NEWPORT, R.I., Aug. 12, 2019 /PRNewswire/ — Pangaea Logistics Solutions Ltd. («Pangaea» or the «Company») (NASDAQ: PANL), a global provider of comprehensive maritime logistics solutions, announced today its results for the three months ended June 30, 2019.

Pangaea Logistics Solutions Ltd. (PRNewsfoto/Pangaea Logistics Solutions Ltd.)

2nd Quarter Highlights    

  • Net income attributable to Pangaea Logistics Solutions Ltd. of $4.0 million as compared to $5.8 million for the three months ended June 30, 2018.
  • Earnings per share were $0.09 as compared to $0.13 for the three months ended June 30, 2018.
  • Pangaea’s TCE rates were $12,933 for the three months ended June 30, 2019 and $13,728 for the three months ended June 30, 2018 while the market average for the second quarter of 2018 was approximately $8,665, giving the Company an overall average premium over market rates of approximately $4,268 or 49%.
  • At the end of the quarter, Pangaea had $43.7 million in cash, restricted cash and cash equivalents.
  • Initiated and paid quarterly cash dividend of $0.035 per common share

Ed Coll, Chief Executive Officer of Pangaea Logistics Solutions, commented:

«Our second quarter results continued to outperform a turbulent market thanks to our active differentiated business model.  We reported positive net income once again, declared and payed our first dividend, and continued to expand our platform by investing in our niche trades through the ordering of two new ice class post panamax vessels and the purchase of three second-hand vessels. Among those purchased ships was Nantong K, to be renamed Bulk Friendship, which will be delivered to us in September as part of our planned fleet renewal.  Our markets have demonstrated extraordinary resiliency since hitting lows early this year, but we remain cautious of the risks of uncertain times in international trading and commerce. Our committed cargo relationships help mitigate this type of risk, as does our flexible charter-in strategy that keeps our chartered-in tonnage in sync with our cargo commitments.»

Mr. Coll added, «Looking ahead, we move into our seasonally strong summer ice season in good shape, hoping to further extend our services to customers who appreciate our capabilities and performance. We will continue to carefully approach our markets to expand in areas where we can continue to achieve above market returns by providing exceptional service to meet the needs of our partners and clients.»

Results for the three months ended June 30, 2019 and 2018

Total revenue was $83.3 million for the three months ended June 30, 2019, compared with $96.8 million for the three months ended June 30, 2018. The total number of shipping days performed decreased by 17 percent to 3,562, compared to 4,283 days during the second quarter of 2018.

The average TCE rate achieved was $12,933 per day for the three months ended June 30, 2019, slightly lower than the average of $13,728 per day for the same period in 2018. The achieved premium over the average market increased to $4,268 per day or 49% for the three months ended June 30, 2019, from $3,355 per day or 32% for the three months ended June 30, 2018.  The total number of shipping days decreased 17% to 3,562 in the three months ended June 30, 2019, compared to 4,283 for the same period in 2018, predominantly due to the decrease in time charter days. Net income held relatively steady at $4.0 million as compared to $5.8 million for the three months ended June 30, 2018.

Liquidity and Cash Flows

Cash, restricted cash and cash equivalents were $43.7 million as of June 30, 2019, compared with $56.1 million on December 31, 2018.

At June 30, 2019 and December 31, 2018, the Company had working capital of $28.5 million and $34.5 million, respectively. For the six months ended June 30, 2019, the Company’s net cash provided by operating activities was $19.6 million, compared to $20.8 million for the six months ended June 30, 2018.

For the six months ended June 30, 2019 and 2018, net cash used in investing activities was $33.5 million and $2.8 million, respectively. Net cash provided by financing activities was $1.5 million for the six months ended June 30, 2019 while net cash used in financing activities was $4.1 million for the six months ended June 30, 2018. These changes reflect the Company’s investment in and purchase of a new vessel in 2019, including the m/v Bulk Spirit, which was financed under a finance lease arrangement and the m/v Bulk Independence which was financed under a commercial loan facility. The financing activities also include a dividend paid to our JV partners of $ 4.7 million and a dividend paid to the common stockholders of $3.8 million.

Conference Call Details

The Company’s management team will host a conference call to discuss the Company’s financial results on August 13, 2019 at 8:00 a.m., Eastern Time (ET). To access the conference call, please dial (888) 895-3561 (domestic) or (904) 685-6494 (international) approximately ten minutes before the scheduled start time and reference ID#7487666.

