# Lindblad Expeditions Holdings, Inc.: Form 10-Q for the period ended Mar 31, 2024

- Company: [Lindblad Expeditions Holdings, Inc.](/companies/lind.md) (CIK 1512499)
- Form: 10-Q
- Filed: 2024-05-01
- Accepted by EDGAR: May 1, 2024, 08:52 ET
- Period: 2024-03-31
- Accession: 0001437749-24-014073
- Inline XBRL: yes
- Main document: https://www.sec.gov/Archives/edgar/data/1512499/000143774924014073/lindb20240331c_10q.htm
- All documents and exhibits: https://www.sec.gov/Archives/edgar/data/1512499/000143774924014073/

## Figures reported in this filing

Standardized XBRL line items for the period ended 2024-03-31.

| Line item | Period | Value | XBRL concept |
| --- | --- | ---: | --- |
| Revenue | 3 months, 2024-01-01 to 2024-03-31 | $153.6m | us-gaap:RevenueFromContractWithCustomerIncludingAssessedTax |
| Cost of revenue | 3 months, 2024-01-01 to 2024-03-31 | $79.3m | us-gaap:CostOfRevenue |
| Operating income | 3 months, 2024-01-01 to 2024-03-31 | $7.8m | us-gaap:OperatingIncomeLoss |
| Income tax | 3 months, 2024-01-01 to 2024-03-31 | $244.0k | us-gaap:IncomeTaxExpenseBenefit |
| Net income | 3 months, 2024-01-01 to 2024-03-31 | −$4.0m | us-gaap:NetIncomeLoss |
| Diluted EPS | 3 months, 2024-01-01 to 2024-03-31 | −$0.10 | us-gaap:EarningsPerShareDiluted |
| Basic EPS | 3 months, 2024-01-01 to 2024-03-31 | −$0.10 | us-gaap:EarningsPerShareBasic |
| Diluted shares (weighted) | 3 months, 2024-01-01 to 2024-03-31 | 53,372,171 shares | us-gaap:WeightedAverageNumberOfDilutedSharesOutstanding |
| Operating cash flow | 3 months, 2024-01-01 to 2024-03-31 | $43.9m | us-gaap:NetCashProvidedByUsedInOperatingActivities |
| Capital expenditure | 3 months, 2024-01-01 to 2024-03-31 | $6.5m | us-gaap:PaymentsToAcquirePropertyPlantAndEquipment |
| Cash and equivalents | at 2024-03-31 | $177.7m | us-gaap:CashAndCashEquivalentsAtCarryingValue |
| Current assets | at 2024-03-31 | $286.6m | us-gaap:AssetsCurrent |
| Total assets | at 2024-03-31 | $868.0m | us-gaap:Assets |
| Current liabilities | at 2024-03-31 | $357.6m | us-gaap:LiabilitiesCurrent |
| Total liabilities | at 2024-03-31 | $984.5m | us-gaap:Liabilities |
| Long-term debt | at 2024-03-31 | $622.7m | us-gaap:LongTermDebtNoncurrent |
| Current portion of debt | at 2024-03-31 | $46.0k | us-gaap:LongTermDebtCurrent |
| Shareholders' equity | at 2024-03-31 | −$227.4m | us-gaap:StockholdersEquity |

## Management's discussion and analysis

As filed, 39,850 characters.

*The following discussion and analysis addresses material changes in the financial condition and results of operations of the Company for the periods presented. This discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and related notes included in this Quarterly Report on Form 10-Q (“Form 10-Q”), as well as the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 6, 2024 (the “2023 Annual Report”). Unless the context otherwise requires, in this Form 10-Q, “Company,” “Lindblad,” “we,” “us,” “our,” and “ours” refer to Lindblad Expeditions Holdings, Inc., and its subsidiaries.*

### Cautionary Note Regarding Forward-Looking Statements

Any statements in this Form 10-Q about our expectations, beliefs, plans, objectives, prospects, financial condition, assumptions or future events or performance are not historical facts and are “forward-looking statements” as that term is defined under the federal securities laws. These statements are often, but not always, made through the use of words or phrases such as “believe,” “anticipate,” “should,” “intend,” “plan,” “will,” “expects,” “estimates,” “projects,” “positioned,” “strategy,” “outlook” and similar words. You should read the statements that contain these types of words carefully. Such forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from what is expressed or implied in such forward-looking statements. There may be events in the future that we are not able to predict accurately or over which we have no control. Potential risks and uncertainties include, but are not limited to:

