Good morning. My name is Madison, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pangaea Logistics Solutions Fourth Quarter and Full Year 2024 Earnings Teleconference. Today's call is being recorded and will be available for replay beginning at 11:00 a.m. Eastern Standard Time. The recording can be accessed by dialing (800) 723-0532 or (402) 220-2655. Operator instructions were provided. It is now my pleasure to turn the floor over to Stefan Neely with Vallum Advisors.

Thank you, operator, and welcome to the Pangaea Logistics Solutions Fourth Quarter and Full Year 2024 Results Conference Call. During the call with me today is CEO Mark Filanowski; Chief Financial Officer Gianni DelSignore; and COO Mads Petersen. Today's discussion contains forward-looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward-looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the SEC. Except as required by law, we undertake no obligation to update our forward-looking statements. At the conclusion of our prepared remarks, we will open the line for questions. With that, I would like to turn the call over to Mark.

Thank you, Stefan, and welcome to those joining us on the call today. After the market closed yesterday, we issued a release detailing our fourth quarter and full year 2024 results. Our fourth quarter performance was a strong finish to a transformational year for Pangaea, one in which our strong base of long-term contracts and premium rate model supported a greater than 20% year-over-year increase in adjusted EBITDA despite pronounced softness in the broader dry bulk market. Our differentiated cargo strategy and leading market share across global ice class trades have enabled us to drive consistent TCE rate outperformance versus the broader market, culminating in significant growth in fourth quarter profitability. On December 30, we successfully completed our previously announced merger with a strategic shipping fleet of 15 Handysize dry bulk vessels. This complementary transaction will allow us to expand our business into a smaller-sized segment of the market, leveraging these smaller ships to grow our stevedoring and terminal services offerings. In connection with this transaction, we issued 18.1 million common shares to SSI in exchange for the 15 vessels, and we assumed approximately $100 million in vessel indebtedness, all of which have now been incorporated into our balance sheet. Following the conclusion of this transaction, we now have a total fleet of 41 owned vessels, supplemented by short-term chartered-in ships that bring our operating fleet into a range of 60 to 70 vessels at any given time. With the larger fleet, we're in a strong position to materially expand our logistics and terminal services across a broader footprint of high-traffic ports consistent with our strategic focus. While we continue to experience robust demand across all our bulk trades, supported by ongoing economic expansion and domestic infrastructure investment, we recognize the potential headwinds posed by proposed tariffs and new port entry fees in the U.S. These factors could introduce near-term volatility in market rates, and they may drive structural shifts within the global shipping and dry bulk landscapes. We remain vigilant in monitoring developments and trade policies that have potential implications for our business. Importantly, our asset-light cargo-centric operating model is designed to leverage a strategic mix of owned and chartered-in vessels and remains a key competitive advantage. This model enhances our flexibility, cost efficiency and scalability through market cycles, positioning us to effectively manage potential volatility while continuing to drive profitable growth, generate free cash flow and deliver premium TCE returns. For the fourth quarter of 2024, we reported adjusted net income of $7.6 million and adjusted EBITDA of $23.2 million, representing significant year-over-year growth despite prevailing market rates decreasing by 22.6% during the quarter. Our adjusted EBITDA growth of approximately $4 million compared to last year's fourth quarter reflects the performance of our active operating model and a full quarter of operations from the two ships we purchased earlier this year, which drove a more than 20% increase in our voyage days. Our TCE exceeded the benchmark index by 48% in the fourth quarter. Looking ahead to the first quarter of 2025, dry bulk demand has been seasonally soft across all major trade routes. Market prices have been volatile over the last few months due to anticipation, uncertainty and anxiety over international trade, although demand remains consistent. Through today, we booked 4,982 shipping days, generating a TCE of $11,412 a day for the current 2025 quarter. As we move further into 2025, we'll continue to exercise a balanced return-focused approach to capital allocation. Our recent vessel acquisitions, fleet combination and JV buyout are a testament to our confidence in our business plan and our disciplined capital allocation strategy that seeks to maximize long-term shareholder returns. With that, I'll hand it over to Gianni for a discussion of our fourth quarter and full year financial results.

