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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): August 8, 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 August 8, 2024, Registrant issued a press release announcing financial results for three months ended June 30, 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: August 8, 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 June 30, 2024
NEWPORT, RI - August 8, 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 June 30, 2024.
SECOND QUARTER 2024 RESULTS

•Net income attributable to Pangaea of $3.7 million, or $0.08 per diluted share
•Adjusted net income attributable to Pangaea of $4.6 million, or $0.10 per diluted share
•Operating cash flow of $9.0 million
•Adjusted EBITDA of $15.9 million
•Time Charter Equivalent ("TCE") rates earned by Pangaea of $16,223 per day
•Pangaea’s TCE rates exceeded the average Baltic Panamax and Supramax indices by 7%
•Ratio of net debt to trailing twelve-month Adjusted EBITDA of 2.1x
•Expanded owned vessel fleet to 26 with the acquisitions of the Bulk Brenton and Bulk Patience in third quarter

For the three months ended June 30, 2024, Pangaea reported non-GAAP adjusted net income of $4.6 million, or $0.10 per diluted share, on total revenue of $131.5 million. Second quarter TCE rates increased 4% on a year-over-year basis, while total shipping days, which include both voyage and time charter days, increased 2% to 4,117 days, when compared to the year-ago period.

The TCE earned was $16,223 per day for the three months ended June 30, 2024, compared to an average of $15,558 per day for the same period in 2023. During the second quarter ended June 30, 2024, the Company’s average TCE rate exceeded the benchmark average Baltic Panamax and Supramax indices by 7%, supported by Pangaea’s long-term contracts of affreightment ("COAs"), specialized fleet, and cargo-focused strategy.

Total Adjusted EBITDA was $15.9 million in the second quarter and unchanged compared to the prior year period. Total Adjusted EBITDA margin was 12.1% during the second quarter of 2024, compared to 13.5% during the prior year period. Second quarter Adjusted EBITDA performance relative to the prior year period reflects the increase in market rates, which were offset by higher charter hire and vessel operating expenses per day.

As of June 30, 2024, the Company had $77.9 million in cash and cash equivalents. Total debt, including lease finance obligations was $252.6 million. At the end of the second quarter 2024, the ratio of net debt to trailing twelve-month adjusted EBITDA was 2.1x, which was flat compared to the prior year period. During the three months ended June 30, 2024, the Company repaid $3.6 million of finance leases, $4.6 million of long-term debt in conjunction with a refinancing, and paid $4.5 million in cash dividends.

On August 8, 2024, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per common share, payable on September 16, 2024, to all shareholders of record as of September 2, 2024.

MANAGEMENT COMMENTARY

“Our second quarter results reflect consistent execution amid a stable dry-bulk market, which enabled us to deliver continued premium TCE returns,” stated Mark Filanowski, Chief Executive Officer of Pangaea Logistics Solutions. “Our fleet remained well utilized during the second quarter as we executed long-term contracts within our key Atlantic trade routes. As we enter the peak demand period for our specialized ice-class fleet operating in the Canadian Arctic region, the stable market environment and our expanded fleet of owned vessels positions us for strong performance in the second half of the year.”

“The global dry bulk market has proven to be resilient in the face of recent global trade disruptions, which has resulted in a more normal price environment compared to a year-ago,” continued Filanowski. “Within our key trade regions, economic activity continues to support demand for our key bulk trades. Second hand vessel values have increased substantially as dry bulk newbuilding orders show continued weakness. Increased newbuilding prices, higher interest rates, and uncertainty of the impact of emissions regulations, have limited orders for new vessels. Going forward, we expect the limited number of newbuild vessels entering the market will provide a systemic catalyst for higher market rates going in to 2025, as dry bulk capacity will become further constrained.”

“Given the attractive macro backdrop for dry bulk economics, we have been very focused on our capital deployment priorities,” continued Filanowski. “During the quarter, we entered into an agreement to acquire the Bulk Brenton and Bulk Patience, which will enter our fleet during the third quarter. At the same time, we refinanced two of our owned ships with new lenders and repaid over $8 million in debt, which further improves the flexibility of our balance sheet.”

