Good morning or good afternoon all, and welcome to the Lindblad Expeditions first quarter's financial results call. My name is Adam, and I'll be your operator for today. If you'd like to ask a question during the Q&A portion of today's call, you may do so by pressing star followed by one on your telephone keypad to enter the queue. I will now hand the call over to Chief Financial Officer Craig Felenstein, to begin. Craig, please go ahead when you are ready.
Thank you, Adam. Good morning, everyone, and thank you for joining us for Lindblad's 2023 first quarter earnings call. With me on the call today is Dolf Berle, Lindblad's Chief Executive Officer. Dolf 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. With that out of the way, let me turn the call over to Dolf.
Thanks, Craig. Good morning, everyone, and thanks for joining us today. Not long ago, I wrote our annual report letter to shareholders and described 2022 as a year of resurgence for our company. It was a year with many highlights, returning to full operations on all our ships, the first full year and brilliant performance at both poles of our new blue water ships, the National Geographic Endurance and the National Geographic Resolution. In the Galápagos, the extremely positive reception of our guests to the Islander II, and the securing of 20 more years of CUPOS to operate there. The record-setting financial performance of our land companies were all reasons for celebration. Most importantly, we experienced a change in guest focus. With COVID becoming less and less of a topic, the desire to once again explore the world's most amazing geographies returned and bookings started to meaningfully increase.
This backdrop is one which created momentum into our first quarter performance, and I'm pleased to say that Q1 2023 results represent all-time highs for Lindblad Expeditions in both revenue and EBITDA. Craig will give some additional color on our financial results in a few minutes, but our first quarter performance demonstrates the earnings power inherent in the increased capacity of our fleet, as well as the fast-growing land companies. I, for one, am extremely grateful to the hardworking and dedicated team of people who fought steadfastly over the last three years to ensure Lindblad Expeditions emerged from the pandemic as a strong and vibrant company, and who are now working diligently to push it to new heights. A centerpiece of the Q1 2023 performance was the increased guest count as we broadened the usage of our expanded fleet and achieved 81% occupancy fleet-wide.
All of our ships were fully deployed during the quarter. The occupancy bump from 66% a year ago was due to a variety of factors. First, as noted a moment ago, the world is opening up again to travel, and the confidence among guests continues to grow as they consider travel on expedition ships to remote places. Second, our modern marketing machine is starting to yield powerful results. I wanna tell you a bit more about that now. Prior to the pandemic, the company had been predominantly utilizing a historically successful marketing approach, which centered around brochures, letters from our founder and now board co-chair, Sven-Olof Lindblad, targeted emails, and smaller direct mail pieces which focused on specific geographies and itineraries.
Over the last two years, we have invested heavily in transitioning to an omni-channel marketing approach that evolves our past practices and adds meaningful digital marketing components. Today, we are developing an ever-growing capacity to source guests through search engine optimization and SEM. We are active on social media platforms. We also have a growing set of capabilities around the analytics, which allow us to gauge the effectiveness of our various digital marketing efforts, and also to understand the relative performance of all these different approaches and channels from a customer acquisition cost standpoint. The largest result thus far of the growing proficiency of this new omni-channel marketing approach is that we are attracting a higher number of first-time guests than ever before.
Coupled with the ongoing strength of our repeat guest business, which continues to be on average more than 35% of each voyage, we are booking higher guest volumes than ever before. At this time, our bookings for 2023 are 45% higher than pre-pandemic bookings in 2019 for the year 2020. I am also happy to report that cancellations, which had more than doubled as a percentage of booked revenue late last year, are settling down significantly. While still higher than in 2019, they have dropped due to a number of factors. First, the threat of COVID meaningfully impacting a voyage continues to diminish, and indeed, the incidence of COVID ownership is increasingly rare. Secondly, we have now reinstituted a more industry norm cancellation policy, which drives guests to think more critically before booking or canceling a trip.
