PANL 8-K
Pangaea Logistics Solutions Ltd. (PANL)
8-K
2022-03-16
For: 2022-03-16
View Original
Added on
April 09, 2026
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 16, 2022
(Exact Name of Registrant as Specified in Charter)
| (State or Other Jurisdiction | (Commission | (IRS Employer | ||||||
| of Incorporation) | File Number) | Identification No.) | ||||||
c/o Phoenix Bulk Carriers (US) LLC
(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 | ||||||
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 16, 2022 , Registrant issued a press release announcing financial results for the the three and twelve months ended December 31, 2021. 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 16, 2022 Reporting Financial Results for the three and twelve months ended December 31, 2021 (furnish pursuant to Item 2.02).
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 16, 2022
| PANGAEA LOGISTICS SOLUTIONS LTD. | ||||||||
| By: | /s/ Gianni Del Signore | |||||||
| Name: Gianni Del Signore Title: Chief Financial Officer | ||||||||
Pangaea Logistics Solutions Ltd. Reports Record Financial Results for the
Three Months and Year Ended December 31, 2021
NEWPORT, RI - March 16, 2022 - 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, 2021.
4th Quarter 2021 Highlights
•Net income of $15.2 million, as compared to a net income of $7.6 million in the same period of 2020.
◦Non-GAAP adjusted net income attributable to Pangaea Logistics Solutions Ltd. of $24.9 million, as compared to $6.2 million for the same period of 2020.
◦Adjusted Earnings per share of $0.56, as compared to $0.14 for the same period of 2020.
•Income from operations of $30.8 million, up from $8.3 million for December 31, 2020.
•Diluted net income per share were $0.34 as compared to $0.17 for the three months ended December 31, 2020.
•Pangaea's TCE rates were $32,563 for the three months ended December 31, 2021 and $14,640 for the three months ended December 31, 2020, a 122% increase, giving the Company an overall average premium over market rates of $4,459 or 16%.
•Adjusted EBITDA of $38.0 million for the fourth quarter of 2021 versus $12.9 million for the same period in 2020.
2021 Highlights
•Net income attributable to Pangaea Logistics Solutions Ltd. of $67.2 million, as compared to $11.4 million for the year ended December 31, 2020,
◦Non-GAAP adjusted Net Income attributable to Pangaea Logistics Solutions Ltd. of $63.3 million, as compared to $14.0 million for the year ended December 31, 2020.
•Income from operations of $78.9 million, up from $19.7 million for 2020.
•Earnings per share of $1.50 as compared to $0.26 for the year ended December 31, 2020.
◦Adjusted earnings per share of $1.41, as compared to $0.32 for the year ended December 31, 2020.
•Cash flow from operations of $61.7 million, compared to $20.8 million for the prior year.
•Pangaea's TCE rates increased 102% to $25,056 from $12,433 in 2020.
•Adjusted EBITDA of $105.1 million for the year ended December 31, 2021 versus $42.6 million for the same period in 2020.
•At December 31, 2021, Pangaea had $56.2 million in cash and cash equivalents.
Mark Filanowski, Pangaea's Chief Executive Officer, commented;
"It really was a banner year in 2021 for Pangaea’s performance. Our revenues and income reached new records. With our fleet renewal well underway, and timely deliveries of newbuilding vessels, we have remade our fleet profile and strengthened our balance sheet. We are a substantial company in a dynamic industry, our business plans are becoming more focused and sustainable, and we are supported by extremely talented, experienced, and dedicated people serving customers who appreciate our targeted, but wide array of ocean transportation and cargo services. In addition to increased earnings and cash flow from a larger fleet and stronger freight markets, our entire fleet has seen a significant increases in fair market value. It was a year that Ed Coll, our late CEO, would be extremely proud of."
Mr. Filanowski continued, "This year we were pleased to see recent key growth initiatives begin to return value. We had the first full year of additional profits from the acquisition of a one-third interest in our panamax joint venture from our partner, increasing Pangaea’s net income by over $5.3 million for 2021. We took delivery of four new 95,000 dwt Ice 1A ships, which will add over 1,400 annual shipping days fleet capacity next year in a profitable niche business, with 33% revenue coverage under a ten year contract. We purchase four second hand vessels during the year, adding more owned ship days capacity, better vessel efficiencies and emissions, valuation increases, and longer life. And the establishment of our Sabine Pass, Texas port facility, and expanded port and terminal business relationships along other parts of the U.S. coasts."
