| Price | 17.19 | EPS | 0 | |
| Shares | 50 | P/E | 60 | |
| MCap | 853 | P/FCF | 21 | |
| Net Debt | 118 | EBIT | 22 | |
| TEV | 971 | TEV/EBIT | 44 | TTM 2019-09-30, in MM, except price, ratios |
| 10-Q | 2020-06-30 | Filed 2020-08-10 |
| 10-Q | 2020-03-31 | Filed 2020-05-06 |
| 10-K | 2019-12-31 | Filed 2020-02-26 |
| 10-Q | 2019-09-30 | Filed 2019-10-30 |
| 10-Q | 2019-06-30 | Filed 2019-08-01 |
| 10-Q | 2019-03-31 | Filed 2019-05-02 |
| 10-K | 2018-12-31 | Filed 2019-02-28 |
| 10-Q | 2018-09-30 | Filed 2018-11-02 |
| 10-Q | 2018-06-30 | Filed 2018-08-02 |
| 10-Q | 2018-06-30 | Filed 2018-08-02 |
| 10-Q | 2018-03-31 | Filed 2018-05-03 |
| 10-K | 2017-12-31 | Filed 2018-03-02 |
| 10-Q | 2017-09-30 | Filed 2017-11-07 |
| 10-Q | 2017-06-30 | Filed 2017-08-03 |
| 10-Q | 2017-03-31 | Filed 2017-05-09 |
| 10-K | 2016-12-31 | Filed 2017-03-07 |
| 10-Q | 2016-09-30 | Filed 2016-11-04 |
| 10-Q | 2016-06-30 | Filed 2016-08-08 |
| 10-Q | 2016-03-31 | Filed 2016-05-09 |
| 10-K | 2015-12-31 | Filed 2016-03-14 |
| 10-Q | 2015-09-30 | Filed 2015-11-09 |
| 10-Q | 2015-06-30 | Filed 2015-08-07 |
| 10-Q | 2015-03-31 | Filed 2015-05-11 |
| 10-K | 2014-12-31 | Filed 2015-03-13 |
| 10-Q | 2014-09-30 | Filed 2014-11-06 |
| 10-Q | 2014-06-30 | Filed 2014-08-06 |
| 10-Q | 2014-03-31 | Filed 2014-05-07 |
| 10-K | 2013-12-31 | Filed 2014-03-06 |
| 10-Q | 2013-09-30 | Filed 2013-11-12 |
| 10-Q | 2013-06-30 | Filed 2013-08-14 |
| 10-Q | 2013-03-31 | Filed 2013-06-24 |
| 8-K | 2020-08-31 | Enter Agreement, Sale of Shares, Shareholder Rights, Amend Bylaw, Exhibits |
| 8-K | 2020-08-26 | Enter Agreement, Sale of Shares, Other Events, Exhibits |
| 8-K | 2020-08-10 | Earnings, Exhibits |
| 8-K | 2020-07-29 | |
| 8-K | 2020-07-17 | |
| 8-K | 2020-06-10 | |
| 8-K | 2020-05-15 | |
| 8-K | 2020-04-14 | |
| 8-K | 2020-03-31 | |
| 8-K | 2020-03-26 | |
| 8-K | 2020-03-13 | |
| 8-K | 2019-12-31 | |
| 8-K | 2019-12-06 | |
| 8-K | 2019-09-30 | |
| 8-K | 2019-07-17 | |
| 8-K | 2019-07-09 | |
| 8-K | 2019-06-30 | |
| 8-K | 2019-06-10 | |
| 8-K | 2019-05-02 | |
| 8-K | 2019-04-11 | |
| 8-K | 2019-02-28 | |
| 8-K | 2018-11-02 | |
| 8-K | 2018-09-04 | |
| 8-K | 2018-08-02 | |
| 8-K | 2018-06-12 | |
| 8-K | 2018-05-03 | |
| 8-K | 2018-03-27 | |
| 8-K | 2018-02-28 | |
| 8-K | 2018-01-08 |
| Part I. Financial Information Item 1. Financial Statements |
| Note 1 – Business and Basis of Presentation |
| Note 2 – Earnings per Share |
| Note 3 – Revenues |
| Note 4 – Financial Statement Details |
| Note 5 – Long - Term Debt |
| Note 6 – Financial Instruments and Fair Value Measurements |
| Note 7 – Stockholders’ Equity |
| Note 8 – Stock - Based Compensation |
| Note 9 – Related Party Transactions |
| Note 10 – Income Taxes |
| Note 11 – Commitments and Contingencies |
| Note 12 – Segment Information |
| Note 13 – Subsequent Event |
| EX-10.3 | ex_198380.htm |
| EX-31.1 | ex_186606.htm |
| EX-31.2 | ex_186607.htm |
| EX-32.1 | ex_186608.htm |
| EX-32.2 | ex_186609.htm |
| Balance Sheet | Income Statement | Cash Flow |
|---|---|---|
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Assets, Equity
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Rev, G Profit, Net Income
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Ops, Inv, Fin
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
For the quarterly period ended
For the transition period from to
Commission file number
LINDBLAD EXPEDITIONS HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
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| (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
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(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
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Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | | ☒ | |
| Non-accelerated filer | ☐ | Smaller reporting company | | |
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| Emerging growth company | | ||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
