NOTE 1—BUSINESS AND BASIS OF PRESENTATION

Business

Lindblad Expeditions Holdings, Inc. and its consolidated subsidiaries’ (collectively, the “Company” or “Lindblad”) mission is to offer life-changing adventures around the world and pioneering innovative ways to allow its guests to connect with exotic and remote places. The Company’s common stock is listed on the NASDAQ Capital Market under the symbol “LIND”.

The Company currently operates the following two reportable business segments:

Lindblad Segment. The Lindblad segment primarily provides ship-based expeditions. 

Land Experiences Segment. The Land Experiences segment primarily provides land-based adventure experiences.

NOTE 2—EARNINGS PER SHARE

Earnings (loss) per Common Share

For the three months ended March 31, 2026, earnings per common share is computed by dividing net income available to common stockholders by the weighted average number of common shares outstanding during the period. For the three months ended March 31, 2025, earnings (loss) per common share was computed using the two-class method related to the Company’s Series A Redeemable Convertible Preferred Stock, par value of $0.0001 (“Preferred Stock”), prior to its conversion into common shares on February 3, 2026. Under the two-class method, undistributed earnings available to stockholders for the period are allocated on a pro rata basis to the common stockholders and to the holders of the Preferred Stock based on the weighted average number of common shares outstanding and number of shares that could be issued upon conversion of the Preferred Stock. Diluted earnings per share is computed using the weighted average number of common shares outstanding and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the dilutive incremental common shares associated with restricted stock awards, shares issuable upon the exercise of stock options, using the treasury stock method, and the potential common shares that could be issued from conversion of the Preferred Stock, using the if-converted method. When a net loss occurs, potential common shares have an anti-dilutive effect on earnings per share and such shares are excluded from the diluted earnings per share calculation.

For the three months ended March 31, 2025, the Company incurred a net loss available to stockholders, therefore potential common shares were excluded from the diluted earnings per share calculation as being anti-dilutive, and basic and diluted net loss per share is the same in the period. For the three months ended March 31, 2025, 0.8 million unvested restricted shares, 1.7 million shares issuable upon exercise of options and 8.6 million common shares issuable upon the conversion of the Preferred Stock, were excluded. On February 3, 2026, the Company caused all 62,000 outstanding shares of Preferred Stock to be converted into 9,018,763 shares of common stock, see Note 7—Stockholders’ Equity for additional information. 

Earnings (loss) per share was calculated as follows:

NOTE 3—REVENUES

Customer Deposits and Contract Liabilities

The Company’s guests remit deposits in advance of tour embarkation. Guest deposits consist of guest ticket revenues as well as revenues from the sale of pre- and post-expedition excursions, hotel accommodations, land-based expeditions and certain air transportation. Guest deposits represent unearned revenues and are reported as unearned passenger revenue when received and are subsequently recognized as tour revenue over the duration of the expedition. Contract liabilities represent the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration from the customer. The Company does not consider guest deposits to be a contract liability until the guest no longer has the right, resulting from the passage of time, to cancel their reservation and receive a full refund. 

The change in contract liabilities within unearned passenger revenues are as follows:

The Company sources its guest bookings through a combination of direct selling and various agency networks and alliances. The following table disaggregates each segments’ tour revenues by the sales channel it was derived from:

NOTE 4—FINANCIAL STATEMENT DETAILS

The following is a reconciliation of cash and cash equivalents and restricted cash to the statement of cash flows:

Restricted cash consists of the following:

Prepaid expenses and other current assets are as follows: 

NOTE 5—LONG-TERM DEBT

For the three months ended March 31, 2026 and 2025, $0.7 million and $0.9 million, respectively, of deferred financing costs were charged to interest expense. 

