Business Context and Reporting Period
This Form 8-K filing by Lindblad Expeditions Holdings, Inc. covers events occurring on June 10, 2020, and June 12, 2020. The report details the results of the 2020 Annual Meeting of Stockholders, the entry into material amendments to senior secured credit agreements with Export Credit Agency (ECA) lenders, and operational updates regarding the impact of the COVID-19 pandemic on scheduled voyages.
Key Financial Metrics and Liquidity
- Cash Position (as of May 31, 2020): Approximately $99.2 million in unrestricted cash and $21.7 million in restricted cash (totaling ~$120.9 million).
- Monthly Cash Usage: Estimated at $10-15 million while vessels are not in operation, covering operating expenses, capital expenditures, and debt service.
- Debt Facility Amendments:
- Hull No. 312 Facility: Up to $107,694,892.
- Hull No. 316 Facility: Up to $122,840,000.
- Deferred Payments: $8.97 million in scheduled amortization payments deferred for four quarters (June 2020 through March 2021).
- Liquidity Covenant: New requirement to maintain a minimum of $30 million in total consolidated cash.
Material Changes and Operational Updates
The Company has rescheduled or rebooked the majority of voyages originally scheduled for July 2020 due to global travel restrictions stemming from the COVID-19 virus. As of the filing date, the Company reported no known cases of COVID-19 aboard its ships, and all vessels had disembarked passengers. The credit agreement amendments represent a material change to debt terms, specifically deferring principal payments and suspending the Total Net Leverage Ratio covenant through June 2021 to provide financial flexibility during the pandemic.
Corporate Governance and Voting Results
The 2020 Annual Meeting was held on June 10, 2020, with 41,366,889 shares represented (83% of outstanding shares). All three proposals were approved:
- Proposal 1 (Election of Directors): L. Dyson Dryden, John M. Fahey, Catherine B. Reynolds, Thomas S. Smith Jr., and Sarah Farrell were elected. "For" votes ranged from approximately 37.05 million to 37.17 million.
- Proposal 2 (Executive Compensation): Advisory approval of 2019 executive compensation received 37,285,005 "For" votes versus 54,221 "Against" votes.
- Proposal 3 (Auditor Ratification): Ratification of Marcum LLP as the independent auditor received 41,344,473 "For" votes.
Investor Verification Checklist
- Verify the Company's ability to maintain the new $30 million minimum liquidity covenant given the estimated monthly cash burn of $10-15 million.
- Monitor the timeline for the rescheduled July 2020 voyages and potential revenue recognition delays.
- Review the full text of the Second Amendment (Hull 312) and First Amendment (Hull 316) to understand specific default triggers related to the deferred tranche.
- Assess the impact of the suspended Total Net Leverage Ratio covenant on future borrowing capacity and refinancing options.