LIND - Earnings call transcript Q3 2017 | Lindblad Expeditions Holdings, Inc.

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Operator

Good morning and welcome to the Lindblad Expeditions Inc Third Quarter 2017 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions]. After today's presentation there will be an opportunity to ask questions. [Operator Instructions]. is event this note, being recorded. Please now Craig Felenstein, would like to to over conference the Chief turn I Financial Officer. Please go ahead.

Craig I. Felenstein

quarter Good on Lindblad's some and follow earnings Chief Executive Thank joining opening the Sven the comments operator. morning Sven our Founder thank is some results. and with you and our you call us today for will With will third then call. XXXX Officer. third I Lindblad, quarter details me on everyone for begin with

You find release the can latest our in website. Investor earnings our of Relations section

in undertake Before obligation factors results expectations. we known by suggested to forward-looking of to any that today estimates, periods or different may forecast guarantee actual accuracy be any company's that Those get these statements started, company's results include future subject other from the everyone are no and future let or cause and the to to future. me we performance may update any the forward-looking expectations performance the remind statements. unknown about risks, The cannot for expectations company and materially comments uncertainties and

the on SEC If please you statements, involved filings. see information in would forward-looking risks the like more company's

me reconciliation most And with may that comments non-GAAP In of the the release. earnings associated in over turn addition, let company's call and some our disclosures out directly financial other the financial of measures. measures reference to GAAP A the comparable are way, Sven. contained of

Sven-Olof Lindblad

bookings previously we year, EBITDA grow travel. generated thanks play public is short we opportunity add the to performance well July actually accessed growth last when time delivered level the and both delighted of unheard our reflection U.S. The National meet quarter of expedition on and our thesis comfort with the size. to same everybody see focusing time it markets ship, the firmly past the at we Craig we on ships out. of a to launched while guests the a XXXX gratifying XXXX beginning during the a personally Thanks the result and back growing over outside resulting of the great service of September am and our and In revenue basic this to we demonstrates strong on premise morning what's Geographic for strong I delivering as of joining Quest I out in and our we've experience for spent this appreciation our us. good demand guests. the the years labor was and of laid Quest and as fruits have capacity two to the the of over of on and loved is as in third front,

launch but and the up based strength, bookings was which in year traveler delay specifically. financial and discuss moment, the more sign the experience of builds. decades XXXX. better Bookings significant of cannibalization And are and the National strong. XXXX team importantly healthy made This to robust also over did ships for building very in outlook for existing U.S. up our a XXXX Geographic of to Venture the current Bookings factors future first XX% Quest National a of for factors, will the momentum we no for of new allows for be ship, a same sister quarter rudder. to Geographic ship a XXXX any short-term period and last a The XXXX. variety for lessons seeing full propeller the planned we're sustained in than the additional building Lindblad sustained learned Quest our of mentioned and versus informs demand seen prototype course we year Reservations travel of enthusiasm being for ship a delivery improvement brand during the while with most passenger the three Quest, for very we're all and expedition years XXXX speaks the caused and key of last Craig Quest grounding future remainder new of As plan about year, remained not level widespread on however, as envision later sophistication a ship -- over prototype XXXX. XX% indicators. very and for in for continue first overall are a bookings quarters a the the also a from seeing not and of relevant our company building damage the ship Geographic in at for ones National to indicators,

aspects to of As elected seek the have vessel. the to months two our ensure next both builds lay quality we we new by all to in some

to planned of XX essential marine blue vessel This years signing shipyards experience announced the of the into fully art to built and -- the intended will with explore specialize are to understood will Orion challenged in of additional contract join the in their contract that rough globe Norway the that cabin vessel and Antarctic polar and the for of the also in a which the travel with to our comfort devil vessels as the will and expand come. National options our and us the Explorer will details a greater voyage This to be The exploring water Ulstein ships for guests. all allowing state world's for build the this deep to for build waters waters. signing She ships remote ex-bow the morning now for our Ulstein have have places. are includes sophisticated the better up of by through morning and third well Arctic design, we Shipyard We around Geographic we the most ensuring ice with details. a further anywhere kind fleet team enable National announced in especially some is The two the in most the National capabilities Lindblad the Geographic ability the new fleet. clash Geographic will parties

