Lindblad Expeditions Holdings Inc.

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

Thank you, Matthew. Good morning, everyone, and thank you for joining us for Lindblad's 2021 Third Quarter Earnings Call. With me on the call today is Dolph Burley, Lindblad's Chief Executive Officer. 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. And with that out of the way, let me turn the call over to Dolph.

Thank you, Craig, and welcome to all of you joining our call today. Let me begin by saying that Q3 was an extremely busy time for the company as we executed against each dimension of our strategic and operating plans. I am grateful to the hardworking teams on our ships, the many highly professional members of our land companies, and the Lindblad office employees who worked together so well to accomplish so much these past few months. Highlights include our return to broader operations, the success of our COVID protocols, the acquisition of Classic Journeys walking company, the delivery of the National Geographic Resolution, our newest polar ice class vessel, meaningful progress with our digital initiatives, and ongoing development in the areas of environmental sustainability and our commitment to diversity, equity, and inclusion as an organization. I would like to take the next few minutes to provide some additional details on each of these areas, beginning with how quickly we have been able to get the majority of our fleet back into operations in geographies that we have been exploring for many decades. Eight of our nine ships took guests on immersive expeditions this past quarter, including two vessels in the Galapagos, four in Alaska, and two in Iceland, and we were able to achieve a fleet-wide occupancy of 82%. There was particular strength across our Alaska season, where we initially launched only two ships, but due to guest demand, were able to ultimately operate all four of our U.S.-flagged vessels throughout the summer. Our international ships also performed well despite achieving lower occupancies for the most part due to the continued nuances of foreign travel and concerns around the COVID Delta variant. One thing to note is for those guests who were already booked but opted to not travel abroad this year, the majority rescheduled their expeditions for 2022 or 2023. While there may be caution on the part of some due to the pandemic, the spirit of adventure and the yearning to see parts of the world that inspire wonder is very much alive in the hearts of our guests. An important highlight operationally was the strong performance by our field staff and crew on board the ships. Guest feedback has been extremely positive regarding the quality of the itineraries, the knowledge and care of our naturalists, the food and beverage, and the quality of the accommodations. In many cases for our guests, their voyage with us was the first time they had traveled recreationally since COVID began over a year and a half ago. And you could feel the excitement and joy from these guests who are returning to the adventure and beauty that is so much part of the Lindblad Expedition experience. Fundamental to the quality of our operations has been the strict adherence to the COVID protocols across all of our voyages. 100% of guests age 12 and over and all crew and all staff are required to be vaccinated. We also require a negative PCR test prior to travel from home and an additional negative test prior to boarding the ships. Furthermore, we instituted daily symptom checks and mid voyage testing as necessary to ensure the health and safety of everyone on the vessels. We did experience a small number of breakthrough cases but the sizes of our ships and our rigorous protocols enabled us to limit the spread of the virus on any voyage. As we look forward, we remain very optimistic about sustaining our business momentum. Aside from being in a strong booking position, which Craig will cover in more detail in a moment, we're extremely excited to be returning to Antarctica with our first voyage set to depart this week. The season overall is well booked across our three polar ships from November through early March, and particularly encouraging is the response we have gotten for our two brand-new polar vessels. As you may know, we took delivery of the National Geographic Endurance last March and have been eagerly awaiting the time when we could take guests aboard this amazing ship. The Endurance combines cutting-edge marine capabilities, such as her X-BOW, which provides a smoother ride through rough waters, as well as luxurious accommodations and food and beverage capabilities which are at the highest standard in the industry. We were able to catch a glimpse of what she can provide to guests this past quarter in Iceland, and the response was nothing short of phenomenal. She is now preparing to provide guests an unparalleled experience in Antarctica, and she will be joined by her sister ship, the National Geographic Resolution, which is making its way from its birthplace in Norway down to Argentina as we speak. I would like to thank our hardworking team in cooperation with the Ulstein Yard, who were able to deliver the resolution on time and on budget during one of the most challenging business environments in modern memory. This is a truly remarkable achievement and a great moment in our company's history. While we are certainly optimistic about the future for the Lindblad feed of vessels, it is also important to note some of the hurdles we continue to face due in large part to the pandemic. After an early summer where we saw pent-up demand pushing booking levels to two-year highs, the Delta variant did slow that progress temporarily in later summer and early fall. We saw a number of guests decide not to travel, with many of them pushing their reservations into 22 and beyond, as I