What changed in this filing

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Item 1. Financial Statements

2023-11-02 compared with 2023-07-27 · 197 added, 195 removed, 943 unchanged (29% of the section changed)

4 unchanged sentences

(In thousands, except share and per share data)

June 30, 2023

September 30, 2023

December 31, 2022

22 unchanged sentences

11,219  

Deferred tax asset

27 unchanged sentences

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

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

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

72,397  

7 unchanged sentences

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

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

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

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

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

53,379,750 and 53,177,437 issued, 53,321,818 and 53,110,132 outstanding as of September 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 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

29 unchanged sentences

351,291  

Operating (loss) income

Operating income (loss)

20,476  

5 unchanged sentences

( 33,593 )  

Gain (loss) on foreign currency

(Loss) gain on foreign currency

( 455 )  

( 872 )  

Other (expense) income

6 unchanged sentences

( 37,320 )  

Loss before income taxes

( 23,664 )  

( 29,522 )  

( 21,340 )  

Income tax expense (benefit)

( 964 )  

Income (loss) before income taxes

( 3,766 )  

( 12,876 )  

Income tax expense

Net income (loss)

( 5,498 )  

Net income (loss) attributable to noncontrolling interest

Net loss attributable to Lindblad Expeditions Holdings, Inc.

( 14,463 )  

Net income attributable to noncontrolling interest

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

( 8,726 )  

1 unchanged sentence

Series A redeemable convertible preferred stock dividend

Net loss available to stockholders

Net income (loss) available to stockholders

$ 4,540  

10 unchanged sentences

51,665,912  

Undistributed loss per share available to stockholders:

Undistributed income (loss) per share available to stockholders:

$ 0.08  

7 unchanged sentences

AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Loss

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

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,

Net income (loss)

Other comprehensive income:

2 unchanged sentences

Total other comprehensive income

Total comprehensive loss

comprehensive income (loss) attributive to non-controlling interest

Comprehensive loss attributable to stockholders

Total comprehensive income (loss)

comprehensive income attributive to non-controlling interest

Comprehensive income (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

Balance as of June 30, 2023

Stock-based compensation

2 unchanged sentences

Series A preferred stock dividend

Net loss attributable to Lindblad Expeditions Holdings, Inc.

Balance as of June 30, 2023

Net income attributable to Lindblad Expeditions Holdings, Inc

Balance as of September 30, 2023

Additional Paid-In

6 unchanged sentences

Net loss attributable to Lindblad Expeditions Holdings, Inc

Balance as of June 30, 2023

Balance as of September 30, 2023

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

8 unchanged sentences

Comprehensive Loss

Balance as of March 31, 2022

Balance as of June 30, 2022

Stock-based compensation

Net activity related to equity compensation plans

Issuance of stock for conversion of preferred stock

Redeemable noncontrolling interest

1 unchanged sentence

Net loss attributable to Lindblad Expeditions Holdings, Inc.

Balance as of June 30, 2022

Balance as of September 30, 2022

Additional Paid-In

2 unchanged sentences

Comprehensive Loss

Equity (Deficit)

Balance as of December 31, 2021

6 unchanged sentences

Net loss attributable to Lindblad Expeditions Holdings, Inc.

Balance as of June 30, 2022

Balance as of September 30, 2022

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

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

Adjustments to reconcile net loss to net cash provided by operating activities:

Depreciation and amortization

18 unchanged sentences

Sale of short-term securities

Net cash provided by (used in) investing activities

Net cash used in investing activities

Cash Flows From Financing Activities

4 unchanged sentences

Net cash provided by financing activities

Net increase in cash, cash equivalents and restricted cash

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

Cash, cash equivalents and restricted cash at beginning of period

10 unchanged sentences

Lindblad Expeditions Holdings, Inc.’s and its consolidated subsidiaries’

(the “Company”

(collectively, the “Company”

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.