As of July 31, 2020,
LINDBLAD EXPEDITIONS HOLDINGS, INC.
Quarterly Report On Form 10-Q
For The Quarter Ended June 30, 2020
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| PART I. FINANCIAL INFORMATION |
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| ITEM 1. | Financial Statements (Unaudited) |
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| PART II. OTHER INFORMATION |
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| PART I. | FINANCIAL INFORMATION |
| Item 1. | FINANCIAL STATEMENTS |
LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
| As of June 30, 2020 | As of December 31, 2019 | |||||||
| ASSETS | (unaudited) | |||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Marine operating supplies | ||||||||
| Inventories | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Goodwill | ||||||||
| Intangibles, net | ||||||||
| Deferred tax asset | ||||||||
| Right-to-use lease assets | ||||||||
| Other long-term assets | ||||||||
| Total assets | $ | $ | ||||||
| LIABILITIES | ||||||||
| Current Liabilities: | ||||||||
| Unearned passenger revenues | $ | $ | ||||||
| Accounts payable and accrued expenses | ||||||||
| Lease liabilities - current | ||||||||
| Long-term debt - current | ||||||||
| Total current liabilities | ||||||||
| Long-term debt, less current portion | ||||||||
| Deferred tax liabilities | ||||||||
| Lease liabilities | ||||||||
| Other long-term liabilities | ||||||||
| Total liabilities | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| REDEEMABLE NONCONTROLLING INTEREST | ||||||||
| STOCKHOLDERS’ EQUITY | ||||||||
| Preferred stock, par value, shares authorized; shares issued and outstanding | ||||||||
| Common stock, par value, shares authorized; and issued, and outstanding as of June 30, 2020 and December 31, 2019, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Total stockholders' equity | ||||||||
| Total liabilities, stockholders' equity and redeemable noncontrolling interest | $ | $ | ||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(unaudited)
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Tour revenues | $ | ( | ) | $ | $ | $ | ||||||||||
| Operating expenses: | ||||||||||||||||
| Cost of tours | ||||||||||||||||
| General and administrative | ||||||||||||||||
| Selling and marketing | ||||||||||||||||
| Depreciation and amortization | ||||||||||||||||
| Total operating expenses | ||||||||||||||||
| Operating (loss) income | ( | ) | ( | ) | ||||||||||||
| Other (expense) income: | ||||||||||||||||
| Interest expense, net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| (Loss) gain on foreign currency | ( | ) | ( | ) | ||||||||||||
| Other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total other expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| (Loss) income before income taxes | ( | ) | ( | ) | ||||||||||||
| Income tax (benefit) expense | ( | ) | ( | ) | ( | ) | ||||||||||
| Net (loss) income | ( | ) | ( | ) | ||||||||||||
| Net (loss) income attributable to noncontrolling interest | ( | ) | ( | ) | ( | ) | ||||||||||
| Net (loss) income available to common stockholders | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic | ||||||||||||||||
| Diluted | ||||||||||||||||
| Net (loss) income per share available to common stockholders | ||||||||||||||||
| Basic | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Diluted | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income (Loss)
(In thousands)
(unaudited)
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Net (loss) income | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Other comprehensive income (loss): | ||||||||||||||||
| Cash flow hedges: | ||||||||||||||||
| Net unrealized gain (loss) | ( | ) | ( | ) | ||||||||||||
| Reclassification adjustment, net of tax | ||||||||||||||||
| Total other comprehensive income (loss) | ( | ) | ( | ) | ||||||||||||
| Total comprehensive (loss) income | ( | ) | ( | ) | ||||||||||||