- adverse general economic factors, such as fluctuating or increasing levels of interest rates, inflation, unemployment and perceptions of these and similar conditions that decrease the level of disposable income of consumers or consumer confidence that negatively impact the ability or desire of people to travel;
- suspended operations, cancelling or rescheduling of voyages and other potential disruptions to our business and operations related to the COVID-19 virus or other health pandemic, the civil unrest in Ecuador, the Israel-Hamas war, the Russia-Ukraine conflict, political unrest, terrorism, war or another unexpected event in destinations we visit;
- events and conditions around the world, including war and other military actions, such as the civil unrest in Ecuador, the Israel-Hamas war, the current conflict between Russia and Ukraine, inflation, higher fuel prices, higher interest rates and other general concerns about the state of the economy or other events impacting the ability or desire of people to travel;
- increases in fuel prices, changes in fuels consumed and availability of fuel supply in the geographies in which we operate or in general;
- the loss of key employees, our inability to recruit or retain qualified shoreside and shipboard employees and increased labor costs;
- the impact of delays or cost overruns with respect to anticipated or unanticipated drydock, maintenance, modifications or other required construction related to any of our vessels;
- unscheduled disruptions in our business due to civil unrest, travel restrictions, weather events, mechanical failures, pandemics or other events;
- changes adversely affecting the business in which we are engaged;
- management of our growth and our ability to execute on our planned growth, including our ability to successfully integrate acquisitions;
- our business strategy and plans;
- our ability to maintain our relationships with National Geographic and/or World Wildlife Fund;
- compliance with new and existing laws and regulations, including environmental regulations and travel advisories and restrictions;

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- our substantial indebtedness and our ability to remain in compliance with the financial and/or operating covenants in such arrangements;
- the impact of severe or unusual weather conditions, including climate change, on our business;
- adverse publicity regarding the travel and cruise industry in general;
- loss of business due to competition;
- the inability to meet or achieve our sustainability related goals, aspirations, initiatives, and our public statements and disclosures regarding them;
- the result of future financing efforts;
- our common stock ranks junior to our Series A Convertible Preferred Stock with respect to dividends and amounts payable in the event of our liquidation, dissolution or winding-up of our affairs; and
- those risks discussed herein and in Item 1A. Risk Factors in our 2023 Annual Report.

We urge you not to place undue reliance on these forward-looking statements, which speak only as of the date of this Form 10-Q. We do not undertake any obligation to release publicly any revisions to such forward-looking statements to reflect events or uncertainties after the date hereof or to reflect the occurrence of unanticipated events.

### Business Overview

We provide expedition cruising and land-based adventure travel fostering a spirit of exploration and discovery, using itineraries featuring up-close encounters with wildlife and nature, history and culture and promote guest empowerment, human connections and interactivity. Our mission is to offer life-changing adventures around the world and pioneer innovative ways to allow our guests to connect with exotic and remote places.

We currently operate a fleet of ten owned expedition ships and operate six seasonal charter vessels under the Lindblad Expeditions, LLC. (“Lindblad”) brand. Each expedition ship is fully equipped with state-of-the-art tools for in-depth exploration and the majority of our expeditions involve travel to remote places, such as voyages to Alaska, the Arctic, Antarctic, the Galápagos Islands, Baja’s Sea of Cortez, the South Pacific, Costa Rica and Panama. We have a longstanding relationship with the National Geographic Society dating back to 2004, which is based on a shared interest in exploration, research, technology and conservation. This relationship, which was recently expanded and extended in November 2023 to the end of 2040 through a Brand License Agreement with National Geographic Partners, LLC (“National Geographic”), includes a co-selling, co-marketing and global branding arrangement whereby National Geographic promotes our offerings in its marketing campaigns across web-based, email, print and other marketing platforms and distributes our expeditions through the Disney Signature Experiences platform and our owned vessels carry the National Geographic name. We collaborate with National Geographic on voyage planning to enhance the guest experience by having National Geographic experts, including photographers, writers, marine biologists, naturalists, field researchers and film crews, join our expeditions. Guests have the ability to interact with these experts through lectures, excursions, dining and other experiences throughout their voyage.

We operate land-based nature adventure travel expeditions around the globe, with unique itineraries designed to offer intimate encounters with nature and the planet’s wild destinations and the animals and people who live there.

Natural Habitat, Inc. (“Natural Habitat”) provides eco-conscious expeditions and nature-focused, small-group experiences that include polar bear tours in Churchill, Canada, Alaskan grizzly bear adventures, small-group Galápagos Islands tours and African safaris. Natural Habitat has partnered with World Wildlife Fund (“WWF”) to offer conservation travel, which is sustainable travel that contributes to the protection of nature and wildlife.

Off the Beaten Path, LLC (“Off the Beaten Path”) provides small group travel, led by local, experienced guides, with distinct focus on wildlife, hiking national parks and culture. Off the Beaten Path offerings include insider national park experiences in the Rocky Mountains, Desert Southwest, and Alaska, as well as unique trips across Central and South America, Oceania, Europe and Africa.