34 unchanged sentences

EARNINGS PER SHARE

Earnings per Common Share

Earnings (loss) per Common Share

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”).

3 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 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 nine months ended September 30, 2023 and three and nine months ended September 30, 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 nine months ended September 30, 2023, 0.8  million unvested restricted shares, 1.3  million shares issuable upon exercise of options and 7.8  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 September 30, 2023, 7.8  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, 2022, 

three and nine months ended September 30, 2022, 

0.8  million unvested restricted shares, 1.4  million shares issuable upon exercise of options and 7.4 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 June 30,

For the six months ended June 30,

Earnings (loss) per share was calculated as follows:

For the three months ended September 30,

For the nine months ended September 30,

(In thousands, except share and per share data)

Net loss attributable to Lindblad Expeditions Holdings, Inc.

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

$ 5,638  

2 unchanged sentences

Series A redeemable convertible preferred stock dividend

Undistributed loss available to stockholders

Undistributed income (loss) available to stockholders

$ 4,540  

7 unchanged sentences

51,665,912  

Dilutive potential common shares

91,365  

Dilutive potential options

Total weighted average shares outstanding, diluted

3 unchanged sentences

51,665,912  

Undistributed loss per share available to stockholders:

Undistributed income (loss) per share available to stockholders:

$ 0.08  

13 unchanged sentences

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.

September 30, 2023 and December 31, 2022, 

the Company has $ 250.6 million and $ 245.1  million, related to unearned passenger revenue, respectively.

Contract Liabilities

5 unchanged sentences

365,392  

Balance as of June 30, 2023

Balance as of September 30, 2023

$ 115,632  

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:

6 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,

As of September 30,

(In thousands)

9 unchanged sentences

Restricted cash consists of the following:

As of June 30, 2023

As of September 30, 2023

As of December 31, 2022

10 unchanged sentences

Prepaid expenses and other current assets are as follows: 

As of June 30, 2023

As of September 30, 2023

As of December 31, 2022

9 unchanged sentences

Accounts payable and accrued expenses are as follows:

As of June 30, 2023

As of September 30, 2023

As of December 31, 2022

11 unchanged sentences

LONG-TERM DEBT

As of June 30, 2023

As of September 30, 2023

As of December 31, 2022

37 unchanged sentences

$ 529,452  

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.

For the three and nine months ended September 30, 2023, $ 0.9  million and $ 2.4  million, respectively, of deferred financing costs were charged to interest expense, and for the three and nine months ended September 30, 2022, $ 0.7  million and $ 2.1 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 

15 unchanged sentences

liens, subject to permitted liens and certain exceptions, on substantially all the assets of the Company and the Guarantors.

Borrowings under the Revolving Credit Facility, if any, will bear interest at a rate per annum equal to, at the Company’s option, an adjusted Secured Overnight Financing Rate (“SOFR”) rate plus a spread or a base rate plus a spread.

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

7 unchanged sentences

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, 

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 and its $ 0.8 million loan under the Main Street Expanded Loan Facility, which originated on December 11, 2020, 

was repaid during May 2023. 

3 unchanged sentences

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. 

The First Export Credit Agreement was repaid in full on May 2, 2023 with the proceeds of the 9.00 % Notes. 

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 

1 unchanged sentence

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 Second Export Credit Agreement was repaid in full on May 2, 2023 with the proceeds of the 9.00 % Notes. 

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.

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

NOTE 6 —

11 unchanged sentences

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.

Interest Rate Risk .

The Company previously used interest rate caps to manage the risk related to its previously existing variable rate corporate debt.

The Company recorded the effective portion of changes in the fair value of its cash flow hedges to other comprehensive income (loss), net of tax, and subsequently reclassified these amounts into earnings in the period during which the hedged transaction was recognized.

