Lindblad Expeditions Holdings, Inc. (LIND) Q4 2017 Earnings Report, Transcript and Summary

Good morning, and welcome to the Lindblad Expeditions Fourth Quarter and Full Year 2017 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Craig Felenstein. Please go ahead.

Thank you, operator. Good morning, everyone, and thank you for joining us for Lindblad's 2017 fourth quarter and full year earnings call. With me on the call today is Sven Lindblad, our Founder and Chief Executive Officer. Sven will begin with some opening comments and then I will follow with some details on our fourth quarter and full year results 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 the 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, some of our comments may reference to 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. I'm pleased to have the opportunity to review the company's performance in 2017 and to highlight some of the key events that shaped our financial results and our progress towards meaningful growth, and then I would like to turn to 2018 and beyond. With what was announced we were delighted with this past year to begin operation of our newest ship, National Geographic Quest, on July 29, the first of our robust new build program. Yes, that was later than originally planned by 32 days, but she is in fact a prototype and certainly the most sophisticated passenger ship built in the U.S. in decades. While any delay is unfortunate, its effect, when considering a 25-plus year life, is really, in my view, minimal. Most importantly, she completed 2017 with high occupancies and the yields, and our guests are delighted with our ability to execute expeditions in comfort and in style. At the same time, the National Geographic Sea Bird and Sea Lion, which operated the same core geography as the Quest, Alaska primarily, maintained their high occupancies this past year, confirming that demand is very strong, and we need not be concerned with cannibalization as a consequence of bringing new vessels into the region. As we speak, the National Geographic Quest is exploring the geography where we have not been since 2004, Belize, which is totally sold out for the seven voyages planned this year. Expanding our expedition footprint is key for our U.S. flag fleet, which makes this result typically important. The Quest will have a full year of operation this year and, much like the second half of 2017, we expect it to be a key driver of our strong financial growth. Of course, as we have discussed before, the other significant event from this past year was losing the Orion's Antarctic season in the first quarter of 2017, particularly as all of the canceled voyages were completely sold out. I've been asked on occasion by investors with this incident, combined with a much shorter two-week canceling of the National Geographic Sea Lion, was indicative of any sort of pattern. Perhaps the best way to answer to this is that in the past that 10 years prior to 2017, we averaged only 2.1 days out of service on our owned and operated ships due to any form of mechanical or accidental reason. There is no correlation to any lack of maintenance, age or vessels or human error that caused the incidence on the National Geographic Orion or the Sea Lion. As we know, as well as anyone, that the prospect to being out of a service is prevented both by rigorous maintenance and personnel training, and the track record I mentioned earlier is a testament to that. So it is clear that these incidents are, without question, the exception rather than the rule. While we did deliver financial growth this past year, this increase would, of course, been significantly greater had it not been for these unusual events. Craig will walk you through the details shortly, but with these unique incidents in our rearview mirror, we're poised to deliver a significant growth in the years ahead. When we spoke to you on our third quarter earnings call on November 7, we highlighted that bookings during 2017 for travel in 2018 and beyond are up approximately 26% over the same time a year prior. That base has continued into 2018, already bookings for travel during 2018 have all except all of 2017 bookings, and each week that gap widens considerably. It is partially a factor of the added inventory but also a stronger occupancy and yield on the fleet more broadly. At the same time, bookings for 2019 and beyond are approximately 40% higher than the same point in 2017 and for 2018. This again, is not just based on new inventory but largely by increased demand for existing itineraries as well as from opening up new geographies, particularly in bringing the National Geographic Orion to Russian Far East and Northern Alaska in the summer of 2019, where occupancy already is approximately 60%, with limited marketing efforts to date. I believe this booking strength is driven in part because of the ever-increasing demand for this kind of travel but also because we're focused tenured expedition brand are in a very good position to harvest increased interest in this space despite capacity because of new entrants. People who sign on to this kind experience do a lot of research, and have proven track record along with a trusted partnership like the ones between ourselves in National Geographic means a great deal. Our jointly developed photography program, for example, is relevant both in perception and execution. Our guest want to travel with the company that is fully committed to the notion that we will do whatever it takes to provide them with extraordinary experiences in the world's on traveling space. We also launched, in 2017 a jointly created global explorers program for kids, making their experience richer and more meaningful, something not only they, but parents and grandparents appreciated enormously. And the family business particularly during school holidays is very, very important for Lindblad expeditions. Now I'd like to turn to our next new, the National Geographic Venture sister to the quest, and the new blue-water vessel being built in Europe. We will be announcing the name on March 17, during the [indiscernible] ceremony. Both are on track for their revised delivery dates of December 2018 for the Venture and January 2019 for the Polar Ice. These dates are approximately six months later than our original expectations, but with good reason. In the case of the Venture, it is a factor of lessons learned from building the Quest areas for improvement that required re-engineering aspects of the prototype design. In the case of the Bluewater vessel this is a very, very specialized ships. The most sophisticated expedition ship ever designed with capabilities unheard of previously. We decided subsequent to our original plan to add elements based on what we perceive as an opportunity in part because we realize there is a significant interest increased interest in polar travel. The new vessel as now engineered will extend our polar season by several months, a huge competitive advantage. A six month delay may feel like a loss in the short term, but again, if you look out through and over 25-year lifespan, it's so much more valuable to factory new information, new opportunity that will pay dividends for more than a quarter century. In the meantime, aside from just build the new ships that are expanding geographies where we operate as a Russian Far East and Northern Alaska, as I mentioned earlier. We have also reentered Egypt modestly initially, but with the intent to expand significantly in 2019, a region which was once very, very important to Lindblad Expeditions. We are expanding on a series of shorter voyages, four and five day in a variety of regions, to attract audiences that simply do not have the time of a longer of a voyages. Perhaps people like many of you who might be on this call. Some of these shorter expeditions are incorporating new and different focuses as well, more active, how wellness brought to a higher level, et cetera et cetera to test and nurture future generations of traveler. Our marketing and sales platform have been significantly augmented since 2017, expanding the use of video with both National Geographic outlets and our own. Recently, National Geographic posted a video do we from the decks of the National Geographic Explorer about the killer whale hunt with a tape has well over five million views in nearly 20,000 shares. We're also beginning to build the architecture for a new CRM system and focusing on increasing the sales activity from our web platform. Same regions travel agent exponentially increase by doubling our infield sales force. And together with National Geographic, we will significantly increase our region to the international markets. Before I finish, I do want to mention the strong year that the Natural Habitat delivered in its first full year as part of our company. Ben Bressler and his team have done a fantastic job driving this land-based business, and Natural Habitats continues to achieve our initial expectations. They are attracting more and more guests across their diverse and unique product offerings while at the same time, we're generating increased cross-selling between Lindblad and Nat Hab. This acquisition has proven to be very accretive to both – the number of Nat Hab guests traveling with Lindblad increased four fold in 2017 versus 2016. And we are seeing significant growth already for 2018 as well. So with our future on a multitude of important measures extremely positive, we are excited about the year ahead, and is confident as ever and ever a long-range growth platform. Demand is clearly very strong expansion. The fleet expansion albeit with some delivery changes in on track and most importantly our core mission to supply guests with awesome connections with the worlds loud places. Radiating fashion is in fact something I would contend as the ultimate luxury in today’s world. So thank you for your time this morning. And now please let me turn this over to Craig.