"Looking ahead, 2022 has started out well for us but also presents a new set of challenges to which we are reacting. Rapidly changing sanctions imposed by the European Union and the United States, and a general market movement away from “Russian” cargo, changed trading patterns overnight. Only time will tell us what the long term impact will be on demand for commodities exported from Russia or Ukraine, and the impact on dry bulk ton miles. In the short term, to comply with
sanctions, we have refocused some of our commercial efforts away from certain loading areas, and we have rearranged our technical management contracts on part of our fleet. We think the market will present many opportunities for us as it adjusts."
Results for the three months and year ended December 31, 2021
Total revenue was $234.6 million for the three months ended December 31, 2021, compared with $112.9 million for the three months ended December 31, 2020. The 108% increase in revenues was mainly attributable to the increase in the average TCE rates achieved by our vessels during the fourth quarter of 2021 compared to the same period in 2020.
Time Charter Equivalent rate (TCE) was $32,563 per day for the three months ended December 31, 2021, compared to an average of $14,640 per day for the same period in 2020. The achieved premium over the average market increased to $4,459 per day or 16% for the three months ended December 31, 2021.
Total revenue was $718.1 million for the year ended December 31, 2021, compared with $382.9 million for the year ended December 31, 2020. The 88% increase in revenues was mainly attributable to the increase in the average TCE rates achieved by our vessels in 2021 compared to the same period in 2020.
The average TCE rate achieved was $25,056 per day for the year ended December 31, 2021, compared to an average of $12,433 per day for the year ended December 31, 2020. The Baltic Dry Index (“BDI”), a measure of dry bulk market performance, averaged 2,956 for 2021, up from an average of 1,085 for 2020. The Company's average TCE rates increased 102% in 2021 over the average for 2020.
Liquidity and Cash Flows
Cash, cash equivalents and restricted cash were $56.2 million as of December 31, 2021, compared to $48.4 million on December 31, 2020.
At December 31, 2021 and December 31, 2020, the Company had working capital of $72.2 million and $0.5 million, respectively. This increase was primarily due to the refinancing of Bulk Nordic Odin, Bulk Nordic Olympic, Bulk Nordic Oshima, and Bulk Nordic Oasis Loan Agreements in 2021. The increase in working capital is also due to an increase in accounts receivable due to increased revenue in 2021.
For the twelve months ended December 31, 2021, the Company’s net cash provided by operating activities was $61.7 million, compared to $20.8 million for the twelve months ended December 31, 2020.
For the twelve months ended December 31, 2021 and 2020, net cash used in investing activities was $197.8 million and $6.9 million, respectively. These changes reflect the Company’s acquisition of seven vessels which includes three second hand vessels and four new-build ice class post panamax vessels.
For the twelve months ended December 31, 2021, net cash provided by financing activities was $143.9 million compared to net cash used in financing activities of $18.6 million for the same period of 2020. During the twelve months ended December 31, 2021, the Company received $220.3 million in proceeds from long-term debt and finance leases and $9.2 million in proceeds from non-controlling interest recorded as a long-term liability. The Company repaid $62.0 million of long term debt, $9.9 million of finance leases and $2.5 million of other long term liabilities. The Company also paid $5.5 million of common stock cash dividends and $3.3 million cash dividends to non-controlling interests.
Subsequent Events
In November 2021 the Company entered into a memorandum of agreement to purchase a Panamax vessel to add to its operating fleet for $19.9 million. The vessel was delivered to the Company on February 17, 2022 and renamed the m/v Bulk Concord.
As previously announced the Company declared a $0.05 per share dividend which was paid to shareholders on March 15, 2022 to shareholders of record on March 1, 2022.
Conference Call Details
The Company’s management team will host a conference call to discuss the Company’s financial results on March 17, 2022 at 8:00 a.m., Eastern Time (ET). To access the conference call, please dial (866) 518-6930 (domestic) or (203) 518-9797 (international) approximately ten minutes before the teleconference's scheduled start time and reference ID PANLQ421.