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 June 30, 2023:

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

(In thousands)

3 unchanged sentences

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

As of June 30, 2023

As of September 30, 2023

As of December 31, 2022

11 unchanged sentences

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 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)

7 unchanged sentences

$ ( 455 )  

Recognized in interest expense, net.

$ ( 637 )  

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.

Recognized in interest expense, net, for the three and nine months ended September 30, 2023 and the three months ended September 30, 2022.

For the nine months ended September 30, 2022, $ 1.3 million was recognized as income in interest expense net, and $ 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 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.

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

to be $ 613.3  million based on the terms of the agreements and comparable market data as of September 30, 2023.

As of September 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 June 30, 2023. 

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

Preferred Stock

8 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 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.

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

The Company recorded accrued dividends for Preferred Stock of $ 1.1  million and $ 3.3 million for the three and nine months ended September 30, 2023, respectively, and $ 1.0  million and $ 3.6 million for the three and nine months ended September 30, 2022, respectively.

As of September 30, 2023, the 62,000 shares of Preferred Stock outstanding and accumulated dividends could be converted at the option of the holders into 7.8  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 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.

As of September 30, 2023, 3.8 million shares were available to be granted under the Plan.

The Company recorded stock-based compensation expense of $ 3.0  million and $ 9.2 million during the three and nine months ended September 30, 2023, respectively, and $ 1.6  million and $ 5.3 million during the three and nine months ended September 30, 2022, respectively.

Long-Term Incentive Compensation

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 .

During the nine months ended September 30, 2023, the Company granted 553,871 restricted stock units (“RSUs”) with a weighted average grant price of $ 9.78 .

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

During the nine months ended September 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 

2 unchanged sentences

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

During the nine months ended September 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. 

8 unchanged sentences

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.

As of September 30, 2023 and December 31, 2022, options to purchase an aggregate of 1.3  million and 1.4  million shares of the Company’s common stock, respectively, with a weighted average exercise price of $ 12.36  and $ 15.10 , respectively, were outstanding.

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

Natural Habitat Contingent Arrangement

9 unchanged sentences

NOTE 9 —

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.

As of September 30, 2023 

and December 31, 2022, the Company had no unrecognized tax benefits recorded. The Company's effective tax rate for the three and nine months ended September 30, 2023 was an expense of 0.0 % and 12.3 %, respectively, versus an expense of 

46.0 % and 0.8 % for the three and months ended September 30, 2022, respectively. In 2023, the effective income tax expense differs from the statutory rate primarily due to the valuation allowance and for the nine months ended September 30, 2023 was also impacted by a $ 1.5 million discrete tax expense. 

In 2022, the effective income tax expense differs from the statutory rate primarily due to the expected results for the year and the impact of taxes from foreign jurisdictions.

NOTE 10 —

15 unchanged sentences

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)

4 unchanged sentences

$ 10,626  

Net income (loss) attributable to noncontrolling interest

Net income attributable to noncontrolling interest

Redemption value adjustment of put option

17,957  

( 255 )  

Ending balance

9 unchanged sentences

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 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 

Royalty expense for the three and nine months ended September 30, 2023 was $ 2.0 million and $ 5.9 million, respectively, and was $ 1.9  million and $ 4.5 million for the three and nine months ended September 30, 2022, respectively.

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

was $ 1.9 million and $ 1.8 million, respectively, and is included in accounts payable and accrued expenses.

4 unchanged sentences

The fees are included within selling and marketing expense.

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.

This royalty fee expense was $ 0.4  million and $ 0.9  million for the three and nine months ended September 30, 2023, respectively, and $ 0.4  million and $ 1.0 million for the three and nine months ended September 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 June 30, 2023 are as follows:

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

For the years ended December 31,

(In thousands)

2023 (six months)

$ 1,905  

2023 (three months)

18,558  

8 unchanged sentences

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 months ended September 30,

For the nine months ended September 30,

(In thousands)

19 unchanged sentences

Land Experiences

Total operating (loss) income

12,975  

1 unchanged sentence

15,868  

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.

