Q1 2024 Lindblad Expeditions Holdings Inc Earnings Call

Operator: Good morning everyone and welcome to the Lindblad Expeditions 2024 first quarter financial results. My name is Angela, and I'll be coordinating your call today. During the presentation, you can register to ask a question by pressing star followed by one on your telephone keypad. If you change your mind, please press star followed by t. I will now hand you over to your host, Craig Felenstein, Chief Financial Officer, to begin. Please go ahead

Good morning, everyone and welcome to the Lindblad expeditions 'twenty 'twenty four first quarter financial results. My name is Angela and I'll be coordinating your call today. During the presentation. You can register to ask a question by pressing star followed by one on your telephone keypad, if you change your.

Mike Please press star followed by T O.

I will now hand, you over to your house, Craig sounds Fine Chief Financial Officer to begin. Please go ahead.

Craig: Thank you operator, good morning, everyone and thank you for joining us for Lindblad is 2024 first quarter earnings call.

Craig I. Felenstein: Thank you, operator. Good morning, everyone, and thank you for joining us for Lindblad's 2024 first quarter earnings call. With me on the call today is Sven Lindblad, Lindblad's founder and chief executive officer. Sven will begin with some opening comments, and then I will follow up with some details on our financial results, balance sheet, and current 2024 expectations before we open the call for Q&A. You can find our latest earnings release in the Investor Relations section of our website.

Craig: With me on the call today is steadily bled Lindblad is founder and Chief Executive Officer.

<unk> will begin with some opening comments and then I will follow with some details on our financial results balance sheet and current 2024 expectations before we open the call for Q&A you.

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

Craig I. Felenstein: Before we get started, let me remind everyone that the company's comments today may not be forward-looking data. Those expectations are subject to risks and uncertainties that may cause actual results and performance to be materially different from these expectations. The company cannot guarantee the accuracy of any forecast or estimates, and we undertake no obligation to update any such forward-looking statements. If you would like more information on the risks involved in forward-looking statements, please see the company's SEC filing.

Speaker Change: Before we get started let me remind everyone that the company's comments today may be forward looking statements those expectations are subject to risks and uncertainties that may cause actual results and performance to be materially different from these expectations. The company cannot guarantee the accuracy of any forecast or estimates.

Speaker Change: And we undertake no obligation to update any such forward looking statements. If you would like more information on the risks involved in forward looking statements. Please see the company's SEC filings.

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

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

Stephanie: Thank you Craig and good morning, and thank you all for joining us today.

Sven Lindblad: Thank you, Craig, and good morning, and thank you all for joining us today. If I sound a little odd periodically, I've been hit hard by allergies, so I might cough now and then.

Stephanie: If I sound, a little odd periodically I had been hit hard.

Stephanie: So I might cost now and then I'm sure that's true for many of you with all of the flowering trees around.

Sven Lindblad: I'm sure that's true for many of you with all of the flowering trees around. Lindblad's first quarter results set the stage for another year of double-digit growth and record results in 2024. Craig will provide additional color on our performance this past quarter, but before he does, let me take a few minutes to discuss some of the drivers of continued growth this year, as well as some of the steps we are taking to sustain that momentum in the years ahead.

Speaker Change: In any case.

Speaker Change: Linda its first quarter results set the stage for another year of double digit growth and record results in 2024.

Speaker Change: Greg will provide additional color on our performance this past quarter, but before he does let me take a few minutes to discuss some of the drivers of the continued growth this year as well as some of the steps we are taking to sustain that momentum in the years ahead.

Speaker Change: First and foremost the booking strength, we experienced throughout 2023 has continued into this year as more and more guests want to explore the remarkable destinations we visit.

Sven Lindblad: First and foremost, the booking strength we experienced throughout 2023 has continued into this year, as more and more guests want to explore the remarkable destinations we visit. The pull to connect authentically with nature and culture is continually growing, and there's no other company in this segment with our track record or with our commitment to providing authentic and immersive travel itineraries.

Speaker Change: The boat to connect authentically with nature and culture is continuously growing and there is no. Other company in this segment with our track record or with our commitment to providing authentic and immersive travel itineraries.

Speaker Change: Bookings this year to date for future travel were up 20% versus the same period in 2023, and we expanded our overall, India bookings growth to 4% ahead of where we were at the same point in 2023.

Sven Lindblad: Bookings this year to date for future travel were up 20% versus the same period in 2023, and we expanded our overall in-year bookings growth to 4% ahead of where we were at the same point in 2023. Now it's worth reminding that 2023 benefited from significant carryover business from cancellations during COVID. Excluding these carryover bookings, the reservations for 24 travel would be well over 20 percent of that year ago.

Speaker Change: Now it's worth reminding that 2023 benefited from significant carryover business from cancellations during COVID-19.

Speaker Change: Excluding excluding these carryover bookings the reservations for 2000 and for travel.

Speaker Change: Would be well over 20%.

Speaker Change: Of that a year ago.

Speaker Change: These carryover bookings were also one of the primary reasons for Occupancies below the first quarter a year ago, excluding carryover bookings the occupancy would have increased <unk>.

Sven Lindblad: These carryover bookings were also one of the primary reasons for occupancies below the first quarter a year ago. Excluding carryover bookings, the occupancy would have increased versus the first quarter of 2023. The majority of the carryover bookings were for 2023. We're early in the year.

Speaker Change: This is the first quarter of 2023 the.

Speaker Change: The majority of the carryover bookings for.

Speaker Change: 2023 were early in the year. So the impact of these guests on occupancy growth will diminish as the year progresses.

Sven Lindblad: So the impact of these guests on occupancy growth will diminish as the year progresses. Lastly, it is important to remember, as I discussed last quarter, that a key contributor to current occupancy levels is a two-year loss of generating new guests during COVID, drying up the pipeline of the key past guest constituents. This effect is diminishing by the day, and occupancies will move higher as the pipeline again fills. However, at the same time, there are a couple of external headwinds that we continue to deal with. The first is geopolitical events across the globe.

Speaker Change: Lastly, it is important to remember as I discussed last quarter that a key contributor to current occupancy levels is a two year loss of generating new guests during COVID-19 driving up the pipeline of the key past guests constituency. This effect is diminishing by the day and Occupancies will move higher.

Speaker Change: Again refills.

Speaker Change: At the same time, there are a couple of external headwinds that we continue to deal with the first is geopolitical.

Speaker Change: Events across the globe reality is that we've always they've always played a role ebbing and flowing through the years and we are currently dealing with two specific events that certainly depressed revenue and occupancy in the first quarter.

Sven Lindblad: The reality is that we've always, they've always played a role ebbing and flowing through the years. And we are currently dealing with two specific events that certainly depressed revenue and occupancy in the first quarter. The Israeli-Hamas war and events in Ecuador in early January both caused cancellations and short-term softening of future business.

Speaker Change: Israeli Hammas war and events in Ecuador in early January both caused cancellations in the short term softening in future business.

Sven Lindblad: These kinds of events can also affect costs. Fuel, for example, has increased significantly, hopefully temporarily, due to the instability in the Middle East. Periodic disruptions may have a distorting effect on quarters, but as we continue to scale our business, they will have less and less impact on overall results. The other headwind is the discounting taking place by our competition in the expedition space. As 2023 evolved into the summer and fall, we started seeing more and more dramatic price actions, sometimes even two-for-one offerings for prime seasons in places like Antarctica.

Speaker Change: These kinds of events can also affect costs fuel for example, Z increased significantly hopefully temporarily due to the instability in the middle East.

Speaker Change: Iodic disruptions may have a distorting effect on quarters, but as we continue to scale our business they will have less and less impact on overall results.

Speaker Change: The other headwind is the discounting taking place with our competition and the expedition space.

Speaker Change: As 2023 evolve the summer and fall, we started seeing more and more dramatic price actions, sometimes even two for one offerings for prime seasons in places like Antarctica.

Sven Lindblad: Clearly, the relationship of inventory and demand is out of balance for some of our peers as well as some desperation coming out of COVID. Rather than joining the fray, given the potential long-term ramifications to the value proposition we deliver, we have remained committed not to buy occupancy and maintain price integrity, which you can see with our net yield up slightly versus the first quarter of the year. There is little to no benefit in adding occupancy if yield decreases proportionately.