DuVine Cycling + Adventure Company (“DuVine”) provides intimate cycling adventures and travel experiences, led by expert guides, with a focus on connecting with local character and culture, including high-quality local cuisine and accommodations. International cycling tours include the exotic Costa Rican rainforests, the rocky coasts of Ireland and the vineyards of Spain, while cycling adventures in the United States include cycling beneath the California redwoods, pedaling through Vermont farmland and wine tastings in the world-class vineyards of Napa and Sonoma.

Classic Journeys, LLC (“Classic Journeys”) offers highly curated active small-group and private custom journeys centered around cinematic walks led by expert local guides in over 50 countries around the world. These walking tours are highlighted by luxury boutique accommodations, and handcrafted itineraries that immerse guests into the history and culture of the places they are exploring and the people who live there.

We operate two segments consisting of (i) the Lindblad segment, which consists of the operations of our Lindblad brand, and (ii) the Land Experiences segment, consisting of our Natural Habitat, DuVine, Off the Beaten Path and Classic Journeys brands.

### 2024 Highlights

During the first quarter we provided immersive expeditions to our guests across all of our ships including voyages to Antarctica, Patagonia, South Georgia and the Falkland Islands, Baja California’s Sea of Cortez, the Galápagos Islands, Central America, Australia, New Zealand, the South Pacific and elsewhere.

During April 2024, we increased our ownership of Natural Habitat to 90.1% for $15.2 million, as Mr. Bressler exercised a portion of his put option, and we exercised a portion of our call option on DuVine, increasing our ownership to 75% for $1.5 million.

During April 2024, we announced an agreement for the acquisition of Wineland-Thomson Adventures, Inc, an adventure travel company that primarily operates Tanzania safaris, camp and tours, for approximately $30.0 million in cash and Lindblad stock. We expect to complete the acquisition following required Tanzanian regulatory review and approval, which is expected to take at least three months.

We have substantial advanced reservations for future travel with bookings for the full year 2024 4% ahead of the bookings for 2024 at the same point in 2023 and over 20% ahead excluding carryover bookings in 2023.

**The discussion and analysis of our results of operations and financial condition are organized as follows:**

- a description of certain line items and operational and financial metrics we utilize to assist us in managing our business;
- results and a comparable discussion of our consolidated and segment results of operations;
- a discussion of our liquidity and capital resources, including future capital and contractual commitments and potential funding sources; and
- a review of our critical accounting policies.

### Financial Presentation

### Description of Certain Line Items

### Tour revenues

Tour revenues consist of the following:

- Guest ticket revenues recognized from the sale of guest tickets; and
- Other tour revenues from the sale of pre- or post-expedition excursions, hotel accommodations, air transportation to and from the ships and excursions, goods and services rendered onboard that are not included in guest ticket prices, trip insurance, and cancellation fees.

### Cost of tours

Cost of tours includes the following:

- Direct costs associated with revenues, including cost of pre- or post-expedition excursions, hotel accommodations, and land-based expeditions, air and other transportation expenses, and cost of goods and services rendered onboard;
- Payroll costs and related expenses for shipboard and expedition personnel;
- Food costs for guests and crew, including complimentary food and beverage amenities for guests;

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- Fuel costs and related costs of delivery, storage and safe disposal of waste; and
- Other tour expenses, such as land costs, port costs, repairs and maintenance, equipment expense, drydock, ship insurance, and charter hire costs.

### Selling and marketing

Selling and marketing expenses include commissions, royalties and a broad range of advertising and promotional expenses.

### General and administrative

General and administrative expenses include the cost of shoreside vessel support, reservations and other administrative functions, including salaries and related benefits, credit card commissions, professional fees and rent.

### Operational and Financial Metrics

We use a variety of operational and financial metrics, including non-GAAP financial measures, such as Adjusted EBITDA, Net Yields, Occupancy and Net Cruise Costs, to enable us to analyze our performance and financial condition. We utilize these financial measures to manage our business on a day-to-day basis and believe that they are the most relevant measures of performance. Some of these measures are commonly used in the cruise and tourism industry to evaluate performance. We believe these non-GAAP measures provide expanded insight to assess revenue and cost performance, in addition to the standard GAAP-based financial measures. There are no specific rules or regulations for determining non-GAAP measures, and as such, they may not be comparable to measures used by other companies within the industry.