7.00% Notes

The Company has $675.0 million aggregate principal 7.00% Notes (the “7.00% Notes”) outstanding. The 7.00% Notes bear interest at a rate of 7.00% per year, payable semiannually in arrears on  March 15 and  September 15 of each year. The 7.00% Notes will mature on  September 15, 2030, subject to earlier repurchase or redemption. The 7.00% Notes are senior secured obligations of the Company and are guaranteed on a senior secured basis by the Company and certain of the Company’s subsidiaries (collectively, the “Guarantors”) and secured by first-priority pari passu liens, subject to permitted liens and certain exceptions, on substantially all the assets of the Company and the Guarantors. The 7.00% Notes  may be redeemed by the Company, at set redemption prices and premiums, plus accrued and unpaid interest, if any.

Revolving Credit Facility 

The Company has a senior secured revolving credit facility (the “Revolving Credit Facility”), with an aggregate principal commitment amount of $60.0 million, which matures  August 2030, with a letter of credit sub-facility of $15.0 million aggregate principal amount. The obligations under the Revolving Credit Facility are guaranteed by the Company and the Guarantors and are secured by first-priority pari passu liens, subject to permitted liens and certain exceptions, on substantially all the assets of the Company and the Guarantors. Borrowings under the Revolving Credit Facility, if any, will bear interest at a rate per annum equal to, at the Company’s option, an adjusted Secured Overnight Financing Rate (“SOFR”) plus a spread or a base rate plus a spread. The Company is required to pay a 0.5% quarterly commitment fee on undrawn amounts under the Revolving Credit Facility. As of  March 31, 2026, the Company had no borrowings under the Revolving Credit Facility.

Covenants

The Company’s 7.00% Notes and Revolving Credit Facility contain covenants that include, among others, limits on additional indebtedness and making certain dividend payments, distributions, investments and other restricted payments. These covenants are subject to a number of important exceptions and qualifications set forth in the 7.00% Notes and the Revolving Credit Facility. The Company was in compliance with its covenants in effect as of March 31, 2026.

NOTE 6—FAIR VALUE MEASUREMENTS

The carrying amounts of cash and cash equivalents, accounts payable and accrued expenses, approximate fair value due to the short-term nature of these instruments. The Company estimates the approximate fair value of its long-term debt as of March 31, 2026 to be $661.4 million based on the terms of the agreements and comparable market data as of March 31, 2026. As of March 31, 2026 and December 31, 2025, other than derivative instruments and investments in securities, the Company had no other significant liabilities that were measured at fair value on a recurring basis.

NOTE 7—STOCKHOLDERS’ EQUITY

Preferred Stock

On February 3, 2026, the Company caused the mandatory conversion of all 62,000 outstanding shares of Preferred Stock into 9,018,763 shares of its common stock. Through conversion, the Company continued to pay dividends in-kind. The Company had the option to convert all, but not less than all, of the Preferred Stock into common stock if the volume-weighted average closing price (“VWAP”) of shares of common stock was at least 150% of the conversion price ($14.25) for 20 out of 30 consecutive trading days. The number of shares of common stock received in such conversion shall be equal to the quotient obtained by dividing the then-current accrued value by the conversion price. This VWAP threshold was satisfied on  January 16, 2026 and on  January 20, 2026, the Company issued a Notice of Conversion to each holder of the Company’s Preferred Stock, providing that the Company intended to exercise its right, pursuant to the terms of the Certificate of Designations of the Preferred Stock, to effect a mandatory conversion of all the shares of Preferred Stock. 

The Company recorded accrued dividends for Preferred Stock of $0.5 million for the three months ended March 31, 2026 and $1.2 million for the three months ended March 31, 2025. 

NOTE 8—STOCK BASED COMPENSATION

The Company is authorized to issue up to 9.3 million shares of common stock under the amended 2021 Long-Term Incentive Plan (the “Plan”) which was approved by shareholders in  September 2021, and as amended in  June 2025. As of March 31, 2026, 4.6 million shares were available to be granted under the Plan.

The Company recorded stock-based compensation expense of $1.7 million and $3.7 million for the three months ended March 31, 2026 and 2025, respectively.

Long-Term Incentive Compensation

During the three months ended March 31, 2026, the Company awarded 430,072 restricted stock units (“RSUs”) with a weighted average grant price of $16.66. The RSUs will generally vest equally over three years on the anniversary of the grant date, subject to the recipient’s continued employment or service with the Company on the applicable vesting date. The number of shares were determined based upon the closing price of our common stock on the date of the award.