Thanks, Sven. Lindblad strategic investment to expand our capacity capitalize on the growing demand for high-quality, authentic exhibition travel has begun to generate significant financial returns. In the fourth quarter of 2017, total company revenue growth was 13% versus the fourth quarter a year ago. And this revenue growth contributed to a $3.3 million increase in adjusted EBITDA to $4.8 million. The substantial year-on-year increase during the fourth quarter was driven by the Lindblad segment which generated 17% revenue growth to $48.9 million. This $7 million increase was primarily due to a 10% rise in available guest nights from the launch of the National Geographic Quest in July. The fourth quarter also included higher guest nights from the National Geographic Orion from the addition of a trans-Atlantic voyage in the current year and the cancellation of an expedition in the prior year due to engine repairs. The revenue growth also reflects a 6% increase in net yield to $924 due to higher pricing of most itineraries. Occupancy across the fleet was in line with a year ago despite the inclusion of the Orion's trans-Atlantic voyage and the vessel traveled from Portugal to Chile in October, ahead of the Antarctica season. As I mentioned last quarter, this voyage was always expected to sail at below normal occupancy levels given the itinerary, but the addition of these voyage was opportunistic and added to our revenue and adjusted EBITDA growth this past quarter. Turning the cost of the business. Lindblad segment operating expenses increased 10% on a reported basis and 8%, excluding stock-based compensation and depreciation and amortization. The year-on-year growth was primarily driven by cost from operating the National Geographic Quest and increased commissions due to the revenue and booking growth we generated this year, partially offset by lower personnel costs. Fuel cost in the quarter were 18% above prior year due in large part to the additional operating nights in the Quest, and fuel, overall, was 4.4% of revenue, in line with the fourth quarter of the year ago. Adjusted net cruise cost on a per night basis decreased 2%, reflecting the lower personnel cost I just mentioned. Overall, the 17% revenue growth and stable cost base driven $3.4 million increase in adjusted EBITDA at the Lindblad segment versus the fourth quarter a year ago. At Natural Habitat segment. Revenues of $14.3 million and adjusted EBITDA of $2.9 million were in line with the year ago. It's important to note that commissions from the sale of Lindblad itineraries and Natural Habitat guests, which continues to grow rapidly as Sven just mentioned, are eliminated from these reported results. Total company net loss available to common stockholders in the quarter, was $16 million or $0.36 a share versus a loss of $8.7 million or $0.18 a share reported in the fourth quarter a year ago, as the improved operating results were more than offset by higher taxes, primarily due to a $12.7 million impact from the enactment of the U.S. Tax Cuts and Jobs Act in December 2017. This expense is noncash and primarily relates to a onetime toll charge on our accumulated foreign cash and retained earnings. While we are still evaluating the full impact of the tax rules on both current and future earnings, we do not currently currently anticipate a significant increase on our overall taxes moving forward at this time, but we do anticipate additional flexibility with regards to utilizing the cash generated at our international operations. Turning quickly to the full year. On a reported basis, Lindblad delivered revenue growth of 10% and adjusted EBIT growth of 4%. These results included a full year of contributions from Natural Habitat, which was acquired during the second quarter of 2016 and the impact of the highly booked voyage cancellations on the National Geographic Orion, Sea Lion and Quest that we have discussed previously. As Sven mentioned in his remarks, these types of cancellations have been extremely rare for Lindblad, and we continue to take every measure possible to ensure there are no significant voyage disruptions in the future. Excluding the impact of these voyage cancellations in 2017, we estimate that total company revenue would have increased 15% to $179 million, and adjusted EBITDA would have increased 26% to $52.5 million. On a reported basis, the Lindblad segment delivered revenues of $217 million in 2017, an increase of $9 million or 4% versus 2016, primarily due to a 3% increase in Available Guest Nights driven by the launch of the National Geographic Quest and a full year of charter expeditions to Cuba, partially offset by the voyage cancellations. Excluding the impact of the cancellations, we estimate that Lindblad segment revenue would have grown 10% to $129 million. Net Yield for the full year