During the pandemic, we had reduced penalties for canceling a trip, even on short notice, to very low levels. Recognizing that our valued guests wanted and needed flexibility due to illnesses and the quarantine requirements that nearly all countries had imposed for anyone who tested positive for COVID. We expect cancellations to continue to drop as a % of booked revenue and are encouraged by the current trends. A big step forward in our marketing and sales efforts occurred earlier this week with the launch of our new Seaware reservations and booking platform. The Seaware platform is one which will allow guests and eventually travel advisor partners to book, select a cabin, and access any special offers online. I'm quite excited about the fact that it will also allow guests who are on a voyage with us to book a future trip in real time.
We have found historically that guests who love seeing whales in Alaska express interest in seeing the whales in Baja. The same is true for our polar explorers, who once they have experienced one of the poles on a Lindblad ship, have a great desire to travel to the other pole in the same fashion. Seaware will also allow us to implement modern dynamic pricing practices, enhancing our ability to reach higher levels of revenue yield on voyages across the globe. Just as importantly, we're building connectivity between the Seaware platform and our marketing technology and CRM stack. This will give us better and faster access to customer data and enable us to be more effective in our guest generation and customer service efforts. The Seaware implementation is a major milestone in these digital transformation efforts and enables a leap forward towards a more powerful future.
Back in 2002, our founder, Sven, pulled a group of leaders together within the company and established Lindblad Expeditions Guiding Principles. Our first guiding principle is ensure that everything we do must add value to the guest experience. I'm really grateful to our team for the guest feedback we are seeing across our fleet, both new and old, with regards to the quality of expedition content, food and beverage, and the onboard hotel and amenities aspects of these expeditions. The other thing that is improving as each month goes by is the reliability of the network of partners which we enjoy, including airlines and the many land and port operations partners that we have built relationships with over decades of working together. They are returning to more normal operations, which has a great impact on the enjoyment of our guests traveling the world with us.
Delivering amazing experiences for our guests remains our primary focus. As we do so, we are equally committed to pushing booking levels higher and higher to once again achieve the occupancy levels that we had attained prior to the pandemic. At this particular time, we have seen the best performance in the geographies which are the historical strongholds for the company. The Antarctic season, which just finished, was extremely strong. Our newest ships demonstrated their Polar Class 5 capabilities in the ice and enabled voyages to areas that were previously unreachable. The abundance of wildlife and remarkable scenery observed further south than ever before in the Amundsen Sea created unforgettable experiences for our guests. We also continue to generate booking strength in the Galápagos while experiencing some of the highest guest feedback scores in our history there.
Our Alaska season, which begins in May, is showing strong guest demand across all four of our U.S. flagged vessels. We're expecting another strong season in the Arctic when the polar ships move further north for the Arctic summer. As we continue to ramp occupancy levels, we are focused on fine-tuning marketing for some of our more esoteric or shoulder season itineraries, including where the ships are in transition between the poles or repositioning before and after very popular destinations such as Baja. I mentioned the performance of our land companies earlier, but their progress deserves more detailed description. As you may recall, our strategy is to develop a best-in-class platform company which can provide adventure travel options across multiple types of experiences and with different thematic focuses for our guests.
Famously, Sven Lindblad describes our guests as omnivorous in their desire to experience the world broadly from a travel and expedition standpoint. Q1 is a seasonally quiet quarter for all of our land companies. They delivered positive earnings and are poised for another year of record results. Key drivers behind their performance include the quality of their offerings and strong consumer demand for premium experiential travel. They are also benefiting from the sharing of best practices and greater infrastructure and marketing support resident in our larger organization. Our ability to grow these land companies once they join the Lindblad family of companies is demonstrated by the success of Natural Habitat, which has more than tripled its EBITDA contribution since joining Lindblad in 2016.
As I near the end of my comments, I feel it is important to mention our continued focus related to environmental sustainability and our mission to educate guests about what they can do to support the health of our planet. In addition to our now longtime commitment to being carbon neutral and having zero single-use plastics in our system, we continue to push forward on many other efforts. We sponsored the 2023 Planet Forward Storyfest, relaunched our support for the Kampong Tralach Green School in Cambodia, and launched the Visiting Scientist Program for the 2022 and 2023 Antarctic and Southern Ocean season. The scientists on board our ship will study snow algae, DNA in the ocean's waters, and baleen whales.
