Lindblad Expeditions Holdings, Inc. Reports Second Quarter 2015 Financial Results of Lindblad Expeditions, Inc.

Aug 07, 2015, 07:30 ET from Lindblad Expeditions Holdings, Inc.

NEW YORK, Aug. 7, 2015 /PRNewswire/ -- Lindblad Expeditions Holdings, Inc. (NASDAQ: LIND; the "Company"), a global provider of expedition cruises and adventure travel experiences, today reported the financial results of Lindblad Expeditions, Inc. ("Lindblad") for the quarter ended June 30, 2015. 

As previously announced, on July 8, 2015, Lindblad and Capitol Acquisition Corp. II ("Capitol") completed their merger. As a result of the merger, Lindblad became a direct wholly-owned subsidiary of Capitol. Immediately following the merger, Capitol changed its name to Lindblad Expeditions Holdings, Inc. and its common stock and warrants began trading on the NASDAQ Stock Market under the new symbols LIND and LINDW, respectively.

Lindblad's Second Quarter and First Half 2015 Financial Highlights

  • Lindblad generated tour revenue of $49.5 million in the second quarter of 2015 compared to $50.8 million in the prior year quarter, and $105.0 million of tour revenue in the first half of 2015 compared to $102.2 million in the prior year period
  • Net Yield for the second quarter was $963.10 compared to $1,020.45 in the prior year quarter, and $984.12 in the first half of 2015 compared to $983.22 in the prior year period
  • Adjusted EBITDA for the second quarter was $12.0 million, a 9.1% increase from $11.0 million in the prior year quarter. Adjusted EBITDA was $26.3 million for the first half of 2015, a 4.8% increase from $25.1 million in the prior year period

Review of Lindblad's Second Quarter 2015 Results

"We are pleased with our results in the second quarter which demonstrate consistent performance by our existing fleet.  We delivered a 9.1% increase in Adjusted EBITDA compared to the prior year quarter, despite a slight decrease in guest ticket revenues compared to the prior year quarter related to softer demand for Africa and Indian Ocean based voyages by the National Geographic Orion.  During the summer of 2016, the Orion will be redeployed to Europe as part of our already planned integration of the Orion acquisition into our fleet," said Sven-Olof Lindblad, President and Chief Executive Officer of Lindblad Expeditions Holdings, Inc.  

Tour revenue in the quarter amounted to $49.5 million, compared to $50.8 million in the second quarter in 2014 which represents a decrease by 2.6%. The change was primarily the result of a decrease in guest ticket revenue from $44.0 million in the second quarter of 2014 to $43.2 million in the same period in 2015, due to an increase in discounts related principally to cabin revenue received for Africa and Indian Ocean-based voyages on the Orion.  Tour revenues for the first half of 2015 increased 2.7% compared to the prior year, to $105.0 million from $102.2 million in the first half of 2014.

Net Yield in the quarter amounted to $963.10 compared to $1,020.45 in the second quarter of 2014, which represents a decrease of 5.6%.  Lindblad recorded 40,597 Guest Nights Sold in the period, 4,818 guests, and an occupancy rate of 91.9%.  Net Yield for the first half of 2015 amounted to $984.12 compared to $983.22 in the prior year period.

Adjusted Net Cruise Cost per Available Guest Night amounted to $690.45 in the second quarter of 2015, compared to $762.18 in the same period in the prior year, which represents a decrease of 9.4%. The decrease in Adjusted Net Cruise Cost was primarily driven by a reduction in the cost of fuel in the second quarter of 2015 compared to 2014 and a decrease in dry dock costs and maintenance costs for the owned fleet. Adjusted Net Cruise Cost per Available Guest Night amounted to $696.04 for the first half of 2015 compared with $703.47 for the same time period in 2014.

Adjusted EBITDA, a non-GAAP financial measure, increased 9.1% in the second quarter of 2015 to $12.0 million compared to $11.0 million in the same period in 2014. Adjusted EBITDA increased 4.8% in the first half of 2015 to $26.3 million compared to $25.1 million in the first half of 2014.  A reconciliation between Adjusted EBITDA and GAAP net income is included in the accompanying financial data.

Full Year 2015

The Company remains confident it will achieve the 2015 financial projections set forth in the investor presentation filed with the Securities and Exchange Commission ("SEC") on April 1, 2015 in connection with the merger with Capitol. Revenue is projected to be $204 million and Adjusted EBITDA is projected to be $45 million for the full year of 2015.