increased slightly, and occupancy was 87% versus 90% a year ago, reflecting the impact of the canceled voyages as well as lower bookings in 2016 for travel in the first half of 2017. Lindblad segment cost increased 7% in 2017 versus 2016, primarily reflecting operating costs associated with the National Geographic Quest, $5 million of higher stock-based compensation mainly associated with Sven's distribution of his personal shares to the employee base and $1.4 million in executive severance expense. These were partially offset by accelerated depreciation a year ago related to the December 2016 retirement of the National Geographic Endeavour. Excluding stock-based compensation, severance costs and depreciation and amortization, total operating expenses were 5% higher than 2016, primarily from costs associated with operating the Quest and increased charter cost mostly related to Cuba. Fuel costs in the year were slightly below prior year despite additional operating nights from the Quest, and fuel overall was 3.2% of revenue, compared with 3.4% in 2016. Total company net loss for the full year available to common stockholders was $8.7 million or $0.19 a share versus net income of $4.9 million of $0.10 a share a year ago, as the improved operating results were more than offset by the higher taxes and stock-based compensation. Looking at our balance sheet. We're extremely well positioned to invest in future growth opportunities. We ended the year with $96 million in unrestricted cash. Free cash flow for 2017 was a use of $28 million, including $71 million spent on the new builds. Including only maintenance CapEx, free cash flow was a $44 million for 2017, an increase of $19 million over the same period a year ago. In January of 2018, we further expanded our financial flexibility by securing an export credit agreement with regard to our Norwegian Blue Water build. This loan is available at our option where the vessel is delivered, and at our election, will bear either at fixed interest rate of 5.78% or a floating rate equal to LIBOR plus a margin of 3%. Given the strength of our balance sheet, the confidence we have in our long-term growth opportunities and the beliefs that the company's share and warrant prices are not reflective of the value of the company and our prospects, we repurchased 6.2 million in securities during the year under our $35 million stock and warrant repurchase plan, including the 574,000 shares of stock and 530,000 warrants. As of February 26, we have approximately $12 million remaining under the existing plan. It is important to note that our first priority for capital allocation is investing in our existing business and external growth opportunities that will enhance our long-term growth profile. Turning to the full year 2018. We anticipate significant growth driven by the increased capacity from the full year of operating the National Geographic Quest and the impact of the voyage cancellations in 2017. The Lindblad segment is currently pacing $28 million ahead of the same point a year ago, and we are already at 90% of our full year projected ticket revenues for 2018, despite the additional inventory that we have in the upcoming year, as compared with 85% of the 2017 full year ticket revenue at the same time a year ago. It is important to note that our venture will launch late in 2018 and contribute to the revenue growth in the current year, it will have a negative impact on EBITDA as it will have startup cost ahead of its December launch. We also anticipate a $1.5 million negative impact in the year due to the adoption of new revenue recognition rules under ASC 606. Previously all revenue for voyages under 10 days that started from before year-end were recognized in the year the voyage departed despite some of the operating days not taking place until the following year. Starting in 2018, we are required to recognize revenue in the current year only for those days that actually operate within the current year regardless of voyage start date and length. Lastly, we will also have less Cuba inventory in 2018 versus 2017, which will be partially offset by the addition of the two expeditions to Egypt in the current year that Sven mentioned earlier. Factoring all these items, the current operating environment, booking trends and the impact of the additional capacity in the current year, we expect total company core revenue in 2017 between $308 million and $315 million, 16% to 18% growth versus 2017, and we expect adjusted EBITDA between $54 million and $57 million or 24% to 31% growth versus 2017. We also, as Sven mentioned, remain firmly on track to meet the long-term financial objectives that were laid out when the company went public in 2015. Thank you for your time this morning, and now Sven and I will be happy to answer any questions that you might have.