A supplemental slide presentation will accompany this quarter’s conference call and can be found attached to the Current Report on Form 8-K that the Company filed concurrently with this press release. This document will be available at http://www.pangaeals.com/company-filings or at sec.gov.

A recording of the call will also be available for two weeks and can be accessed by calling (855) 859-2056 (domestic) or (404) 537-3406 (international) and referencing ID#7487666.

Pangaea Logistics Solutions Ltd.

Consolidated Statements of Income

Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018

(unaudited)

(unaudited)

Revenues:

Voyage revenue

$

77,430,067

$

81,847,649

$

143,281,414

$

152,166,843

Charter revenue

5,860,548

14,975,553

19,553,386

23,629,652

83,290,615

96,823,202

162,834,800

175,796,495

Expenses:

Voyage expense

37,224,412

38,027,489

69,398,519

68,195,517

Charter hire expense

18,317,345

30,683,892

43,264,714

53,379,827

Vessel operating expense

11,074,547

10,046,709

20,828,922

19,895,874

General and administrative

5,358,991

4,378,671

9,392,671

8,506,969

Depreciation and amortization

4,491,327

4,391,069

8,868,515

8,729,257

Loss on sale and leaseback of vessels

860,426

860,426

Total expenses

76,466,622

88,388,256

151,753,341

159,567,870

Income from operations

6,823,993

8,434,946

11,081,459

16,228,625

Other expense:

Interest expense, net

(2,101,052)

(2,091,989)

(4,308,220)

(4,152,725)

Interest expense on related party debt

(11,138)

(53,914)

(38,036)

(117,373)

Unrealized gain (loss) on derivative instruments, net

215,171

553,701

2,504,957

(8,904)

Other income

232,092

30,000

399,912

458,332

Total other expense, net

(1,664,927)

(1,562,202)

(1,441,387)

(3,820,670)

Net income

5,159,066

6,872,744

9,640,072

12,407,955

Income attributable to non-controlling interests

(1,126,565)

(1,099,721)

(1,905,017)

(2,309,938)

Net income attributable to Pangaea Logistics Solutions Ltd.

$

4,032,501

$

5,773,023

$

7,735,055

$

10,098,017

Earnings per common share:

Basic

$

0.09

$

0.14

$

0.18

$

0.24

Diluted

$

0.09

$

0.13

$

0.18

$

0.24

Weighted average shares used to compute earnings per common share:

Basic

42,767,785

42,252,552

42,684,966

42,259,594

Diluted

43,293,022

42,763,925

43,202,187

42,632,688

 

 

Pangaea Logistics Solutions Ltd.

Consolidated Balance Sheets

June 30, 2019

December 31, 2018

(unaudited)

Assets

Current assets

Cash and cash equivalents

$

41,161,115

$

53,614,735

Accounts receivable (net of allowance of $2,183,096 at

June 30, 2019 and $2,357,130 December 31, 2018)

15,995,543

28,481,787

Bunker inventory

17,446,489

19,222,087

Advance hire, prepaid expenses and other current assets

18,495,225

12,187,551

Total current assets

93,098,372

113,506,160

Restricted cash

2,500,000

2,500,000

Fixed assets, net

301,096,555

281,355,366

Investment in newbuildings in-process

7,657,000

Finance lease right of use assets, net

54,864,199

56,113,096

Total assets

$

459,216,126

$

453,474,622

Liabilities and stockholders’ equity

Current liabilities

Accounts payable, accrued expenses and other current liabilities

$

31,169,464

$

31,897,507

Related party debt

1,185,782

2,877,746

Deferred revenue

8,814,462

14,717,072

Current portion of secured long-term debt

14,952,927

20,127,742

Current portion of finance lease liabilities

6,632,119

5,364,963

Dividend payable

1,864,431

4,063,598

Total current liabilities

64,619,185

79,048,628

Secured long-term debt, net

102,394,123

95,374,270

Finance lease liabilities

54,508,878

45,684,727

Commitments and contingencies (Note 7)

Stockholders’ equity:

Preferred stock, $0.0001 par value, 1,000,000 shares authorized and no shares issued or outstanding

Common stock, $0.0001 par value, 100,000,000 shares authorized; 44,451,940 shares issued and outstanding at June 30, 2019; 43,998,560 shares issued and outstanding at December 31, 2018

4,445

4,400

Additional paid-in capital

156,855,761

155,946,452

Retained earnings

11,916,436

5,737,199

Total Pangaea Logistics Solutions Ltd. equity

168,776,642

161,688,051

Non-controlling interests

68,917,298

71,678,946

Total stockholders’ equity

237,693,940

233,366,997

Total liabilities and stockholders’ equity

$

459,216,126

$

453,474,622

 

 

Pangaea Logistics Solutions Ltd.

