $6.1 million in 2021, primarily due to increased borrowings under our term loan facility as part of the Main Street Lending Program, and the additional drawdowns under our export credit agreements related to the National Geographic Resolution , as well as higher rates on our debt facilities. 

Recognition of $4.4 million in other income related to expenses covered under the CERTS grant received in September 2021.

Other expenses, for the nine months ended September 30, 2021, decreased $4.1 million to $14.2 million from $18.3 million for the nine months ended September 30, 2020, primarily due to the following:

A $1.2 million loss in foreign currency translation in 2021, compared to a $6.3 million loss in foreign currency translation in 2020 primarily due to lower losses on the maturity of foreign currency hedges related to installment payments for the National Geographic Resolution in 2021 as compared with 2020.

A $5.7 million increase in interest expense, net to $17.4 million in 2021, primarily due to increased borrowings under our term loan facility as part of the Main Street Lending Program, the higher rates on our debt facilities and the additional drawdowns under our export credit agreements related to our new builds, the National Geographic Endurance  and the National Geographic Resolution . 

Recognition of $4.4 million in other income related to expenses covered under the CERTS grant received in September 2021.

Results of Operations –

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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.

For the three months ended

For the six months ended

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

10 unchanged sentences

Lindblad Segment

The following table sets forth our Available Guest Nights, Guest Nights Sold, Occupancy, Maximum Guests, Number of Guests and Voyages for the three and six months ended June 30, 2021 and 2020:

For the three months ended June 30,

For the six months ended June 30,

The following table sets forth our Available Guest Nights, Guest Nights Sold, Occupancy, Maximum Guests, Number of Guests and Voyages for the three and nine months ended September 30, 2021 and 2020:

For the three months ended September 30,

For the nine months ended September 30,

Available Guest Nights

2 unchanged sentences

Number of Guests

The following table shows the calculations of Gross Yield and Net Yield for the three and six months ended June 30, 2021 and 2020.

The following table shows the calculations of Gross Yield and Net Yield for the three and nine months ended September 30, 2021 and 2020.

Gross Yield is calculated by dividing Tour Revenues by Available Guest Nights and Net Yield is calculated by dividing Net Revenue by Available Guest Nights:

Calculation of Gross Yield per Available Guest Night and Net Yield per Available Guest Night

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands, except for Available Guest Nights, Gross and Net Yield per Available Guest Night)

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The following table reconciles operating income to our Net Yield Guest Metric for the Lindblad Segment:

For the three months ended June 30,

For the six months ended June 30,

For the three months ended

September 30,

For the nine months ended

September 30,

(In thousands)

5 unchanged sentences

Other tour expenses

The following table shows the calculations of Gross Cruise Cost and Net Cruise Costs for the three and six months ended June 30, 2021 and 2020:

The following table shows the calculations of Gross Cruise Cost and Net Cruise Costs for the three and nine months ended September 30, 2021 and 2020:

Calculation of Gross Cruise Cost and Net Cruise Cost

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands, except for Available Guest Nights, Gross and Net Cruise Cost per Avail.

11 unchanged sentences

Adjusted Net Cruise Cost

Comparison of Three and Six Months Ended June 30, 2021 to Three and Six Months Ended June 30, 2020 at the Lindblad Segment

Available Guest Nights

Gross Cruise Cost per Available Guest Night

Net Cruise Cost per Available Guest Night

Net Cruise Cost Excluding Fuel per Available Guest Night

Adjusted Net Cruise Cost Excluding Fuel per Available Guest Night

Adjusted Net Cruise Cost per Available Guest Night

Comparison of Three and Nine Months Ended September 30, 2021 to Three and Nine Months Ended September 30, 2020 at the Lindblad Segment

Tour Revenues

Tour revenues for the three months ended June 30, 2021 increased $6.7 million to $6.7 million.

The increase was a result of restarting certain expeditions during the second quarter of 2021 compared with cancelling, disrupting and rescheduling all expeditions due to COVID-19 during the second quarter of 2020.

Tour revenues for the six months ended June 30, 2021 decreased $62.4 million to $7.2 million, compared to $69.5 million for the six months ended June 30, 2020.

Tour revenues for the three months ended September 30, 2021 increased $33.1 million to $33.1 million.

The increase was a result of restarting expeditions during 2021 compared with cancelling, disrupting and rescheduling all expeditions due to COVID-19 in the third quarter of 2020.

