Norwegian Cruise Line Holdings Reports First Quarter 2023 Financial Results
- Total revenue of $1.8 billion in Q1 2023, exceeding guidance
- Sequential occupancy improvement to approximately 101.5%
- Total revenue per Passenger Cruise Day increased approximately 17.5% compared to 2019
- Cumulative booked position for the remainder of 2023 at record levels
- Full year 2023 Adjusted EPS guidance improved to approximately $0.75
- Net loss of $(159.3) million in Q1 2023
- Higher anticipated fuel costs and foreign exchange for the remainder of 2023
- CEO retirement and succession plan
MIAMI, May 01, 2023 (GLOBE NEWSWIRE) -- Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) (together with NCL Corporation Ltd., “Norwegian Cruise Line Holdings”, “Norwegian” or the “Company”) today reported financial results for the first quarter ended March 31, 2023 and provided guidance for the second quarter and full year 2023.
First Quarter 2023 Highlights:
- Total revenue of
$1.8 billion , GAAP net loss of$(159.3) million or EPS of$(0.38) . - Achieved Adjusted EBITDA of
$234 million and Adjusted EPS of$(0.30) , above guidance of$195 million and$(0.45) respectively. - Company met or exceeded guidance for all key metrics in the first quarter.
- Sequential Occupancy improvement to approximately
101.5% in the quarter, exceeding guidance of100% . - Total revenue per Passenger Cruise Day increased approximately
17.5% as-reported and18.3% in constant currency, compared to the same period in 2019. - Gross Cruise Costs per Capacity Day was approximately
$298 in the quarter. Adjusted Net Cruise Costs excluding Fuel per Capacity Day in constant currency of approximately$161 was better than guidance of$165 as certain efficiencies and cost savings from the Company’s ongoing margin enhancement initiative were realized earlier than anticipated. - Cumulative booked position for the remainder of 2023 continues to be at record levels and at higher pricing.
- Full year 2023 Adjusted EPS guidance improved to approximately
$0.75 reflecting first quarter outperformance partially offset by higher anticipated fuel costs and foreign exchange for the remainder of 2023. Adjusted EBITDA is still expected to be in the range of$1.8 t o$1.95 billion .
CEO Retirement and Succession Plan
As previously announced, Frank J. Del Rio is retiring and stepping down from his position as the Company’s President and Chief Executive Officer, and from its Board of Directors, effective June 30, 2023. Del Rio will serve in a consultant capacity as a Senior Advisor to the Board through 2025. Harry J. Sommer, a 15-year veteran of Norwegian Cruise Line Holdings and former President of the Company’s largest cruise line, Norwegian Cruise Line (“NCL”), has been appointed to succeed Del Rio and will also join the Board of Directors, effective July 1, 2023.
“It has been an honor and privilege to lead the world-class team at Norwegian Cruise Line Holdings for the past eight years,” said Frank Del Rio, president and chief executive officer of Norwegian Cruise Line Holdings Ltd. “With the post-pandemic operational recovery complete and the Company solidly positioned for 2023 and beyond, now is the right time to make way for the next generation of leaders who are ready to take this Company on to its newest chapter. Harry is a deeply experienced and strategic leader and I have full confidence that this iconic Company will not skip a beat with him at the helm.”
“On behalf of the entire team at Norwegian Cruise Line Holdings, I want to thank Frank for his invaluable contributions as he brought together three of the industry’s leading brands – Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises – to form the best cruise operator in the industry,” said Harry Sommer, president and chief executive officer-elect of Norwegian Cruise Line Holdings Ltd. “Frank has been a friend and mentor for decades, and I look forward to building upon his unequaled legacy.”
Sommer added, “We are embarking on an exciting new chapter with an industry-leading growth profile including one new ship for each of our brands in 2023, beginning with Oceania Cruises’ outstanding Vista which we took delivery of just last week. We are also focused on improving profitability and accelerating our financial recovery, while maintaining the superior service levels and the exceptional guest experience our loyal guests expect from our amazing brands as well as advancing our efforts to drive a positive impact on society and the environment through our Sail & Sustain program. We continue to experience healthy demand across the board as evidenced by our record booked position as well as robust onboard revenue generation.”
Business, Operations and Booking Environment Update
The Company continued its phased Occupancy ramp-up in the first quarter of 2023 achieving a 15-point sequential improvement to approximately
On the heels of a very strong WAVE season, the Company continues to experience strong consumer demand. Cumulative booked position for the remainder of 2023 is ahead of 2019 levels inclusive of the Company’s approximately
Total revenue per Passenger Cruise Day was up approximately
The Company continues to focus on efforts to maximize revenue opportunities and right size its cost base in order to strengthen the foundation for sustained, profitable growth. Gross Cruise Costs per Capacity Day was approximately
Liquidity and Financial Recovery Plan
The Company continues to prioritize enhancing liquidity and financial flexibility in the current environment while seeking opportunities to optimize its balance sheet and reduce leverage. As of March 31, 2023, the Company’s total debt position was
The Company has taken the following additional action to enhance its liquidity profile and financial flexibility since its fourth quarter and full year 2022 earnings report:
- In April 2023, the Company increased its export-credit agency backed commitments by approximately
€1.7 billion to finance improvements, changes and modifications to certain newbuilds, owners’ supplies associated with preparing these ships to enter service and related financing premiums. These changes include the previously communicated modification and enlargement of the last four Prima Class vessels which will increase their gross tonnage by up to20% compared to Norwegian Prima and Norwegian Viva. This also includes modifications to create a Methanol-Ready configuration for the final two Prima Class vessels.
