What changed in this filing

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Item 1. Financial Statements

2023-07-27 compared with 2023-05-03 · 344 added, 217 removed, 794 unchanged (41% of the section changed)

4 unchanged sentences

(In thousands, except share and per share data)

March 31, 2023

June 30, 2023

December 31, 2022

37 unchanged sentences

23,337  

Lease liabilities - current

13 unchanged sentences

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

62,000 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

62,000 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

71,296  

7 unchanged sentences

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

62,000 Series A shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively

62,000 Series A shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively

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

53,243,007 and 53,177,437 issued, 53,175,702 and 53,110,132 outstanding as of March 31, 2023 and December 31, 2022, respectively

53,320,546 and 53,177,437 issued, 53,253,241 and 53,110,132 outstanding as of June 30, 2023 and December 31, 2022, respectively

Additional paid-in capital

13 unchanged sentences

(In thousands, except share and per share data)

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

Tour revenues

$ 124,798  

$ 90,910  

$ 268,194  

$ 158,756  

Operating expenses:

Cost of tours

77,654  

62,499  

149,703  

120,447  

General and administrative

29,155  

23,710  

55,574  

44,347  

Selling and marketing

15,158  

12,839  

35,810  

25,168  

Depreciation and amortization

11,331  

11,176  

23,139  

22,354  

Total operating expenses

Operating income (loss)

133,298  

110,224  

264,226  

212,316  

Operating (loss) income

( 8,500 )  

( 19,314 )  

Other (expense) income:

Interest expense, net

Gain on foreign currency

( 11,645 )  

( 9,416 )  

( 22,112 )  

Gain (loss) on foreign currency

( 676 )  

Other (expense) income

( 3,867 )  

( 116 )  

( 3,696 )  

Total other expense

Income (loss) before income taxes

( 15,164 )  

( 10,208 )  

( 25,308 )  

Loss before income taxes

( 23,664 )  

( 29,522 )  

( 21,340 )  

Income tax expense (benefit)

Net income (loss)

( 964 )  

( 23,705 )  

( 28,558 )  

( 22,924 )  

Net income (loss) attributable to noncontrolling interest

Net income (loss) attributable to Lindblad Expeditions Holdings, Inc.

Net loss attributable to Lindblad Expeditions Holdings, Inc.

( 24,470 )  

( 28,756 )  

( 23,846 )  

Series A redeemable convertible preferred stock dividend

Net loss available to stockholders

$ ( 25,553 )  

$ ( 30,039 )  

$ ( 26,001 )  

Weighted average shares outstanding

53,245,491  

51,195,280  

53,186,796  

50,976,203  

53,245,491  

51,195,280  

53,186,796  

50,976,203  

Undistributed loss per share available to stockholders:

$ ( 0.48 )  

$ ( 0.59 )  

$ ( 0.49 )  

$ ( 0.48 )  

$ ( 0.59 )  

$ ( 0.49 )  

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

3 unchanged sentences

(In thousands)

For the three months ended March 31,

Net income (loss)

For the three months ended June 30,

For the six months ended June 30,

Other comprehensive income:

2 unchanged sentences

Total other comprehensive income

Total comprehensive income (loss)

Total comprehensive loss

comprehensive income (loss) attributive to non-controlling interest

Comprehensive income (loss) attributable to stockholders

Comprehensive loss attributable to stockholders

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

6 unchanged sentences

Total Stockholders'

Balance as of March 31, 2023

Stock-based compensation

Net activity related to equity compensation plans

Redeemable noncontrolling interest

Series A preferred stock dividend

Net loss attributable to Lindblad Expeditions Holdings, Inc.

Balance as of June 30, 2023

Additional Paid-In

Total Stockholders'

Balance as of December 31, 2022

3 unchanged sentences

Series A preferred stock dividend

Net income attributable to Lindblad Expeditions Holdings, Inc.

Net loss attributable to Lindblad Expeditions Holdings, Inc.

Balance as of June 30, 2023

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

LINDBLAD EXPEDITIONS HOLDINGS, INC.

AND SUBSIDIARIES

Condensed Consolidated Statements of Stockholders ’

 Deficit

(In thousands, except share data)

Additional Paid-In

Accumulated Other

Total Stockholders'

Comprehensive Loss

Balance as of March 31, 2022

Stock-based compensation

Net activity related to equity compensation plans

Issuance of stock for conversion of preferred stock

Redeemable noncontrolling interest

Series A preferred shares dividend

Net loss attributable to Lindblad Expeditions Holdings, Inc.

Balance as of June 30, 2022

Additional Paid-In

2 unchanged sentences

Comprehensive Loss

Equity (Deficit)

Balance as of December 31, 2021

1 unchanged sentence

Net activity related to equity compensation plans

Issuance of stock for conversion of preferred stock

Other comprehensive income, net

2 unchanged sentences

Net loss attributable to Lindblad Expeditions Holdings, Inc.

Balance as of March 31, 2022

Balance as of June 30, 2022

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

3 unchanged sentences

(In thousands)

For the three months ended March 31,

For the six months ended June 30,

Cash Flows From Operating Activities

Net income (loss)

Adjustments to reconcile net loss to net cash (used in) provided by operating activities:

5 unchanged sentences

Change in fair value of contingent acquisition consideration

Gain on foreign currency

(Gain) loss on foreign currency

Write-off of unamortized issuance costs related to debt refinancing

10 unchanged sentences

Purchases of property and equipment

Sale of securities

Sale of short-term securities

Net cash provided by (used in) investing activities

4 unchanged sentences

Repurchase under stock-based compensation plans and related tax impacts

Net cash (used in) provided by financing activities

Net cash provided by financing activities

Net increase in cash, cash equivalents and restricted cash

38 unchanged sentences

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.

The accompanying unaudited condensed consolidated financial statements and notes to the unaudited condensed consolidated financial statements 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.

Operating results for the periods presented are not necessarily indicative of the results of operations to be expected for the full year due to seasonality and other factors.

Certain information and footnote disclosures normally included in the consolidated financial statements in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC for interim reporting.

Certain information and note disclosures normally included in the consolidated financial statements in accordance with GAAP have been omitted in accordance with the rules and regulations of the SEC for interim reporting.

All intercompany balances and transactions have been eliminated in these unaudited condensed consolidated financial statements.

These unaudited condensed consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto for the year ended December 31, 2022 

These unaudited condensed consolidated financial statements and notes should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto for the year ended December 31, 2022 

contained in the Company’s Annual Report on Form 10 -K filed with the SEC on March 10, 2023 ( the “2022  Annual Report”).

8 unchanged sentences

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  months ended March 31, 2023 and 2022, the Company incurred net losses available to stockholders, therefore basic and diluted net loss per share are the same in each respective period.

For the three  months ended March 31, 2023, 0.8  million unvested restricted shares, 1.9 million shares issuable upon exercise of options and 7.6  million common shares issuable upon the conversion of the Preferred Stock were excluded from the calculation of dilutive potential common shares for the period as they were anti-dilutive.

For the three and six months ended June 30, 2023 and 2022, the Company incurred net losses available to stockholders, therefore basic and diluted net loss per share are the same in each respective period.

