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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): March 13, 2024  
 
PANGAEA LOGISTICS SOLUTIONS LTD.
(Exact Name of Registrant as Specified in Charter)
 
Bermuda 001-36798 98-1205464
(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 class Trading Symbol(s) Name of exchange on which registered
Common Stock PANL Nasdaq 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 2.02 Results of Operations and Financial Condition.

On March 13, 2024, Registrant issued a press release announcing financial results for three and twelve months ended December 31, 2023. 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 9.01 Financial Statements and Exhibits.
 
(d)Exhibits
Exhibit Description
 
99.1    Press Release of Pangaea Logistics Solutions Ltd., dated March 13, 2024 Reporting Financial Results for the three and twelve months ended December 31, 2023 (furnish pursuant to Item 2.02).

99.2    Q4 2023 Investor Presentation of Pangaea Logistics Solutions Ltd. dated March 13, 2024.

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: March 13, 2024
  PANGAEA LOGISTICS SOLUTIONS LTD.
   
  By:  /s/ Gianni Del Signore
    Name: Gianni Del Signore
Title: Chief Financial Officer
 
 


EX-99.1 2 a2023earningspressrelease.htm EX-99.1 PRESS RELEASE Document

Pangaea Logistics Solutions Ltd. Reports Financial Results for the
Three Months and Year Ended December 31, 2023

NEWPORT, RI - March 13, 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 and year ended December 31, 2023.
FOURTH QUARTER 2023 RESULTS

•Net income of $1.1 million, or $0.03 per diluted share
•Adjusted net income attributable to Pangaea Logistics Solutions Ltd. of $7.4 million, or $0.16 per diluted share
•Operating cash flow of $23.9 million
•Adjusted EBITDA of $19.7 million
•Time Charter Equivalent ("TCE") rates earned by Pangaea of $17,685 per day
•Pangaea’s TCE rates exceeded the average Baltic Panamax and Supramax indices by 27%
•Ratio of net debt to trailing twelve-month Adjusted EBITDA of 2.12x
•In November 2023, completed the sale of the Supramax Bulk Trident for $9.8 million

FULL YEAR 2023 RESULTS
•Net income attributable to Pangaea Logistics Solutions Ltd. of $26.3 million, or $0.58 per diluted share
•Adjusted Net Income attributable to Pangaea Logistics Solutions Ltd. of $31.4 million, or $0.69 per diluted share
•Operating cash flow of $53.8 million
•Adjusted EBITDA of $79.7 million
•Time Charter Equivalent ("TCE") rates earned by Pangaea of $15,849 per day
•Pangaea’s TCE rates exceeded the average Baltic Panamax and Supramax indices by 39%

For the fourth quarter ended December 31, 2023, Pangaea reported non-GAAP adjusted net income of $7.4 million, or $0.16 per diluted share, on total revenue of $131.9 million. Fourth quarter TCE rates declined 11.7% on a year-over-year basis, while total shipping days, which include both voyage and time charter days, increased 11% to 4,087 days, when compared to the year-ago period.
The TCE earned was $17,685 per day for the three months ended December 31, 2023, compared to an average of $20,023 per day for the same period in 2022. During the fourth quarter 2023, the Company’s average TCE rate exceeded the benchmark average Baltic Panamax and Supramax indices by approximately 27%, supported by Pangaea’s long-term contracts of affreightment ("COAs"), specialized fleet, and cargo-focused strategy.
Total Adjusted EBITDA decreased by 27% to $19.7 million in the fourth quarter due to fewer total shipping days and lower market rates, partially offset by the benefit of more owned ship days from a larger owned fleet and a decline in charter-hire expenses.

Total Adjusted EBITDA margin was 14.9% during the fourth quarter of 2023, compared to 21.0% during the prior year period. The decrease in Adjusted EBITDA margin reflects the 11% year-over-year increase in shipping days, coupled with the 12% year-over-year decrease in TCE rate, partially offset by a 4% year-over-year decline in vessel operating expenses per day, net of technical management fees. Fourth quarter 2024 expenses also reflect approximately $1.0 million impact from elevated Panama Canal transit fees caused by drought conditions in portions of Central and South America.