Speaker Change: Clearly the relationship with inventory and demand is out of balance for some of our peers as well as some desperation coming out of Covid.

Speaker Change: Rather than joining the fray given the potential long term ramifications to the value proposition we deliver we are.

Remain committed not to buy occupancy.

Speaker Change: And maintained price integrity, which you can see with our net yield up slightly versus a year versus the first quarter a year ago.

Speaker Change: There is little to no benefit in adding occupancy of yield decreases proportionately.

Sven Lindblad: So price integrity is key, is a key long-term metric, and essential to preserve even if occupancies move ahead a bit slower in the short term. Given the opportunity and experiential travel, our thesis is that brand is now and will become even more important than ever. That is why we are so excited about the recent extension and expansion of our brand partnership with National Geographic until 2040. With the power of both our brands, now combined with the distribution clout of Disney, we believe we can leverage our collective strengths to really take advantage of the increased demand while distinguishing ourselves from the competition.

Speaker Change: So price integrity is key is the key.

Speaker Change: Key long term metric that are essential to preserve even if occupancies move ahead, a bit slower in the short term.

Speaker Change: Given the opportunity in experiential travel.

Speaker Change: Our thesis is that brand is now and will become even more important than ever that.

Speaker Change: And that is why we are so excited about the recent extension and expansion of our brand partnership with National geographic until 2040.

Speaker Change: With the power of both of our brands now combined with the distribution cloud with Disney We believe we can leverage our collective strengths to really take advantage of the increased demand while distinguishing ourselves from competition.

Sven Lindblad: We just came off a five-day off-site on one of our expedition ships with high-level participation from all three entities. The purpose was to build understanding and to surface meaningful ideas that will propel us all into the future, with its core theme being the power of three.

We just came off of a five day outside on one of our expedition ships with high level of participation from all three entities.

Speaker Change: The purpose was to build understanding and to surface meaningful ideas that will propel us into the future.

Speaker Change: With a core theme being the power of three.

Speaker Change: This is just another step towards maximizing the opportunity ahead.

Sven Lindblad: This was just another step towards maximizing the opportunity ahead. Since the day the new agreement was signed in November, our team, along with their marketing and sales teams, have deepened into strategy and tactical plans on a regular basis to energize collective goals and build specific initiatives to drive business. Collaboratively, we have made significant progress, including a new brand strategy that incorporates a new co-branded logo with National Geographic, which we will begin rolling out later this year.

Speaker Change: Since the date of the New agreement was signed in November our team along with their marketing and sales teams have deepened into strategy and tactical plans on a regular basis to energize collective goals and build specific initiatives to drive business.

Speaker Change: Collaboratively, we have made significant progress, including a new brand strategy that incorporates a new co branded logo with national geographic, which we will begin rolling out later this year.

Sven Lindblad: The brand changes are subtle, but they more fully harness the National Geographic brand to capitalize on one of the world's largest social media followings and their extremely high awareness, trust, and credibility. As we focus on maximizing the brand opportunity, we are also updating our website on both National Geographic Expeditions and Expeditions.com domains to create a seamless, unified booking experience. Last summer, we launched a completely redesigned online booking flow on the Expeditions.com website and have since seen a near doubling of the percentage of our direct bookings made online. We're now actively working on the development needed to enable all those same digital features on the National Geographic Expeditions website, and we'll launch those enhancements later this year.

Speaker Change: The brand changes are subtle, but more fully harnessed the national geographic brand to capitalize on one of the world's largest social media followings and Theyre extremely high awareness trust and credibility.

Speaker Change: As we focus on maximizing the brand opportunity. We are also updating our website on both national geographic expeditions.

Speaker Change: And expeditions dot com domains to create a seamless unified booking experience.

Speaker Change: Last summer, we launched a completely redesigned online online booking flow on the expeditions dot com website and have since seen that.

Speaker Change: The percentage of our direct bookings made online.

We're now actively working on the development needed to enable all of those same digital features.

Speaker Change: National Geographic expeditions website, and we will launch those enhancements later in this year.

Sven Lindblad: A key component of the new arrangement is the ability to leverage the powerful Disney sales network. Our teams are focused and energized on developing coordinated sales strategies, B2B marketing tactics, and events, and activating high-potential Disney distribution channels. The expanded license agreement also gives us the ability to sell globally. Our consumer and trade sales efforts will launch in our first new market by the end of the summer, and more will follow based on market opportunities.

Speaker Change: A key component of the new arrangement is the ability to leverage the powerful Disney sales network.

Speaker Change: Our teams are focused and energized on developing coordinated sales strategies, <unk> marketing tactics and events and activating high potential Disney distribution channels. The expanded license agreement also gives us the ability to sell globally.

Speaker Change: Our consumer and trade sales efforts will launch in the first.

Speaker Change: And our first new market by the end of the summer and more will follow based on market opportunity.

Speaker Change: While we continue to lay these foundational blocks, we're already leveraging leveraging the power of Disney's synergies machine.

Sven Lindblad: While we continue to lay these foundational blocks, we're already leveraging the power of Disney's Synergy Machine to execute high visibility on brand activations today. Over the course of the last few months, Disney has leaned on their marketing engine to place the co-brand on some of their most valuable, visible media assets, including the Wheel of Fortune, Good Morning America, Disney+, National Geographic, and even on the homepage of Disney.com to celebrate Earth Month

Speaker Change: To execute high visibility and brand Activations today.

Speaker Change: Over the course of the last few months Disney has leaned on their marketing engine to place the co branded some of their most valuable visible media assets, including the wheel of Fortune. Good morning America, Disney plus national geographic and even on the homepage of the Disney Dot Com to celebrate Earth model.

Speaker Change: Bookings in the year for travel in 2024 are up 35% versus 2023, and the Disney and National geographic marketing efforts contribute to that has contributed to that result.

Sven Lindblad: Bookings in the year for travel in 2024 are up 35% versus 2023, and the Disney and National Geographic marketing efforts have contributed to that result. These are just a few highlights where we're working together to create both top of funnel demand and lower funnel performance for years to come. We anticipate really benefiting from this new arrangement starting in 2025 as we reach more citizen explorers than ever before by opening larger addressable markets through new worldwide audiences.

Speaker Change: These are just a few highlights where we're working together to create both the top of funnel demand and lower funnel performance for years to come.

Speaker Change: We anticipate reading benefiting from this new arrangement starting in 2025.

Speaker Change: As we reach more citizens explores than ever before by opening larger addressable markets through new worldwide audiences.

Speaker Change: As we look to maximize the opportunity with national geographic and Disney we have become even more focused on itinerary development and innovating new ways reimbursed our guests in parts of the world. We have been busy for years, we have made some major changes for this year and into the future balancing our inventory to accommodate both past and new guess.

Sven Lindblad: As we look to maximize the opportunity with National Geographic and Disney, we have become even more focused on itinerary development and innovating the ways we immerse our guests in parts of the world we have been visiting for years. We have made some major changes for this year and into the future, balancing our inventory to accommodate both past and new guests. Two of the most significant are a focus on Iceland, which attracts a greater number of new guests, and new itineraries in Antarctica that provide flights either one way or both ways from South America to the continent, avoiding either one or both crossings of the Drake Passage and allowing people with less available time to participate.

Speaker Change: Yes.

Speaker Change: Two of the most significant for our focus on Iceland, which attracts a greater level of new guests and new itineraries and that dark together provide flights either one way or both ways from South America to the continent, avoiding either one or both crossing the Drake passage and allowing people with less available time to participate.

Speaker Change: These programs are in November from November 2004 through February 25 sold out faster than anything we have ever ever offered and.

Sven Lindblad: These programs from November 24th through February 25th sold out faster than anything we have ever, ever offered, and for the 25-26 season, we will add another ship, the National Geographic Orion, fully dedicated to this approach, allowing us to connect with more travelers who wouldn't have considered this type of expedition before. This also speaks to our ability to be nimble with regard to our product offering.