Tour revenues for the nine months ended September 30, 2021 decreased $29.3 million to $40.3 million, compared to $69.5 million for the nine months ended September 30, 2020.

The decrease was primarily driven by additional cancelled, disrupted and rescheduled expeditions due to COVID-19 during 2021.

Operating Loss

Operating loss decreased $0.6 million to loss of $31.0 million for the three months ended June 30, 2021 compared to operating loss of $31.6 million for the three months ended June 30, 2020. The decrease was a result of restarting certain expeditions during the second quarter of 2021 compared with cancelling, disrupting and rescheduling all expeditions due to COVID-19 during the second quarter of 2020.

Operating loss increased $28.8 million to a loss of $58.3 million for the six months ended June 30, 2021, compared to a loss of $29.5 million for the six months ended June 30, 2020.

The increase was primarily driven by lower revenue from cancelled, disrupted and rescheduled voyages due to COVID-19 and costs associated with adding the National Geographic Endurance to the fleet in March 2020.

Operating loss decreased $2.6 million to a loss of $22.3 million for the three months ended September 30, 2021 compared to an operating loss of $24.8 million for the three months ended September 30, 2020. The decrease was a result of restarting expeditions during 2021 compared with cancelling, disrupting and rescheduling all expeditions due to COVID-19 during the third quarter of 2020.

Operating loss increased $26.3 million to a loss of $80.6 million for the nine months ended September 30, 2021, compared to a loss of $54.3 million for the nine months ended September 30, 2020.

The increase was primarily driven by lower revenue from cancelled, disrupted and rescheduled voyages due to COVID-19.

Results of Operations –

Land Experiences Segment

Comparison of Three and Six Months Ended June 30, 2021 to Three and Six Months Ended June 30, 2020

Comparison of Three and Nine Months Ended September 30, 2021 to Three and Nine Months Ended September 30, 2020

Tour Revenues

Tour revenues for the three months ended June 30, 2021 increased $8.8 million to $8.6 million, primarily as a result of operating additional trips during the second quarter 2021 and the inclusion of the operations of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021. 

Tour revenues for the six months ended June 30, 2021 decreased $1.6 million to $9.9 million compared to $11.5 million for the six months ended June 30, 2020, due primarily to cancelled, disrupted and rescheduled expeditions due to COVID-19, partially offset by the inclusion of the operations of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021.

Operating Loss

An operating loss of $1.5 million was incurred for the three months ended June 30, 2021, compared to operating loss of $3.1 million for the three months ended June 30, 2020.

The lower operating loss was primarily a result of operating additional trips during the second quarter of 2021.

The second quarter of 2021 also included the operations of Off the Beaten Path and DuVine which were acquired during the first quarter of 2021.

Operating loss for the six months ended June 30, 2021 increased $2.3 million to a loss of $5.3 million compared to a loss of $3.0 million for the six months ended June 30, 2020.

The increase was primarily a result of cancelled, disrupted and rescheduled expeditions due to COVID-19. The second quarter of 2021 also included the operations of Off the Beaten Path and DuVine which were acquired during the first quarter of 2021.

Tour revenues for the three months ended September 30, 2021 increased $30.4 million to $31.4 million compared to $1.0 million for the three months ended September 30, 2020, primarily as a result of operating additional trips during the third quarter 2021 and the inclusion of the results of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021. 

Tour revenues for the nine months ended September 30, 2021 increased $28.8 million to $41.3 million compared to $12.5 million for the nine months ended September 30, 2020, due primarily to operating additional trips beginning the second quarter of 2021, the cancelled, disrupted and rescheduled expeditions due to COVID-19 during 2020, and by the inclusion of the operations of Off the Beaten Path and DuVine, which were acquired during the first quarter of 2021.

Operating Income (Loss)

Operating income increased $6.6 million to $4.6 million for the three months ended September 30, 2021, compared to an operating loss of $2.0 million for the three months ended September 30, 2020.

The higher operating income was primarily a result of operating additional trips during the third quarter of 2021.

The third quarter of 2021 also included the results of Off the Beaten Path and DuVine which were acquired during the first quarter of 2021.

Operating loss for the nine months ended September 30, 2021 decreased $4.3 million to a loss of $0.7 million compared to a loss of $5.0 million for the nine months ended September 30, 2020.

The decrease was primarily a result of operating additional trips and from the inclusion of the results of Off the Beaten Path and DuVine which were acquired during the first quarter of 2021.

