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 2020-09-30 Filed 2020-10-30
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 2020-10-29 Earnings, Exhibits
8-K 2020-09-30 Other Events, Exhibits
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
EX-31.1 ex_200381.htm
EX-31.2 ex_200382.htm
EX-32.1 ex_200383.htm
EX-32.2 ex_200384.htm

Lindblad Expeditions Earnings 2020-09-30

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

lindb20200930_10q.htm
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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 September 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 October 26, 2020, 49,875,186 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 September 30, 2020

 

Table of Contents

 

 

 

Page(s)

 

 

 

PART I. FINANCIAL INFORMATION  

 

 

 

 

ITEM 1.

Financial Statements (Unaudited)

 

 

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

1

 

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

2

 

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

3

 

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

4

 

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

6

 

Notes to the Condensed Consolidated Financial Statements (Unaudited)

7

 

 

 

ITEM 2.

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

23

ITEM 3.

Quantitative and Qualitative Disclosures about Market Risk

35

ITEM 4.

Controls and Procedures

36

 

 

 

PART II. OTHER INFORMATION

 

 

 

 

ITEM 1.

Legal Proceedings

36

ITEM 1A.

Risk Factors

36

ITEM 2.

Unregistered Sale of Equity Securities and Use of Proceeds

36

ITEM 3.

Defaults Upon Senior Securities

37

ITEM 4.

Mine Safety Disclosures

37

ITEM 5.

Other Information

37

ITEM 6.

Exhibits

38

 

 

 

SIGNATURES 

39

 

 

 

 

 

 

 

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 September 30, 2020

  

As of December 31, 2019

 

ASSETS

 

(unaudited)

     

Current Assets:

        

Cash and cash equivalents

 $129,647  $101,579 

Restricted cash

  16,523   7,679 

Marine operating supplies

  5,913   6,299 

Inventories

  1,824   2,027 

Prepaid expenses and other current assets

  22,820   29,055 

Total current assets

  176,727   146,639 
         

Property and equipment, net

  488,048   357,790 

Goodwill

  22,105   22,105 

Intangibles, net

  5,212   6,396 

Deferred tax asset

  3,392   218 

Right-to-use lease assets

  5,349   6,105 

Other long-term assets

  7,971   9,405 

Total assets

 $708,804  $548,658 
         

LIABILITIES

        

Current Liabilities:

        

Unearned passenger revenues

 $120,463  $138,825 

Accounts payable and accrued expenses

  31,811   38,231 

Lease liabilities - current

  1,436   1,335 

Long-term debt - current

  8,451   4,525 

Total current liabilities

  162,161   182,916 
         

Long-term debt, less current portion

  391,284   213,543 

Deferred tax liabilities

  -   4,491 

Lease liabilities

  4,321   5,029 

Other long-term liabilities

  401   3,317 

Total liabilities

  558,167   409,296 
         

COMMITMENTS AND CONTINGENCIES

          
         

Series A redeemable convertible preferred stock, 165,000 and no shares authorized; 85,000 and no shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively

  82,636   - 

Redeemable noncontrolling interest

  7,940   16,112 
         

STOCKHOLDERS’ EQUITY

        

Preferred stock, $0.0001 par value, 1,000,000 shares authorized; 85,000 Series A shares issued and outstanding

  -   - 

Common stock, $0.0001 par value, 200,000,000 shares authorized; 49,875,186 and 49,717,522 issued, 49,801,510 and 49,626,498 outstanding as of September 30, 2020 and December 31, 2019, respectively

  5   5 

Additional paid-in capital

  47,662   46,271 

Retained earnings

  19,473   81,655 

Accumulated other comprehensive loss

  (7,079)  (4,681)

Total stockholders' equity

  60,061   123,250 

Total liabilities, stockholders' equity and redeemable noncontrolling interest

 $708,804  $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 September 30,

  

For the nine months ended September 30,

 
  

2020

  

2019

  

2020

  

2019

 
                 

Tour revenues

 $1,019  $100,983  $81,991  $267,294 
                 

Operating expenses:

                

Cost of tours

  8,075   48,294   62,988   124,831 

General and administrative

  9,145   15,266   36,170   47,615 

Selling and marketing

  2,128   15,531   18,413   42,100 

Depreciation and amortization

  8,485   6,233   23,728   18,603 

Total operating expenses

  27,833   85,324   141,299   233,149 
                 

Operating (loss) income

  (26,814)  15,659   (59,308)  34,145 
                 

Other (expense) income:

                

Interest expense, net

  (4,529)  (3,214)  (11,763)  (9,391)

Gain (loss) on foreign currency

  989   (2,338)  (6,334)  (1,181)

Other expense

  (74)  (30)  (188)  (79)

Total other expense

  (3,614)  (5,582)  (18,285)  (10,651)
                 

(Loss) income before income taxes

  (30,428)  10,077   (77,593)  23,494 

Income tax (benefit) expense

  (2,893)  7,351   (7,664)  4,838 
                 

Net (loss) income

  (27,535)  2,726   (69,929)  18,656 

Net (loss) income attributable to noncontrolling interest

  (156)  565   (956)  834 

Net (loss) income attributable to Lindblad Expeditions Holdings, Inc.

  (27,379)  2,161   (68,973)  17,822 
Non-cash deemed dividend to warrant holders  -   2,654   -   2,654 
                 

Net (loss) income available to stockholders

 $(27,379) $(493) $(68,973) $15,168 
                 

Weighted average shares outstanding

                

Basic

  49,779,525   48,863,506   49,715,663   46,704,634 

Diluted

  49,779,525   48,863,506   49,715,663   49,091,370 
                 

Undistributed (loss) earnings per share available to stockholders

                

Basic

 $(0.56) $(0.01) $(1.40) $0.32 

Diluted

 $(0.56) $(0.01) $(1.40) $0.31 

 


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 September 30,

  

For the nine months ended September 30,

 
  

2020

  

2019

  

2020

  

2019

 
                 

Net (loss) income

 $(27,535) $2,726  $(69,929) $18,656 

Other comprehensive income (loss):

                

Cash flow hedges:

                

Net unrealized gain (loss)

  1,745   (7,393)  (7,724)  (8,654)

Reclassification adjustment, net of tax

  -   1,624   5,326   1,624 

Total other comprehensive income (loss)

  1,745   (5,769)  (2,398)  (7,030)

Total comprehensive (loss) income

  (25,790)  (3,043)  (72,327)  11,626 

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

  (156)  565   (956)  834 

Comprehensive (loss) income attributable to stockholders

 $(25,634) $(3,608) $(71,371) $10,792 

 

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 June 30, 2020

  49,822,955  $5  $47,394  $45,403  $(8,824) $83,978 

Stock-based compensation

  -   -   310   -   -   310 

Issuance of stock for equity compensation plans, net

  52,231   -   (42)  -   -   (42)

Repurchase of shares and warrants

  -   -   -   -   -   - 

Other comprehensive income, net

  -   -   -   -   1,745   1,745 

Redeemable noncontrolling interest

  -   -   -   1,874   -   1,874 
Series A preferred stock dividend  -   -   -   (425)  -   (425)

Net loss available to stockholders

  -   -   -   (27,379)  -   (27,379)

Balance as of September 30, 2020

  49,875,186  $5  $47,662  $19,473  $(7,079) $60,061 
                         
  

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

  -   -   1,911   -   -   1,911 

Issuance of stock for equity compensation plans, net

  166,181   -   (393)  -   -   (393)

Repurchase of shares and warrants

  (8,517)  -   (127)  -   -   (127)

Other comprehensive loss, net

  -   -   -   -   (2,398)  (2,398)

Redeemable noncontrolling interest

  -   -   -   7,216   -   7,216 
Series A preferred stock dividend  -   -   -   (425)  -   (425)

Net loss available to stockholders

  -   -   -   (68,973)  -   (68,973)

Balance as of September 30, 2020

  49,875,186  $5  $47,662  $19,473  $(7,079) $60,061 

 

 

 

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 June 30, 2019

    45,801,025     $ 5     $ 41,617     $ 90,832     $ (1,932 )   $ 130,522  

Stock-based compensation

    -       -       917       -       -       917  

Issuance of stock for equity compensation plans, net

    19,391       -       (95 )     -       -       (95 )

Warrants

    3,895,651       -       2,938       (2,654 )     -       284  

Other comprehensive loss, net

    -       -       -       -       (5,769 )     (5,769 )

Net income available to common stockholders

    -       -       -       2,161       -       2,161  

Balance as of September 30, 2019

    49,716,067     $ 5     $ 45,377     $ 90,339     $ (7,701 )   $ 128,020  
                                                 
   

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

    -       -       2,671       -       -       2,671  

Issuance of stock for equity compensation plans, net

    4,786       -       (1,778 )     -       -       (1,778 )

Repurchase of shares and warrants

    (1,895 )     -       (23 )     -       -       (23 )

Warrants

    3,898,251       -       2,968       (2,654 )     -       314  

Other comprehensive loss, net

    -       -       -       -       (7,030 )     (7,030 )

Net income available to common stockholders

    -       -       -       17,822       -       17,822  

Balance as of September 30, 2019

    49,716,067     $ 5     $ 45,377     $ 90,339     $ (7,701 )   $ 128,020  

 

 

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 nine months ended September 30,

 
  

2020

  

2019

 

Cash Flows From Operating Activities

        

Net (loss) income

 $(69,929) $18,656 

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

        

Depreciation and amortization

  23,728   18,603 

Amortization of National Geographic fee

  727   2,181 

Amortization of deferred financing costs and other, net

  1,549   1,392 

Amortization of right-to-use lease assets

  149   217 

Stock-based compensation

  1,911   2,671 

Deferred income taxes

  (7,710)  4,177 

Loss on foreign currency

  6,334   1,181 

Changes in operating assets and liabilities

        

Marine operating supplies and inventories

  589   (620)

Prepaid expenses and other current assets

  6,320   (2,780)

Unearned passenger revenues

  (18,362)  1,116 

Other long-term assets

  698   (7,561)

Other long-term liabilities

  (4,949)  4,530 

Accounts payable and accrued expenses

  (12,794)  (2,213)

Net cash (used in) provided by operating activities

  (71,739)  41,550 
         

Cash Flows From Investing Activities

        

Purchases of property and equipment

  (152,791)  (76,720)

Net cash used in investing activities

  (152,791)  (76,720)
         

Cash Flows From Financing Activities

        

Proceeds from long-term debt

  183,339   30,476 

Proceeds from Series A preferred stock issuance

  85,000   - 

Repayments of long-term debt

  (1,500)  (1,500)

Payment of deferred financing costs

  (4,877)  (2,340)

Repurchase under stock-based compensation plans and related tax impacts

  (393)  (1,778)

Repurchase of warrants and common stock

  (127)  (23)

Warrants exercised

  -   314 

Net cash provided by financing activities

  261,442   25,149 

Net increase (decrease) in cash, cash equivalents and restricted cash

  36,912   (10,021)

Cash, cash equivalents and restricted cash at beginning of period

  109,258   122,151 
         

Cash, cash equivalents and restricted cash at end of period

 $146,170  $112,130 
         

Supplemental disclosures of cash flow information:

        

Cash paid during the period:

        

Interest

 $12,418  $10,651 

Income taxes

 $650  $1,893 

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)

Non-cash deemed dividend to warrant holders

 $-  $2,654 

 

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, with the exception of those noted below.

 

Series A Redeemable Convertible Preferred Stock 

 

The Company’s Series A redeemable convertible preferred stock is accounted for as equity instruments, presented on the condensed consolidated balance sheets in the temporary equity section. The redemption or conversion of the preferred stock into shares of the Company’s common stock is not solely controlled by the Company. At the six-year anniversary of the issuance, the holders have the right to require the Company to repurchase their redeemable convertible preferred stock. The redeemable convertible preferred stock is convertible into the Company’s common stock (i) any time at the holder’s election, (ii) at the six-year anniversary of the issuance of those shares not redeemed at the request of the holder, or (iii) after the third anniversary of the issuance by the Company under certain circumstances. 

 

 

7

 

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 December 31, 2020 and has rescheduled its 2020-2021 Antarctica season. The Company has been working with guests to amend 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 through the issuance of preferred stock, while 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. 

 

 

 

 

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 October 26, 2020, Lindblad segment bookings for travel in 2020 are now 74% below the same point a year ago for 2019 due primarily to the cancelled and rescheduled voyages. The Company has substantial advanced bookings for travel in 2021 and despite increased cancellations for travel in the first quarter of 2021, total bookings for 2021 are 4% ahead of bookings for 2019 as of the same date in 2018 and only 12% below the same date a year ago for 2020. For the last nine months of 2021 bookings are 12% ahead of the bookings for the same period in 2020 as of the same date a year ago. The Company continues to see new bookings for future travel including over $44.0 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 October 26, 2020, the majority of guests have opted for future travel credits.

 

Balance Sheet and Liquidity

 

As of September 30, 2020, the Company had $129.6 million in unrestricted cash and $16.5 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.

 

8

 

During June 2020, the Company amended its export credit agreements to defer approximately $9.0 million in aggregate scheduled amortization payments originally due in  June 2020 through March 2021 and to suspend the total net leverage ratio covenant from June 2020 through June 2021. During August 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 125 basis points, to be paid-in-kind at maturity, a LIBOR minimum of 0.75% has been added to the term loan and revolving credit facilities and certain covenants have been amended to be more restrictive.

 

During August 2020, the Company raised $85.0 million in gross proceeds through the private placement issuance of 85,000 shares of Series A Redeemable Convertible Preferred Stock (“Preferred Stock”), that carries a 6.0% annual dividend, which is payable in kind for two years and thereafter in cash or in-kind at the Company’s option. The Preferred Stock is convertible into shares of Lindblad common stock at a conversion price of $9.50 per share, representing a premium of 23% to Lindblad’s 30-trading volume weighted average price on the date of issuance. The holders may request redemption of the Preferred Stock at the six-year anniversary of the issuance.

 

As of September 30, 2020, the Company had a total debt position of $412.2 million and was in compliance with all of its debt covenants 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 continues to evaluate additional strategies to enhance its liquidity position which may include, but are not limited to, further reductions in operating expenses, capital expenditures and administrative costs as well as additional financings. 

 

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, 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 rescheduled 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 October 29, 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 an 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

 

In accordance with ASC 360, the Company tests for impairment annually as of September 30, or more frequently if warranted. The Company assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the estimated fair value of goodwill is less than its carrying amount. The Company completed the annual impairment test as of September 30, 2020 with no indication of goodwill impairment.

 

9

 

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 September 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.

 

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity's Own Equity (Subtopic 815-40)—Accounting for Convertible Instruments and Contracts in an Entity's Own Equity. The amendments in this Update address issues identified as a result of the complexity associated with applying GAAP for certain financial instruments with characteristics of liabilities and equity. The amendments in this Update reduce the number of accounting models for convertible debt instruments and convertible preferred stock, and address convertible instruments with conversion features, as well as other items. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2021, early adoption is permitted for fiscal years beginning after December 15, 2020, and must be adopted at the beginning of an entities’ fiscal year. The Company will adopt this ASU as required and is currently reviewing the impacts this ASU will have on its financial statements.

 

 

 

NOTE 2 – EARNINGS PER SHARE

 

Earnings per Common Share

 

Earnings per common share is computed using the two-class method related to its Preferred Stock. Under the two-class method, undistributed earnings available to stockholders for the period are allocated on a pro rata basis to the common stockholders and to the holders of convertible preferred shares based on the weighted average number of common shares outstanding and number of shares that could be issued upon conversion of the Preferred Stock. 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, and the potential common shares that could be issued from conversion of the Preferred Stock, using the if-converted method. When a net loss occurs, potential common shares have an anti-dilutive effect on earnings per share and such shares are excluded from the diluted EPS calculation.

 

10

 

For the three and nine months ended September 30, 2020 and 2019, the Company calculated earnings (loss) per share as follows:

 

  

For the three months ended September 30,

  

For the nine months ended September 30,

 
  

2020

  

2019

  

2020

  

2019

 

(In thousands, except share and per share data)

 

(unaudited)

  

(unaudited)

  

(unaudited)

  

(unaudited)

 

Net (loss) income attributable to Lindblad Expeditions Holdings, Inc.

 $(27,379) $2,161  $(68,973) $17,822 
Series A redeemable convertible preferred stock dividend  425   -   425   - 

Non-cash deemed dividend to warrant holders

  -   2,654   -   2,654 

Undistributed (loss) earnings available to stockholders

 $(27,804) $(493) $(69,398) $15,168 
                 

Weighted average shares outstanding:

                

Total weighted average shares outstanding, basic

  49,779,525   48,863,506   49,715,663   46,704,634 

Dilutive potential common shares

  -   -   -   252,279 

Dilutive potential options

  -   -   -   66,105 
Dilutive potential redeemable convertible preferred shares  -   -   -   - 

Dilutive potential warrants

  -   -   -   2,068,352 

Total weighted average shares outstanding, diluted

  49,779,525   48,863,506   49,715,663   49,091,370 
                 

Undistributed (loss) earnings per share available to stockholders

                

Basic

 $(0.56) $(0.01) $(1.40) $0.32 

Diluted

 $(0.56) $(0.01) $(1.40) $0.31 

 

For the three and nine months ended September 30, 2020, the Company incurred a net loss from operations, therefore 0.3 million restricted shares, 0.2 million options and 8.9 million common shares issuable upon the conversion of the Preferred Stock as of September 30, 2020, 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 months ended September 30, 2019, the Company incurred a net loss available to common stockholders, therefore 0.6 million restricted shares and 0.2 million options were excluded from dilutive potential common shares for the period as they are anti-dilutive, and basic and diluted net loss per share are the same for the period. For the nine months ended September 30, 2019, 0.1 million restricted shares were excluded from dilutive potential common shares as performance conditions have not been met. 

 

 

 

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

 $72,051 

Recognized in tour revenues during the period

  (68,182)

Additional contract liabilities in period

  88,689 

Balance as of September 30, 2020

 $92,558 

 

11

 

The following table disaggregates our tour revenues by the sales channel it was derived from:
 

  

For the three months ended September 30,

  

For the nine months ended September 30,

 
  

2020

  

2019

  

2020

  

2019

 

Guest ticket revenue:

 

(unaudited)

  

(unaudited)

  

(unaudited)

  

(unaudited)

 

Direct

  32%  48%  41%  44%

National Geographic

  0%  14%  18%  16%

Agencies

  26%  21%  24%  23%

Affinity

  6%  10%  6%  8%

Guest ticket revenue

  64%  93%  89%  91%

Other tour revenue

  36%  7%  11%  9%

Tour revenues

  100%  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: 

 

  

As of September 30,

 
  

2020

  

2019

 

(In thousands)

 

(unaudited)

  

(unaudited)

 

Cash and cash equivalents

 $129,647  $104,135 

Restricted cash

  16,523   7,995 

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

 $146,170  $112,130 

 

Restricted cash consist of the following: 

 

  

As of September 30, 2020

  

As of December 31, 2019

 

(In thousands)

 

(unaudited)

     

Federal Maritime Commission escrow

 $14,264  $6,104 

Certificates of deposit and other restricted securities

  1,290   1,575 

Credit card processor reserves

  969   - 

Total restricted cash

 $16,523  $7,679 

 

The Company’s prepaid expenses and other current assets consist of the following: 

 

  

As of September 30, 2020

  

As of December 31, 2019

 

(In thousands)

 

(unaudited)

     

Prepaid tour expenses

 $13,223  $15,630 

Prepaid air expense

  3,361   4,415 

Prepaid marketing, commissions and other expenses

  2,159   4,026 

Prepaid client insurance

  2,085   3,064 

Prepaid corporate insurance

  1,433   1,376 

Prepaid port agent fees

  415   491 

Prepaid income taxes

  144   53 

Total prepaid expenses

 $22,820  $29,055 

 

12

 

The Company’s accounts payable and accrued expenses consist of the following: 

 

  

As of September 30, 2020

  

As of December 31, 2019

 

(In thousands)

 

(unaudited)

     

Accounts payable

 $8,192  $14,633 

Foreign currency forward contract liability

  6,909   1,300 

Accrued other expense

  5,996   8,348 

Employee liability

  3,958   3,712 

Refunds and commissions payable

  2,697   1,873 

Bonus compensation liability