**The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. You should read this discussion and analysis of our financial condition and results of operations together with the condensed consolidated financial statements and the related notes thereto also included within.**

***Adjusted EBITDA*** is net income (loss) excluding depreciation and amortization, net interest expense, other income (expense), income tax (expense) benefit, (gain) loss on foreign currency, (gain) loss on transfer of assets, reorganization costs, and other supplemental adjustments. Other supplemental adjustments include certain non-operating items such as stock-based compensation, executive severance costs, the National Geographic fee amortization, debt refinancing costs, acquisition-related expenses and other non-recurring charges. We believe Adjusted EBITDA, when considered along with other performance measures, is a useful measure as it reflects certain operating drivers of the business, such as sales growth, operating costs, selling and administrative expense, and other operating income and expense. We believe Adjusted EBITDA helps provide a more complete understanding of the underlying operating results and trends and an enhanced overall understanding of our financial performance and prospects for the future. Adjusted EBITDA is not intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income as it does not take into account certain requirements, such as unearned passenger revenues, capital expenditures and related depreciation, principal and interest payments, and tax payments. Our use of Adjusted EBITDA may not be comparable to other companies within the industry.

### The following metrics apply to our Lindblad segment:

***Adjusted Net Cruise Cost*** represents Net Cruise Cost adjusted for non-GAAP other supplemental adjustments which include certain non-operating items such as stock-based compensation, the National Geographic fee amortization, and acquisition-related expenses.

***Available Guest Nights*** is a measurement of capacity and represents double occupancy per cabin (except single occupancy for a single capacity cabin) multiplied by the number of cruise days for the period. We also record the number of guest nights available on our limited land programs in this definition.

***Gross Cruise Cost*** represents the sum of cost of tours plus, selling and marketing expenses, and general and administrative expenses.

***Gross Yield per Available Guest Night*** represents tour revenues less insurance proceeds divided by Available Guest Nights.

***Guest Nights Sold*** represents the number of guests carried for the period multiplied by the number of nights sailed within the period.

***Maximum Guests*** is a measure of capacity and represents the maximum number of guests in a period and is based on double occupancy per cabin (except single occupancy for a single capacity cabin).

***Net Cruise Cost*** represents Gross Cruise Cost excluding commissions and certain other direct costs of guest ticket revenues and other tour revenues.

***Net Cruise Cost Excluding Fuel*** represents Net Cruise Cost excluding fuel costs.

***Net Yield*** represents tour revenues less insurance proceeds, commissions and direct costs of other tour revenues.

***Net Yield per Available Guest Night*** represents Net Yield divided by Available Guest Nights.

***Number of Guests*** represents the number of guests that travel with us in a period.

***Occupancy*** is calculated by dividing Guest Nights Sold by Available Guest Nights.

***Voyages*** represent the number of ship expeditions completed during the period.

### Foreign Currency Translation

The U.S. dollar is the functional currency in our foreign operations and re-measurement adjustments and gains or losses resulting from foreign currency transactions are recorded as foreign exchange gains or losses in the condensed consolidated statements of operations.

### Seasonality

Traditionally, our Lindblad brand tour revenues are mildly seasonal, historically larger in the first and third quarters. The seasonality of our operating results fluctuates due primarily to our vessels being taken out of service for scheduled maintenance or drydocking, which is typically during nonpeak demand periods, in the second and fourth quarters. Our drydock schedules are subject to cost and timing differences from year-to-year due to the availability of shipyards for certain work, drydock locations based on ship itineraries, operating conditions experienced especially in the polar regions and the applicable regulations of class societies in the maritime industry, which require periodically more extensive reviews. Drydocking impacts operating results by reducing tour revenues and increasing cost of tours. Our Natural Habitat, Off the Beaten Path, DuVine and Classic Journeys brands are seasonal businesses, with the majority of Natural Habitat’s tour revenue recorded in the third and fourth quarters from its summer season departures and polar bear tours, while the majority of Off the Beaten Path, DuVine and Classic Journeys’ revenues recorded during the second and third quarters from their spring and summer season departures.

**Results of Operations — Consolidated**

Our consolidated results for the three months ended March 31, 2024 and 2023 are set forth below. Percentages that are not meaningful to the change are noted as NM in the table.

*(In thousands)*

|  | For the three months ended March 31, 2024 | 2023 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Tour revenues | $153,614 | $143,395 | $10,219 | 7% |
| Cost of tours | 79,302 | 72,050 | 7,252 | 10% |
| General and administrative | 32,387 | 26,419 | 5,968 | 23% |
| Selling and marketing | 22,758 | 20,652 | 2,106 | 10% |
| Depreciation and amortization | 11,317 | 11,808 | (491) | (4)% |
| Operating income | $7,850 | $12,466 | $(4,616) | (37)% |
| Net (loss) income | $(4,210) | $778 | $(4,988) | NM |
| Undistributed loss per share available to stockholders: |  |  |  |  |
| Basic | $(0.10) | $(0.01) | $(0.09) |  |
| Diluted | $(0.10) | $(0.01) | $(0.09) |  |

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**Comparison of the Three Months Ended March 31, 2024 and 2023 — Consolidated**

### Tour Revenues

Tour revenues for the three months ended March 31, 2024 increased $10.2 million, or 7%, to $153.6 million, compared to $143.4 million for the three months ended March 31, 2023. The Lindblad segment tour revenues increased by $2.8 million, or 2%, and the Land Experiences segment increased $7.4 million, or 27%, primarily due to operating additional trips, higher pricing and increased other revenue.