“Looking ahead, the third quarter represents a seasonally strong period for demand in our niche Arctic trades and we expect that our fleet of ice class vessels will be fully utilized during the third quarter. Through today we’ve booked 3,298 shipping days at an average TCE rate of $17,978 per day” continued Filanowski. “Entering our period of peak demand, we will remain focused on


maximizing fleet utilization in order to deliver premium asset returns, invest in profitable growth and deliver consistent shareholder returns.”

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. Since acquiring marine port terminal operations in Port Everglades/Ft. Lauderdale, Port of Palm Beach, Florida, and Port of Baltimore, Maryland a year ago, the Company has opportunistically deployed capital to support continued organic growth of this business. During the second quarter, the port and logistics business continued to build momentum, delivering strong margins and profitability. Earlier in the year, the Company launched an expansion of its terminal operations in the Port of Tampa, which is on track to be complete in the second half of 2025.

Continue to drive strong fleet utilization. In the second quarter, Pangaea's 24 owned vessels were fully utilized and supplemented with an average of 22 chartered-in vessels to support cargo and COA commitments. During the quarter, the Company announced the acquisition of two new vessels, which will expand the owned vessel fleet to 26. These vessels will further position the Company to maximize the utilization of its fleet and serve the evolving needs of its customers.

Continue to upgrade fleet, while divesting older, non-core assets. During the quarter, the Company entered into an agreement to acquire the Bulk Brenton and Bulk Patience for a combined purchase price of $56.6 million. These two 2016 built vessels represent an upgrade to the composition of our fleet by increasing our environmentally compliant fleet tonnage and improving our ability to meet customer demand. Going forward, the Company intends to opportunistically manage its fleet with the purpose of maximizing TCE rates, meeting evolving regulatory requirements and supporting client cargo needs on an on-demand basis.

SECOND QUARTER 2024 CONFERENCE CALL

The Company’s management team will host a conference call to discuss the Company’s financial results on Friday, August 9, 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: 1-800-267-6316
International Live: 1-203-518-9783
Conference ID:     PANLQ224    

To listen to a replay of the teleconference, which will be available through August 16, 2024:

Domestic Replay: 1-800-938-2376
International Replay: 1-402-220-1129




Pangaea Logistics Solutions Ltd.
Consolidated Statements of Operations
(unaudited)
Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Revenues:
Voyage revenue$124,095,728 $110,465,557 $211,386,291 $218,415,680 
Charter revenue3,846,797 7,090,440 18,877,824 12,839,392 
Terminal & Stevedore Revenue3,555,327 519,657 5,982,290 519,657 
Total revenue131,497,852 118,075,654 236,246,405 231,774,729 
Expenses:
Voyage expense61,150,855 54,459,633 98,265,519 111,274,264 
Charter hire expense32,685,075 29,125,662 59,827,925 51,716,502 
Vessel operating expense14,735,927 13,210,851 27,405,184 26,817,666 
   Terminal & Stevedore Expenses2,828,398 374,582 4,907,585 374,582 
General and administrative5,029,696 5,923,159 12,307,699 11,614,892 
Depreciation and amortization7,453,675 7,126,995 14,890,148 14,453,855 
Loss on sale of vessel— — — 1,172,196 
Total expenses123,883,626 110,220,882 217,604,060 217,423,957 
Income from operations7,614,226 7,854,772 18,642,345 14,350,772 
Other income (expense): 
Interest expense(3,812,783)(4,125,720)(7,663,513)(8,376,234)
Interest income665,362 1,042,564 1,540,446 2,092,410 
Loss (Income) attributable to Non-controlling interest recorded as long-term liability interest expense
119,950 (905,337)(695,152)(760,600)
Unrealized (loss) gain on derivative instruments, net(927,503)(1,348,284)4,156,836 (1,771,853)
Other income334,248 248,863 678,172 635,275 
Total other expense, net(3,620,726)(5,087,914)(1,983,211)(8,181,002)
Net income3,993,500 2,766,858 16,659,134 6,169,770 
(Income) loss attributable to non-controlling interests(310,725)77,682 (1,302,183)149,037 
Net income attributable to Pangaea Logistics Solutions Ltd.$3,682,775 $2,844,540 $15,356,951 $6,318,807 
Earnings per common share:
Basic$0.08 $0.06 $0.34 $0.14 
Diluted$0.08 $0.06 $0.33 $0.14 
Weighted average shares used to compute earnings per common share:
Basic45,276,791 44,775,438 45,245,655 44,744,039 
Diluted46,028,902 45,127,972 45,922,272 45,122,019 