A supplemental slide presentation will accompany this quarter’s conference call and can be found attached to the Current Report on Form 8-K that the Company filed concurrently with this press release. This document will be available at http://www.pangaeals.com/company-filings or at sec.gov.
A recording of the call will also be available for one week following the teleconference and will be accessible by calling 888-225-1540 (domestic) or 402-220-4973 (international) and referencing ID PANLQ421.
Pangaea Logistics Solutions Ltd.
Consolidated Statements of Operations
| Three months ended December 31, | Twelve months ended December 31, | ||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Voyage revenue | $ | 202,503,619 | $ | 98,236,752 | $ | 614,482,101 | $ | 349,738,153 | |||||||||||||||
| Charter revenue | 32,054,642 | 14,616,574 | 103,622,287 | 33,157,838 | |||||||||||||||||||
| Total revenue | 234,558,261 | 112,853,326 | 718,104,388 | 382,895,991 | |||||||||||||||||||
| Expenses: | |||||||||||||||||||||||
| Voyage expense | 65,265,750 | 41,598,040 | 219,623,127 | 161,881,133 | |||||||||||||||||||
| Charter hire expense | 114,992,408 | 45,270,313 | 334,952,823 | 127,769,042 | |||||||||||||||||||
| Vessel operating expenses | 12,693,076 | 9,088,496 | 42,715,496 | 38,047,308 | |||||||||||||||||||
| General and administrative | 4,289,733 | 4,357,441 | 18,966,488 | 15,915,035 | |||||||||||||||||||
| Depreciation and amortization | 6,522,946 | 4,237,011 | 22,974,249 | 17,055,271 | |||||||||||||||||||
| Loss on impairment of vessels | — | — | — | 1,801,039 | |||||||||||||||||||
| Loss on sale of vessels | — | 25,000 | — | 730,065 | |||||||||||||||||||
| Total expenses | 203,763,913 | 104,576,301 | 639,232,183 | 363,198,893 | |||||||||||||||||||
| Income from operations | 30,794,348 | 8,277,025 | 78,872,205 | 19,697,098 | |||||||||||||||||||
| Other (expense) income: | |||||||||||||||||||||||
| Interest expense, net | (3,334,804) | (1,684,574) | (10,329,397) | (7,653,512) | |||||||||||||||||||
| Interest expense, non-controlling interest | (409,254) | (73,141) | (1,184,741) | (177,802) | |||||||||||||||||||
| Unrealized (loss) gain on derivative instruments | (9,784,274) | 1,374,856 | 3,886,201 | (156,019) | |||||||||||||||||||
| Other income (expense) | 327,693 | (14,389) | 1,129,436 | 982,345 | |||||||||||||||||||
| Total other expense, net | (13,200,639) | (397,248) | (6,498,501) | (7,004,988) | |||||||||||||||||||
| Net income | 17,593,709 | 7,879,777 | 72,373,704 | 12,692,110 | |||||||||||||||||||
| Income attributable to noncontrolling interests | (2,443,553) | (289,643) | (5,146,871) | (1,339,930) | |||||||||||||||||||
| Net income attributable to Pangaea Logistics Solutions Ltd. | $ | 15,150,156 | $ | 7,590,134 | $ | 67,226,833 | $ | 11,352,180 | |||||||||||||||
| Earnings per common share: | |||||||||||||||||||||||
| Basic | $ | 0.34 | $ | 0.17 | $ | 1.53 | $ | 0.26 | |||||||||||||||
| Diluted | $ | 0.34 | $ | 0.17 | $ | 1.50 | $ | 0.26 | |||||||||||||||
| Weighted average shares used to compute earnings per common share | |||||||||||||||||||||||
| Basic | 44,004,980 | 43,489,698 | 43,997,311 | 43,417,879 | |||||||||||||||||||
| Diluted | 44,689,309 | 44,337,242 | 44,848,997 | 43,817,348 | |||||||||||||||||||
Pangaea Logistics Solutions Ltd.