For the three and six months ended June 30, 2023, 0.7  million unvested restricted shares, 1.9  million shares issuable upon exercise of options and 7.7  million common shares issuable upon the conversion of the Preferred Stock were excluded from the calculation of dilutive potential common shares for the period as they were anti-dilutive.

For the 

three months ended March 31, 2022, 

0.8  million unvested restricted shares, 1.5  million shares issuable upon exercise of options and 9.3  million common shares issuable upon conversion of the Preferred Stock were excluded from the calculation of dilutive potential common shares for the period as they were anti-dilutive. 

three and six months ended June 30, 2022, 

0.8  million unvested restricted shares, 1.4  million shares issuable upon exercise of options and 7.3 million common shares issuable upon conversion of the Preferred Stock were excluded from the calculation of dilutive potential common shares for the period as they were anti-dilutive. 

Loss per share was calculated as follows:

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands, except share and per share data)

Net income (loss) attributable to Lindblad Expeditions Holdings, Inc.

Net loss attributable to Lindblad Expeditions Holdings, Inc.

$ ( 24,470 )  

$ ( 28,756 )  

$ ( 23,846 )  

Series A redeemable convertible preferred stock dividend

1 unchanged sentence

$ ( 25,553 )  

$ ( 30,039 )  

$ ( 26,001 )  

Weighted average shares outstanding:

2 unchanged sentences

51,195,280  

53,186,796  

50,976,203  

Total weighted average shares outstanding, diluted

1 unchanged sentence

51,195,280  

53,186,796  

50,976,203  

Undistributed loss per share available to stockholders:

1 unchanged sentence

$ ( 0.59 )  

$ ( 0.49 )  

$ ( 0.48 )  

$ ( 0.59 )  

$ ( 0.49 )  

NOTE 3 —

6 unchanged sentences

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 value of future travel certificates in excess of cash received is being recognized as a discount to tour revenues at the time the related expedition occurs. Future travel certificates are valued based on the Company’s expectation that a guest will travel again.

March 31, 2023 and December 31, 2022, 

the Company has recorded $ 249.6  million and $ 245.1  million, related to unearned passenger revenue, respectively.

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 primarily related to the COVID- 19 pandemic, the Company provided guests an option of either a refund or future travel certificates, which in some instances exceeded the original cash deposit. The value of future travel certificates in excess of cash received is being recognized as a discount to tour revenues at the time the related expedition occurs. Future travel certificates are valued based on the Company’s expectation that a guest will travel again.

June 30, 2023 and December 31, 2022, 

the Company has $ 272.9  million and $ 245.1  million, related to unearned passenger revenue, respectively.

Contract Liabilities

5 unchanged sentences

223,361  

Balance as of March 31, 2023

Balance as of June 30, 2023

$ 169,089  

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

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 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 three months ended March 31,

For the six months ended June 30,

(In thousands)

(unaudited)  

Cash and cash equivalents

8 unchanged sentences

Restricted cash consists of the following:

As of March 31, 2023

As of June 30, 2023

As of December 31, 2022

(In thousands)

(unaudited)  

Credit card processor reserves

8 unchanged sentences

Prepaid expenses and other current assets are as follows: 

As of March 31, 2023

As of June 30, 2023

As of December 31, 2022

9 unchanged sentences

Accounts payable and accrued expenses are as follows:

As of March 31, 2023

As of June 30, 2023

As of December 31, 2022

11 unchanged sentences

LONG-TERM DEBT

As of March 31, 2023

As of June 30, 2023

As of December 31, 2022

(unaudited)  

(In thousands)

7 unchanged sentences

351,032  

First Export Credit Agreement

275,000  

1 unchanged sentence

268,192  

First Export Credit Agreement

94,794  

5 unchanged sentences

107,837  

110,044  

( 2,207 )  

107,837  

Total long-term debt

16 unchanged sentences

$ 529,452  

For the three months ended March 31, 2023 and 2022, $ 0.7  million and $ 0.5  million, respectively, of deferred financing costs were charged to interest expense.

For the three and six months ended June 30, 2023, $ 0.8  million and $ 1.5  million, respectively, of deferred financing costs were charged to interest expense, and for the three and six months ended June 30, 2022, $ 0.7  million and $ 1.4  million, respectively, of deferred financing costs were charged to interest expense.

During the three months ended June 30, 2023, $ 3.9  million of deferred financing costs related to the repayment of the Company’s prior senior secured credit agreements (the “Export Credit Agreements”) were written-off to other expense. During the 

three  months ended 

March 31, 2022, 

$ 9.0  million of deferred financing costs related to the repayment of the Company’s prior credit agreement, including the term facility, Main Street Loan and revolving credit facility were written-off to other expense.

On February 4, 2022, the Company issued $ 360.0 million aggregate principal amount of 6.75 % senior secured notes due 

13 unchanged sentences

The Revolving Credit Facility contains customary affirmative and negative covenants, as well as financial covenants and event of default provisions.

Senior Secured Credit Agreements

In January 2018, the Company entered into a senior secured credit agreement (the “First Export Credit Agreement”) making 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 , delivered in March 2020. 

The loan amortizes quarterly based on a 

twelve -year profile, with 

70 % maturing over 

twelve  years from drawdown, and 

30 % maturing over 

five  years from drawdown. In September 2021, the Company amended its First Export Credit Agreement to, among other things, waive the net leverage coverage ratio through March 2022 and annualize EBITDA used in its covenant calculation through December 31, 2022.

During May 2022, the Company further amended its First Export Credit Agreement to extend the waiver of its net leverage coverage ratio from March 2022 through December 31, 2022.

The First Export Credit Agreement, as amended, bears interest at a variable interest rate equal to three -month LIBOR plus a margin of 3.50 % per annum, for an aggregated rate of 8.65 % over the borrowing period covering March 31, 2023. 

In April 2019, the Company entered into a senior secured credit agreement (the “Second Export Credit Agreement”), to make available to the Company 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 , delivered in September 2021, and borrowed $ 122.8 million under the Second Export Credit Agreement. The loan amortizes quarterly based on a 

twelve -year profile, with 

70 % maturing over 

twelve  years from final drawdown, and 

30 % maturing over  

five  years from final drawdown. In September 2021, the Company amended its Second Export Credit Agreement to, among other things, waive the net leverage coverage ratio through March 2022 and annualize EBITDA used in its covenant calculation through December 31, 2022.

During May 2022, the Company further amended its Second Export Credit Agreement to extend the waiver of its net leverage coverage ratio from March 2022 through December 31, 2022.

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, for an aggregated rate of 8.46 % over the borrowing period covering March 31, 2023.

The Company’s Off the Beaten Path subsidiary has a loan maturing September 2023 for the purchase of guest transportation vehicles.

The loan’s original principal was $ 0.3 million, is collateralized by the vehicles and bears an interest rate of 4.77 % annually.

The Company’s Off the Beaten Path subsidiary has a $ 0.8 million loan under the Main Street Expanded Loan Facility, originated on December 11, 2020.

