Company Quick10K Filing
Lindblad Expeditions
Price17.19 EPS0
Shares50 P/E60
MCap853 P/FCF21
Net Debt118 EBIT22
TEV971 TEV/EBIT44
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

LIND 10Q Quarterly Report

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

Lindblad Expeditions Earnings 2020-06-30

Balance SheetIncome StatementCash Flow
53042431821210602012201420172020
Assets, Equity
1058055305-202012201420172020
Rev, G Profit, Net Income
2151569738-21-802012201420172020
Ops, Inv, Fin

lindb20200630_10q.htm
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During the three and six months ended June 30, 2020, a gain of $1.4 million and a loss of $2.0 million was recognized in gain (loss) on foreign currency. During the three and six months ended June 30, 2019, a gain of $0.5 million and $1.2 million, respectively, was recognized in gain (loss) on foreign currency. Recorded in prepaid expenses and other current assets, and accounts payable and accrued expenses. 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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2020

 

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from                   to

 

Commission file number 001-35898

 

LINDBLAD EXPEDITIONS HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware

 

27-4749725

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

 

96 Morton Street, 9th Floor, New York, New York, 10014

(Address of principal executive offices) (Zip Code)

 

(212) 261-9000

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading Symbol(s)

 

Name of each exchange on which registered

 

 

 

 

 

Common Stock, par value $0.0001 per share

 

LIND

 

The NASDAQ Stock Market LLC

 

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. ☒ Yes ☐ No

 

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). ☒ Yes ☐ No

 

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

Accelerated filer

Non-accelerated filer

☐ 

Smaller reporting company

 

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).

Yes ☒ No

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, 49,823,199 shares of common stock, par value $0.0001 per share, were issued and outstanding.

 

  

 

LINDBLAD EXPEDITIONS HOLDINGS, INC.

 

Quarterly Report On Form 10-Q

For The Quarter Ended June 30, 2020

 

Table of Contents

 

 

 

Page(s)

 

 

 

PART I. FINANCIAL INFORMATION  

 

 

 

 

ITEM 1.

Financial Statements (Unaudited)

 

 

Condensed Consolidated Balance Sheets as of June 30, 2020 (Unaudited) and December 31, 2019 

1

 

Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2020 and 2019 (Unaudited)

2

 

Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2020 and 2019 (Unaudited)

3

 

Condensed Consolidated Statements of Stockholders’ Equity for the Three and Six Months Ended June 30, 2020 and 2019 (Unaudited)

4

 

Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2020 and 2019 (Unaudited)

5

 

Notes to the Condensed Consolidated Financial Statements (Unaudited)

7

 

 

 

ITEM 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

21

ITEM 3.

Quantitative and Qualitative Disclosures about Market Risk

34

ITEM 4.

Controls and Procedures

34

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

ITEM 1.

Legal Proceedings

34

ITEM 1A.

Risk Factors

34

ITEM 2.

Unregistered Sale of Equity Securities and Use of Proceeds

35

ITEM 3.

Defaults Upon Senior Securities

35

ITEM 4.

Mine Safety Disclosures

35

ITEM 5.

Other Information

35

ITEM 6.

Exhibits

36

 

 

 

SIGNATURES 

37

 

 

 

 

 

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

 $80,897  $101,579 

Restricted cash

  21,333   7,679 

Marine operating supplies

  6,759   6,299 

Inventories

  1,824   2,027 

Prepaid expenses and other current assets

  23,753   29,055 

Total current assets

  134,566   146,639 
         

Property and equipment, net

  495,370   357,790 

Goodwill

  22,105   22,105 

Intangibles, net

  5,607   6,396 

Deferred tax asset

  639   218 

Right-to-use lease assets

  5,601   6,105 

Other long-term assets

  8,401   9,405 

Total assets

 $672,289  $548,658 
         

LIABILITIES

        

Current Liabilities:

        