Speaker Change: And for the $25 26 season, we will add another ship the national geographic Orion fully dedicated to this approach, allowing us to connect with more travelers who wouldn't have considered this type of an expedition before.

Speaker Change: This also speaks to our ability to be nimble with regard to our product offerings.

Speaker Change: As we focus on driving higher returns across the fleet. We also continue to broaden and deepen our land based portfolio with this morning's announcement of our signing a deal to acquire why Wildland Thompson Adventures, which includes respected Tanzania Safari specialist Thompson safaris with more than 40 years.

Sven Lindblad: As we focus on driving higher returns across the fleet, we also continue to broaden and deepen our land-based portfolio with this morning's announcement of our signing a deal to acquire Wineland Thompson Adventures, which includes respected Tanzania safari specialist, Thompson Safaris, with more than 40 years of experience in the country. Their portfolio also includes the historic award-winning Gibbs Farm Lodge and 80 Acre Sanctuary, which was my favorite lodge when I was a guide in East Africa.

Speaker Change: <unk> experience in the country.

Speaker Change: The portfolio also includes the Historic award winning gifts farm Lodge, an 80 acre sanctuary that was my favorite Raj when I was a guide in East Africa.

Speaker Change: Tanzania is one of the finest places now figure for wildlife viewing, including Fame National parks like the Serengeti and in Golar and Golar crater.

Sven Lindblad: Tanzania is one of the finest places in Africa for wildlife viewing, including famed national parks like the Serengeti and Ngorongoro Crater, and African safaris have exploded in recent years, as evidenced by the growth of natural habitats in the region.

Speaker Change: And African suppliers have been have exploded in recent years as evidenced by natural habitats growth in the region.

Sven Lindblad: Similar to the acquisitions of natural habitat, divine cycling, off the beaten path, and classic journeys, Lindblad will leverage its experience and resources to further accelerate the growth of the Wineland Thompson brands and capitalize on the growing demand for authentic and immersive adventure travel and safari. We do need regulatory approval in Tanzania and expect the transaction to close early in the second half of 2024. Once it does, Weinlein Thompson Adventures will create additional value for our guests and for our shareholders.

Speaker Change: Similar to the acquisitions of natural habitat design cycling off the beaten path classic journeys lindblad will leverage its experience and resources to further accelerate the growth of the wine Thompson brands and capitalized.

Speaker Change: On the growing demand for authentic and immersive adventure travel and safaris.

Speaker Change: We do need regulatory approval in Tanzania unexpected transaction to close early in the second half of 2024.

Speaker Change: Once it does wildland Thompson adventures will create additional value for our guests and for our shareholders.

Sven Lindblad: Before I finish up, I would be remiss not to mention this is Craig's last earnings call with us. He has been our valued CFO for seven and a half years and has been a true partner to me, the board, and the entire organization. We will miss him a great deal and wish him well in his new, non-competitive opportunity. We are working on the transition and expect to have news on this front before Craig leaves at the end of the month. Many thanks for your time, for the last time, Craig, and now I will turn the call back over to you. Thanks.

Speaker Change: Before I finish up I would be remiss not to mention this is craig's last earnings call with US is been our valued CFO for seven and a half years and it's been a true partner to me the board and the entire organization we.

Speaker Change: We will miss him a great deal and wish him well on his new noncompetitive opportunity.

Speaker Change: We are working on the transition and expect to have news on this front before Craig leaves at the end of the months.

Speaker Change: Many thanks for your time.

Speaker Change: For the last time, Craig and now I will turn the call back over to you.

Craig I. Felenstein: Thanks, Sven, and thanks so much for those kind words. Lindblad's first quarter performance has the company well-positioned to deliver another year of record financial results as it further ramps up ship operations with broader deployment of its expanded fleet and continued expansion of its diversified portfolio of land businesses. The year-on-year results are expected to ramp throughout the year as the company leverages the investments it has made in overall infrastructure and marketing and sales capabilities to capitalize on the strong demand for experiential travel.

Craig: And thanks, so much for those kind words.

Craig: <unk> first quarter performance has the company well positioned to deliver another year of record financial results as it further ramps chip operations with broader deployment of its expanded fleet and continued expansion of its diversified portfolio of land businesses.

Craig: The year on year results are expected to ramp throughout the year as the company Leverages the investments made in overall infrastructure and marketing and sales capabilities to capitalize on the strong demand for experiential travel.

Craig I. Felenstein: Turning to the first quarter, total company revenue of $154 million increased $10 million, or 7%, versus the first quarter of 2023, as we continue to offer additional trips across both the Lindblad and Land Experience segments. At the Lindblad segment, revenue of $118.3 million increased $2.8 million, or 2% versus the first quarter a year ago, led by a 3% increase in available guest nights from broader utilization of the fleet and from 1% net yield growth to $1,219 per available guest night, primarily due to higher pricing and increased other revenue, partially offset by a decrease in occupancy to 76% from 81% in the first quarter a year ago The first quarter did include the impact of softness in the Middle East due to recent worldwide events and also included the cancellation of two voyages to the Galapagos Islands, as we discussed last quarter.

Craig: Turning to the first quarter total company revenue of $154 million increased $10 million or 7% versus the first quarter of 2023 as we continue to offer additional trips across both the lindblad and land experience segments.

Craig: At the Lindblad segment revenue of $118 3 million increased $2 8 million or 2% versus the first quarter a year ago led by a 3% increase in available guest nights from broader utilization of the fleet and 1% net yield growth to 1219 per available guest night, primarily.

Craig: Due to higher pricing and increased other revenue, partially offset by a decrease in occupancy to 76% from 81% in the first quarter a year ago.

Craig: The first quarter did include the impact of softness in the middle East due to recent worldwide events and also included the cancellation of two voyages in the Galapagos as we discussed last quarter.

Craig I. Felenstein: As occupancy ramps up, there will be significant operating leverage inherent in the marine platform as the company attracts more and more guests while maintaining strong pricing discipline across the expanded fleet. At the land experiences segment, revenue of $35.3 million increased to $7.4 million, or 27% versus a year ago, led by additional guests and higher pricing across natural habitats trips to Africa and to the Northern Lights, divine cycling tours across Latin America and Portugal, classic journeys, walking tours in Cuba and Costa Rica, and off the beaten path trips to U.S. National Parks.

Craig: As occupancy ramps there will be significant operating leverage inherent in the marine platform as the company attracts more and more guests, while maintaining strong pricing discipline across the expanded fleet.

Craig: At the land experiences segment revenue of $35 3 million increased $7 4 million or 27% versus a year ago led by additional guests and higher pricing across natural habitats trips to Africa, and the northern lights, Dubai cycling towards across Latin America, and Portugal Classic journeys walk.

Tours in Cuba in Costa Rica, and off the beaten path trips to use national parks.

Craig I. Felenstein: Total company revenue growth was more than offset by higher operating costs in the quarter, with adjusted EBITDA of $21.6 million, down $5.6 million versus the same period a year ago. Looking a little closer at the cost side of the business, operating expenses before depreciation and amortization, interest, and taxes increased $15.8 million, or 14%, versus the first quarter of 2023, led by a $7.3 million, or 10%, increase in the cost of tours versus a year ago.

Craig: Total company revenue growth was more than offset by higher operating costs in the quarter with adjusted EBITDA of $21 6 million down $5 6 million versus the same period a year ago.

Craig: Looking a little closer at the cost side of the business operating expenses before depreciation and amortization interest and taxes increased $15 8 million or 14% versus the first quarter of 2023 led.

Led by a $7 3 million or 10% increase in cost of tours versus a year ago. This was primarily related to operating additional ship and land based itineraries.

Craig I. Felenstein: This was primarily related to operating additional ship and land-based itineraries. The cost of tours also reflects expenses associated with the other revenue, the impact of foreign currency on operating expenses, and higher fuel costs due to increased usage from operating additional trips and higher pricing versus a year ago. Fuel costs were 6% of revenue in the first quarter of 2024, which was in line with the first quarter a year ago. However, fuel prices have continued to rise and are anticipated to be a bit of a headwind for the remainder of the year. But overall, fuel remains a relatively small component of our operating costs.