Adjusted EBITDA –

The following table outlines the reconciliation to net income (loss) and calculation of consolidated Adjusted EBITDA for the three and six months ended June 30, 2021 and 2020.

The following table outlines the reconciliation of net loss to consolidated Adjusted EBITDA for the three and nine months ended September 30, 2021 and 2020.

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

Interest expense, net

Income tax benefit

Income tax expense (benefit)

Depreciation and amortization

Loss (gain) on foreign currency

Other expense

Other (income) expense

Stock-based compensation

1 unchanged sentence

Adjusted EBITDA

The following tables outline the reconciliation for each reportable segment from operating income to Adjusted EBITDA for the three and six months ended June 30, 2021 and 2020.

The following tables outline the reconciliation for each reportable segment from operating income to Adjusted EBITDA for the three and nine months ended September 30, 2021 and 2020.

Lindblad Segment

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

5 unchanged sentences

Land Experiences Segment

For the three months ended June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

(In thousands)

Operating loss

Operating income (loss)

Depreciation and amortization

2 unchanged sentences

Liquidity and Capital Resources

Due to the spread of the COVID-19 virus and the effects of travel restrictions around the world, we suspended or rescheduled the majority of expeditions and fleet operations departing after March 16, 2020 and have been working with guests to reschedule travel plans and refund payments, as applicable. Our Land Experiences segment has operated limited tours during the first six months of 2021 and our Lindblad segment partially resumed expeditions during June 2021, with expeditions to Alaska and the Galapagos and, following the quarter, we resumed operations on the majority of our remaining vessels with additional ships launching in Alaska and the Galapagos, as well as Iceland.

The COVID-19 pandemic has already had a material negative impact on our operations and financial results and we expect the evolving pandemic to have ongoing material negative effects on operations, financial results and liquidity as various geographical locations around the world continue to be significantly impacted by COVID-19 and have travel restrictions.

Given the dynamic nature of this situation, we cannot reasonably estimate the impacts of the COVID-19 pandemic on our financial condition, results of operations, cash flows, plans and growth for the foreseeable future.

The COVID-19 pandemic has had a material negative impact on our operations and financial results and while we have substantially resumed operations, given the dynamic nature of this situation, we cannot reasonably estimate the impacts of the COVID-19 pandemic on our financial condition, results of operations, cash flows, plans and growth for the foreseeable future.

It is unknown when travel restrictions and various border closures will be completely lifted and what the demand for expedition travel will be once these restrictions are no longer in place.

As of June 30, 2021, we had approximately $514.7 million in long-term debt obligations, including the current portion of long-term debt.

We believe that our cash on hand, our Second Export Credit Agreement and expected future operating cash inflows will be sufficient to fund operations, debt service requirements and necessary capital expenditures, assuming that our operations resume on the timeline we currently expect. 

As we continue to ramp up operations, our monthly cash usage will increase as we incur costs in operating expeditions, preparing additional ships for return to service, spending to market and advertise upcoming expeditions and trips and instating remaining furloughed and part-time office staff as needed.

During August 2021, we received a $21.0 million grant under the CERTS Act, which provided grants to eligible motorcoach, school bus, passenger vessel, and pilotage companies, see the notes to the condensed consolidated financial statements for more information. 

As of September 30, 2021, we had approximately $561.8 million in long-term debt obligations, including the current portion of long-term debt.

We believe that our cash on hand and expected future operating cash inflows will be sufficient to fund operations, debt service requirements and necessary capital expenditures, assuming that our operations continue to ramp up as we currently expect. 

As we continue to ramp up operations, our monthly cash usage will increase as we incur costs in operating expeditions, preparing additional ships for return to service, and spending to market and advertise upcoming expeditions and trips.

We also anticipate a significant increase in guest payments as we receive final payments for upcoming expeditions as well as deposits for new reservations for future travel. However, there can be no assurance that cash flows from operations will be available to fund future obligations or that we will not experience delays or cancellations with respect to the resumption of our operations.

Sources and Uses of Cash for the Six Months Ended June 30, 2021 and 2020

Net cash provided by operating activities was $21.8 million in 2021 compared to net cash used in operating activities of $36.8 million in 2020.

The $58.6 million increase is primarily due to cash received from guests for deposits on upcoming expeditions and trips partially offset by costs of operations.