Consolidated Balance Sheets
| December 31, 2021 | December 31, 2020 | ||||||||||
| Assets | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 56,208,902 | $ | 46,897,216 | |||||||
| Restricted cash | — | 1,500,000 | |||||||||
| Accounts receivable (net of allowance of $1,990,459 and $1,896,038 at December 31, 2021 and 2020, respectively) | 54,259,265 | 29,152,153 | |||||||||
| Bunker inventory | 27,147,760 | 15,966,247 | |||||||||
| Advance hire, prepaid expenses and other current assets | 46,347,687 | 17,826,153 | |||||||||
| Total current assets | 183,963,614 | 111,341,769 | |||||||||
| Fixed assets, net | 471,912,810 | 276,741,751 | |||||||||
| Advances for vessel purchases | 1,990,000 | — | |||||||||
| Investment in newbuildings in-process | — | 15,390,635 | |||||||||
| Finance lease right of use assets, net | 45,195,759 | 45,240,198 | |||||||||
| Other Non-current Assets | 3,961,823 | 1,689,792 | |||||||||
| Total assets | $ | 707,024,006 | $ | 450,404,145 | |||||||
| Liabilities and stockholders' equity | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable, accrued expenses and other current liabilities | $ | 49,154,439 | $ | 32,400,288 | |||||||
| Related party notes payable | 242,852 | 242,852 | |||||||||
| Deferred revenue | 32,205,312 | 12,799,561 | |||||||||
| Current portion of long-term debt | 15,443,115 | 57,382,674 | |||||||||
| Current portion of finance lease liabilities | 14,479,803 | 6,978,192 | |||||||||
| Dividends payable | 213,765 | 1,005,763 | |||||||||
| Total current liabilities | 111,739,286 | 110,809,330 | |||||||||
| Secured long-term debt, net | 105,836,797 | 44,507,708 | |||||||||
| Finance lease liabilities | 170,959,553 | 50,520,294 | |||||||||
| Long-term liabilities - other | 17,806,976 | 10,135,408 | |||||||||
| 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, 45,617,840 and 45,447,751 shares issued and outstanding at December 31, 2021 and 2020, respectively | 4,562 | 4,545 | |||||||||
| Additional paid-in capital | 161,534,280 | 159,581,415 | |||||||||
| Retained Earnings | 85,663,375 | 23,179,805 | |||||||||
| Total Pangaea Logistics Solutions Ltd. equity | 247,202,217 | 182,765,765 | |||||||||
| Non-controlling interests | 53,479,177 | 51,665,640 | |||||||||
| Total stockholders' equity | 300,681,394 | 234,431,405 | |||||||||
| Total liabilities and stockholders' equity | $ | 707,024,006 | $ | 450,404,145 | |||||||
Pangaea Logistics Solutions Ltd.
Consolidated Statements of Cash Flows
| Years ended December 31, | |||||||||||
| 2021 | 2020 | ||||||||||
| Operating activities | |||||||||||
| Net income | $ | 72,373,704 | $ | 12,692,110 | |||||||
| Adjustments to reconcile net income to net cash provided by operations: | |||||||||||
| Depreciation and amortization expense | 22,974,249 | 17,055,271 | |||||||||
| Amortization of deferred financing costs | 920,995 | 662,440 | |||||||||
| Amortization of prepaid rent | 115,256 | 122,272 | |||||||||
| Unrealized (gain) loss on derivative instruments | (3,886,201) | 156,019 | |||||||||
| Income from equity method investee | (1,129,436) | (1,083,142) | |||||||||
| Earnings attributable to non-controlling interest recorded as interest expense | 1,184,741 | 177,802 | |||||||||
| Provision for doubtful accounts | 1,559,378 | 152,416 | |||||||||
| Loss on impairment of vessels | — | 1,801,039 | |||||||||
| Loss on sales of vessels | — | 730,065 | |||||||||
| Drydocking costs | (8,075,813) | (5,858,960) | |||||||||
| Share-based compensation | 2,102,897 | 2,314,940 | |||||||||