For the first 12 months, interest was not payable and accrued to the principal balance, thereafter, monthly interest payments are required.

The outstanding balance will amortize at a rate of 15 % on both December 2023 and December 2024, with the remaining balance due December 2025.

The loan bears a variable interest rate equal to one -month LIBOR plus a spread of 3.00 %, or 7.86 % as of March 31, 2023.

This loan may be voluntarily prepaid at any time and from time to time, without premium or penalty, other than customary “breakage costs”

and fees for LIBOR-based loans.

On May 2, 2023, the Company issued $ 275.0 million aggregate principal amount of 9.00 % senior secured notes due 

2028  (the “9.00% Notes”) in a private offering.

The 9.00% Notes bear interest at a rate of 9.00% per year, accruing from May 2, 2023, and interest is payable semiannually in arrears on May 15 and November 15 of each year, beginning on November 

9.00% Notes will mature on May 

15, 2028, subject to earlier repurchase or redemption.

The Company used the net proceeds from the offering to prepay in full all outstanding borrowings under its prior senior secured credit agreements, to pay any related premiums and to terminate in full its prior senior secured credit agreements and the commitments thereunder. The 9.00% Notes are senior unsecured obligations of the Company and are guaranteed (i) on a senior secured basis by certain of the Company’s subsidiaries (collectively, the “Secured Guarantors”) and secured by a first -priority lien, subject to permitted liens and certain exceptions, on the equity and substantially all the assets of the Secured Guarantors, and (ii) on a senior unsecured basis by certain other subsidiaries of the Company. The 9.00% Notes may be redeemed by the Company, at set redemption prices and premiums, plus accrued and unpaid interest, if any. 

The 9.00% Notes contain covenants that, among other things, restrict the Company’s ability, and the ability of the Company’s restricted subsidiaries, to incur certain additional indebtedness and make certain dividend payments, distributions, investments and other restricted payments.

These covenants are subject to a number of important exceptions and qualifications set forth in the 9.00% Notes. 

The Company’s Off the Beaten Path subsidiary’s original $ 0.3 million loan for the purchase of guest transportation vehicles was repaid during June 2023.

The Company’s Off the Beaten Path subsidiary’s $ 0.8 million loan under the Main Street Expanded Loan Facility, which originated on December 11, 2020, 

was repaid during May 2023. 

The Company’s DuVine subsidiary has a EUR 0.1 million State Assistance Loan related to the financial consequences of the COVID- 19 pandemic, for the purpose of employment preservation.

This loan matures August 2025, with monthly payments, and bears an interest rate of 0.53 % annually. 

The Company’s Notes, Revolving Credit Facility, 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. On October 11, 2022, the Company amended the covenants of its Senior Secured Credit Agreements to use an annualized EBITDA calculation in its net leverage ratio covenant for the periods from March 31, 2023 through September 30, 2023.

The Company was in compliance with its covenants in effect as of March 31, 2023.

Prior Senior Secured Credit Agreements

In January 2018, the Company entered into a senior secured credit agreement (the “First Export Credit Agreement”), 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 , and borrowed $ 107.7 million upon delivery in March 2020. 

The First Export Credit Agreement was repaid in full on May 2, 2023. 

In April 2019, the Company entered into a senior secured credit agreement (the “Second Export Credit Agreement”), under which the Company borrowed $ 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 , delivered in September 2021.

The Company borrowed $ 30.5 million in 2019, $ 30.6 million in 2020 and $ 61.7 million in 2021.

The Second Export Credit Agreement was repaid in full on May 2, 2023. 

The Company’s 6.75% Notes, Revolving Credit Facility and 9.00% Notes contain covenants that include, among others, limits on additional indebtedness and limits on certain investments.

The Company was in compliance with its covenants in effect as of June 30, 2023.

NOTE 6 —

1 unchanged sentence

Derivative Instruments and Hedging Activities

The Company’s derivative assets and liabilities consist principally of foreign exchange forward contracts and interest rate caps and are carried at fair value based on significant observable inputs (Level 2 inputs).

The Company’s derivative assets and liabilities consist principally of foreign exchange forward contracts and are carried at fair value based on significant observable inputs (Level 2 inputs).

Derivatives entered into by the Company are typically executed over-the-counter and are valued using internal valuation techniques, as quoted market prices are not readily available.

5 unchanged sentences

dollar denominated receivables and payables.

The Company primarily economically hedges a portion of its current-year currency exposure to the Canadian and New Zealand dollars, the Brazilian Real, the South African Rand, the Euro and the British pound sterling.

The Company primarily economically hedges a portion of its current-year currency exposure to the Canadian and New Zealand dollars, the Euro and the British pound sterling .

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.

3 unchanged sentences

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

The Company held the following derivative instruments with absolute notional values as of March 31, 2023:

The Company held the following derivative instruments with absolute notional values as of June 30, 2023:

(In thousands)

Absolute Notional Value

Interest rate caps

$ 100,000  

Foreign exchange contracts

1 unchanged sentence

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

As of March 31, 2023

As of June 30, 2023

As of December 31, 2022

8 unchanged sentences

Recorded in prepaid expenses and other current assets.

The interest rate cap matured during 

(b) Recorded in accounts payable and accrued expenses. 

Changes in the fair value of the Company’s hedging instruments are recorded in accumulated other comprehensive income. The effects of derivatives recognized in the Company’s condensed consolidated financial statements were as follows:

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

(unaudited)  

Derivative instruments not designated as cash flow hedging instruments:

1 unchanged sentence

$ ( 316 )  

$ ( 683 )  

Foreign exchange forward (b)

( 676 )  

$ ( 522 )  

$ ( 183 )  

Recognized in interest expense, net.

For the three  months ended March 31, 2022, $ 0.6  million was reclassified from other comprehensive income (loss) to interest expense, net.

The interest rate cap matured during May 2023.

For the three and six months ended June 30, 2022, $ 0.6  million was reclassified from other comprehensive income (loss) to interest expense, net.

Gains (losses) related to derivative instruments are expected to be largely offset by (losses) gains on the underlying exposures being hedged and recognized in gain (loss) on foreign currency.

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 Company estimates the approximate fair value of its long-term debt as of March 31, 2023 

to be $ 541.8  million based on the terms of the agreements and comparable market data as of March 31, 2023.

As of March 31, 2023 and December 31, 2022, the Company had no other significant liabilities that were measured at fair value on a recurring basis.

The Company estimates the approximate fair value of its long-term debt as of June 30, 2023 

to be $ 619.3  million based on the terms of the agreements and comparable market data as of June 30, 2023.

As of June 30, 2023 and December 31, 2022, the Company had no other significant liabilities that were measured at fair value on a recurring basis.

NOTE 7 —

6 unchanged sentences

These repurchases exclude shares repurchased to settle statutory employee tax withholding related to the exercise of stock options and vesting of stock awards. 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 March 31, 2023.

The remaining balance for the Repurchase Plan was $ 12.0  million as of June 30, 2023. 

Preferred Stock

In August 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.

The Preferred Stock is entitled to cumulative dividends of 6.00 % per annum, and for the first two years the dividends were paid-in-kind.

