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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
 
FORM 8-K
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 
 
Date of Report (Date of earliest event reported): May 9, 2024  
 
PANGAEA LOGISTICS SOLUTIONS LTD.
(Exact Name of Registrant as Specified in Charter)
 
Bermuda001-3679898-1205464
(State or Other Jurisdiction(Commission(IRS Employer
of Incorporation)File Number)Identification No.)
 
c/o Phoenix Bulk Carriers (US) LLC
109 Long Wharf, Newport, Rhode Island 02840
(Address of Principal Executive Offices) (Zip Code)
 
(401) 846-7790
(Registrant’s Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
 ☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 ☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 ☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 ☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of exchange on which registered
Common StockPANLNasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Item 2.02Results of Operations and Financial Condition.

On May 9, 2024, Registrant issued a press release announcing financial results for three months ended March 31, 2024. The press release is furnished as Exhibit 99.1, its Quarterly Investor Presentation is attached as Exhibit 99.2.
 
The information contained in, or incorporated into, this Current Report on Form 8-K is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that section, nor shall it be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in any such filing.

Item 9.01Financial Statements and Exhibits.
 
(d)Exhibits
ExhibitDescription
 


104    Cover Page Interactive Data File ( embedded within Inline XBRL document)




SIGNATURE
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
Dated: May 9, 2024
 PANGAEA LOGISTICS SOLUTIONS LTD.
  
 By: /s/ Gianni Del Signore
  Name: Gianni Del Signore
Title: Chief Financial Officer
 
 



Pangaea Logistics Solutions Ltd. Reports Financial Results for the Quarter Ended March 31, 2024
NEWPORT, RI - May 9, 2024 - 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 March 31, 2024.
FIRST QUARTER 2024 RESULTS

•Net income attributable to Pangaea of $11.7 million, or $0.25 per diluted share
•Adjusted net income attributable to Pangaea of $6.6 million, or $0.14 per diluted share
•Operating cash flow of $9.0 million
•Adjusted EBITDA of $19.9 million
•Time Charter Equivalent ("TCE") rates earned by Pangaea of $17,697 per day
•Pangaea’s TCE rates exceeded the average Baltic Panamax and Supramax indices by 29%
•Ratio of net debt to trailing twelve-month Adjusted EBITDA of 2.0x
•Announced the acquisition of two 58,000 dwt bulk vessels for $56.6 million in May 2024

For the first quarter ended March 31, 2024, Pangaea reported non-GAAP adjusted net income of $6.6 million, or $0.14 per diluted share, on total revenue of $104.7 million. First quarter TCE rates increased 23% on a year-over-year basis, while total shipping days, which include both voyage and time charter days, declined 7% to 3,685 days, when compared to the year-ago period.

The TCE earned was $17,697 per day for the three months ended March 31, 2024, compared to an average of $14,372 per day for the same period in 2023. During the first quarter ended March 31, 2024, the Company’s average TCE rate exceeded the benchmark average Baltic Panamax and Supramax indices by 29%, supported by Pangaea’s long-term contracts of affreightment ("COAs"), specialized fleet, and cargo-focused strategy.

Total Adjusted EBITDA increased by 23% to $19.9 million in the first quarter due to higher earned TCE rates and lower vessel operating expenses, which more than offset lower shipping days compared to the prior year period. Total Adjusted EBITDA margin was 19.0% during the first quarter of 2024, compared to 14.3% during the prior year period, driven by a 23% year-over-year increase in the earned TCE rates. The increase in earned TCE was driven by higher market rates and lower per-day voyage expenses, partially offset by an increase in charter hire expenses per chartered-in day.

As of March 31, 2024, the Company had $95.9 million in cash and cash equivalents. Total debt, including lease finance obligations was $260.8 million. At the end of the first quarter of 2024, the ratio of net debt to trailing twelve-month adjusted EBITDA was 2.0x, versus 1.3x in the prior year period. During the three months ended March 31, 2024, the Company repaid $3.4 million of long-term debt, $3.7 million of finance leases, and paid $4.9 million of cash dividends.

On May 7, 2024, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per common share, payable on June 13, 2024, to all shareholders of record as of May 30, 2024.