We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Chris Woronka of Deutsche Bank. Please go ahead.

Hi, guys, this is Steve Pizzella on for Chris. As you look into your 2018 guidance, can you walk us through some of the headwinds and tailwinds you foresee?

Sure. Its obviously a much different year in 2018 versus 2017. So the headwinds that we would see, overall, on the revenue side is certainly the addition of a full year of the Quest will certainly be helpful for the full year because the Quest in 2017 launched in -- at the end of July. So will have a full year of operations on the Quest so that will be a positive. We also will have the voyage cancellations that happened on the Orion as well on the Sea Lion. We will obviously, not be taking place this year. So those two things are very positive as well as the booking strength that we have seen release since the early part of 2017, the booking trend has been remarkably strong. So we expect significant growth from that. Those will be really the things that are driving the growth in the upcoming years we expect our occupancies, higher yields and additional Available Guest Nights due to the items I just mentioned. On the flip side, we do expect less inventory on Cuba, which will certainly overall, be a slight negative for the full year. As I mentioned the revenue recognition change will lower revenues by $1.5 million because of the timing really because there's nothing be deferred into 2018 but there are stuff being different out of 2018. So that really a 2018 issue, and will resolve itself in 2019 and then, so there is that are really big items that are going to take place in 2018 versus 2017.

Okay, great, thanks. And then just reflecting back on 2017, have you made any adjustments to internal processes or maintenance schedules to potentially reduce the impact of any future malfunctions?

Yes, Sven here. Well, first of all the malfunctions had nothing to do with any maintenance factor or human error. They were complete -- just unusual events that could not have been predicted. So we did not require any kind of a change in our procedures as a consequence to those events. We are, however, expanding our Marine team, both in capacity and number, given the fact that the fleet is growing, and that is a necessary thing to do and a wise thing to do, but not because of those particular incidents which were not reflective of anything that needs to be changed.