After the second anniversary of the issuance date, the dividends may be paid-in-kind or be paid in cash at the Company’s option. At any time after the 

The Preferred Stock is entitled to cumulative dividends of 6.00 % per annum, and for the first two years the dividends were required to be paid-in-kind.

After the second anniversary of the issuance date, the dividends may be paid-in-kind or be paid in cash at the Company’s option. During 2023, the Company thus far has continued to pay Preferred Stock dividends in-kind. At any time after the 

third  anniversary of the issuance, the Company 

4 unchanged sentences

30  consecutive trading days. The Preferred Stock is convertible at any time, at the holder’s election, into a number of shares of common stock of the Company equal to the quotient obtained by dividing the then-current accrued value by the conversion price of $ 9.50 .

The Preferred Stock deferred issuance costs was $ 2.1  million as of March 31, 2023, recorded as reduction to preferred stock.

The Company recorded accrued dividends for Preferred Stock of $ 1.1  million and $ 1.3  million for the three  months ended March 31, 2023 and 2022, respectively.

As of March 31, 2023, the 62,000 shares of Preferred Stock outstanding and accumulated dividends could be converted at the option of the holders into 

7.6  million shares of the Company’s common stock.

The Preferred Stock deferred issuance costs were $ 2.1  million as of June 30, 2023, recorded as reduction to preferred stock.

The Company recorded accrued dividends for Preferred Stock of $ 1.1  million and $ 2.2  million for the three and six months ended June 30, 2023, respectively, and $ 1.3  million and $ 2.6 million for the three and six months ended June 30,2022, respectively.

As of June 30, 2023, the 62,000 shares of Preferred Stock outstanding and accumulated dividends could be converted at the option of the holders into 7.7 million shares of the Company’s common stock.

NOTE 8 —

1 unchanged sentence

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 September 2021.

As of March 31, 2023, 

2.9  million shares were available to be granted under the Plan.

The Company recorded stock-based compensation expense of $ 2.8  million and $ 1.8  million during the three  months ended March 31, 2023 and 2022, respectively.

As of June 30, 2023, 2.9  million shares were available to be granted under the Plan.

The Company recorded stock-based compensation expense of $ 3.4  million and $ 6.3  million during the three and six months ended June 30, 2023, respectively, and $ 1.8  million and $ 3.7 million during the three and six months ended June 30,2022, respectively.

Long-Term Incentive Compensation

During the three months ended March 31, 2023, the Company granted 273,656 restricted stock units (“RSUs”) with a weighted average grant price of $ 9.57 .

During the six months ended June 30, 2023, the Company granted 277,331  restricted stock units (“RSUs”) with a weighted average grant price of $ 9.59 .

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 three months ended March 31, 2023, the Company awarded 96,757  performance-based restricted share units (“PSUs”) with a weighted average grant price of $ 9.56 .

During the six months ended June 30, 2023, the Company awarded 96,757  performance-based restricted share units (“PSUs”) with a weighted average grant price of $ 9.56 .

The PSUs generally vest 

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not  deliver the shares associated with the PSUs to the employee, non-employee director or other service providers until the performance and vesting conditions are met. 

During the three months ended March 31, 2023, the Company granted 500,000 options, with an average exercise price of $ 9.56 .

During the six months ended June 30, 2023, the Company granted 500,000 options, with an average exercise price of $ 9.56 .

The options vest ratably over four years with a term of ten years. 

Stock Option Grants

Exercise price

Dividend yield

Expected Volatility

Risk-free interest rate

Expected term (in years)

As of March 31, 2023 and December 31, 2022, options to purchase an aggregate of 1.9  million and 1.4  million shares of the Company’s common stock, respectively, with a weighted average exercise price of $ 13.64  and $ 15.10 , respectively, were outstanding.

As of March 31, 2023, 388,000  options were exercisable.

Stock Option Grants  

Stock price  

$ 9.56  

Exercise price  

$ 9.56  

Dividend yield  

Expected Volatility  

Risk-free interest rate  

Expected term (in years)  

As of June 30, 2023 and December 31, 2022, options to purchase an aggregate of 1.9  million and 1.4  million shares of the Company’s common stock, respectively, with a weighted average exercise price of $ 13.64  and $ 15.10 , respectively, were outstanding.

As of June 30, 2023, 638,115  options were exercisable.

Natural Habitat Contingent Arrangement

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2016  acquisition of Natural Habitat, Mr.

Bressler employment agreement, as amended, provides Mr.

Bressler’s employment agreement, as amended, provides Mr.

Bressler, President of Natural Habitat, with an equity incentive opportunity to earn an award of options based on the future financial performance of Natural Habitat, effective as of 

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NOTE 9 —

As of March 31, 2023 

and December 31, 2022, the Company had no unrecognized tax benefits recorded. The Company's effective tax rate for the three months ended March 31, 2023 was an expense of 66.5 %, versus a benefit of 

0.4 % for the three  months ended March 31, 2022. 

The effect tax rate for the three months ended March 31, 2023 was impacted by a $ 1.5 million discrete tax expense.

As of June 30, 2023 

and December 31, 2022, the Company had no unrecognized tax benefits recorded. The Company's effective tax rate for the three and six months ended June 30, 2023 was an expense of 0.2 % and 7.4 %, respectively, versus a benefit of 

3.3 % and 1.5 % for the three and months ended June 30, 2022, respectively.

The effect tax rate for the six months ended June 30, 2023 was also impacted by a $ 1.5 million discrete tax expense.

NOTE 10 —

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equity but after its total liabilities.

In addition, if it is probable that the instrument will become redeemable, as such solely due to the passage of time, the redeemable noncontrollable interest should be adjusted to the redemption value via one of two measurement methods. The Company elected the income classification-excess adjustment and accretion methods for recognizing changes in the redemption value of the put options.

In addition, if it is probable that the instrument will become redeemable, solely due to the passage of time, the redeemable noncontrollable interest should be adjusted to the redemption value via one of two measurement methods. The Company elected the income classification-excess adjustment and accretion methods for recognizing changes in the redemption value of the put options.

Under this methodology, a calculation of the present value of the redemption value is compared to the carrying value of the redeemable noncontrolling interest, and the carrying value of the redeemable noncontrolling interest is adjusted to the redemption value’s present value.

Any adjustments to the carrying value of the redeemable noncontrolling interest, up to the redemption value of the noncontrolling interest, are classified to retained earnings.

Adjustments in excess of the redemption value of the noncontrolling interest, are treated as a decrease to net income available to common stockholders.

Adjustments in excess of the redemption value of the noncontrolling interest are treated as a decrease to net income available to common stockholders.

The redemption value of the put options were determined using a discounted cash flow model.

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

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

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$ 14,458  

$ 27,886  

$ 10,626  

Net income (loss) attributable to noncontrolling interest

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( 255 )  

Ending balance

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$ 19,595  

$ 30,513  

$ 19,595  

Royalty Agreement –

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The fee 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  months ended March 31, 2023 was $ 1.3  million, and was $ 1.2  million for the three  months ended March 31, 2022.