“As we continue to focus on rebuilding our financial track record, we are pleased to report that we met or exceeded guidance on all key metrics in the first quarter, buoyed by the strong consumer demand we are experiencing across our brands,” said Mark A. Kempa, executive vice president and chief financial officer of Norwegian Cruise Line Holdings Ltd. “The results of our ongoing margin enhancement initiative are already starting to reflect in our financial results during the quarter, as evidenced by the significant sequential improvement in our operating costs. We will continue to capitalize and build on this momentum as we remain keenly focused on strategically improving our margins while maintaining our brands’ strong and unique positioning.”
First Quarter 2023 Results
GAAP net loss was
Revenue increased to
Fuel price per metric ton, net of hedges, increased to
Interest expense, net was
Other income (expense), net was expense of
Outlook and Guidance
In addition to announcing the results for the first quarter 2023, the Company also provided guidance for the second quarter and full year 2023, along with accompanying sensitivities. The Company does not provide certain estimated future results on a GAAP basis because the Company is unable to predict, with reasonable certainty, the future movement of foreign exchange rates or the future impact of certain gains and charges. These items are uncertain and will depend on several factors, including industry conditions, and could be material to the Company’s results computed in accordance with GAAP. The Company has not provided reconciliations between the Company’s 2023 guidance and the most directly comparable GAAP measures because it would be too difficult to prepare a reliable U.S. GAAP quantitative reconciliation without unreasonable effort.
| 2023 Guidance | ||||
| Second Quarter 2023 | Full Year 20231 | |||
| As Reported | Constant Currency | As Reported | Constant Currency | |
| Net Per Diem vs. 2019 | ||||
| Net Yield vs. 2019 | ||||
| Adjusted Net Cruise Cost Excluding Fuel per Capacity Day | Approx. | Approx. | ||
| Capacity Days | Approx. 5.5 million | Approx. 22.75 million | ||
| Occupancy | Approx. | Approx. | ||
| Adjusted EBITDA | Approx. | |||
| Adjusted EPS2 | Approx. | Approx. | ||
| Depreciation and Amortization | Approx. | Approx. | ||
| Adjusted Interest Expense, net | Approx. | Approx. | ||
| Effect of a | Approx. Approx. | Approx. Approx. | ||
| Effect of a | Approx. Approx. | Approx. Approx. | ||
| (1) | Sensitivities for Adjusted EBITDA and Adjusted EPS are for the remainder of 2023. |
| (2) | Based on midpoint of guidance and using a share count of approximately 460 million for both second quarter 2023 and full year 2023 Adjusted EPS. Adjusted EPS is calculated using the if-converted method and therefore excludes approximately |
The following reflects the foreign currency exchange rates the Company used in its second quarter 2023 guidance.
| Current Guidance | ||
| Euro | ||
| British pound | ||
| Australian Dollar | ||
| Canadian Dollar | ||
Fuel
The following reflects the Company’s expectations regarding fuel consumption and pricing, along with accompanying sensitivities.
| Second Quarter 2023 | Full Year 2023 | |
| Fuel consumption in metric tons1 | 235,000 | 980,000 |
| Fuel price per metric ton, net of hedges2 | ||
| Effect on Adjusted EPS of a in fuel prices, net of hedges |
| (1) | Fuel consumption for the full year 2023 is expected to be split approximately evenly between heavy fuel oil and marine gas oil |
| (2) | Fuel prices are based on forward curves as of 4/21/23 |
| (3) | For the remaining quarters of 2023 |
As of March 31, 2023, the Company had hedged approximately
| Remainder of 2023 | 2024 | |
| % of HFO Consumption Hedged1 | - | |
| Blended HFO Hedge Price / Metric Ton | - | |
| % of MGO Consumption Hedged | ||
| Blended MGO Hedge Price / Metric Ton | ||
| Total % of Consumption Hedged | 53% | 13% |
| (1) | Both USGC and Brent include derivatives representing accounting hedges as well as economic hedges. |
Capital Expenditures
Non-newbuild capital expenditures for first quarter of 2023 were
Newbuild-related capital expenditures, net of export credit financing, are expected to be approximately
Company Updates and Other Business Highlights:
Environmental, Social and Governance (“ESG”)
- Revamped Company’s climate action strategy to focus on three key pillars: Efficiency, Innovation and Collaboration. Also established new short- and near-term GHG reduction targets to support the Company’s ambitious pursuit of net zero by 2050. Company is targeting a reduction in GHG intensity by
10% by 2026 and25% by 2030, compared to a 2019 baseline with intensity measured on a per Capacity Day basis. For more information view a press release here and video here.