### Cost of Tours

Total cost of tours for the three months ended March 31, 2024 increased $7.3 million, or 10%, to $79.3 million, compared to $72.0 million for the three months ended March 31, 2023. The Lindblad segment cost of tours increased by $1.6 million, or 3%, and the Land Experiences segment increased $5.7 million, or 38%, primarily due to operating additional trips, higher costs, increased fuel pricing and higher expenses associated with increased other revenue.

### General and Administrative

General and administrative expenses for the three months ended March 31, 2024 increased $6.0 million, or 23%, to $32.4 million, compared to $26.4 million for the three months ended March 31, 2023. At the Lindblad segment, general and administrative expenses increased $4.0 million, or 21%, from the prior year period, primarily due to higher personnel costs, increased information technology costs following the launch of our digital infrastructure and higher credit card commissions due to the strong booking environment. At the Land Experiences segment, general and administrative expenses increased $2.0 million, or 26%, primarily due to increased personnel costs related to operating additional trips and higher credit card commissions due to the strong booking environment.

### Selling and Marketing

Selling and marketing expenses for the three months ended March 31, 2024 increased $2.1 million, or 10%, to $22.8 million, compared to $20.7 million for the three months ended March 31, 2023. At the Lindblad segment, selling and marketing expenses increased $2.3 million, or 14%, primarily due to higher royalties associated with the new National Geographic agreement. At the Land Experiences segment, selling and marketing expenses decreased $0.2 million, or 5%.

### Depreciation and Amortization

Depreciation and amortization expenses for the three months ended March 31, 2024 decreased $0.5 million, or 4%, to $11.3 million, compared to $11.8 million for the three months ended March 31, 2023.

### Other Income (Expense)

Other expense for the three months ended March 31, 2024, increased $1.7 million to $11.8 million from $10.1 million for the three months ended March 31, 2023, due primarily to a $1.1 million increase in interest expense, due to increased borrowings and higher interest rates related to our high yield offering in May 2023.

**Results of Operations — Segments**

Selected information for our reportable segments is below. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

*(In thousands)*

| Tour revenues: | For the three months ended March 31, 2024 | 2023 | Change% |  |
| --- | ---: | ---: | ---: | ---: |
| Lindblad | $118,303 | $115,498 | $2,805 | 2% |
| Land Experiences | 35,311 | 27,897 | 7,414 | 27% |
| Total tour revenues | $153,614 | $143,395 | $10,219 | 7% |
| **Operating income:** |  |  |  |  |
| Lindblad | $7,783 | $12,118 | $(4,335) | (36)% |
| Land Experiences | 67 | 348 | (281) | (81)% |
| Total operating income | $7,850 | $12,466 | $(4,616) | (37)% |
| **Adjusted EBITDA:** |  |  |  |  |
| Lindblad | $20,472 | $26,083 | $(5,611) | (22)% |
| Land Experiences | 1,134 | 1,103 | 31 | 3% |
| Total adjusted EBITDA | $21,606 | $27,186 | $(5,580) | (21)% |

**Guest Metrics — Lindblad Segment**

The following table sets forth our Available Guest Nights, Guest Nights Sold, Occupancy, Maximum Guests, Number of Guests and Voyages:

|  | For the three months ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| **Available Guest Nights** | 85,954 | 83,184 |
| **Guest Nights Sold** | 64,963 | 67,057 |
| **Occupancy** | 76% | 81% |
| **Maximum Guests** | 9,714 | 8,990 |
| **Number of Guests** | 7,508 | 7,354 |
| **Voyages** | 122 | 113 |

The following table shows the calculations of Gross and Net Yield. Gross Yield is calculated by dividing Tour Revenues by Available Guest Nights and Net Yield is calculated by dividing Net Revenue by Available Guest Nights:

*(In thousands, except for Available Guest Nights, Gross and Net Yield per Available Guest Night)*

| Calculation of Gross and Net Yield per Available Guest Night | For the three months ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Guest ticket revenues | $103,017 | $102,614 |
| Other tour revenue | 15,286 | 12,884 |
| **Tour Revenues** | **118,303** | **115,498** |
| Less: Commissions | (5,374) | (7,816) |
| Less: Other tour expenses | (8,152) | (7,458) |
| **Net Yield** | $104,777 | $100,224 |
| Available Guest Nights | 85,954 | 83,184 |
| **Gross Yield per Available Guest Night** | $1,376 | $1,388 |
| **Net Yield per Available Guest Night** | 1,219 | 1,205 |

