Good morning and welcome to the Lindblad Expeditions third quarter 2016 earnings conference call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Craig Felenstein, Chief Financial Officer. Please go ahead.

Thank you, operator. Good morning, everyone. And thank you for joining us for Lindblad’s third quarter 2016 earnings call. Joining me today is Sven Lindblad, our Founder and Chief Executive Officer, and Ian Rogers, our Chief Operating Officer. Sven will begin with some opening comments and I will follow with some details on our third quarter results. 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 statements about expectations for the future. Those expectations are subject to known and unknown risks, uncertainties and other factors that may cause the company’s actual results and performance of future periods to be materially different from any future results or performance suggested by these expectations. The company cannot guarantee the accuracy of any forecast or estimates and we undertake no obligation to update any forward-looking statements. If you’d like more information on the risks involved in the forward-looking statements, please see the company’s SEC filings. In addition, some of 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.

Thanks, Craig. And thank you, everyone, for joining us this morning. Craig is going to walk you through our financial results and full-year expectations in a few moments, but before he does, I’d like to provide some color on how the business is operating today and provide some insight as to why I’m confident of the opportunities in front of us to expand our reach and provide sustained growth over the foreseeable future. Our primary focus today is the same as when Lindblad Expeditions was founded in 1979, with the groundbreaking expedition to Tanzania. Please understand that it is ultimately all about the guests and delivering an experience that fosters exploration and discovery through unique offerings that are immersive and a very high standard, all led by the finest expedition teams in the industry. As we’ve been doing this consistently now for nearly 40 years, our credibility makes us uniquely positioned to capitalize on the growing demand for experiential travel. Experience matters a great deal. Planning and executing these expeditions is extremely complex and I firmly believe that we understand that better than anyone. We have spent years exploring the world, fine-tuning itineraries and developing key relationships, while investing in vessels and amenities, so that we can deliver unparalleled experiences to our guests. That is why we are able to generate net yields of over $1,000 per night and why guests who travel with us keep recharging. In fact, over one-third of the guests in 2016 have traveled with Lindblad previously. At the same time, we are attracting more new guests than ever before and we’re confident that there is significant opportunity to expand by creating new expedition opportunities on new expedition vessels. As we have discussed before, it’s hard to look at our business from a quarterly perspective as…

Thanks, Sven. I’m extremely excited to have joined Lindblad and look forward to working with this amazing team to capitalize on the many opportunities we see in front of us. I also look forward to connecting with each of you over the next few months to further discuss our business and its prospects. Turning to the third quarter, on a reported basis, Lindblad delivered revenue growth of 21% and adjusted EBITDA growth of 10%. These results, including contributions from Natural Habitat, which was acquired during the second quarter of 2016 and which remains firmly on plan to achieve its financial objectives for the year. The Lindblad segment reported a 4% revenue decline versus the year ago, primarily due to 9% lower available guest nights. The majority of this change year-on-year was planned, so we can reposition the Explorer from St. John’s directly down to Chile to take advantage of the southern hemisphere season as soon as practical. Similarly, as Orion heads out, it had less voyage days since it was traveling from Europe versus transitioning from Australia a year ago. The Orion also canceled the voyage of September due to some necessary repairs, which resulted in lost revenue as well as an unplanned drydock expense. As Sven just mentioned, despite some of the noise in the marketplace, we still expanded our net yields by 8% this past quarter to over $1,000 per night. The primary drivers of this growth were increased pricing from higher rates as well as itinerary changes versus a year ago. And as we increased our net yields, we were also able to slightly grow our higher occupancy rates to 90.8% in the third quarter versus 90.5% in the same period a year ago. We do anticipate a decrease in occupancy during Q4, primarily related to the…

[Operator Instructions] The first question is from Robert Kirkpatrick at Cardinal Capital.

Good morning. Could you talk a little bit more about the voyage that was canceled in terms of the Orion and how often does something like that happen? What were the costs and what was done with the passengers?

Certainly. This is Ian Rogers here. I can talk briefly with regard to the Orion. The Orion experienced an event related to one of its stabilizers for the ship. And although there was no safety impact on the vessel, we decided that the best thing to do before that ship returned to the Antarctic was to get that stabilizer repaired for the benefit of the guests who will be onboard in perhaps a more extreme operating environment. So, when we looked at our voyages, the ship was already positioned in Lisbon. We have familiarity with that yard. So, we took one week out of service. We rebooked – we canceled our voyage and rebooked as many guests that wanted to move to an alternate voyage and were able to replace the stabilizer of the vessel in one week, which reflects the size of our vessels and our operating efficiency and being able to make those repairs quickly and efficiently and the ship resumed its itinerary. How often does this occur? Very rarely. We have the most experience expedition captains, officers, and engineers on our fleet and safety is our number one priority. So, we take extreme care, but events do happen from time to time and we minimize any effects.