Fleet and Brand Updates
- Oceania Cruises took delivery of its new ship Vista on April 28, 2023 in Genoa, Italy marking the first newbuild addition to the brand’s fleet in over a decade. The 67,000-ton, 791-foot-long Vista is the first of two 1,200-guest next-generation Allura Class ships and will be christened on May 8, 2023 in Valletta, Malta.
- Announced plan to improve connectivity for guests and crew at sea by offering SpaceX’s Starlink high-speed internet on its ships across its three brands. Starlink is currently being tested and the Company intends to rollout this game-changing technology across its entire world-class fleet in a phased manner. Learn more here.
- Oceania Cruises named celebrated Italian-American chef, author, restaurateur and Emmy Award-winning food personality Giada De Laurentiis as godmother of its newest ship Vista, debuting May 2023. Multiple Grammy and Emmy Award-winning singer, pianist and actor Harry Connick Jr. will appear alongside De Laurentiis at the star-studded christening and naming ceremony, taking place on May 8 in Valletta, Malta. Learn more here.
- Norwegian Cruise Line announced Tony Award-nominated “Beetlejuice” The Musical as the headline production aboard its newest groundbreaking ship, Norwegian Viva. Learn more here.
Other Highlights
- Effective April 1, 2023, David Herrera was appointed to succeed Harry Sommer as President of Norwegian Cruise Line. Herrera is an 8-year Company veteran and previously served as the line’s Chief Consumer Sales and Marketing Officer. Learn more here.
Conference Call
The Company has scheduled a conference call for Monday, May 1, 2023 at 10:00 a.m. Eastern Time to discuss first quarter 2023 results and provide a business update. A link to the live webcast along with a slide presentation can be found on the Company’s Investor Relations website at https://www.nclhltd.com/investors. A replay of the conference call will also be available on the website for 30 days after the call.
About Norwegian Cruise Line Holdings Ltd.
Norwegian Cruise Line Holdings Ltd. (NYSE: NCLH) is a leading global cruise company which operates the Norwegian Cruise Line, Oceania Cruises and Regent Seven Seas Cruises brands. With a combined fleet of 30 ships with over 60,000 berths, these brands offer itineraries to approximately 500 destinations worldwide. NCLH has seven additional ships scheduled for delivery through 2028, comprising over 19,000 berths.
Terminology
Adjusted EBITDA. EBITDA adjusted for other income (expense), net and other supplemental adjustments.
Adjusted EPS. Adjusted Net Income (Loss) divided by the number of diluted weighted-average shares outstanding.
Adjusted Gross Margin. Gross margin adjusted for payroll and related, fuel, food, other and ship depreciation. Gross margin is calculated pursuant to GAAP as total revenue less total cruise operating expense and ship depreciation.
Adjusted Net Cruise Cost Excluding Fuel. Net Cruise Cost less fuel expense adjusted for supplemental adjustments.
Adjusted Net Income (Loss). Net income (Loss), adjusted for supplemental adjustments.
Berths. Double occupancy capacity per cabin (single occupancy per studio cabin) even though many cabins can accommodate three or more passengers.
Capacity Days. Berths available for sale multiplied by the number of cruise days for the period for ships in service.
Constant Currency. A calculation whereby foreign currency-denominated revenues and expenses in a period are converted at the U.S. dollar exchange rate of a comparable period in order to eliminate the effects of foreign exchange fluctuations.
Dry-dock. A process whereby a ship is positioned in a large basin where all of the fresh/sea water is pumped out in order to carry out cleaning and repairs of those parts of a ship which are below the water line.
EBITDA. Earnings before interest, taxes, and depreciation and amortization.
EPS. Diluted income (loss) per share.
GAAP. Generally accepted accounting principles in the U.S.
Gross Cruise Cost. The sum of total cruise operating expense and marketing, general and administrative expense.
Net Cruise Cost. Gross Cruise Cost less commissions, transportation and other expense and onboard and other expense.
Net Cruise Cost Excluding Fuel. Net Cruise Cost less fuel expense.
Net Per Diem. Adjusted Gross Margin divided by Passenger Cruise Days.
Net Yield. Adjusted Gross Margin per Capacity Day.
Occupancy, Occupancy Percentage or Load Factor. The ratio of Passenger Cruise Days to Capacity Days. A percentage in excess of
Operating Cash Flow. Net cash provided by (used in) operating activities.
Operating Credit Facility. Consists of the
Passenger Cruise Days. The number of passengers carried for the period, multiplied by the number of days in their respective cruises.