Pangaea Logistics Solutions Ltd.
Consolidated Balance Sheets
June 30, 2024December 31, 2023
(unaudited)(audited)
Assets
Current assets
Cash and cash equivalents$77,946,955 $99,037,866 
Accounts receivable (net of allowance of $6,494,900 and $5,657,837 at June 30, 2024 and December 31, 2023, respectively)41,332,293 47,891,501 
Inventories28,889,890 16,556,266 
Advance hire, prepaid expenses and other current assets33,182,103 28,340,246 
Total current assets181,351,241 191,825,879 
Fixed assets, net464,347,780 474,265,171 
Advances for vessel purchases8,500,000 — 
Finance lease right of use assets, net29,630,660 30,393,823 
Goodwill3,104,800 3,104,800 
Other non-current Assets5,986,121 5,590,295 
Total assets$692,920,602 $705,179,968 
Liabilities and stockholders' equity
Current liabilities
Accounts payable, accrued expenses and other current liabilities$39,257,972 $35,836,262 
Deferred revenue10,064,097 15,629,886 
Current portion of secured long-term debt12,049,931 30,751,726 
Current portion of finance lease liabilities21,480,421 21,970,124 
Dividend payable1,116,964 1,146,321 
Total current liabilities83,969,385 105,334,319 
Secured long-term debt, net78,474,348 68,446,309 
Finance lease liabilities, net137,035,935 143,266,867 
Long-term liabilities - other16,631,692 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; 46,902,091 shares issued and outstanding at June 30, 2024; 46,466,622 shares issued and outstanding at December 31, 20234,692 4,648 
Additional paid-in capital166,521,852 164,854,546 
Retained earnings165,003,909 159,026,799 
Total Pangaea Logistics Solutions Ltd. equity331,530,453 323,885,993 
Non-controlling interests45,278,789 46,309,940 
Total stockholders' equity376,809,242 370,195,933 
Total liabilities and stockholders' equity$692,920,602 $705,179,968 

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

Six Months Ended June 30,
20242023
Operating activities
Net income$16,659,134 $6,169,770 
Adjustments to reconcile net income to net cash provided by operations: 
Depreciation and amortization expense14,890,148 14,453,855 
Amortization of deferred financing costs399,259 471,582 
Amortization of prepaid rent60,933 60,564 
Unrealized (gain) loss on derivative instruments(4,156,836)1,771,853 
Income from equity method investee(678,172)(635,275)
Earnings attributable to non-controlling interest recorded as other long term liability695,152 760,600 
Provision for doubtful accounts837,063 1,129,270 
Loss on impairment of vessel— — 
Loss on sale of vessel— 1,172,196 
Drydocking costs(3,154,809)(3,361,280)
Share-based compensation1,667,350 1,123,507 
Change in operating assets and liabilities:
Accounts receivable5,722,145 (7,196,493)
Inventories(12,333,624)1,652,227 
Advance hire, prepaid expenses and other current assets(2,426,074)(3,503,097)
Accounts payable, accrued expenses and other current liabilities5,339,639 5,894,024 
Deferred revenue(5,565,789)(6,383,893)
Net cash provided by operating activities17,955,519 13,579,410 
Investing activities  
Purchase of vessels and vessel improvements(498,982)(27,039,525)
Advances for vessel purchases(8,500,000)— 
Purchase of fixed assets and equipment(140,018)— 
Proceeds from sale of vessel— 8,933,700 
Acquisitions, net of cash acquired— (7,200,000)
Dividends received from equity method investments— 1,627,500 
Net cash used in investing activities(9,139,000)(23,678,325)
Financing activities
Proceeds from long-term debt17,600,000 — 
Payments of financing fees and issuance costs(866,801)— 
Payments of long-term debt(25,573,461)(9,096,390)
Payments of finance lease obligations(7,324,636)(8,133,049)
Dividends paid to non-controlling interests(2,333,334)(5,000,000)
Cash dividends paid(9,409,198)(9,133,109)
Cash paid for incentive compensation shares relinquished— (127,283)
Payments to non-controlling interest recorded as long-term liability(2,000,000)(2,500,000)
Net cash used in financing activities(29,907,430)(33,989,831)
Net change in cash and cash equivalents(21,090,911)(44,088,746)
Cash and cash equivalents at beginning of period99,037,866 128,384,606 
Cash and cash equivalents at end of period$77,946,955 $84,295,860 

