Lindblad Expeditions Holdings, Inc. — FY 2022 Form 10-K
Reporting period: Fiscal year ended December 31, 2022. This is an annual report, not a standalone fourth-quarter report. Lindblad operates expedition cruises and land-based adventure travel through its Lindblad and Land Experiences segments.
Financial performance
| Metric | FY 2022 | FY 2021 |
|---|---|---|
| Tour revenue | $421.5 million | $147.1 million |
| Operating loss | $63.0 million | $110.8 million |
| Net loss | $108.2 million | $119.2 million |
| Net loss per diluted share | $2.23 | $2.41 |
| Adjusted EBITDA (non-GAAP) | $(11.5) million | $(64.0) million |
| Cash from operating activities | $(2.2) million | $32.5 million |
| Cash and cash equivalents, year-end | $87.2 million | $150.8 million |
Revenue increased 187%, reflecting the continued restart and expansion of operations, higher pricing, and a full year of results from three land-travel acquisitions made in 2021. The operating-loss margin improved to approximately 15.0% negative from 75.3% negative; net-loss margin was approximately 25.7% negative versus 81.0% negative. These margins are calculated from reported figures. The company remained loss-making.
The Lindblad segment generated $278.4 million of revenue and a $77.9 million operating loss. Land Experiences generated $143.1 million of revenue and $14.8 million of operating income. Lindblad occupancy was 75%, down from 81%, while net yield per available guest night rose to $978 from $879. Available guest nights more than tripled, reflecting increased operating capacity.
Cash, liquidity and debt
- Cash, cash equivalents and restricted cash totaled $116.0 million at year-end, including $28.8 million of restricted cash. Cash and cash equivalents alone were $87.2 million.
- Working capital deficit was $156.4 million, compared with $79.1 million a year earlier, largely reflecting advance customer receipts recorded as unearned passenger revenue.
- Total debt obligations, including current portion, were $565.8 million. The company issued $360 million of 6.75% senior secured notes due 2027 in February 2022 and used proceeds to repay its previous term and revolving facilities, including the Main Street loan. The new $45 million revolving facility was undrawn at year-end.
- Export-credit vessel loans carried floating rates of approximately 8.23% and 8.25% at year-end. The company reported compliance with covenants then in effect; leverage-ratio waivers on those facilities ran through December 2022, with covenant calculations modified for specified 2023 periods.
- Investing cash use was $49.6 million, including vessel maintenance and Islander II renovations. Financing cash use was $4.9 million after the debt refinancing and repayments.
Changes, outlook and material risks
- Operations resumed in June 2021 and expanded across the owned fleet and land businesses in 2022. The National Geographic Islander II entered service in the Galápagos during the third quarter.
- Management reported that 2023 bookings were 47% ahead of full-year 2019 bookings at the comparable point in the booking cycle. The filing gives no specific full-year 2023 revenue or earnings guidance.
- Management said it expected cash on hand and future operating inflows to cover operations, debt service and necessary capital expenditures, assuming no substantial interruption to operations.
- Key risks include renewed travel disruption or weaker discretionary demand; inflation, fuel and labor costs; geopolitical events, including the Russia-Ukraine conflict and unrest in Peru; vessel repair delays; and high leverage and covenant/refinancing requirements. Fuel represented 7.4% of tour revenue in 2022, up from 4.5% in 2021.
- Brand partnerships are significant: National Geographic accounted for about 25% of expedition-cruise guest ticket revenue in 2022; its agreements run through December 31, 2025. Natural Habitat’s WWF license was disclosed as running through December 2023.
- Unusual items included a $9.0 million write-off of deferred financing costs and $1.9 million of related refinancing fees and expenses. CERTS grant income was $11.6 million in 2022 versus $15.4 million in 2021.
- Series A preferred stock carried a 6% cumulative dividend. At year-end, outstanding preferred shares and accumulated dividends were convertible into approximately 7.5 million common shares, creating potential dilution.
- The company reported effective disclosure controls and internal control over financial reporting; the auditor issued unqualified opinions. Management said no pending litigation was expected to have a material adverse effect.
Investor verification priorities
- Check whether the booking lead and 2023 demand translated into completed travel, stronger operating cash flow and positive EBITDA.
- Review unrestricted cash, advance passenger receipts, refund or future-travel-certificate obligations, and the trend in working capital deficit.
- Verify debt amortization, floating-rate exposure, covenant requirements and refinancing needs, particularly the 2027 notes maturity.
- Track occupancy, net yields, fuel and labor costs, and whether pricing offsets inflation without weakening demand.
- Confirm the status and economics of National Geographic and WWF agreements, and assess potential dilution from preferred stock and minority-interest put/call arrangements.