Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2020

Basis of Accounting, Policy [Policy Text Block]

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements and footnotes have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (the “SEC”) regarding unaudited interim financial information and include the accounts and transactions of the Company. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company’s financial statements for the periods presented. Operating results for the periods presented are

not

necessarily indicative of the results of operations to be expected for the full year due to seasonality and other factors. Certain information and footnote disclosures normally included in the consolidated financial statements in accordance with U.S. GAAP have been omitted in accordance with the rules and regulations of the SEC for interim reporting. All intercompany balances and transactions have been eliminated in these unaudited condensed consolidated financial statements. These unaudited condensed consolidated financial statements and footnotes should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto for the year ended

December 31, 2019

contained in the Company’s Annual Report on Form

-K filed with the SEC on

February 26, 2020 (

the

“2019

Annual Report”).

The presentation of certain items in the condensed consolidated statements of cash flows have been reclassified to conform to the

2020

presentation. The reclassification had

effect on previously reported results of net cash provided by operating activities.

There have been

significant changes to the Company’s accounting policies from those disclosed in the

2019

Annual Report.

COVID-19 Business Update, Policy [Policy Text Block]

COVID-

Business Update

Due to the spread of the COVID-

virus and the effects of travel restrictions around the world, the Company has suspended or rescheduled the majority of its expeditions departing

March 16, 2020

through

June 30,

2020

and has been working with guests to reschedule travel plans and refund payments, as applicable. To date, the Company has had

reported cases of COVID-

across its fleet and all guests have safely disembarked its vessels. The majority of the Company’s ships are currently being maintained with minimally required crew on-board to ensure they comply with all necessary regulations and can be fully put back into service quickly as needed. In accordance with local regulations, the Company closed its offices and most employees are working remotely to maintain general business operations, to provide assistance to existing and potential guests and to maintain information technology systems.

The Company has moved quickly to implement a comprehensive plan to mitigate the impact of COVID-

and preserve and enhance its liquidity position. The Company is employing a variety of cost reduction and cash preservation measures, while accessing available capital under its existing debt facilities and exploring additional sources of capital and liquidity. These measures include the following operating expense and capital expenditure reductions:

	●	Significantly reducing ship and land-based expedition costs including crew payroll, land costs, fuel and food. All ships have been safely laid up.

	●	Lowered expected annual maintenance capital expenditures by over $10 million, savings of more than 50% from originally planned levels.

	●	Meaningfully reduced general and administrative expenses through payroll reductions and the elimination of all non-essential travel, office expenses and discretionary spending.

	●	Suspended the majority of planned advertising and marketing spend.

	●	Deferred payment of the majority of bonuses earned for 2019 performance, as well as cash compensation for the Board of Directors.

	●	Suspended all repurchases of common stock under the stock repurchase plan.

Bookings Trends

The Company was off to a strong start to the year with Lindblad segment bookings at the end of

February

25%

for the full year

2020

as compared to the same point a year ago for

2019,

and had sold

86%

of our original projected guest ticket revenues for the year. Since that point, the Company has experienced a substantial impact from the COVID-

virus including elevated cancellations and softness in near-term demand. Lindblad segment bookings for travel in

2020

are now

27%

below the same point a year ago for

2019

due primarily to the cancelled and rescheduled voyages, as well as cancellations for travel later this year. The Company does still have substantial advanced bookings for future travel in

2020,

including

more bookings for the

second

half of

2020

as compared with the

second

half of

2019

as of the same date a year ago. Additionally, the Company continues to see new bookings for travel in

2020,

2021

and

2022,

including over

$15

million since

March 1, 2020,

and it is receiving deposits and final payments for future travel.

For

2020

voyages that have been cancelled or rescheduled, the Company is offering future travel credits with incremental value or full refunds to its fully paid guests. As of

April 24, 2020,

the majority of guests have opted for future travel credits.

Balance Sheet and Liquidity, Policy [Policy Text Block]

Balance Sheet and Liquidity

As of

March 31, 2020,

the Company had

$137.0

million in unrestricted cash and

$22.8

million in restricted cash primarily related to deposits on future travel originating from U.S. ports. The unrestricted cash included

$45.0

million drawn under our revolving credit facility during the

first

quarter as a precautionary measure for working capital and general corporate purposes given the uncertainty related to the COVID-

pandemic. Additionally, during the quarter, the Company borrowed

$107.7

million under its

first

senior secured credit agreement in conjunction with final payment on delivery of the

National Geographic Endurance

March 2020.

As of

March 31, 2020,

the Company had a total debt position of

$382.2

million and was in compliance with all of its debt covenants. Following the quarter, the Company drew down an additional

$30.6

million under its

second

senior secured credit agreement in conjunction with its

third

installment payment on the

National Geographic Resolution

scheduled for delivery in the

fourth

quarter of

2021.