For the full year ended December 31, 2023, Pangaea reported non-GAAP adjusted net income of $31.4 million or $0.69 per diluted share, on total revenue of $499.3 million. Total Adjusted EBITDA was $79.7 million for the full year 2023 and total Adjusted EBITDA margin was 16.0%, compared to 20.1% for the full year 2022. Full year TCE rates declined 35.1% on a year-over-year basis in 2023 , while total shipping days decreased 5.7% to 16,711 when compared to 2022. The Company’s average TCE rate during 2023 exceeded the benchmark average Baltic Panamax and Supramax indices by approximately 39%, supported by Pangaea’s specialized fleet of ice-class vessels, long-term COAs, and cargo-focused strategies.

As of December 31, 2023, the Company had $99.0 million in cash and equivalents. Total debt, including lease finance obligations was $264 million at year-end 2023. At the end of the fourth quarter 2023, the ratio of net debt to trailing twelve-month adjusted EBITDA was 2.12x, versus 1.25x in the prior-year period. During the three months ended December 31, 2023, the Company repaid $3.3 million of long-term debt, $8.0 million of finance leases, and paid $4.5 million of cash dividends.



As previously announced on Feb 15, 2024, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per common share, to be paid on March 15, 2024, to all shareholders of record as of March 1, 2024.

MANAGEMENT COMMENTARY

“We continued to execute on our premium-rate, cargo-centric strategy throughout the year, culminating in a strong fourth quarter operating performance,” stated Mark Filanowski, Chief Executive Officer of Pangaea Logistics Solutions. “While the fourth quarter is generally a slower period for Pangaea as we complete the peak Arctic trade season, ongoing geopolitical trade disruptions have led to increased demand for our solutions outside of our traditional trade routes, contributing to increased shipping days in the period compared to the prior year.”

“During the fourth quarter and full-year 2023, our TCE rate exceeded the benchmark BSI Index by nearly 27% and 39%, respectively,” continued Filanowski. “This performance is demonstrates our ability to drive relative out performance versus the broader industry even in periods of pronounced rate volatility. We believe we are the industry leader in this regard. During 2023, we also celebrated our 27th year of service to our loyal customer base and we rebranded our operating companies, Phoenix Bulk and Nordic Bulk, with proud Pangaea Logistics names.”

“Entering 2024, trade disruptions are causing persistent market inefficiencies driving a higher seasonal freight rate environment,” continued Filanowski. “Through today, we have performed 3,513 shipping days generating a TCE of $17,430/day, representing a strong seasonal start to the new year.”

“While dry bulk demand conditions remain robust, the global supply of newer, compliant fleet tonnage remains constrained, with the order book for new dry bulk vessels continuing to sit well below historical levels,” continued Filanowski. “With a limited volume of newbuild vessels scheduled to enter service over the next several years, the existing fleet of vessels in operation are expected to stay in high demand, a dynamic supportive of a strengthening rate environment.”

“In a strengthening dry-bulk market, Pangaea will continue to focus on driving superior returns on capital deployed,” continued Filanowski. “In 2023, we invested in the strategic expansion of our logistics capabilities through the acquisition of new port and terminal operations, deployed more than $34 million in our fleet renewal strategy, reduced our long-term debt by $36 million, and returned more than $18 million of capital to shareholders through our quarterly cash dividend. In 2024, we intend to prioritize growth in our fleet and logistics capabilities, while we continue to maintain a stable return of capital program, consistent with our long-term focus on shareholder value creation.”

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 one of 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 2024, the Company intends to opportunistically expand its marine port terminal operations footprint across the U.S Gulf Coast through strategic joint operations partnerships.

Continue to drive strong fleet utilization. In the fourth quarter, Pangaea's 24 owned vessels were fully utilized and supplemented with an average of 20 chartered-in vessels to support cargo and COA commitments. While the Company benefited from continued artic trade activity demand early in the quarter, global trade disruptions bolstered demand, resulting in an 11% increase in shipping days. 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 November 2023, the Company completed the sale of the 2006-built Supramax Bulk Trident for $9.8 million. Looking ahead, 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.