very company multi-faceted of of relevant powerful. meaningfully ships and of to the of broadening market is the Depth excited unparalleled be I for it of takes inevitable and and we Lindblad National next by the to are can XXXX Geographic a focus, and evolution brand we We in expedition the that our number understanding extremely at deliver continue in the category. new this on value deep despite believe course capitalize to what and step the significant of slated collaboration continues of expeditions believe experience, beyond,

external forces not more XXXX it certainly of anticipated. with clearly its share had Looking be XXXX intensity today a factor is to albeit and of the that short-term needs

of although of up hurricanes, factors of directly has this in Department The the aggregate hit geographies of their While the in the Northwest been by life, our of further. to recent and to will with space. exacerbated Wild do these interest at constantly expeditions add diminishing have travel, guests Cuba and for Internally the resulted major and affected None capitalize some our the resilience the numerous that interests the ways time their comments importance that affected the they the across impact. a trust initial we're Pacific better Advisories made by we challenges in short-term State opportunities on of affect the fires however do also and based cancellations. have I they they have looking form some consistently not on Columbia in and at place significant individually River we some are markets. U.S. do administration forefront. certain momentum to navigate marvel growing

are strides results in direct reach, and making mail platforms marketing for significant Our efficiency both less example. with more

geographies proposition which consistently and concluded people looking articulate feelers and a data and untraditional exponentially help ways, the new Many in have those will relevant have detail. sophisticated of can own channels and field feelers it's closely have more at opportunities for We're new people have our improved value channel across -- exploring exercise both BXB our pretty understand ships brand results been use out charter improving and for audiences in new for as become the We much applied in developed and also value. we out is us that better research board. discovered our for

and are Some exceeding be We R&D can are to see years as we habitat a we growing but Natural expect convinced expectations. of our of approach competition. side acquisition those financially difficulty nothing the an to also willing be work relevant asset, always that light in asset. complex hard and will is initial continues we to make ahead which the our Without efforts valuable. both have geography continue the advance to do you and

attractive enterprise. to proactively are We marketing audience clearly to that ship have are more such our and to more clientele. opportunities trips are they now proven how traditional opportunities and acquisition based discovered discovering to that our committed their We're still more is however, other to offerings us based land and accretive the

aspect It is of is terms be know consistent focus. what continue they found believe traditional cruise to and growth in well have those in understand and So I finally our value business the the discussion. And different in our growth of this strategy intent team top of I the that felt both is the our as market. deserves this terms that niche of absolute yield. enthusiastic opportunity we of and investors. have speaking to to rest about spoken stay call to on better to last very I mentioned forthright have much in our

in and by in continue interest leader absolutely cruising this to to the best Craig. in are increasing space. a an to benefit We ever be position expedition

Craig I. Felenstein

Sven. Thanks

for the financial occupancy mentioned opportunity in combined has long-term material Sven when further and has unparalleled and public Lindblad Expeditions. to July went capacity growth. As XXXX for our to of distinguished experiences our started growth significant the pieces to track the fruition. degradation investment any us the The existing travel the growing laid delivering expedition The it of without in Quest enthusiasm expanding record expedition that in with launch Geographic out come for fleet deliver considerable demand National begun surrounding confidence the gives company

financial growth have to anticipated be to next deliver delivery of While little and ahead. shareholder create targets poised initial years due value are sustained a we of schedule in growth builds, two increasing new the the shifted the the timing

XXXX. at segment the contributed three nearly recent habitat, of quarter to generated the growth a XX% and natural XX% times the increase growth led a revenue to the XX% habitat. XX% in revenue growth delivered adjusted Lindblad the This and third EBITDA segment ago EBITDA the a ago in habitat growth $X.X by year at quarter natural quarter, year natural most of the with versus third in Turning adjusted increase a Lindblad that versus Lindblad third XX% in million quarter increase

to in Looking of Geographic of to quarter at cancellation across the and current on the increased also of the segments a and third cancellations revenues year. an a ago a from from capacity year due the a Quest, in to quarter yield over to the voyages quarter the we while occupancy $XXX,XXX did fueled to Geographic of Alaska, individually, in million growth insurance due a launch July nights is It from of repair National higher changes that increase launch National itinerary remained a increase the note highly XX.X while the for extent proceeds cancel delay was the the million, fleet increase reported National to despite included earlier available Orion a the current reflects impact year The the lesser four a ago. in booked XX% year primarily voyage important XX% also Orion ago the versus original segment date. net guest Quest Lindblad $XXXX delivery revenue due pricing quarter Geographic related of to The to the X% the of in the XX.X the stabilizer. this the by increase

