Lindblad Expeditions Holdings Inc.

Good morning, and welcome to the Lindblad Expeditions Inc. Second Quarter 2021 Financial Results Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star and then one on your telephone keypad. To withdraw your question, please press star and then two. Please do note, this event is being recorded. I would now like to turn the conference over to Craig Finlayson. Please go ahead, sir.

Thank you, Chris. Good morning, everyone, and thank you for joining us for Lindblad's 2021 second quarter earnings call. With me on the call today is Dolph Burley, Lindblad's chief executive officer, and Sven Lindblad, founder and co-chair of Lindblad Expeditions. Dolph will begin with some opening comments, and then I will follow with some details on our financial results and liquidity before we open the call for Q&A. You can find our latest earnings release in the investor relations section of our website. Before we get started, let me remind everyone that the company's comments today may include 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 forecasts 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 filings. 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. With that out of the way, let me turn the call over to Delph.

Thanks, Craig, and thank you all for joining us this morning. As most of you know, this is my first earnings call since joining Lindblad in May, and I'm excited to begin establishing a dialogue with the investment community while providing an update on our business. It's a great privilege to succeed our founder and now co-chair of Lindblad Expeditions, Sven Lindblad, in the CEO role. I would like to publicly thank Sven for his partnership thus far and for his very generous efforts in helping me onboard as leader of this remarkable company. Over the past 40 years, Sven has built the preeminent expedition travel business that is the gold standard for providing high quality and immersive experiences in the world's most extraordinary destinations. I look forward to partnering with Sven, his co-chair Mark Ein, the Lindblad Expeditions team, and our board of directors as we continue to build the company and explore the wonderful potential we all believe is ahead of us. My professional background has been focused on growing companies that I describe as being in the joy business, and being able to serve as CEO for the company that pioneered expedition travel fits well with my experience. The opportunity to lead Lindblad also embodies two important themes in my life. First, I have a deep personal connection with Lindblad's mission to help preserve our planet and educate people across the world about the natural wonders that we must protect. In my youth, my father served as the environmental commissioner for the state of New York. and then as the president of the National Audubon Society, so I grew up in an environmentalist family. Secondly, I have devoted the majority of my professional career to creating memorable guest experiences. Lindblad does this on a grand scale, creating true life experiences for our guests, and I consider it a great honor to build upon what Sven and the team have delivered for so many years. In my first 10 weeks with the company, I have been focused on learning about our team, our product, our guests, the work processes inside the company, our partners, the industry in which we operate, and our competitive positioning. As you can imagine, I have also been very focused on supporting our team as we ensure a strong return to operations during the COVID-19 pandemic. This is actually the second time I have done this as my previous company, Topgolf, did just that throughout 2020. Before I discuss where we are today, I do think it is important to highlight that the thorough plan the company has been executing during the pandemic, which included swiftly reducing costs across all aspects of the business and opportunistically raising capital, is enabling us to return to operations as a vibrant company poised to regain the momentum Lindblad was delivering prior to the pandemic and with ample liquidity in support of long-term growth initiatives. Craig will walk you through our financial position in a moment, but while COVID is not yet in our rear view mirror, we have returned to sailing with over $200 million in cash on our balance sheet. We are tremendously excited to once again be taking guests to the world's most remarkable destinations. We began in early June with two ships in Alaska and one in the Galapagos. And given the significant demand for our Alaska itineraries, we were able to quickly launch our two remaining US ships shortly thereafter. And that momentum has continued throughout July. I'm happy to say that today we have eight out of our nine ships operating across Alaska, the Galapagos, and Iceland. Our ability to return to operations so quickly once the opportunity presented itself is a testament to the hard work and dedication of our employees, the relationships we have cultivated globally over the last four decades, the robust protocols we have continually developed over the past 16 months, the flexibility we have as a company given the size of our ships and the destinations we visit, and the desire of our loyal guests to return to exploring the world's most amazing geographies. A great example of our nimbleness is the launch of our newest expedition ship, the National Geographic Endurance. She was delivered last March, and we have been eagerly waiting to have guests experience all she has to offer. Her original post-COVID voyage was scheduled to be the Northeast Passage, followed by the exploration of the Arctic. But due to restrictions in Norway and Russia, we had to quickly come up with new options. The expedition team worked diligently to develop unique itineraries in a geography we have been traveling to for years, Iceland. And then we reached out to guests scheduled on the original departure to see if they would be interested in joining us on the amended voyage. This could have been particularly challenging, as many of the guests on these voyages had already been to Iceland, and many multiple times, but the response was overwhelmingly positive, and the Endurance is now poised