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The following table reconciles operating income to our Net Yield Guest Metric for the Lindblad Segment:

*(In thousands)*

|  | For the three months ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| **Operating income** | $7,783 | $12,118 |
| Cost of tours | 58,682 | 57,095 |
| General and administrative | 22,466 | 18,566 |
| Selling and marketing | 18,890 | 16,567 |
| Depreciation and amortization | 10,482 | 11,152 |
| Less: Commissions | (5,374) | (7,816) |
| Less: Other tour expenses | (8,152) | (7,458) |
| **Net Yield** | $104,777 | $100,224 |

The following table shows the calculations of Gross and Net Cruise Costs:

*(In thousands, except for Available Guest Nights, Gross and Net Cruise Cost per Avail. Guest Night)*

| Calculation of Gross and Net Cruise Cost | For the three months ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Cost of tours | $58,682 | $57,095 |
| Plus: Selling and marketing | 18,890 | 16,567 |
| Plus: General and administrative | 22,466 | 18,566 |
| **Gross Cruise Cost** | **100,038** | **92,228** |
| Less: Commissions | (5,374) | (7,816) |
| Less: Other tour expenses | (8,152) | (7,458) |
| **Net Cruise Cost** | **86,512** | **76,954** |
| Less: Fuel Expense | (8,751) | (8,351) |
| **Net Cruise Cost Excluding Fuel** | **77,761** | **68,603** |
| **Non-GAAP Adjustments:** |  |  |
| Stock-based compensation | (2,116) | (2,803) |
| Other | (91) | (10) |
| **Adjusted Net Cruise Cost Excluding Fuel** | $75,554 | $65,790 |
| **Adjusted Net Cruise Cost** | $84,305 | $74,141 |
| **Available Guest Nights** | 85,954 | 83,184 |
| Gross Cruise Cost per Available Guest Night | $1,164 | $1,109 |
| Net Cruise Cost per Available Guest Night | 1,006 | 925 |
| Net Cruise Cost Excluding Fuel per Available Guest Night | 905 | 825 |
| Adjusted Net Cruise Cost Excluding Fuel per Available Guest Night | 879 | 791 |
| Adjusted Net Cruise Cost per Available Guest Night | 981 | 891 |

### Comparison of the Three Months Ended March 31, 2024 and 2023 at the Lindblad Segment

### Tour Revenues

Tour revenues for the three months ended March 31, 2024 increased $2.8 million, or 2%, to $118.3 million, compared to $115.5 million for the three months ended March 31, 2023. The increase was primarily driven by other revenue.

### Operating Income

Operating income of $7.8 million for the three months ended March 31, 2024 decreased $4.3 million compared to a $12.1 million for the three months ended March 31, 2023, as the increase in tour revenues was more than offset by higher operating expenses. Operating expenses included higher cost of tours, primarily due to increased fuel pricing and land costs, as well as expenses associated with the other revenue, higher sales and marketing costs, primarily due to increased royalties associated with the new National Geographic agreement and higher general and administrative costs, primarily due to increased personnel costs, increased information technology costs following the launch of our digital infrastructure and higher credit card commissions due to the revenue and bookings growth.

### Comparison of Three Months Ended March 31, 2024 and 2023 at the Land Experiences Segment

### Tour Revenues

Tour revenues for the three months ended March 31, 2024 increased $7.4 million, or 27%, to $35.3 million compared to $27.9 million for the three months ended March 31, 2023 primarily as a result of operating additional trips during the first quarter 2024 and higher pricing.

### Operating Income

Operating income of $0.1 million for the three months ended March 31, 2024 decreased $0.2 million compared to a $0.3 million for the three months ended March 31, 2023, as the increase in tour revenue was more than offset by higher operating and personnel costs related to operating additional departures, higher marketing spend to drive future growth and the impact of foreign currency on operating expenses.

**Adjusted EBITDA — Consolidated**

The following table outlines the reconciliation of net income (loss) to consolidated Adjusted EBITDA. The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

### Reconciliation of Net (Loss) Income to Adjusted EBITDA Consolidated

*(In thousands)*

| Consolidated | For the three months ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Net (loss) income | $(4,210) | $778 |
| Interest expense, net | 11,585 | 10,467 |
| Income tax expense | 244 | 1,543 |
| Depreciation and amortization | 11,317 | 11,808 |
| (Gain) loss on foreign currency | 239 | (152) |
| Other expense (income) | (8) | (170) |
| Stock-based compensation | 2,116 | 2,902 |
| Other | 323 | 10 |
| **Adjusted EBITDA** | $21,606 | $27,186 |

The following tables outline the reconciliation for each reportable segment from operating income to Adjusted EBITDA.