Thank you, Mark, and welcome to those joining us on the call today. Our fourth quarter financial results are highlighted by strong earnings growth, sustained TCE premiums relative to the prevailing market and strong free cash flow generation, all during a period where broader demand and market prices softened. Fourth quarter TCE rates were approximately $15,941 per day, a premium of approximately 48% over the average published market rates for Supramax and Panamax vessels in the period, which was driven by strong fleet utilization within Arctic trade routes and our broad base of long-term contracts of affreightment. Our adjusted EBITDA for the fourth quarter was $23.2 million, an increase of approximately $4 million relative to the prior year period. Our adjusted EBITDA margin increased 180 basis points to 16.7% as strong growth in the total shipping days year-over-year and lower charter-in rates drove operating efficiencies. This dynamic is enabled by our flexible cargo-focused business model, which allows us to focus on meeting customer cargo obligations in the most efficient possible manner based on prevailing market conditions. Our total charter hire expense increased by 1.7% compared to the fourth quarter of 2023 due to a 33% increase in total chartered-in days that was almost entirely offset by a 23% decrease in the prevailing market rates for Panamax and Supramax vessels. Our charter-in cost on a per day basis was $13,787 in the fourth quarter of 2024. And through today, we booked approximately 1,736 days at $10,243 per day for the first quarter of 2025. Special operating expenses net of technical management fees increased by approximately 9% year-over-year from an average of $5,971 per day last year to $6,525 per day in the fourth quarter of 2024. However, for the full year of 2024, vessel operating expenses, net of technical management fees, declined by 7% to $5,820 per day. In total, our reported GAAP net income attributable to Pangaea for the fourth quarter was $8.4 million or $0.18 per diluted share compared to $1.1 million or $0.03 per diluted share in the fourth quarter of last year. When excluding the impact of the unrealized losses from derivative instruments as well as other non-GAAP adjustments, our reported adjusted net income attributable to Pangaea during the quarter was $7.6 million or $0.16 per diluted share, which was consistent with the fourth quarter of last year. Moving on to cash flows, total cash from operations decreased by $4.6 million year-over-year to approximately $19.2 million due to a decrease in cash generated by net working capital, which offset improved operating earnings. At quarter end, the company had $86.8 million in cash and total debt, including finance lease obligations, of approximately $404 million. Our finance leases at the end of the quarter include approximately $100 million of lease obligations associated with the strategic fleet combination, which closed on December 30. During the quarter, our overall interest expense was $4.7 million, an increase of 10.5% due to new debt facilities entered into during the third and fourth quarter of 2024. When factoring in the interest expense from leases assumed from the SSI merger, our interest expense would have been approximately $1.3 million higher, which is the approximate run rate we expect going forward, barring material changes in interest rates. Through the successful completion of the SSI acquisition, the strategic deployment of equity to expand our fleet and the recent buyout of the remaining 50% equity interest in our post-Panamax ice-class joint venture vessels, we have taken a disciplined and opportunistic approach to capital allocation. These initiatives are designed to maximize long-term capital return potential while positioning the company for continued growth. In the near term, our capital allocation strategy will remain focused on targeted investments in our onshore logistics operations, the renewal and modernization of our dry bulk fleet and the continued reduction of our debt. Additionally, we remain committed to a consistent and sustainable return of capital strategy. With that, we will now open the line for questions.

Operator instructions were provided. And we will take our first question from Liam Burke with B. Riley Securities.

Mark, on your partial fixtures for the first quarter, obviously, the rates in general have been weak, but you really have distanced them. I mean that's, on a relative basis, a pretty impressive number. Is it just your COAs and contracts, what's contributed to that 40% boost?

Liam, we always look for work that pays a little bit more than market. We've always prided ourselves on taking tough cargoes, making our ships work hard for what we do. We take dirty cargoes, we go into ice waters. We go to places where other people don't really want to go because of the risks and the cost to manage the risks; they're not willing to pay. So we will do that. We've got an excellent operating platform. We've got really strong ship managers that really contribute to the bottom line for us. So in addition to the COAs and contracts that we enter into, we look for things that add value. That's our whole business plan in a nutshell.