Unearned passenger revenues

 $120,788  $138,825 

Accounts payable and accrued expenses

  43,443   38,231 

Lease liabilities - current

  1,394   1,335 

Long-term debt - current

  5,646   4,525 

Total current liabilities

  171,271   182,916 
         

Long-term debt, less current portion

  395,637   213,543 

Deferred tax liabilities

  136   4,491 

Lease liabilities

  4,567   5,029 

Other long-term liabilities

  6,730   3,317 

Total liabilities

  578,341   409,296 
         

COMMITMENTS AND CONTINGENCIES

 
         
         

REDEEMABLE NONCONTROLLING INTEREST

  9,970   16,112 
         

STOCKHOLDERS’ EQUITY

        

Preferred stock, $0.0001 par value, 1,000,000 shares authorized; no shares issued and outstanding

  -   - 

Common stock, $0.0001 par value, 200,000,000 shares authorized; 49,822,955 and 49,717,522 issued, 49,754,431 and 49,626,498 outstanding as of June 30, 2020 and December 31, 2019, respectively

  5   5 

Additional paid-in capital

  47,394   46,271 

Retained earnings

  45,403   81,655 

Accumulated other comprehensive loss

  (8,824)  (4,681)

Total stockholders' equity

  83,978   123,250 

Total liabilities, stockholders' equity and redeemable noncontrolling interest

 $672,289  $548,658 


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

 $(268) $76,658  $80,971  $166,311 
                 

Operating expenses:

                

Cost of tours

  12,721   37,520   54,913   76,537 

General and administrative

  9,798   16,268   27,025   32,350 

Selling and marketing

  3,406   12,567   16,285   26,569 

Depreciation and amortization

  8,553   6,182   15,243   12,370 

Total operating expenses

  34,478   72,537   113,466   147,826 
                 

Operating (loss) income

  (34,746)  4,121   (32,495)  18,485 
                 

Other (expense) income:

                

Interest expense, net

  (4,179)  (3,188)  (7,234)  (6,176)

(Loss) gain on foreign currency

  (3,879)  501   (7,322)  1,157 

Other expense

  (62)  (30)  (113)  (49)

Total other expense

  (8,120)  (2,717)  (14,669)  (5,068)
                 

(Loss) income before income taxes

  (42,866)  1,404   (47,164)  13,417 

Income tax (benefit) expense

  (2,943)  553   (4,770)  (2,513)
                 

Net (loss) income

  (39,923)  851   (42,394)  15,930 

Net (loss) income attributable to noncontrolling interest

  (265)  (137)  (801)  269 

Net (loss) income available to common stockholders

 $(39,658) $988  $(41,593) $15,661 
                 

Weighted average shares outstanding

                

Basic

  49,741,635   46,155,981   49,683,381   45,607,307 

Diluted

  49,741,635   49,485,004   49,683,381   48,281,002 
                 

Net (loss) income per share available to common stockholders

                

Basic

 $(0.80) $0.02  $(0.84) $0.34 

Diluted

 $(0.80) $0.02  $(0.84) $0.32 


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

 $(39,923) $851  $(42,394) $15,930 

Other comprehensive income (loss):

                

Cash flow hedges:

                

Net unrealized gain (loss)

  3,930   377   (9,469)  (1,261)

Reclassification adjustment, net of tax

  5,326   -   5,326   - 

Total other comprehensive income (loss)

  9,256   377   (4,143)  (1,261)

Total comprehensive (loss) income

  (30,667)  1,228   (46,537)  14,669 

Less: comprehensive (loss) income attributive to non-controlling interest

  (265)  (137)  (801)  269 

Comprehensive (loss) income attributable to common shareholders

 $(30,402) $1,365  $(45,736) $14,400 

 

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

    49,758,787     $ 5     $ 46,908     $ 78,820     $ (18,080 )   $ 107,653  

Stock-based compensation

    -       -       703       -       -       703  

Issuance of stock for equity compensation plans, net

    64,168       -       (217 )     -       -       (217 )

Repurchase of shares and warrants

    -       -       -       -       -       -  

Other comprehensive income, net

    -       -       -       -       9,256       9,256  

Redeemable noncontrolling interest

    -       -       -       6,241       -       6,241  

Net loss available to common stockholders

    -       -       -       (39,658 )     -       (39,658 )