### Reconciliation of Operating Income to Adjusted EBITDA Lindblad Segment

*(In thousands)*

| Lindblad Segment | For the three months ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Operating income | $7,783 | $12,118 |
| Depreciation and amortization | 10,482 | 11,152 |
| Stock-based compensation | 2,116 | 2,803 |
| Other | 91 | 10 |
| **Adjusted EBITDA** | $20,472 | $26,083 |

*(In thousands)*

| Land Experiences Segment | For the three months ended March 31, 2024 | 2023 |
| --- | ---: | ---: |
| Operating income | $67 | $348 |
| Depreciation and amortization | 835 | 656 |
| Stock-based compensation | - | 99 |
| Other | 232 | - |
| **Adjusted EBITDA** | $1,134 | $1,103 |

24

### Liquidity and Capital Resources

As of March 31, 2024, the Company had $177.7 million in unrestricted cash and cash equivalents and $46.5 million in restricted cash primarily related to deposits on future travel originating from U.S. ports and credit card reserves.

As of March 31, 2024, we had $635.1 million in long-term debt obligations, including the current portion of long-term debt. We believe that our cash on hand and expected future operating cash inflows will be sufficient to fund operations, debt service requirements and necessary capital expenditures for at least the next 12 months.

### Sources and Uses of Cash for the Three Months Ended March 31, 2024 and 2023

*Net cash provided by operating activities* was $43.9 million for the three months ended March 31, 2024 compared to $2.1 million for the same period in 2023. The $41.8 million increase is primarily due to increased cash received from guests for future travel.

*Net cash used in investing activities* was $6.5 million for the three months ended March 31, 2024 compared to $8.7 million in cash provided by investing activities during the same period in 2023. 2024 primarily included capital expenditures on our vessels and our digital transformation initiatives, while 2023 primarily included divesting of marketable securities, partially offset by capital expenditures on our vessels and our digital transformation initiatives.

*Net cash used in financing activities* was $0.6 million for the three months ended March 31, 2024 compared to $6.1 million for the same period in 2023. 2024 primarily included income tax withholdings for stock-based compensation, while 2023 primarily included principal payments on our prior export credit agreements.

### Funding Sources

### Debt Facilities

### 6.75% Notes

On February 4, 2022, we issued $360.0 million aggregate principal amount of 6.75% senior secured notes due 2027 (the “6.75% Notes”) in a private offering. The 6.75% Notes bear interest at a rate of 6.75% per year and is payable semiannually in arrears on February 15 and August 15 of each year. The 6.75% Notes will mature on February 15, 2027, subject to earlier repurchase or redemption. We used the net proceeds from the offering to prepay in full all outstanding borrowings under our prior credit agreement, including the term facility, Main Street Loan, and revolving credit facility, to pay any related premiums and to terminate in full our prior credit agreement and the commitments thereunder. The 6.75% Notes are senior secured obligations and are guaranteed on a senior secured basis by us and certain of our subsidiaries (collectively, the “Guarantors”) and secured by first-priority *pari passu* liens, subject to permitted liens and certain exceptions, on substantially all of our and the Guarantors’ assets. We may redeem the 6.75% Notes at set redemption prices and premiums, plus accrued and unpaid interest, if any.

### Revolving Credit Facility

On February 4, 2022, we entered into a senior secured revolving credit facility (the “Revolving Credit Facility”), which provides for an aggregate principal amount of commitments of $45.0 million, maturing February 2027, including a letter of credit sub-facility in an aggregate principal amount of up to $5.0 million. The obligations under the Revolving Credit Facility are guaranteed by us and the Guarantors and are secured by first-priority *pari passu* liens, subject to permitted liens and certain exceptions, on substantially all the assets of the Company and the Guarantors. Borrowings under the Revolving Credit Facility, if any, will bear interest at a rate per annum equal to, at our option, an adjusted SOFR rate plus a spread or a base rate plus a spread. As of March 31, 2024, we had no borrowings under the Revolving Credit Facility.

### 9.00% Notes

On May 2, 2023, we issued $275.0 million aggregate principal amount of 9.00% senior secured notes due 2028 (the “9.00% Notes”) in a private offering. The 9.00% Notes bear interest at a rate of 9.00% per year and is payable semiannually in arrears on May 15 and November 15 of each year. The 9.00% Notes will mature on May 15, 2028, subject to earlier repurchase or redemption. The net proceeds from the offering were used to prepay in full all outstanding borrowings under our prior senior secured credit agreements, to pay any related premiums and to terminate in full the prior senior secured credit agreements and the commitments thereunder. The 9.00% Notes are senior unsecured obligations and are guaranteed (i) on a senior secured basis by certain of our subsidiaries (collectively, the “Secured Guarantors”) and secured by a first-priority lien, subject to permitted liens and certain exceptions, on the equity and substantially all the assets of the Secured Guarantors, and (ii) on a senior unsecured basis by certain of our other subsidiaries. We may redeem the 9.00% Notes at set redemption prices and premiums, plus accrued and unpaid interest, if any.