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

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Net Transportation and Service Revenue
Gross Profit$12,671,400 $13,805,410 $31,005,001 $27,192,817 
Add:
Vessel Depreciation and Amortization7,426,197 7,099,516 14,835,191 14,398,898 
Net transportation and service revenue$20,097,597 $20,904,926 $45,840,192 $41,591,715 
Adjusted EBITDA
Net Income3,993,500 2,766,858 16,659,134 6,169,770 
Interest expense, net3,147,421 3,083,156 6,123,067 6,283,824 
Income (loss) attributable to Non-controlling interest recorded as long-term liability interest expense
(119,950)905,337 695,152 760,600 
Depreciation and amortization7,453,675 7,126,995 14,890,148 14,453,855 
EBITDA14,474,646 13,882,346 38,367,501 27,668,049 
Non-GAAP Adjustments:
Loss on sale of vessels— — — 1,172,196 
Share-based compensation528,673 267,073 1,667,350 1,123,507 
Unrealized (gain) loss on derivative instruments, net927,503 1,348,284 (4,156,836)1,771,853 
Other non-recurring items— 425,702 — 425,702 
Adjusted EBITDA$15,930,822 $15,923,405 $35,878,015 $32,161,307 
Earnings Per Common Share
Net income attributable to Pangaea Logistics Solutions Ltd.$3,682,775 $2,844,540 $15,356,951 $6,318,807 
Weighted average number of common shares outstanding - basic45,276,791 44,775,438 45,245,655 44,744,039 
Weighted average number of common shares outstanding - diluted46,028,902 45,127,972 45,922,272 45,122,019 
Earnings per common share - basic$0.08 $0.06 $0.34 $0.14 
Earnings per common share - diluted$0.08 $0.06 $0.33 $0.14 
Adjusted EPS
Net Income attributable to Pangaea Logistics Solutions Ltd.$3,682,775 $2,844,540 $15,356,951 $6,318,807 
Non-GAAP
Add:
Loss on sale of vessels— — — 1,172,196 
Unrealized loss (gain) on derivative instruments927,503 1,348,284 (4,156,836)1,771,853 
Other non-recurring items— $425,702 — 425,702 
Non-GAAP adjusted net income attributable to Pangaea Logistics Solutions Ltd.$4,610,278 $4,618,526 $11,200,115 $9,688,558 
Weighted average number of common shares - basic45,276,791 44,775,438 45,245,655 44,744,039 
Weighted average number of common shares - diluted46,028,902 45,127,972 45,922,272 45,122,019 
Adjusted EPS - basic$0.10 $0.10 $0.25 $0.22 
Adjusted EPS - diluted$0.10 $0.10 $0.24 $0.21 


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.