Sources and Uses of Cash for the Nine Months Ended September 30, 2021 and 2020

Net cash provided by operating activities was $21.5 million in 2021 compared to net cash used in operating activities of $71.7 million in 2020. The $93.3 million increase is primarily due to cash received from guests for final payments and deposits on upcoming expeditions and trips, partially offset by costs of operations.

The current period also included $21.0 million received for the CERTS grant.

Net cash used in investing activities was $96.3 million in 2021 compared to $152.8 million in 2020.

The $119.6 million decrease was primarily due to payments for the completion of the National Geographic Endurance  during the first quarter 2020, partially offset mainly by costs associated with building the 

National Geographic Resolution  and the net cash used for the acquisitions of Off the Beaten Path and DuVine during 2021. 

Net cash provided by financing activities was $9.6 million in 2021 compared to $181.8 million in 2020.

The $172.3 million decrease is primarily due to the borrowing $107.7 million under the senior secured credit agreement for the final contracted payment of the National Geographic Endurance and a $45.0 million drawdown of our revolving credit facility during the first quarter 2020, partially offset by the borrowing of $15.5 million under the senior secured credit agreement for a contracted payment of the National Geographic Resolution .

The $56.5 million decrease was primarily due to payments for the completion of the National Geographic Endurance  during the first quarter 2020, partially offset during 2021 by costs associated with building the 

National Geographic Resolution , the purchase of the Crystal Esprit and the net cash used for the acquisitions of Off the Beaten Path and DuVine. 

Net cash provided by financing activities was $55.3 million in 2021 compared to $261.4 million in 2020.

The $206.2 million decrease is primarily due to the borrowing $107.7 million under the senior secured credit agreement for the final contracted payment of the National Geographic Endurance , a $45.0 million drawdown of our revolving credit facility, the $85.0 million generated from the issuance of Preferred Stock and the borrowing of $30.6 million under the senior secured credit agreement for an installment payment on the National Geographic Resolution  during 2020, partially offset by the borrowing of $61.7 million under the senior secured credit agreement for remaining payments on the National Geographic Resolution .

Funding Sources

4 unchanged sentences

The Amended Credit Agreement was amended in August 2020 to waive the application of the total net leverage ratio covenant through June 2021. In connection with the amendment, the interest rate of the Term Facility was increased 125 basis points, to be paid-in-kind at maturity, a LIBOR minimum of 0.75% was added to the Term Facility and certain covenants were amended to be more restrictive.

During April 2021, we further amended our Amended Credit Agreement that, among other things, extends the waiver of the total net leverage ratio covenant through March 31, 2022, annualized EBITDA used in the covenant calculation through December 31, 2022 and increases the interest rate spreads of the Term Facility, excluding the Main Street Loan, and the Revolving Facility by 50 basis points.

Certain other covenants under the Amended Credit Agreement continue to be more restrictive during the extended covenant waiver period.

In December 2020, we amended the Amended Credit Agreement to provide for the borrowing of a new tranche of incremental term loans under the Amended Credit Agreement in an amount of $85.0 million, maturing December 2025, made under the Main Street Expanded Loan Facility (the “Main Street Loan”).

Interest on the Main Street Loan shall be paid-in-kind for the first year and the principal shall amortize at a rate of 15% in each of the third and fourth years, with the remaining amounts to be paid at maturity.

The Term Facility (excluding the Main Street Loan), as amended as of June 30, 2021, bears interest at an adjusted Intercontinental Exchange (“ICE”) Benchmark administration LIBOR, with a minimum of 0.75%, plus a spread of 5.25%, for an aggregated rate of 6.00% as of June 30, 2021, and the Revolving Facility bears interest at an adjusted ICE Benchmark administration LIBOR plus a spread of 3.50%, for an aggregated rate of 3.60% as of June 30, 2021.

The Main Street Loan bears interest at a rate per annum of an adjusted ICE Benchmark administration LIBOR for an interest period of 3-months plus 3.00%, for an aggregated rate of 3.15% as of June 30, 2021.

Certain other covenants under the Amended Credit Agreement continue to be more restrictive during the extended covenant waiver period.

The Term Facility (excluding the Main Street Loan), as amended, as of September 30, 2021, bears interest at an adjusted Intercontinental Exchange (“ICE”) Benchmark administration LIBOR, with a minimum of 0.75%, plus a spread of 5.25%, for an aggregated rate of 6.00% as of September 30, 2021, and the Revolving Facility bears interest at an adjusted ICE Benchmark administration LIBOR plus a spread of 3.50%, for an aggregated rate of 3.58% as of September 30, 2021.