Non-GAAP Financial Measures
We use certain non-GAAP financial measures, such as Adjusted Gross Margin, Net Yield, Net Cruise Cost, Adjusted Net Cruise Cost Excluding Fuel, Adjusted EBITDA, Adjusted Net Loss, Adjusted EPS and Net Per Diem, to enable us to analyze our performance. See “Terminology” for the definitions of these and other non-GAAP financial measures. We utilize Adjusted Gross Margin, Net Yield, and Net Per Diem to manage our business on a day-to-day basis and believe they are relevant measures of our revenue performance because they reflect revenue earned net of certain direct variable costs. We also utilize Net Cruise Cost and Adjusted Net Cruise Cost Excluding Fuel to manage our business on a day-to-day basis. In measuring our ability to control costs in a manner that positively impacts net income (loss), we believe changes in Adjusted Gross Margin, Net Cruise Cost and Adjusted Net Cruise Cost Excluding Fuel to be the most relevant indicators of our performance.
As our business includes the sourcing of passengers and deployment of vessels outside of the U.S., a portion of our revenue and expenses are denominated in foreign currencies, particularly British pound, Canadian dollar, Euro and Australian dollar which are subject to fluctuations in currency exchange rates versus our reporting currency, the U.S. dollar. In order to monitor results excluding these fluctuations, we calculate certain non-GAAP measures on a Constant Currency basis, whereby current period revenue and expenses denominated in foreign currencies are converted to U.S. dollars using currency exchange rates of the comparable period. We believe that presenting these non-GAAP measures on both a reported and Constant Currency basis is useful in providing a more comprehensive view of trends in our business.
We believe that Adjusted EBITDA is appropriate as a supplemental financial measure as it is used by management to assess operating performance. We also believe that Adjusted EBITDA is a useful measure in determining our performance as it reflects certain operating drivers of our business, such as sales growth, operating costs, marketing, general and administrative expense and other operating income and expense. Adjusted EBITDA is not a defined term under GAAP nor is it intended to be a measure of liquidity or cash flows from operations or a measure comparable to net income (loss), as it does not take into account certain requirements such as capital expenditures and related depreciation, principal and interest payments and tax payments and it includes other supplemental adjustments.
In addition, Adjusted Net Loss and Adjusted EPS are non-GAAP financial measures that exclude certain amounts and are used to supplement GAAP net loss and EPS. We use Adjusted Net Loss and Adjusted EPS as key performance measures of our earnings performance. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparison to our historical performance. In addition, management uses Adjusted EPS as a performance measure for our incentive compensation during normal operations. The amounts excluded in the presentation of these non-GAAP financial measures may vary from period to period; accordingly, our presentation of Adjusted Net Loss and Adjusted EPS may not be indicative of future adjustments or results.
You are encouraged to evaluate each adjustment used in calculating our non-GAAP financial measures and the reasons we consider our non-GAAP financial measures appropriate for supplemental analysis. In evaluating our non-GAAP financial measures, you should be aware that in the future we may incur expenses similar to the adjustments in our presentation. Our non-GAAP financial measures have limitations as analytical tools, and you should not consider these measures in isolation or as a substitute for analysis of our results as reported under GAAP. Our presentation of our non-GAAP financial measures should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items. Our non-GAAP financial measures may not be comparable to other companies. Please see a historical reconciliation of these measures to the most comparable GAAP measure presented in our consolidated financial statements below.
Cautionary Statement Concerning Forward-Looking Statements
Some of the statements, estimates or projections contained in this release are “forward-looking statements” within the meaning of the U.S. federal securities laws intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained, or incorporated by reference, in this release, including, without limitation, those regarding our business strategy, financial position, results of operations, plans, prospects, actions taken or strategies being considered with respect to our liquidity position, valuation and appraisals of our assets and objectives of management for future operations (including those regarding expected fleet additions, our expectations regarding the impacts of the COVID-19 pandemic, Russia’s invasion of Ukraine and general macroeconomic conditions, our expectations regarding cruise voyage occupancy, the implementation of and effectiveness of our health and safety protocols, operational