During the three months ended March 31, 2026, the Company awarded 91,109 performance-based restricted share units (“PSUs”) with a weighted average grant price of $17.30. The PSUs generally vest three years following the date of grant based on the attainment of performance-based goals, all of which are subject to a service condition. The Company does not issue the shares associated with the PSUs to the recipient until the performance and vesting conditions are met.

Options

During the three months ended March 31, 2026, the Company granted 771,863 options, with an average exercise price of $17.65. The options vested on their grant date, with a term of ten years.

As of March 31, 2026 and December 31, 2025, options to purchase an aggregate of 1.3 million and 1.5 million shares of the Company’s common stock, respectively, with weighted average exercise price of $13.98 and $8.91, respectively, were outstanding. As of March 31, 2026, 1,069,363 options were exercisable.

Mr. Bressler’s employment agreement, as amended, provides Mr. Bressler, Founder and Chief Executive Officer of Natural Habitat, Inc. (“Natural Habitat”), with an equity incentive opportunity, established in 2016, to earn an award of options based on the long-term future financial performance of Natural Habitat. During 2025, the award was modified to extend the performance period from  December 31, 2025, to  December 31, of any given year that Mr. Bressler exercises his put right (see Note 10—Commitments and Contingencies), aligning the percentage of the option award to be granted each year with the percentage of put exercised by Mr. Bressler. The equity incentive opportunity award, as amended, is based on the future financial performance of Natural Habitat, where if the final year equity value of Natural Habitat, as defined in Mr. Bressler's employment agreement, exceeds $25.0 million, effective as of the preceding  December 31, of any given year that Mr. Bressler exercises a portion of his put right, Mr. Bressler will be granted options with a fair value equal to 5.05% of such excess in proportion to the percentage of the put option exercised. The actual number of options granted will be determined by the calculated final year equity value of Natural Habitat divided by the Black-Scholes per share option value, factoring in the Company’s stock price on the date of the issuance of the options, its volatility and an appropriate risk-free rate. The options will be vested as of the issuance date and have a term of ten years. 

During the three months ended  March 31, 2026, Mr. Bressler exercised a portion of his put right and received the equivalent percentage of options under the equity incentive award, which was calculated based on performance through  December 31, 2025. As a result, the Company issued 771,863 fully vested options to Mr. Bressler, as noted above. The Company had previously determined it was probable the performance condition would be met related to this award and recorded the related expense on a straight-line basis through  December 31, 2025. Expense related to the incremental fair value measured on the 2025 modification date of the award will be recognized when Mr. Bressler exercises the put and option award and the performance condition is deemed probable. During the three months ended March 31, 2026, the Company recorded $0.1 million stock-based compensation expense related to this award. 

NOTE 9—INCOME TAXES

As of March 31, 2026 and December 31, 2025, the Company had no unrecognized tax benefits recorded. The Company's effective tax rate for the three months ended March 31, 2026 was a benefit of 25.4% versus a benefit of 312.8% for the three months ended March 31, 2025. In both periods, the effective tax rate differs from the statutory rate because of the mix of jurisdictions generating income and the valuation allowance against certain loss and interest carryforwards in the United States.

NOTE 10—COMMITMENTS AND CONTINGENCIES

Redeemable Noncontrolling Interest

The Company has controlling interests in its Natural Habitat, Off the Beaten Path, DuVine and Classic Journeys consolidated subsidiaries. The noncontrolling interests are subject to put/call agreements. The put options enable the minority holders, but do not obligate them, to sell the remaining interests to the Company. The Company has call options which enable it, but does not obligate it, to acquire the remaining interests in the subsidiaries, subject to certain dates, expirations and similar redemption value purchase measurements as the put options. 