year revenues, been we canceling XX% these from have have as the increased well insurance from estimate XX% as impact Lindblad tour just third the by Orion the a total would versus increased segment the company I that exclude you proceeds mentioned and voyages revenue quarter ago. the would If

quarter fourth the nights at anticipate we revenue Looking guest fourth growth quarter XXXX. increase available an significant do the versus in of from

due we in sale guests voyage levels as opened dispositioning be we While will launch do have capacity up these Antarctica fourth will a ahead current to decline as of October that the offset was Orion engine the QX the Portugal repairs year additional in quarter. and Orion dry The ago of voyage and occupancy year the in quarter the positioning the vessel by to normal versus the will the Chile a cancellation for anticipate to includes Transatlantic We below a EBITDA Quest in days this at slight fourth on QX travelled year result also dock ago. the a on a in always add to from trip season. in but of planned and revenue occupancy the to voyage

the executive depreciation These Geographic were shares million to a business, with X.X personal the operating base increased offset Sven's his the of retirement ago to the associated stock-based Quest, earlier to Lindblad million with of employee Geographic Endeavor. severance primarily expense. in year due cost side related compensation the this the segment year, Turning XX% to in National expenses of salary distribution associated mainly costs by and X.X National higher increases partially December

versus cost, were Quest, primarily in per year operating operating the costs XX% Excluding and land third itinerary year on a than of third operating of stock-based XX% cost ago the with total was quarter I cruise to from with Adjusted higher a growth Fuel XX% operating in XX% stable due compensation amortization, X.X% the to changes the nights adjusted expenses ago. the Quest. XXXX. from increase Overall revenue the revenue reflecting Geographic and quarter compared a were basis drove mostly year third segment costs X% net in increase Lindblad did the X.X% severance earlier. associated National costs cost and additional discussed above due prior some the higher quarter the EBITDA quarter night fuel depreciation

launch EBITDA for Lindblad the increased XX% the Excluding the versus in at company third the delayed year insurance the to ago. the and the a have cancellations proceeds voyage adjusted the would impact estimate the of due on from Orion and quarter Quest quarter segment XX% total we

versus XX.X the significant third Turning million a ago expense the driven X.X the or to a reported in year increased of this quarter X.X the attributable a operating but revenue the company bulk to delivered well from Lindblad million related guests. due the results, EBITDA million X.X the partially taxes. the income the as a in increased leverage Habitat Natural Habitat in to which was capitalized into offset increase segment, higher Natural million an $X.XX or builds X.X year revenues to lower million $X.XX share, this a X.X quarter versus the interest primarily interest of improved to of by by number also in year. operating new versus increased increase year as Total adjusted current of quarter an net ago share XX% growth fall third ago quarter income million

Free CAPEX, quarter September to sheet we opportunities. Looking extremely unrestricted invest a in an on at for spent of million ago. well XX balance included million period million increase which growth XX.X in was positioned months months, it. the free cash. ended our million We million first the remain future ended Including nine for was same the year XXth from a cash XXX XX.X nine of with the flow cash use XX.X only maintenance

year, warning Geographic following It the of seen an in to State launch we Department Cuba quarter that full Sea at Quest increase is the primarily October. first in year to the currently the expeditions contributed the in approximately and the in X additional revenue National year cancellations growth Lion a Looking the the charter XXXX, to has on segment the cancellations million same from pacing the Advisory Cuba. Orion our have voyage while point in additional ahead inventory ago important Lindblad despite note is of and from due current

for currently our time ago. XXX% projected are XX% same year in ticket of We ticket full-year XXXX revenue the full at revenue XXXX a the versus of year at

While XXXX and we the month this month to majority increased on versus bookings continue relate at reservations to XXXX. see XXXX, those of point

