FIRST 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 $11.7 million •Net income of $5.9 million •$42.0 million cash, restricted cash and cash equivalents Q1‐2021 Results •17 drybulk ships and one barge in owned and controlled fleet at March 31, 2021 Fleet •Operating 52 vessels on average during Q1 2021 •6.3 million tons carried; 112 voyages performed for 46 clients Operations 1) Adjusted EBITDA is a non‐GAAP measure and represents income or loss from operations before depreciation and amortization, loss on sale and leaseback of vessel, share‐based compensation, and when applicable, loss on impairment of vessels and certain non‐recurring items. 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 superior returns – 2% premium over average market rates in Q1 – 2021 Rate Environment: The Baltic Dry Index average decreased in the fourth quarter compared to prior year. (1) Per reported indices DRIVERS OF PERFORMANCE 4 0 500 1000 1500 2000 2500 Baltic Dry Index (1)
1st Quarter Highlights • Net income attributable to Pangaea Logistics Solutions Ltd. was $5.9 million for three months ended March 31, 2021 as compared to $6.8 million of net loss for the same period of 2020. • Non‐GAAP adjusted net income attributable to Pangaea Logistics Solutions Ltd. of $3.8 million as compared to adjusted net loss of $4.0 million for the three months ended March 31, 2020. • Diluted net income per share was $0.13 for three months ended March 31, 2021 as compared to loss per share of $0.16 for the same period of 2020. • Pangaea's TCE rates were $16,524 for the three months ended March 31, 2021 and $10,508 for the three months ended March 31, 2020. • Adjusted EBITDA of $11.7 million for the three months ended March 31, 2021, as compared to $2.9 million for the same period of 2020. • At the end of the quarter, Pangaea had $42.0 million in cash and cash equivalents. Subsequent Business Update • On May 10, 2021, the Company's Board of Directors declared a quarterly cash dividend of $0.035 per common share, to be paid on June 15, 2021, to all shareholders of record as of June 1, 2021. • On May 11, 2021, the Company signed a memorandum of agreement to acquire a 2013 Tsuneishi‐built 58,000 dwt dry bulk vessel for $17.8 million. FINANCIAL HIGHLIGHTS 5
1) Adjusted EBITDA is a non‐GAAP measure and represents income or loss from operations before depreciation and amortization, loss on sale and leaseback of vessel, share‐based compensation, and when applicable, loss on impairment of vessels and certain non‐recurring items. SELECTED INCOME STATEMENT DATA 6 (in thousands,may not foot due to rounding) Three months ended March 31, 2021 2020 (unaudited) (unaudited) Revenues: Voyage revenue $ 108,230 $ 86,524 Charter revenue 16,742 9,356 Total revenue 124,973 95,880 Expenses: Voyage expense 47,839 47,796 Charter hire expense 53,635 32,325 Vessel operating expenses 8,496 9,934 General and administrative 4,205 3,993 Depreciation and amortization 4,419 4,242 Gain on sale of vessels ‐ (78) Total expenses 118,594 98,213 Income (loss) from operations 6,379 (2,333) Total other income (expense), net 128 (4,437) Net income (loss) 6,507 (6,770) Income attributable to noncontrolling interests (653) (26) Net income (loss) attributable to Pangaea Logistics Solutions Ltd. $ 5,854 $ (6,795) Adjusted EBITDA (1) $ 11,745 $ 2,934
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) March 31, 2021 December 31, 2020 Current Assets Cash and cash equivalents 42,019$ 46,897$ Restricted cash ‐ 1,500 Accounts receivable, net 29,254 29,152 Other current assets 39,367 35,482 Total current assets 110,639 113,032 Fixed assets, including finance lease right of use assets, net 324,137 321,982 Investment in newbuildings in‐process 15,391 15,391 Total assets 450,167$ 450,404$ Current liabilities Accounts payable, accrued expenses and other current liabilities 29,303$ 32,400$ Related party debt 243 243 Current portion long‐term debt and finance lease liabilities 17,636 64,361 Other current liabilities 13,751 13,805 Total current liabilties 60,933 110,809 Secured long‐term debt and finance lease liabilities, net 137,071 95,028 Other long‐term liabilities 10,406 10,135 Total Pangaea Logistics Solutions Ltd. equity 189,438 182,766 Non‐controlling interests 52,319 51,666 Total stockholders' equity 241,757 234,431 Total liabilities and stockholders' equity 450,167$ 450,404$ Cash flows for the years ended: March 31, 2021 March 31, 2021 Net cash provided by (used in) operating activities 4,940$ (6,845)$ Net cash (used in) provided by investing activities (5,467)$ 7,452$ Net cash used in financing activities (5,851)$ (11,190)$
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 1,820 1,886 1,875 1,573 1,623 1,566 1,461 1,372 1,742 2,750 3,365 3,003 1,977 3,168 3,406 3,296 ‐ 1,000 2,000 3,000 4,000 5,000 6,000 Q2‐19 Q3‐19 Q4‐19 Q1‐20 Q2‐20 Q3‐20 Q4 ‐20 Q1‐21 D ay s Owned Days Charter‐in Days
PANGAEA TCE v. AVERAGE MARKET TCE 9 **Average of the published Panamax and Supramax index net of commission $8,665 $13,728 $10,819 $5,920 $5,548 $10,286 $10,326 $16,261 $4,268 $2,187 $4,353 $4,588 $5,185 $3,030 $4,314 $263 49% 16% 40% 78% 93% 29% 42% 2% $‐ $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 Q2‐2019 Q3‐2019 Q4‐2019 Q1‐2020 Q2‐2020 Q3‐2020 Q4‐2020 Q1‐2021 Market Avg TCE** Market Premium over Market Pangaea TCE $12,933 $15,915 $15,172 $10,508 $10,733 $13,316 $14,640 $16,524
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 Q2‐2019 THROUGH Q1‐2021 10 ‐ 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Q2‐19 Q3‐19 Q4‐19 Q1‐20 Q2‐20 Q3‐20 Q4 ‐20 Q1‐21 ADJUSTED EBITDA(1) (in Thousands) $‐ $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 Q2‐19 Q3‐19 Q4‐19 Q1‐20 Q2‐20 Q3‐20 Q4 ‐20 Q1‐21 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 $0.09 for Q1‐2021 0.14 0.18 0.09 0.03 0.09 0.20 0.10 (0.09) 0.09 0.19 0.14 0.09 (0.10) (0.05) ‐ 0.05 0.10 0.15 0.20 0.25 Q2‐18 Q3‐18 Q4‐18 Q1‐19 Q2‐19 Q3‐19 Q4‐19 Q1‐20 Q2‐20 Q3‐20 Q4 ‐20 Q1‐21 Historical Adjusted EPS (1) $0.44 $0.30 $0.51
TCE OUTLOOK 12 * Q2 21TCE performance based on shipping days fixed for the second quarter as of May 10, 2021