Furthermore, the Company anticipates that it will enter into contracts to build two new coastal vessels in the third quarter of 2015 with expected deliveries on target for the second quarter of 2017 and 2018.  "These new vessels, which will be 100-passenger U.S. flagged ships, will allow us to capitalize on the strong demand for our expeditions with routes similar to existing ones where demand is in excess of our capacity," said Sven-Olof Lindblad.  "We are also reviewing a variety of acquisition opportunities that we believe would be accretive to our planned expansion.  Given our strong capital position and the fragmented nature of our industry, we are well positioned to act as a platform to facilitate consolidation." 

In addition, Ian Rogers, the Company's Chief Financial and Operating Officer commented: "Although it is too early to provide a detailed picture for 2016, bookings remain strong with 43% of ticket revenue for the 2016 financial year on the books, as at June 30, 2015, compared with 40% in 2014 for the 2015 financial year."

Debt Financing and Liquidity

On June 22, 2015, Lindblad completed the syndication of its new $175.0 million senior secured term loan.  The term loan was increased to $175.0 million from its original size of $150.0 million at the time of the initial funding of the loan on May 8, 2015.  The interest rate on the loan was also decreased during syndication by 100 basis points to LIBOR (subject to a minimum of 1.00%) plus 4.50%. The upsized credit facility provides greater flexibility to the combined company to, among other things, make acquisitions and repurchase stock.

As of June 30, 2015, Lindblad's cash balance was $101 million.  Upon completion of the merger with Capitol and the completion of the loan syndication, the combined company had approximately $220 million of cash and restricted cash.

New Independent Board Member

On August 4, 2015, the Company announced that it had appointed Bernard W. Aronson to serve as an independent director. Mr. Aronson is currently Founding Partner of ACON Investments L.L.C., a middle market private equity group. He also serves as the U.S. Special Envoy to the Colombian Peace Process, appointed by President Obama in February 2015.  Mr. Aronson previously served as a director of Royal Caribbean Cruises Ltd. from 1993 until 2015, and also serves or has served during the past five years as a director of Kate Spade Inc., Hyatt Hotels Corporation, Chroma Oil and Gas, LP, Sequitur Energy, ACON Franchise Holdings, Mariner Energy and Northern Tier Energy.   He serves on several Non-Profit Boards including The Nature Conservancy Maryland/DC chapter, The Amazon Conservation Team, the National Democratic Institute for International Affairs and is a member of the Council on Foreign Relations. 

"We are thrilled to have Bernie join our board of outstanding individuals.  He brings an unparalleled mix of board experience with some of the biggest success stories in the marine and broader hospitality industries as well as political relationships and experience in geographies that are important for us," said Mark D. Ein, Chairman of Lindblad Expeditions Holdings, Inc.

Conference Call Scheduled

The Company has scheduled a conference call at 10:00 a.m. Eastern Time on August 7, 2015 to discuss the earnings of Lindblad.  The conference call can be accessed by dialing (888) 317-6016 (United States) or (412) 317-6016 (outside the U.S.).  A replay of the call will be available at the Company's investor relations website, investors.expeditions.com.

About Lindblad Expeditions Holdings, Inc.

Lindblad Expeditions Holdings, Inc. is an expedition travel company that works in partnership with National Geographic to inspire people to explore and care about the planet. The organizations work in tandem to produce innovative marine expedition programs and to promote conservation and sustainable tourism around the world. The partnership's educationally oriented voyages allow guests to interact with and learn from leading scientists, naturalists and researchers while discovering stunning natural environments, above and below the sea, through state-of-the-art exploration tools.

FORWARD LOOKING STATEMENTS 

Certain matters discussed in this press release are "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements include our financial projections and may also generally be identified as such because the context of such statements will include words such as "anticipate," "believe," "could," "estimate," "expect," "intend," "may," "plan," "potential," "predict," "project," "should," "will," "would" or words of similar import. Similarly, statements that describe the Company's financial guidance or future plans, objectives or goals are also forward-looking statements. Such forward-looking statements are subject to certain risks and uncertainties that could cause results to differ materially from those expected, including, but not limited to, the following: (i) the anticipated results of the merger of Capitol with Lindblad.; (ii) changes adversely affecting the business in which we are engaged; (iii) management of our growth and our ability to execute on our planned growth; (iv) general economic conditions; (v) our business strategy and plans; (vi) compliance with applicable laws and regulations; (vii) compliance with the financial and/or operating covenants in our amended credit agreement; (viii) adverse publicity regarding the cruise industry in general; (ix) loss of business due to competition; (x) the result of future financing efforts; and (xi) those risks described in our filings with the SEC. Stockholders, potential investors and other readers are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. The forward-looking statements made herein are made only as of the date of this press release and the Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. More detailed information about factors that may affect our performance may be found in our filings with the SEC, which are available at http://www.sec.gov or at http://www.expeditions.com in the Investor Relations section of the Company's website.