MANAGEMENT COMMENTARY

“Our flexible, cargo-focused business model continued to drive premium earned TCE rates during the first quarter, positioning us to achieve improved operating leverage and year-over-year growth in profitability,” stated Mark Filanowski, Chief Executive Officer of Pangaea Logistics Solutions. “While the first quarter is generally a seasonally softer period for dry bulk activity, our first quarter results benefited from elevated long-haul voyage demand across our ice-class fleet, together with a solid base of premium long-term COAs. As market rates have increased in recent months, we’ve added to our cargo commitments to fully utilize our owned fleet and we have chartered-in more vessels, positioning us to optimize our TCE performance.”

“Global demand for dry bulk remains strong and the supply of vessels remains constrained, giving us confidence in both the near and longer-term outlooks for our business,” continued Filanowski. “While the current geopolitical environment has resulted in an increase in ton-mile demand within certain shipping channels, we’re seeing solid demand within our key bulk trades given rising infrastructure investment and project activity across North America. With a limited number of newbuild vessels coming into service over the coming years, dry bulk capacity is expected to become increasingly constrained. We believe these capacity constraints should be supportive of structurally higher TCE rates in 2024 and beyond.”

“Amid the supportive backdrop for dry bulk demand, we remain committed to a returns-focused approach to capital allocation that supports long-term value creation,” continued Filanowski. “In 2024, our capital deployment priorities are on the build-out of our on-shore logistics business, together continued investment in our fleet. To that end, we recently executed a long-term lease agreement in the Port of Tampa, Florida to handle dry bulk commodities that are complementary to those carried on our fleet vessels. This year, we will also continue to refresh and expand our owned fleet with newer, more efficient vessels that support the unique requirements of our customers, while continuing to opportunistically divest of older vessels, consistent with our long-term strategy.”



“Market conditions have remained strong into the second quarter. Through today we've booked over 2,890 shipping days at an average TCE rate of $16,300 per day,” continued Filanowski. “We’ve built a durable model, one that consistently drives premium rates above broader market indices throughout the cycle, while delivering sustained profitability that supports a robust cash dividend. We look forward to continuing to scale our platform in the years ahead as we build market-leading positions across our core trades.”

STRATEGIC UPDATE

Pangaea remains committed to developing a leading dry bulk logistics and transportation services company of scale, providing its customers with specialized shipping and supply chain and logistics offerings in commodity and niche markets, which drive premium returns measured in time charter equivalent per day.

Leverage integrated shipping and logistics model. In addition to operating the largest high ice class dry bulk fleet of Panamax and post-Panamax vessels globally, Pangaea also performs stevedoring services, together with port and terminal operations capabilities. Following the acquisition of marine port terminal operations in Port Everglades/Ft. Lauderdale, Port of Palm Beach, Florida, and Port of Baltimore, Maryland in June 2023, the company has been actively working to expand its onshore relationships with new and existing customers. During the first quarter, the Company began investing in the expansion of our logistics business in the Port of Tampa, Florida through strategic joint operations partnerships and a land lease commitment. The Company has already begun limited operations in Tampa through leased port space but intends to leverage the investment of its joint venture partnership to further grow the port and logistics business that it acquired last year.

Continue to drive strong fleet utilization. In the first quarter, Pangaea's 24 owned vessels were fully utilized and supplemented with an average of 17 chartered-in vessels to support cargo and COA commitments. Going forward, the Company will continue to opportunistically evaluate the composition of its fleet in order to meet the growing needs of new and existing customers.

Continue to upgrade fleet, while divesting older, non-core assets. In May 2024, the Company announced that it had entered into two memoranda agreements for the acquisition of two 2016 built 58,000 dwt dry bulk vessels for a combined purchase price of $56.6 million. The Company expects to take delivery of these vessels in the third quarter of 2024. Going forward, the Company intends to opportunistically manage its fleet with the purpose of maximizing TCE rates, while continuing to support client requirements on an on-demand basis. Going forward, the Company intends to opportunistically manage its fleet with the purpose of maximizing TCE rates, while continuing to support client requirements on an on-demand basis.

