Hello, everyone, and welcome to the Lindblad Expeditions Fourth Quarter and Full Year Financial Results. My name is Bruno, and I'll be operating your call today. [Operator Instructions] I will now hand over to your host and Chief Financial Officer, Craig Felenstein. Please go ahead.

Thank you, Bruno. Good morning, everyone, and thank you for joining us for Lindblad's 2023 fourth quarter and year-end earnings Callc With me on the call today is Sven Lindblad, Lindblad's Founder and Chief Executive Officer. Sven will begin with some opening comments, and then I will follow with some details on our 2023 financial results and current expectations for 2024 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 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, let me turn the call over to Sven.

Thanks, Craig, and good morning, and thank you all for joining us today. When I returned to CEO of Lindblad Expeditions in June of 2023, I laid out for you a variety of priorities that I believe would usher in a new era for our enterprise. With eight months now in the rearview mirror, I would like to take a few minutes to discuss the progress we have made in each of these areas while providing some color on what drove our success this past year and why we are excited about the growth opportunity we have in the months and years ahead. First and foremost, the new era starts with putting the pandemic definitively behind us. The record financial results we delivered in 2023, including 35% revenue growth and adjusted EBITDA of over $71 million, a pretty good indication that we are well on our way to achieving that outcome. Craig will go through our financial results in a moment, but we took nearly 30,000 guests more than ever before to the remarkable destinations we have been visiting for decades. And most importantly, the guest feedback has been nothing short of extraordinary. All the drivers of our business were up this year, led by a 33% increase in guest nights, as we began to fully utilize our expanded fleet. As we increase capacity, we also saw meaningful growth in net yield, up 12% to $1,097 per guests night and occupancy taking up to 77% from 75% a year ago. I know there is a tendency to focus on occupancy, but in isolation, it is a misleading metric, especially in our business. Understandably, at the big cruise lines, there is a commitment to 100% occupancy even if the last percentages represent very low or perhaps even no yield. The reason…

Thanks, Sven. As Sven highlighted, Lindblad delivered record revenue and EBITDA in 2023 as we further ramped operations with broader deployment of our expanded fleet and additional departures across our platform of land-based businesses. As we have discussed previously, the earnings potential of the company has increased considerably over the last several years with the addition of over 40% more ship capacity and three industry-leading land operators. And the record results we delivered in 2023 demonstrates the opportunity we have across our diverse portfolio of experiential offerings. Before we look ahead, let me take a few minutes to discuss our performance from this past year as we focused on further ramping ship operations, fueling the growth of our differentiated land portfolio and solidifying our overall infrastructure, technological footprint and marketing and sales capabilities to allow us to maximize the earnings potential in the years ahead. Total company revenue for the full year 2023 of $570 million increased $148 million or 35% versus 2022, as we continue to ramp operations with strong growth across both our Lindblad and Land Experiences segments. At the Lindblad segment, revenue of $397 million increased $119 million or 43% year-on-year, primarily due to a 33% increase in available guest nights from broader utilization of the fleet. Additionally, net yield increased 12% to $1,097 per available guest night due to higher pricing and occupancy expansion to 77%, despite the significant increase in available guest nights year-over-year. As we further ramp occupancy towards historical levels, you can see both the revenue opportunity and the operating leverage inherent in our marine platform as we attract more and more guests while maintaining strong pricing discipline across the expanded fleet. Similar to our ship operations, our land portfolio is also delivering strong growth, driven by additional departures and guests across each…

Thank you. [Operator Instructions] Our first question comes from Steve Wieczynski from Stifel. Steve, your line is now open.

Hi This is Jackson Gibb on for Steve Wieczynski. So we've seen a fair amount of these disruptions over time and kind of how they're magnified by your scale and in some cases, the uniqueness and your replaceability of the destinations you visit. But is there anything about the new expanded Disney deal that might help mitigate that impact by maybe filling funnel more from the demand side moving forward? Any kind of specifics about how you're thinking about the deal might help mitigate impacts from shifting itineraries would be helpful.

Yeah. That's an interesting question. Well, first of all, the -- as a consequence of this new deal with National Geographic and by extension Disney, our marketing prowess or power, if you will, will increase, we believe, rather dramatically. Obviously, we will know more specifically and in greater detail by the end of the year how that manifests itself in terms of combating situations around the world that periodically arise, we will have to see. I mean one of the things we have done -- first of all, there's always been -- if you think about going back decades, there's always been something almost invariably, every now and then, you get through a year where absolutely nothing happened in the world that has any consequence or disruption in any way. But generally speaking, there's always a couple of things -- two or three things that cause you to have to maybe reroute a ship or diminish booking somewhat, in certain instances, significantly. So most areas we're in are -- we're not in for extended periods of time, except for places that are traditionally very, very stable, Alaska, Galapagos, okay, we had some recent disruption, but that's not -- historically, there has not been disruption there, Iceland, Antarctica, the Arctic. So we're very conscientious of making sure that we're not in places in a significant -- for a significant amount of time that are questionable in terms of the degree to which political influences and such can affect them. So I would say that -- put it this way, we are going to be strengthened as a consequence of this relationship. Now we have a triangle. In essence, we have National Discovery, Disney and ourselves, and that's a real powerhouse. So anything we face should be faced much -- in a stronger way than we would have without them as part of it. I hope that answers your question.