| Less: comprehensive (loss) income attributive to non-controlling interest | ( | ) | ( | ) | ( | ) | ||||||||||
| Comprehensive (loss) income attributable to common shareholders | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity
(In thousands, except share data)
(unaudited)
| Common Stock | Additional Paid-In | Retained | Accumulated Other Comprehensive | Total Stockholders' | ||||||||||||||||||||
| Shares | Amount | Capital | Earnings | Loss | Equity | |||||||||||||||||||
| Balance as of March 31, 2020 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Issuance of stock for equity compensation plans, net | ( | ) | ( | ) | ||||||||||||||||||||
| Repurchase of shares and warrants | ||||||||||||||||||||||||
| Other comprehensive income, net | - | |||||||||||||||||||||||
| Redeemable noncontrolling interest | - | |||||||||||||||||||||||
| Net loss available to common stockholders | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of June 30, 2020 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Common Stock | Additional Paid-In | Retained | Accumulated Other Comprehensive | Total Stockholders' | ||||||||||||||||||||
| Shares | Amount | Capital | Earnings | Loss | Equity | |||||||||||||||||||
| Balance as of January 1, 2020 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Issuance of stock for equity compensation plans, net | ( | ) | ( | ) | ||||||||||||||||||||
| Repurchase of shares and warrants | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Other comprehensive loss, net | - | ( | ) | ( | ) | |||||||||||||||||||
| Redeemable noncontrolling interest | - | |||||||||||||||||||||||
| Net loss available to common stockholders | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of June 30, 2020 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Stockholders’ Equity (continued)
(In thousands, except share data)
(unaudited)
| Common Stock | Additional Paid-In | Retained | Accumulated Other Comprehensive | Total Stockholders' | ||||||||||||||||||||
| Shares | Amount | Capital | Earnings | Loss | Equity | |||||||||||||||||||
| Balance as of March 31, 2019 | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Issuance of stock for equity compensation plans, net | ( | ) | ( | ) | ||||||||||||||||||||
| Repurchase of shares and warrants | ||||||||||||||||||||||||
| Other comprehensive income, net | - | |||||||||||||||||||||||
| Net income available to common stockholders | - | |||||||||||||||||||||||
| Balance as of June 30, 2019 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Common Stock | Additional Paid-In | Retained | Accumulated Other Comprehensive | Total Stockholders' | ||||||||||||||||||||
| Shares | Amount | Capital | Earnings | Loss | Equity | |||||||||||||||||||
| Balance as of January 1, 2019 | $ | $ | $ | ( | ) | $ | ||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Issuance of stock for equity compensation plans, net | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Repurchase of shares and warrants | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Other comprehensive loss, net | - | ( | ) | ( | ) | |||||||||||||||||||
| Net income available to common stockholders | - | |||||||||||||||||||||||
| Balance as of June 30, 2019 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
| For the six months ended June 30, | ||||||||
| 2020 | 2019 | |||||||
| Cash Flows From Operating Activities | ||||||||
| Net (loss) income | $ | ( | ) | $ | ||||
| Adjustments to reconcile net (loss) income to net cash (used by) provided by operating activities: | ||||||||
| Depreciation and amortization | ||||||||
| Amortization of National Geographic fee | ||||||||
| Amortization of deferred financing costs and other, net | ||||||||
| Amortization of right-to-use lease assets | ||||||||
| Stock-based compensation | ||||||||
| Deferred income taxes | ( | ) | ( | ) | ||||
| Loss (gain) on foreign currency | ( | ) | ||||||
| Changes in operating assets and liabilities | ||||||||