FIRST QUARTER 2024 CONFERENCE CALL

The Company’s management team will host a conference call to discuss the Company’s financial results on Friday, May 10, 2024 at 8:00 a.m., Eastern Time (ET). Accompanying presentation materials will be available in the Investor Relations section of the Company’s website at https://www.pangaeals.com/investors/.

To participate in the live teleconference:

Domestic Live: 1-888-632-3384
International Live: 1-785-424-1794
Conference ID:     PANLQ124     

To listen to a replay of the teleconference, which will be available through May 17, 2024:

Domestic Replay: 1-877-856-8964
International Replay: 1-402-220-1608




Pangaea Logistics Solutions Ltd.
Consolidated Statements of Operations
(unaudited)
Three Months Ended March 31,
20242023
Revenues:
Voyage revenue$87,290,563 $107,950,123 
Charter revenue15,031,027 5,748,952 
Terminal & Stevedore Revenue2,426,963 — 
Total revenue104,748,553 113,699,075 
Expenses:
Voyage expense37,114,664 56,814,631 
Charter hire expense27,142,850 22,590,840 
Vessel operating expense12,669,257 13,606,815 
   Terminal & Stevedore Expenses2,079,187 — 
General and administrative7,278,003 5,691,733 
Depreciation and amortization7,436,473 7,326,860 
Loss on sale of vessel— 1,172,196 
Total expenses93,720,434 107,203,075 
Income from operations11,028,119 6,496,000 
Other income (expense): 
Interest expense(3,850,730)(4,250,514)
Interest income875,084 1,049,846 
(Income) loss attributable to Non-controlling interest recorded as long-term liability interest expense
(815,102)144,736 
Unrealized gain (loss) on derivative instruments, net5,084,339 (423,569)
Other income343,924 386,413 
Total other income (expense), net1,637,515 (3,093,088)
Net income12,665,634 3,402,912 
(Income) loss attributable to non-controlling interests(991,458)71,355 
Net income attributable to Pangaea Logistics Solutions Ltd.$11,674,176 $3,474,267 
Earnings per common share:
Basic$0.26 $0.08 
Diluted$0.25 $0.08 
Weighted average shares used to compute earnings per common share:
Basic45,214,519 44,712,290 
Diluted45,914,772 45,116,719 



Pangaea Logistics Solutions Ltd.
Consolidated Balance Sheets
March 31, 2024December 31, 2023
(unaudited)(audited)
Assets
Current assets
Cash and cash equivalents$95,873,255 $99,037,866 
Accounts receivable (net of allowance of $6,015,917 and $5,657,837 at March 31, 2024 and December 31, 2023, respectively)41,997,734 47,891,501 
Inventories22,151,644 16,556,266 
Advance hire, prepaid expenses and other current assets35,534,470 28,340,246 
Total current assets195,557,103 191,825,879 
Fixed assets, net469,077,334 474,265,171 
Finance lease right of use assets, net29,829,974 30,393,823 
Goodwill3,104,800 3,104,800 
Other non-current Assets5,735,863 5,590,295 
Total assets$703,305,074 $705,179,968 
Liabilities and stockholders' equity
Current liabilities
Accounts payable, accrued expenses and other current liabilities$32,953,336 $35,836,262 
Deferred revenue13,773,306 15,629,886 
Current portion of secured long-term debt29,999,163 30,751,726 
Current portion of finance lease liabilities21,644,835 21,970,124 
Dividend payable966,786 1,146,321 
Total current liabilities99,337,426 105,334,319 
Secured long-term debt, net65,929,536 68,446,309 
Finance lease liabilities, net139,980,818 143,266,867 
Long-term liabilities - other18,751,642 17,936,540 
Commitments and contingencies
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; 46,839,591 shares issued and outstanding at March 31, 2024; 46,466,622 shares issued and outstanding at December 31, 20234,685 4,648 
Additional paid-in capital165,993,186 164,854,546 
Retained earnings166,006,383 159,026,799 
Total Pangaea Logistics Solutions Ltd. equity332,004,254 323,885,993 
Non-controlling interests47,301,398 46,309,940 
Total stockholders' equity379,305,652 370,195,933 
Total liabilities and stockholders' equity$703,305,074 $705,179,968 