12,629  

Total operating income (loss)

$ 20,476  

$ 5,808  

$ 24,444  

For the three and nine months ended September 30, 2023, there was $ 2.3 million and $ 6.3 million, respectively, of intercompany tour revenues between the Lindblad and Land Experiences reportable segments, which were eliminated in consolidation. For the three and nine months ended September 30, 2022, there was $ 1.7 million and $ 5.3 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 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)

12 unchanged sentences

(In thousands)

As of June 30, 2023

As of September 30, 2023

As of December 31, 2022

54 unchanged sentences

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

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;

events and conditions around the world, including war and other military actions, such as the Israel-Hamas war, 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, 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;

the Israel-Hamas war, 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;

increases in fuel prices, changes in fuels consumed and availability of fuel supply in the geographies in which we operate or in general; 

2 unchanged sentences

the impact of delays or cost overruns with respect to anticipated or unanticipated drydock, maintenance, modifications or other required construction related to any of our vessels;

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

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

any change in state classifications of our workforce;

11 unchanged sentences

those risks discussed herein and in Item 1A.

Risk Factors in our 2022 Annual Report.

Risk Factors in our 2022 Annual Report and in Part II - Item 1A.

Risk Factors in our Form 10-Q for the quarterly period ended June 30, 2023.

We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this Form 10-Q.

3 unchanged sentences

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.

We currently operate a fleet of ten owned expedition ships and five seasonal charter vessels under the Lindblad brand.

Each expedition ship is fully equipped with state-of-the-art tools for in-depth exploration and the majority of our expeditions involve travel to remote places, such as voyages to the Arctic, Antarctic, the Galápagos Islands, Alaska, Baja’s Sea of Cortez, the South Pacific, Costa Rica and Panama.

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2023 Highlights

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.

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, British Columbia, Eastern Canada, Central America, Europe, the Galápagos Islands, Greenland, Iceland, Indonesia, Japan, New Zealand, through the Northwest Passage, 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. 

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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.

We have substantial advanced reservations for future travel with bookings for the full year 2023 42% 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 :

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Traditionally, our Lindblad brand tour revenues 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.

The seasonality of our operating results fluctuates due primarily 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 periodically more extensive reviews.

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Results of Operations —

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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Depreciation and amortization

Operating (loss) income

Undistributed loss per share available to stockholders:

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

Operating income (loss)

Net income (loss)

Undistributed income (loss) per share available to stockholders:

Comparison of the Three and Nine Months Ended September 30, 2023 to the Three and Nine Months Ended September 30, 2022 —

Tour Revenues

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. 

Tour revenues for the three months ended September 30, 2023 increased $31.2 million, or 22%, to $176.0 million, compared to $144.8 million for the three months ended September 30, 2022.

The Lindblad segment tour revenues increased by $25.0 million, or 30%, and the Land Experiences segment increased $6.2 million, or 10%, primarily due to operating additional expeditions and trips, and from higher pricing. 

Tour revenues for the nine months ended September 30, 2023 increased $140.6 million, or 46%, to $444.2 million, compared to $303.5 million for the nine months ended September 30, 2022.

The Lindblad segment tour revenues increased by $113.6 million, or 57%, and the Land Experiences segment increased $27.0 million, or 26%, primarily due to operating additional expeditions and trips, and from higher pricing. 

Cost of Tours

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. 

Total cost of tours for the three months ended September 30, 2023 increased $8.0 million, or 9%, to $95.6 million, compared to $87.6 million for the three months ended September 30, 2022.

The Lindblad segment cost of tours increased by $3.7 million, or 7%, and the Land Experiences segment increased $4.3 million, or 12%, primarily due to operating additional expeditions and trips. 

Total cost of tours for the nine months ended September 30, 2023 increased $37.3 million, or 18%, to $245.3 million, compared to $208.0 million for the nine months ended September 30, 2022.