FOURTH QUARTER 2023 CONFERENCE CALL
The Company’s management team will host a conference call to discuss the Company’s financial results on Thursday, March 14, 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: 1-800-245-3047
International Live: 1-203-518-9765
Conference ID: PANLQ423

To listen to a replay of the teleconference, which will be available through March 21, 2024:

Domestic Replay: 1-800-839-5630
International Replay: 1-402-220-2557


Pangaea Logistics Solutions Ltd.
Consolidated Statements of Operations

  Three months ended December 31, Twelve months ended December 31,
  2023 2022 2023 2022
(unaudited) (unaudited)
Revenues:    
Voyage revenue $ 122,280,728  $ 117,339,854  $ 468,580,914  $ 640,033,668 
Charter revenue 7,078,975  10,583,556  23,715,895  59,673,238 
Terminal & stevedore revenue 2,517,214  —  6,971,025  — 
Total revenue 131,876,917  127,923,410  499,267,834  699,706,906 
Expenses:
Voyage expense 57,085,198  54,214,070  227,434,670  262,088,555 
Charter hire expense 33,850,149  28,156,765  111,033,537  222,332,197 
Vessel operating expenses 14,713,363  15,380,167  55,783,562  56,859,340 
Terminal & stevedore expenses 1,916,707  —  5,809,025  — 
General and administrative 5,665,924  3,907,905  22,780,937  20,103,346 
Depreciation and amortization 7,524,045  7,529,397  30,070,395  29,489,810 
Loss on impairment of vessels —  —  —  3,007,809 
   Loss on sale of vessels 566,315  —  1,738,511  318,032 
Total expenses 121,321,701  109,188,304  454,650,637  594,199,089 
Income from operations 10,555,216  18,735,106  44,617,197  105,507,817 
Other (expense) income:
Interest expense (4,300,627) (4,264,918) (17,025,547) (15,704,233)
Interest income 704,220  614,978  3,572,134  932,069 
Loss (income) attributable to Non-controlling interest recorded as long-term liability interest expense 565,648  (755,563) (462,150) (6,717,414)
Unrealized (loss) gain on derivative instruments (5,685,406) 1,192,416  (2,925,347) 682,323 
Other income 338,849  290,025  761,485  807,142 
Total other expense, net (8,377,316) (2,923,062) (16,079,425) (20,000,113)
Net income 2,177,900  15,812,044  28,537,772  85,507,704 
Income attributable to noncontrolling interests (1,041,698) (309,443) (2,214,472) (6,016,291)
Net income attributable to Pangaea Logistics Solutions Ltd. $ 1,136,202  $ 15,502,601  $ 26,323,300  $ 79,491,413 
Earnings per common share:
Basic $ 0.03  $ 0.35  $ 0.59  $ 1.79 
Diluted $ 0.03  $ 0.34  $ 0.58  $ 1.76 
Weighted average shares used to compute earnings per common share      
Basic 44,815,282  44,435,664  44,773,899  44,398,987 
Diluted 45,392,225  44,985,969  45,475,453  45,059,587 