Craig: The cost of towards increase also reflects expenses associated with the other revenue the impact of foreign currency on operating expenses and higher fuel costs due to increased usage from operating additional treatments and higher pricing versus a year ago.

Craig: Fuel costs were 6% of revenue in the first quarter of 2024, which was in line with the first quarter a year ago fuel prices have continued to rise and are anticipated to be a bit of a headwind for the remainder of the year, but overall fuel remains a relatively small component of our operating costs.

Craig I. Felenstein: Sales and marketing costs increased $2.1 million, or 10% versus a year ago, primarily due to increased royalties associated with the expanded National Geographic Agreement and additional marketing spend to drive future bookings. G&A expense during the quarter increased $6.4 million, or 27% versus a year ago, excluding stock-based compensation and one-time items, primarily due to higher personnel costs associated with the expanded operations as well as from increased credit card commissions related to final payments for upcoming itineraries and higher deposits on new reservations for future travel. It's important to remember that credit card commissions are paid on cash received, with the expense recognized today and the trip revenue not recognized until the guest travels.

Craig: Sales and marketing costs increased $2 1 million or 10% versus a year ago, primarily due to increased royalties associated with the expanded national geographic agreement and additional marketing spend to drive future bookings.

Craig: G&A expense during the quarter increased $6 4 million or 27% versus a year ago, excluding stock based compensation of one time items, primarily due to higher personnel costs associated with the expanded operations as well as from increased credit card commissions related to final payments for upcoming itineraries and higher deposits.

Craig: On new reservations for future travel.

Craig: It's important to remember that the credit card commissions are paid upon cash receipts with the expense recognized today and the trip revenue not recognized until the guest travels with bookings up meaningfully in the first quarter versus the same period a year ago. The expense impact is significantly higher year on year with the revenue growth to be delivered in the periods ahead.

Craig I. Felenstein: With bookings up meaningfully in the first quarter versus the same period a year ago, the expense impact is significantly higher year on year, with revenue growth to be delivered in the periods ahead. The increased operating expenses resulted in a total company net loss available to stockholders of $5.1 million, or $0.10 per diluted share, versus $0.4 million, or $0.01 per diluted share, reported in the first quarter a year ago. The current quarter also included additional interest expense of $1.1 million, net associated with higher rates and increased borrowings related to our debt refinancing in May 2023, as well as lower tax expense of $1.3 million and a $0.8 million decline in stock-based guidance.

Craig: The increased operating expenses resulted in total company net loss available to stockholders of $5 1 million or <unk> 10 per diluted share versus <unk> 4 million or <unk> <unk> per diluted share reported in the first quarter a year ago.

Craig: The current quarter also included additional interest expense of $1 1 million net associated with higher rates and increased borrowings related to our debt refinancing in may 2023, as well as lower tax expense of $1 3 million and $8 $8 million decline in stock based compensation.

Craig I. Felenstein: Turning to the balance sheet, we ended the first quarter with $224 million in cash, an increase of $37 million versus the end of 2023. The growth was driven by free cash flow of $37 million, with operating cash flow of $44 million, primarily due to increased cash received for future travel, partially offset by $6 million of CapEx, mostly due to maintenance CapEx, and some additional spending on our digital initiatives. Please note that after the quarter, the company did acquire an additional 10% of natural habitat and an additional 5% of divine cycling for $16.7 million in aggregate, and now owns 90% and 75% of these growing businesses, respectively. Moving forward, the company anticipates using approximately $24 million in cash in the acquisition of Weinman Thompson that was announced this morning, with the transaction expected to close during the third quarter.

Craig: Turning to the balance sheet, we ended the first quarter with $224 million in cash an increase of $37 million versus the end of 2023 the growth was driven.

Craig: Driven by free cash flow of 37 million with operating cash flow of $44 million, primarily due to increased cash received for future travel, partially offset by $6 million of capex, mostly due to maintenance capex and some additional spending on our digital initiatives.

Craig: Please note that after the quarter the company did acquire an additional 10% of natural habitat and an additional 5% of demand cycling for $16 7 million in aggregate and now owns 90% and 75% of these growing businesses respectively.

Craig: Moving forward the company anticipates using approximately $24 million in cash in the acquisition of Wildland Thompson that was announced this morning with the transaction expected to close during the third quarter.

Craig I. Felenstein: The company will continue to explore additional growth opportunities in the year ahead, including further diversifying its product portfolio or opportunistically expanding its fleet to capitalize on the continued growth in demand for experiential travel. Turning to the full year 2024, the company continues to anticipate significant growth driven by higher guest counts and increased net yield across the fleet, as well as additional travel across the growing land business. The Lindblad segment is in a strong booking position for the current year, having already booked over 94% of its full-year projected ticket revenues for 2024.

Craig: The company will continue to explore additional growth opportunities in the years year ahead, including further diversifying its product portfolio or opportunistically expanding its fleet to capitalize on the continued growth in demand for experiential travel.

Craig: Turning to the full year 2024, the company continues to anticipate significant growth driven by higher guest counts and increased net yield across the fleet as well as additional additional trials across the growing land businesses. The Lindblad segment is in a strong booking position for the current year, having already booked over 94% of the Lindblad segment full year.

Craig: Projected ticket revenues for 2024.

Craig I. Felenstein: Given the strong booking trends, the company still expects tour revenue in 2024 between $610 and $630 million and adjusted EBITDA between $88 and $98 million. Due to the uncertainty regarding the timing of closing the acquisition of Wineland-Thompson Adventures, there are minimal contributions included in our expectations for this year. Please note that, as we mentioned last quarter, our second quarter results will be impacted slightly by two voice cancellations on the Explorer as we decided to transit around the Red Sea.

Craig: Given the strong booking trends the company still expects tour revenue in 2024 between $610 $630 million and adjusted EBITDA between 88% $98 million.

Craig: Due to the uncertainty regarding the timing of closing the acquisition of Wilen Thompson Adventures Theres minimal contributions included our expectations for this year.

Craig: Please note that as we mentioned last quarter, our second quarter results will be impacted slightly by two boys cancellations on the explore as we decided to transit around the Red Sea.

Speaker Change: Before I finish I would like to take a quick moment to thank all the employees of lindblad, including Sterne and the leadership team in particular as well as the Lindblad board for their support over these past seven five years. It has been an honor and privilege to work for Lindblad expeditions and I know the company has a really bright future ahead as they take more and more guests to the <unk>.

Craig I. Felenstein: Before I finish, I would like to take a quick moment to thank all the employees of Lindblad, including Sven and the leadership team, in particular, as well as the Lindblad board for their support over these past seven and a half years. It has been an honor and a privilege to work for Lindblad Expeditions, and I know the company has a really bright future ahead as it takes more and more guests to the remarkable destinations they have been visiting for decades.

Speaker Change: <unk> destinations they have been visiting for decades and lastly, thank you to all of you in the investment community, who have supported the company and it will I have had the pleasure of interacting with and my time here I have really enjoyed sharing our business with you.

Craig I. Felenstein: And lastly, thank you to all of you in the investment community who have supported the company and who I have had the pleasure of interacting with in my time here. I have really enjoyed sharing our business with you. Thank you for your interest, and now Sven and I would be happy to answer any questions you may have.

Thank you for your interest and now spend and I would be happy to answer any questions you may have.

Speaker Change: Hum.

Speaker Change: Thank you very much Greg.

Operator: Thank you very much, Craig. Everyone, if you would like to ask a question, please press star followed by 1 on your telephone keypad now. If you change your mind, please press star followed by 2.

Speaker Change: Everyone. If you would like to ask a question. Please press star followed by one on your telephone keypad.

Speaker Change: You changed your mind, Please press star followed by <unk>.

Speaker Change: Comparing to ask a question. Please ensure your devices from Manta Luckily well.

Operator: When preparing to ask a question, please ensure your device is unmuted locally. We'll pause here briefly as the questions are at this time. We have the first question from Steve Wieczynski from Stiefel. Your line is open.

Well pause briefly ask the question over to Scott.

Speaker Change: We have the first question from Steve Wilson from Stifel. Your line is open.