I think its important to note that we actually go above and beyond what is required from the maintenance perspective in terms of putting our ships into dry dock annually, in terms of going ahead and doing any kind of inspections that we can do to make sure that we are operating the vessels at the most efficient capacity. We’ve always done that just to make sure that we're delivering the best experience to our guests, but also because where our vessels operate, we want to make sure they are in the right shape to operate in these, I would say disperse locations. The other thing that I would point out is when you look at the 2017 incidents, the repairs on these vessels was fully covered by our insurance policies, which speaks to the fact that the insurance companies saw that the work with the lease vessels and fully agree with is that the impact of these items could not have been identified previously. That have been prevented by doing anything different than we’ve already done. So we feel very confident given the history of the company, the efforts that we put in on a repair and maintenance and upkeep schedule that we will continue to operate these vessels very efficiently moving forward.

Okay, understood. Thank you.

The next question is from Greg Badishkanian of Citi. Please go ahead.

Hi. This is actually Jesse on for Greg. Thanks for taking my call. So looking at Cuba, I know there’s some trouble there in the third quarter, just kind of wondering what you guys saw on the fourth quarter in terms of bookings? Any kind of recovery you saw there? And then maybe just what you're seeing in that market going forward?

Yes. So the Cuba, as we mentioned in the last quarter call, the government warning about traveling to Cuba as well as some of the news reports regarding some of the sonic boom issues that are happening in Cuba certainly slowed down some of the bookings that we have seen for Cuba. The bookings for us are so far advanced that we haven't seen many new bookings really in the fourth quarter for the first quarter of travel because we don't operate the vessel in Cuba other than the first quarter. So the first quarter of 2018, we are seeing lower occupancies than we saw in the first quarter of 2017, but we do not expect that to change since the last call because the window between then and the travel in the first quarter was so short. I will say that overall, the Cuba, definition for us is not something that we’re spending a lot of time focused on. We talk about our growth plan. We’re looking for opportunities to find locations that can expand our itineraries that our guests are really interested in doing it. A prime example of that as Sven mentioned earlier is Egypt. Egypt was a place for the company to travel to previously done very well with. We have not been there in a while, we are charting a vessel later this year for two voyages and we have some vessels – some itineraries lined up for 2019 as well. And early indications from just an early e-mail and a quick brochure have been very positive on Egypt. So we think we have an opportunity to grow there and we’re always looking for new itineraries and new kind of opportunities around the globe. So we will continue to do that. And Cuba, while there short-term impact is minor from a financial perspective, overall, it's not going to be a big implication to our long-term growth strategy.

Okay, great. That makes sense. And then, just on the overall concerns about industry demand keeping of capacity three years out from now. Can you maybe just talk about yourself on that how – what do you see with the intuitive capacity like 2019 and after?

I’m not 100% sure what you mean, consumer capacity or industry – or supply – demand or supply capacity, but I will try to speak to them both. Demand, I see absolutely nothing on the horizon that would suggest anything but an increasing demand as it relates to both demographics and an ever-growing interest in this kind of travel. As far as the supply side, there are new entrants coming into the market as, in my view, is that any market that is sort of underserved, if you will, and I think the expedition market is somewhat underserved that new entrants in fact broaden the category, increase interest in the category and that is fundamentally good thing, and I believe that we're well positioned in the harvest interest simply because of our tenure, our partnership with National Geographic, the fact that this is what we're focused on. And so, we do not view these new entrants as a negative. In fact, I would view it primarily as a positive, broadening the category, and we believe we will benefit as a consequent of that.

Tenure, yes. Sorry, I was talking about supply. That’s all from me. Thanks.

Thank you.

The next question is from George Kelly of Imperial Capital. Please go ahead.

Hi, guys. Thanks for taking my questions. I just have a few for you. So first to follow-up on the previous question; have you seen any pricing pressure from any of your competitors? Or just generally just the pricing environment seems healthy?

Well, to-date, we have not seen any long-term pricing pressure. What does happen invariably, if people feel that they are coming up short in terms of their expectations, attracting guests, they start lowering their prices. But a lot of the competition or a lot of the new entrants are not here yet. They're out into the future. Most of them will be entering in 2019 and 2020. So we haven't seen any of that to-date.

One other thing I would point out is that we're not once to compete on price. We compete on delivering an exceptional experience and amazing opportunity for our guests given the history of the company and what we – the locations that we deliver to. I think it is important to note that, yes, obviously, pricing the market place will certainly play into the overall occupancy and demand factors that are in the marketplace. But we have traditionally been at the high end of the yields per night. And the reason we can charge those yields is because of the experience that we're delivering to our guests on a regular basis.