The royalty balance payable to National Geographic as of March 31, 2023 and December 31, 2022 

was $ 2.1 million and $ 1.8 million, respectively, and are included in accounts payable and accrued expenses.

Royalty expense for the three and six months ended June 30, 2023 was $1.8  million and $3.8  million, respectively, and was $ 1.7  million and $ 2.9 million for the three and six months ended June 30, 2022, respectively.

The royalty balance payable to National Geographic as of June 30, 2023 and December 31, 2022 

was $1.7 million and $ 1.8 million, respectively, and is included in accounts payable and accrued expenses.

Royalty Agreement –

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The fees are included within selling and marketing expense.

This royalty fee expense was $ 0.2  million for the three  months ended March 31, 2023 and 

March 31, 2022.

This royalty fee expense was $ 0.2  million and $ 0.5  million for the three and six months ended June 30, 2023, respectively, and 

$0.2  million and $ 0.4  million for the three and six months ended June 30, 2022, 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 March 31, 2023 are as follows:

Future minimum payments on its charter agreements as of June 30, 2023 are as follows:

For the years ended December 31,

(In thousands)

(unaudited)  

2023 (six months)

$ 1,905  

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The Company evaluates the performance of the business based largely on the results of its operating segments.

The chief operating decision maker and management review operating results monthly, and base operating decisions on the total results at a consolidated level, as well as at a segment level.

The chief operating decision maker and management review operating results monthly and base operating decisions on the total results at a consolidated level, as well as at a segment level.

The reports provided to the Board of Directors are at a consolidated level and contain information regarding the separate results of both segments.

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.

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.

Operating results for the Company’s reportable segments were as follows:

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

(unaudited)  

Tour revenues:

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$ 64,047  

$ 202,910  

$ 114,321  

Land Experiences

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26,863  

65,284  

44,435  

Total tour revenues

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$ 90,910  

$ 268,194  

$ 158,756  

Operating income (loss):

$ ( 11,043 )  

$ ( 19,670 )  

$ 1,076  

Land Experiences

Total operating income (loss)

Total operating (loss) income

$ ( 8,500 )  

For the three months ended March 31, 2023 

there was $ 2.5  million in intercompany tour revenues between the Lindblad and Land Experiences reportable segments, which were eliminated in consolidation. For the three months ended March 31, 2022, there was $ 1.6  of intercompany tour revenues between the Lindblad and Land Experiences reportable segments eliminated in consolidation.

$ ( 19,314 )  

$ 3,968  

For the three and six months ended June 30, 2023, there was $ 1.6  million and $ 4.0 million, respectively, of intercompany tour revenues between the Lindblad and Land Experiences reportable segments, which were eliminated in consolidation. For the three and six months ended June 30, 2022, there was $ 2.0 million and $ 3.6 million, respectively, of intercompany tour revenues between the Lindblad and Land Experiences reportable segments eliminated in consolidation.

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

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

(unaudited)  

Depreciation and amortization:

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$ 10,257  

$ 21,490  

$ 20,998  

Land Experiences

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$ 11,176  

$ 23,139  

$ 22,354  

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

(In thousands)

As of March 31, 2023

As of June 30, 2023

As of December 31, 2022

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$ 42,017  

NOTE 12 —

SUBSEQUENT EVENTS

In May 2023, the Company issued $ 275.0 million of 9.00 % senior secured notes, maturing 2028 (the “2028 Notes”), with proceeds used primarily to prepay in full all outstanding borrowings under its existing export credit facilities.

The 2028 Notes are guaranteed on a senior secured basis by the Company and certain of the Company’s subsidiaries, and collateralized by certain of the Company’s assets.

MANAGEMENT ’

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events and conditions around the world, including war and other military actions, such as the current conflict between Russia and Ukraine, inflation, higher fuel prices, higher interest rates and other general concerns about the state of the economy or other events impacting the ability or desire of people to travel;

suspended operations, cancelling or rescheduling of voyages and other potential disruptions to our business and operations related to the COVID-19 virus, the Russia-Ukraine conflict, the political unrest in Peru or another unexpected event;

suspended operations, cancelling or rescheduling of voyages and other potential disruptions to our business and operations related to the COVID-19 virus, the Russia-Ukraine conflict, political unrest in destinations we visit, outbreak of disease in any destination we visit or another unexpected event;

the impacts of inflation, the COVID-19 virus and/or the Russia-Ukraine conflict on our financial condition, liquidity, results of operations, cash flows, employees, plans and growth;

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unscheduled disruptions in our business due to travel restrictions, weather events, mechanical failures, pandemics or other events;

any change in state classifications of our workforce;

changes adversely affecting the business in which we are engaged:

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We provide expedition cruising and land-based adventure travel fostering a spirit of exploration and discovery, using itineraries featuring up-close encounters with wildlife and nature, history and culture and promote guest empowerment, human connections and interactivity.

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

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

We currently operate a fleet of ten owned expedition ships and five seasonal charter vessels under the Lindblad Expeditions, LLC (“Lindblad”) brand.

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(“Natural Habitat”) provides eco-conscious expeditions and nature-focused, small-group experiences that include polar bear tours in Churchill, Canada, Alaskan grizzly bear adventures, small-group Galápagos Islands tours and African safaris.

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. 

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

DuVine Cycling + Adventure Company (“DuVine”) provides intimate cycling adventures and travel experiences, led by expert guides, with a focus on connecting with local character and culture, including high-quality local cuisine and accommodations.

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2023 Highlights

During the first quarter we provided immersive expeditions to our guests across all of our ships including voyages to Antarctica, Patagonia, Baja California’s Sea of Cortez, the Galápagos Islands, Central America, Australia, New Zealand, the South Pacific and elsewhere and generated $143.4 million in revenue, $12.5 million in operating income and $27.2 million in Adjusted EBITDA (non-GAAP financial measure defined below). 

We have substantial advanced reservations for future travel with bookings for the full year 2023 45% ahead of the bookings for 2019 at the same point in 2019.

During May, we issued $275.0 million of 9.00% senior secured notes, maturing 2028, with proceeds used primarily to pay the outstanding borrowings under our existing export credit agreements. 

During 2023, we provided immersive expeditions to our guests across all of our ships including voyages to Antarctica, the Arctic, Alaska, Australia, Baja California’s Sea of Cortez, the Baltic Sea, Central America, Europe, the Galápagos Islands, Iceland, New Zealand, the Pacific Northwest, Patagonia, the South Pacific and elsewhere, as well as African safaris, trips and tours through the U.S.

National Parks, our Alaska Bear Camp, the Scotland Highlands, bike tours of Portugal, the French wine country, Tuscany and Spain. 

During May 2023, we issued $275.0 million of 9.00% senior secured notes, maturing 2028, with proceeds used primarily to pay the outstanding borrowings under our prior senior secured credit agreements (the “Export Credit Agreements”). 

During June 2023, Natural Habitat renewed its partnership agreement with WWF through December 31, 2028.

We have substantial advanced reservations for future travel with bookings for the full year 2023 43% ahead of the bookings for 2019 at the same point in 2019.

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 months ended March 31, 2023 and 2022;

results and a comparable discussion of our consolidated and segment results of operations;

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

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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.