| Change in operating assets and liabilities: | |||||||||||
| Accounts receivable | (26,666,490) | (995,167) | |||||||||
| Bunker inventory | (11,181,513) | 5,034,763 | |||||||||
| Advance hire, prepaid expenses and other current assets | (24,935,427) | 338,022 | |||||||||
| Accounts payable, accrued expenses and other current liabilities | 16,983,215 | (10,887,555) | |||||||||
| Deferred revenue | 19,405,751 | (1,576,833) | |||||||||
| Net cash provided by operating activities | 61,745,306 | 20,835,502 | |||||||||
| Investing activities | |||||||||||
| Purchase of vessels and vessel improvements | (194,620,582) | (2,892,776) | |||||||||
| Proceeds from sale of vessels | — | 11,666,507 | |||||||||
| Acquisition of non-controlling interest | — | (15,000,000) | |||||||||
| Advances for Vessel Purchases / Investment in newbuildings in-process | (1,990,000) | (33,446) | |||||||||
| Purchase of equipment and internal use software | (42,963) | — | |||||||||
| Contributions to non-consolidated subsidiaries | (1,138,835) | — | |||||||||
| Purchase of derivative instrument | — | (628,000) | |||||||||
| Net cash used in investing activities | (197,792,380) | (6,887,715) | |||||||||
| Financing activities | |||||||||||
| Proceeds from long-term debt | 79,150,000 | 18,000,000 | |||||||||
| Payments of financing and issuance costs | (2,046,450) | (421,775) | |||||||||
| Payments of long-term debt | (61,960,469) | (22,990,674) | |||||||||
| Proceeds from finance leases | 141,166,978 | — | |||||||||
| Payments on finance lease obligation | (9,919,514) | (12,548,938) | |||||||||
| Payments on other long-term liability | (2,500,000) | — | |||||||||
| Dividends paid to non-controlling interests | (3,333,334) | — | |||||||||
| Common stock accrued dividends paid | (5,535,261) | (535,153) | |||||||||
| Cash paid for incentive compensation shares relinquished | (150,015) | (238,364) | |||||||||
| Contributions from non-controlling interests | 9,182,423 | 322,750 | |||||||||
| Payments to non-controlling interest recorded as long-term liability | (195,598) | (193,508) | |||||||||
| Net cash provided by (used in) financing activities | 143,858,760 | (18,605,662) | |||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | 7,811,686 | (4,657,875) | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 48,397,216 | 53,055,091 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 56,208,902 | $ | 48,397,216 | |||||||
| Supplemental cash flow items: | |||||||||||
| Cash paid for interest | $ | 9,088,684 | $ | 7,149,210 | |||||||
| Supplemental non-cash investing and financing Information: | |||||||||||
| Deferred consideration related to acquisition of non-controlling interest | $ | — | $ | 7,500,000 | |||||||
Pangaea Logistics Solutions Ltd.
Reconciliation of Non-GAAP Measures
(unaudited)
| For the three months ended | For the twelve months ended | ||||||||||||||||||||||
| December 31, 2021 | December 31, 2020 | December 31, 2021 | December 31, 2020 | ||||||||||||||||||||
| (unaudited) | (unaudited) | ||||||||||||||||||||||
Net Transportation and Service Revenue (1) | |||||||||||||||||||||||
| Gross Profit | $ | 35,102,473 | $ | 12,691,168 | $ | 97,938,881 | $ | 38,270,047 | |||||||||||||||
| Add: | |||||||||||||||||||||||
| Vessel Depreciation and amortization | 6,504,554 | 4,205,309 | 22,874,061 | 16,928,461 | |||||||||||||||||||
| Net transportation and service revenue | $ | 41,607,027 | $ | 16,896,477 | $ | 120,812,942 | $ | 55,198,508 | |||||||||||||||