Pangaea Logistics Solutions, Ltd.
Consolidated Statements of Cash Flows
(unaudited)

Three Months Ended March 31,
20242023
Operating activities
Net income$12,665,634 $3,402,912 
Adjustments to reconcile net income to net cash provided by operations: 
Depreciation and amortization expense7,436,473 7,326,860 
Amortization of deferred financing costs205,472 239,207 
Amortization of prepaid rent30,467 30,484 
Unrealized (gain) loss on derivative instruments(5,084,339)423,569 
Income from equity method investee(343,924)(386,413)
Earnings attributable to non-controlling interest recorded as other long term liability815,102 (144,736)
Provision (recovery) for doubtful accounts358,080 (170,525)
Loss on sale of vessel— 1,172,196 
Drydocking costs(1,267,661)(1,347,899)
Share-based compensation1,138,677 856,434 
Change in operating assets and liabilities:
Accounts receivable5,535,687 3,485,973 
Inventories(5,595,378)2,370,157 
Advance hire, prepaid expenses and other current assets(3,850,938)(2,917,384)
Accounts payable, accrued expenses and other current liabilities(1,187,491)1,695,595 
Deferred revenue(1,856,580)(4,464,780)
Net cash provided by operating activities8,999,281 11,571,650 
Investing activities  
Purchase of vessels and vessel improvements(130,000)(75,291)
Purchase of fixed assets and equipment(73,618)— 
Contributions to non-consolidated subsidiaries— (63,917)
Proceeds from sale of vessel— 8,933,700 
Net cash (used in) provided by investing activities(203,618)8,794,492 
Financing activities
Payments of long-term debt(3,356,824)(5,765,505)
Payments of finance lease obligations(3,729,323)(4,060,499)
Dividends paid to non-controlling interests— (5,000,000)
Accrued common stock dividends paid(4,874,127)(4,647,788)
Cash paid for incentive compensation shares relinquished— (127,283)
Net cash used in financing activities(11,960,274)(19,601,075)
Net (decrease) increase in cash and cash equivalents(3,164,611)765,067 
Cash and cash equivalents at beginning of period99,037,866 128,384,606 
Cash and cash equivalents at end of period$95,873,255 $129,149,673 

Pangaea Logistics Solutions Ltd.
Reconciliation of Non-GAAP Measures
(unaudited)

Three Months Ended March 31,
20242023
Net Transportation and Service Revenue
Gross Profit$18,333,600 $13,387,407 
Add:
Vessel Depreciation and Amortization7,408,995 7,299,382 
Net transportation and service revenue$25,742,595 $20,686,789 
Adjusted EBITDA
Net Income12,665,634 3,402,912 
Interest expense, net2,975,646 3,200,668 
Income (loss) attributable to Non-controlling interest recorded as long-term liability interest expense
815,102 (144,736)
Depreciation and amortization7,436,473 7,326,860 
EBITDA23,892,855 13,785,704 
Non-GAAP Adjustments:
Loss on sale of vessels— 1,172,196 
Share-based compensation1,138,677 856,434 
Unrealized (gain) loss on derivative instruments, net(5,084,339)423,569 
Adjusted EBITDA$19,947,193 $16,237,903 
Earnings Per Common Share
Net income attributable to Pangaea Logistics Solutions Ltd.$11,674,176 $3,474,267 
Weighted average number of common shares outstanding - basic45,214,519 44,712,290 
Weighted average number of common shares outstanding - diluted45,914,772 45,116,719 
Earnings per common share - basic$0.26 $0.08 
Earnings per common share - diluted$0.25 $0.08 
Adjusted EPS
Net Income attributable to Pangaea Logistics Solutions Ltd.$11,674,176 $3,474,267 
Non-GAAP
Add:
Loss on sale of vessels— 1,172,196 
Unrealized (gain) loss on derivative instruments(5,084,339)423,569 
Non-GAAP adjusted net income attributable to Pangaea Logistics Solutions Ltd.$6,589,837 $5,070,032 
Weighted average number of common shares - basic45,214,519 44,712,290 
Weighted average number of common shares - diluted45,914,772 45,116,719 
Adjusted EPS - basic$0.15 $0.11 
Adjusted EPS - diluted$0.14 $0.11 


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.