| Marine operating supplies and inventories | ( | ) | ( | ) | ||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Unearned passenger revenues | ( | ) | ||||||
| Other long-term assets | ( | ) | ||||||
| Other long-term liabilities | ( | ) | ||||||
| Accounts payable and accrued expenses | ( | ) | ( | ) | ||||
| Net cash (used in) provided by operating activities | ( | ) | ||||||
| Cash Flows From Investing Activities | ||||||||
| Purchases of property and equipment | ( | ) | ( | ) | ||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash Flows From Financing Activities | ||||||||
| Proceeds from long-term debt | ||||||||
| Repayments of long-term debt | ( | ) | ( | ) | ||||
| Payment of deferred financing costs | ( | ) | ( | ) | ||||
| Repurchase under stock-based compensation plans and related tax impacts | ( | ) | ( | ) | ||||
| Repurchase of warrants and common stock | ( | ) | ( | ) | ||||
| Net cash provided by (used in) financing activities | ( | ) | ||||||
| Net decrease in cash, cash equivalents and restricted cash | ( | ) | ( | ) | ||||
| Cash, cash equivalents and restricted cash at beginning of period | ||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid during the period: | ||||||||
| Interest | $ | $ | ||||||
| Income taxes | $ | $ | ||||||
| Non-cash investing and financing activities: | ||||||||
| Additional paid-in capital exercise proceeds of option shares | $ | $ | ||||||
| Additional paid-in capital exchange proceeds used for option shares | $ | $ | ( | ) | ||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
Lindblad Expeditions Holdings, Inc.
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
NOTE 1 – BUSINESS AND BASIS OF PRESENTATION
Business
Lindblad Expeditions Holdings, Inc. and its consolidated subsidiaries (the “Company” or “Lindblad”) mission is offering life-changing adventures around the world and pioneering innovative ways to allow its guests to connect with exotic and remote places. The Company currently operates a fleet of owned expedition ships and seasonal charter vessels under the Lindblad brand and operates eco-conscious expeditions and nature-focused, small-group tours under the Natural Habitat, Inc. (“Natural Habitat”) brand.
The Company operates the following reportable business segments:
Lindblad – Offers primarily ship-based expeditions aboard customized, nimble and intimately-scaled vessels that are able to venture where larger cruise ships cannot, thereby allowing Lindblad to offer up-close experiences in the planet’s wild and remote places and capitals of culture. Many of these expeditions involve travel to remote places with limited infrastructure and ports (such as Antarctica and the Arctic) or places that are best accessed by a ship (such as the Galápagos, Alaska, Baja’s Sea of Cortez, Costa Rica and Panama), and foster active engagement by guests. Each expedition ship is designed to be comfortable and inviting, while being fully equipped with state-of-the-art tools for in-depth exploration. The Company has an alliance with National Geographic Partners (“National Geographic”), which provides for lecturers and National Geographic experts, including photographers, writers, marine biologists, naturalists, field researchers and film crews, to join many of the Company’s expeditions.
Natural Habitat – Offers over 100 different expedition itineraries of primarily land-based nature adventures in more than 45 countries spanning all seven continents. The expeditions focus on small groups led by award-winning naturalists to achieve close-up wildlife and nature experiences. Examples of expeditions offered include safaris in Botswana, grizzly bear adventures in Alaska, polar bear tours in Canada and small-group Galápagos tours. Many of the expeditions feature access to private wildlife reserves, remote corners of national parks and distinctive lodges and camps for the best wildlife viewing. 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.