Steven Moyer Wieczynski: Yeah, Hey, guys good morning.

Steven Moyer Wieczynski: Yeah, hey guys, good morning. First of all, congrats, Craig, on the new opportunity. You obviously will be missed at Lindblad, for sure.

Steven Moyer Wieczynski: First of all congrats Craig on the on the new opportunity.

Steven Moyer Wieczynski: You, obviously will be best fit.

Steven Moyer Wieczynski: For you know for sure so.

Steven Moyer Wieczynski: So, if we think about the rest of the year, it seems like the investment and the royalties that you guys are going to be paying out for this year under the revised Disney agreement might be a little bit more than we were expecting in terms of what we saw in the first quarter. So, just kind of wondering how we should think about costs associated with that investment for the next three quarters.

Steven Moyer Wieczynski: Yeah. Okay. So if we think about the rest if we think about the rest of the year it seems like the.

Steven Moyer Wieczynski: The investment and the royalties that you guys are going to be paying out for this year for the revised Disney agreement, but it might be a little bit more than we were expecting in terms of what we saw in the first quarter. So I'm just kind of wondering how we should think about cost associated with that investment for the next three quarters and then on top of that is the rate is the right thinking here that this year is all.

Steven Moyer Wieczynski: And then on top of that, is the right thinking here that this year is all about the investment in that new partnership, and then 2025 and beyond is really when you'll start to see the benefits from teaming up with Disney? And I think Sven mentioned that in his prepared remarks, but just want to make sure that's the way we should think about the next, call it 12 to 24 months.

Steven Moyer Wieczynski: The investment.

Steven Moyer Wieczynski: In that new partnership and in 2025 and beyond just really when youll start to see the benefits.

Steven Moyer Wieczynski: From teaming up with Disney and I think spend mentioned that in his prepared remarks, but just want to make sure that that's the way we should think about the next call. It 12 to 24 months.

Speaker Change: Sure. So let me, let me start with and thanks for your kind words, Steve I appreciate it.

Craig I. Felenstein: Sure. So, let me start with, and thanks for your kind words, Steve. I appreciate them.

Speaker Change: So let me start with the National geographic year on year payments. So as you know we are now with that agreement and pay a flat royalty fee throughout the course of the year a year ago, the payments to national geographic, obviously fluctuated depending on their individual performance because they're being paid a commission at the same time as well as the performance of the overall company.

Craig I. Felenstein: So, let me start with the National Geographic year-on-year payments. As you know, we are now, with that agreement, paying a flat royalty fee throughout the course of the year. A year ago, the payments to National Geographic obviously fluctuated depending on their individual performance because they were being paid a commission at the same time, as well as the performance of the overall company. So, the impact in every given quarter is going to fluctuate, and the impact in Q1, when you look at it year-on-year, will be greater than it will be in some of the other quarters later in this year.

Speaker Change: So the impact in every given quarter is going to fluctuate and the impact in Q1. When you look at it year on year will be greater than it will be in some of the other quarters later in this year.

Speaker Change: So that's kind of how the year on year growth in the National geographic payments will play out for the next nine months. When you look at the positive impact that theyre going to have incentive to add some additional color here.

Craig I. Felenstein: So, that's kind of how the year-on-year growth in the National Geographic payments will play out for the next nine months. When you look at the positive impact that they're going to have, and Sven could add some additional color here, given the booking window that we do have, which is still about nine months on average, you would anticipate the majority of the impact being in 2025 in earnest. Now, there have been, as Sven mentioned this year, some one-offs that have been done to take advantage of their Disney distribution power and the National Geographic distribution power, and we do believe that's contributing to some of the strong booking growth that we're seeing today, but the real value and the real significant value will take place in 2025 and beyond.

Speaker Change: Given the booking window that we do have which is about nine months still on average you would anticipate the majority of the impact being in 2025.

Speaker Change: Now there has been as I mentioned in this year. Some one offs that have been done to take advantage of that Disney distribution power International geographic distribution power and we do believe thats contributing to some of the strong booking growth that we're seeing today, but the real value in the real significant value will take place in 2025 and beyond.

Speaker Change: Yes, Steve I could add a couple of things so.

Speaker Change: If you think if you think about the.

Speaker Change: We signed our agreement with National Geographic in November.

Speaker Change: Last year and and.

Speaker Change: And prior to that Disney was really not a factor in the equation. It was we had.

Speaker Change: Since 2004, we had a relationship with national geographic.

Sven Lindblad: Yeah, Steve, I could add a couple of things. So, if you think about that we signed our agreement with National Geographic in November, right, last year. And prior to that, Disney was really not a factor in the equation. We had, you know, since 2004, we had a relationship with National Geographic, and whatever their machine was capable of providing, and it was actually significant. But now, you know, now that since November, we're adding Disney to the equation, and obviously their channels for distribution, in particular, and many of their ideas are incredible.

Speaker Change: And whatever their machine was capable.

Speaker Change: Providing and it is actually significant.

Speaker Change: But now for the.

Speaker Change: Now since November we're adding Disney to the equation and obviously their channels for distribution.

Speaker Change: Houston in particular.

Speaker Change: And many of their ideas are incredible I mean, this is the largest entertainment conglomerate in the world and so.

Speaker Change: We believe that there is going to be significant value as a consequence, but it is going to take a bit of time to ramp up because.

Speaker Change: They don't they don't make decisions as it relates to something next month for a few weeks from dollar and implement in that way, it's much more of a long term play.

Sven Lindblad: I mean, this is the largest entertainment conglomerate in the world, and so we believe that there is going to be significant value as a consequence, but it is going to take a bit of time to ramp up because, you know, they don't make decisions as it relates to something next month or a few weeks from now and implement them that way. It's much more of a long-term play, but we will start seeing results. We already have started seeing some results, but we will see, I think, significantly greater results starting in 2020.

Speaker Change: But we will start seeing we already have started seeing some results, but we will see I think significantly greater results starting in 2025.

Speaker Change: Thanks for that guys.

Speaker Change: Second question want to ask about the acquisition.

Speaker Change: There was announced this morning, and I guess my question really isn't about the acquisition, but yes.

Speaker Change: Around the use of capital for that acquisition and I guess, what I'm getting at is look I don't think we can ignore.

Steven Moyer Wieczynski: Thanks for that, guys. And then, second question, I want to ask about the acquisition that was announced this morning. And I guess my question really isn't about the acquisition, but around the use of capital for that acquisition. And I guess what I'm getting at is, look, I don't think we can ignore where the share price is today, and, in our opinion, to us, the underappreciated long-term opportunity here with Disney National Geographic

Speaker Change: The share prices today.

Speaker Change: And in our opinion.

Speaker Change: To us the underappreciated long term opportunity here with Disney National Geographic so.

Speaker Change: So to us the share price does seem undervalued here. So I guess the question is how do you balance doing acquisitions like this versus.

Speaker Change: Taking that 30 million, maybe not all of that $30 million.

Steven Moyer Wieczynski: So, to us, the share price does seem undervalued here. So I guess the question is, how do you balance doing acquisitions like this versus taking that $30 million, maybe not all that $30 million in terms of what you spent on the acquisition, and essentially looking at buying back shares at these levels? Hopefully, that makes sense.

Speaker Change: In terms of what you spent on the acquisition and essentially looking at buying back shares at.

Speaker Change: At these levels hopefully that makes sense.

Speaker Change: Yeah sure Thanks, Steve for the question.

Speaker Change: We always have.

Speaker Change: <unk>, what I would say is long term growth.

Speaker Change: And long term capital deployment, where we look at the opportunities in front of us for an asset and acquisition like why not get too specific opportunity is moving forward, but when you can buy it at a multiple that we acquired that asset which is significantly below.

Craig I. Felenstein: Yeah, sure. Thanks, Steve, for the question. You know, we always have balanced, what I would say, is long-term growth and long-term capital deployment. When we look at the opportunities in front of us for an asset, an acquisition like Wineland, I'm not getting too specific in what the opportunity is moving forward, but when you can buy it at the multiple that we acquired that asset at, which is significantly below where the multiple of our existing company is trading at, and you see some significant growth in that asset moving forward, especially when you layer in some of the expertise that we have at the Lindblad and National Habitat companies, as well as some of the resources we have to continue to invest in those assets, you weigh the opportunity versus the opportunity that you see investing in your own shares.