That's great. Just as a follow-up to that, you've added new vessels in the year-end acquisition. How quickly do you think you can roll those vessels from their traditional chartering to the Pangaea chartering platform?

We've made great progress already. I think we've done half a dozen different voyages on these ships or planned voyages on these ships in trades that they haven't done much of before — and I'm talking about taking the ships into the icy waters and taking the dirtier cargoes and visiting places where they haven't been before. So we are making progress already. But in this difficult market, the margins to do all that stuff have shrunk as well as the rates themselves. So we hope when the market bounces — we've seen a little greener numbers in the last couple of weeks on the dry bulk side and on the indexes — we hope to make that happen in the near term. Later this year, we should see some improvement in that.

Great. And if I could slip in one more quickly. Your port services business generated a little more profitability than you had in the past on similar type revenue levels. Is there anything going on there that allowed you to eke out a little more profitability?

Yes. What we've done is we've done more dry bulk business in some of our terminals that pays a little bit more than some of the other work we do. But the port side is really bright for us. We've opened up a new port operation in Aransas near Corpus Christi, which is a fast-growing place that we think we'll be able to do some really nice business with. We've started the actual construction down in Tampa, the Red Wing terminal, where we'll bring 20 ships this year loaded with aggregate to discharge and store on that site. That's a big step for us on the terminal side. So we're looking at other business in Lake Charles. It's really starting to come together for us.

And we'll take our next question from Poe Fratt with AGP.

Glad you're all well. When I look at the capital allocation, you highlighted two things: one, fleet renewal and then debt reduction. And with the fleet renewal you added with the SSI you added the 15 Handysize vessels. Can you help me understand how to frame the capital allocation and fleet renewal? Do you think that you have an optimal number of owned vessels right now? Or do you think that it might be worthwhile to scale back and pay down debt by selling some of the older assets?

Boy, Poe, like every ship owner, we are always trying to grow our fleet. But we want to do it cautiously. We want to do it thoughtfully. We just took on a big slug of new ships, the 15 Handysizes. That brings us a long way toward our growth goals. There is renewal to do — we have some older ships reaching the 20-year age. So we will sell off some of those ships as they come up to 20 years in age. What we do with the proceeds is really — we haven't decided yet where we should put that money, whether we should pay down debt. We don't think we're over-leveraged today, although if rates trend down, that might not be the best use of capital. We want to be opportunistic in buying ships. So we'll wait for the market to drop a little bit, and we will want to take advantage of that going forward, but not 15 more this year, for sure.

Poe, if I could add on the debt service side for 2025. We basically have steady, minimal repayments on our debt facilities. So it's around $11 million of debt service per quarter, pretty steady right until 2027 when we have our first meaningful balloon payment. But then if we look at our debt structure as a whole, we're fixed on a large portion — about 34% of our debt is fixed. And then about 27% of our debt is capped or fixed through an interest rate cap. The remaining portion is floating. So there is, I think, opportunity if we wanted to attack some of the debt. But when I look at debt service for 2025 and even right through 2026, we have a pretty steady repayment forecast ahead, and we can be opportunistic if we want to. We're not forced necessarily to repay anything unless we choose to.

And on that balloon that comes up in '27 — that debt is on ships that are readily financeable or refinanceable.

Great. Those metrics are really helpful. So just on the margin, you're more of a buyer than a seller with where asset values are right now?

Well, we'd like to see asset values come down a tick more before we jump in, but we'd consider opportunistic purchases when we see attractive values.

Gianni, can you highlight the operating leverage with the acquisition of SSI? Maybe one way to look at it would be your G&A level. Can you highlight your current per day G&A level or maybe at an absolute level for the first quarter of 2025?

Sure. From a G&A perspective per day, for 2024, the number was around about $1,200 per day as our overall G&A cost. With the addition of the vessels, our platform is quite scalable when you look at the vessel operations side; the incremental G&A to add the number of vessels that we did is not a significant increase. So on a per day basis, I do expect it to be relatively consistent per shipping day. I do expect it to remain relatively consistent or even maybe come down a little bit as we see some of that economy of scale and our operation really kick in. So while the number is certain that there'll be incremental G&A with the number of people we've onboarded as part of the acquisition — it's about 10 people that were brought onto the team — but on a per day basis, we're still pretty comfortable. We can deploy our operating model in a really efficient way.