Balance as of June 30, 2020

    49,822,955     $ 5     $ 47,394     $ 45,403     $ (8,824 )   $ 83,978  
                                                 
    Common Stock     Additional Paid-In     Retained     Accumulated Other Comprehensive     Total Stockholders'  
    Shares     Amount     Capital     Earnings     Loss     Equity  
Balance as of January 1, 2020     49,717,522     $ 5     $ 46,271     $ 81,655     $ (4,681 )   $ 123,250  
Stock-based compensation     -       -       1,601       -       -       1,601  
Issuance of stock for equity compensation plans, net     113,950       -       (351 )     -       -       (351 )
Repurchase of shares and warrants     (8,517 )     -       (127 )     -       -       (127 )
Other comprehensive loss, net     -       -       -       -       (4,143 )     (4,143 )
Redeemable noncontrolling interest     -       -       -       5,341       -       5,341  
Net loss available to common stockholders     -       -       -       (41,593 )     -       (41,593 )
Balance as of June 30, 2020     49,822,955     $ 5     $ 47,394     $ 45,403     $ (8,824 )   $ 83,978  

 

 

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

    45,768,715     $ 5     $ 41,102     $ 89,844       (2,309 )   $ 128,642  

Stock-based compensation

    -       -       1,001       -       -       1,001  

Issuance of stock for equity compensation plans, net

    32,310       -       (486 )     -       -       (486 )

Repurchase of shares and warrants

    -       -       -       -       -       -  

Other comprehensive income, net

    -       -       -       -       377       377  

Net income available to common stockholders

    -       -       -       988       -       988  

Balance as of June 30, 2019

    45,801,025     $ 5     $ 41,617     $ 90,832     $ (1,932 )   $ 130,522  
                                                 
    Common Stock     Additional Paid-In     Retained     Accumulated Other Comprehensive     Total Stockholders'  
    Shares     Amount     Capital     Earnings     Loss     Equity  
Balance as of January 1, 2019     45,814,925     $ 5     $ 41,539     $ 75,171       (671 )   $ 116,044  
Stock-based compensation     -       -       1,754       -       -       1,754  
Issuance of stock for equity compensation plans, net     (12,005 )     -       (1,653 )     -       -       (1,653 )
Repurchase of shares and warrants     (1,895 )     -       (23 )     -       -       (23 )
Other comprehensive loss, net     -       -       -       -       (1,261 )     (1,261 )
Net income available to common stockholders     -       -       -       15,661       -       15,661  
Balance as of June 30, 2019     45,801,025     $ 5     $ 41,617     $ 90,832     $ (1,932 )   $ 130,522  

 

 

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

  $ (42,394 )   $ 15,930  

Adjustments to reconcile net (loss) income to net cash (used by) provided by operating activities:

               

Depreciation and amortization

    15,243       12,370  

Amortization of National Geographic fee

    727       1,454  

Amortization of deferred financing costs and other, net

    972       911  

Amortization of right-to-use lease assets

    101       185  

Stock-based compensation

    1,601       1,754  

Deferred income taxes

    (4,817 )     (4,106 )

Loss (gain) on foreign currency

    7,322       (1,157 )

Changes in operating assets and liabilities

               

Marine operating supplies and inventories

    (257 )     (32 )

Prepaid expenses and other current assets

    5,342       (10,033 )

Unearned passenger revenues

    (18,037 )     21,600  

Other long-term assets

    277       (767 )

Other long-term liabilities

    (730 )     706  

Accounts payable and accrued expenses

    (2,112 )     (1,587 )

Net cash (used in) provided by operating activities

    (36,762 )     37,228  
                 

Cash Flows From Investing Activities

               

Purchases of property and equipment

    (152,031 )     (42,311 )

Net cash used in investing activities

    (152,031 )     (42,311 )
                 

Cash Flows From Financing Activities

               

Proceeds from long-term debt

    183,339       -  

Repayments of long-term debt

    (1,000 )     (1,000 )

Payment of deferred financing costs

    (96 )     (2,340 )

Repurchase under stock-based compensation plans and related tax impacts

    (351 )     (1,653 )

Repurchase of warrants and common stock

    (127 )     (23 )