Gross Profit. Gross profit represents total revenue less net transportation and service revenue and less vessel depreciation and amortization.

Net transportation and service revenue. Net transportation and service revenue represents total revenue less the total direct costs of transportation and services, which includes charter hire, voyage and vessel operating expenses and terminal & stevedore expenses. Net transportation and service revenue is included because it is used by management and certain investors to measure performance by comparison to other logistic service providers. Net transportation and service 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 transportation and service revenue used here may not be comparable to an operating measure used by other companies.

Adjusted EBITDA and adjusted EPS. Adjusted EBITDA represents net income (or loss), determined in accordance with U.S. GAAP, excluding interest expense, interest income, income taxes, depreciation and amortization, loss on impairment, loss on sale and leaseback of vessels, share-based compensation, other non-operating income and/or expense and other non-recurring items, if any. 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 of vessel, loss on sale and leaseback of vessel, loss on impairment of vessel, unrealized gains and losses on derivative instruments, and certain non-recurring charges, 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) and its subsidiaries (collectively, “Pangaea” or the “Company”) provides seaborne drybulk logistics and transportation services as well as terminal and stevedoring services. Pangaea utilizes its logistics expertise to service a broad base of industrial customers who require the transportation of a wide variety of drybulk cargoes, including grains, coal, iron ore, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite and limestone. The Company addresses the logistics needs of its customers by undertaking a comprehensive set of services and activities, including cargo loading, cargo discharge, port and terminal operations, vessel chartering, voyage planning, and vessel technical management. Learn more at www.pangaeals.com.




Investor Relations Contacts
Gianni Del SignoreStefan C. Neely
Chief Financial OfficerVallum Advisors
401-846-7790
Investors@pangaeals.comPANL@val-adv.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.

1Q24 Earnings Call Presentation 2 Safe Harbor 1Q24 Earnings Call Presentation This presentation may include certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth and future acquisitions. These statements are based on Pangaea’s and managements’ current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive and/or regulatory factors, and other risks and uncertainties affecting the operation of Pangaea’s business. These risks, uncertainties and contingencies include: business conditions; weather and natural disasters; changing interpretations of GAAP; outcomes of government reviews; inquiries and investigations and related litigation; continued compliance with government regulations; legislation or regulatory environments; requirements or changes adversely affecting the business in which Pangaea is engaged; fluctuations in customer demand; management of rapid growth; intensity of competition from other providers of logistics and shipping services; general economic conditions; geopolitical events and regulatory changes; and other factors set forth in Pangaea’s filings with the Securities and Exchange Commission and the filings of its predecessors. The information set forth herein should be read in light of such risks. Further, investors should keep in mind that certain of Pangaea’s financial results are unaudited and do not conform to SEC Regulation S-X and as a result such information may fluctuate materially depending on many factors. Accordingly, Pangaea’s financial results in any particular period may not be indicative of future results. Pangaea is not under any obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise. 3 1Q24 Performance Highlights Flexible operating model supports opportunistic capital deployment Favorable long-haul voyage demand across specialized ice-class fleet and solid base of premium long-term COAs, resulted in earned TCE rates exceeding the benchmark average Baltic Panamax and Supramax indices by 29%+ in 1Q24. Adjusted EBITDA increased by 23% y/y to $19.9 million in 1Q24, as Adjusted EBITDA margin increased by 400 basis points y/y to 19.0% due to the 23% y/y increase in earned TCE rates, lower per-day voyage expenses, partially offset by an increase in charter hire expenses per chartered-in day associated with higher market rates. In May 2024, announced the acquisition of two 58,000 dwt dry bulk vessels for a combined price of $56.6 million to be delivered in 3Q24. The acquisitions are aligned with the Company’s strategy of upgrading its fleet to optimize TCE return. Continue to execute on key capital allocation priorities, maintaining cash dividend of $0.10 per common share, to be paid on June 13, 2024. As of May 7, 2024, booked 2,890 days at an average of $16,300/day. During 1Q24 the Company began investing in the expansion of its logistics business in the Port of Tampa, Florida through strategic joint operations partnerships and a land lease commitment. The Company is committed to generated profitable organic growth through investment in its port and logistics business. 4 1Q 2024 Performance Summary Adjusted EBITDA $s in Millions Adjusted EPS $s per Share TCE Rate $s per Shipping Day Operating Cash Flow $s in Millions $ 19 .9 $ 16 .2 1Q24 1Q23 $ 0 .14 $ 0 .11 1Q 24 1Q 23 $ 17,6 9 7 $ 14 ,372 1Q 24 1Q 23 $ 9 .0 $ 11.6 1Q 24 1Q 23