position, demand for voyages, plans or goals for our sustainability program and decarbonization efforts, our expectations for future cash flows and profitability, financing opportunities and extensions, and future cost mitigation and cash conservation efforts and efforts to reduce operating expenses and capital expenditures) are forward-looking statements. Many, but not all, of these statements can be found by looking for words like “expect,” “anticipate,” “goal,” “project,” “plan,” “believe,” “seek,” “will,” “may,” “forecast,” “estimate,” “intend,” “future” and similar words. Forward-looking statements do not guarantee future performance and may involve risks, uncertainties and other factors which could cause our actual results, performance or achievements to differ materially from the future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these risks, uncertainties and other factors include, but are not limited to the impact of: adverse general economic factors, such as fluctuating or increasing levels of interest rates, inflation, unemployment, underemployment and the volatility of fuel prices, declines in the securities and real estate markets, and perceptions of these conditions that decrease the level of disposable income of consumers or consumer confidence; the spread of epidemics, pandemics and viral outbreaks, including the COVID-19 pandemic, and their effect on the ability or desire of people to travel (including on cruises), which is expected to continue to adversely impact our results, operations, outlook, plans, goals, growth, reputation, cash flows, liquidity, demand for voyages and share price; implementing precautions in coordination with regulators and global public health authorities to protect the health, safety and security of guests, crew and the communities we visit and to comply with regulatory restrictions related to the pandemic; our indebtedness and restrictions in the agreements governing our indebtedness that require us to maintain minimum levels of liquidity and be in compliance with maintenance covenants and otherwise limit our flexibility in operating our business, including the significant portion of assets that are collateral under these agreements; our ability to work with lenders and others or otherwise pursue options to defer, renegotiate, refinance or restructure our existing debt profile, near-term debt amortization, newbuild related payments and other obligations and to work with credit card processors to satisfy current or potential future demands for collateral on cash advanced from customers relating to future cruises; our need for additional financing or financing to optimize our balance sheet, which may not be available on favorable terms, or at all, and our outstanding exchangeable notes and any future financing which may be dilutive to existing shareholders; the unavailability of ports of call; future increases in the price of, or major changes, disruptions or reduction in, commercial airline services; changes involving the tax and environmental regulatory regimes in which we operate, including new regulations aimed at reducing greenhouse gas emissions; the accuracy of any appraisals of our assets as a result of the impact of the COVID-19 pandemic or otherwise; our success in controlling operating expenses and capital expenditures; trends in, or changes to, future bookings and our ability to take future reservations and receive deposits related thereto; adverse events impacting the security of travel, or customer perceptions of the security of travel, such as terrorist acts, armed conflict, such as Russia’s invasion of Ukraine, and threats thereof, acts of piracy, and other international events; adverse incidents involving cruise ships; breaches in data security or other disturbances to our information technology and other networks or our actual or perceived failure to comply with requirements regarding data privacy and protection; changes in fuel prices and the type of fuel we are permitted to use and/or other cruise operating costs; mechanical malfunctions and repairs, delays in our shipbuilding program, maintenance and refurbishments and the consolidation of qualified shipyard facilities; the risks and increased costs associated with operating internationally; our inability to recruit or retain qualified personnel or the loss of key personnel or employee relations issues; our inability to obtain adequate insurance coverage; pending or threatened litigation, investigations and enforcement actions; volatility and disruptions in the global credit and financial markets, which may adversely affect our ability to borrow and could increase our counterparty credit risks, including those under our credit facilities, derivatives, contingent obligations, insurance contracts and new ship progress payment guarantees; any further impairment of our trademarks, trade names or goodwill; our reliance on third parties to provide hotel management services for certain ships and certain other services; fluctuations in foreign currency exchange rates; our expansion into new markets and investments in new markets and land-based