### Other

Our DuVine subsidiary has a EUR 0.1 million State Assistance Loan related to the financial consequences of the COVID-19 pandemic, for the purpose of employment preservation. This loan matures August 2025, with monthly payments, and bears an annual interest rate of 0.53%.

### Covenants

The 6.75% Notes, Revolving Credit Facility and 9.00% Notes contain covenants that, among other things, restrict our ability and the ability of our restricted subsidiaries to incur certain additional indebtedness and make certain dividend payments, distributions, investments and other restricted payments. These covenants are subject to a number of important exceptions and qualifications set forth in the 6.75% Notes, Revolving Credit Facility and 9.00% Notes. As of March 31, 2024, we were in compliance with the covenants currently in effect.

### Equity

### Preferred Stock

In August 2020, we issued and sold 85,000 shares of Series A Redeemable Convertible Preferred Stock, par value of $0.0001, (“Preferred Stock”) for $1,000 per share for gross proceeds of $85.0 million. As of March 31, 2024, 62,000 shares of Preferred Stock were outstanding. The Preferred Stock has senior and preferential ranking to our common stock. The Preferred Stock is entitled to cumulative dividends of 6.00% per annum, and for the first two years, the dividends were required to be paid-in-kind. After the second anniversary of the issuance date, the dividends may be paid-in-kind or be paid in cash at our option. During 2024, we thus far have continued to pay Preferred Stock dividends in-kind. At any time after the third anniversary of the issuance, we may, at our option, convert all, but not less than all, of the Preferred Stock into common stock if the closing price of shares of common stock is at least 150% of the conversion price for 20 out of 30 consecutive trading days. The Preferred Stock is convertible at any time, at the holder’s election, into a number of shares of our common stock equal to the quotient obtained by dividing the then-current accrued value by the conversion price of $9.50. At the six-year anniversary of the closing date, each investor has the right to request that we repurchase their Preferred Stock, and any Preferred Stock not requested to be repurchased shall be converted into our common shares equal to the quotient obtained by dividing the then-current accrued value by the conversion price. As of March 31, 2024, the outstanding Preferred Stock and accumulated dividends could be converted, at the option of the holders, into approximately 8.1 million shares of our common stock.

### Funding Needs

We generally rely on a combination of cash flows provided by operations and the incurrence of additional debt to fund obligations. A vast majority of guest ticket receipts are collected in advance of the applicable expedition date. These advance passenger receipts remain a current liability until the expedition date, and the cash generated from these advance receipts is used interchangeably with cash on hand from other cash from operations. The cash received as advanced receipts can be used to fund operating expenses for the applicable future expeditions or otherwise, pay down debt, make long-term investments or any other use of cash. Traditionally we run a working capital deficit due primarily to a large balance of unearned passenger revenues. As of March 31, 2024, we had a working capital deficit of $71.0 million, and as of December 31, 2023, we had a working capital deficit of $74.7 million.

### Critical Accounting Policies

Our preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect reported amounts and related disclosures. For a detailed discussion of our Critical Accounting Policies, please see our 2023 Annual Report, where we have discussed those policies and estimates that we believe are critical and require the use of complex judgment in their application. There have been no significant changes to our accounting policies from those disclosed in the 2023 Annual Report.

## Market risk

As filed, 411 characters.

We may be exposed to a market risk for interest rates related to our revolving credit facility. As of March 31, 2024, no amounts were outstanding under the revolving credit facility. There have otherwise been no other material changes in our exposure to market risks from the information set forth in the “Quantitative and Qualitative Disclosures About Market Risk” sections contained in our 2023 Annual Report.

## Controls and procedures

As filed, 1,282 characters.

### Evaluation of Disclosure Controls and Procedures

Based on an evaluation under the supervision and with the participation of the Company’s management, the Company’s principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) were effective as of March 31, 2024 to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

### Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

### PART 2. OTHER INFORMATION

## Risk factors

As filed, 353 characters.

We operate in a rapidly changing environment that involves a number of risks that could materially affect our business, financial condition or future results, some of which are beyond our control. The risks and uncertainties that we believe are most important for you to consider are discussed under the heading “Risk Factors” in the 2023 Annual Report.

Filed May 1, 2024.
Source: SEC EDGAR, the filing index for accession 0001437749-24-014073. Last ingested by Listed: Nov 5, 2026, 13:57 ET. No prices; not investment advice.