 
5 Outperforming Industry Benchmark Our TCE has exceeded the market by an average of 32% on a trailing 5-year basis Cargo Focused Business Model Consistently Delivers Above- Market Performance • Current 2Q24 booked TCE rate of $16,200, a 8% premium to the market average through the quarter.* • Our niche, higher- margin trades, long- term COAs and charter-in strategy remain key areas of differentiation. * Q2 24 estimated TCE performance based on shipping days booked as of May 7, 2024 **Average of the published Panamax and Supramax indices, net of commission - 1,000 2,000 3,000 4,000 5,000 6,000 $- $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 D ay s TC E R at e ($ s p er S h ip p in g D ay ) PANL Total Shipping Days PANL TCE Rate Market TCE Rate** 6 Recent Vessel Acquisitions Disciplined acquiror of complementary assets MV Bulk Sachuest - Supramax MV Bulk Courageous - Ultramax MV Bulk Promise - Panamax MV Bulk Valor - Supramax MV Bulk Concord - Panamax MV Nordic Nuluujaak – Post Panamax(1) MV Nordic Qinnqua – Post Panamax(1) MV Nordic Sanngijug – Post Panamax(1) MV Nordic Siku – Post Panamax(1) (1) Vessels are owned through a Joint Venture, of which Pangaea owns 50%. 2021 Purchased 7 vessels for $205 million Purchased 3 vessels for $64 million 2022 & 2023 MV Bulk Prudence - Ultramax 7 Return of Capital Program Stable quarterly cash dividend supported by stable profitability Annual Dividend Payout Ratio % of Adjusted Net Income Total Annual Cash Dividend Paid $s per Share Annual Dividend Coverage Ratio Ratio of Operating Cash Flow to Dividends Issued Ta rg e te d d ivid e nd p o lic y is a im e d towa rd sust a ina b ilit y t h ro ug h the c yc le Divid e nd p ayo ut ha s inc re a se d a m id favo ra b le m a rke t co nd it io ns a nd s t ra te g ic exe c ut io n Im p rove d m a rg ins a nd c a sh co nve rs io n sup p o rt d ivid e nd cove ra g e d e sp ite vo la t ile d ry b ulk m a rke t 6 .3% 7.4 % 16 .5% 58 .0 % 20 20 20 21 20 22 20 23 $ 0 .0 2 $ 0 .11 $ 0 .30 $ 0 .4 0 20 20 20 21 20 22 20 23 22.9 x 11.2x 10 .1x 3 .0 x 20 20 20 21 20 22 20 23 8 Balance Sheet Update Ample liquidity to support ongoing growth of business O p p o rtunis t ic a lly inve ste d in ow ne d sh ip fle e t d uring 20 21 a m id a t t ra c t ive m a rke t d yna m ic s Re p a id ove r $ 35 m illio n in d e b t d uring 20 23 thro ug h o p e ra t ing c a sh flow a nd ve sse l sa le s Ca p it a l a llo c a t io n p rio rit ie s w ill b e b a la nce d b e twe e n d e b t re p aym e nt , fle e t inve stm e nt , o p p o rtunis t ic M&A a nd sha re ho ld e r re turns $116.4 $255.5 $175.6 $168.9 $165.0 $46.9 $56.2 $128.4 $99.0 $95.9 2.7x 2.4 x 1.3x 2.1x 2.0 x 0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x $- $50.0 $100.0 $150.0 $200.0 $250.0 $300.0 $350.0 2020 2021 2022 2023 1Q24 TT M N et D eb t/ A d j. E B IT D A $s in M ill io n s Total Net Debt Total Cash Net Leverage