Net cash provided by (used in) financing activities

    181,765       (5,016 )

Net decrease in cash, cash equivalents and restricted cash

    (7,028 )     (10,099 )

Cash, cash equivalents and restricted cash at beginning of period

    109,258       122,150  
                 

Cash, cash equivalents and restricted cash at end of period

  $ 102,230     $ 112,051  
                 

Supplemental disclosures of cash flow information:

               

Cash paid during the period:

               

Interest

  $ 7,971     $ 6,999  
Income taxes   $ 60     $ 564  
Non-cash investing and financing activities:                
Additional paid-in capital exercise proceeds of option shares   $ -     $ 225  
Additional paid-in capital exchange proceeds used for option shares   $ -     $ (225 )

 

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 nine owned expedition ships and five 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. 

 

7

 

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:

 

 

Significantly reduced ship and land-based expedition costs including crew payroll, land costs, fuel and food. All ships have been safely laid up. 

 

 

 

 

Lowered expected annual maintenance capital expenditures by over $10 million, savings of more than 50% from originally planned levels. 

 

 

 

 

Meaningfully reduced general and administrative expenses through staff furloughs, payroll reductions and the elimination of all non-essential travel, office expenses and discretionary spending.

 

 

 

 

Suspended the majority of planned advertising and marketing spend. 

 

 

 

 

Deferred payment of the majority of bonuses earned for 2019 performance, as well as cash compensation for the Board of Directors.

 

 

 

 

Suspended all repurchases of common stock under the stock repurchase plan.

 

Bookings Trends

 

The Company was off to a strong start to the year with Lindblad segment bookings at the end of February up 25% for the full year 2020 as compared to the same point a year ago for 2019, and had sold 86% of its originally projected guest ticket revenues for the year. Since that point, the Company has experienced a substantial impact from the COVID-19 virus including elevated cancellations and softness in near-term demand. As of July 28, 2020, Lindblad segment bookings for travel in 2020 are now 62% below the same point a year ago for 2019 due primarily to the cancelled and rescheduled voyages, as well as cancellations for travel later this year. The Company has substantial advanced bookings for travel in 2021, including 6% more bookings as compared with bookings for 2020 as of the same date a year ago and 35% higher bookings as of the same date in 2018 for 2019. The Company continues to see new bookings for future travel including over $30.0 million since March 1, 2020, and it is receiving deposits and final payments for future travel.

 

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 $80.9 million in unrestricted cash and $21.3 million in restricted cash primarily related to deposits on future travel originating from U.S. ports. During the first quarter of 2020 the Company drew down $45.0 million under its revolving credit facility as a precautionary measure for working capital and general corporate purposes given the uncertainty related to the COVID-19 pandemic and borrowed $107.7 million under its first export credit agreement in conjunction with final payment on delivery of the National Geographic Endurance in March 2020. During April 2020, the Company drew down $30.6 million under its second export credit agreement in conjunction with its third installment payment on the National Geographic Resolution, scheduled for delivery in the fourth quarter of 2021. 

 

During May 2020, the Company amended its $2.5 million promissory note, changing the maturity date of the principal payments to be due in three equal installments, with the first payment due on December 22, 2020, the second due on December 22, 2021 and the final payment due on December 22, 2022.

 

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 $9.0 million in aggregate scheduled amortization payments from June 2020 through March 2021 and to suspend the total net leverage ratio covenant from June 2020 through June 2021.  On August 7, 2020, the Company amended its term loan and revolving credit facilities to waive the application of the total net leverage ratio covenant through June 2021. In connection with the amendment, the interest rate of the term loan has been increased by 125bps, to be paid-in-kind at maturity, a LIBOR floor of 75bps has been added to each facility and certain covenants have been amended to be more restrictive.

 

8

 

 As of June 30, 2020, the Company had a total debt position of $412.3 million and was in compliance with all of its debt covenants currently in effect. The Company has no material debt maturities until 2023.

 

The Company estimates its monthly cash usage while its vessels are not in operations to be approximately $10-15 million including ship and office operating expenses, necessary capital expenditures and interest and principal payments. This excludes guest payments for future travel and cash refunds requested on previously made guest payments.