Export credit agencies, in conjunction with export credit lenders, are working to finalize an industrywide initiative to grant a

-month debt holiday to provide interim debt service relief for amortization payments and financial covenants. The Company has approximately

$9.0

million of export credit agency backed amortization payments due over the next

months on the

first

senior secured credit agreement.

Considering the cost reduction measures and the potential deferral of near-term export credit agreement amortization, the Company estimates its monthly cash usage while its vessels are

not

in operations is approximately

$10

million including ship and office operating expenses, necessary capital expenditures and interest and principal payments. This excludes guest payments for future travel and cash refunds requested on previously made guest payments.

The Company is also currently evaluating several additional strategies to enhance its liquidity position. These strategies

may

include, but are

not

limited to, pursuing additional financing from both the public and private markets through the issuance of equity and/or debt. The timing and structure of any transaction will depend on market conditions.

Following the

first

quarter, the Company received a U.S. Small Business Administration Loan related to the COVID-

crisis in the amount of

$6.6

million. The Company has subsequently returned the funds received from this loan and, as a result, will pursue additional adjustments to our cost structure.

The Company has

not

previously experienced a complete cessation of its operations and, as a consequence, its ability to predict the impact of such cessation on its costs and future prospects is limited. Given the dynamic nature of this situation, the Company cannot reasonably estimate the impacts of the COVID-

virus on its financial condition, results of operations, cash flows, plans and growth for the foreseeable future. It is unknown when travel restrictions and various border closures will be lifted and what the demand for expedition travel will be once these restrictions are

longer in place. The estimates for monthly cash usage reflect the Company’s current forecast for operating costs, capital expenditures and expected debt and interest payments. Based on the actions taken to date by the Company, its planned and anticipated actions and its current forecast, the Company believes that it can meet its obligations for the next

months from

May 5, 2020,

the date of this Quarterly Report on Form

-Q.

Return to Operations, Policy [Policy Text Block]

Return to Operations

While it is uncertain when the Company will return to operations, it believes there are a variety of strategic advantages that should enable it to deploy its ships safely and quickly once travel restrictions have been lifted. The most notable is the size of its owned and operated vessels which range from

148

passengers, allowing for a highly controlled environment that includes stringent cleaning protocols. The small nature of the Company’s ships should also allow it to efficiently and effectively test its guests and crew prior to boarding. On average, the Company estimates it will only take a few thousand tests a month to ensure all guests and crew across its entire fleet have been tested. Additionally, the majority of its expeditions take place in remote locations where human interactions are limited, so there is less opportunity for external influence. Lastly, the Company’s guests are explorers by nature, eager to travel and have historically been very resilient following periods of uncertainty.

Goodwill and Intangible Assets, Policy [Policy Text Block]

Valuation of Goodwill and Trademarks

The effects of COVID-

on the Company’s expected future operating cash flows and the decline in the market value of the Company’s common stock from

December 31, 2019,

were an indicator of potential impairment, so the Company performed an analyses of its reporting unit’s goodwill for potential impairment as of

March 31, 2020.

Based on this analysis, there was

impairment of goodwill.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

Valuation of Long-lived Assets

The effects of COVID-

on the Company’s expected future operating cash flows and the decline in the market value of the Company’s common stock from

December 31, 2019,

were a potential indicator that the carrying value of the Company's long-lived assets

may

not

be recoverable. The Company performed an undiscounted cash flow analyses of its long-lived assets for potential impairment as of

March 31, 2020,

and based on the analyses, there was

impairment to the Company's long-lived assets.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

December 2019,

the FASB issued ASU

2019

12,

Income Taxes (Topic

740

)–Simplifying the Accounting for Income Taxes. The amendments of this ASU are intended to simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic

740.

The amendments also improve consistent application of and simplify GAAP for other areas of Topic

740

by clarifying and amending existing guidance. This ASU is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2020,

and early adoption is permitted. The Company will adopt this ASU as required and does

not

expect it to have a material impact to the Company’s financial statements.

March 2020,

the FASB issued ASU

2020

Reference Rate Reform (Topic

848

) –Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The guidance of this ASU is designed to provide relief from the accounting analysis and impacts that

may

otherwise be required for modifications to agreements (e.g., loans, debt securities, derivatives, borrowings) necessitated by reference rate reform. It also provides optional expedients to enable companies to continue to apply hedge accounting to certain hedging relationships impacted by reference rate reform. Application of the guidance is optional, is only available in certain situations, and is only available for companies to apply until

December 31, 2022.

The Company is currently reviewing its agreements impacted by the reference rate reform and does

not

expect this ASU to have a material impact to the Company’s financial statements.