The Company’s common stock is listed on the NASDAQ Capital Market under the symbol “LIND”.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding unaudited interim financial information and include the accounts and transactions of the Company. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial statements for the periods presented. Operating results for the periods presented are not necessarily indicative of the results of operations to be expected for the full year due to seasonality and other factors. Certain information and footnote disclosures normally included in the consolidated financial statements in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC for interim reporting. All intercompany balances and transactions have been eliminated in these unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto for the year ended December 31, 2019 contained in the Company’s Annual Report on Form 10-K filed with the SEC on February 26, 2020 (the “2019 Annual Report”).
The presentation of certain items in the condensed consolidated statements of cash flows have been reclassified to conform to the 2020 presentation. The reclassification had no effect on previously reported results of net cash provided by operating activities.
There have been no significant changes to the Company’s accounting policies from those disclosed in the 2019 Annual Report.
COVID-19 Business Update
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 September 30, 2020 and has been working with guests to reschedule travel plans and refund payments, as applicable. The Company’s ships are currently being maintained with minimally required crew on-board to ensure they comply with all necessary regulations and can be fully put back into service quickly as needed. In accordance with local regulations, the Company closed its offices and most employees are working remotely to maintain general business operations, to provide assistance to existing and potential guests and to maintain information technology systems.
The Company 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 exploring additional sources of capital and liquidity. These measures include the following operating expense and capital expenditure reductions:
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| ● | Significantly reduced ship and land-based expedition costs including crew payroll, land costs, fuel and food. All ships have been safely laid up. |
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| ● | Lowered expected annual maintenance capital expenditures by over $ |
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| ● | Meaningfully reduced general and administrative expenses through staff furloughs, payroll reductions and the elimination of all non-essential travel, office expenses and discretionary spending. |
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| ● | Suspended the majority of planned advertising and marketing spend. |
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| ● | Deferred payment of the majority of bonuses earned for 2019 performance, as well as cash compensation for the Board of Directors. |
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| ● | 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
For 2020 voyages that have been cancelled or rescheduled, the Company is providing future travel credits with incremental value or full refunds, as applicable, to its fully paid guests. As of July 28, 2020, the majority of guests have opted for future travel credits.
Balance Sheet and Liquidity
As of June 30, 2020, the Company had $
During May 2020, the Company amended its $
The Company has also amended both its export credit agreements and term loan and revolving credit facilities. During June 2020, the Company amended its export credit agreements to defer approximately $
As of June 30, 2020, the Company had a total debt position of $
The Company estimates its monthly cash usage while its vessels are not in operations to be approximately $
The Company is currently evaluating several additional strategies to enhance its liquidity position. These strategies may include, but are not limited to, pursuing additional financing from both the public and private markets through the issuance of equity and/or debt. The timing and structure of any transaction, if completed, will depend on market conditions.
In April 2020, the Company received a U.S. Small Business Administration Loan related to the COVID-19 crisis in the amount of million. The Company subsequently returned the funds received from this loan and, as a result, has made additional adjustments to its cost structure.
The Company has not previously experienced a complete cessation of its operations and, as a consequence, its ability to predict the impact of such cessation on its costs and future prospects is limited. Given the dynamic nature of this situation, the Company cannot reasonably estimate the impacts of the COVID-19 virus on its financial condition, results of operations, cash flows, plans and growth for the foreseeable future. It is unknown when travel restrictions and various border closures will be lifted and what the demand for expedition travel will be once these restrictions are no longer in place. The estimates for monthly cash usage reflect the Company’s current forecast for operating costs, capital expenditures and expected debt and interest payments. Based on current liquidity, the actions taken to date and its current forecast, which assumes reduced operations during 2020 with a ramp up in operations throughout 2021, the Company believes that its liquidity should be adequate to meet its obligations for the next 12 months from August 10, 2020, the date of this Quarterly Report on Form 10-Q.
Return to Operations
The Company 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. Additionally, the majority of its expeditions take place in remote locations where human interactions are limited, so there is less opportunity for external influence. The Company also has the ability to be flexible with regards to existing itineraries and is actively investigating additional itinerary opportunities both internationally and domestically. Lastly, the Company’s guests are explorers by nature, eager to travel and have historically been very resilient following periods of uncertainty.