The Lindblad segment cost of tours increased by $22.2 million, or 15%, and the Land Experiences segment increased $15.1 million, or 24%, primarily due to operating additional expeditions and trips. 

General and Administrative

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. 

General and administrative expenses for the three months ended September 30, 2023 increased $5.5 million, or 22%, to $30.0 million, compared to $24.5 million for the three months ended September 30, 2022.

At the Lindblad segment, general and administrative expenses increased $4.3 million, or 25%, 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 $1.2 million, or 16%, 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 nine months ended September 30, 2023 increased $16.7 million, or 24%, to $85.6 million, compared to $68.9 million for the nine months ended September 30, 2022.

At the Lindblad segment, general and administrative expenses increased $11.9 million, or 25%, from the prior year period, primarily due to higher personnel costs 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 $4.8 million, or 24%, 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 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.

Selling and marketing expenses for the three months ended September 30, 2023 increased $3.4 million, or 21%, to $19.4 million, compared to $16.0 million for the three months ended September 30, 2022.

At the Lindblad segment, selling and marketing expenses increased $2.8 million, or, 22%, 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 $0.6 million, or 16%, 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 nine months ended September 30, 2023 increased $14.0 million, or 34%, to $55.2 million, compared to $41.2 million for the nine months ended September 30, 2022.

At the Lindblad segment, selling and marketing expenses increased $10.5 million, or 31%, 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 $3.5 million, or 46%, 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 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.

Depreciation and amortization expenses for the three months ended September 30, 2023 decreased $0.3 million, or 3%, to $10.5 million, compared to $10.8 million for the three months ended September 30, 2022.

Depreciation and amortization expenses for the nine months ended September 30, 2023 increased $0.5 million, or 1%, to $33.7 million, compared to $33.2 million for the nine months ended September 30, 2022.

Other Income (Expense)

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.

Other expense for the three months ended September 30, 2023, increased $2.5 million to $12.0 million from $9.5 million for the three months ended September 30, 2022, due to a $3.1 million increase in interest expense, primarily due to higher interest rates across our debt facilities and increased borrowings.

Other expense for the nine months ended September 30, 2023, increased $9.5 million to $37.3 million from $27.8 million for the nine months ended September 30, 2022, primarily due to a $7.1 million increase in interest expense, due to higher interest rates across our debt facilities, increased borrowings, 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.

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 $1.4 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 grant for the Coronavirus Economic Relief for Transportation Services 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 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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Total tour revenues

Operating (loss) income:

Operating income (loss):

Land Experiences

Total operating (loss) income

Total operating income (loss)

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 June 30,

For the six months ended June 30,

For the three months ended September 30,

For the nine months ended September 30,

Available Guest Nights

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Calculation of Gross 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)

Operating (loss) income

Operating income (loss)

Cost of tours

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Calculation of Gross 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.

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Adjusted Net Cruise Cost per Available Guest Night

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

Comparison of the Three and Nine Months Ended September 30, 2023 to the Three and Nine Months Ended September 30, 2022 at the Lindblad Segment

Tour Revenues

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.

Tour revenues for the three months ended September 30, 2023 increased $25.0 million, or 30%, to $108.7 million, compared to $83.7 million for the three months ended September 30, 2022.

The 30% increase in 2023 was primarily driven by higher guest ticket revenues from a 21% increase in available guest nights due to greater fleet utilization and from a 9% increase in net yield per available guest night to $1,110 mostly due to higher pricing. Occupancy of 81% was in line with the third quarter of 2022. 

Tour revenues for the nine months ended September 30, 2023 increased $113.6 million, or 57%, to $311.7 million, compared to $198.1 million for the nine months ended September 30, 2022.

The 57% increase in 2023 was primarily driven by higher guest ticket revenues from a 39% increase in available guest nights due to greater fleet utilization and from a 20% increase in net yield per available guest night to $1,119 due to higher pricing and increased occupancy compared with 2022.