XXXX $XXX million for in $XXX company booking anticipate cancellations booking Cuba focused associated with not do on revenue we and we significant revenue XXXX, million total XXXX. trends now in current $X.X So between additional total EBITDA and EBITDA any also expect on $XX.X the Factoring impact million million these million $XX the and between remember estimated Lion, adjusted adjusted Quest. and Orion, the from Sea million. Please $XX include and cancellations the voyage forecasts and that revenue

provide quarter associated National [ph] are guidance will and primarily of scheduled in of and We purchase building original versus will the Quest. price our in year-end financial related expectations on operating Venture fourth the The a for call have changes the that note XXXX National please our to launch Geographic March now with Geographic earnings $XX million. but approximately XXXX to is

expedition additional that the guests. quality expeditions a delivery It mentioned a the XX U.S. delivery and and vessel a to This thereafter. was taking blue cost announced important vessel ideal to in time vessels; for contract. design this first of shift This ships state of the XXXX also the contract XX Sven the $XXX dates includes for the approximately on vessels the in total for million second Ulstein in the potential water new we to order fourth to up also vessel with months the option of in of measures have the immersive, we quarter for delivery ensure contract art signing Lindblad XXXX. for months two morning delivery has As most to to hedging appropriate after will deliver and result note the the Norway with the the accelerated to discussion is our for is initial scheduled have currently January build high

XXXX. fourth Venture were that for does water of financial for drivers XXXX impact might place you well XXXX will have. the Thanks time the The to morning XXXX are XXXX to quarter May early the track from in the annual projections back long-term dates be answer or from May laid delivery end on vessel out company your for in any for in this to blue and and that remain of shift the our we the While questions and growth firmly I Sven and objectives. happy meet to now XXXX

Operator

Instructions]. [Operator

Greg ahead. Please question first comes of The go Citi. from Badishkanian

Unidentified Analyst

Jessy this [ph] is actually Hi, Greg. for

cancellations if guidance X.X couple other million that where your range of this walk year from? a ones. kind you the through revenue of quarter, X had think from so million and million quick came full X.X reduce Did just of So, the you by us I you could impact

Craig I. Felenstein

So, three the say decrease separate really relates would items. to I

to The first relates certainly item Cuba.

We have bookings seen actually in State few the Department not have seen and cancellations. October a of coming new a whole lot we warning after in

So for come going was Cuba that is us expected. deliver venture it originally not we in but will are expected. a not return to be It kind as certainly we the profitable seeing revenue still originally in that of

bit which my have an low quarter from highly on expectations. impacting the little a in our is we other the other have in as EBITDA XXXX insurance, in around XXXX. then perspective certainly I The because shift is of that But falloff mentioned there some towards The fourth prepared bookings items. is item. remarks, as is are seen happen trends in the voyage, of that currently more that we are is of seen a those that reality the than margins And profitable those we of cancellations, not second such bulk items seeing options, items revenue revenue extensions, that

size and the bookings bookings it significant but of the the than remains of quality XXXX more in we're XXXX. the seeing in So

guidance current causing factors to So really three that the year. the those lower are are for us

Unidentified Analyst

then deceleration of I Okay, had the XX now. XX% said second, first XX you up about and the another think bookings thanks. think one I in in for the kind are And I XXXX the quarter from

and them So will everything with you just that go kind covered of pretty much just paint there? right

Craig I. Felenstein

the We did growth copy months where current applies is a that in we look of versus year throughout year-on-year towards throughout now half year-on-year bookings the reality the still are seen even also XXXX. examine XXXX. monthly in the last you bookings overall year, of not have growth significant the the the ago some seeing seeing a we year against but XXXX the But XXXX in Yeah, we're XXXX strength XXXX. at we for growth been have that when nice see that we entirety are only were versus bookings already we year of the some back and double-digit strong to

Unidentified Analyst

Thanks. great. Okay,

Operator

from Please question ahead. Kelly Capital. go next The is Imperial George of

George Kelly

be Hi, could thanks Back in from questions. clear for to actually, were taking included quarter they previous to guidance cancellations the were if guidance, my not? third the we and that just

Craig I. Felenstein

entity we reported Quest so was a included. EBITDA QX Correct, already million so the cancellations earnings known $X that when impact the to after was

little and that the XXXX of really of the I mentioned guidance down bit flow a bringing are the Cuba, relates As our items three for other bookings, revenue. to timing

