PART 1: Performance Analysis
Lindblad Expeditions Holdings, Inc. resumed operations in June 2021, and since then, it has ramped up its operations. The Company owns and operates a fleet of ten expedition ships and operates five seasonal charter vessels under the Lindblad Expeditions brand. The Company provides expedition cruising and land-based adventure travel, fostering a spirit of exploration and discovery. In its 2022 Highlights, the Company provided immersive expeditions on all ten of its owned and operated vessels to Alaska, Antarctica, the Arctic, Baja California’s Sea of Cortez, British Columbia, the Galápagos Islands, Greenland, Iceland, Norway, the Pacific Northwest, and South America. During 2022, the Company launched the National Geographic Islander II for expeditions in the Galápagos Islands, replacing the National Geographic Islander. The Company enjoys a longstanding relationship with the National Geographic Society dating back to 2004, and this relationship includes co-selling, co-marketing, and branding arrangements.
The Company has a Land Experiences segment, adding new travelers to the Lindblad Company and adding significant revenue growth. The Company's Land Experiences segment provided over 2,000 adventures and trips to more than 16,000 guests during 2022. During the year, the Company acquired Off the Beaten Path, DuVine, and Classic Journeys under its Land Experiences segment, introducing many new travelers to the Lindblad Company.
During February 2022, the Company issued $360.0 million of 6.75% senior secured notes due 2027 and entered into a new $45.0 million revolving credit facility, which remains undrawn and matures February 2027. The Company used the proceeds from the notes to prepay in full all outstanding borrowings under its prior term loan, including the Main Street Expanded Loan Facility, and revolving credit facility, and paid all related premiums, terminating its existing credit agreement and commitments. During May and October 2022, the Company amended its senior secured credit agreements to extend the waiver of the net leverage ratio covenant through December 31, 2022, and to use an annualized EBITDA calculation in its net leverage ratio covenant for the periods from March 31, 2023, through September 30, 2023.
PART 2: Forward Looking Analysis
Industry experts predict the global adventure tourism market will continue to expand, especially as travel restrictions related to COVID-19 diminish. Lindblad Expeditions is well-positioned to benefit from this growth, given its unique offerings, high-quality experiences, and longstanding partnership with National Geographic. The Company’s focus on sustainable and eco-conscious expeditions is also likely to appeal to a growing number of tourists.
The Company expects to continue to resume operations in additional geographies throughout 2023 as travel restrictions are lifted. The Company's new ship, the National Geographic Islander II, is expected to significantly increase its capacity of Galápagos expeditions. The Company will continue to expand its Land Experiences segment, introducing many new travelers to the Lindblad Company and adding significant revenue growth.
The Company has a robust balance sheet to support its growth plans. It recently raised capital through a senior secured notes offering, and its revolving credit facility remains undrawn. It has a solid liquidity position with cash and cash equivalents of $42.8 million and a total unused borrowing capacity of $51.9 million. Furthermore, the Company has waived and amended its net leverage ratio covenant, indicating confidence in its ability to generate cash flow and repay debts.
In conclusion, Lindblad Expeditions Holdings, Inc. has a unique business model that positions it well for growth in the rapidly expanding adventure tourism market. The Company's focus on sustainable and eco-conscious expeditions, its longstanding partnership with National Geographic, and expansion into land-based experiences provides a diversified growth strategy. The Company's balance sheet is strong, and it has ample liquidity to support its growth plans. Overall, while the COVID-19 pandemic continues to present uncertainties, the Company's outlook is optimistic, and it remains well-positioned for long-term growth.