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revenues recorded during the second and third quarters from their spring and summer season departures.

Results of Operations - Consolidated

For the three months ended March 31,

Results of Operations —

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

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Depreciation and amortization

Operating income (loss)

Net income (loss)

Operating (loss) income

Undistributed loss per share available to stockholders:

Comparison of the Three Months Ended March 31, 2023 to Three Months Ended March 31, 2022 —

Comparison of the Three and Six Months Ended June 30, 2023 to the Three and Six Months Ended June 30, 2022 —

Tour Revenues

Tour revenues for the three months ended March 31, 2023 increased $75.5 million, to $143.4 million, compared to $67.8 million for the three months ended March 31, 2022.

The Lindblad segment tour revenues increased by $65.2 million, and the Land Experiences segment increased $10.3 million, primarily due to the ramp of expeditions and trips, and higher pricing. 

Tour revenues for the three months ended June 30, 2023 increased $33.9 million, or 37%, to $124.8 million, compared to $90.9 million for the three months ended June 30, 2022.

The Lindblad segment tour revenues increased by $23.4 million, and the Land Experiences segment increased $10.5 million, primarily due to operating additional expeditions and trips, and higher pricing. 

Tour revenues for the six months ended June 30, 2023 increased $109.4 million, or 69%, to $268.2 million, compared to $158.8 million for the six months ended June 30, 2022.

The Lindblad segment tour revenues increased by $88.6 million, and the Land Experiences segment increased $20.8 million, primarily due to operating additional expeditions and trips, and higher pricing. 

Cost of Tours

Total cost of tours for the three months ended March 31, 2023 increased $14.1 million, or 24%, to $72.0 million, compared to $57.9 million for the three months ended March 31, 2022.

The Lindblad segment cost of tours increased by $9.5 million, and the Land Experiences segment increased $4.6 million, primarily due to the ramp of expeditions and trips. 

Total cost of tours for the three months ended June 30, 2023 increased $15.2 million, or 24%, to $77.7 million, compared to $62.5 million for the three months ended June 30, 2022.

The Lindblad segment cost of tours increased by $8.9 million, and the Land Experiences segment increased $6.3 million, primarily due to operating additional expeditions and trips. 

Total cost of tours for the six months ended June 30, 2023 increased $29.3 million, or 24%, to $149.7 million, compared to $120.4 million for the six months ended June 30, 2022.

The Lindblad segment cost of tours increased by $18.4 million, and the Land Experiences segment increased $10.9 million, primarily due to operating additional expeditions and trips. 

General and Administrative

General and administrative expenses for the three months ended March 31, 2023 increased $5.8 million, or 28%, to $26.4 million, compared to $20.6 million for the three months ended March 31, 2022.

At the Lindblad segment, general and administrative expenses increased $3.3 million from the prior year period, primarily due to higher personnel costs associated with the ramp in operations and higher credit card commissions due to the strong booking environment. At the Land Experiences segment, general and administrative expenses increased $2.5 million, primarily due to increased personnel costs related to operating additional trips and higher credit card commissions due to the strong booking environment. 

General and administrative expenses for the three months ended June 30, 2023 increased $5.4 million, or 23%, to $29.2 million, compared to $23.7 million for the three months ended June 30, 2022.

At the Lindblad segment, general and administrative expenses increased $4.3 million from the prior year period, primarily due to higher personnel and sales tax costs associated with the ramp in operations, higher credit card commissions due to the strong booking environment and increased stock compensation expense. At the Land Experiences segment, general and administrative expenses increased $1.1 million, primarily due to increased personnel costs related to operating additional trips. 

General and administrative expenses for the six months ended June 30, 2023 increased $11.2 million, or 25%, to $55.6 million, compared to $44.3 million for the six months ended June 30, 2022.

At the Lindblad segment, general and administrative expenses increased $7.5 million from the prior year period, primarily due to higher personnel costs associated with the ramp in operations, higher credit card commissions due to the strong booking environment and increased stock compensation expense. At the Land Experiences segment, general and administrative expenses increased $3.6 million, primarily due to increased personnel costs related to operating additional trips and higher credit card commissions due to the strong booking environment. 

Selling and Marketing

Selling and marketing expenses for the three months ended March 31, 2023 increased $8.3 million, or 68%, to $20.7 million, compared to $12.3 million for the three months ended March 31, 2022.

At the Lindblad segment, selling and marketing expenses increased $6.3 million, primarily due to higher commissions related to the ramp in operations and increased marketing spend to drive future bookings.

At the Land Experiences segment, selling and marketing expenses increased $2.0 million, primarily due to increased marketing spend to drive future bookings.

Selling and marketing expenses for the three months ended June 30, 2023 increased $2.3 million, or 18%, to $15.2 million, compared to $12.8 million for the three months ended June 30, 2022.

At the Lindblad segment, selling and marketing expenses increased $1.4 million, primarily due to higher commissions related to the ramp in operations.

At the Land Experiences segment, selling and marketing expenses increased $0.9 million, primarily due to increased marketing spend to drive future bookings and higher commissions related to the ramp in operations. 

Selling and marketing expenses for the six months ended June 30, 2023 increased $10.6 million, or 42%, to $35.8 million, compared to $25.2 million for the six months ended June 30, 2022.

At the Lindblad segment, selling and marketing expenses increased $7.7 million, primarily due to higher commissions related to the ramp in operations and increased sales and marketing spend on future bookings.

At the Land Experiences segment, selling and marketing expenses increased $2.9 million, primarily due to increased marketing spend to drive future bookings and higher commissions related to the ramp in operations.

Depreciation and Amortization

Depreciation and amortization expenses for the three months ended March 31, 2023 increased $0.6 million, or 6%, to $11.8 million, compared to $11.2 million for the three months ended March 31, 2022.

Depreciation and amortization expenses for the three months ended June 30, 2023 increased $0.1 million, or 1%, to $11.3 million, compared to $11.2 million for the three months ended June 30, 2022.

Depreciation and amortization expenses for the six months ended June 30, 2023 increased $0.7 million, or 4%, to $23.1 million, compared to $22.4 million for the six months ended June 30, 2022.

Other Income (Expense)

Other expense for the three months ended March 31, 2023, increased $2.1 million to $10.1 million from $8.1 million for the three months ended March 31, 2022, primarily due to a $1.8 million increase in interest expense, primarily due to higher rates across our debt facilities.

Other expense for the three months ended June 30, 2023, increased $5.0 million to $15.2 million from $10.2 million for the three months ended June 30, 2022, primarily due to the write-off of $3.9 million of deferred financing costs, fees and other expenses related to the repayment of our prior Export Credit Agreements and a $2.2 million increase in interest expense, primarily due to higher rates across our debt facilities and increased borrowings.

Other expense for the six months ended June 30, 2023, increased $7.0 million to $25.3 million from $18.3 million for the six months ended June 30, 2022, primarily due to a $4.0 million increase in interest expense, primarily due to higher rates across our debt facilities, and the write-off of $3.9 million of deferred financing costs, fees and other expenses related to the repayment of our prior Export Credit Agreements, partially offset by a $0.5 million gain on foreign currency.

