Lindblad Expeditions has reported financial results for the fourth quarter and year ended December 31, 2021.
The company noted strong reservations for future travel with bookings up nearly 20% for the second half of 2022 and 54% for 2023 versus bookings for the comparable periods at the same point in 2020 prior to the pandemic
Dolf Berle, Chief Executive Officer, said: “Lindblad has been delivering the joy of exploration for over four decades and we couldn’t be more excited to have nine of our ten ships once again providing immersive experiences in the world’s most remarkable destinations. The exhilaration we see from our guests as they return to these remote geographies is truly inspiring and a daily reminder of the opportunity Lindblad has in front of it. In the short-term there is certainly pent-up demand for high-quality experiential travel and while there is likely to be continued choppiness during the first half of 2022, guest demand for future travel remains strong with bookings pacing well ahead of pre-pandemic levels.
“Over the long-term, the strategic steps we have taken throughout to the pandemic to expand our fleet with the delivery of two new polar ships and to diversify our product portfolio with the addition of three unique land-based travel offerings, has us well positioned to deliver results significantly above pre-pandemic levels and will allow us to build additional shareholder value in the years ahead,” Berle said.
Return to Operations
Lindblad resumed ship operations in June 2021 and currently has nine of its ten owned vessels providing expeditions to guests. Expedition cruise operations restarted with three ships in Alaska and another in the Galapagos, and subsequently it resumed operations on the majority of its remaining vessels with additional ships operating in Alaska, the Galapagos, Iceland, the Pacific Northwest, Baja California’s Sea of Cortez, Central America and Antarctica. The company continues to work with local authorities on plans to operate in additional geographies during 2022. As the COVID-19 virus effects travel restrictions in various locations around the world, the company also continues to work with its guests to reschedule travel plans and refund payments, as applicable, for those expeditions and trips that the company is not able to operate.
Booking Trends
The company has experienced a substantial negative impact from the COVID-19 virus including elevated cancellations and softness in near-term demand. Despite the COVID-19 impact, it said it continues to see significant new bookings across the fleet and have substantial advanced reservations for future travel. Compared to the same date two years ago, which was prior to the pandemic, bookings for the second half of 2022 are nearly 20% ahead of the bookings for the second half of 2020 and bookings for 2023 are 54% ahead of the bookings for 2021.
Balance Sheet and Liquidity
On February 4, 2022, the company issued $360.0 million of 6.75% senior secured notes due 2027 and used the proceeds to prepay in full all outstanding borrowings under its existing term loan, including the Main Street Loan, and revolving credit facility. The company also entered into a new $45.0 million revolving credit facility, which remains undrawn and matures February 2027.
As of December 31, 2021, the company had $150.8 million in unrestricted cash and $21.9 million in restricted cash primarily related to deposits on future travel originating from U.S. ports and credit card reserves. During 2021, the company received a $27.0 million grant under the Coronavirus Economic Relief for Transportation Services (“CERTS”) Act, which provided grants to eligible motorcoach, school bus, passenger vessel, and pilotage companies.
As of December 31, 2021, the company had a total debt position of $558.5 million and was in compliance with all of its debt covenants. During September 2021, the company drew down an additional $46.2 million under its second export credit agreement in conjunction with its final payment upon delivery of the National Geographic Resolution. In April 2021, the company drew down $15.5 million under the second export credit agreement in conjunction with its fourth installment payment for the vessel.
Throughout 2021 the company took further steps to provide additional financial flexibility including amending its export credit facilities in June 2021 to, among other things, extend the deferral of scheduled amortization payments of the first export credit facility through December 2021, extend the effective suspension of the total net leverage ratio covenant through March 2022, increase the interest rate by 50 basis points and annualize EBITDA used in the covenant calculation through December 31, 2022. The deferred principal payments, in the aggregate amount of $15.7 million, will amortize quarterly over three years starting in March 2022.
As the company continues to ramp up operations, monthly cash usage will increase as it incurs costs in operating expeditions, prepares additional ships for return to service and spends to market and advertise upcoming expeditions and trips. The company also anticipates a significant increase in guest payments as it receives final payments for upcoming expeditions and trips, as well as deposits for new reservations for future travel.