 

 

 

LINDBLAD EXPEDITIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

As of

June 30, 2015

December 31, 2014

(unaudited)

ASSETS

Current Assets:

Cash and cash equivalents

$

53,473,021

$

39,678,720

Restricted cash and marketable securities

47,478,278

8,334,632

Inventories

1,921,917

1,700,226

Marine operating supplies

5,145,250

5,078,552

Prepaid expenses and other current assets

10,994,135

11,320,698

Total current assets

119,012,601

66,112,828

Property and equipment, net

119,175,217

121,873,440

Due from shareholder

-

1,500,926

Deferred financing costs, net

-

2,019,503

Operating rights

6,528,949

6,528,949

Deferred tax assets

253,829

101,860

Investment in CFMF

-

47,787,835

Total assets

$

244,970,596

$

245,925,341

LIABILITIES

Current Liabilities:

Unearned passenger revenues

$

79,042,259

$

73,195,195

Accounts payable and accrued expenses

18,070,214

20,028,315

Long-term debt - current

1,500,000

4,934,030

Obligations to repurchase shares of Class A common stock

4,965,792

4,965,792

Due to CFMF

-

22,733,000

Total current liabilities

103,578,265

125,856,332

Long-term debt, less current portion

138,271,507

51,755,608

Other long term liabilities

418,070

447,145

Deferred income taxes - long term

408,226

299,035

Total liabilities

242,676,068

178,358,120

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY

Common stock, Class A, no par value, 450,000 shares authorized; 90,000 shares issued and outstanding.

-

-

Common stock, Class B, no par value, 50,000 shares authorized; 0 issued and outstanding.

-

-

Additional paid-in capital

(59,574,152)

21,466,308

Retained earnings

61,868,680

46,100,913

Total shareholders' equity

2,294,528

67,567,221

Total liabilities and shareholders' equity

$

244,970,596

$

245,925,341

The following table includes assets to be used to settle liabilities of the consolidated variable interest entities ("VIEs"). These assets and liabilities are included in the condensed consolidated balance sheet above. See Note 2 for additional information on the Company's VIEs.

As of

June 30, 2015

December 31, 2014

(unaudited)

ASSETS

Cash and cash equivalents

$

2,000

$

2,000

Property and equipment

1,562,701

1,755,446

LIABILITIES

Accounts payable and accrued expenses

633,254

55,456

Long-term debt

-

2,170,000

 

 

 

LINDBLAD EXPEDITIONS, INC. AND SUBSIDIARIES Condensed Consolidated Income Statements (unaudited)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

2015

2014

2015

2014

Tour revenues

$

49,531,025

$

50,790,991

$

104,951,551

$

102,165,680

Cost of tours

21,485,767

24,100,955

45,886,988

46,077,828

Gross profit

28,045,258

26,690,036

59,064,563

56,087,852

Operating expenses:

General and administrative

14,556,935

7,973,652

25,682,431

15,242,723

Selling and marketing

8,189,162

7,730,227

17,351,646

15,846,423

Depreciation and amortization

2,895,026

2,873,736

5,646,825

5,747,794

Total operating expenses

25,641,123

18,577,615

48,680,902

36,836,940

Operating income

2,404,135

8,112,421

10,383,661

19,250,912

Other income (expense):

Change in fair value of obligation to repurchase shares of Class A common stock

-

857,565

-

(572,431)

Gain (loss) on foreign currency

(78,329)

178,607

(194,367)

(219,286)

Gain on transfer of assets

7,525,926

-

7,525,926

-

Other income (expense), net

5,000,000

-

5,000,000

-

(Loss) on investment in CFMF

(235,000)

-

-

-

Interest expense, net

(3,888,204)

(1,337,238)

(5,077,627)

(2,657,499)

Total other income (expense)

8,324,393

(301,066)

7,253,932

(3,449,216)

Income  before income taxes

10,728,528

7,811,355

17,637,593

15,801,696

Income tax expense

1,893,259

2,646,957

1,869,831

2,242,492

Net income

$

8,835,269

$

5,164,398

$

15,767,762

$

13,559,204

Class A Common Stock

Net income available to Class A Common Stockholders

$

8,835,269

$

4,906,163

$

15,767,762

$

12,881,204

Weighted average shares outstanding

Basic

154,817

244,287

199,769

244,287

Diluted

159,596

244,287

203,057

244,287

Earnings per share

Basic

$

57.07

$

20.08

$

78.93

$

52.73

Diluted

$

55.36

$

20.08

$

77.65

$

52.73

Class B Common Stock

Net income available to Class B Common Stockholders

$

-

$

258,235

$

-

$

678,000

Weighted average shares outstanding

Basic

-

12,858

-

12,858

Diluted

-

12,858

-

12,858

Earnings per share

Basic

$

-

$

20.08

$

-

$

52.73

Diluted

$

-

$

20.08

$

-

$

52.73

 