destination projects; overcapacity in key markets or globally; and other factors set forth under “Risk Factors” in our most recently filed Annual Report on Form 10-K and subsequent filings with the Securities and Exchange Commission. Additionally, many of these risks and uncertainties are currently amplified by and will continue to be amplified by, or in the future may be amplified by, the COVID-19 pandemic, Russia’s invasion of Ukraine and the impact of general macroeconomic conditions. It is not possible to predict or identify all such risks. There may be additional risks that we consider immaterial or which are unknown. The above examples are not exhaustive and new risks emerge from time to time. Such forward-looking statements are based on our current beliefs, assumptions, expectations, estimates and projections regarding our present and future business strategies and the environment in which we expect to operate in the future. These forward-looking statements speak only as of the date made. We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in our expectations with regard thereto or any change of events, conditions or circumstances on which any such statement was based, except as required by law.
| Investor Relations & Media Contact |
| Jessica John |
| (305) 468-2339 InvestorRelations@nclcorp.com |
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | |||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | |||||||
| (Unaudited) | |||||||
| (in thousands, except share and per share data) | |||||||
| Three Months Ended | |||||||
| March 31 | |||||||
| 2023 | 2022 | ||||||
| Revenue | |||||||
| Passenger ticket | $ | 1,208,841 | $ | 342,455 | |||
| Onboard and other | 613,098 | 179,485 | |||||
| Total revenue | 1,821,939 | 521,940 | |||||
| Cruise operating expense | |||||||
| Commissions, transportation and other | 409,684 | 87,958 | |||||
| Onboard and other | 119,697 | 32,550 | |||||
| Payroll and related | 304,155 | 240,727 | |||||
| Fuel | 194,868 | 135,509 | |||||
| Food | 95,966 | 39,516 | |||||
| Other | 156,048 | 199,153 | |||||
| Total cruise operating expense | 1,280,418 | 735,413 | |||||
| Other operating expense | |||||||
| Marketing, general and administrative | 336,013 | 296,207 | |||||
| Depreciation and amortization | 194,790 | 179,076 | |||||
| Total other operating expense | 530,803 | 475,283 | |||||
| Operating income (loss) | 10,718 | (688,756 | ) | ||||
| Non-operating income (expense) | |||||||
| Interest expense, net | (171,257 | ) | (327,685 | ) | |||
| Other income (expense), net | (8,955 | ) | 38,120 | ||||
| Total non-operating income (expense) | (180,212 | ) | (289,565 | ) | |||
| Net loss before income taxes | (169,494 | ) | (978,321 | ) | |||
| Income tax benefit (expense) | 10,173 | (4,393 | ) | ||||
| Net loss | $ | (159,321 | ) | $ | (982,714 | ) | |
| Weighted-average shares outstanding | |||||||
| Basic | 422,655,215 | 417,734,591 | |||||
| Diluted | 422,655,215 | 417,734,591 | |||||
| Loss per share | |||||||
| Basic | $ | (0.38 | ) | $ | (2.35 | ) | |
| Diluted | $ | (0.38 | ) | $ | (2.35 | ) | |
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | |||||||
| CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS | |||||||
| (Unaudited) | |||||||
| (in thousands) | |||||||
| Three Months Ended | |||||||
| March 31 | |||||||
| 2023 | 2022 | ||||||
| Net loss | $ | (159,321 | ) | $ | (982,714 | ) | |
| Other comprehensive income (loss): | |||||||
| Shipboard Retirement Plan | 64 | 2,476 | |||||
| Cash flow hedges: | |||||||
| Net unrealized gain (loss) | (18,475 | ) | 39,304 | ||||
| Amount realized and reclassified into earnings | (9,874 | ) | (7,502 | ) | |||
| Total other comprehensive income (loss) | (28,285 | ) | 34,278 | ||||
| Total comprehensive loss | $ | (187,606 | ) | $ | (948,436 | ) | |
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | |||||||
| CONSOLIDATED BALANCE SHEETS | |||||||
| (Unaudited) | |||||||
| (in thousands, except share data) | |||||||
| March 31, | December 31, | ||||||
| 2023 | 2022 | ||||||
| Assets | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 700,600 | $ | 946,987 | |||
| Accounts receivable, net | 259,289 | 326,272 | |||||
| Inventories | 145,948 | 148,717 | |||||
| Prepaid expenses and other assets | 538,833 | 450,893 | |||||
| Total current assets | 1,644,670 | 1,872,869 | |||||
| Property and equipment, net | 14,508,426 | 14,516,366 | |||||
| Goodwill | 98,134 | 98,134 | |||||
| Trade names | 500,525 | 500,525 | |||||
| Other long-term assets | 1,598,936 | 1,569,800 | |||||
| Total assets | $ | 18,350,691 | $ | 18,557,694 | |||
| Liabilities and shareholders' equity | |||||||
| Current liabilities: | |||||||
| Current portion of long-term debt | $ | 1,210,248 | $ | 991,128 | |||
| Accounts payable | 203,233 | 228,742 | |||||
| Accrued expenses and other liabilities | 1,109,029 | 1,318,460 | |||||
| Advance ticket sales | 3,177,026 | 2,516,521 | |||||
| Total current liabilities | 5,699,536 | 5,054,851 | |||||
| Long-term debt | 11,920,504 | 12,630,402 | |||||
| Other long-term liabilities | 830,199 | 803,850 | |||||
| Total liabilities | 18,450,239 | 18,489,103 | |||||