Great. And do you have sort of — what's the target for absolute G&A in the first quarter then? From a dollar perspective, what's your sort of run rate for the first quarter?

I'd say what we have in the fourth quarter is probably a good indication for a quarterly rate for next year. For the full year compared to 2024, I would say there will probably be an incremental amount, maybe $1 million to $2 million of incremental G&A.

The other thing that impacts the number you're looking for, Poe, is the shift in cost per shipping day based on the number of chartered-in ships we have at any point in time. So that can cause that product to move up and down.

Great. And then it looked like at year-end, you were running 62. Can you give me a snapshot right now on how many total operating fleet vessels you have or what we should use for an average for the first quarter as far as the operating fleet?

Poe, Mads here. We're probably a tick lower than that now, maybe around 60, which fluctuates a little bit. We tend to shrink the fleet a little bit when the market is depressed. Of course, the hope is that as the market picks up, our business will also grow in the rest of the year.

Great. And then Gianni, or maybe Mads, can you highlight first quarter dry docking and maybe dry docking for the year as far as idle time on the fleet?

Yes. For us and for many others in the business, it's a busy year for dry docking. We have four ships in the radar right now. We will have 12 in total for the year. The ship spends about 25 to 30 days in dry dock, and that drives those idle days.

Great. And congratulations on closing the transaction, and also buying in the 50% order book.

Thank you, Poe. It was a busy year.

And we will take our next question from Neil with Fernley Securities.

Yes. There has been quite an extensive amount of questions on capital allocation, but I'd like to add one more. The market is where it is, and I guess you're looking at quite a big reduction in earnings for Q1 and with your amortization profile being what it is, how should we think about dividends as earnings are a bit suppressed over the coming one, perhaps two quarters? Do you expect to maintain that level? Or could we see amendments to the run rate dividend that's been paid over the past four quarters?

Neil, thanks for the question. The dividend consideration is reviewed by the Board every quarter. We look at the market, we look at the cash flow generation capability of our fleet, upcoming capital expenditures like dockings — so there's no fixed formula, but we look at it every quarter. It is our hope to — we strive to have a consistent and sustainable dividend. That's what we discuss each quarter when dividend discussion comes up.

Okay. Understood. And a bit on your terminal operations: you're saying that you expect to be complete with expanding those operations in the second half of 2025. What sort of earnings level can we expect as a run rate when you're at full operations? And are you seeing any incremental investment opportunities in that space currently?

Neil, do you want Gianni to talk about the upcoming year and what we think income is when we're fully ramped?

Yes. For ports and terminals, like Mark said earlier, we're seeing a lot of opportunities there. It was a good fourth quarter — good margins, especially on our dry bulk side in Port Everglades with the amount of volume there. Next year, projects coming online are not really in a straight-line manner; they can be somewhat lumpy. But we do expect it to grow in 2025, especially as we get towards the end of the year. The fourth quarter is a good indication of a decent run rate of operations for our ports and terminals, and then as projects come on, there will be incremental EBITDA generated, especially toward the second half of 2025.

And we will take our next question from Michael Matheson with Sidoti & Company.

Congratulations on the quarter.

Thanks, Michael.

In your earnings presentation, you pointed out that near-term growth in shipping capacity is going to be pretty limited, which obviously benefits TCE rates. But looking ahead to the medium term, are there enough ships being delivered to potentially reduce TCE, and does the specialized nature of your business and your port calls insulate you a bit from competitive pressures?

Well, Michael, you hit on one of our plans to lean a little bit more toward ports and terminals to get us away from the volatility of the shipping business. We think we've done that and demonstrated that it works over the past few years where our performance is a little bit better than the general market. So that is a goal of ours to be a little more consistent and to show more sustainable income on the bottom line. Regarding newbuild deliveries, newbuilding orders have increased somewhat, but they're still relatively low compared to historic delivery books. We expect that over the next couple of years, there will continue to be some tightness in the market that will support rates.