Yeah. Thanks, Sven. The other side of this -- yes, thanks, Sven. Jackson, the other side of this from my perspective is that there's two aspects of our business that are pretty unique. One is we should have fair enough flexibility as Sven kind of highlighted, which is because of we are expedition by nature and we're less reliant on individual ports or resources, we can't take our ships and move them when these disruptions happen as long as there's enough notice to ultimately sell whatever the change, ultimately we're going to do is. The second thing is the company has scaled up pretty dramatically. If you think about where we were back in 2016 before we embarked on our expansion of our overall fleet, the fleet itself is up over 60% in terms of size. And then when you look at the land companies that we've expanded, the company's earnings power has increased so dramatically that these kind of issues, the ones that you're seeing in something like Ecuador potentially in the Red Sea have much less of an impact than they ever had before. The second thing on that front is we will continue to expand the company. As we continue to increase the scale and diversify the company, these things will continue to have less and less of an impact as we move forward. So to echo Sven's point, it is something that is inherent in our business, but traditionally, the impact has not been significant or it will be even less so here moving forward as we continue to scale.

Okay. Awesome. That's super helpful. I guess on the subject of expanding the company, we've seen a couple of your larger peers put in new ship orders, obviously, much different size and scale and different areas of operation. But is that something that you're considering more seriously now? And I guess, a different way, what would have to happen for it to be the right time to order a new ship to make an addition to the fleet?

Yeah. So first of all, it's absolutely clear that the most valuable thing, the single most valuable thing that we can do as a company and our focus on doing as a company is maximizing the inventory that we have already bought and spent money on acquiring, right? So getting the occupancies back up and making sure that the yields are maintained is the primary key element of growth, obviously, internally. So this year, we will learn a lot about what this triangle, and it's the first time I've actually referenced it in that way. Disney, National Geographic and Lindblad, what the power of that is and assume as we understand that somewhat better, that will accelerate in all likelihood the commitment to acquire new vessels, whether that is acquiring vessels that exist that are no longer viable in the companies where they live or building new ships. Those are two avenues. If you think about our fleet broadly, up until 2015, there was -- that we -- up until 2017, we hit -- always bought existing ships, modified them and made them suitable for our purposes, and then we started building ships. So we only built four new ships, and we have acquired a lot more than that over time. And so going forward, we will also be looking at these two avenues: are there existing ships that are suitable to us that need a happy home or are there -- or should we build -- be building new ships? And we will begin looking closely at that in the not-too-distant future as to which of those avenues is most suitable going forward.

Okay. Understood. And if I could just squeeze in one more. I just wanted to get some updated thoughts on how you're thinking about buybacks. You've been unrestricted by -- from a covenant perspective since February 2023, seem to have fairly ample liquidity. Just wanted to get your perspective on how you're thinking about share repurchases now?

Sure. Thanks, Jackson. So I would say we really haven't changed the way we look at share buybacks, really since we put our share buyback plan in place prior to the pandemic. And that is when you think about the cash at the company and what we want to do with that cash, our first priority is to grow the business organically. Our second priority is to look for M&A opportunities that will ultimately increase the earnings potential of the company here moving forward and increase the opportunity to grow. And then third, we have no hesitation about returning capital to shareholders, either through buying back shares or obviously lowering our outstanding debt when we have the ability to do so. So I would say that's how we weigh all of our cash return at any given moment, and we'll continue to do that moving forward.

Got it. Thanks, great. That’s all from me. Thank you.

Our next question comes from Eric Wold from B. Riley Securities. Eric, your line is now open.

Thank you. Hi, everyone. Just a couple of questions for me. I guess first, Craig, if we think about the obviously strong growth in EBITDA year-over-year, we think about the numbers came in towards the lower end of the guidance range that you gave or kind of reaffirmed on the Q3 call. I know that there's disruption from the Israeli-Hamas war, which was known at that time. Maybe just kind of give us a sense of kind of what are the biggest factors that kept EBITDA towards the lower end versus possibly getting up towards that higher end?

Sure. Yeah. I think you pretty much touched upon it, Eric, more than anything else, right? So when you look at the fourth quarter, everything pretty much came in where we anticipated it to come in from both revenue and cost perspective with the exception of the cancellations that came because of the conflict that was happening over in the Middle East. So when you ultimately have cancellations, they tend to have a pretty dramatic effect on revenue and it tends to fall right to the bottom line. So in the absence of that, the numbers certainly would have been a little bit higher, but the expectations for everything else pretty much came in where we thought they would.

