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Lindblad swings to higher than expected Q3 profit, sees Egypt cancellations

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Lindblad Expeditions Holdings swung to a higher than expected third quarter profit on record revenues and a 9% net yield increase though occupancy was flat at 81%.

Apart from 'heightened Egypt cancellations,' the company has 'not seen any real impact yet other than Egypt' due to geopolitical issues, according to CFO Craig Felenstein. He said the booking window continues to average about nine months.

Q3 net income improved by $14.3m

Net income was $4.5m, or 8 cents per share, higher than Wall Street's consensus expectation of 4 cents, and up from the year-ago loss of $9.8m, or 18 cents per share.

The $14.3m improvement was mainly due to the ramp-up in operations, partially offset by a $3.1m increase in interest expense for additional borrowings and higher rates and a $1.3m increase in stock-based compensation.

Revenues of $176m were up 22% from Q3 2022, and higher than Wall Street's $168m forecast. The increase was driven by a $25m improvement at the Lindblad segment and a $6.2m increase in the land experiences segment.

$1,110 net yield

Lindblad revenues rose $25m, to $108.8m, a 30% increase due to more guest nights and a 9% increase in net yield per available guest night to $1,110. This was driven by higher pricing and broader fleet utilization, while occupancy was in line with a year ago at 81%.

Why occupancy was flat

Addressing the occupancy, which remained below the pre-pandemic 90%-plus range, CEO Sven Lindblad said certain bucket-list destinations like Alaska and the Galápagos entice new customers, while more 'esoteric' destinations like Papua New Guinea and the Arctic are fed by repeat customers.

During the pandemic, the company wasn't generating new customers to eventually fuel demand for those more esoteric destinations, so 'inventory has been out of balance.'

In addition, before the war in Ukraine, new itineraries to the Russian Arctic on Lindblad's newly introduced polar-class expedition ships had 'flown off the shelves,' but then the company had to drop Russia. The substituted itineraries were ones that many Lindblad loyalists had already taken.

So Lindblad Expeditions is in the process of 'rebalancing itineraries' for 2024 and working on deployment for 2025, 'and by 2026, we should be back to a normal cadence again,' Sven Lindblad said.