Pangaea Logistics Solutions Ltd.
Consolidated Balance Sheets

December 31, 2023 December 31, 2022
Assets    
Current Assets    
Cash and cash equivalents $ 99,037,866  $ 128,384,606 
Accounts receivable (net of allowance of $5,657,837 and $4,367,848 at December 31, 2023 and 2022, respectively) 47,891,501  36,755,149 
Bunker inventory 16,556,266  29,104,436 
Advance hire, prepaid expenses and other current assets 28,340,246  28,266,831 
Total current assets 191,825,879  222,511,022 
Fixed assets, at cost, net of accumulated depreciation of $127,015,253 and $108,844,668, at December 31, 2023 and 2022, respectively 474,265,171  476,524,752 
Finance lease right of use assets, at cost, net of accumulated depreciation of $10,393,823 and $12,139,654 at December 31, 2023 and 2022, respectively 30,393,823  43,921,569 
Goodwill 3,104,800  — 
Other Non-current Assets 5,590,295  5,284,127 
Total assets $ 705,179,968  $ 748,241,470 
Liabilities and stockholders' equity    
Current liabilities    
Accounts payable, accrued expenses and other current liabilities $ 35,836,262  $ 38,554,131 
Deferred revenue 15,629,886  20,883,958 
Current portion of long-term debt 30,751,726  15,782,530 
Current portion of finance lease liabilities 21,970,124  16,365,075 
Dividends payable 1,146,321  626,178 
Total current liabilities 105,334,319  92,211,872 
Secured long-term debt, net 68,446,309  98,819,739 
Finance lease liabilities 143,266,867  168,513,939 
Long-term liabilities - other 17,936,540  19,974,390 
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, 46,466,622 and 45,898,395 shares issued and outstanding at December 31, 2023 and 2022, respectively 4,648  4,590 
Additional paid-in capital 164,854,546  162,894,080 
Retained Earnings 159,026,799  151,327,392 
Total Pangaea Logistics Solutions Ltd. equity 323,885,993  314,226,062 
Non-controlling interests 46,309,940  54,495,468 
Total stockholders' equity 370,195,933  368,721,530 
Total liabilities and stockholders' equity $ 705,179,968  $ 748,241,470 



Pangaea Logistics Solutions Ltd.
Consolidated Statements of Cash Flows
  Years ended December 31,
  2023 2022
Operating activities    
Net income $ 28,537,772  $ 85,507,704 
Adjustments to reconcile net income to net cash provided by operations:    
Depreciation and amortization expense 30,070,395  29,489,810 
Amortization of deferred financing costs 946,593  1,005,487 
Amortization of prepaid rent 121,532  122,343 
Unrealized loss (gain) on derivative instruments 2,925,347  (682,323)
Income from equity method investee (684,470) (807,142)
Earnings attributable to non-controlling interest recorded as interest expense 462,150  6,717,414 
Provision for doubtful accounts 2,938,879  2,377,389 
Loss on impairment of vessels —  3,007,809 
Loss on sales of vessels 1,738,511  — 
Drydocking costs (4,154,283) (6,019,126)
Share-based compensation 2,087,807  1,767,726 
Change in operating assets and liabilities:
Accounts receivable (14,075,231) 15,126,727 
Bunker inventory 12,548,170  (1,956,676)
Advance hire, prepaid expenses and other current assets (342,776) 19,086,893 
Accounts payable, accrued expenses and other current liabilities (4,079,047) (8,939,313)
Deferred revenue (5,254,072) (11,321,354)
Net cash provided by operating activities 53,787,277  134,801,400 
Investing activities    
Purchase of vessels and vessel improvements (27,264,044) (35,740,482)
Proceeds from sale of vessels 17,271,489  8,400,000 
Acquisitions, net of cash acquired (7,200,000) — 
Purchase of equipment and internal use software —  (653,452)
Contributions to non-consolidated subsidiaries (427,270) (515,162)
Dividends received from equity method investments 1,637,500  — 
Net cash used in investing activities (15,982,325) (28,509,096)
Financing activities    
Proceeds from long-term debt —  8,500,000 
Payments of financing and issuance costs —  (466,544)
Payments of long-term debt (15,782,528) (15,443,115)
Proceeds from finance leases —  15,000,000 
Payments on finance lease obligation (20,238,131) (15,834,059)
Payments on other long-term liability —  (5,000,000)
Dividends paid to non-controlling interests (10,400,000) (5,000,000)
Common stock accrued dividends paid (18,103,750) (13,414,984)
Cash paid for incentive compensation shares relinquished (127,283) (407,898)
Payments to non-controlling interest recorded as long-term liability (2,500,000) (2,050,000)
Net cash used in financing activities (67,151,692) (34,116,600)
Net (decrease) increase in cash and cash equivalents (29,346,740) 72,175,704 
Cash and cash equivalents at beginning of period 128,384,606  56,208,902 
Cash and cash equivalents at end of period $ 99,037,866  $ 128,384,606 
Supplemental cash flow items:
Cash paid for interest $ 18,850,078  $ 14,906,972 