Speaker Change: Multiple of our existing company is trading at and <unk>.

Speaker Change: You see some significant growth in that asset moving forward, especially when you layer in some of the expertise that we have.

Speaker Change: The lindblad and natural habitat.

Speaker Change: Companies as well as some of the resources, we have to continue to invest in those assets.

Speaker Change: You weigh the opportunity versus the opportunity that you see investing in your own shares.

Speaker Change: As you know you can always help and identify when these assets become available they become available when they become available. So we are continuously weighing the future growth opportunity with an asset like this versus what we believe is obviously significant upside in our existing shares and as we move forward and we look to allocate capital moving forward, we will balance those things still.

Craig I. Felenstein: And as you know, you can't always help and identify when these assets become available; they become available when they become available. So, we are continuously weighing the future growth opportunity of an asset like this versus what we believe is obviously a significant upside in our existing shares. And as we move forward and we look to allocate capital moving forward, we will balance those things still between investing in our existing business, investing in M&A, or returning capital to shareholders, either through buying back stock or through reducing our debt load in some capacity.

Speaker Change: Between investing in our existing business investing in M&A or returning capital to shareholders either through buying back stock.

Speaker Change: Stock or through reducing our debt load in some capacity.

Speaker Change: Okay, great. Thanks, guys appreciate it.

Speaker Change: Thank you.

Speaker Change: The next question is from Eric Wold with B Riley Securities. Your line is open.

Eric Christian Wold: Thank you good morning.

Eric Christian Wold: Two questions from me I guess I guess the first one.

Steven Moyer Wieczynski: Okay, great. Thanks, guys. I appreciate it.

Eric Christian Wold: I know you reaffirmed the prior guidance range and it's only been a couple of months since the Q4 call. When you first gave that but was there anything with the costs.

Operator: Thank you. The next question is from Eric Wold with BRIT Securities. Your line is open.

Eric Christian Wold: Thank you. Good morning. Two questions for me. I guess the first one, yeah, I know that you reaffirmed the prior guidance ranges and it's only been, you know, a couple months since the Q4 call when you first gave that, but was there anything with the costs you saw in Q1 and maybe so far in April Q2 that were not fully anticipated when you gave that guidance that would kind of need to see some relief to maybe give you more comfort in a higher end of that range than the lower end?

Eric Christian Wold: In Q1, and maybe so far in April Q2.

Eric Christian Wold: That were not fully anticipated when you gave that guidance that would kind of need to see some relief maybe give you more comfort in the higher end of that range than the lower end.

Speaker Change: Nothing significant I think the biggest one is obviously fuel prices have continued to rise and that has created a bit of a headwind for us and that will continue to be the case.

Eric Christian Wold: Nothing significant. I mean, the biggest one is obviously fuel.

Craig I. Felenstein: Prices have continued to rise, and that has created a bit of a headwind for us, and that will continue to be the case. And then certainly when we look at, you know, some of the voyage cancellations that we've had, the impact of not only those voyage cancellations but also some of the, what I would say is, residual softness related to some of the instability around the world would have us experiencing, you know, a bit of a headwind on some of our guidance here.

Eric Christian Wold: Certainly when we look at some of the voyage cancellations that we've had the impact of not only those voyage cancellations, but also some of the what I would say is residual softness related to some of the.

Eric Christian Wold: Instability around the world would have us.

Eric Christian Wold: It's a bit of a headwind on some of our guidance here.

Eric Christian Wold: But we gave a range when we gave the range back in.

Eric Christian Wold: The first ore ended the fourth quarter, and we still feel comfortable that we'll be within that range here moving forward.

Craig I. Felenstein: But we gave a range when we gave the range back in, you know, the end of the first or end of the fourth quarter, and we still feel comfortable that we'll be within that range here moving forward. The biggest variables will certainly be continued revenue generation. As I said in my remarks, we're 94% of the way sold out with regard to our revenue expectations for the year at the Lindblad segment, but that last 6% does come at a very high margin, right? So it's imperative for us to fill the rest of that 6%, and if we do that, we should be able to get where we want to be from a full year perspective.

Eric Christian Wold: The biggest variables will certainly be the continued.

Eric Christian Wold: Revenue generation as I said in my remarks, we're 94% of the way sold out with regards to our.

Eric Christian Wold: Revenue expectations for the year at the Lindblad segment, but that last 6% does come at a very high margin right. So it's imperative on us to fill the rest of the 6% and if we do that we should be able to get.

Eric Christian Wold: Where we want to be from a full year perspective.

Speaker Change: Got it and then.

Speaker Change: The second question.

Speaker Change: We understand the decision to add a highly variable cost land based business.

Eric Christian Wold: I got it. And then, Second question, I don't understand why the decision to add a highly variable cost land-based business is different than the decision to add a new ship to the fleet. But you'll maybe update us on kind of where you are on the decision curve to add to the fleet and kind of what you really need to see to make that commitment, whether it's a used ship available out there with some of these competitors that may be struggling or committing to a multi-year build process.

Speaker Change: It's different than.

Speaker Change: The decision to add a new ship to the fleet, but maybe update us on kind of where you are on the decision curve to add to the fleet and kind of.

Speaker Change: What you really need to see to make that commitment whether it's you ship available out there with some of your competitors that may be struggling or committing to a kind of a multiyear build process.

Speaker Change: Yes.

Speaker Change: First about the land company.

Sven Lindblad: Yeah, first of all, the land company. Just one of the things that was particularly attractive about this most recent acquisition was that this is a company that's been in existence for 40 years and in a country which is probably the wealthiest country from the perspective of wildlife in all of Africa. And, you know, to get a footing in a country like Tanzania with somebody that has had that wealth of experience is really, really a meaningful opportunity and has tremendous opportunity to be developed further.

Speaker Change: <unk>.

Speaker Change: Just one of the things that was particularly attractive about this most recent acquisition.

Speaker Change: Was that this is this is a company that's been in existence for 40 years.

Speaker Change: In a country, which is probably the wealthiest country from the perspective of <unk>.

Speaker Change: Wildlife in all of Africa.

Speaker Change: To get our footing in a country like Tanzania with somebody that has had that wealth of experience.

Speaker Change: Is really really a meaningful opportunity.

Speaker Change: Has tremendous opportunity to be developed further.

Sven Lindblad: So, you know, for us so far, the whole concept of Latin businesses has been a sort of a counterbalance, if you will, with ships here that are largely fixed costs. Certain things happen, like COVID, and, you know, the dynamics of that are different, or the effect of that is different on ships than it is on land companies. But we are absolutely keen on growing our maritime business. Now, there are a couple of triggers that we need to, there are a couple of things that we need to see before we launch new opportunities.

Speaker Change: So for us so far the whole concept of Latin businesses.

Speaker Change: It's been a sort of a counter balance if you will.

Speaker Change: Ships here Thats it.

Speaker Change: Largely fixed costs certain things happen by Covid.

Speaker Change: And.

Speaker Change: Dynamics that are different or the effect of that is different on ships than it is on land company.

Speaker Change: But we are absolutely key in growing our maritime business. There are a couple of triggers that we need to.

Speaker Change: A couple of things that we need to see before we trigger new opportunities and one of them by the way is.

Sven Lindblad: And one of them, by the way, is an interesting question about building ships or acquiring ships. The business was largely built on acquiring ships, and then in recent years, on building ships. Our thesis is that there probably will be ships available in the future that were built and perhaps weren't as successful as the people who built them hoped they'd be. A polite way of putting it. And so we're really, really keeping our eyes out for companies that have ships that may become available. That's number one.

Speaker Change: There is an interesting question.

Speaker Change: About building ships are acquiring ships.

Speaker Change: The business was largely built on acquiring ships and than in recent years on building ships.

Speaker Change: Our thesis is that there probably will be available in the future.

Speaker Change: That were built and perhaps don't have the.

