Lindblad Expeditions Holdings, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Financial statements are unaudited. The company operates expedition cruises and land-based travel through its Lindblad and Land Experiences segments.
Financial performance and liquidity
| Metric | Q1 2022 | Q1 2021 |
|---|---|---|
| Tour revenue | $67.8 million | $1.8 million |
| Operating loss | $34.2 million | $31.1 million |
| Net loss | $42.1 million | $33.9 million |
| Net loss available to stockholders | $43.0 million; $0.85 per share | $34.5 million; $0.66 per share |
| Adjusted EBITDA (non-GAAP) | $(21.2) million | $(20.8) million |
| Net cash from operating activities | $5.2 million | $(6.9) million |
| Capital expenditures | $7.5 million | $3.8 million |
Operating loss was approximately 50.5% of revenue; net loss was approximately 62.1% of revenue. The filing does not present a consolidated gross-margin measure. Q1 is seasonally affected by the company’s travel and vessel schedules.
- Revenue rose $66.1 million as voyages and trips resumed; Q1 2021 had most expeditions cancelled, disrupted, or rescheduled. The comparison also reflects full-quarter contributions from acquired land-travel businesses.
- Lindblad segment revenue was $50.3 million and operating loss was $33.6 million. Land Experiences revenue was $17.6 million and operating loss was $0.7 million, improved from $3.8 million a year earlier.
- Despite the revenue recovery, consolidated operating loss widened by $3.2 million and net loss by $8.3 million. Higher tour, personnel, commission, marketing, depreciation, and interest costs contributed. Interest expense, net, was $8.7 million versus $5.7 million.
- Cash and cash equivalents were $154.8 million; restricted cash was $30.0 million. Total debt principal was $584.1 million. The company reported a $89.1 million working-capital deficit, primarily reflecting advance passenger receipts recorded as unearned revenue.
- Operating cash flow improved by $12.1 million year over year, largely from resumed operations and guest deposits/final payments. These advance receipts support liquidity but remain obligations to provide travel or otherwise address guest claims.
Material changes, financing, and unusual items
- In February 2022, the company issued $360 million of 6.75% senior secured notes due 2027 and entered into a new $45 million revolving facility, which was undrawn at quarter-end. Proceeds principally refinanced prior credit facilities. The notes are secured and include restrictive covenants.
- Remaining significant debt includes export credit agreements with variable rates; reported rates were 4.33% and 4.43% at March 31. The company said it was in compliance with covenants then in effect, while leverage-ratio covenants under those agreements had been waived.
- The refinancing resulted in a $9.0 million write-off of deferred financing costs and $1.9 million of related fees and other expenses. The company also recognized $11.6 million of CERTS grant income for eligible payroll and ship operating costs, contributing to a reported $0.6 million net gain among other items.
- During the quarter, the company operated voyages on nine of ten owned vessels. It reported 66% Lindblad occupancy across 83 voyages. Galápagos operating permits were contractually renewed for 20 years in February.
Outlook, commentary, and risks
- Management said second-half 2022 bookings were 50% ahead of the same point in 2019 and 32% ahead of the same point in 2020. It reported substantial advance reservations but also elevated cancellations and softer near-term demand.
- The company planned to expand itineraries in 2022 and 2023 as travel restrictions eased. Some itineraries remained affected by the Russia-Ukraine conflict. Management expected monthly cash usage to rise as more trips and vessels returned to service, alongside anticipated guest payments and new deposits.
- Management believed cash on hand and expected operating inflows would fund operations, debt service, and necessary capital spending if the operational ramp proceeded as expected; it cautioned that delays, cancellations, or insufficient operating cash flows could affect that outlook. No specific revenue or earnings guidance was provided.
- Key disclosed risks include renewed pandemic disruption, geopolitical events, weaker travel demand, fuel costs and availability, weather and mechanical disruption, labor costs and staffing, acquisition integration, debt covenant compliance, and maintaining the National Geographic relationship.
- The company described ordinary-course claims and proceedings and said insurance would be expected to cover damages. Management concluded internal control over financial reporting was effective as of March 31, 2022.
Important facts for investors to verify
- Whether booking momentum converts into completed travel and recognized revenue, and how cancellations, refunds, and future travel certificates develop.
- Unrestricted liquidity and cash generation after operating costs, vessel preparation, capital spending, and debt service; distinguish unrestricted from restricted cash.
- Debt terms, variable-rate exposure, covenant status, and the availability and conditions of the undrawn $45 million revolver.
- The sustainability of the recovery in both segments, including the effects of seasonality, fuel and labor costs, and acquired businesses.
- Potential future cash or dilution obligations from the 6% cumulative preferred stock, which could convert into approximately 9.3 million common shares, and redeemable noncontrolling interests.