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


For the three months ended For the twelve months ended
December 31, 2023 December 31, 2022 December 31, 2023 December 31, 2022
Net Transportation and Service Revenue
Gross Profit $ 19,040,854  $ 22,700,870  $ 69,868,128  $ 129,050,037 
Add:
Vessel Depreciation and amortization 7,187,353  7,471,538  29,338,912  29,376,777 
Net transportation and service revenue $ 26,228,207  $ 30,172,408  $ 99,207,040  $ 158,426,814 
Adjusted EBITDA
Net Income $ 2,177,900  $ 15,812,044  $ 28,537,772  $ 85,507,704 
Interest expense, net 3,596,407  3,649,940  13,453,413  14,772,164 
(Loss) income attributable to Non-controlling interest recorded as long-term liability interest expense (565,648) 755,563  462,150  6,717,414 
Depreciation and amortization 7,524,045  7,529,397  30,070,395  29,489,810 
EBITDA 12,732,704  27,746,944  72,523,730  136,487,092 
Non-GAAP Adjustments:
Loss on impairment of vessels —  —  —  3,007,809 
Loss on sale of vessels 566,315  —  1,738,511  318,032 
Share-based compensation 694,293  309,754  2,087,807  1,767,726 
Unrealized loss (gain) on derivative instruments, net 5,685,406  (1,192,416) 2,925,347  (682,323)
Other non-recurring items $ 3,195  $ —  $ 448,373  $ — 
Adjusted EBITDA $ 19,681,913  $ 26,864,282  $ 79,723,768  $ 140,898,336 
Earnings Per Common Share
Net income attributable to Pangaea Logistics Solutions Ltd. $ 1,136,202  $ 15,502,601  $ 26,323,300  $ 79,491,413 
Weighted average number of common shares - basic 44,815,282  44,435,664  44,773,899  44,398,987 
Weighted average number of common shares - diluted 45,392,225  44,985,969  45,475,453  45,059,587 
Earnings per common share - basic $ 0.03  $ 0.35  $ 0.59  $ 1.79 
Earnings per common share - diluted $ 0.03  $ 0.34  $ 0.58  $ 1.76 
Adjusted EPS
Net income attributable to Pangaea Logistics Solutions Ltd. $ 1,136,202  $ 15,502,601  $ 26,323,300  $ 79,491,413 
Non-GAAP
Add:
Loss on impairment of vessels —  —  —  3,007,809 
Loss on sale of vessels 566,315  —  1,738,511  318,032 
Unrealized loss (gain) on derivative instruments, net 5,685,406  (1,192,416) 2,925,347  (682,323)
Other non-recurring items 3,195  —  448,373  — 
Non-GAAP adjusted net income attributable to Pangaea Logistics Solutions Ltd. $ 7,391,118  $ 14,310,185  $ 31,435,531  $ 82,134,931 
Weighted average number of common shares - basic 44,815,282  44,435,664  44,773,899  44,398,987 
Weighted average number of common shares - diluted 45,392,225  44,985,969  45,475,453  45,059,587 
Adjusted EPS - basic $ 0.16  $ 0.32  $ 0.70  $ 1.85 
Adjusted EPS - diluted $ 0.16  $ 0.32  $ 0.69  $ 1.82 



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, non-GAAP adjusted EBITDA and non-GAAP Adjusted EPS. These are considered non-GAAP financial measures 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. 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, income taxes, depreciation and amortization, loss on sale and leaseback of vessels, share-based compensation and other non-operating income and/or expense, 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 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 Signore Noel Ryan or Stefan Neely
Chief Financial Officer
401-846-7790
Investors@pangaeals.com PANL@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.