mentioned earlier. The daily adherence to COVID protocols is also something that, while necessary, adds a layer of complexity for our guests. our shipboard teams, as well as those explaining and documenting compliance on a per-guest basis in our offices. As all of you are likely familiar, we're also working through the challenges related to the global supply chain slowdown. We have so far been able to navigate the supply chain challenges by diversifying our sources, including using more local suppliers for both consumables, such as food and beverage, as well as the parts and technologies required to run our ships. Another exciting development in early October was the next acquisition, which expands our platform of best-in-class land company operators, delivering authentic travel experiences across the globe. Classic Journeys is a leading luxury cultural walking tour company based in La Jolla, California. They run premium walking tours focusing on engaging experiences that immerse guests into the history and culture of the places they are exploring and the people who live there. Classic Journeys tours are highlighted by expert and well-connected local guides who live in the regions being explored. They feature luxury boutique accommodations and handcrafted itineraries, which have been curated through years of local connections and experience. Classic Journeys is a very complimentary addition to our stable of land-based adventure travel companies that includes Natural Habitat and our acquisitions from earlier this year Off the Beaten Path and the DuVine Cycling and Adventure Company. Lindblad will leverage its experience and resources to accelerate the growth of these unique offerings so we can further capitalize on the growing demand for authentic and immersive adventure travel around the world. We also see great potential in the cross-marketing opportunities that exist between the now five companies under the Lindblad platform. It was a thrill for me to be part of a summit a month ago where all the founders of these companies shared best practices, sought to learn how they could take steps together to provide our combined pool of guests more and more compelling travel experiences. This team of pioneering founders, combined with the shared services we can provide, as part of the larger Lindblad platform, will be hard at work determining how we can really grow these collective businesses. And we have actually already started to see the benefits of our diverse platform. This past quarter, our land businesses delivered positive earnings as they were able to take advantage of the surging demand for domestic travel. With regard to our digital initiatives, we continue to make strong progress. This work is multidimensional and includes revamping our website the booking flow for our guests, transforming our reservation system, our approach to CRM, and the addition of marketing technologies which will allow us to be much more data-driven in our approach to both marketing efficiency and also understanding the needs of our guests. This past quarter, we were able to increase the amount of web traffic by nearly 50% versus the same period in 2019. We also more than doubled our social media audience versus 2019. At the moment, we continue to focus on building the foundations for each of these capabilities, and we will keep you posted on the results we generate. Before I turn the call over to Greg, I would like to mention our work this past quarter on the environmental sustainability and company cultural front. As you know, we are a company that is very mission-driven, which is a function of what we care about as a group of leaders, and the wonderful legacy that was always part of our founder and now co-chairman Sven Lindblad's approach to building the company. This past quarter, we made good progress with our program geared at providing funding for ocean conservation in collaboration with our partners at National Geographic. We also were pleased with the progress being made as part of our Galapagosal Island Relief Fund, which has provided 56 microloans to date ranging from $400 to $5,000 to support entrepreneurship, business reactivation, food security, and education for the islanders of the Galapagos. And we had a total of 135 educators who traveled with us in the Galapagos this summer before returning home to their classrooms to share what they had learned with their students. Also of significance is that we are well into the training of all our leaders on the subject of diversity, equity, and inclusion. This training is only a start in our efforts, which will also involve reviewing our recruiting, hiring, and training approaches with the goal of being an ever more inclusive organization where everyone feels that they belong. Our work across the planet is inherently diverse in terms of the places and people with whom we work, and we want to ensure that our team mirrors that same diversity. Let me close by sharing a personal note. I had the opportunity to visit with several of our ship teams last quarter, speak with guests from a variety of our voyages, and also take a few days to experience a divine bicycling tour in the Shenandoah Valley. This combination of experiences reinforced for me how meaningful these travel experiences are in the lives of our guests. We take this responsibility very seriously and are committed to making this product better and better, building the strength of our teams. and by advancing our technologies, as well as investing in the study of fascinating places and people on all continents, and additionally, closely listening to the needs and wants of our guests. Now, entering my sixth month at the company, I am more excited than ever about the future for Lindblad Expeditions. And now, I would like to turn the call over to our Chief Financial Officer, Craig.