In 2018, we entered into interest rate cap agreements to hedge our exposure to interest rate movements and manage our interest rate expense related to the Term Facility.

Senior Secured Credit Agreements

Our senior secured credit agreement (the “Export Credit Agreement”) makes available a loan in an aggregate principal amount not to exceed $107.7 million for the purpose of providing financing for up to 80% of the purchase price of our new polar ice class vessel, the National Geographic Endurance .

During March 2020, we borrowed the $107.7 million under the Export Credit Agreement for the final contracted payment of the National Geographic Endurance .

The Export Credit Agreement, as amended, bears interest at a floating interest rate equal to three-month LIBOR plus a spread of 3.50% per annum, or 3.62% over the borrowing period covering June 30, 2021, with interest and principal payments due every 90 days from borrowing date, with final principal due January 2032.

Our senior secured credit agreement (the “Second Export Credit Agreement”) makes available to us a loan in an aggregate principal amount not to exceed $122.8 million for the purpose of providing pre- and post- delivery financing for up to 80% of the purchase price of the National Geographic Resolution , scheduled to be delivered in the fourth quarter of 2021.

The Second Export Credit Agreement, as amended, bears a variable interest rate equal to three-month LIBOR plus a spread of 3.50% per annum, or 3.62% over the borrowing period covering June 30, 2021.

After completion of the vessel, the Second Export Credit Agreement, at our option, will bear an interest rate of either a fixed rate of 6.36% or a variable rate equal to three-month LIBOR plus a margin of 3.00% per annum.

In September 2019, April 2020 and April 2021, we drew approximately $30.5 million, $30.6 million and $15.5 million, respectively, against the Second Export Credit Agreement for contracted installment payments on the National Geographic Resolution .

The final 30% is due upon delivery and acceptance of the vessel. During 2019, we entered into foreign exchange forward contracts, designated as cash flow hedges, to hedge our exposure to the Norwegian kroner (“NOK”), related to our installment payments under the contract to purchase the National Geographic Resolution .

Our first senior secured credit agreement (the “First Export Credit Agreement”) made available a loan in an aggregate principal amount not to exceed $107.7 million for the purpose of providing financing for up to 80% of the purchase price of our new polar ice class vessel, the National Geographic Endurance .

During March 2020, we borrowed the $107.7 million under the First Export Credit Agreement for the final contracted payment of the National Geographic Endurance .

Our second senior secured credit agreement (the “Second Export Credit Agreement”) made available to us a loan in an aggregate principal amount not to exceed $122.8 million for the purpose of providing pre- and post-delivery financing for up to 80% of the purchase price of the National Geographic Resolution , which was delivered during September 2021. As of September 30, 2021, we borrowed the $122.8 million available under the Second Export Credit Agreement, drawing approximately $30.5 million in 2019, $30.6 million in 2020 and $61.7 million in 2021. 

In June 2020, we amended our export credit agreements to defer scheduled amortization payments from June 2020 to March 2021 and suspend the total net leverage ratio covenant through June 2021.

During June 2021, we further amended our export credit agreements to, among other things, extend the deferral of scheduled amortization payments of the first export credit agreement through December 2021 in the aggregate amount of $15.7 million, extend the waiver of the total leverage ratio covenant through March 31, 2022, increase interest rate spreads of the export credit agreements by 50 basis points and annualize EBITDA used in the covenant calculation through December 31, 2022.

During June 2021, we further amended our export credit agreements to, among other things, extend the deferral of scheduled amortization payments of the First Export Credit Agreement through December 2021 in the aggregate amount of $15.7 million, extend the waiver of the total leverage ratio covenant

through March 31, 2022, increase interest rate spreads of the export credit agreements by 50 basis points and annualize EBITDA used in the covenant calculation through December 31, 2022.

The deferred principal payments will amortize quarterly over three years starting March 2022.

Certain other covenants continue to be more restrictive during the extended covenant waiver period.

We were in compliance with our covenants in effect as of June 30, 2021.

We were in compliance with our covenants in effect as of September 30, 2021.

The First Export Credit Agreement, as amended, bears interest at a floating interest rate equal to three-month LIBOR plus a spread of 3.50% per annum, or 3.62% over the borrowing period covering September 30, 2021.