EX-99.2 3 earningspresentation4q23.htm EX-99.2 earningspresentation4q23
4Q23 Earnings Call Presentation

 
2 Safe Harbor 4Q23 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 4Q23 & FY2023 Performance Highlights Strong operating results highlight consistency of cargo-focused strategy Superior TCE rate driven by long-term COAs, seasonal ice-class utilization and cargo-focused strategy resulted in TCE rates exceeding the benchmark average Baltic Panamax and Supramax indices by 27%+ in 4Q23 and 39% for FY2023. Despite 43% y/y decline in market rates in 2023 as post-pandemic port capacity constraints eased, maintained Adj. EBITDA margins of 16% for FY2023, well above pre-pandemic levels of ~13% due to disciplined operating expense management and execution of chartered-in strategy. In November 2023, completed the sale of the Supramax Bulk Trident for $9.8 million. The Company will continue to evaluate fleet renewal and expansion opportunities, particularly in-light of growing demand in key trades. Continue to execute on key capital allocation priorities, maintaining cash dividend of $0.10 per common share, paid on March 15th. Geopolitical disruptions are supporting market pricing during a period of normal seasonal softness in Q1 . As of March 12, 2024, booked 3,513 revenue days at an average TCE of $17,430/day, and 1,300 charter-in expense days at an average cost of $17,100 During 2023, the Company deployed $7.2 million in capital to opportunistically expand its on-shore stevedoring business across the U.S mid-Atlantic and Gulf Coast regions to further vertically integrate its business model and improve its position in key trades.

 
4 4Q and FY2023 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 .7 $ 26 .9 $ 79 .7 $ 14 0 .9 4 Q 23 4 Q 22 FY 20 23 FY 20 22 $ 0 .16 $ 0 .32 $ 0 .6 9 $ 1.8 2 4 Q 23 4 Q 22 FY 20 23 FY 20 22 $ 24 $ 33 $ 53 .8 $ 134 .8 4 Q 23 4 Q 22 FY 20 23 FY 20 22 17,6 8 5 20 ,0 23 $ 15,8 4 9 $ 24 ,4 34 4 Q 23 4 Q 22 FY 20 23 FY 20 22

 
5 Outperforming Industry Benchmark Our TCE has exceeded the market by an average of 34% on a trailing 5-year basis Cargo Focused Business Model Consistently Delivers Above- Market Performance • Current 1Q24 booked TCE rate of $17,430, a 34% premium to the market average through the quarter.* • Our niche, higher- margin trades remain a key area of differentiation. * Q1 24 estimated TCE performance based on shipping days booked as of March 11, 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 $ 127.8 $ 116 .4 $ 255.5 $ 175.6 $ 16 8 .9 $ 53 .1 $ 4 6 .9 $ 56 .2 $ 128 .4 $ 9 9 .0 2.4 x 2.7x 2.4 x 1.3x 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 2019 2020 2021 2022 2023 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 (2024-2026) • Geo-political tensions are continuing to create market inefficiencies and support market pricing during the typically soft Q1 period • 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) December 31, 2023 December 31, 2022 (audited) (audited) Current Assets Cash and cash equivalents 99,038$ 128,385$ Accounts receivable, net 47,892 36,755 Other current assets 44,897 57,371 Total current assets 191,826 222,511 Fixed assets, including finance lease right of use assets, net 504,659 520,446 Goodwill 3,105 - Other Non-current Assets 5,590 5,284 Total assets 705,180$ 748,241$ Current liabilities Accounts payable, accrued expenses and other current liabilities 35,836$ 38,554$ Current portion long-term debt and finance lease liabilities 52,722 32,148 Other current liabilities 16,776 21,510 Total current liabilties 105,334 92,212 Secured long-term debt and finance lease liabilities, net 211,713 267,334 Other long-term liabilities 17,937 19,974 Total Pangaea Logistics Solutions Ltd. equity 323,886 314,226 Non-controlling interests 46,310 54,495 Total stockholders' equity 370,196 368,722 Total liabilities and stockholders' equity 705,180$ 748,241$