2Q24 Earnings Call Presentation 2 Safe Harbor 2Q24 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 2Q24 Performance Highlights Consistent financial performance and execution on capital priorities Favorable long-haul voyage demand across and solid base of premium long-term COAs, resulted in earned TCE rates exceeding the benchmark average Baltic Panamax and Supramax indices by 7%+ in 2Q24. Adjusted EBITDA was unchanged y/y at $15.9 million in 2Q24, as a 9% y/y increase in charter hire expenses per day and a 13%y/y increase in vessel operating expenses per day offset the 45% increase in market dry bulk rates and a 2% increase in shipping days. Announced acquisition of the Bulk Brenton and Bulk Patience for a combined price of $56.6 million. The acquisitions improve the amount of environmentally compliant fleet tonnage and increased the number of owned vessels to 26. Continue to execute on key capital allocation priorities, maintaining cash dividend of $0.10 per common share, to be paid on September 16, 2024. Entering the third quarter, demand activity in artic trade routes has accelerated while prevailing market rates have been mixed. As of August 7, 2024, booked 3,298 days at an average of $17,978/day. Refinanced and upsized a maturing credit facility in support of the acquisition of the Bulk Brenton and Bulk Patience in 3Q24. In conjunction with the refinancing, repaid $4.6 million of long-term debt. 4 2Q 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 $ 15.9 $ 15.9 2Q 24 2Q 23 $ 0 .10 $ 0 .10 2Q 24 2Q 23 $ 9 .0 $ 2.0 2Q 24 2Q 23 $ 16 ,223 $ 15,558 2Q 24 2Q 23

