Lindblad Expeditions Holdings, Inc. — 2023 Form 10-K
Reporting period: Fiscal year ended December 31, 2023. This filing reports full-year results; it does not provide a standalone fourth-quarter income statement or cash-flow summary.
Business context
Lindblad operates expedition cruises and land-based adventure travel through its Lindblad Expeditions and Land Experiences segments. At year-end, it operated 10 owned ships and six seasonal charter vessels. Its brands include Natural Habitat, Off the Beaten Path, DuVine and Classic Journeys. The National Geographic brand partnership was extended through 2040; Natural Habitat’s WWF partnership runs through 2028.
Key financial results
| Metric | 2023 | 2022 |
|---|---|---|
| Tour revenue | $569.5 million | $421.5 million |
| Operating income (loss) | $10.6 million | $(63.0) million |
| Net loss | $(40.9) million | $(108.2) million |
| Net loss available to stockholders | $(50.0) million | $(116.1) million |
| Loss per share, basic and diluted | $(0.94) | $(2.23) |
| Adjusted EBITDA (non-GAAP) | $71.2 million | $(11.5) million |
| Cash from operating activities | $25.4 million | $(2.2) million |
| Capital expenditures | $30.0 million | $38.2 million |
2023 operating margin was approximately 1.9%; net margin was approximately negative 7.2%. Adjusted EBITDA was approximately 12.5% of revenue; it is a non-GAAP measure and is not a substitute for cash flow or net income.
- Revenue and segment performance: Revenue rose 35%, driven by additional trips and higher pricing. Lindblad revenue increased 43% to $397.4 million; Land Experiences revenue increased 20% to $172.1 million.
- Lindblad operations: Operating loss narrowed to $8.7 million from $77.9 million. Occupancy rose to 77% from 75%; net yield per available guest night increased to $1,097 from $978 in the detailed segment table.
- Land Experiences: Operating income increased 30% to $19.3 million from $14.8 million.
- Costs and interest: Cost of tours rose 14% to $322.4 million, slower than revenue growth. General and administrative expense increased 23% to $118.4 million; selling and marketing increased 17% to $71.4 million. Net interest expense increased to $45.0 million from $37.5 million.
- Liquidity: Cash and cash equivalents were $156.8 million, plus $30.5 million restricted cash. Working capital deficit was $74.7 million, improved from $157.8 million, largely in the context of advance customer deposits and unearned passenger revenue.
Debt, financing and capital structure
Debt obligations totaled $635.1 million at year-end, before deferred financing costs. The company had $360 million of 6.75% senior secured notes due 2027 and issued $275 million of 9.00% senior secured notes due 2028 in May 2023, primarily to repay prior export credit agreements. The $45 million revolving facility had no borrowings at year-end. The company reported covenant compliance. Scheduled principal maturities are concentrated in 2027 and 2028; disclosed future interest payments total $185.3 million.
Series A preferred stock had 62,000 shares outstanding, a 6% cumulative dividend, and approximately 8.0 million common shares issuable upon conversion as of year-end. Preferred dividends were paid in kind in 2023. Common stockholders rank behind preferred holders for dividends and liquidation proceeds. No common shares were repurchased under the plan in 2023, and the company does not anticipate common dividends in the foreseeable future.
Outlook, commentary and risks
- Management described 2023 as record financial performance, with $569.5 million of tour revenue and $71.2 million of Adjusted EBITDA, exceeding pre-pandemic results.
- As of February 26, 2024, bookings for 2024 travel were 2% above bookings at the same point a year earlier; Lindblad had 85% of projected full-year 2024 guest ticket revenue booked. Management cited short-term booking impacts from instability in Ecuador and the Middle East. These are booking indicators, not formal earnings guidance.
- Key risks include weaker discretionary travel demand, geopolitical events and travel disruption, inflation, fuel and labor costs, competition and pricing pressure, severe weather and climate change, vessel maintenance or drydock delays, and regulatory or access restrictions in destinations such as the Galápagos.
- Material financial risks include substantial debt service, refinancing and covenant risks, and the potential dilution or cash claims associated with preferred stock. National Geographic is also an important brand and sales relationship; its channel represented 20% of expedition-sailing ticket revenue in 2023, compared with 25% in 2022.
- Future travel certificates involve estimates of customer repeat travel and breakage. The auditor identified unearned passenger revenue related to these certificates as a critical audit matter. Management reported no material pending legal proceedings. Management and the auditor reported effective internal control over financial reporting; the financial statement audit opinion was unqualified.
Important facts for investors to verify
- Review the full debt documents, interest burden, 2027–2028 maturities, covenant headroom and refinancing plan.
- Reconcile cash generation with the working capital deficit, restricted cash and $252.2 million of unearned passenger revenue; assess how cancellations or lower bookings could affect liquidity.
- Track 2024 booking conversion, occupancy, pricing and segment profitability against the early-2024 booking update.
- Assess the economics and termination provisions of the National Geographic and WWF agreements, including the new royalty arrangements.
- Evaluate the preferred stock’s accumulated claims, possible conversion dilution and six-year holder redemption rights.
- Monitor whether higher operating costs, vessel maintenance needs, geopolitical disruptions or destination restrictions affect margins and cash flow.