Valuation of Goodwill
The effects of COVID-19 on the Company’s expected future operating cash flows was an indicator of potential impairment, so the Company performed a discounted cash flow analysis of its reporting unit to estimate its fair value compared to the reporting unit’s carrying value as of June 30, 2020. Based on this analysis, it was determined that there was no impairment of goodwill.
Valuation of Long-lived Assets
The effects of COVID-19 on the Company’s expected future operating cash flows was a potential indicator that the carrying value of the Company's long-lived assets may not be recoverable. The Company performed an undiscounted cash flow analysis of its long-lived assets for potential impairment as of June 30, 2020, and based on the analysis, it was determined that there was no impairment to the Company's long-lived assets.
Recent Accounting Pronouncements
In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740)–Simplifying the Accounting for Income Taxes. The amendments of this ASU are intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2020, and early adoption is permitted. The Company will adopt this ASU as required and does not expect it to have a material impact to the Company’s financial statements.
In March 2020, the FASB issued ASU 2020-4, Reference Rate Reform (Topic 848) –Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The guidance of this ASU is designed to provide relief from the accounting analysis and impacts that may otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, borrowings) necessitated by reference rate reform. It also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by reference rate reform. Application of the guidance is optional, is only available in certain situations, and is only available for companies to apply until December 31, 2022. The Company is currently reviewing its agreements impacted by the reference rate reform and does not expect this ASU to have a material impact to the Company’s financial statements.
NOTE 2 – EARNINGS PER SHARE
Earnings per Common Share
Earnings per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares outstanding and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the dilutive incremental common shares associated with restricted stock awards, shares issuable upon the exercise of stock options and previously outstanding warrants, using the treasury stock method.
For the three and six months ended June 30, 2020 and 2019, the Company calculated earnings per share as follows:
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| (In thousands, except share and per share data) | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||
| Net (loss) income available to common stockholders | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Weighted average shares outstanding: | ||||||||||||||||
| Total weighted average shares outstanding, basic | ||||||||||||||||
| Dilutive potential common shares | ||||||||||||||||
| Dilutive potential options | ||||||||||||||||
| Dilutive potential warrants | ||||||||||||||||
| Total weighted average shares outstanding, diluted | ||||||||||||||||
| Net (loss) income per share available to common stockholders | ||||||||||||||||
| Basic | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
| Diluted | $ | ( | ) | $ | $ | ( | ) | $ | ||||||||
For the three and six months ended June 30, 2020, the Company incurred a net loss from operations, therefore
NOTE 3 – REVENUES
Customer Deposits and Contract Liabilities
The Company’s guests remit deposits in advance of tour embarkation. Guest deposits consist of guest ticket revenues as well as revenues from the sale of pre- and post-expedition excursions, hotel accommodations, land-based expeditions and air transportation to and from the ships. Guest deposits represent unearned revenues and are reported as unearned passenger revenues in the condensed consolidated balance sheets when received and are subsequently recognized as tour revenue over the duration of the expedition. Accounting Standards Codification, Revenue from Contracts with Customers (Topic 606) defines a “contract liability” as an entity’s obligation to transfer goods or services to a customer for which the entity has received consideration from the customer. The Company does not consider guest deposits to be a contract liability until the guest no longer has the right, resulting from the passage of time, to cancel their reservation and receive a full refund. The change in contract liabilities within unearned passenger revenues presented in our condensed consolidated balance sheets are as follows:
| Contract Liabilities | ||||
| (In thousands) | (unaudited) | |||
| Balance as of January 1, 2020 | $ | |||
| Recognized in tour revenues during the period | ( | ) | ||
| Additional contract liabilities in period | ||||
| Balance as of June 30, 2020 | $ | |||
The following table disaggregates our tour revenues by the sales channel it was derived from:
| For the three months ended June 30, | For the six months ended June 30, | |||||||||||||||
| 2020 | 2019 | 2020 | 2019 | |||||||||||||
| Guest ticket revenue: | (unaudited) | (unaudited) | (unaudited) | (unaudited) | ||||||||||||
| Direct | % | % | % | % | ||||||||||||
| National Geographic | % | % | % | % | ||||||||||||
| Agencies | % | % | % | % | ||||||||||||
| Affinity | % | % | % | % | ||||||||||||
| Guest ticket revenue | % | % | % | % | ||||||||||||
| Other tour revenue | % | % | % | % | ||||||||||||
| Tour revenues | % | % | % | % | ||||||||||||
NOTE 4 – FINANCIAL STATEMENT DETAILS
The following is a reconciliation of cash, cash equivalents and restricted cash to the statement of cash flows:
| For the six months ended June 30, | ||||||||
| 2020 | 2019 | |||||||
| (In thousands) | (unaudited) | (unaudited) | ||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash, cash equivalents and restricted cash as presented in the statement of cash flows | $ | $ | ||||||
Restricted cash consist of the following:
| As of June 30, 2020 | As of December 31, 2019 | |||||||
| (In thousands) | (unaudited) | |||||||
| Federal Maritime Commission escrow | $ | $ | ||||||
| Certificates of deposit and other restricted securities | ||||||||
| Credit card processor reserves | ||||||||
| Total restricted cash | $ | $ | ||||||
The Company’s prepaid expenses and other current assets consist of the following:
| As of June 30, 2020 | As of December 31, 2019 | |||||||
| (In thousands) | (unaudited) | |||||||
| Prepaid tour expenses | $ | $ | ||||||
| Prepaid client insurance | ||||||||
| Prepaid air expense | ||||||||
| Prepaid marketing, commissions and other expenses | ||||||||
| Prepaid corporate insurance | ||||||||
| Prepaid port agent fees | ||||||||
| Prepaid income taxes | ||||||||
| Total prepaid expenses | $ | $ | ||||||
The Company’s accounts payable and accrued expenses consist of the following:
| As of June 30, 2020 | As of December 31, 2019 | |||||||
| (In thousands) | (unaudited) | |||||||
| Refunds and commissions payable | $ | $ | ||||||
| Accounts payable | ||||||||
| Accrued other expense | ||||||||
| Bonus compensation liability | ||||||||
| Employee liability | ||||||||
| Foreign currency forward contract liability | ||||||||
| Travel certificate liability | ||||||||
| Accrued travel insurance expense | ||||||||
| Income tax liabilities | ||||||||
| Royalty payable | ||||||||
| Total accounts payable and accrued expenses | $ | $ | ||||||
Loan Receivable
The Company’s loan receivable is recorded at amortized cost within other long-term assets. The Company reviewed its loan receivable for credit losses in connection with the preparation of its condensed consolidated financial statements for the period ended June 30, 2020. In evaluating the allowance for loan losses, the Company considered factors such as historical loss experience, the type and amount of loan, adverse situations that may affect the borrower’s ability to repay and prevailing economic conditions. Based on these credit loss estimation and experience factors, the Company realized no allowance for loan loss for the three or six months ended June 30, 2020. The roll-forward of the loan receivable balance is as follows:
|
|
| Loan Receivable |
| |
| (In thousands) |
|
| (unaudited) |
|
| Balance as of January 1, 2020 |
| $ | |
|
| Accrued interest |
|
| |
|
| Amortization of deferred costs |
|
|
| ) |
| Balance as of June 30, 2020 |
| $ | |
|
NOTE 5 – LONG-TERM DEBT
| As of June 30, 2020 | As of December 31, 2019 | |||||||||||||||||||||||
| (unaudited) | ||||||||||||||||||||||||
| (In thousands) | Principal | Deferred Financing Costs, net | Balance | Principal | Deferred Financing Costs, net | Balance | ||||||||||||||||||
| Note payable | $ | $ | $ | $ | $ | $ | ||||||||||||||||||
| Revolving Facility | ( | ) | ||||||||||||||||||||||
| Credit Facility | ( | ) | ( | ) | ||||||||||||||||||||
| 1st Senior Secured Credit Agreement | ( | ) | ||||||||||||||||||||||
| 2nd Senior Secured Credit Agreement | ( | ) | ||||||||||||||||||||||