Okay. Perfect. And then kind of a broader question. I know you've had now a number of months of working with kind of the expanded National Geographic, Disney team since you announced the extended agreement. I guess maybe give us, if you had more time to work with them, updated sense on, I guess, timing of when you expect kind of the full effect of kind of the Disney travel team to really start working with yours and start pushing the Lindblad tours? How visible do you think this relationship will be to consumers now versus maybe previously how visible consumers know that you're a partner or kind of working with Disney and a part of that relationship? And then any sense on how those teams will kind of market your voyages relative to Disney's own mass crews and kind of how that will be kind of -- since you kind of parsed out in kind of their efforts, so to speak?

Yeah. So this is a multifaceted answer because it's a multifaceted campaign, if you will. So there are three buckets of investment in terms of marketing. One is a joint investment between Disney and ourselves, which is managed jointly. There's the National Geographic expeditions investment and there's our investments, all pulling in the same direction because we have no longer any attribution connected with how business comes in. We -- for the 20 years previously, we've had attribution. There's specific business that's coming through the National Geographic expeditions channel and through our own. And those have different financial mechanisms connected with it. That has been completely eliminated. So we're all pulling in absolutely the same direction. None of us care where the business comes from, which of the channels it comes from and there's value in all of the channels. So when you think about the addition of Disney, right, you had National Geographic expeditions in Lindblad, that's been going on for 20 years. Now Disney comes into the mix as part of it. They have extraordinary distribution channels. When it comes to -- I mean they have a huge sales force, for example, that accesses the trade. They have so many sort of distribution avenues, where they are intending to showcase Lindblad Expeditions, National Geographic. The teams are meeting regularly month to month on a disciplined basis for an extended period of time to develop strategies and tactics. And periodically, we get together on a wider basis at different levels of engagement between ourselves, the Disney team and the National Geographic expedition's team to deal with longer-term issues that we believe can drive the business. So the engagement between the organizations has just been hugely cooperative and very excited and very, very committed to the idea of growing our business together because there's lots of value for all parties if we do that. The good thing about a really, really good agreement is where you pretty much assured that everybody that's part of that agreement gain significant value as a consequence of growth, and that's what this agreement is.

Helpful. Thank you. Thank you, both.

[Operator Instructions] Our next question comes from Alex Fuhrman from Craig-Hallum Capital Group. Alex, your line is now open.

Hey, guys. Thanks for taking my question. It sounds like you're obviously guiding to pretty significant revenue growth this year and the vast majority of the revenue that you're projecting is already on the book. Can you help us square that a little bit with a relatively modest 2% increase in bookings compared to the same time last year? Are you starting to see people maybe book a little bit closer to the departure time now that it's harder for them to cancel or reschedule their voyages?

Yeah. So let me touch on that, and then I'll turn it over to Sven for any comments. The 2% increase in terms of revenue today is very misleading because we had this significant pile of money that was in -- from cancellations that happened -- cancellations from deferrals that happened during COVID into 2023 that were on the books at this point versus what we're seeing this year, which is we had less of the carry in, but the week-on-week growth of bookings is so much more significant than it was a year ago in terms of the weekly bookings. So what we're seeing is that 2% growth number is expanding rapidly every single week. So if I looked at it several weeks ago, it was down and now it's already up and it will continue to head in that direction because, again, as I mentioned in my comments, if you look at the bookings from kind of December 1 through today, we're up 50%, 5-0, versus where we were in the same bookings a year ago. So the momentum is really, really strong, and it has really just continued, so we fully anticipate that, that opportunity will continue to expand moving forward. Sven, I think you want to add.

Yeah. Well, just to clarify, so when -- during COVID, we issued a ton of -- and Craig can give you the actual amount of what's called future travel credits, right, rather than canceling, they got a credit for the future. So we already received the money and then they were able to travel in the future. And so last year, a lot of -- a significant number of those credits were utilized and were part of the -- or considered part of the revenue. So this year, it's all new people, by and large, very, very few future travel credits. So in a sense, the 2% is really misleading. If you exclude that particular metric, it'd be more like 20%, 21% ahead and 50% in the last couple of months in terms of future growth. So you got to take that in context.

Okay, guys. That’s really helpful. I appreciate that. Thank you, both.

Thank you.

We have no further questions. So I'd like to hand the call back to you, Craig.

Thank you, operator. Thank you, everybody else for joining us today. We appreciate your time. As always, if you have additional questions, please reach out. And we look forward to hearing from each of you. Thank you.

Thank you very much.

Ladies and gentlemen, this concludes today's call. Thank you for joining. You may now disconnect your lines. Thank you.