If you'll permit a follow-up, you stated earlier that you're planning to be thoughtful and disciplined about capital allocation, particularly debt paydowns. Is there a sort of target ratio for leverage?

We look at leverage in a few ways. We look at debt relative to shareholders' equity, cash needed to service the debt, and debt outstanding compared to fair market vessel values. We don't think we're overleveraged. We think we're somewhere around 50% when looking at those ratios together. Gianni, do you want to add?

Yes. When we look at it from a debt-to-vessel-value perspective, we're around 50% to 55% from a book value perspective. When adjusted to fair market value, we're generally comfortable where we stand. And when we look at new debt facilities, we set thresholds we don't want to exceed on leverage. Ultimately, when we look at corporate leverage now, I think we're pretty comfortable where we stand, and as I mentioned, our repayment forecast for the next couple of years makes us comfortable.

What's helped us a little bit in terms of the cash necessary to make debt service is that we fixed interest rates on a significant part of the debt a few years ago, and that has paid off for us.

And we will take our next question from Climent Molins with Value Investor's Edge.

You've already provided commentary on how costs should move going forward. But as we think about the Handysizes, is there any potential for OpEx per day to come in below your figures for Supramax and Panamax? Any additional color you can provide on that would be appreciated.

Thanks for the question, Climent. I think our estimate is that the OpEx will be fairly similar to our Supramax vessels. We don't expect a huge difference in the operating costs.

Makes sense. And final modeling question for me: could you quantify the amount of operating lease liabilities you had on the balance sheet as of year-end?

Sorry, Climent, could you ask that again? If I understand the question correctly, we don't have any operating leases on the balance sheet. I'm assuming you may be referring to chartered-in vessels that from an accounting perspective might be classified as leases. However, all of our charters are shorter term. We don't charter in vessels for greater than a year on average. Typically, our average is three to six months, sometimes longer or shorter depending on where the market is. Currently, we're chartering in on a shorter-term basis for trips and short charters. So none of our chartered-in vessels would be considered an operating lease capitalized on the balance sheet given our chartering strategy.

And we do have a follow-up question from Poe Fratt with AGP.

I just have two more. Mark, you talked about increasing the stevedoring business to smooth out the volatility of earnings. We've been talking about that for a couple of years. But right now, it's about 2% of revenues in the fourth quarter, roughly. That percentage is likely to go down with the acquisition you made at the end of last year. Are there any big opportunities out there to ramp up that business, or is it just going to be slow and steady and never really get above 5% of total revenues?

Well, we were looking at the Panama Canal deal before it was taken away by another bidder. But there are big deals out there, Poe. Right now, we're trying to grow without spending a lot of money upfront. We're making progress without buying land, which is an expensive way to do it. As we grow and show up in more places, more opportunities are coming to us. We have some momentum building, and we'll continue to work on it.

Poe, a big part of the value of this operation shows up in our ability to package services — offering turnkey solutions to customers. That part of the business also drives a TCE premium that has been mentioned a couple of times on the call.

Okay. And then you made the big acquisition at the end of last year. There's been extensive discussions and diligence leading up to that because it took a while for that deal to get across the finish line. You're about 70 days into it. Can you give me an idea of how it's going so far, whether there's been any surprises integrating that fleet, any positives or negatives you want to highlight on how that transaction is panning out so far?

I think it's all been positive for us, Poe. It's not a totally different business for us, but it does give us a different look at some of the cargoes that are available and ways to offer more services to our customers. Our participation has been welcomed by the market. The people that came with us are doing a great job of aligning with our business plan and doing things a little differently with their fleet. It's our goal to have people cross-trained in the different segments and bring different thoughts to each piece of the business we do. So it's been nothing but positive.

It appears that we have no further questions at this time. I will now turn the program back to Mark Filanowski for any additional or closing remarks.

Thank you for joining us on the call today. If you've got follow-up questions, we're always available through our links online. Thanks very much.

Thank you. This does conclude today's presentation. Thank you for your participation. You may disconnect at any time.