 
5 Outperforming Industry Benchmark Our TCE has exceeded the market by an average of 31% on a trailing 5-year basis Cargo Focused Business Model Consistently Delivers Above- Market Performance • Current 3Q24 booked TCE rate of $17,978, an 24% 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. * Q3 24 estimated TCE performance based on shipping days booked as of August 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%. Purchased 9 vessels for $242 million Purchased 2 vessels for $55 million 2023 & 2024 MV Bulk Prudence - Ultramax 2021 & 2022 MV Bulk Brenton - Supramax 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 $ 16 8 .9 $ 175.1 $ 4 6 .9 $ 56 .2 $ 128 .4 $ 9 9 .0 $ 77.9 2.7x 2.4 x 1.3x 2.1x 2.1x 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 2Q24 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 (2H24) Medium Term Outlook (Full-Year 2025) Long-Term Outlook (2026 - 2027) • While the situation in the Panama Canal has improved ton-mile demand remains elevated because of the disruption in the Red Sea and the Russian invasion of Ukraine. The 2nd half of the year is typically stronger due to the Northern hemisphere grain export season, which we also expect to contribute positively to the market rates for the rest of the year • 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) June 30, 2024 December 31, 2023 (unaudited) (audited) Current Assets Cash and cash equivalents 77,947$ 99,038$ Accounts receivable, net 41,332 47,892 Other current assets 62,072 44,897 Total current assets 181,351 191,826 Fixed assets, including finance lease right of use assets, net 502,478 504,659 Goodwill 3,105 3,105 Other Non-current Assets 5,986 5,590 Total assets 692,921$ 705,180$ Current liabilities Accounts payable, accrued expenses and other current liabilities 39,258$ 35,836$ Current portion long-term debt and finance lease liabilities 33,530 52,722 Other current liabilities 11,181 16,776 Total current liabilties 83,969 105,334 Secured long-term debt and finance lease liabilities, net 215,510 211,713 Other long-term liabilities 16,632 17,937 Total Pangaea Logistics Solutions Ltd. equity 331,530 323,886 Non-controlling interests 45,279 46,310 Total stockholders' equity 376,809 370,196 Total liabilities and stockholders' equity 692,921$ 705,180$ 14 Selected Income Statement Data 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 2024 2023 (unaudited) (unaudited) (audited) (audited) Revenues: Voyage revenue 124,096$ 110,466$ 211,386$ 218,416$ Charter revenue 3,847 7,090 18,878 12,839 Terminal & stevedore revenue 3,555 520 5,982 520 Total revenue 131,498 118,076 236,246 231,775 Expenses: Voyage expense 61,151 54,460 98,266 111,274 Charter hire expense 32,685 29,126 59,828 51,717 Vessel operating expenses 14,736 13,211 27,405 26,818 Terminal Expenses 2,828 375 4,908 375 General and administrative 5,030 5,923 12,308 11,615 Depreciation and amortization 7,454 7,127 14,890 14,454 Loss on sale of vessel - - - 1,172 Total expenses 123,884 110,221 217,604 217,424 Income from operations 7,614 7,855 18,642 14,351 Total other expense, net (3,621) (5,088) (1,983) (8,181) Net income 3,994 2,767 16,659 6,170 (Income) loss attributable to noncontrolling interests (311) 78 (1,302) 149 Net income attributable to Pangaea Logistics Solutions Ltd. 3,683$ 2,845$ 15,357$ 6,319$ Adjusted EBITDA (1) 15,931$ 15,923$ 35,878$ 32,161$ Six months ended June 30,Three months ended June 30, 15 Reconciliation of Non-GAAP Measures 6/30/2024 6/30/2023 6/30/2024 6/30/2023 (unaudited) (unaudited) (unaudited) (unaudited) Net Transportation and Service Revenue Gross Profit 12,671,400$ 13,805,410$ 31,005,001$ 27,192,817$ Add: Vessel Depreciation and amortization 7,426,197 7,099,516 14,835,191 14,398,898 Net transportation and service revenue 20,097,597$ 20,904,926$ 45,840,192$ 41,591,715$ Adjusted EBITDA Net Income 3,993,500$ 2,766,858$ 16,659,134$ 6,169,770$ Interest expense, net 3,147,421 3,083,156 6,123,067 6,283,824 Income (loss) attributable to Non-controlling interest recorded as long-term liability interest expense (119,950) 905,337 695,152 760,600 Depreciation and amortization 7,453,675 7,126,995 14,890,148 14,453,855 EBITDA 14,474,646 13,882,346 38,367,501 27,668,049 Non-GAAP Adjustments: Loss on sale of vessels - - - 1,172,196 Share-based compensation 528,673 267,073 1,667,350 1,123,507 Unrealized loss (gain) on derivative instruments, net 927,503 1,348,284 (4,156,836) 1,771,853 Other non-recurring items - 425,702 - 425,702 Adjusted EBITDA 15,930,822$ 15,923,405$ 35,878,015$ 32,161,307$ For the three months ended For the six months ended 16 Reconciliation of Non-GAAP Measures Earnings Per Common Share Net income attributable to Pangaea Logistics Solutions Ltd. 3,682,775$ 2,844,540$ 15,356,951$ 6,318,807$ Weighted average number of common shares - basic 45,276,791 44,775,438 45,245,655 44,744,039 Weighted average number of common shares - diluted 46,028,875 45,127,972 45,922,272 45,122,019 Earnings per common share - basic 0.08$ 0.06$ 0.34$ 0.14$ Earnings per common share - diluted 0.08$ 0.06$ 0.33$ 0.14$ Adjusted EPS Net income attributable to Pangaea Logistics Solutions Ltd. 3,682,775$ 2,844,540$ 15,356,951$ 6,318,807$ Non-GAAP Add: Loss on impairment of vessels - - - - Loss on sale of vessels - - - 1,172,196 Unrealized loss (gain) on derivative instruments, net 927,503 1,348,284 (4,156,836) 1,771,853 Other non-recurring items - 425,702 - 425,702 Non-GAAP adjusted net income attributable to Pangaea Logistics Solutions Ltd. 4,610,278 4,618,526 11,200,115 9,688,558 Weighted average number of common shares - basic 45,276,791 44,775,438 45,245,655 44,744,039 Weighted average number of common shares - diluted 46,028,875 45,127,972 45,922,272 45,122,019 Adjusted EPS - basic 0.10$ 0.10$ 0.25$ 0.22$ Adjusted EPS - diluted 0.10$ 0.10$ 0.24$ 0.21$

 
v3.24.2.u1
Cover
Aug. 08, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 08, 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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