| Adjusted EBITDA | |||||||||||||||||||||||
| Net Income | $ | 17,593,709 | $ | 7,879,777 | $ | 72,373,704 | $ | 12,692,110 | |||||||||||||||
| Interest expense, net | 3,744,058 | 1,757,715 | 11,514,138 | 7,831,314 | |||||||||||||||||||
| Depreciation and amortization | 6,522,946 | 4,237,011 | 22,974,249 | 17,055,271 | |||||||||||||||||||
| EBITDA | 27,860,713 | 13,874,503 | 106,862,091 | 37,578,695 | |||||||||||||||||||
| Non-GAAP Adjustment | |||||||||||||||||||||||
| Loss on impairment of vessels | — | — | — | 1,801,039 | |||||||||||||||||||
| Loss on sale of vessels | — | 25,000 | — | 730,065 | |||||||||||||||||||
| Share-based compensation | 367,939 | 399,752 | 2,102,897 | 2,314,940 | |||||||||||||||||||
| Unrealized loss (gain) on derivative instruments, net | 9,784,274 | (1,374,856) | (3,886,201) | 156,019 | |||||||||||||||||||
| Adjusted EBITDA | $ | 38,012,926 | $ | 12,924,399 | $ | 105,078,787 | $ | 42,580,758 | |||||||||||||||
| Earnings Per Common Share | |||||||||||||||||||||||
| Net income attributable to Pangaea Logistics Solutions Ltd. | $ | 15,150,156 | $ | 7,590,134 | $ | 67,226,833 | $ | 11,352,180 | |||||||||||||||
| Weighted average number of common shares - basic | 44,004,980 | 43,489,698 | 43,997,311 | 43,417,879 | |||||||||||||||||||
| Weighted average number of common shares - diluted | 44,689,309 | 44,337,242 | 44,848,997 | 43,817,348 | |||||||||||||||||||
| Earnings per common share - basic | $ | 0.34 | $ | 0.17 | $ | 1.53 | $ | 0.26 | |||||||||||||||
| Earnings per common share - diluted | $ | 0.34 | $ | 0.17 | $ | 1.50 | $ | 0.26 | |||||||||||||||
| Adjusted EPS | |||||||||||||||||||||||
| Net income attributable to Pangaea Logistics Solutions Ltd. | $ | 15,150,156 | $ | 7,590,134 | $ | 67,226,833 | $ | 11,352,180 | |||||||||||||||
| Non-GAAP | |||||||||||||||||||||||
| Add: | |||||||||||||||||||||||
| Loss on impairment of vessels | — | — | — | 1,801,039 | |||||||||||||||||||
| Loss on sale of vessels | — | 25,000 | — | 730,065 | |||||||||||||||||||
| Unrealized (loss) gain on derivative instruments | (9,784,274) | 1,374,856 | 3,886,201 | (156,019) | |||||||||||||||||||
| Non-GAAP adjusted net income attributable to Pangaea Logistics Solutions Ltd. | $ | 24,934,430 | $ | 6,240,278 | $ | 63,340,632 | $ | 14,039,303 | |||||||||||||||
| Weighted average number of common shares - basic | 44,004,980 | 43,489,698 | 43,997,311 | 43,417,879 | |||||||||||||||||||
| Weighted average number of common shares - diluted | 44,689,309 | 44,337,242 | 44,848,997 | 43,817,348 | |||||||||||||||||||
| Adjusted EPS - basic | $ | 0.57 | $ | 0.14 | $ | 1.44 | $ | 0.32 | |||||||||||||||
| Adjusted EPS - diluted | $ | 0.56 | $ | 0.14 | $ | 1.41 | $ | 0.32 | |||||||||||||||
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) provides logistics services to a broad base of industrial customers who require the transportation of a wide variety of dry bulk cargoes, including grains, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite, and limestone. The Company addresses the transportation needs of its customers with a comprehensive set of services and activities, including cargo loading, cargo discharge, vessel chartering, and voyage planning. Learn more at www.pangaeals.com.
Investor Relations Contacts
| Gianni Del Signore | Emily Blum | |||||||
| Chief Financial Officer | Prosek Partners | |||||||
| 401-846-7790 | 973-464-5240 | |||||||
| [email protected] | [email protected] | |||||||
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.