 

 

LINDBLAD EXPEDITIONS, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows (unaudited) 

For the Six Months Ended June 30,

2015

2014

Cash Flows From Operating Activities

Net income

$

15,767,762

$

13,559,204

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

5,646,825

5,747,794

Amortization of debt discount and deferred financing costs

2,208,948

543,303

Stock-based compensation

2,427,447

-

Deferred income taxes

(42,778)

277,895

(Gain) loss on currency translation

(194,367)

(219,286)

Gain on transfer of assets

(7,502,668)

-

Changes in operating assets and liabilities:

Inventories and Marine operating supplies

(251,188)

262,949

Prepaid expenses and other current assets

316,966

(433,860)

Unearned passenger revenues

6,021,897

(496,242)

Other long term liabilities

(29,075)

110,120

Accounts payable and accrued expenses

(1,168,060)

(417,785)

Net cash provided by operating activities

23,201,709

18,934,092

Cash Flows From Investing Activities

Purchase of investment in CFMF

(68,087,953)

-

Purchase of property and equipment, net

(2,567,268)

(2,336,841)

Advance from (to) shareholder

1,500,926

(47,163)

Purchase of restricted cash and marketable securities

(39,143,646)

(7,923,356)

Net cash used in investing activities

(108,297,941)

(10,307,360)

Cash Flows From Financing Activities

Proceeds from long-term debt

150,000,000

-

Deferred financing costs

(10,532,175)

-

Repayments of long-term debt

(41,003,232)

(2,167,434)

Repurchase of stock from Class A shareholders

-

572,430

Net cash provided by (used in) financing activities

98,464,593

(1,595,004)

Effect of exchange rate changes on cash

425,940

(230,956)

Net increase in cash and cash equivalents

13,794,301

6,800,772

Cash and cash equivalents at beginning of year

39,678,720

44,353,563

Cash and cash equivalents at end of year

$

53,473,021

$

51,154,335

Supplemental disclosures of cash flow information:

Cash paid during the year for

Interest

$

2,087,329

$

2,129,629

Income taxes

$

298,226

$

247,645

Non-cash investing and financing activities:

Investment in CFMF liquidation of Junior debt asset, warrant

$

84,903,567

-

CFMF liquidation of Junior debt long term debt, additional paid in capital

(84,903,567)

-

 

LINDBLAD EXPEDITIONS, INC. AND SUBSIDIARIES

Non-GAAP Information

(unaudited)

Reconciliation of Net Income to EBITDA

And Adjusted EBITDA

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Net income

$

8,835,269

$

5,164,398

$

15,767,762

$

13,559,204

Income tax expense

1,893,259

2,646,957

1,869,831

2,242,492

Interest expense, net

3,888,204

1,337,238

5,077,627

2,657,499

Depreciation and amortization expense

2,895,026

2,873,736

5,646,825

5,747,794

EBITDA

17,511,758

12,022,329

28,362,045

24,206,989

Change in fair value of obligation to repurchase shares of Class A common stock

-

(857,565)

-

572,431

Gain (loss) on foreign currency translation

78,329

(178,607)

194,367

219,286

Stock based compensation

1,213,722

-

2,427,447

-

Gain on transfer of assets

(7,525,926)

-

(7,525,926)

-

Other non-cash income

(4,765,000)

-

(5,000,000)

-

Non-recurring merger related expenses

5,536,354

-

7,804,602

-

Non-recurring acquisition related expenses

-

-

-

112,000

Adjusted EBITDA

$

12,049,237

$

10,986,157

$

26,262,535

$

25,110,706

 

 

Guest Metrics

Three Months Ended June 30,

Six Months Ended June 30,

2015

2014

2015

2014

Available Guest Nights

44,193

42,538

91,164

89,760

Guest Nights Sold

40,597

40,751

83,807

85,402

Occupancy

91.9

%

95.8

%

91.9

%

95.1

%

Maximum Guests

5,171

5,014

10,610

10,268

Number of Guests

4,818

4,829

9,806

9,804

 

 