FULL YEAR RESULTS
Tour Revenues
Full year tour revenues of $147.1 million increased $64.8 million as compared to the same period in 2020. The increase was driven by a $13.2 million increase at the Lindblad segment, primarily due to the resumption of expeditions beginning in June of 2021, and by a $51.5 million increase at the Land Experiences segment, primarily due to the ramp in operations during 2021. The Land Experiences segment also included the results of Off the Beaten Path, DuVine and Classic Journeys, which were acquired during 2021.
Net Income
Net loss available to stockholders for 2021 was $124.7 million, $2.41 per diluted share, as compared with net loss available to stockholders of $100.4 million, $2.01 per diluted share, in 2020. The $24.2 million decrease primarily reflects the impact of COVID-19 on operations, as well as a $7.4 million increase in depreciation and amortization due mainly to a full year of ownership of the National Geographic Endurance following its March 2020 delivery and the launch of the National Geographic Resolution in September 2021. These decreases were partially offset by a $15.6 million increase in other income mainly due to the utilization of the CERTS grant for covered expenses.
Adjusted EBITDA
Full year Adjusted EBITDA loss of $64.0 million decreased $11.9 million as compared to 2020. The decrease was driven by $22.8 million decline at the Lindblad segment and an $11.0 million improvement at the Land Experiences segment.
Lindblad segment Adjusted EBITDA loss of $67.2 million was $22.8 million greater than 2020, as increased tour revenues due to the resumption of expeditions beginning June 2021 were more than offset by higher cost of tours, increased personnel costs and higher marketing spend related to restarting operations as well as increased credit card commissions related to final payments for upcoming trips and deposits for future travel.
Land Experiences segment Adjusted EBITDA of $3.2 million improved $11.0 million as compared to 2020, primarily due to additional trips, partially offset by higher cost of tours and increased personnel costs related to the ramp in operations and increased marketing costs to drive future bookings. The Land Experiences segment also included the results of Off the Beaten Path, DuVine and Classic Journeys, which were acquired during 2021.
FOURTH QUARTER RESULTS
Tour Revenues
Fourth quarter tour revenues of $65.6 million increased $65.2 million as compared to the same period in 2020. The increase was driven by a $42.5 million increase at the Lindblad segment and by a $22.7 million increase at the Land Experiences segment. Lindblad segment revenue increased primarily due to the resumption of expeditions beginning in June of 2021 as compared with the rescheduling of nearly all expeditions due to COVID-19 in the fourth quarter of 2020. The Land Experiences increase was primarily due to the ramp in operations during 2021 as compared with rescheduling nearly all expeditions in the fourth quarter of 2020 due to COVID-19, as well as from the inclusion of results from Off the Beaten Path, DuVine and Classic Journeys, which were acquired during 2021.
Net Income
Net loss available to stockholders for the fourth quarter was $27.8 million, $0.54 per diluted share, as compared with net loss available to stockholders of $31.0 million, $0.59 per diluted share, in the fourth quarter of 2020. The $3.2 million improvement primarily reflects the resumption of expeditions and operation of additional trips, as well as a $11.0 million increase in other income mainly due to the utilization of the CERTS grant for covered expenses. These increases were partially offset by a $5.4 million increase in depreciation and amortization due mainly to the launch of the National Geographic Resolution in September 2021, a $2.2 million increase in interest expense due to additional borrowings and higher rates and a $0.1 million foreign currency loss in the current year versus a $1.6 million foreign currency gain in the fourth quarter of 2020.
Adjusted EBITDA
Fourth quarter Adjusted EBITDA loss of $13.7 million improved $6.1 million as compared to the same period in 2020. The increase was driven by a $6.6 million improvement at the Land Experiences segment, partially offset by a $0.5 million decrease at the Lindblad segment.
Lindblad segment Adjusted EBITDA loss of $15.9 million decreased $0.5 million versus the fourth quarter a year ago as the revenue from the resumption of expeditions was offset by higher cost of tours, increased personnel costs and higher marketing spend related to ramping up operations, as well as by increased credit card commissions on final payments for upcoming trips and deposits for future travel.
Land Experiences segment Adjusted EBITDA of $2.2 million improved $6.6 million versus the fourth quarter a year ago, primarily due to additional trips, partially offset by higher cost of tours and increased personnel costs related to the additional departures and increased marketing costs to drive future bookings. The Land Experiences segment also included the results of Off the Beaten Path, DuVine and Classic Journeys, which were acquired during 2021.