A personal highlight for me was welcoming 50 elementary, middle school, and high school teachers to our 2023 class of Lindblad National Geographic Society Grosvenor Teacher Fellows, who will take expeditions with us and then translate their experiences to future generations in their classrooms across America. We look forward, I wanna share my belief that the future will be bright for our segment of this industry and for Lindblad Expeditions individually. The rise in environmental consciousness and the consumer trends indicating that people are desiring experiences rather than being more focused on material goods provide secular tailwinds for our business. Within the industry, Lindblad Expeditions has the deepest and widest history related to expedition travel, including the many firsts our company recorded, such as being the first company to take tourists to places such as Antarctica and the Galápagos.
We are building on that great tradition by continuing to advance the technologies and depth of expertise within our ranks, which will allow us to maintain the preeminent position in this exciting field. With that, I will turn the call over to Craig.
Thanks, Dolf. The strong financial results Lindblad generated during the first quarter perfectly demonstrates the opportunity we have across our platform as we take advantage of the strong and growing demand for high-quality experiential travel. The targeted strategic investments we made during the pandemic to dramatically increase the capacity of our fleet and to broaden our portfolio of product offerings has significantly expanded the earnings potential of the company. We have just started to significantly tap into that earnings power. At the same time, with our recent debt refinancing, we have further strengthened our balance sheet, providing additional financial flexibility as we continue to ramp the business and explore additional growth opportunities that can further amplify the growth trajectory of the company. I'll discuss our balance sheet in a moment, but before I do, let's take a quick look at our financial performance from this past quarter.
First quarter total company revenue of $143 million increased $76 million or 111% versus the first quarter a year ago, as we continue to ramp operations, and was $54 million or 60% higher than 2019, due in large part to our expanded fleet and additional land-focused offerings. At the Lindblad segment, revenue of $115 million increased $65 million or 130% versus the first quarter a year ago, and $39 million or 52% versus 2019. The year-on-year growth was driven by a 71% expansion in available guest nights from broader utilization of the fleet and by increased occupancy of 81% versus 66% in the first quarter a year ago.
The higher occupancy, combined with increased pricing across the fleet, drove net yield to $1,205 per night, an increase of 63% from the first quarter of 2022. While occupancy is not yet back to traditional levels, you can see the revenue opportunity we have across the expanded fleet as we ramp guest counts and increase yields. As we dramatically improve the results across our fleet, we also significantly grew our land platform by driving more guests across our product portfolio and further integrating the three businesses we acquired in 2021. Revenue at the Land Experiences segment for the first quarter of 2023 of $28 million increased 59% versus the first quarter of 2022 and was more than double the first quarter of 2019.
The strong revenue performance across both segments generated significant operating leverage, with total company Adjusted EBITDA of $27 million in the first quarter, an increase of $48 million versus the first quarter a year ago, and growth of 23% compared with the first quarter of 2019. The year-on-year growth was driven by a $47 million increase at the Lindblad segment, led by broader utilization of the fleet and strong demand in our Antarctica, the Galápagos, Baja, and Costa Rica. While the Land Experiences segment, in a traditionally slow season, increased by $1 million due predominantly to the growth in Natural Habitat Adventures from northern light trips in Canada and monarch butterfly trips in Mexico.
Looking a little closer at the cost side of the business, operating expenses before depreciation and amortization, interest, and taxes increased $27 million or 31% versus the first quarter of 2022, led by a 24% increase in cost of tours, primarily related to the ramp in ship utilization, which included higher fuel and crew costs, as well as expenses related to operating additional land-based trips. Fuel costs increased 40% due to the ramp in ship operations, was only 6% of revenue as compared to 9% of revenue in the first quarter of 2022, reflecting the increased revenue overall offset by slightly higher pricing.
Sales and marketing costs increased 68% versus a year ago, primarily due to higher commissions and royalties related to the increase in revenues and from increased search and direct mail marketing to drive future bookings. The quarter also included some additional costs associated with our digital initiatives, most notably associated with our new reservation system, which, as Dolf mentioned, launched earlier this week. G&A expense during the quarter increased 26% versus a year ago, excluding stock-based compensation and one-time items, primarily due to higher personnel costs as we ramp operations and increased credit card commissions related to final payments for upcoming itineraries and higher deposits on new reservations for future travel.