 
9 Macro Shipping Outlook Focused on providing comprehensive logistics solutions with targeted dry bulks Near Term Outlook (1H24) Medium Term Outlook (Full-Year 2024) Long-Term Outlook (2025-2026) • Trade disruptions and limited dry bulk vessel supply have resulted in elevated ton-mile demand, supporting elevated market rates entering 2Q24 • US Infrastructure spending is beginning to ramp up, creating favorable tailwinds for construction related raw materials • Global dry bulk fleet growth is expected to remain limited amid limited new-building activity • Trade disruptions resulting from geopolitical tensions are expected to increase could create opportunities as trade looks to avoid regions of turmoil • Current risk to medium-term rate improvement is a more pronounced global recession • Clarity in emissions free fuel alternatives creates opportunity for fleet renewal and niche offerings • Supply chain reorganizations provide the opportunity for the Company to grow its logistics offerings with new and existing customers • Emissions regulations will continue to put pressure on markets as fleets age amid limited new and compliant vessels are built 10 Value Creation Strategy Durable business model insulated from macro volatility – focused on deploying capital to drive above-sector growth Integrated shipping- logistics model • Provide solutions to customer supply chain issues • More efficient, lower total cost of delivery for customer • Adds volume and margins to PANL ocean freight offerings High fleet utilization • Utilize chartered in fleet to arbitrage vessel positions and provide more revenue days Organic investment • Expand capabilities to offer cargo movement beyond ocean transportation • Expand owned fleet for growth using our unique business plan • Apply consistent approach to expand and renew fleet Inorganic investment • Purchase vessels in support of existing long- term COAs, to maximize returns • Acquire logistics companies to grow in logistics sector Return of capital • Sustain consistent dividend approach, not a payout formula • Conserve capital for fleet renewal and opportunistic growth • Compensate for volatility of sector by maintaining reasonable liquidity Balance sheet optionality • Promote historical lending relationships, sustainable business plan, and consistent performance to help provide favorable lending terms • Maintain low net leverage and substantial free cash generation to provide flexibility in financing growth projects • Consider joint ventures to help mitigate risks and create synergies 11 Investment Conclusion Small-cap growth play with stable return of capital program Integrated shipping-logistics model delivering consistent, above-market returns Focused on consistently high fleet utilization to drive operating leverage Positioned to benefit from tightening global supply of dry- bulk vessels amid continued demand growth On-shore logistics offering provides significant, incremental revenue opportunities Leading position within Ice-Class trades supports superior earned TCE rates Disciplined capital allocation strategy Long-term cargo-based contracts provide multi-year demand visibility Significant balance sheet optionality to pursue growth, low net leverage Co nfid e n t ia l: Pa ng a e a Lo g is t ic s So lu t io ns Appendix