| Commitments and contingencies | |||||||
| Shareholders' equity: | |||||||
| Ordinary shares, | 424 | 421 | |||||
| Additional paid-in capital | 7,631,028 | 7,611,564 | |||||
| Accumulated other comprehensive income (loss) | (505,364 | ) | (477,079 | ) | |||
| Accumulated deficit | (7,225,636 | ) | (7,066,315 | ) | |||
| Total shareholders' equity (deficit) | (99,548 | ) | 68,591 | ||||
| Total liabilities and shareholders' equity | $ | 18,350,691 | $ | 18,557,694 | |||
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | |||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||
| (Unaudited) | |||||||
| (in thousands) | |||||||
| Three Months Ended | |||||||
| March 31 | |||||||
| 2023 | 2022 | ||||||
| Cash flows from operating activities | |||||||
| Net loss | $ | (159,321 | ) | $ | (982,714 | ) | |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | |||||||
| Depreciation and amortization expense | 210,676 | 195,464 | |||||
| (Gain) loss on derivatives | 4,404 | (19,779 | ) | ||||
| Loss on extinguishment of debt | 2,434 | 188,433 | |||||
| Provision for bad debts and inventory obsolescence | 1,199 | 1,294 | |||||
| Share-based compensation expense | 28,155 | 32,792 | |||||
| Net foreign currency adjustments | 1,021 | (4,126 | ) | ||||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable, net | 65,391 | 618,853 | |||||
| Inventories | 2,812 | (24,141 | ) | ||||
| Prepaid expenses and other assets | (127,192 | ) | (632,610 | ) | |||
| Accounts payable | (25,926 | ) | (136,767 | ) | |||
| Accrued expenses and other liabilities | (168,581 | ) | (25,587 | ) | |||
| Advance ticket sales | 668,261 | 417,877 | |||||
| Net cash provided by (used in) operating activities | 503,333 | (371,011 | ) | ||||
| Cash flows from investing activities | |||||||
| Additions to property and equipment, net | (237,676 | ) | (165,284 | ) | |||
| Proceeds from maturities of short-term investments | — | 240,000 | |||||
| Other | 1,320 | 4,940 | |||||
| Net cash provided by (used in) investing activities | (236,356 | ) | 79,656 | ||||
| Cash flows from financing activities | |||||||
| Repayments of long-term debt | (1,821,412 | ) | (935,444 | ) | |||
| Proceeds from long-term debt | 1,330,622 | 2,073,175 | |||||
| Proceeds from employee related plans | 2,618 | 2,557 | |||||
| Net share settlement of restricted share units | (11,306 | ) | (11,961 | ) | |||
| Early redemption premium | — | (172,012 | ) | ||||
| Deferred financing fees | (13,886 | ) | (34,767 | ) | |||
| Net cash provided by (used in) financing activities | (513,364 | ) | 921,548 | ||||
| Net increase (decrease) in cash and cash equivalents | (246,387 | ) | 630,193 | ||||
| Cash and cash equivalents at beginning of the period | 946,987 | 1,506,647 | |||||
| Cash and cash equivalents at end of the period | $ | 700,600 | $ | 2,136,840 | |||
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | ||||||||||||||
| NON-GAAP RECONCILING INFORMATION | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Adjusted Gross Margin, Net Per Diem, and Net Yield were calculated as follows (in thousands, except Passenger Cruise Days and per Passenger Cruise Day data): | ||||||||||||||
| Three Months Ended | ||||||||||||||
| March 31 | ||||||||||||||
| 2023 | ||||||||||||||
| Constant Currency | ||||||||||||||
| 2023 | compared to 2019 | 2019 | ||||||||||||
| Total revenue | $ | 1,821,939 | $ | 1,835,356 | $ | 1,403,630 | ||||||||
| Less: | ||||||||||||||
| Total cruise operating expense | 1,280,418 | 1,289,860 | 826,651 | |||||||||||
| Ship depreciation | 181,569 | 181,569 | 152,851 | |||||||||||
| Gross margin | 359,952 | 363,927 | 424,128 | |||||||||||
| Ship depreciation | 181,569 | 181,569 | 152,851 | |||||||||||
| Payroll and related | 304,155 | 304,554 | 223,107 | |||||||||||
| Fuel | 194,868 | 194,882 | 98,253 | |||||||||||
| Food | 95,966 | 96,487 | 55,045 | |||||||||||
| Other | 156,048 | 161,535 | 141,569 | |||||||||||
| Adjusted Gross Margin | $ | 1,292,558 | $ | 1,302,954 | $ | 1,094,953 | ||||||||
| Passenger Cruise Days | 5,497,106 | - | 5,497,106 | - | 4,975,440 | |||||||||
| Capacity Days | 5,415,547 | 5,415,547 | 4,716,929 | |||||||||||
| Total revenue per Passenger Cruise Day | $ | 331.44 | $ | 333.88 | $ | 282.11 | ||||||||
| Gross margin per Passenger Cruise Day | $ | 65.48 | $ | 66.20 | $ | 85.24 | ||||||||
| Net Per Diem | $ | 235.13 | $ | 237.03 | $ | 220.07 | ||||||||
| Gross margin per Capacity Day | $ | 66.47 | $ | 67.20 | $ | 89.92 | ||||||||
| Net Yield | $ | 238.68 | $ | 240.60 | $ | 232.13 | ||||||||
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | ||||||||||||||
| NON-GAAP RECONCILING INFORMATION | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Gross Cruise Cost, Net Cruise Cost, Net Cruise Cost Excluding Fuel and Adjusted Net Cruise Cost Excluding Fuel were calculated as follows (in thousands, except Capacity Days and per Capacity Day data): | ||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||
| March 31 | December 31 | |||||||||||||
| 2023 | ||||||||||||||
| Constant Currency | ||||||||||||||
| 2023 | compared to 2019 | 2019 | 2022 | |||||||||||