Okay. And then, secondly, to what extent can you help us understand the seasonality of the Natural Habitat business, now that we’ve had the business one full quarter, we’ve seen the financial results there. But help us understand, first quarter, second quarter, third quarter, fourth quarter, kind of how things flow for that business?

So, the most profitable activity of Natural Habitat takes place in the northern part of Canada, primarily in October, which is centered around experiences [indiscernible]. That is the largest single segment. And so, therefore, the fourth quarter becomes the most profitable segment.

This is Craig. From a revenue perspective, you will see that the back half traditionally -- obviously, didn’t own it for majority of the first half this year. But the back half of the year, from a revenue perspective, is certainly the bigger half. And then on an EBITDA perspective, it is also true that the back of the year is the most weighted for that business, especially in the fourth quarter. So, you’ll see the majority of the EBITDA come through in Q4. And then next year, we’ll be able to – for the full year, you’ll see the revenue back half weighted and then the EBITDA more weighted to the fourth quarter.

And during the first half of the year or the first quarter, second quarter, is the business EBITDA positive or does it go into a loss position during those parts of the year?

Yeah. It really depends on the year, certainly where the bookings go. Typically, it’s been positive. But, obviously, it really depends on how much activity they’re having in a given period, although the reality is, again, you’re going to see the majority of the results in the fourth quarter.

All right, great. Thank you so much.

[Operator Instructions]. Our next question is from Eric Gomberg at Dane Capital.

Hey, good morning. I was just hoping you could touch a little bit more on the repurchase plan. You’ve had the plan out since last fall and you haven’t bought anything back since January and now you’re upping it. And you said your first use of excess capital is growth opportunities. It seems like there’s plenty of excess capital. Should we read in that you’ll be back active in the market now that you have upped the buyback?

I’m sure we’re not going to say, obviously, what our intention is in the short term. But, obviously, the Board would not have authorized an increase to the plan if we didn’t expect to be active under the plan. The things you’ll remember about this year is that the second quarter we were prohibited from buying back because we were looking at the Natural Habitat acquisition. So, during the second quarter and then coming out of the second quarter, that was the case. And then, obviously, with the transition at the CFO level, there were some things on hold until I came onboard. But the reality is the Board is fully behind the repurchase plan. That’s why they increased the authorization. And certainly, when we look at the – where the shares are trading today and the capital that we have on hand and the strength of our balance sheet, we see a significant opportunity to be active over time.

Fair enough. Thanks for that. I have a couple of more just quick ones. On the Endeavour II, is it fair to assume that on a like-for-like basis versus the current Endeavour, there should be fairly meaningful greater profitability just getting rid of Endeavour for scrap, less drydocking, better efficiency, etc. on Endeavour II. is that a fair assumption?

Yes. And as we announced the acquisition of the Endeavour II, operating efficiency has increased because you require less crew to maintain and to carry out our day by day operation. As well as the newness of the engines and the equipment on board will mean that our fuel consumption will be less and there are operating efficiencies, as well as we’ve been very skilled in terms of cabin allocation and being able to reconfigure the ships, so that we can maximize yield in the most efficient manner.

Okay, thanks. And then just one last one, Craig, I think you said in your remarks that bookings have improved month on month. First, did I hear that right? And second, are you talking sequentially that bookings seem to be strengthening or they’re improving month-on-month on a year-over-year basis, so the strength kind of going into 2017 is better than the strength was going into 2016?

Yeah. I was talking year-on-year, not month-on-month. So, if you look at 2016 months versus the 2015 months, the bookings have been up for each of the last seven months and we’ve continued to see that strength very consistently. And I think it speaks to the momentum that’s behind the business today and we expect that to continue going forward and we will continue to push on all the levers that we can push to drive the business in the short term, while we continue to focus on the long-term.

All right. Great, thanks so much, guys.

Thank you.

Next question is from Robert Kirkpatrick at Cardinal Capital.

And so, if I were to look at the percent of forward year revenue that’s booked, so we are talking about 2017 now, and compare that with the percent of forward revenue booked a year ago, where would be standing?

Right now, we’re still behind on 2017 versus 2016. Very similar to where we were at the end of the second quarter. I should say very similar to the comments we made at the end of the second quarter, which was that some of the things that Sven talked about got us out of the gate little slower this year than it got us out of the gate last year. That being said, the gap today is certainly also significantly less than it was at the end of the second quarter and it continues to close. What we’ll do on the next earnings call, which would be our year-end call, we will provide much greater clarity on where 2017 is shaping out.

Great, thank you so much.

Thank you.

[Operator Instructions]. Seeing no further questions, this concludes our question-and-answer session. I would like to turn the conference back over to Craig Felenstein for any closing remarks.

Sure. Thank you, everybody, for joining us. We really appreciate your time. And as I said, I look forward to getting to know all of you guys. So, if you have any questions to follow-up, please give me a call in our office and we can catch up over the next few weeks. Thanks for joining us.

The conference has now concluded. Thank you for attending today’s presentation. You may now disconnect.