 
13 Selected Balance Sheet Data (in thousands,may not foot due to rounding) March 31, 2024 December 31, 2023 (unaudited) (audited) Current Assets Cash and cash equivalents 95,873$ 99,038$ Accounts receivable, net 41,998 47,892 Other current assets 57,686 44,897 Total current assets 195,557 191,826 Fixed assets, including finance lease right of use assets, net 498,907 504,659 Goodwill 3,105 3,105 Other Non-current Assets 5,736 5,590 Total assets 703,305$ 705,180$ Current liabilities Accounts payable, accrued expenses and other current liabilities 32,953$ 35,836$ Current portion long-term debt and finance lease liabilities 51,644 52,722 Other current liabilities 14,740 16,776 Total current liabilties 99,337 105,334 Secured long-term debt and finance lease liabilities, net 205,910 211,713 Other long-term liabilities 18,752 17,937 Total Pangaea Logistics Solutions Ltd. equity 332,004 323,886 Non-controlling interests 47,301 46,310 Total stockholders' equity 379,306 370,196 Total liabilities and stockholders' equity 703,305$ 705,180$ 14 Selected Income Statement Data (1) Ad just e d EBITDA re p re se n t s ne t inco m e (o r lo ss) , d e t e rm ine d in acco rd ance w ith U.S. GAAP, e xc lud ing in t e re s t e xp e nse , in t e re s t inco m e , inco m e t axe s , d e p re c ia t io n and am o rt iza t io n , lo ss o n im p a irm e nt , lo ss o n sa le and le a se b ack o f ve sse ls , sha re -b ase d co m p e nsa t io n , o the r no n-o p e ra t ing inco m e and / o r e xp e nse , and o the r no n-re curring it e m s, if any. (in thousands,may not foot due to rounding) 2024 2023 (audited) (audited) Revenues: Voyage revenue 87,291$ 107,950$ Charter revenue 15,031 5,749 Terminal & stevedore revenue 2,427 - Total revenue 104,749 113,699 Expenses: Voyage expense 37,115 56,815 Charter hire expense 27,143 22,591 Vessel operating expenses 12,669 13,607 Terminal Expenses 2,079 - General and administrative 7,278 5,692 Depreciation and amortization 7,436 7,327 Loss on sale of vessel - 1,172 Total expenses 93,720 107,203 Income from operations 11,028 6,496 Total other expense, net 1,638 (3,093) Net income 12,666 3,403 (Income) loss attributable to noncontrolling interests (991) 71 Net income attributable to Pangaea Logistics Solutions Ltd. 11,674$ 3,474$ Adjusted EBITDA (1) 19,947$ 16,238$ Three months ended March 31, 15 Reconciliation of Non-GAAP Measures 3/31/2024 3/31/2023 (unaudited) (unaudited) Net Transportation and Service Revenue Gross Profit 18,333,600$ 13,387,407$ Add: Vessel Depreciation and amortization 7,408,995 7,299,382 Net transportation and service revenue 25,742,595$ 20,686,789$ Adjusted EBITDA Net Income 12,665,634$ 3,402,912$ Interest expense, net 2,975,646 3,200,668 Income (loss) attributable to Non-controlling interest recorded as long-term liability interest expense 815,102 (144,736) Depreciation and amortization 7,436,473 7,326,860 EBITDA 23,892,855 13,785,704 Non-GAAP Adjustments: Loss on sale of vessels - 1,172,196 Share-based compensation 1,138,677 856,434 Unrealized (gain) loss on derivative instruments, net (5,084,339) 423,569 Adjusted EBITDA 19,947,193$ 16,237,903$ For the three months ended 16 Reconciliation of Non-GAAP Measures 3/31/2024 3/31/2023 (unaudited) (unaudited) Earnings Per Common Share Net income attributable to Pangaea Logistics Solutions Ltd. 11,674,176$ 3,474,267$ Weighted average number of common shares - basic 45,214,519 44,712,290 Weighted average number of common shares - diluted 45,914,772 45,116,719 Earnings per common share - basic 0.26$ 0.08$ Earnings per common share - diluted 0.25$ 0.08$ Adjusted EPS Net income attributable to Pangaea Logistics Solutions Ltd. 11,674,176$ 3,474,267$ Non-GAAP Add: Loss on sale of vessels - 1,172,196 Unrealized (gain) loss on derivative instruments, net (5,084,339) 423,569 Non-GAAP adjusted net income attributable to Pangaea Logistics Solutions Ltd. 6,589,837 5,070,032 Weighted average number of common shares - basic 45,214,519 44,712,290 Weighted average number of common shares - diluted 45,914,772 45,116,719 Adjusted EPS - basic 0.15$ 0.11$ Adjusted EPS - diluted 0.14$ 0.11$ For the three months ended

 
v3.24.1.u1
Cover
May 09, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date May 09, 2024
Entity Registrant Name PANGAEA LOGISTICS SOLUTIONS LTD.
Entity Central Index Key 0001606909
Entity Tax Identification Number 98-1205464
Amendment Flag false
Entity Incorporation, State or Country Code D0
Entity File Number 001-36798
Entity Address, Address Line One 109 Long Wharf
Entity Address, City or Town Newport
Entity Address, State or Province RI
Entity Address, Postal Zip Code 02840
City Area Code 401
Local Phone Number 846-7790
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock
Trading Symbol PANL
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
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