Total company net loss available to stockholders of $0.4 million or $0.01 per diluted share improved $43 million versus net loss available to common stockholders of $43 million or $0.85 per diluted share reported in the first quarter a year ago.
The improvement reflects the significant ramp in operations, partially offset by higher taxes of $1.7 million and additional interest expense of $1.8 million net associated with higher rates on our export credit agreements and increased borrowings related to our debt refinancing in February 2022. Turning to the balance sheet, we ended the quarter with $121 million in cash and short-term investments, a $9 million decline from the end of 2022 as positive operating cash of $2 million was more than offset primarily by CapEx of $6 million, which included maintenance CapEx and spending on our digital initiatives, as well as by principal payments on our ECA facilities of $6 million. Following the quarter, we further solidified our balance sheet by refinancing our export credit agreements with notes that mature in 2028.
The 9% fixed rate notes replace variable rate debt that had an interest rate of approximately 8.5% in the first quarter, and also eliminates principal payments of over $20 million annually. We also increased our cash position by nearly $70 million, providing further flexibility as we ramp operations and additional capital as we explore additional strategic initiatives to expand our long-term growth opportunities. Turning to the full year 2023, we remain excited by the sustained operating momentum across our portfolio and continue to anticipate significant growth as we ramp operations and capitalize on our expanded platform.
The Lindblad segment has already booked well over 90% of its full-year projected ticket revenues for the year. We continue to expect total company tour revenue in 2023 between $550 million and $575 million and Adjusted EBITDA between $70 million and $80 million. These projections reflect the impact of elevated cancellations on occupancy in the first half of the year. As anticipated, we have started to see a slowdown in cancellation rates with regards to bookings for the back half of the year and into 2024.
Please note that quarterly results will reflect the seasonality of our business, with the second and fourth quarters impacted by less available guest nights due to the heavy dry dock and transit time across our fleet, more shoulder season inventory, the impact of launching our new reservation platform, and seasonality for our land businesses. Conversely, the third quarter will benefit from more complete fleet usage and peak seasons across our fleet and land companies. Overall, while there will be quarterly choppiness, we are well positioned for strong results in 2023 and beyond. More and more guests are experiencing the thrill of exploration, and with an expanded fleet and a broader set of product offerings, we are well situated to capitalize on the growing demand for experiential travel and deliver additional shareholder value in the months and years ahead.
Thanks for your time this morning, and now Dolf and I would be happy to answer any questions you may have.
As a reminder, if you'd like to ask a question today, please press star followed by one on your telephone keypad now. When preparing to ask your question, please ensure your headset is fully plugged in and unmuted locally. That's star one to ask a question. Now our first question today comes from Steve Wieczynski from Stifel. Steve, your line is open. Please go ahead.
Yeah. Hey, guys. Good morning. Craig, let's... Can we do some simple math here? You know, you just posted a $27 million EBITDA first quarter and based on your unchanged guidance, you know, you're saying your business is gonna do, let's say, let's call it $48 million at the midpoint, you know, for the last three quarters of the year. You kinda talked about this towards the end of your prepared remarks, and I fully understand the seasonality of your business, but, you know, I guess I have, I really have no idea how this business is only gonna do $48 million of EBITDA over the last three quarters of the years, over the years. You know, Are you being super conservative here? Are you seeing something, you know, we aren't seeing?
Just trying to square away, you know, why that full year guidance wasn't touched yet at this point. Thanks.
Sure. Thanks, Steve. When you look at the guidance that we gave for the year, obviously there was a fair amount of items that we knew heading into the year, including the fact that we expected Q1 to be very strong, and it was. We knew we were gonna start off the year on the right foot, which is certainly what happened. When you look at kind of the rest of the year, there are certain headwinds which are just relevant in the business. Certainly when you look at Q2, you're gonna have a significant amount of dry dock and transit time, as I just mentioned. There is some expenses associated with launching our Seaware product this week, which will roll through the quarter. There are some cancellation impacts associated with Peru.