Consolidated Statements of Cash Flows

(unaudited)

Six Months Ended June 30,

2019

2018

Operating activities

Net income

$

9,640,072

$

12,407,955

Adjustments to reconcile net income to net cash provided by operations:

Depreciation and amortization expense

8,868,515

8,729,257

Amortization of deferred financing costs

365,564

331,061

Amortization of prepaid rent

59,299

60,968

Unrealized (gain) loss on derivative instruments

(2,504,957)

8,904

Gain from equity method investee

(247,312)

(90,000)

Provision for doubtful accounts

320,491

(148,458)

Loss on sale of vessel

860,426

Drydocking costs

(1,545,094)

(1,497,979)

Recognized cost for restricted stock issued as compensation

1,045,507

839,396

Change in operating assets and liabilities:

Accounts receivable

12,165,753

2,855,167

Bunker inventory

1,775,598

(2,033,966)

Advance hire, prepaid expenses and other current assets

(6,002,847)

(844,650)

Accounts payable, accrued expenses and other current liabilities

1,546,305

844,340

Deferred revenue

(5,902,610)

(1,516,665)

Net cash provided by operating activities

19,584,284

20,805,756

Investing activities

Purchase of vessels and vessel improvements

(25,557,060)

(2,517,355)

Purchase of building and equipment

(281,011)

(360,286)

Proceeds from sale of equipment

31,594

Net cash used in investing activities

(33,495,071)

(2,846,047)

Financing activities

Proceeds from long-term debt

14,000,000

Payments of related party debt

(1,691,964)

(2,487,226)

Payments of financing fees and issuance costs

(277,577)

(367,052)

Payments of long-term debt

(12,242,949)

(12,145,694)

Proceeds from finance leases

13,000,000

13,000,000

Dividends paid to non-controlling interests

(4,666,665)

(904,803)

Payments of finance lease obligations

(2,908,693)

(1,014,939)

Accrued common stock dividends paid

(3,754,985)

Cash paid for incentive compensation shares relinquished

(101,075)

Proceeds from private placement of common stock, net of issuance costs

(50,812)

Net cash provided by (used in) financing activities

1,457,167

(4,071,601)

Net (decrease) increase in cash, cash equivalents and restricted cash

(12,453,620)

13,888,108

Cash, cash equivalents and restricted cash at beginning of period

56,114,735

38,531,812

Cash, cash equivalents and restricted cash at end of period

$

43,661,115

$

52,419,920

Supplemental cash flow information and disclosure of noncash items

Cash paid for interest

$

4,414,197

$

3,809,699

Cash and cash equivalents

$

41,161,115

$

48,919,920

Restricted cash

2,500,000

3,500,000

$

43,661,115

$

52,419,920

 

 

Pangaea Logistics Solutions Ltd.

Reconciliation of Non-GAAP Measures

(unaudited)

Three Months Ended June 30,

Six Months Ended June 30,

2019

2018

2019

2018

Net Revenue

Income from operations

$

6,823,993

$

8,434,946

$

11,081,459

$

16,228,625

General and administrative

5,358,991

4,378,671

9,392,671

8,506,969

Depreciation and amortization

4,491,327

4,391,069

8,868,515

8,729,257

Net Revenue

$

16,674,311

$

18,065,112

$

29,342,645

$

34,325,277

Adjusted EBITDA

Income from operations

$

6,823,993

$

8,434,946

$

11,081,459

$

16,228,625

Depreciation and amortization

4,491,327

4,391,069

8,868,515

8,729,257

Adjusted EBITDA

$

11,315,320

$

13,686,441

$

19,949,974

$

25,818,308

INFORMATION ABOUT NON-GAAP FINANCIAL MEASURES. As used herein, «GAAP» refers to accounting principles generally accepted in the United States of America. To supplement our consolidated financial statements prepared and presented in accordance with GAAP, this earnings release discusses non-GAAP financial measures, including non-GAAP net revenue and non-GAAP adjusted EBITDA. This is considered a non-GAAP financial measure as defined in Rule 101 of Regulation G promulgated by the Securities and Exchange Commission. Generally, a non-GAAP financial measure is a numerical measure of a company’s historical or future performance, financial position, or cash flows that either excludes or includes amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. The presentation of this non-GAAP financial information is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with GAAP.