 
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) 2023 2022 2023 2022 (unaudited) (unaudited) (audited) (audited) Revenues: Voyage revenue 122,281$ 117,340$ 468,581$ 640,034$ Charter revenue 7,079 10,584 23,716 59,673 Terminal & stevedore revenue 2,517 - 6,971 - Total revenue 131,877 127,923 499,268 699,707 Expenses: Voyage expense 57,085 54,214 227,435 262,089 Charter hire expense 33,850 28,157 111,034 222,332 Vessel operating expenses 14,713 15,380 55,784 56,859 Terminal Expenses 1,917 - 5,809 - General and administrative 5,666 3,908 22,781 20,103 Depreciation and amortization 7,524 7,529 30,070 29,490 Loss on impairment of vessel - - - 3,008 Loss on sale of vessel 566 - 1,739 318 Loss on sale and leaseback of vessels - - - - Total expenses 121,322 109,188 454,651 594,199 Income from operations 10,555 18,735 44,617 105,508 Total other expense, net (8,377) (2,923) (16,079) (20,000) Net income 2,178 15,812 28,538 85,508 Income attributable to noncontrolling interests (1,042) (309) (2,214) (6,016) Net income attributable to Pangaea Logistics Solutions Ltd. 1,136$ 15,503$ 26,323$ 79,491$ Adjusted EBITDA (1) 19,682$ 26,864$ 79,724$ 140,898$ Twelve months ended December 31,Three months ended December 31,

 
15 Reconciliation of Non-GAAP Measures 12/31/2023 12/31/2022 12/31/2023 12/31/2022 (unaudited) (unaudited) (unaudited) (unaudited) Net Transportation and Service Revenue Gross Profit 19,040,854$ 22,700,870$ 69,868,128$ 129,050,037$ Add: Vessel Depreciation and amortization 7,187,353 7,471,538 29,338,912 29,376,777 Net transportation and service revenue 26,228,207$ 30,172,408$ 99,207,040$ 158,426,814$ Adjusted EBITDA Net Income 2,177,900$ 15,812,044$ 28,537,772$ 85,507,704$ Interest expense, net 3,596,407 3,649,940 13,453,413 14,772,164 (Loss) income attributable to Non-controlling interest recorded as long-term liability interest expense (565,648) 755,563 462,150 6,717,414 Depreciation and amortization 7,524,045 7,529,397 30,070,395 29,489,810 EBITDA 12,732,704 27,746,944 72,523,730 136,487,092 Non-GAAP Adjustments: Loss on impairment of vessels - - - 3,007,809 Loss on sale of vessels 566,315 - 1,738,511 318,032 Share-based compensation 694,293 309,754 2,087,807 1,767,726 Unrealized (gain) loss on derivative instruments, net 5,685,406 (1,192,416) 2,925,347 (682,323) Other non-recurring items 3,195 - 448,373 - Adjusted EBITDA 19,681,913$ 26,864,282$ 79,723,768$ 140,898,336$ For the three months ended For the twelve months ended

 
16 Reconciliation of Non-GAAP Measures 12/31/2023 12/31/2022 12/31/2023 12/31/2022 (unaudited) (unaudited) (unaudited) (unaudited) Earnings Per Common Share Net income attributable to Pangaea Logistics Solutions Ltd. 1,136,202$ 15,502,601$ 26,323,300$ 79,491,413$ Weighted average number of common shares - basic 44,815,282 44,435,664 44,773,899 44,398,987 Weighted average number of common shares - diluted 45,392,225 44,985,969 45,475,453 45,059,587 Earnings per common share - basic 0.03$ 0.35$ 0.59$ 1.79$ Earnings per common share - diluted 0.03$ 0.34$ 0.58$ 1.76$ Adjusted EPS Net income attributable to Pangaea Logistics Solutions Ltd. 1,136,202$ 15,502,601$ 26,323,300$ 79,491,413$ Non-GAAP Add: Loss on impairment of vessels - - - 3,007,809 Loss on sale of vessels 566,315 - 1,738,511 318,032 Unrealized (gain) loss on derivative instruments, net 5,685,406 (1,192,416) 2,925,347 (682,323) Other non-recurring items 3,195 - 448,373 - Non-GAAP adjusted net income attributable to Pangaea Logistics Solutions Ltd. 7,391,118 14,310,185 31,435,531 82,134,931 Weighted average number of common shares - basic 44,815,282 44,435,664 44,773,899 44,398,987 Weighted average number of common shares - diluted 45,392,225 44,985,969 45,475,453 45,059,587 Adjusted EPS - basic 0.16$ 0.32$ 0.70$ 1.85$ Adjusted EPS - diluted 0.16$ 0.32$ 0.69$ 1.82$ For the three months ended For the twelve months ended