Operating Income

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

Operating income of $7.5 million for the three months ended September 30, 2023 improved $14.6 million compared to a $7.1 million operating loss for the three months ended September 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 bookings. 

Operating income of $8.6 million for the nine months ended September 30, 2023 improved $69.0 million compared to a $60.4 million operating loss for the nine months ended September 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 bookings.

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

Tour Revenues

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.

Tour revenues for the three months ended September 30, 2023 increased $6.2 million, or 10%, to $67.2 million compared to $61.0 million for the three months ended September 30, 2022 primarily as a result of operating additional trips during the third quarter 2023 and higher pricing. 

Tour revenues for the nine months ended September 30, 2023 increased $27.0 million, or 26%, to $132.5 million compared to $105.5 million for the nine months ended September 30, 2022 primarily as a result of operating additional trips during 2023 and higher pricing. 

Operating Income 

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.

Operating income of $13.0 million for the three months ended September 30, 2023 was flat compared to $13.0 million for the three months ended September 30, 2022, as the increase in tour revenue was offset by increased operating and personnel costs related to operating additional departures, higher commissions related to the revenue and bookings growth and increased marketing spend to support future growth initiatives.

Operating income of $15.9 million for the nine months ended September 30, 2023 increased $3.2 million compared to operating income of $12.6 million for the nine months ended September 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 higher marketing spend to support future growth initiatives.

Adjusted EBITDA —

The following table outlines the reconciliation of net loss to consolidated Adjusted EBITDA.

The following table outlines the reconciliation of net income (loss) to consolidated Adjusted EBITDA.

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)

Net income (loss)

Interest expense, net

Income tax expense (benefit)

Income tax expense

Depreciation and amortization

(Gain) loss on foreign currency

Loss (gain) on foreign currency

Stock-based compensation

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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)

Operating (loss) income

Operating income (loss)

Depreciation and amortization

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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 income (loss)

Operating income

Depreciation and amortization

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Liquidity and Capital Resources

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.

As of September 30, 2023, the Company had $168.0 million in unrestricted cash and cash equivalents and $36.8 million in restricted cash primarily related to deposits on future travel originating from U.S.

ports and credit card reserves.

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 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 .

As of September 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 for at least the next 12 months. 

Sources and Uses of Cash for the Nine Months Ended September 30, 2023 and 2022

Net cash provided by operating activities was $35.3 million for the nine months ended September 30, 2023 compared to $0.8 million for the same period in 2022. The $34.5 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 used in investing activities was $7.6 million for the nine months ended September 30, 2023 compared to $29.6 million in the same period in 2022.

2023 primarily included divesting of marketable securities, partially offset by capital expenditures on our vessels and our digital transformation initiatives, 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 $61.0 million for the nine months ended September 30, 2023 compared to $2.1 million for the same period in 2022. 2023 primarily included the issuance of $275.0 million of 9.00% Notes (as described below) which were used primarily to repay our prior Export Credit Agreements, while 2022 primarily included the issuance of $360.0 million of 6.75% Notes (as described below) 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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liens, subject to permitted liens and certain exceptions, on substantially all the assets of the Company and the Guarantors.

Borrowings under the Revolving Credit Facility, if any, will bear interest at a rate per annum equal to, at our option, an adjusted SOFR rate plus a spread or a base rate plus a spread.

Borrowings under the Revolving Credit Facility, if any, will bear interest at a rate per annum equal to, at our option, an adjusted SOFR rate plus a spread or a base rate plus a spread. As of September 30, 2023, we had no borrowings under the Revolving Credit Facility.

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

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

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

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

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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 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. 

As of September 30, 2023, the outstanding Preferred Stock and accumulated dividends could be converted, at the option of the holders, into approximately 7.8 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 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. 

As of September 30, 2023, we had a working capital deficit of $59.9 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