to enjoy its new summer season. Before moving on, I would like to mention that the feedback we are receiving regarding the Endurance and what she has to offer has been phenomenal. The Endurance, along with her soon-to-be-delivered sister ship, the National Geographic Resolution, represent a new standard in polar class vessels and expedition ships in general. She is technically innovative, including her unique X-BOW design, which allows us to reach even more remarkable destinations deep in the polar ice. And the guest amenities and accommodations set a new standard for our industry. She is a marvel in every way, and we are excited to finally have guests on board. On the Endurance and across every geography and ship we operate, the protocols we have put in place to mitigate the risks for our guests and crew while enabling the immersive experiences our guests are accustomed to have held up very well. Among other stringent protocols, we are requiring 100% of our guests, 12 and over, and all of our crew to be vaccinated, while also requiring negative PCR tests three to five days ahead of embarkation and negative antigen tests immediately prior to boarding our ships. These company mandates are in addition to local, state, national, and international standards that may apply. We are also well prepared to handle any COVID-19 circumstances that arise, and we have had to do so on a couple of occasions. The health and safety of our guests, crew, and staff is certainly our first priority, but delivering amazing experiences that foster conservation and awareness is a close second and it is so rewarding to hear all the positive feedback we have gotten from guests across all our geographies as they return to the wild. While the momentum is generally positive in terms of various geographies reopening, there are still challenges which prevent us from running at historic business volumes. We have temporarily reduced the number of cabins for sale out of an abundance of caution, and as I mentioned earlier, not all destinations are receiving visitors just yet. We are working diligently to reactivate additional itineraries with a significant focus on Antarctica, where the season for Lindblad sailing is scheduled to begin in November. Another challenge is that there is also some hesitancy among some Americans to travel outside the country today. The good news is that these guests remain booked with us. They are just pushing their trips to later dates when they feel they will be more comfortable to travel globally. From a booking standpoint, we have seen sustained strong production over the last few months. Bookings for 2022 are at historic levels with more revenue booked at this point for travel in the upcoming year than ever before. We are keeping a close eye on the potential COVID Delta variant impact, but as of today, reservations continue to pace strongly ahead of the same point two years ago prior to COVID. This booking strength is not limited to our ship-based businesses. We are seeing significant demand at natural habitat, which is particularly pleased that the Canadian government has allowed a return of tourism, which means we will be able to begin running our polar bear trips later this year. We are also seeing strength at our two recent acquisitions, Off the Beaten Path is especially strong given their focus on U.S. national park destinations, and DuVine is seeing strong bookings for future travel globally while also expanding their U.S. trips in the short term. Both of these acquisitions have also already begun to benefit from cross-marketing synergies, and each are well positioned to grow as we leverage the scale of our business with their wide addressable markets. I have spent time with each of the dynamic and entrepreneurial leaders of these businesses and look forward to working with each of them to maximize these unique opportunities. As we look towards the future, I am very optimistic. In the short term, we will continue to main austerity on costs to ensure that our liquidity position remains healthy. We certainly believe that demand for experiential travel will only grow moving forward, and Lindblad is poised to once again capitalize on this opportunity. Aside from a proven track record of delivering amazing experiences for the past four decades, we emerge with two new state-of-the-art ships, which will increase our available guest nights by well over 30% from 2019 levels once they are being fully utilized. Plus, we have an expanded product portfolio with amazing experiences across ships, land, bikes, and U.S. national parks. I also look forward to dedicating time with our team to further codify and enhance our growth strategy in the coming months. Although I think it would be premature for me to provide any great detail on my initial strategic thoughts, you can expect that we will be evaluating a number of growth dimensions that build upon our history of adding ships and acquiring synergistic companies in the adventure travel marketplace. My first lens is to think deeply about our guests and what would enhance their life experiences. And I believe there's significant opportunity to build upon our existing businesses and expand our addressable market of guests across the world. Lastly, I'm optimistic about how our investments in technology will enhance future guest experiences and help us grow as a company. As has been discussed previously, we are in the process of driving a digital transformation within the company, focused on upgrading our website, evolving our reservation system, advancing our CRM capabilities, and creating the architecture of linking each of the companies under the Lindblad banner. In closing, I'm honored to be a member of this very fine team here at Lindblad Expeditions. We have a great deal of work to do as we recover from the pandemic impact, but I am really optimistic about the future. The foundations of the company are strong from both a financial and operational standpoint, and we see many opportunities to grow and innovate in the coming years. I look forward to sharing our plans and our progress at regular intervals with all of you as time goes by. Thanks for your time this morning, and now let me turn the call over to Craig.