FOURTH QUARTER 2021 EARNINGS CONFERENCE CALL PRESENTATION 1
SAFE HARBOR This presentation includes 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. 2
BUSINESS HIGHLIGHTS •Adjusted EBITDAof $38.0 million •Net income of $15.2 million •$56.2 million cash, restricted cash and cash equivalents Q4‐2021 Results •24 drybulk ships and one barge in owned and controlled fleet at December 31, 2021 Fleet •Operating 57 vessels on average during Q4 2021 •6.4 million tons carried; 118 voyages performed for 65 clients Operations 1) 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. Consistent Performance Working Fleet Extensive and varied experience 3
Customer Focus: Long‐term, fixed contract employment and recurring business with new and longstanding customers Targeted Business: Specialty tonnage provides consistent returns through fluctuating market cycles – 16% premium over average market rates in Q4‐21. Rate Environment: The Baltic Dry Index average decreased in the fourth quarter. (1) Per reported indices DRIVERS OF PERFORMANCE 4 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 Baltic Dry Index (1)
4th Quarter Highlights • Net income of $15.2 million, as compared to a net income of $7.6 million in the same period of 2020. o Non‐GAAP adjusted net income attributable to Pangaea Logistics Solutions Ltd. of $24.9 million, as compared to $6.2 million for the same period of 2020. o Adjusted Earnings per share of $0.56, as compared to $0.14 for the same period of 2020. • Income from operations of $30.8 million, up from $8.3 million for December 31, 2020. • Diluted net income per share were $0.34 as compared to $0.17 for the three months ended December 31, 2020. • Pangaea's TCE rates were $32,563 for the three months ended December 31, 2021 and $14,640 for the three months ended December 31, 2020, a 122% increase, giving the Company an overall average premium over market rates of $4,459 or 16%. Adjusted EBITDA of $38.0 million for the fourth quarter of 2021 versus $12.9 million for the same period in 2020. Subsequent Business Update • In November 2021 the Company entered into a memorandum of agreement to purchase a Panamax vessel to add to its operating fleet for $19.9 million. The vessel was delivered to the Company on February 17, 2022 and renamed the m/v Bulk Concord. • As previously announced the Company declared a $0.05 per share dividend which was paid to shareholders on March 15, 2022 to shareholders of record on March 1, 2022. FINANCIAL HIGHLIGHTS 5
1) 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. SELECTED INCOME STATEMENT DATA 6 (in thousands,may not foot due to rounding) Three months ended December 31, Three months ended December 31, 2021 2020 2021 2020 (unaudited) (unaudited) (unaudited) (unaudited) Revenues: Voyage revenue $ 202,504 $ 98,237 $ 614,482 $ 349,738 Charter revenue 32,055 14,617 103,622 33,158 Total revenue 234,558 112,853 718,104 382,896 Expenses: Voyage expense 65,266 41,598 219,623 161,881 Charter hire expense 114,992 45,270 334,953 127,769 Vessel operating expenses 12,693 9,088 42,715 38,047 General and administrative 4,290 4,357 18,966 15,915 Depreciation and amortization 6,523 4,237 22,974 17,055 Loss on impairment of vessels ‐ ‐ ‐ 1,801 Loss on sale of vessels ‐ 25 ‐ 730 Total expenses 203,764 104,576 639,232 363,199 Income from operations 30,794 8,277 78,872 19,697 Total other income (expense), net (13,201) (397) (6,499) (7,005) Net income 17,594 7,880 72,374 12,692 Income attributable to noncontrolling interests (2,444) (290) (5,147) (1,340) Net income attributable to Pangaea Logistics Solutions Ltd. $ 15,150 $ 7,590 $ 67,227 $ 11,352 Adjusted EBITDA (1) $ 38,013 $ 12,924 $ 105,079 $ 42,581