We use non-GAAP financial measures for internal financial and operational decision making purposes and as a means to evaluate period-to-period comparisons of the performance and results of operations of our core business. Our management believes that non-GAAP financial measures provide meaningful supplemental information regarding the performance of our core business by excluding charges that are not incurred in the normal course of business. Non-GAAP financial measures also facilitate management’s internal planning and comparisons to our historical performance and liquidity. We believe certain non-GAAP financial measures are useful to investors as they allow for greater transparency with respect to key metrics used by management in its financial and operational decision making and are used by our institutional investors and the analyst community to help them analyze the performance and operational results of our core business.

Net revenue. Net revenue represents total revenue less the total direct costs of transportation and services, which includes charter hire, voyage and vessel operating expenses. Net revenue is included because it is used by management and certain investors to measure performance by comparison to other logistic service providers. Net revenue is not an item recognized by the generally accepted accounting principles in the United States of America, or U.S. GAAP, and should not be considered as an alternative to net income, operating income, or any other indicator of a company’s operating performance required by U.S. GAAP. Pangaea’s definition of net revenue used here may not be comparable to an operating measure used by other companies.

Adjusted EBITDA and adjusted EPS. Adjusted EBITDA represents income or loss from operations before depreciation, amortization and, when applicable, loss on sale and leaseback of vessel, loss on impairment of vessels and certain non-recurring income and/or expense. Earnings per share represents net income divided by the weighted average number of common shares outstanding. Adjusted earnings per share represents net income attributable to Pangaea Logistics Solutions Ltd. plus, when applicable, loss on sale and leaseback of vessel, loss on impairment of vessel and certain non-recurring income and/or expenses, divided by the weighted average number of shares of common stock.

There are limitations related to the use of net revenue versus income from operations, adjusted EBITDA versus income from operations, and adjusted EPS versus EPS calculated in accordance with GAAP. In particular, Pangaea’s definition of adjusted EBITDA used here are not comparable to EBITDA.

The table set forth above provides a reconciliation of the non-GAAP financial measures presented during the period to the most directly comparable financial measures prepared in accordance with GAAP.

About Pangaea Logistics Solutions Ltd.

Pangaea Logistics Solutions Ltd. (NASDAQ: PANL) provides logistics services to a broad base of industrial customers who require the transportation of a wide variety of dry bulk cargoes, including grains, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite, and limestone. The Company addresses the transportation needs of its customers with a comprehensive set of services and activities, including cargo loading, cargo discharge, vessel chartering, and voyage planning. Learn more at www.pangaeals.com.

Investor Relations Contacts

Sean Silva
Prosek Partners
646 818 9122
ssilva@prosek.com

Tom Rozycki
Prosek Partners
646 818 9208
trozycki@prosek.com

Forward-Looking Statements

Certain statements in this press release are «forward-looking statements» within the meaning of the Private Securities Litigation Act of 1995. These forward-looking statements are based on our current expectations and beliefs and are subject to a number of risk factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. The Company disclaims any obligation to publicly update or revise these statements whether as a result of new information, future events or otherwise, except as required by law. Such risks and uncertainties include, without limitation, the strength of world economies and currencies, general market conditions, including fluctuations in charter rates and vessel values, changes in demand for dry bulk shipping capacity, changes in our operating expenses, including bunker prices, dry-docking and insurance costs, the market for our vessels, availability of financing and refinancing, charter counterparty performance, ability to obtain financing and comply with covenants in such financing arrangements, changes in governmental rules and regulations or actions taken by regulatory authorities, potential liability from pending or future litigation, general domestic and international political conditions, potential disruption of shipping routes due to accidents or political events, vessels breakdowns and instances of off-hires and other factors, as well as other risks that have been included in filings with the Securities and Exchange Commission, all of which are available at www.sec.gov.

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SOURCE Pangaea Logistics Solutions Ltd.