George Kelly

are of and order you putting Okay, in magnitude? those

Craig I. Felenstein

I decline the would pretty than perspective dramatically they're same pretty it's other most the perspective. a other the say less bit that would the probably with maybe impacted all little not much has they're an equal applies the other revenue size. From low part very to say for margin. revenue a regards because But all all I that EBITDA from revenue really EBITDA two.

two items more wouldn't other other the revenue the change. have impacted than really EBITDA So

George Kelly

calls XXXX get was on booked. and to not too of your I conference but previous release XX% and think Okay, --

of change, smallest can can you understand you other help revenue the So just is if component that? help how me the explain the

Craig I. Felenstein

sure. Yeah,

average through windows is in So our what years, bookings so that we normal any as booking advance happens typically months. about our go far have nine been

for we you're as get of ton So current see continue a lot but vast the the year bookings a year end you majority the of what towards is the not seeing certain as come fruition get don't But the normal of of end the as to for is ultimately the towards year. cancellations you year. see do course but bookings cancellations following you

the it business. the bookings. end towards more is normal the It course fourth of of the see nothing part into third out is ordinary quarter to not of get you more you early when So but quarter are typically you seeing of the cancellations the than

some report going the August. any high -- So our is once typically it of see positives even point second the that see to quarter the percentage we revenue you'll some of given at ticket offset And because of any by we positive of year for end or by but in you're the offset year. already predominantly positions expecting today have. cancellations why the little year of debt bookings are the for that bit be negatives a That's remainder the we remainder will

George Kelly

Okay, Thank you. got you.

Operator

[Operator a next from of ahead. question Please Instructions]. The Greg is Sidoti. Pendy go

Greg Pendy

thanks Hi down. net -- question. my wondering guys, for the I wanted just yields, taking I on was just to I that think you broke

You of was growth fleet, said a some wondering an you that that just of in numbers that? a kind of net the was the much just change. vessel how year-over-year coming some itinerary on newer I just is -- can give from yield us perspective from

Craig I. Felenstein

you seeing net the factors. really when in you're look quarter few at yield Sure, the a additional

pricing The the year. across fleet first our do is have we entire for

whenever increase traditionally and opportunities we moment, so the we are Okay, look do any at we prices at our year-on-year. at fleet given what look

look opportunity, it vessels, than demand much the cost adjust Sometimes others. accordingly. we so more is at look we these We at and prices with the associated

increases. So really be the price will first

obviously the as with that's Quest we When so played doing The increase in of existing we change second by But Bird the of did certainly Quest Lion did talk itineraries these launch the a and there. bit made change some the then well. itineraries. to overall little yield the Sea on and we which a which our to increase able fleet, vessels little into launched some some overall terms Sven could on would be yield we of helped the Sea were certainly bit changes we

want little Alaska. you in about itineraries So a to Sven talk the bit in change the

Sven-Olof Lindblad

to Quest other launched didn't Well, too itineraries much good the we focus have in we estimation vessels idea. which is then to between with want the a vessels running because older head difference to the same the our obviously have when we head on

So to some we've some interestingly distinguish to which different potentially ideas we experimenting differentiate audiences. attracts enough us with been that come with up in different and so started also Alaska -- the allows programs, itineraries

So we Bird our the itineraries land shortened Alaska Sea some some and of on incorporated components.

a that, turned out very through very this being of than the the those so the have incorporating and land more equation. before And in very the of people very, because of more consequence you're as long-term was well some those idea, system were be And experimental, as received. to a profitable you getting are part good potential

that and certainly beyond. XXXX were and that's planned for So we about pleased very, very

Craig I. Felenstein

I a certainly that bit. should significant year has you factor well we year-on-year to on mentioned factor so gone is well. in up as third the were regards given as other the newer this of mention as retiring Endeavor Geographic yield the increase That it with vessel other One the yields net ago vessel National as the year the was not little a the you some into items play but did quarter that

Greg Pendy

Got it, that's helpful, thanks a lot.

Craig I. Felenstein

additional office. call I'm questions appreciate New you and time have a me Thanks. in if please York Okay, to answer anything thank that today. happy give taking you everybody for have. you We the us joining you the

Operator

now The presentation. Thank for conference has today's concluded. attending you

now may disconnect. You

Lindblad Expeditions (LIND) 7 Nov 172017 Q3 Earnings call transcript