Since the redemption of the noncontrolling interests are not solely in the Company’s control, the Company is required to record the redeemable noncontrolling interest outside of stockholders’ equity but after its total liabilities. In addition, if it is probable that the instrument will become redeemable, solely due to the passage of time, the redeemable noncontrolling interest should be adjusted to the redemption value via one of two measurement methods. The Company elected the income classification-excess adjustment and accretion methods for recognizing changes in the redemption value of the put options. Under this methodology, a calculation of the present value of the redemption value is compared to the carrying value of the redeemable noncontrolling interest, and the carrying value of the redeemable noncontrolling interest is adjusted to the redemption value’s present value. Any adjustments to the carrying value of the redeemable noncontrolling interest, up to the redemption value of the noncontrolling interest, are classified to retained earnings. 

The redemption value of the put options were determined using a discounted cash flow model. The redemption values were adjusted to their present value using the Company’s weighted average cost of capital. 

During  January 2026, Mr. Levine, President of DuVine Cycling + Adventure Company (“DuVine”), entered into a Second Amended and Restated Operating Agreement to replace the previous put for the Company’s right to acquire all of Mr. Levine’s remaining interests in DuVine, with a put right, but not an obligation, that may be exercised annually, up to 50% in any given year, beginning December 31, 2027, for so long as Mr. Levine holds interest in DuVine, and a one-time right to exercise 100% of the put at December 31, 2027. 

During March 2026, Mr. Bressler exercised a portion of the put option on Natural Habitat, allowing the Company to acquire an additional 5.0% of Natural Habitat for $16.6 million, increasing its ownership to 95.1%.

The following is a rollforward of redeemable noncontrolling interest: 

Charter Commitments

From time to time, the Company enters into agreements to charter vessels onto which it holds its tours and expeditions. Future minimum payments on its charter agreements as of March 31, 2026 are as follows:

NOTE 11—SEGMENT INFORMATION

The Company is primarily an experiential travel operator with operations in two reportable segments, Lindblad, which provides ship-based expeditions, and Land Experiences, which provides active, land-based trips, tours, treks and safari adventures. In identifying its reportable segments, the Company organized them around the nature of services provided and other relevant factors. While both segments have similar characteristics, the two operating and reporting segments cannot be aggregated because they fail to meet the requirements for aggregation. The Company’s chief operating decision maker, or CODM, is its Chief Executive Officer. The CODM assesses performance and allocates resources based upon the separate financial information from the Company’s operating segments. 

The CODM and management review operating results monthly and evaluate the performance of the business segments and base operating decisions on the total results at a consolidated level, as well as at a segment level, based largely on tour revenues and operating income without allocating other income and expenses, net, income taxes and interest expense, net. The reports provided to the Board of Directors are at a consolidated level and contain information regarding the separate results of both segments. Operating results for the Company’s reportable segments were as follows:

For the three months ended March 31, 2026 and 2025, there was $2.8 million and $3.3 million, respectively, of intercompany tour revenues between the Lindblad and Land Experiences reportable segments, which were eliminated in consolidation. 

The following table presents the Lindblad segment expenses:

The following table presents the Land Experiences segment expenses:

Depreciation and amortization are included in segment operating income as shown below:

The following table presents our total assets, intangibles, net and goodwill by segment:

NOTE 12—ACQUISITIONS

On  January 9, 2025, the Company completed the acquisition of Torcatt Enterprises Limitada, a holding company that owns and operates two vessels in the Galápagos Islands, expanding the Company’s vessels and guest capacity in one of its core markets, for which the Company paid $16.0 million in cash. The acquisition was accounted for as a business combination and the results of its operations are included in the consolidated results from the acquisition date. The purchase price allocations are finalized and the Company recorded $3.3 million in intangible assets related to Galápagos Islands cupos operating rights, $12.1 million of acquired vessels, $1.7 million in other assets, net, and a $1.1 million gain in other income, related to the acquisition. 

NOTE 13—SUBSEQUENT EVENT

On April 3, 2026, Mr. and Mrs. Piegza, President and Vice President, respectively, of Classic Journeys, LLC (“Classic Journeys”), exercised a portion of their put on Classic Journeys, allowing the Company to acquire an additional 9.9% of Classic Journeys for $3.2 million in cash, increasing the Company’s ownership to 90.1%.