Speaker Change: That werent as successful as the people who build some hope they'd be maybe.

Speaker Change: Maybe a polite way of putting it.

Speaker Change: And so we're really really keeping our eyes on.

Speaker Change: Companies that have ships that may become available.

Speaker Change: No more than that.

Sven Lindblad: And what we want to make sure of is that we are doing as good a job as we did prior to the pandemic in filling the ships that we have, because the value of that is off the charts by comparison to any other form of investment. You know, making up the 10% differential, let's say, between where we are now and where we would like to be 10-12% is just massively valuable. And you don't want to add inventory and spread out your reach because you're adding your costs, and you're just spreading out your reach. That really isn't a smart thing to do.

Speaker Change: What we wanted to make sure of is that we are doing as good a job as we did prior to the pandemic and filling the ships that we have because the value of that is off the charts by comparison to any other form of investment so.

Speaker Change: Making up to 10% differential let's say.

Speaker Change: Where we are now and where we would like to be at 10% 12%.

Speaker Change: Is just massively valuable.

Speaker Change: You don't want to add inventory and spread out your reach.

Speaker Change: Youre, adding your costs and you're just spreading out your reach that really isn't the smart thing to do so.

Sven Lindblad: We have to feel that we're at the stage where, I mean, my goal is to feel that you can get 125% of the occupancy that you have, and the minute you think you're headed in that direction, you can begin to trigger new acquisitions.

Speaker Change: We have to feel that we're at the stage, where I mean my goal is to have to feel that you can get 125% of <unk>.

Speaker Change: Occupancy that you have and the minute you envision you're headed in that direction, you can begin to trigger new acquisitions.

Speaker Change: Got it thank you both.

Speaker Change: Thank you Eric Thank you.

Operator: The next question is from Chris Voronka with DP. Your line is open.

Speaker Change: The next question is from Chris well, Ron This DB your line is open.

Chris Voronka: Good morning, guys. And Craig, congrats on the new opportunity. All the best at the new place, and we'll miss you.

Chris: Hey, good morning, guys and Craig.

Chris: Grabbed some new opportunity all the best.

Ron: Your place and we'll Miss you.

Chris Voronka: Can we maybe talk a little bit about the comments you made earlier about the competitive environment? I guess the question would be, is the level of surprise greater about the kind of level of competition that's out there and some of the new entrants, or is it more about how they're handling their pricing strategies?

Ron: Can we maybe talk a little bit about that.

Chris: Comments, you made earlier about the competitive environment I guess the question would be.

Chris: Is the level of surprise greater on kind of the level of competition Thats out there and some of the new entrants or is it more about how they're handling their pricing strategies.

Chris: Yeah.

Chris: Yes.

Chris Voronka: Thanks.

Chris: Yes, I've said here I think it's a combination of both.

Sven Lindblad: Yeah, I'm sad to hear it. I think it's a combination of both. You know, somebody obviously got ahold of a spreadsheet at a certain point and said, wow, this business looks like it has tremendous potential. And because when you think about it, the explosion of entries in the last five years is just unprecedented. It's so, so, you know, so many more ships than were ever imagined in this segment. So it's unprecedented. So I think.

Chris: Somebody obviously, you've got a hold of a spreadsheet at a certain point and said Wow. This business looks like it has.

Chris: Tremendous potential.

Chris: Because when you think about it the explosion of entries in the last five years is just.

Chris: So so so many more ships them wherever imagined in this segment so it's unprecedented.

Speaker Change: I think.

Sven Lindblad: To be totally honest, I think what people have probably underestimated the complexity of expedition travel. You're going to remote areas, you have to understand geography, you have to have the right teams, or else you're going to get into trouble. You have to have good, deep relationships with the people in the institutions in those countries, etc., etc., etc. So it's actually quite complicated.

Chris: To be totally honest I think what people have probably done is underestimated.

Chris: The complexity of expedition travel.

Chris: Youre going to remote areas, you have to understand geography, right teams or else youre going to get into trouble you have to.

Chris: You have to have good deep relationships with the people and the institutions in those countries et cetera, et cetera et cetera. So it's actually quite complicated. The other thing is as I think people maybe have underrated the intelligence of the audience.

Sven Lindblad: The other thing is, I think people maybe have underrated the intelligence of the audience in certain instances because the audience is very sophisticated and does this kind of thing. And, you know, they care deeply about quality, what is the quality of the staff, what is the quality of the experience, how well thought out are the itineraries, etc., etc., etc. So, and then the brand, of course, as I mentioned earlier, is, I think, an important thing.

Chris: For instance, because the audience is very sophisticated.

Chris: That does this kind of thing.

Chris: <unk>.

Chris: They care deeply about quality what is the quality of the stock what is the quality of experience, how well thought out of the itineraries et cetera, et cetera et cetera. So.

Chris: So.

Chris: And then brand of course as I mentioned earlier is I think an important thing I mean, obviously our brand.

Sven Lindblad: I mean, obviously, our brand is very, very well known to a very, very small number of people. I mean, because when we started this business, expedition travel was not a big category. For people that have any interest in that category, and that includes the trade, we are very well-known in that regard. But obviously, National Geographic is a brand that everybody on the planet knows, and so the combination of the two creates something I think quite meaningful, or very, very meaningful, that helps those interested in expedition travel sort of migrate. I hope that answers your question.

Chris: Is is very very well known to a very very small number of people.

Chris: Because when we started this business expedition travel was not it was not a big big category.

Chris: But.

Chris: For people that are that have any interest in that category and that includes the trade.

Chris: We are very well known in that regard, but obviously national geographic is a brand that everybody on the planet knows and so the combination of the two.

Chris: Create something I think quite meaningful.

Chris: Very very meaningful.

Chris: <unk>.

Chris: That helps those interested in expedition travel sort of migrate nonfiction.

Chris: Okay.

Chris: Question.

Speaker Change: Yeah, Yeah, great. Thanks, and just a follow up.

Chris Voronka: Yeah, yeah, no, thanks, Sven. And just to follow up, you know, on the cost side, and I totally understand and heard what you mentioned about the National Geographic fees and the changes there, but on the other things, and maybe even look at it at XFUEL, is there anything, you know, to suggest that you see moderation on the pressure coming in the second half? I know some of the costs can be kind of lumpy, insurance, things like that. But is there any visibility into, you know, lower increases moving forward?

Speaker Change: On the cost side and I totally understand and heard what you mentioned about the national.

Speaker Change: Geographic fees and the changes there, but on the other things and maybe even look at it ex fuel is there anything.

Speaker Change: To suggest that you see moderation on the pressure coming in the second half I know some of the cost can be kind of lumpy insurance things like that I mean is there any visibility into into.

Craig I. Felenstein: Sure. And thanks for the comments earlier, Chris.

Speaker Change: Lower lower increases moving forward.

Speaker Change: Sure and thanks for the comment earlier, Chris So there's a couple of things on the cost debt.

Craig I. Felenstein: So there's a couple things about the cost that will, I would say, mitigate a bit. One is, as you can imagine, the first quarter of the year is a big quarter for us from a cash receipt perspective, both from deposits on future travel as well as down payments for new reservations. The credit card fees are definitely higher in Q1, so the growth in Q1 there would be higher than it would be later in the year.

Speaker Change: So I would say mitigate a bit one is as you can imagine the first quarter of the year is a big quarter for us from a cash receipt perspective, both from a deposits on future travel as well as <unk>.

Speaker Change: Down payments for new reservations.

Speaker Change: So the credit card fees are definitely higher in Q1, so the growth in Q1, there would be higher than it would be later in the year. The second thing is there are some timing issues associated with some of the land company costs that come into the first quarter you can see that flow through from a land company profitability perspective in the first quarter is not what it is later in the year.

Craig I. Felenstein: The second thing is there are some timing issues associated with some of the land company costs that come in the first quarter. You can see the flow through from a land company profitability perspective in the first quarter is not what it is later in the year. So you should see, what I would say, better margins, I would say, on the land business, certainly in the rest of the year. So those are the big ones.

Speaker Change: So you should see.