Thankfully, that's in the rearview window, but it did have an impact on us in the early part of the quarter. As Dolf mentioned in his commentary, you certainly do have some of these more esoteric or shoulder season inventory voyages, which are still ramping up. You know, the, the geographies that have bounced back quicker are the tried and true geographies that we have certainly been operating in for years. Some of the more, I would say, nuanced itineraries are still ramping, and those are more prevalent in the second quarter and the fourth quarter. That's kind of the primary driver between a lot of this.
The other thing that's kind of happening on the cost side is while fuel costs have come down from where they were in fourth quarter, they still haven't fully abated, and we're still seeing the impact of higher costs. The last thing that I'll say with regards to guidance is where we end up for the full year still has a significant amount of variability to it associated with, do bookings continue on the same trajectory that they're on today? What happens with cancellations? You know, Dolf talked about cancellations coming down dramatically, and they have, but they're still higher than they were in 2019 and probably close to 2x higher, which is still a headwind that we're facing.
With all those things combined, we felt leaving guidance where it is made the most sense at this time.
Okay. Thanks, Craig, for that. Second question, you know, in terms of cancellation rates. I guess, can you then help us think about, you know, maybe how you, how you guys are thinking about load factors for the, you know, for the rest of the year? You know, there's obviously gonna be some seasonality with shoulder seasons and stuff like that. So just any help there around how you're thinking about occupancy for the last three quarters. Also if we can get an update on just kinda how you know, what you're seeing from higher airfares, and any pressure that you are seeing or is that, you know, come back in a little bit from a, you know, from a booking perspective. Thanks.
Sure. Let me handle the first part, and I'll turn it over to Dolf for the second part. You know, when you look at the year that we're facing it moving forward, we do expect to continue to ramp occupancy each quarter versus where we were back in 2022. However, we will not yet obviously get back to the levels we were at in 2019, and we're ramping towards that as we head out of this year into 2024. When you think about the quarterly cadence of our occupancies, certainly Q1 and Q3 will be the strongest occupancy quarters for the year, and you would expect Q2 and Q4 to be the lowest occupancies of the year, with Q2 probably facing the most headwinds out of all of the quarters for the upcoming year.
That's kind of how the cadence should play itself out in 2023.
Yeah. I'll just comment briefly on the airfare comment. It's certainly the case that airfares are higher. They're dramatically higher for places like Australia and New Zealand. We're also seeing airfare to Europe, being something that our guests are thinking about. I do think it has had some effect on bookings. We make quite an effort to offset that with promotions of our own to, like, reduce that as a negative factor. I do think that, for the next few months at least, I do think that'll be a factor. We expect that it will improve by the end of the year.
Okay, great. Thanks, guys. Appreciate it.
Thanks, Steve.
The next question comes from Tyler Batory from Oppenheimer. Tyler, your line is open. Please go ahead.
Good morning. This is Jonathan on for Tyler. Thanks for taking our questions, congrats on the quarter. First one from me. Can you talk a little bit about what you're seeing from the consumer, you know, given the macro backdrop here and what's happened over the last few months? Any changes to the guest mix or signs of a shift down in terms of lower priced rooms or itinerary changes or shorter durations?
Sure. Thanks, Jonathan. A couple things are happening with regards to the guest mix. I will say for the most part, they remain pretty consistent with where they have been traditionally. We are seeing some additional bookings in year for 2023 that arguably in past years would probably be pushed out to 2024. That booking window is shifting a little bit to more in the short term and then actually more in the long term. That bell curve has kind of changed a little bit. That could be potentially short-lived, but that's what we're seeing today. We are also continuing to see more bookings from U.S. guests than international guests. The mix is becoming a little more U.S.-focused, not too dramatically, but a little shifting on that front.
We've seen a significant amount of success with first-time guests. The mix of first time to repeat guests has shifted a little bit. That was always to be expected, partially because of the additional inventory that we have across the fleet. As you add more hardware, you're gonna ultimately need to get more new guests into the mix. We are seeing a whole lot of new success with first-time guests, which is nice. We're also seeing growth in the repeat guests, which is nice, but the new guests are growing a little bit faster right now.