| Total cruise operating expense | $ | 1,280,418 | $ | 1,289,860 | $ | 826,651 | $ | 2,458,357 | ||||||
| Marketing, general and administrative expense | 336,013 | 337,826 | 248,942 | 753,818 | ||||||||||
| Gross Cruise Cost | 1,616,431 | 1,627,686 | 1,075,593 | 3,212,175 | ||||||||||
| Less: | ||||||||||||||
| Commissions, transportation and other expense | 409,684 | 412,705 | 229,264 | 690,481 | ||||||||||
| Onboard and other expense | 119,697 | 119,697 | 79,413 | 229,227 | ||||||||||
| Net Cruise Cost | 1,087,050 | 1,095,284 | 766,916 | 2,292,467 | ||||||||||
| Less: Fuel expense | 194,868 | 194,882 | 98,253 | 370,127 | ||||||||||
| Net Cruise Cost Excluding Fuel | 892,182 | 900,402 | 668,663 | 1,922,340 | ||||||||||
| Less Non-GAAP Adjustments: | ||||||||||||||
| Non-cash deferred compensation (1) | 578 | 578 | 534 | 1,399 | ||||||||||
| Non-cash share-based compensation (2) | 28,155 | 28,155 | 26,999 | 50,723 | ||||||||||
| Restructuring costs (3) | - | - | - | 12,140 | ||||||||||
| Redeployment of Norwegian Joy (4) | - | - | 5,016 | - | ||||||||||
| Adjusted Net Cruise Cost Excluding Fuel | $ | 863,449 | $ | 871,669 | $ | 636,114 | $ | 1,858,078 | ||||||
| Capacity Days | 5,415,547 | 5,415,547 | 4,716,929 | 9,948,281 | ||||||||||
| Gross Cruise Cost per Capacity Day | $ | 298.48 | $ | 300.56 | $ | 228.03 | $ | 322.89 | ||||||
| Net Cruise Cost per Capacity Day | $ | 200.73 | $ | 202.25 | $ | 162.59 | $ | 230.44 | ||||||
| Net Cruise Cost Excluding Fuel per Capacity Day | $ | 164.74 | $ | 166.26 | $ | 141.76 | $ | 193.23 | ||||||
| Adjusted Net Cruise Cost Excluding Fuel per Capacity Day | $ | 159.44 | $ | 160.96 | $ | 134.86 | $ | 186.77 | ||||||
| (1) Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses, which are included in payroll and related expense. | ||||||||||||||
| (2) Non-cash share-based compensation expenses related to equity awards, which are included in marketing, general and administrative expense and payroll and related expense. | ||||||||||||||
| (3) Restructuring costs related to workforce reductions are included in marketing, general and administrative expense. | ||||||||||||||
| (4) Expenses related to the redeployment of Norwegian Joy from Asia to the U.S. and the closing of the Shanghai office, which are included in other cruise operating expense and marketing, general and administrative expense. | ||||||||||||||
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | |||||||
| NON-GAAP RECONCILING INFORMATION | |||||||
| (Unaudited) | |||||||
| Adjusted Net Loss and Adjusted EPS were calculated as follows (in thousands, except share and per share data): | |||||||
| Three Months Ended | |||||||
| March 31 | |||||||
| 2023 | 2022 | ||||||
| Net loss | $ | (159,321 | ) | $ | (982,714 | ) | |
| Non-GAAP Adjustments: | |||||||
| Non-cash deferred compensation (1) | 1,010 | 1,012 | |||||
| Non-cash share-based compensation (2) | 28,155 | 32,792 | |||||
| Extinguishment and modification of debt (3) | 2,434 | 188,433 | |||||
| Adjusted Net Loss | $ | (127,722 | ) | $ | (760,477 | ) | |
| Diluted weighted-average shares outstanding - Net loss and Adjusted Net Loss | 422,655,215 | 417,734,591 | |||||
| Diluted loss per share | $ | (0.38 | ) | $ | (2.35 | ) | |
| Adjusted EPS | $ | (0.30 | ) | $ | (1.82 | ) | |
| (1) Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses are included in payroll and related expense and other income (expense), net. | |||||||
| (2) Non-cash share-based compensation expenses related to equity awards are included in marketing, general and administrative expense and payroll and related expense. | |||||||
| (3) Losses on extinguishments and modifications of debt are primarily included in interest expense, net. | |||||||
| NORWEGIAN CRUISE LINE HOLDINGS LTD. | |||||||
| NON-GAAP RECONCILING INFORMATION | |||||||
| (Unaudited) | |||||||
| EBITDA and Adjusted EBITDA were calculated as follows (in thousands): | |||||||
| Three Months Ended | |||||||
| March 31 | |||||||
| 2023 | 2022 | ||||||
| Net loss | $ | (159,321 | ) | $ | (982,714 | ) | |
| Interest expense, net | 171,257 | 327,685 | |||||
| Income tax (benefit) expense | (10,173 | ) | 4,393 | ||||
| Depreciation and amortization expense | 194,790 | 179,076 | |||||
| EBITDA | 196,553 | (471,560 | ) | ||||
| Other (income) expense, net (1) | 8,955 | (38,120 | ) | ||||
| Other Non-GAAP Adjustments: | |||||||
| Non-cash deferred compensation (2) | 578 | 699 | |||||
| Non-cash share-based compensation (3) | 28,155 | 32,792 | |||||
| Adjusted EBITDA | $ | 234,241 | $ | (476,189 | ) | ||
| (1) In 2023, primarily consists of gains and losses, net for foreign currency remeasurements. In 2022, primarily consists of gains and losses, net for fuel swaps not designated as hedges and foreign currency remeasurements. | |||||||
| (2) Non-cash deferred compensation expenses related to the crew pension plan and other crew expenses are included in payroll and related expense. | |||||||
| (3) Non-cash share-based compensation expenses related to equity awards are included in marketing, general and administrative expense and payroll and related expense. | |||||||
FAQ
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