Lindblad Expeditions Holdings Inc.

Thank you for your patience, everyone. The call will begin shortly. In the meantime, if you would like to pre-register to ask a question, you may do so by pressing star followed by one on your telephone keypad. Good morning, everyone, and welcome to the Lindblad Expeditions Report 2023 Third Quarter Financial Results. My name is Chach, and I'll be the coordinator for your call today. During the presentation, you can register to ask a question by pressing star 4x1 on your telephone keypad. If you do change your mind, you may press star 4x2. I would now like to hand over the call to Craig Felsenstein, Chief Financial Officer, to begin. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for Linblad's 2023 third quarter earnings call. With me on the call today is Sven Linblad, Linblad's founder and chief executive officer. Sven will begin with some opening comments, and then I will follow with some details on our financial results, balance sheet, and current 2023 expectations 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 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 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 Sven.

Thank you, Craig, and good morning, everybody, and thank you for joining us. Craig will discuss our record financial results in a moment, but before he does, I would like to take a few minutes to discuss the momentum across our operations, along with where we are focused as a company to further take advantage of the earnings potential of our platform and the growing demand for experiential travel. When I returned to CEO in June, I made it clear to the organization that we have three key priorities. First, as has been the number one principle since we founded the company back in 1979, ensure that everything we do elevates and enhances the guest experience. Second, given the fixed cost nature of our fleet, fill our expanded capacity to the same levels we were doing so prior to the pandemic. And third, continue to rapidly grow the diverse businesses we have acquired while strategically and selectively looking for accretive acquisitions where we can further broaden our offerings and when appropriate, create cross-marketing opportunities that provide meaningful, incremental value. I'd like to provide a little color on each of these priorities, starting with the guest experience. Ensuring our quality is the highest level possible before, during, and after the expedition has always been essential because it is our promise to guests. High quality is what they reasonably expect, and it's even more important today given the evolving competitive landscape. We are proud of the consistently excellent guest satisfaction scores we have always achieved, and we are dedicated to continuing to earn those results as we continue to grow in the months and years ahead. There have been some short-term challenges on the pre-voyage front, the changes in our operating environment and changes and changes to our company infrastructure have presented, but we have been diligent in addressing each head on. External factors such as lingering remnants of COVID, changing political circumstances, and evolving geographic nuances have created much deeper and longer conversations between guests and our service teams. This takes more time to ensure that they have all the information needed for upcoming and prospective voyages. So we have adjusted the employee numbers dedicated to this effort to swiftly accommodate the rise in inbound call volume. At the same time, we are adapting to a massive change in technology as we significantly upgraded our digital stack with a rollout of a new CRM system, reservation platform, content management system, customer data platform, and company websites. Fully integrating these tools will provide far greater efficiency for our guests and employees. And after the expected initial challenges, as we integrated 15 critical systems across the company, including sales, marketing, accounting, operational, and analytical tools, we are beginning to see the benefits from these investments. As we focus on our pre-voyage interactions and integrating technology, we are also now back to full force with research and development. It is the lifeblood of providing unparalleled experience and having significant boots on the ground, planning and developing itineraries is an essential ingredient to cultivating new experiences in parts of the world we have been visiting for years and curating new expeditions and additional destinations worldwide. The same can be said for in-person training of our field staff, marine personnel and hotel operations all key ingredients to the unparalleled service and experiences that Lindblad has been synonymous with over the last five decades. Turning to our second priority, filling our ships, this is obviously an imperative as they are basically fixed cost platforms. The vast majority of each additional guest beyond our current occupancy drops to the bottom line and each bed that goes unsold is a lost opportunity to maximize our platform and increase margins. We have discussed in the past how every point of auction occupancy is worth approximately four to $5 million, all else being equal. So it's not hard to see the tremendous upside in getting from the current occupancies to historic levels. The key to doing so is multifaceted starting with the right balance of inventory. As we strategically expanded our fleet beginning in 2016, we focused on maintaining that balance. investing in capacity that would serve the guest demand we were seeing across the globe. By doing so, we expanded our US fleet, nearly tripling our capacity in key areas such as Alaska, while maintaining high occupancy levels and increasing yields. We were on the same path through the same with our expanded blue water fleet when COVID hit, which was further exasperated by Russia's invasion of Ukraine, forcing the rescheduling of many of our new exciting itineraries like crossing the northeast passage and any other itinerary involving russia these itineraries had to be recrafted remarketed and they had to be done so while we also lost two years of generating new past guests due to covid these past guests are critical to generating strong demand for all of our more esoteric itineraries they have already traveled with us once have an appreciation for what we do have recency as drivers. So it is imperative that we rebuild that past gas pipeline to maximize the opportunity across our fleet. We are already making significant inroads on that front. Itineraries that are drivers of new guests, Alaska, Galapagos, for example, are already performing near historic levels. And so the system is now fully active again, producing the necessary pipeline for a balanced across-the-board occupancy in future years. At the same time as I laid out on our last call, we continue to focus on creating the most modern marketing and sales platform to propel growth. Marrying the historically successful approach, which centered around direct mail and targeted emails, with meaningful digital lead generation, focusing on driving first-time bookings through elevated search campaigns to capture and convert new audiences. We are also continuing to grow our relationship with travel advisors across the globe, as more advisors are booking their clients on expedition cruises than ever before, and we've hired industry-leading salespeople to help us grow our share from these important distribution partners. As we grow occupancy, we are also focused on ensuring that we maintain our premium price point given the experience we deliver. This requires that we continue to reinforce the messaging around our value proposition with an emphasis on the differentiated, high-quality expedition we can provide, given our heritage experience and knowledge base, as well as our long-standing partnership with National Geographic. For many travelers, a destination like Antarctica is a once-in-a-lifetime experience. We believe strongly that such an experience should not be compromised, and with us, it won't be. We clearly have the best and most experienced navigators, expedition leaders, and naturalists, as well as the best chefs, both from the perspective of providing expedition excellence and elegance. The first priority is to continue to drive the results across our land port. The final priority is to continue to drive the results across our land portfolio. The rapid growth we are delivering at Natural Habitat, Divine, Classic Journeys, and Off the Beaten Path is a testament to the founders and leaders of these businesses who share my commitment to the guest experience. They had significant momentum coming out of COVID in 2022 and are certainly building on that success in 2023. The collaboration and sharing of best practices with regard to product marketing and operations is helping to attract more and more travelers, and we believe we are just scratching the surface of opportunity the land portfolio has to offer. As we grow our existing business, we also continue to explore additional opportunities to further broaden our product offerings. We recognize that our travelers are omnivorous in their interest. A person may be with us in Antarctica in December, and on Safari in Africa in September. The more diverse options we can provide, the better. So we are very focused and excited about selectively finding additional companies that are best in class and aligned from a mission perspective to bring into the fold. The biggest opportunity we have in the short term is to increase the execution of our existing portfolio, but augmenting our long-term growth opportunity with additional drivers remains a priority. Overall, we are very excited by the momentum across our entire company as we deliver strong results today while setting ourselves up to further leverage the premium platform we have built. In many ways, we are a much different company now than we were right before the pandemic, with a fleet that is 40% larger, a land portfolio that has quadrupled, and an involved technological footprint and overall company infrastructure. While there are significant opportunities, there will also be a lot of hard work involved in ensuring the success of the priorities I've laid out that the organization fully understands and embraces their importance. And we look forward to delivering continued growth in the months and years ahead. And with that, I will turn the call back to Craig.