Very helpful. Thank you for the color, Craig. Switching gears somewhat in a similar vein on the inorganic growth front, I'm curious, have you seen more opportunities coming to market, whether that's existing hardware or potential bolt-on acquisitions, given some of that macro volatility we've seen?
Thanks, Jonathan. We in fact are seeing, I think, an uptick in the overall marketplace as it relates to the potential acquisitions of some of the smaller companies, similar to what we've done in the past. We're always on the lookout for for ships that could be additive to our fleet. I think the world is opening up again, particularly with family businesses in the travel business that have weathered the storms of the pandemic and are, you know, thinking hard about whether they're going to pass their companies on to the next generation or whether they're, you know, they prefer to make a sale.
We don't have anything that is, you know, close to the finish line at the moment, but we're active in the marketplace, and we're encouraged by the kinds of opportunities that could be available to us in the coming months and years.
Okay, great. I appreciate all the color, guys. That's all for me.
Thanks, Jonathan.
The next question comes from Alex Fuhrman from Craig-Hallum Capital. Alex, your line is open. Please go ahead.
Hey, guys. Thanks for taking my question. Congratulations on a really strong start to the year. You know, wanted to ask about the Land Experiences segment. You know, what's been driving the strength there? I remember a few years ago, there was maybe some hesitation to market the land offering to your cruise customers, just given how, you know, high priced the cruises are relative to some of the land voyages. Not that the land voyages aren't also, you know, up there in price, but just, you know, curious if you've had any more kind of interplay between the two segments there or if it's just been its own kind of natural recovery in demand for the land experiences.
Sure. Thanks. Thanks, Alex. You know, let me start out by saying, you know, one of the things that we were looking for when we acquired these companies was, obviously, we were looking for businesses that fit with the ethos and the mission of what Lindblad does. We were looking for businesses that ultimately had significant growth upside from where they were today. We were also interested in finding businesses that had really strong leaders that were running those businesses today.
I will say, both Dolf and I would point out that the folks who are running those businesses, whether it be Andy and Dina over at DuVine, whether it be Corey at Off the Beaten Path, whether it be Edward and Susie at Classic Journeys, and certainly Ben at Natural Habitat, they've done a great job with these businesses, and they set them up for success coming out of the pandemic because they were delivering such amazing experiences and such amazing geographies. We always knew that they had significant growth ahead of them, and we also knew that we could add some significant fuel to that growth by providing some additional heft from the Lindblad company, providing some additional focus from the Lindblad company. That's exactly what's happened coming out of the pandemic. You're seeing really nice success from these businesses.
I will say we have really just started to scratch the surface of what Lindblad can do for these businesses. A lot of the success that you're seeing today is success that was built into these businesses by these original founders and owners. As Dolf mentioned in his comments, by sharing best practices on the way things can operate, by making sure we're focused on the right products, by giving them the marketing capabilities that they need to attract new guests, all these things are really, what I would say, combining to create some really nice momentum at these businesses.
I'll just add that we're really seeing the benefit of the pent-up demand that occurred during the pandemic. As they come into their stronger seasons now, a lot of the guests that held off for a few years are really coming back with some strength. Probably the most remarkable example of the growth also is DuVine, where the, you may know that there's just been this surge in interest in bicycling, which is true not only here in the US, but also abroad. That company is just riding that wave, no pun intended, extremely well. We're excited about it.
Craig really said the right thing, I think, as it relates to marketing, just the opportunity for these leaders to share best practices in what they're seeing, not only from a sort of traditional marketing standpoint, but definitely with the enhanced kind of web marketing and search engine optimization that comes with being part of the Lindblad company. All of those things are contributing. We're just really optimistic about each of those businesses going forward.
Okay, that's really helpful. Thank you both.
Thanks, Alex.
Nothing further in the queue at present. As a final reminder, that star followed by one on your telephone keypad to ask a question today. We have no further questions at this time. I'll hand the call back to the management team for any concluding remarks.
Thanks, Adam, and thank you everybody for joining us this morning. We look forward to maintaining the dialogue. If you have additional questions, please give us a ring, and we'd be happy to connect again. Thank you.
Thank you, everyone.
This concludes today's call. Thank you very much for your attendance. You may now disconnect.