In 2022, we wrote-off $9.0 million of deferred financing costs and incurred $1.9 million of fees and other expenses related to the repayment of our prior credit agreement, including the term facility, Main Street Loan and revolving credit facility, and a $0.6 million loss on foreign currency translation, which was mostly offset by recognition of $11.6 million in other income related to expenses covered under the CERTS Act grant.

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 March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

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Total tour revenues

Operating income (loss):

Operating (loss) income:

Land Experiences

Total operating income (loss)

Total operating (loss) income

Adjusted EBITDA:

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The following table sets forth our Available Guest Nights, Guest Nights Sold, Occupancy, Maximum Guests, Number of Guests and Voyages:

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

Available Guest Nights

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Calculation of Gross and Net Yield per Available Guest Night

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 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 March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

Operating income (loss)

Operating (loss) income

Cost of tours

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Calculation of Gross and Net Cruise Cost

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

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

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Adjusted Net Cruise Cost per Available Guest Night

Comparison of Three Months Ended March 31, 2023 to Three Months Ended March 31, 2022 at the Lindblad Segment

Comparison of the Three and Six Months Ended June 30, 2023 to the Three and Six Months Ended June 30, 2022 at the Lindblad Segment

Tour Revenues

Tour revenues for the three months ended March 31, 2023 increased $65.2 million to $115.5 million, compared to $50.3 million for the three months ended March 31, 2022.

The 130% increase in 2023 was driven by higher guest ticket revenues primarily from an increase in available guest nights and from higher pricing and occupancy compared with the first quarter of 2022. 

Tour revenues for the three months ended June 30, 2023 increased $23.4 million, or 36%, to $87.4 million, compared to $64.0 million for the three months ended June 30, 2022.

The 36% increase in 2023 was primarily driven by higher guest ticket revenues from a 34% increase in available guest nights due to greater fleet utilization and from a 5% increase in net yield per available guest night to $1,034 mostly due to higher pricing. Occupancy of 75% was in line with the second quarter of 2022. 

Tour revenues for the six months ended June 30, 2023 increased $88.6 million, or 77%, to $202.9 million, compared to $114.3 million for the six months ended June 30, 2022.

The 77% increase in 2023 was primarily driven by higher guest ticket revenues from a 51% increase in available guest nights due to greater fleet utilization and from a 29% increase in net yield per available guest night to $1,124 due to higher pricing and increased occupancy compared with 2022.

Operating Income

We generated $12.1 million of operating income for the three months ended March 31, 2023, compared to a $33.6 operating loss for the three months ended March 31, 2022, primarily due to the increase in tour revenues, partially offset by higher cost of tours and personnel costs due to the ramp in operations, increased commissions related to the revenue and bookings growth and increased marketing spend to support future growth initiatives.

Comparison of Three Months Ended March 31, 2023 to Three Months Ended March 31, 2022 at the Land Experiences Segment

Operating loss of $11.0 million for the three months ended June 30, 2023, improved $8.7 million compared to a $19.7 operating loss for the three months ended June 30, 2022, primarily due to the increase in tour revenues, partially offset by higher cost of tours and personnel costs due to the ramp in operations and increased commissions related to the revenue and bookings growth. 

Operating income of $1.1 million for the six months ended June 30, 2023, improved $54.3 million compared to a $53.2 operating loss for the six months ended June 30, 2022, primarily due to the increase in tour revenues, partially offset by higher cost of tours and personnel costs due to the ramp in operations, increased commissions related to the revenue and bookings growth and increased sales and marketing spend to support future growth initiatives.

Comparison of Three and Six Months Ended June 30, 2023 to Three and Six Months Ended June 30, 2022 at the Land Experiences Segment

Tour Revenues

Tour revenues for the three months ended March 31, 2023 increased $10.3 million to $27.9 million compared to $17.6 million for the three months ended March 31, 2022 primarily as a result of operating additional trips during the first quarter 2023 and higher pricing.

Tour revenues for the three months ended June 30, 2023 increased $10.5 million, or 39%, to $37.4 million compared to $26.9 million for the three months ended June 30, 2022 primarily as a result of operating additional trips during the second quarter 2023 and higher pricing.

Tour revenues for the six months ended June 30, 2023 increased $20.8 million, or 47%, to $65.3 million compared to $44.4 million for the six months ended June 30, 2022 primarily as a result of operating additional trips during 2023 and higher pricing.

Operating Income 

We generated $0.3 million of operating income for the three months ended March 31, 2023, compared to an operating loss of $0.7 million for the three months ended March 31, 2022, primarily due to the increase in tour revenue, partially offset by higher operating and personnel costs related to operating additional departures, increased commissions related to the revenue and bookings growth and increased marketing spend to support future growth initiatives.

Operating income of $2.5 million for the three months ended June 30, 2023, increased $2.1 million compared to $0.4 million for the three months ended June 30, 2022, primarily due to the increase in tour revenue, partially offset by higher operating and personnel costs related to operating additional departures, increased commissions related to the revenue and bookings growth and increased marketing spend to support future growth initiatives.

Operating income of $2.9 million for the six months ended June 30, 2023, increased $3.2 million compared to an operating loss of $0.3 million for the six months ended June 30, 2022, primarily due to the increase in tour revenue, partially offset by higher operating and personnel costs related to operating additional departures, increased commissions related to the revenue and bookings growth and increased marketing spend to support future growth initiatives.

Adjusted EBITDA —

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For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

Net income (loss)

Interest expense, net

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Depreciation and amortization

Gain on foreign currency

(Gain) loss on foreign currency

Stock-based compensation

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Lindblad Segment

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

Operating income (loss)

Operating (loss) income

Depreciation and amortization

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Land Experiences Segment

For the three months ended March 31,

For the three months ended June 30,

For the six months ended June 30,

(In thousands)

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Liquidity and Capital Resources

As of March 31, 2023, the Company had $84.0 million in unrestricted cash and cash equivalents and $36.7 million in restricted cash primarily related to deposits on future travel originating from U.S.

As of June 30, 2023, the Company had $143.0 million in unrestricted cash and cash equivalents and $54.5 million in restricted cash primarily related to deposits on future travel originating from U.S.

ports and credit card reserves.

As of March 31, 2023, we had $560.0 million in long-term debt obligations, including the current portion of long-term debt.

As of June 30, 2023, we had $635.1 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. 

Sources and Uses of Cash for the Three Months Ended March 31, 2023 and 2022

Net cash provided by operating activities was $2.1 million for the three months ended March 31, 2023 compared to $5.2 million for the same period in 2022. The $3.1 million decrease is primarily due to higher costs during 2023 as we returned all vessels to operations. 

Net cash provided by investing activities was $8.7 million for the three months ended March 31, 2023 compared to $7.5 million used in investing activities in the same period in 2022.

2023 primarily included divesting of marketable securities, partially offset by vessel capital expenditures, while 2022 primarily included routine capital vessel maintenance across the fleet and renovations to the National Geographic Islander II  for its launch during the third quarter of 2022.

