Lindblad Expeditions Holdings today reported financial results for the quarter ended September 30, 2020.

Sven-Olof Lindblad, President and Chief Executive Officer, said: “Since the COVID-19 pandemic began our focus has been on enhancing our existing rigorous protocols so we can return safely to the world’s most remarkable destinations, while ensuring we have enough liquidity to withstand the uncertain time out of service and emerge in a position of strength. 

“The response from local authorities and our loyal guests to the extensive protocols we have developed has been overwhelmingly positive and we continue to move closer to resuming operations in geographies that we have been visiting for over forty years,” he continued. “This past quarter we continued to reduce our cost structure while further enhancing our financial position by raising additional capital from a diversified group of long-term investors.  This investment will provide significant runway as we prepare to return to exploring, while also providing us financial flexibility to pursue additional opportunities for growth as we emerge from the pandemic.”   

Due to the spread of the COVID-19 virus and the effects of travel restrictions around the world, the company has suspended or rescheduled the majority of its expeditions departing March 16, 2020 through December 31, 2020 and has rescheduled its 2020-2021 Antarctica season.

Ships are currently being maintained with minimally required crew o-board to ensure they comply with all necessary regulations and can be fully put back into service quickly as needed. 

Lindblad said it moved quickly to implement a comprehensive plan to mitigate the impact of COVID-19 and preserve and enhance its liquidity position. The company is employing a variety of cost reduction and cash preservation measures, while accessing available capital under its existing debt facilities and through the issuance of preferred equity, while exploring additional sources of capital and liquidity. These measures include the following operating expense and capital expenditure reductions:

• Significantly reduced ship and land-based expedition costs including crew payroll, land costs, fuel and food. All ships have been safely laid up.
• Lowered expected annual maintenance capital expenditures by over $10 million, savings of more than 50% from originally planned levels.
• Meaningfully reduced general and administrative expenses through employee furloughs, payroll reductions and the elimination of all non-essential travel, office expenses and discretionary spending.
• Suspended the majority of planned advertising and marketing spend.
• Suspended all repurchases of common stock under the stock repurchase plan.

Bookings Trends

The company was off to a strong start to the year with Lindblad segment bookings at the end of February up 25% for the full year 2020 as compared to the same point a year ago for 2019, and had sold 86% of its originally projected guest ticket revenues for the year.

Since that point, the company has experienced a substantial impact from the COVID-19 virus including elevated cancellations and softness in near-term demand. As of October 26, 2020, Lindblad segment bookings for travel in 2020 are now 74 percent below the same point a year ago for 2019 due primarily to the cancelled and rescheduled voyages.

The company has substantial advanced bookings for travel in 2021 and despite increased cancellations for travel in the first quarter of 2021, total bookings for 2021 are 4 percent ahead of bookings for 2019 as of the same date in 2018 and only 12 percent below the same date a year ago for 2020.

For the last nine months of 2021 bookings are 12 percent ahead of the bookings for the same period in 2020 as of the same date a year ago. The company continues to see new bookings for future travel including over $44.0 million since March 1, 2020, and it is receiving deposits and final payments for future travel.

Balance Sheet and Liquidity

As of September 30, 2020, the company had $129.6 million in unrestricted cash and $16.5 million in restricted cash primarily related to deposits on future travel originating from U.S. ports. 

Lindblad said it estimates its monthly cash usage while its vessels are not in operations to be approximately $10 to $15 million including ship and office operating expenses, necessary capital expenditures and interest and principal payments. This excludes guest payments for future travel and cash refunds requested on previously made guest payments. The company continues to evaluate additional strategies to enhance its liquidity position which may include, but are not limited to, further reductions in operating expenses, capital expenditures and administrative costs as well as additional financings. 

Return to Operations

Lindblad also said it already has a robust set of operating protocols and, in preparation for the resumption of operations, has been proactively working in close cooperation with various medical policy experts and public health authorities to further augment its procedures and protocols for health and safety onboard its vessels to mitigate the potential impacts of the COVID-19 virus. These protocols encompass, but are not limited to, medical care, screening, testing, social distancing, personal protective equipment, and sanitization during all aspects of the expedition.

While it is uncertain when the company will return to operations, it believes there are a variety of strategic advantages that should enable it to deploy its ships safely and quickly once travel restrictions have been lifted. The most notable is the size of its owned and operated vessels which range from 48 to 148 passengers, allowing for a highly controlled environment that includes stringent cleaning protocols. The small nature of the company’s ships should also allow it to efficiently and effectively test its guests and crew prior to boarding. On average, the company estimates it will only take a few thousand tests a month to ensure all guests and crew across its entire fleet have been tested. 

THIRD QUARTER RESULTS

Tour Revenues

Third quarter tour revenues decreased $100.0 million, or 99 percent, as compared to the same period in 2019. The decline was driven by a $76.6 million decrease at the Lindblad segment and a $23.4 million decrease at Natural Habitat as a result of rescheduling nearly all expeditions due to COVID-19.   

Net Income

Net loss available to stockholders for the third quarter was $27.4 million, $0.56 per diluted share, as compared with net loss available to stockholders of $0.5 million, $0.01 per diluted share, in the third quarter of 2019. The $26.9 million decrease primarily reflects the impact of COVID-19 on operations and a $2.3 million increase in depreciation and amortization versus the same period a year ago, primarily due to the addition of the National Geographic Endurance to the fleet in March 2020, partially offset by a $1.0 million foreign currency gain in the current year versus a $2.3 million foreign currency loss in the third quarter of 2019. 

Adjusted EBITDA

Third quarter Adjusted EBITDA loss of $17.5 million decreased $41.6 million as compared to the same period in 2019. The decrease was driven by a $36.7 million decline at the Lindblad segment and a $4.9 million decrease at Natural Habitat.

Lindblad segment Adjusted EBITDA loss of $16.1 million decreased $36.7 million as compared to the third quarter a year ago due primarily to the revenue impact of rescheduling all expeditions as a result of COVID-19 and costs associated with the National Geographic Endurance following its March 2020 delivery.  The current quarter also included lower operating costs for the fleet while laid up, a reduction in commissions from the impact of COVID-19 on revenues and reduced marketing and personnel spend.

Natural Habitat Adjusted EBITDA loss of $1.4 million decreased $4.9 million versus the third quarter a year ago primarily due to the lower revenue as a result of COVID-19, partially offset by lower operating costs due to rescheduled departures and a decline in marketing and personnel spend.