The Second Export Credit Agreement, as amended, bears a variable interest rate equal to three-month LIBOR plus a spread of 3.50% per annum, or 3.63% over the borrowing period covering September 30, 2021.

Preferred Stock

12 unchanged sentences

The cash received as advanced receipts can be used to fund operating expenses for the applicable future expeditions or otherwise, pay down credit facilities, make long-term investments or any other use of cash.

While traditionally we run a working capital deficit due primarily to a large balance of unearned passenger revenues, as of June 30, 2021 and December 31, 2020, we had a working capital deficit of $2.5 million and working capital of $73.4 million, respectively.

At December 31, 2020, the working capital balance was a result of lower unearned passenger revenues while we were not operating and higher cash balances driven by the debt borrowings and a preferred share offering during the year.

As of June 30, 2021 and December 31, 2020, we had $160.1 million and $187.5 million, respectively, in cash and cash equivalents, excluding restricted cash.

Traditionally, we run a working capital deficit due primarily to a large balance of unearned passenger revenues and as of September 30, 2021 we had a working capital deficit of $39.5 million. As of December 31, 2020 we had positive working capital of $73.4 million as a result of lower unearned passenger revenues while we were not operating and higher cash balances driven by the debt borrowings and a preferred share offering during the year.

As of September 30, 2021 and December 31, 2020, we had $155.6 million and $187.5 million, respectively, in cash and cash equivalents, excluding restricted cash.

Our Board of Directors approved a stock and warrant repurchase plan (“Repurchase Plan”) in November 2015 and increased the repurchase plan to $35.0 million in November 2016.

6 unchanged sentences

All repurchases were made using cash resources.

The balance for the Repurchase Plan was $12.0 million as of June 30, 2021. 

In February 2019, we entered into an agreement with Ulstein Verft to construct a polar ice-class vessel, the National Geographic Resolution , a sister ship of the National Geographic Endurance , with a total purchase price of 1,291.0 million NOK, which was amended in December 2019 to (i) provide a $4 million loan to the builder, to be repaid at 112% of the principle balance on maturity in December 2023, and (ii) an expedited delivery incentive that, if the National Geographic Resolution is delivered early, as determined by the expedited delivery schedule per the agreement, that all or a portion of the of the loan will be considered as a delivery bonus and forgiven.

The purchase price is due in installments, with the first 20% paid shortly after execution of the agreement, 50% being paid over the duration of the build and the final 30% due upon delivery and acceptance of the vessel.

The vessel is scheduled to be delivered in the fourth quarter of 2021.

The new-build process exposes us to certain risks typically associated

with new ship construction which we manage through detailed planning and close monitoring by our internal marine team. In September 2019, April 2020, and April 2021, we drew approximately $30.5 million, $30.6 million and $15.5 million, respectively, against the Second Export Credit Agreement for contracted installment payments on the National Geographic Resolution .

The final 30% is due upon delivery and acceptance of the vessel.

The remaining purchase price will be funded through a combination of available cash, borrowing under our Second Export Credit Agreement and our Revolving Facility and excess cash flows generated by our existing operations.

The additional borrowings under the Second Export Credit Agreement and amendments of the Export Credit Agreement created material changes in our future obligations from those reported in our 2020 Annual Report.

The changed or amended obligations as of June 30, 2021 are as follows:

The balance for the Repurchase Plan was $12.0 million as of September 30, 2021. 

The additional borrowings under the Second Export Credit Agreement and amendments of the First Export Credit Agreement created material changes in our future obligations from those reported in our 2020 Annual Report.

The changed or amended obligations as of September 30, 2021 are as follows:

Payments due by period

3 unchanged sentences

Second Export Credit Agreement (b)

The June 2021 amendment to the Export Credit Agreement deferred principal amortization payments through December 31, 2021, as described above.

The balance and future obligations reflect the April 2021 $15.5 million additional borrowing under the Second Export Credit Agreement for contracted installment payment on the National Geographic Resolution .

Off-Balance Sheet Arrangements

In 2019, we entered into a Second Export Credit Agreement as described above.

The June 2021 amendment to the First Export Credit Agreement deferred principal amortization payments through December 31, 2021, as described above.

The balance and future obligations reflect the April 2021 and September 2021 additional borrowings of $15.5 million and $46.2 million, respectively, under the Second Export Credit Agreement for contracted installment payment on the National Geographic Resolution .

Critical Accounting Policies

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements