Lindblad Expeditions Holdings, Inc. Reports 2018 Fourth Quarter and Full Year Financial Results

NEW YORK, Feb. 28, 2019 /PRNewswire/ --

Full Year 2018 Highlights:

    --  Tour revenues increased 16% to $309.7 million
    --  Net income available to common stockholders increased $20.0 million to
        $11.4 million
    --  Adjusted EBITDA increased 26% to $54.8 million
    --  Lindblad segment Net Yield increased 6% to $1,044 and Occupancy
        increased to 91%
    --  Bookings from the Lindblad segment in 2018 for future travel increased
        20% over bookings in 2017
    --  Expanded capacity with the launch of the National Geographic Venture in
        December 2018
    --  Expanded strategic partnership with National Geographic to include all
        of the Americas
    --  Following year end, the Company signed an agreement to build an
        additional polar ice class vessel

Lindblad Expeditions Holdings, Inc. (NASDAQ: LIND; the "Company" or "Lindblad"), a global provider of expedition cruises and adventure travel experiences, today reported financial results for the fourth quarter and year ended December 31, 2018.

Sven-Olof Lindblad, President and Chief Executive Officer, said, "Lindblad's strong financial growth and operating momentum during 2018 demonstrates the unique opportunity we have to build long-term value as we capitalize on the growing demand for expedition travel. We have significantly increased our overall capacity with the launch of our two new coastal vessels, the National Geographic Quest and the National Geographic Venture, and at the same time have been able to expand our Occupancy and Net Yields despite the additional inventory. Lindblad's unparalleled track record of delivering high quality and authentic experiences, along with our strategic partnership with National Geographic, continues to generate high levels of repeat guests and is attracting more and more new travelers who want to immerse themselves in the world's most remarkable geographies. With additional capacity and a strong booking environment, 2019 is poised to grow significantly. At the same time, we continue to build the next drivers of growth with the National Geographic Endurance scheduled to launch in early 2020 and today we announced that that we have contracted for another new, state of the art, polar vessel for delivery late in 2021. Overall, we have committed to expanding our available guest nights by over 60% from pre-expansion levels as we broaden our ability to build additional shareholder value in the years ahead."

FULL YEAR RESULTS

Tour Revenues

Full year tour revenues of $309.7 million increased $43.2 million, or 16%, as compared to 2017. The increase was driven by growth of $29.5 million at the Lindblad segment and a $13.7 million increase at Natural Habitat.

Lindblad segment tour revenues of $246.3 million increased $29.5 million, or 14% compared to 2017 primarily driven by 8% growth in Available Guest Nights, most notably due to the launch of the National Geographic Quest in July 2017 and the National Geographic Venture in December 2018, as well as from the impact of voyage cancellations in the first quarter of 2017 for repairs on the National Geographic Orion and National Geographic Sea Lion. The year on year growth also reflects an increase in Occupancy in 2018 to 91% from 87% in 2017 due to higher overall demand across the fleet, as well as 6% growth in Net Yield to $1,044 from increased prices and changes in itineraries.

Natural Habitat revenues of $63.4 million increased $13.7 million, or 28%, compared to a year ago due primarily to higher ticket revenue from additional departures and increased pricing.

Net Income

Net income available to common stockholders of $11.4 million for 2018, $0.24 per diluted share, increased $20.0 million as compared with a net loss available to common stockholders of $8.7 million, $0.19 per diluted share, in 2017. The increase versus a year ago primarily reflects the higher operating results, $6.2 million of lower stock-based compensation expense and a $9.4 million decrease in tax expense due to a $12.7 million impact in the fourth quarter of 2017 from the enactment of the U.S. Tax Cuts and Jobs Act. The current year also includes a $3.4 million increase in depreciation and amortization due to the addition of new vessels to the fleet, $2.2 million in foreign currency losses and a $1.1 million increase in interest expense primarily related to refinancing the Company's credit facility during the first quarter of 2018.

Adjusted EBITDA

Full year 2018 Adjusted EBITDA of $54.8 million increased $11.4 million, or 26%, compared to 2017. The increase was driven by growth of $9.2 million at the Lindblad segment and a $2.2 million increase at Natural Habitat.

Lindblad segment Adjusted EBITDA of $47.8 million increased $9.2 million, or 24%, as compared to 2017 as the increased tour revenue were partially offset by higher operating costs primarily from a full year of operating the National Geographic Quest and costs associated with the December 2018 launch of the National Geographic Venture. 2018 also included higher commission expense associated with the revenue growth, as well as increased fuel and personnel costs.

Natural Habitat Adjusted EBITDA of $7.0 million increased $2.2 million, or 46%, as compared to 2017 as the revenue growth was partially offset by higher operating costs related to the additional departures and increased marketing and personnel costs to drive long-term growth initiatives.

FOURTH QUARTER RESULTS

Tour Revenues

Fourth quarter tour revenues of $70.6 million increased $7.4 million, or 12%, as compared to the same period in 2017. The increase was driven by growth of $4.5 million at Natural Habitat and a $2.9 million increase at the Lindblad segment.

Lindblad segment tour revenues of $51.8 million increased $2.9 million, or 6%, compared to the fourth quarter a year ago primarily driven by a 16% increase in Net Yield to $1,071 and an increase in Occupancy to 91% from 86% in 2017. Net Yield growth was driven by higher pricing and changes in itineraries, while Occupancy growth was driven by higher demand across the fleet, most notably on the National Geographic Orion due to a lower occupancy trans-Atlantic voyage in the fourth quarter of 2017. Available Guest Nights declined 9% primarily due to the trans-Atlantic voyage a year ago, partially offset by the launch of the National Geographic Venture in December 2018.

Natural Habitat revenues of $18.8 million increased $4.5 million, or 31%, compared to a year ago due primarily to higher ticket revenue from additional departures and increased pricing.

Net Income

Net loss available to common stockholders for the fourth quarter was $4.6 million, $0.10 per diluted share, as compared with a loss of $16.0 million, $0.36 per diluted share, in the fourth quarter of 2017. The $11.4 million improvement versus a year ago primarily reflects a $13.1 million decrease in tax expense mainly due to a $12.7 million impact from the enactment of the U.S. Tax Cuts and Jobs Act in the fourth quarter of 2017, partially offset by lower operating results and $0.8 million in foreign currency losses.

Adjusted EBITDA

Fourth quarter Adjusted EBITDA of $4.1 million decreased $0.7 million, or 15%, as compared to the same period in 2017 as growth of $0.9 million at Natural Habitat was more than offset by a $1.6 million decrease at the Lindblad segment.

Lindblad segment Adjusted EBITDA of $0.3 million decreased $1.6 million compared to the fourth quarter a year ago as the increased tour revenues were offset primarily by higher operating costs from the launch of the National Geographic Venture in December 2018, as well as from increased commission expense related to the revenue growth and higher personnel costs.

Natural Habitat Adjusted EBITDA of $3.8 million increased $0.9 million, or 30%, versus the fourth quarter a year ago as the revenue growth was partially offset by higher operating costs related to the additional departures and increased marketing and personnel costs to drive long-term growth initiatives.



     
              Segment Results




                                               
          
           For the three months ended                           
     
              For the years ended
                                                           December 31,                                                  December 31,



     (In thousands)                      2018                                          2017                Change                     %            2018        2017                Change            %




     
              Tour revenues:



     Lindblad                                    $
         51,817                                $
        48,924               $
            2,893                    6%        $
       246,334          $
       216,815    $
        29,519     14%





     Natural Habitat                                    18,792                                      14,297                         4,495                   31%              63,400                49,689          13,711     28%






     Total tour revenues                         $
         70,609                                $
        63,221               $
            7,388                   12%        $
       309,734          $
       266,504    $
        43,230     16%






     
              Operating income (loss):



     Lindblad                                   $
         (6,957)                              $
        (5,093)            $
            (1,864)                  37%         $
       19,798            $
       7,291    $
        12,507    172%





     Natural Habitat                                     3,436                                       2,580                           856                   33%               5,540                 3,452           2,088     60%






     Total operating income                     $
         (3,521)                              $
        (2,513)            $
            (1,008)                  40%         $
       25,338           $
       10,743    $
        14,595    136%






     
              Adjusted EBITDA:



     Lindblad                                       $
         276                                 $
        1,890             $
            (1,614)                (85%)         $
       47,815           $
       38,655     $
        9,160     24%





     Natural Habitat                                     3,819                                       2,938                           881                   30%               7,031                 4,834           2,197     45%






     Total Adjusted EBITDA                        $
         4,095                                 $
        4,828               $
            (733)                (15%)         $
       54,846           $
       43,489    $
        11,357     26%

Liquidity

The Company's cash, cash equivalents and restricted cash were $122.2 million as of December 31, 2018, as compared with $103.5 million as of December 31, 2017. The $18.7 million increase primarily reflects $56.4 million in net cash provided by operating activities due to the strong operating performance and $16.5 million in net cash provided by financing activities, primarily due to the increase in long-term debt associated with refinancing our credit facility. These increases were partially offset by $54.3 million in net cash used in investing activities, primarily related to the construction of two new vessels.

Free cash flow was $2.0 million for the full year 2018 as compared with a free cash flow use of $27.6 million in 2017. The $29.6 million improvement primarily reflects the strong operating performance in the current year and lower capital expenditures for new vessels. Free cash flow is defined as net cash provided by operating activities less purchases of property and equipment.

On January 8, 2018, the Company entered into a senior secured credit agreement to make available, at the Company's option, a loan in an aggregate principal amount not to exceed $107.7 million for the purpose of providing financing for up to 80% of the purchase price of the Company's new polar ice-class vessel. At the Company's election, the loan will bear interest either at a fixed interest rate effectively equal to 5.78% or a floating interest rate equal to three-month LIBOR plus a margin of 3.00% per annum.

On March 28, 2018, the Company refinanced its existing senior secured term loan and revolving credit facility. The new $200 million, seven-year, senior secured term loan facility bears interest at LIBOR plus 3.50%, with a potential step down to LIBOR plus 3.25% depending on the Company's credit rating. The new $45 million, five-year, revolving credit facility bears interest at LIBOR plus 3.00%. The pricing of the new term loan and revolving credit facility reflected a one percentage point rate reduction compared to the prior $175 million term loan facility and $45 million revolving credit facility. Additionally, the covenants in the new facility were modified to provide the Company with additional strategic and operational flexibility. The proceeds from the new term loan were utilized to pay down the Company's existing term loan with the remaining additional proceeds available for general corporate purposes.

LINDBLAD FLEET ACTIVITIES

The Company expanded its travel offerings in July 2017 with the launch of the National Geographic Quest, which sailed in Alaska and British Columbia during the summer before voyaging to Costa Rica and Panama for the winter season. The Company's second new-build coastal vessel, the National Geographic Venture, launched in the December 2018 and is operating in Baja during the winter season before heading to Alaska for the summer months.

The Company is currently building a polar ice class vessel, the National Geographic Endurance, for delivery in January 2020. This state-of-the art vessel will join the National Geographic Explorer and the National Geographic Orion as the third polar ice class vessels in the Lindblad National Geographic fleet, with the ability to voyage anywhere around the globe and specializing in polar travel. This new vessel will be capable of exploring deep into the Antarctic and Arctic waters and will be built with the Ulstein X-BOW® design, allowing for greater comfort and speed through rough waters.

Following year-end, the Company signed a second contract with Ulstein Verft to build a sister ship to the National Geographic Endurance for delivery in September 2021. This fourth polar ice class vessel will enable us to further capitalize on the growth in high quality adventure travel and broaden the immersive and authentic itineraries we offer to our guests.

STOCK AND WARRANT REPURCHASE PLAN

The Company currently has a $35.0 million stock and warrant repurchase plan in place which authorizes the Company to purchase from time to time the Company's outstanding stock and warrants through open market repurchases and/or in privately negotiated transactions based on market and business conditions, applicable legal requirements and other factors. During 2018, the Company repurchased 568,446 warrants and 9,030 shares of common stock under the plan for a total of $0.9 million. As of February 26, 2019 the Company had repurchased 6.0 million warrants and 866,701 shares of common stock under the plan and had $12.1 million remaining under the plan. As of February 22, 2019, there were 45.7 million shares of common stock and 10.1 million warrants outstanding.

FINANCIAL OUTLOOK

The Company's current expectations for the full year 2019 are as follows:

    --  Tour revenues of $350 - $358 million (13 - 16% growth)
    --  Adjusted EBITDA of $67 - $70 million (22 - 28% growth)

As of February 26, 2019, Lindblad segment bookings for travel during 2019 have increased 10% as compared with bookings for 2018 as of the same date a year ago. Additionally, the Lindblad segment had 87% of full year 2019 projected guest ticket revenues on the books versus 89% of full year 2018 guest ticket revenue at the same time last year.

NON-GAAP FINANCIAL MEASURES

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

The presentation of non-GAAP financial information should not be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP. The definitions of non-GAAP financial measures along with a reconciliation of non-GAAP financial information to GAAP are included in the supplemental financial schedules beginning on page 9.

Conference Call Information

The Company has scheduled a conference call at 8:30 a.m. Eastern Time on February 28, 2018 to discuss the earnings of the Company. The conference call can be accessed by dialing (844) 378-6487 (United States), (855) 669-9657 (Canada) or (412) 542-4182 (outside the U.S.). A replay of the call will be available at the Company's investor relations website, http://investors.expeditions.com.

About Lindblad Expeditions Holdings, Inc.

Lindblad Expeditions Holdings, Inc. is an expedition travel company that focuses on ship-based voyages through its Lindblad Expeditions brand and on land-based travel through its subsidiary, Natural Habitat Adventures, an adventure travel and ecotourism company with a focus on responsible nature travel.

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

Natural Habitat partners with the World Wildlife Fund to offer and promote conservation and sustainable travel that directly protects nature. Natural Habitat's adventures include polar bear tours in Churchill, Canada, Alaskan grizzly bear adventures and African safaris.

Forward Looking Statements

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


                                                                                     
       
          LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES


                                                                                          
        
                Consolidated Balance Sheets


                                                                                       
        (In thousands, except share and per share data)




                                                                                                                                                  
              
             As of
                                                                                                                                                          December 31,


                                                                                                                                                     2018                         2017




     
                ASSETS



     Current Assets:



     Cash and cash equivalents                                                                                                                                  $
           113,396       $
      96,443



     Restricted cash and marketable securities                                                                                                                             8,755            7,057



     Marine operating supplies                                                                                                                                             5,165            5,045



     Inventories                                                                                                                                                           1,604            1,794



     Prepaid expenses and other current assets                                                                                                                            21,263           21,351




     Total current assets                                                                                                                                                150,183          131,690





     Property and equipment, net                                                                                                                                         285,979          250,952



     Goodwill                                                                                                                                                             22,105           22,105



     Intangibles, net                                                                                                                                                      7,975            9,554



     Other long-term assets                                                                                                                                                7,167           10,047




     Total assets                                                                                                                                               $
           473,409      $
      424,348






     
                LIABILITIES



     Current Liabilities:



     Unearned passenger revenues                                                                                                                                $
           123,489      $
      112,238



     Accounts payable and accrued expenses                                                                                                                                33,944           30,422



     Long-term debt - current                                                                                                                                              2,000            1,750




     Total current liabilities                                                                                                                                           159,433          144,410





     Long-term debt, less current portion                                                                                                                                188,089          164,186



     Deferred tax liabilities                                                                                                                                              2,787            2,444



     Other long-term liabilities                                                                                                                                             554              684




     Total liabilities                                                                                                                                                   350,863          311,724






     
                COMMITMENTS AND CONTINGENCIES





     
                REDEEMABLE NONCONTROLLING INTEREST                                                                                                                       6,502            6,302






     
                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;



     45,814,925 and 45,427,030 issued, 45,442,728 and 44,787,608 outstanding



     as of December 31, 2018 and December 31, 2017, respectively                                                                                                               5                5



     Additional paid-in capital                                                                                                                                           41,539           42,498



     Retained earnings                                                                                                                                                    75,171           63,819



     Accumulated other comprehensive income                                                                                                                                (671)




     Total stockholders' equity                                                                                                                                          116,044          106,322




     Total liabilities, stockholders' equity and redeemable noncontrolling interest                                                                             $
           473,409      $
      424,348


                                                                   
        
          LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES


                                                                     
        
                Consolidated Statements of Operations


                                                                      
        (In thousands, except share and per share data)




                                                                                                   For the three months ended                           For the years ended
                                                                                          December 31,                                     December 31,


                                                                                 2018                                           2017                    2018                            2017




     Tour revenues                                                                      $
              70,609                             $
          63,220                       $
         309,734    $
        266,504



     Cost of tours                                                                                  39,098                                     35,746                              153,743          135,526




     Gross profit                                                                                   31,511                                     27,474                              155,991          130,978






     Operating expenses:



     General and administrative                                                                     17,251                                     13,817                               62,898           60,529



     Selling and marketing                                                                          12,076                                     10,833                               46,987           42,354



     Depreciation and amortization                                                                   5,706                                      5,339                               20,768           17,351




     Total operating expenses                                                                       35,033                                     29,989                              130,653          120,234






     Operating (loss) income                                                                       (3,522)                                   (2,515)                              25,338           10,744






     Other expense:



     Interest expense, net                                                                         (2,817)                                   (2,544)                            (10,830)         (9,736)



     (Loss) gain on foreign currency                                                                 (745)                                        96                              (2,175)           1,144



     Other (expense) income                                                                           (45)                                       419                                (165)           (133)



     Gain on transfer of assets                                                                                                                                                                      454




     Total other expense                                                                           (3,607)                                   (2,029)                            (13,170)         (8,271)






     (Loss) income before income taxes                                                             (7,129)                                   (4,544)                              12,168            2,473



     Income tax (benefit) expense                                                                  (2,577)                                    10,475                                  616           10,002






     Net (loss) income                                                                             (4,552)                                  (15,019)                              11,552          (7,529)



     Net income attributable to noncontrolling interest                                                 92                                        983                                  200            1,132






     Net (loss) income available to common stockholders                                $
              (4,644)                          $
          (16,002)                       $
         11,352    $
        (8,661)






     Weighted average shares outstanding



     Basic                                                                                      45,442,728                                 44,725,667                           45,378,188       44,576,912



     Diluted                                                                                    45,442,728                                 44,725,667                           46,340,054       44,576,912





     Net (loss) income per share available to common stockholders



     Basic                                                                              $
              (0.10)                            $
          (0.36)                         $
         0.25     $
        (0.19)



     Diluted                                                                            $
              (0.10)                            $
          (0.36)                         $
         0.24     $
        (0.19)


                                                                                        
       
       LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES


                                                                                          
       
            Consolidated Statements of Cash Flows


                                                                                                 
              (In thousands)




                                                                                                                                                       For the years ended

                                                                                                                                          
              
         December 31,


                                                                                                                                                                      2018                  2017




     
                Cash Flows From Operating Activities



     Net income (loss)                                                                                                                                                     $
           11,552       $
           (7,529)



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



     Depreciation and amortization                                                                                                                                                  20,768                 17,351



     Amortization of National Geographic fee                                                                                                                                         2,907                  2,907



     Amortization of deferred financing costs and other, net                                                                                                                         1,909                  2,226



     Stock-based compensation                                                                                                                                                        4,405                 10,627



     Deferred income taxes                                                                                                                                                             343                  8,336



     Loss (gain) on foreign currency                                                                                                                                                 2,175                (1,144)



     Write-off of unamortized issuance costs related to debt refinancing                                                                                                               359



     Loss on write-off of assets                                                                                                                                                       129



     Changes in operating assets and liabilities



     Marine operating supplies and inventories                                                                                                                                          70                (1,036)



     Prepaid expenses and other current assets                                                                                                                                       (716)                   575



     Unearned passenger revenues                                                                                                                                                    11,134                 20,709



     Other long-term assets                                                                                                                                                          (698)                   136



     Other long-term liabilities                                                                                                                                                     (129)                     3



     Accounts payable and accrued expenses                                                                                                                                           2,149                  (243)




     Net cash provided by operating activities                                                                                                                                      56,357                 52,918




     
                Cash Flows From Investing Activities



     Purchases of property and equipment                                                                                                                                          (54,345)              (80,485)




     Net cash used in investing activities                                                                                                                                        (54,345)              (80,485)




     
                Cash Flows From Financing Activities



     Proceeds from long-term debt                                                                                                                                                  200,000



     Repayments of long-term debt                                                                                                                                                (171,625)               (1,750)



     Payment of deferred financing costs                                                                                                                                           (6,490)                 (418)



     Repurchase under stock-based compensation plans and related tax impacts                                                                                                       (4,510)               (5,034)



     Repurchase of warrants and common stock                                                                                                                                         (854)               (6,192)




     Net cash provided by (used in) financing activities                                                                                                                            16,521               (13,394)




     Effect of exchange rate changes on cash                                                                                                                                           118                     30




     Net increase (decrease) in cash, cash equivalents and restricted cash                                                                                                          18,651               (40,931)



     Cash, cash equivalents and restricted cash at beginning of period                                                                                                             103,500                144,431






     Cash, cash equivalents and restricted cash at end of period                                                                                                          $
           122,151       $
           103,500






     Supplemental disclosures of cash flow information:



     Cash paid during the period:



     Interest                                                                                                                                                              $
           13,391        $
           10,478



     Income taxes                                                                                                                                                             $
           522           $
           965



     Non-cash investing and financing activities:



     Additional paid-in capital exercise proceeds of option shares                                                                                                          $
           1,682         $
           1,682



     Additional paid-in capital exchange proceeds used for option shares                                                                                                  $
           (1,682)      $
           (1,682)


                                                                                           
              
               LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES


                                                                                                     
              
               Supplemental Financial Schedules


                                                                                                                    
              (In thousands)


                                                                                                                     
              (unaudited)





     
                Reconciliation of Net Income to Adjusted EBITDA



     
                Consolidated




                                                                                       For the three months ended                                                        For the years ended
                                                                                   December 31,
                                                                                                                                                                            December 31,



     (In thousands)                                                     2018                                                 2017                                                       2018                2017




     Net (loss) income                                                                $
              (4,552)                                                 $
              (15,019)                   $
        11,552        $
         (7,529)



     Interest expense, net                                                                          2,817                                                                 2,544                          10,830                 9,736



     Income tax (benefit) expense                                                                 (2,577)                                                               10,475                             616                10,002



     Depreciation and amortization                                                                  5,706                                                                 5,339                          20,768                17,351



     Loss (gain) on foreign currency                                                                  745                                                                  (96)                          2,175               (1,144)



     Gain on transfer of assets                                                                                                                                                                                              (454)



     Other expense (income), net                                                                       45                                                                 (419)                            165                   133



     Stock-based compensation                                                                       1,149                                                                 1,163                           4,405                10,627



     National Geographic fee amortization                                                             727                                                                   727                           2,907                 2,907



     Executive severance costs                                                                                                                                               9                              71                 1,409



     Reorganization costs                                                                              35                                                                   104                             360                   451



     Debt refinancing costs                                                                                                                                                                               997




     
                Adjusted EBITDA                                            $
            
                4,095                                        $
              
                4,828              $
       
          54,846  $
        
           43,489








     
                Reconciliation of Operating Income to Adjusted EBITDA



     
                Lindblad Segment




                                                                                       For the three months ended                                                        For the years ended
                                                                                   December 31,
                                                                                                                                                                            December 31,



     (In thousands)                                                     2018                                                 2017                                                       2018                2017




     Operating (loss) income                                                          $
              (6,957)                                                  $
              (5,093)                   $
        19,798          $
         7,292



     Depreciation and amortization                                                                  5,322                                                                 4,980                          19,277                15,969



     Stock-based compensation                                                                       1,149                                                                 1,163                           4,405                10,627



     National Geographic fee amortization                                                             727                                                                   727                           2,907                 2,907



     Executive severance costs                                                                                                                                               9                              71                 1,409



     Reorganization costs                                                                              35                                                                   104                             360                   451



     Debt refinancing costs                                                                                                                                                                               997




     
                Adjusted EBITDA                                              $
            
                276                                        $
              
                1,890              $
       
          47,815  $
        
           38,655








     
                Reconciliation of Operating Income to Adjusted EBITDA



     
                Natural Habitat Segment




                                                                                       For the three months ended                                                        For the years ended
                                                                                   December 31,
                                                                                                                                                                            December 31,



     (In thousands)                                                     2018                                                 2017                                                       2018                2017




     Operating income                                                                   $
              3,436                                                     $
              2,578                     $
        5,540          $
         3,452



     Depreciation and amortization                                                                    383                                                                   360                           1,491                 1,382




     
                Adjusted EBITDA                                            $
            
                3,819                                        $
              
                2,938               $
       
          7,031   $
        
           4,834


                                                  
              
                LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES


                                                            
              
                Supplemental Financial Schedules


                                                          
              (In thousands, except for Available Guest Nights,
                                                                    Gross Yield, Net Yield and guest metrics)


                                                                             
              (unaudited)







     
                Reconciliation of Free cash Flow to Net Cash Provided by Operating Activities




                                                                                                                               For the years ended
                                                                                                                     December 31,


                                                                                                             2018                                  2017




     Net cash provided by operating activities                                                                     $
              56,357                    $
        52,918



     Less: purchases of property and equipment                                                                               (54,345)                       (80,485)




     Free Cash Flow                                                                                                 $
              2,012                  $
        (27,567)



     
     Guest Metrics - Lindblad Segment




                                                           For the three months                          For the years ended
                                                                                            December 31,
                                         
            
                ended
                                                December 31,


                                           2018                                 2017                2018                         2017




     
     Available Guest Nights                      40,274                           44,428                                  200,849  186,719



     
     Guest Nights Sold                           36,584                           38,305                                  182,298  163,256



     
     Occupancy                                      91%                             86%                                     91%     87%





     
     Maximum Guests                               5,061                            5,078                                   25,449   22,805



     
     Number of Guests                             4,549                            4,382                                   23,102   20,140



     
     Voyages                                         61                               64                                      330      308



     
                Calculation of Gross Yield and Net Yield



     
                Lindblad Segment




                                                                               For the three months ended                     For the years ended
                                                                           December 31,                               December 31,



     (In thousands, except for Available Guest Nights, Gross and 2018                                    2017                                 2018                 2017


     Net Yield)




     Guest ticket revenues                                                     $
              46,141                  $
              43,609                    $
        220,841        $
         191,113



     Other tour revenues                                                                    5,676                               5,315                           25,493                25,702




     
                Tour Revenues                                                            51,817                              48,924                          246,334               216,815



     Less: Orion Insurance Proceeds                                                                                            (125)                                              (2,273)




     
                Adjusted Tour Revenues                                                   51,817                              48,799                          246,334               214,542



     Less: Commissions                                                                    (4,544)                            (4,045)                        (19,521)             (16,365)



     Less: Other tour expenses                                                            (4,153)                            (3,703)                        (17,106)             (14,325)




     
                Net Revenue                                         $
          
                43,120             $
      
                41,051              $
       
          209,707  $
       
           183,852




     Available Guest Nights                                                                40,274                              44,428                          200,849               186,719



     
                Gross Yield                                          $
          
                1,287              $
      
                1,098                $
       
          1,226    $
       
           1,149



     
                Net Yield                                                                 1,071                                 924                            1,044                   985


                                                                                 
         
                LINDBLAD EXPEDITIONS HOLDINGS, INC. AND SUBSIDIARIES


                                                                                      
              
                Supplemental Financial Schedules


                                                                                           
              (In thousands, except for Available
                                                                                   Guest Nights, Gross and Net Cruise Cost Per Avail. Guest Night
                                                                                                         and guest metrics)


                                                                                                       
              (unaudited)





              (In thousands, except for Available Guest Nights,                                      For the three months ended                                       For the years ended
    Gross and Net Cruise Cost per Available Guest Night)                                          December 31,                                                 December 31,


                                                                                   2018                                                       2017                                      2018                 2017




              Cost of tours                                                                           $
              29,004                                    $
              28,129                  $
          114,841      $
           105,044



              Plus: Selling and marketing                                                                         10,626                                                 9,799                           42,325                38,429



              Plus: General and administrative                                                                    13,822                                                11,110                           50,093                50,082




              
                Gross Cruise Cost                                                                      53,452                                                49,038                          207,259               193,555



              Less: Commission expense                                                                           (4,544)                                              (4,045)                        (19,521)             (16,365)



              Less: Other tour expenses                                                                          (4,153)                                              (3,703)                        (17,106)             (14,325)




              
                Net Cruise Cost                                                                        44,755                                                41,290                          170,632               162,865



              Less: Fuel expense                                                                                 (2,352)                                              (2,155)                         (9,228)              (7,013)




              
                Net Cruise Cost Excluding Fuel                                                         42,403                                                39,135                          161,404               155,852



              
                Non-GAAP Adjustments:



              Stock-based compensation                                                                           (1,149)                                              (1,163)                         (4,405)             (10,627)



              National Geographic fee amortization                                                                 (727)                                                (727)                         (2,907)              (2,907)



              Executive severance costs                                                                                                                                   (9)                            (71)              (1,409)



              Reorganization costs                                                                                  (35)                                                (104)                           (360)                (451)



              Debt refinancing costs                                                                                                                                                                    (997)



              
                Adjusted Net Cruise Cost Excluding Fuel                       $
              
                40,492                                $
     
                37,131              $
     
            152,664  $
     
             140,458




              
                Adjusted Net Cruise Cost                                      $
              
                42,844                                $
     
                39,286              $
     
            161,892  $
     
             147,471




              
                Available Guest Nights                                                                 40,274                                                44,428                          200,849               186,719



              Gross Cruise Cost per Available Guest Night                                              $
              1,327                                     $
              1,104                    $
          1,032        $
           1,037



              Net Cruise Cost per Available Guest Night                                                            1,111                                                   929                              850                   872



              Net Cruise Cost Excluding Fuel per Available Guest Night                                             1,053                                                   881                              804                   835



              Adjusted Net Cruise Cost Excluding Fuel per Available Guest Night                                    1,005                                                   836                              760                   752



              
                Adjusted Net Cruise Cost per Available Guest Night                                      1,064                                                   884                              806                   790

Operational and Financial Metrics

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

The following metrics apply to the Lindblad segment:

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

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

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

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

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

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

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

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

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

Net Yield represents Net Revenue divided by Available Guest Nights.

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

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

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

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SOURCE Lindblad Expeditions Holdings, Inc.