Net cash used in financing activities was $6.1 million for the three months ended March 31, 2023 compared to $14.5 million provided by financing activities for the same period in 2022. 2023 primarily included repayments under our export credit agreements, while 2022 primarily included the issuance of new senior secured notes which were used to repay the prior credit agreement, including the term facility, the Main Street Loan and the revolving facility .

Sources and Uses of Cash for the Six Months Ended June 30, 2023 and 2022

Net cash provided by operating activities was $19.5 million for the six months ended June 30, 2023 compared to $18.6 million for the same period in 2022. The $0.9 million increase is primarily due to increased cash received from guests for future travel, partially offset higher costs and redemption of future travel credits during 2023 as we returned all vessels to operations. 

Net cash provided by investing activities was $0.4 million for the six months ended June 30, 2023 compared to $23.6 million used in investing activities in the same period in 2022.

2023 primarily included divesting of marketable securities, partially offset by capital expenditures on our vessels, while 2022 primarily included routine capital vessel maintenance across the fleet and renovations to the National Geographic Islander II  for its launch during the third quarter of 2022.

Net cash provided by financing activities was $61.5 million for the six months ended June 30, 2023 compared to $8.0 million for the same period in 2022. 2023 primarily included the issuance of $275.0 million of new senior notes which were used primarily to repay our prior Export Credit Agreements, while 2022 primarily included the issuance of $360.0 million of new 9.00% senior secured notes which were used to repay our prior credit agreement, including the term facility, the Main Street Loan and the revolving facility .

Funding Sources

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The Revolving Credit Facility contains customary affirmative and negative covenants, as well as financial covenants and event of default provisions. 

Senior Secured Credit Agreements

Our first senior secured credit agreement (the “First Export Credit Agreement”) made available a loan 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, upon delivery, we borrowed $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 a loan for the purpose of providing pre- and post-delivery financing for up to 80% of the purchase price of the National Geographic Resolution.

We 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, with the ship delivered in September 2021. 

The First Export Credit Agreement, as amended, bears interest at a variable interest rate equal to three-month LIBOR plus a spread of 3.50% per annum, or 8.65% over the borrowing period covering March 31, 2023.

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 8.46% over the borrowing period covering March 31, 2023. On October 11, 2022, we amended the covenants of our export credit agreements to use an annualized EBITDA calculation in our net leverage ratio covenant for the periods from March 31, 2023 through September 30, 2023.

We were in compliance with our covenants in effect as of March 31, 2023.

During April 2023, we issued $275.0 million of 9.00% senior secured notes, maturing 2028, with proceeds used primarily to pay the outstanding borrowings under our First and Second Export Credit Agreements.

The senior secured notes are guaranteed on a senior secured basis by us and certain of our subsidiaries and are collateralized by certain of our assets.

Our Off the Beaten Path subsidiary has a loan maturing September 2023 for the purchase of guest transportation vehicles.

The loan’s original principal was $0.3 million, is collateralized by the vehicles and bears an annual interest rate of 4.77%.

Our Off the Beaten Path subsidiary has a $0.8 million loan under the Main Street Expanded Loan Facility, originated on December 11, 2020.

The outstanding balance will amortize at a rate of 15% on both December 2023 and December 2024, with the remaining balance due December 2025.

The loan bears a variable interest rate equal to one-month LIBOR plus a spread of 3.00%, or 7.86% as of March 31, 2023.

This loan may be voluntarily prepaid at any time and from time to time, without premium or penalty, other than customary “breakage costs”

and fees for LIBOR-based loans.

On May 2, 2023, we issued $275.0 million aggregate principal amount of 9.00% senior secured notes due 2028 (the “9.00% Notes”) in a private offering.

The 9.00% Notes bear interest at a rate of 9.00% per year, accruing from May 2, 2023, and interest is payable semiannually in arrears on May 15 and November 15 of each year, beginning on November 15, 2023.

The 9.00% Notes will mature on May 15, 2028, subject to earlier repurchase or redemption.

The net proceeds from the offering were used to prepay in full all outstanding borrowings under our prior senior secured credit agreements, to pay any related premiums and to terminate in full the prior senior secured credit agreements and the commitments thereunder. The 9.00% Notes are senior unsecured obligations and are guaranteed (i) on a senior secured basis by certain of our subsidiaries (collectively, the “Secured Guarantors”) and secured by a first-priority lien, subject to permitted liens and certain exceptions, on the equity and substantially all the assets of the Secured Guarantors, and (ii) on a senior unsecured basis by certain of our other subsidiaries.

We may redeem the 9.00% Notes at set redemption prices and premiums, plus accrued and unpaid interest, if any. 

The 9.00% Notes contain covenants that, among other things, restrict our ability, and the ability of our restricted subsidiaries, to incur certain additional indebtedness and make certain dividend payments, distributions, investments and other restricted payments.

These covenants are subject to a number of important exceptions and qualifications set forth in the 9.00% Notes. 

Our DuVine subsidiary has a EUR 0.1 million State Assistance Loan related to the financial consequences of the COVID-19 pandemic, for the purpose of employment preservation.

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In August 2020, we 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.

As of March 31, 2023, 62,000 shares of Preferred Stock were outstanding.

As of June 30, 2023, 62,000 shares of Preferred Stock were outstanding.

The Preferred Stock has senior and preferential ranking to our common stock.

The Preferred Stock is entitled to cumulative dividends of 6.00% per annum, and for the first two years, the dividends were paid-in-kind.

After the second anniversary of the issuance date, the dividends may be paid-in-kind or be paid in cash at our option.

The Preferred Stock is convertible at any time, at the holder’s election, into a number of shares of our common stock equal to the quotient obtained by dividing the then-current accrued value by the conversion price of $9.50.

The Preferred Stock is entitled to cumulative dividends of 6.00% per annum, and for the first two years, the dividends were required to be paid-in-kind.

After the second anniversary of the issuance date, the dividends may be paid-in-kind or be paid in cash at our option. During 2023, we thus far have continued to pay Preferred Stock dividends in-kind. At any time after the third anniversary of the issuance, we may, at our option, convert all, but not less than all, of the Preferred Stock into common stock if the closing price of shares of common stock is at least 150% of the conversion price for 20 out of 30 consecutive trading days. The Preferred Stock is convertible at any time, at the holder’s election, into a number of shares of our common stock equal to the quotient obtained by dividing the then-current accrued value by the conversion price of $9.50.

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

As of March 31, 2023, the outstanding Preferred Stock and accumulated dividends could be converted, at the option of the holders, into approximately 7.6 million shares of our common stock. 

As of June 30, 2023, the outstanding Preferred Stock and accumulated dividends could be converted, at the option of the holders, into approximately 7.7 million shares of our common stock. 

Funding Needs

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Traditionally we run a working capital deficit due primarily to a large balance of unearned passenger revenues.

As of March 31, 2023, we had a working capital deficit of $152.1 million, and as of December 31, 2022, we had a working capital deficit of $157.8 million. 

As of June 30, 2023, we had a working capital deficit of $73.9 million, and as of December 31, 2022, we had a working capital deficit of $157.8 million. 

Critical Accounting Policies

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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