 

The Company 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 $6.6 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.

  

9

 

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

 $(39,658) $988  $(41,593) $15,661 
                 

Weighted average shares outstanding:

                

Total weighted average shares outstanding, basic

  49,741,635   46,155,981   49,683,381   45,607,307 

Dilutive potential common shares

  -   237,813   -   251,131 

Dilutive potential options

  -   70,164   -   55,183 

Dilutive potential warrants

  -   3,021,046   -   2,367,381 

Total weighted average shares outstanding, diluted

  49,741,635   49,485,004   49,683,381   48,281,002 
                 

Net (loss) income per share available to common stockholders

                

Basic

 $(0.80) $0.02  $(0.84) $0.34 

Diluted

 $(0.80) $0.02  $(0.84) $0.32 

 

For the three and six months ended June 30, 2020, the Company incurred a net loss from operations, therefore 0.3 million restricted shares and 0.2 million options were excluded from dilutive potential common shares for the periods as they are anti-dilutive, and basic and diluted net loss per share are the same for the periods. For the three and six months ended June 30, 2019, 0.1 million restricted shares are excluded from dilutive potential common shares as they were anti-dilutive.

 

 

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:

 

10

 
   

Contract Liabilities

 

(In thousands)

 

(unaudited)

 

Balance as of January 1, 2020

  $ 72,051  

Recognized in tour revenues during the period

    (68,182 )

Additional contract liabilities in period

    66,706  

Balance as of June 30, 2020

  $ 70,575  

 

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

    0 %     43 %     42 %     42 %

National Geographic

    0 %     17 %     18 %     19 %

Agencies

    0 %     24 %     24 %     24 %

Affinity

    0 %     7 %     5 %     6 %

Guest ticket revenue

    0 %     91 %     89 %     91 %

Other tour revenue

    0 %     9 %     11 %     9 %

Tour revenues

    0 %     100 %     100 %     100 %

 

 

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

  $ 80,897     $ 78,746  

Restricted cash

    21,333       33,305  

Total cash, cash equivalents and restricted cash as presented in the statement of cash flows

  $ 102,230     $ 112,051  

 

Restricted cash consist of the following: 

 

   

As of June 30, 2020

   

As of December 31, 2019

 

(In thousands)

 

(unaudited)

         

Federal Maritime Commission escrow

  $ 19,692     $ 6,104  

Certificates of deposit and other restricted securities

    1,321       1,575  
Credit card processor reserves     320       -  

Total restricted cash

  $ 21,333     $ 7,679  

 

11

 

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

  $ 14,973     $ 15,630  

Prepaid client insurance

    2,396       3,064  

Prepaid air expense

    3,069       4,415  

Prepaid marketing, commissions and other expenses

    2,175       4,026  

Prepaid corporate insurance

    712       1,376  

Prepaid port agent fees

    288       491  

Prepaid income taxes

    140       53  

Total prepaid expenses

  $ 23,753     $ 29,055  

 

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

  $ 13,876     $ 1,873  

Accounts payable

    9,869       14,633  

Accrued other expense

    7,841       8,348  

Bonus compensation liability

    4,724       5,322  

Employee liability

    3,856       3,712  

Foreign currency forward contract liability

    2,083       1,300  

Travel certificate liability

    870       888  

Accrued travel insurance expense

    322       477  

Income tax liabilities

    2       603  

Royalty payable

    -       1,075  

Total accounts payable and accrued expenses

  $ 43,443     $ 38,231  

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

 

$

4,084

 

Accrued interest

 

 

79

 

Amortization of deferred costs

 

 

(12

)

Balance as of June 30, 2020

 

$

4,151

 

 

12

 
 

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

 $2,525  $-  $2,525  $2,525  $-  $2,525 

Revolving Facility

  45,000   (417)  44,583   -   -   - 

Credit Facility

  196,000   (6,558)  189,442   197,000   (9,704)  187,296 

1st Senior Secured Credit Agreement

  107,695   (1,883)  105,812   -   -   - 

2nd Senior Secured Credit Agreement

  61,120   (2,199)