Speaker Change: But I would say better margins I would say on the land business certainly in the in the rest of the year. So those are the big one there is a little bit of currency hit in the first quarter related to some of the currency movements in some of the operations that are land companies as well so that should abate itself as well. So those are some what I would say is one offs that youll see not flow through the rest of the year.

Craig I. Felenstein: There's a little bit of a currency hit in the first quarter related to some of the currency movements and some of the operations that are land companies as well, so that should abate itself as well. So those are some of what I would say are one-offs that you'll see not flow through the rest of the year. Can I add something? Okay. Very good.

Speaker Change: Okay very good thanks, guys.

Craig I. Felenstein: Thanks, guys. So if I could just add one thing, Sven, here.

Speaker Change: <unk>.

Speaker Change: If I could just add one thing spend here, because Craig and I have talked about this topic.

Sven Lindblad: Because, you know, Craig and I talk about this a lot. Obviously, there is an expectation on the part of a lot of people for the occupancies to go up, rightfully so, and they will go up. By the way, more important than occupancy, in the short term, is price integrity in the long term. Because, you know, one of the things if you really sort of analyze a business like this, let's say you all could get to it, we could get to 100% occupancy tomorrow if we took on some really bad habits that would have a very negative effect on the business long-term.

Speaker Change: <unk> talked about this a lot obviously.

Speaker Change: Obviously there is.

Speaker Change: And expectation on the part of a lot of people for the Occupancies to go up rightfully, so and they will grow up by the way.

Speaker Change: But.

Speaker Change: More important than occupancy.

Speaker Change: In the short term.

Speaker Change: Is price integrity in the long term because whats what are the things that you really sort of annualize a business like this let's say you. All you can get to we could get to a 100% occupancy tomorrow. If we took on some really bad habits.

Speaker Change: That would have a very negative effect on the business long term so.

Sven Lindblad: Ships, small ships, expedition ships, cannot function at revenues that are 50 percent. It's just not possible; it's not sustainable. And so we, our emphasis is, let's do, let's drive up occupancy, but at the same time, let's make sure we do not violate price integrity because once you do too much of that, it's hard to come back. I just wanted to clarify that point. Thanks, sir.

Speaker Change: Ship small small shifts expedition ships cannot function that revenues that are 50%.

Speaker Change: It's not possible it's not sustainable.

Speaker Change: And so we our emphasis is let's do let's drive up occupancy, but at the same time, let's.

Speaker Change: Let's make sure we do not violate price integrity, because once you do too much of that is hard to come back right. So.

Speaker Change: I just wanted to clarify that excellent.

Speaker Change: Thanks, guys.

Speaker Change: Thanks, Chris.

Operator: Thank you. As a reminder to everyone, to ask a question, you may press star followed by 1 on your telephone keypad now. The next question is from Alex Farman with Craig Helm Capital. Your line is open.

Speaker Change: Thank you as a reminder to ask a question you May press star followed by one on your telephone keypad.

Speaker Change: The next question is from Alex Fuhrman with.

Alex Joseph Fuhrman: Craig Hallum capital your.

Alex Joseph Fuhrman: Your line is open.

Alex Joseph Fuhrman: Hey, guys. Thanks for taking my question. And Craig, sorry to hear that you're going to be leaving the company.

Alex Joseph Fuhrman: Hey, guys. Thanks for taking my question and Greg sorry to hear that youre going to be leaving the company.

Alex Joseph Fuhrman: Ben, you mentioned that in some of your geographies, I think Antarctica in particular, you're seeing a lot more competitive pricing from some of your competitors with the two-for-one deal. Curious, do you think a lot of this is ultimately short-term in nature? Or do you think, given the nature of your small ship and how nimble you can be, are there, you know, maybe opportunities to reposition some of your ships for part of the season to, you know, even more remote, less visited destinations where you'd have more pricing power over time?

Alex Joseph Fuhrman: And then you mentioned that some of your geographies I think antartica in particular, you're seeing a lot more competitive pricing from from some of your competitors with the two for one deal curious do you think a lot of it is ultimately short term in nature or do you think given the nature of your small shifts in how nimble you.

Alex Joseph Fuhrman: It could be or there may be opportunities to reposition some of your ships for part of the season to even more remote visit.

Alex Joseph Fuhrman: Visited destination, where you'd have more pricing power over time.

Sven Lindblad: Yeah, well, Antarctica is about as remote as you're going to get, but... So there is competitive price pressure, but we're doing very well on that topic. So I'm not, you know, despite the fact that there are an overwhelming number of shifts down there, we're doing well. And one of the reasons why is because we have. We really liked what we did with developing our fly-in program for one of our ships, so we had the dilemma where we had an older ship, a very nice ship, by the way, the National Geographic Explorer, next to our two new ships, the National Geographic Endeavor and the National Geographic Resolution. And, you know, there's a natural inclination on the part of people who want to buy something that's new.

Alex Joseph Fuhrman: Yes, well and talk to us about as remote as youre going to get but.

Alex Joseph Fuhrman: So.

Alex Joseph Fuhrman: There is there is competitive price pressure, but we're doing very well in that truck. So.

Speaker Change: So I'm not I'm not.

Speaker Change: Despite despite the fact that there is an overwhelming number of shifts down there. We're doing we're doing well in one of the one of the one of the reasons why is because we.

Speaker Change: We've really like what we did with <unk>.

Speaker Change: Our fly in program for one of our so we have the dilemma, where we had.

Speaker Change: Asia that was an older ship very nice shift by the way the National Geographic Explorer next to our two new ships, the national geographic Endeavour and the National Geographic resolution.

Speaker Change: And so there's a natural inclination on the part of people want to buy something that is new so the chips, we're doing well in the explorer was lagging.

Sven Lindblad: So the ships were doing well, and the Explorer was lagging a little bit behind, just because, again, she was older and not the new thing. So what we did is we created a whole different program incorporating flying into Antarctica, allowing people with less time to go there. And that was the perfect counterpoint to the dilemma. We didn't, like, discount it. We just changed the idea, and people just bought it, and it filled up instantly, essentially instantly. And so there are lots of levers you can deploy in order to change your destiny, and it isn't just, [inaudible]

Speaker Change: A little bit behind just because again she was older and not the new thing. So what we did is we created a whole different program.

Speaker Change: Incorporating the flying into Antarctica, allowing people with less time to go there.

Speaker Change: That was the perfect counterpoint to the dilemma, we didnt like discounted we just changed the idea.

Speaker Change: People just bought it and it filled up instantly essentially instantly.

Speaker Change: And so there are lots of levers you can deploy in order to change your destiny and it isn't just.

Speaker Change: It isn't just price geography is absolutely key or how you operate in a particular geography. So there are a variety of ways you can kind of get the job done in.

Alex Joseph Fuhrman: Okay, great. That's really helpful. Thank you very much.

Operator: Thank you. We have no further questions, so I'll hand you over to the management team to conclude.

Speaker Change: In this case it was by creating totally totally new idea so the explorer and the new ships, where in fact not in competition anymore.

Craig I. Felenstein: Thank you, Operator, and thank you, everybody, again, for joining us today, and thank you for your support over the years. And if you have any questions, please let me know and let us know, and we're happy to answer them today or in the future. Thank you. Many thanks, guys.

Speaker Change: Okay.

Speaker Change: Okay, Great. That's really helpful. Thank you very much.

Speaker Change: Thank you Alex.

Speaker Change: Thank you.

Speaker Change: We have no further questions I'll hand.

Speaker Change: Back to the management team to conclude.

Craig I. Felenstein: Thank you operator, and thank you everybody again for joining us today and thank you for your support.

Speaker Change: And a half years and I look forward to finish up the next month and if you have any questions. Please let me know.

Operator: Thank you very much. This concludes today's call. Thank you for joining us. You may now disconnect your line.

Speaker Change: Now, we're happy to answer them today or in the future. Thank you. Many thanks guys.

Speaker Change: Thank you very much.

Speaker Change: This concludes today's call. Thank you for joining you may now disconnect your lines.

Operator: Yeah.

Sven Lindblad: [music].

Operator: Yes.

Sven Lindblad: Okay.

Operator: Sure.