Lindblad Reports Q4 and 2018 Full Year Earnings

National Geographic Quest

Lindblad Expeditions Holdings today reported financial results for the fourth quarter and year ended December 31, 2019.

Sven-Olof Lindblad, President and Chief Executive Officer, said, "Lindblad's strong financial growth and operating momentum during 2018 demonstrates the unique opportunity we have to build long-term value as we capitalize on the growing demand for expedition travel. We have significantly increased our overall capacity with the launch of our two new coastal vessels, the National Geographic Quest and the National Geographic Venture, and at the same time have been able to expand our Occupancy and Net Yields despite the additional inventory. Lindblad's unparalleled track record of delivering high quality and authentic experiences, along with our strategic partnership with National Geographic, continues to generate high levels of repeat guests and is attracting more and more new travelers who want to immerse themselves in the world's most remarkable geographies.

"With additional capacity and a strong booking environment, 2019 is poised to grow significantly," he said. "At the same time, we continue to build the next drivers of growth with the National Geographic Endurance scheduled to launch in early 2020 and today we announced that that we have contracted for another new, state of the art, polar vessel for delivery late in 2021. Overall, we have committed to expanding our available guest nights by over 60% from pre-expansion levels as we broaden our ability to build additional shareholder value in the years ahead."

Full year tour revenues of $309.7 million increased $43.2 million, or 16%, as compared to 2017. The increase was driven by growth of $29.5 million at the Lindblad segment and a $13.7 million increase at Natural Habitat, the company said.

Lindblad segment tour revenues of $246.3 million increased $29.5 million, or 14% compared to 2017 primarily driven by 8% growth in Available Guest Nights, most notably due to the launch of the National Geographic Quest in July 2017 and the National Geographic Venture in December 2018, as well as from the impact of voyage cancellations in the first quarter of 2017 for repairs on the National Geographic Orion and National Geographic Sea Lion.

The year on year growth also reflects an increase in Occupancy in 2018 to 91% from 87% in 2017 due to higher overall demand across the fleet, as well as 6% growth in Net Yield to $1,044 from increased prices and changes in itineraries.

Natural Habitat revenues of $63.4 million increased $13.7 million, or 28%, compared to a year ago due primarily to higher ticket revenue from additional departures and increased pricing.

Net Income

Net income available to common stockholders of $11.4 million for 2018, $0.24 per diluted share, increased $20.0 million as compared with a net loss available to common stockholders of $8.7 million, $0.19 per diluted share, in 2017. The increase versus a year ago primarily reflects the higher operating results, $6.2 million of lower stock-based compensation expense and a $9.4 million decrease in tax expense due to a $12.7 million impact in the fourth quarter of 2017 from the enactment of the U.S. Tax Cuts and Jobs Act. The current year also includes a $3.4 million increase in depreciation and amortization due to the addition of new vessels to the fleet, $2.2 million in foreign currency losses and a $1.1 million increase in interest expense primarily related to refinancing the Company's credit facility during the first quarter of 2018.

Full year 2018 Adjusted EBITDA of $54.8 million increased $11.4 million, or 26%, compared to 2017. The increase was driven by growth of $9.2 million at the Lindblad segment and a $2.2 million increase at Natural Habitat.

Lindblad segment Adjusted EBITDA of $47.8 million increased $9.2 million, or 24%, as compared to 2017 as the increased tour revenue were partially offset by higher operating costs primarily from a full year of operating the National Geographic Quest and costs associated with the December 2018 launch of the National Geographic Venture. 2018 also included higher commission expense associated with the revenue growth, as well as increased fuel and personnel costs.

Natural Habitat Adjusted EBITDA of $7.0 million increased $2.2 million, or 46%, as compared to 2017 as the revenue growth was partially offset by higher operating costs related to the additional departures and increased marketing and personnel costs to drive long-term growth initiatives.

FOURTH QUARTER RESULTS

Tour Revenues

Fourth quarter tour revenues of $70.6 million increased $7.4 million, or 12%, as compared to the same period in 2017. The increase was driven by growth of $4.5 million at Natural Habitat and a $2.9 million increase at the Lindblad segment.

Lindblad segment tour revenues of $51.8 million increased $2.9 million, or 6%, compared to the fourth quarter a year ago primarily driven by a 16% increase in Net Yield to $1,071 and an increase in Occupancy to 91% from 86% in 2017. Net Yield growth was driven by higher pricing and changes in itineraries, while Occupancy growth was driven by higher demand across the fleet, most notably on the National Geographic Orion due to a lower occupancy trans-Atlantic (AT) voyage in the fourth quarter of 2017. Available Guest Nights declined 9% primarily due to the trans-Atlantic voyage a year ago, partially offset by the launch of the National Geographic Venture in December 2018.

Natural Habitat revenues of $18.8 million increased $4.5 million, or 31%, compared to a year ago due primarily to higher ticket revenue from additional departures and increased pricing.

Net Income

Net loss available to common stockholders for the fourth quarter was $4.6 million, $0.10 per diluted share, as compared with a loss of $16.0 million, $0.36 per diluted share, in the fourth quarter of 2017. The $11.4 million improvement versus a year ago primarily reflects a $13.1 million decrease in tax expense mainly due to a $12.7 million impact from the enactment of the U.S. Tax Cuts and Jobs Act in the fourth quarter of 2017, partially offset by lower operating results and $0.8 million in foreign currency losses.

Adjusted EBITDA

Fourth quarter Adjusted EBITDA of $4.1 million decreased $0.7 million, or 15%, as compared to the same period in 2017 as growth of $0.9 million at Natural Habitat was more than offset by a $1.6 million decrease at the Lindblad segment.

Lindblad segment Adjusted EBITDA of $0.3 million decreased $1.6 million compared to the fourth quarter a year ago as the increased tour revenues were offset primarily by higher operating costs from the launch of the National Geographic Venture in December 2018, as well as from increased commission expense related to the revenue growth and higher personnel costs.

Natural Habitat Adjusted EBITDA of $3.8 million increased $0.9 million, or 30%, versus the fourth quarter a year ago as the revenue growth was partially offset by higher operating costs related to the additional departures and increased marketing and personnel costs to drive long-term growth initiatives.

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