Okay, got you. And then, Sven, you mentioned in the prepared remarks that the booking environment continues to be really strong in 2018. And I just – I had a hard time keeping up with some of the numbers. So just wondering if you could again give us what you're seeing so far this year? And then just, if you look at the current environment you've been in this industry for a long time now. Is it just – does it seem like everything is kind of coming together. Have you felt – how do you feel about sort of where we're and what the demand looks like?

Yes. Great, great, great, question. Sometimes the numbers tell you certain things and sometimes it's just the signals you're getting from a variety of sources tell you certain things. And so I've been at this a long time. So I've gone through a whole lot of cycles obviously since I started this business – this particular business in 1979. And 2016 was this – a really, really stressful year because there were all of these external factors that were getting in the way. Just a multitude of them and they were coming in dribs and dribs and dribs. And in 2017 things began to really sort of clear up, there was a lot lesser of that. And in 2018 to-date, it's been a very, very, very positive environment. The level of the future bookings on a daily basis are unprecedented and certainly in terms of my own experience. And it just feels that there's malaises, if you will that took place for a while, is just behind that and it just feels very, very, very optimistic and certainly, the numbers there I mean, to be the – for us, getting bookings far in advance is a good thing. That kind of visibility is a very good thing and for us to be approximately 40% higher for 2019 and we were at the same time for 2018 is a very, very good and positive indicator.

Let me just add little more color what Sven said from that number's perspective, if you look at 2018, as we said earlier, we have, today, $28 million more on the books for 2018 that we have the same time for 2017. And in actuality, when you look at that 2018 bookings we have today, they already exceed the full year of 2017 a year ago. So we're doing very well from a booking perspective, partially due to the increased capacity and partially due to the increased demand in the space certainly.

Great. Thank you very much.

[Operator Instructions] Our next question is from Greg Pendy of Sidoti. Please go ahead.

Hey, guys. Thanks for taking my call. Just two quick questions. One, you mentioned Egypt as far as new regions. Where are you in terms of testing sort of shorter duration trips? There have been – is that something that is likely to enter into 2018 just to get sort of the market that it can't really take two weeks?

Yes. So we started actually, a series of shorter programs in Baja California in – at the end of 2017 and early 2018. This was one of our smaller ships to Sea Bird. Initially, we had that period was intended to be laid up, and we decided to experiment with some of the shorter programs. I think we mentioned it before that we partnered with an organization called Exhale to create programs that had significant and really focus wellness component. We've now decided to continue in the fall of 2018 with some voyage in the Pacific Northwest and on the West Coast of the United States, and to continue those programs in Baja California. So they are going through accelerated significantly. We – honestly, these will not fly off the shelves in the short-term because they require us to build new markets, which we're actively doing. But we believe, in the long term, they will be extremely valuable for the organization, particularly sort of the edges of key seasons.

Great. That's helpful. And then just one for Craig. Can just help us a little bit in terms of how we should be thinking about CapEx? I believe that the large vessel had a 20% down payment. But how should we be thinking about 2018 on that front maintenance versus ship build?

Sure. So maintenance CapEx across the company really hover somewhere in that high-single to low double-digit range, anywhere from $8 million to $12 million depending on the year – this year to be somewhere probably around $10 million or $11 million all-in. When you look at the growth CapEx of the company in the current year, it really depends on a couple of factors but we certainly know that we'll spending the remainder of the build associated with the Venture headed for the rest of the year, that's somewhere probably around $20 million-or-so. And then have some startup cost associated with the blue-water vessel. The one variable that does remain outstanding on the CapEx side is whether exercise the option related to the new build – we have two options on the blue-water build that we have going on in Ulstein, whether we want to exercise those are not. If we do that, then we certainly well on the down payment associated with those, which will impact the current year. But then, we would have the advantage of having that vessel in two to three years from that. And so that's they are really big variable, aside from that, the CapEx would be primarily related to the Venture in the growth CapEx for the current year.

Okay, great. That's helpful and thanks.

There are no additional questions at this time. This concludes our question-and-answer session. I’d like to turn the conference back over to Craig Felenstein for closing remarks.

Thank you, everybody, for joining us this morning. And if you have any follow-up questions, I'm happy to talk later today. Just give me call in the office. Thank you very much.

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