Calculation of Gross Yield and Net Yield

Three Months Ended June 30,

Six  Months Ended June 30,

2015

2014

2015

2014

Guest ticket revenue

$

43,153,749

$

43,970,745

$

90,953,547

$

89,504,670

Other revenue

6,377,276

6,820,246

13,998,004

12,661,010

Tour Revenue

49,531,025

50,790,991

104,951,551

102,165,680

Less: Commissions

(3,436,535)

(3,379,574)

(7,123,099)

(6,692,010)

Less: Other expense

(3,532,318)

(4,003,552)

(8,112,295)

(7,219,797)

Net Revenue

$

42,562,172

$

43,407,865

$

89,716,157

$

88,253,873

Available Guest Nights

44,193

42,538

91,164

89,760

Gross Yield

$

1,120.79

$

1,194.01

$

1,151.24

$

1,138.21

Net Yield

$

963.10

$

1,020.45

$

984.12

$

983.22

 

Calculation of Net Cruise Cost Metrics 

Three Months Ended June 30,

Six  Months Ended June 30,

2015

2014

2015

2014

Cost of tours

$

21,485,767

$

24,100,955

$

45,886,988

$

46,077,828

Plus: Selling and marketing

8,189,162

7,730,227

17,351,646

15,846,423

Plus: General and administrative

14,556,935

7,973,652

25,682,431

15,242,723

Gross Cruise Cost

$

44,231,864

$

39,804,834

$

88,921,065

$

77,166,974

Less: Commission expense

(3,436,535)

(3,379,574)

(7,123,099)

(6,692,010)

Less: Other expenses

(3,532,318)

(4,003,552)

(8,112,295)

(7,219,797)

Net Cruise Cost

$

37,263,011

$

32,421,708

$

73,685,671

$

63,255,167

Less: Fuel expense

(1,677,789)

(2,740,215)

(4,724,586)

(6,361,522)

Net Cruise Cost Excluding Fuel

$

35,585,222

$

29,681,493

$

68,961,085

$

56,893,645

Non-GAAP Adjustments

Stock based compensation

(1,213,722)

-

(2,427,447)

-

Non-recurring merger related expenses

(5,536,354)

-

(7,804,602)

-

Non-recurring acquisition related expenses

-

-

-

(112,000)

Adjusted Net Cruise Cost Excluding Fuel

$

28,835,146

$

29,681,493

$

58,729,036

$

56,781,645

Available Guest Nights

44,193

42,538

91,164

89,760

Gross Cruise Cost per Available Guest Night

$

1,000.88

$

935.75

$

975.40

$

859.70

Net Cruise Cost per Available Guest Night

$

843.19

$

762.18

$

808.28

$

704.71

Net Cruise Cost Excluding Fuel per Available Guest Night

$

805.22

$

697.76

$

756.45

$

633.84

Adjusted Net Cruise Cost per Available Guest Night

$

690.45

$

762.18

$

696.04

$

703.47

Adjusted Net Cruise Cost Excl. Fuel per Available Guest Night

$

652.48

$

697.76

$

644.21

$

632.59

 

Key Operational and Financial Metrics

Lindblad uses a variety of operational and financial metrics, which are defined below, to evaluate its performance and financial condition. Lindblad uses certain non-GAAP financial measures, such as EBITDA, Adjusted EBITDA, Net Yields and Net Cruise Costs, to enable it to analyze its performance and financial condition. Lindblad utilizes these financial measures to manage its business on a day-to-day basis and believes that they are the most relevant measures of performance. Some of these measures are commonly used in the cruise industry to measure performance. Lindblad believes these non-GAAP measures provide expanded insight to measure 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.

Adjusted EBITDA is net income (loss) excluding depreciation and amortization, net interest expense, other income (expense), and income tax benefit (expense), and other supplemental adjustments. The Company believes Adjusted EBITDA can provide a more complete understanding of the underlying operating results and trends and an enhanced overall understanding of the Company's financial performance and prospects for the future. While Adjusted EBITDA is not a recognized measure under GAAP, management uses this financial measure to evaluate and forecast business performance. Adjusted EBITDA is not intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income. The Company's use of Adjusted EBITDA may not be comparable to other companies within the industry.

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. The Company also records the number of guest nights available on its limited land programs in this definition.

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

Gross Yield represents tour revenue 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 revenue and other revenue.

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

Net Revenue represents tour revenue less commissions and direct costs of other revenue.

Net Yield represents Net Revenue divided by Available Guest Nights.

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

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

 

 

SOURCE Lindblad Expeditions Holdings, Inc.



RELATED LINKS

http://www.expeditions.com