SELECTED BALANCE SHEET & CASH FLOW DATA 7 The amounts in the table above have been calculated based on unrounded numbers. Accordingly, certain amounts may not sum due to the effect of rounding. (in thousands) December 31, 2021 December 31, 2020 Current Assets Cash and cash equivalents 56,209$ 46,897$ Restricted cash ‐ 1,500 Accounts receivable, net 54,259 29,152 Other current assets 73,495 33,792 Total current assets 183,964 111,342 Fixed assets, including finance lease right of use assets, net 517,109 321,982 Advances for vessel purchases 1,990 ‐ Investment in newbuildings in‐process ‐ 15,391 Other Non‐current Assets 3,962 1,690 Total assets 707,024$ 450,404$ Current liabilities Accounts payable, accrued expenses and other current liabilities 49,154$ 32,400$ Related party debt 243 243 Current portion long‐term debt and finance lease liabilities 29,923 64,361 Other current liabilities 32,419 13,805 Total current liabilties 111,739 110,809 Secured long‐term debt and finance lease liabilities, net 276,796 95,028 Other long‐term liabilities 17,807 10,135 Total Pangaea Logistics Solutions Ltd. equity 247,202 182,766 Non‐controlling interests 53,479 51,666 Total stockholders' equity 300,681 234,431 Total liabilities and stockholders' equity 707,024$ 450,404$ Cash flows for the years ended: December 31, 2021 December 31, 2020 Net cash provided by operating activities 61,745$ 20,836$ Net cash (used in) provided by investing activities (197,792)$ (6,888)$ Net cash provided by (used in) financing activities 143,859$ (18,606)$
TOTAL SHIPPING DAYS 8 Capital Efficiency: Leveraged owned fleet by chartering‐in market vessels Flexibility: Short‐term charters allow us to react quickly and take advantage of arbitrage opportunities 1,573 1,623 1,566 1,461 1,372 1,615 1,968 2,081 3,002 1,977 3,168 3,407 3,296 3,108 3,337 3,118 ‐ 1,000 2,000 3,000 4,000 5,000 6,000 Q1‐20 Q2‐20 Q3‐20 Q4 ‐20 Q1‐21 Q2‐21 Q3‐21 Q4‐21 D ay s Owned Days Charter‐in Days
PANGAEA AVERAGE TCE vs. MARKET AVERAGE TCE 9 **Average of the published Panamax and Supramax index net of commission $10,508 $10,733 $13,316 $14,640 $16,524 $21,053 $28,770 $32,563 $5,920 $5,548 $10,286 $10,326 $16,261 $24,185 $32,033 $28,104 $‐ $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Q1‐2020 Q2‐2020 Q3‐2020 Q4‐2020 Q1‐2021 Q2‐2021 Q3‐2021 Q4‐2021 Pangaea Average TCE Market Average TCE
1) Adjusted EBITDA is a non‐GAAP measure and represents operating earnings before interest expense, income taxes, depreciation and amortization, share‐based compensation, loss on sale and leaseback of vessels and other non‐operating income and/or expense, if any. 2) TCE is defined as total revenues less voyage expenses divided by the number of shipping days, which is consistent with industry standards. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per‐day amounts while charter hire rates for vessels on time charters generally are expressed in per‐day amounts. FINANCIAL PERFORMANCE Q4‐2020 THROUGH Q4‐2021 10 ‐ 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Q1‐20 Q2‐20 Q3‐20 Q4 ‐20 Q1‐21 Q2‐21 Q3‐21 Q4‐21 ADJUSTED EBITDA(1) $‐ $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Q1‐20 Q2‐20 Q3‐20 Q4 ‐20 Q1‐21 Q2‐21 Q3‐21 Q4‐21 TCE(2)
ADJUSTED EARNINGS PER COMMON SHARE 11 (1) Adjusted earnings per share represents net income attributable to Pangaea Logistics Solutions Ltd. plus, when applicable, loss on sale and leaseback of vessel, loss on impairment of vessel, gains and losses on derivative instruments, and certain non‐recurring charges, divided by the weighted average number of shares of common stock. Adjusted EPS total of $0.56 for Q4‐2021 0.03 0.09 0.20 0.10 (0.09) 0.09 0.19 0.14 0.09 0.29 0.48 0.56 (0.10) ‐ 0.10 0.20 0.30 0.40 0.50 0.60 Q1‐19 Q2‐19 Q3‐19 Q4‐19 Q1‐20 Q2‐20 Q3‐20 Q4 ‐20 Q1‐21 Q2‐21 Q3‐21 Q4‐21 Historical Adjusted EPS (1) $0.42 $0.33 $1.42
TCE OUTLOOK 12 * Q1 22 estimated TCE performance based on shipping days performed through March 15, 2022 **Average of the published Panamax and Supramax index net of commission $14,360 $12,029 $12,933 $15,915 $15,172 $10,508 $10,733 $13,316 $14,640 $16,524 $21,053 $28,770 $32,563 $26,512 * ‐ 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 Q4 ‐ 2018 Q1‐2019 Q2‐2019 Q3‐2019 Q4‐2019 Q1‐2020 Q2‐2020 Q3‐2020 Q4‐2020 Q1‐2021 Q2‐2021 Q3‐2021 Q4‐2021 Q1‐2022e Shipping Days Pangaea TCE Market Average TCE**