NEWPORT, R.I., Nov. 9, 2017 /PRNewswire/ -- Pangaea
Logistics Solutions Ltd. ("Pangaea" or the "Company") (NASDAQ:
PANL), a global provider of comprehensive maritime logistics
solutions, announced today its results for the three months ended
September 30, 2017.
3rd Quarter 2017 Highlights
- Adjusted EBITDA increased to $14.0
million for three months ended September 30, 2017, from $11.3 million for the same period of 2016.
- Income from operations up 29%.
- Net income attributable to Pangaea Logistics Solutions Ltd. of
$7.2 million as compared to
$6.1 million for the three months
ended September 30, 2016.
- 51% increase in revenue; 34% increase in shipping days.
- $29.3 million in unrestricted
cash and cash equivalents at September 30,
2017.
Results for the three months ended September 30,
2017
For the third quarter of 2017, the Company reported net income
of $7.2 million, compared to net
income of $6.1 million in the third
quarter of 2016. Drybulk market demand improved considerably in the
third quarter as compared to the same period of 2016, which helped
push total shipping days up 34% to 5,305 for the three months ended
September 30, 2017, compared to 3,971
for the three months ended September 30,
2016. This increased market demand, together with increased
market rates during the same period, drove an increase in total
revenue to $107.0 million for the
three months ended September 30, 2017, compared to
$70.8 million for the three months
ended September 30, 2016. Adjusted EBITDA1 was
$14.0 million, compared with
$11.3 million for the third quarter
of 2016.
During the quarter, the Company completed its private placement
transaction which included 6,533,443 shares of common stock issued
for aggregate net proceeds of $14.1
million, of which $4.4 million
was issued as in-kind payment of accrued dividends.
Ed Coll, Chairman and Chief
Executive Officer of the Company,
commented, "We are seeing firm evidence that the efforts we took
during the low period of the latest market cycle are paying off as
the market continues its recovery. We've expanded our owned
and controlled fleet by about 40% during this period and our total
operated fleet has increased nearly 80% to about 66 ships
today. Our distinctive business model allowed the sharp
increase in our operated fleet to promptly capture new
opportunities with additional chartered in fleets. We are operating
at a very active pace, and the people we have added to our
chartering and operations departments have become immediately
productive. Our balance sheet continues to improve. We
have support from our banks to finance acquisitions, and from our
customers and shareholders, who see the unique way we operate and
the positive results that follow. Our third quarter is
traditionally seasonally strong, as the Arctic shipping season
opens. Moving into the fourth quarter, we see the market is still
firm and our cargo demand is good."
Liquidity and Cash Flows
Cash and cash equivalents were $29.3
million as of September 30, 2017, compared with
$22.3 million on December 31, 2016.
At September 30, 2017 and December 31, 2016, the
Company had working capital of $22.4
million and a working capital deficit of $9.3 million, respectively. The improvement in
working capital is due to the acquisition of noncontrolling
interest in a consolidated joint venture in January 2017 and the resulting reduction in
related party debt, to the increase in cash from proceeds of common
stock issuance, to the sale of the m/v Bulk Beothuk, and to cash
generated from operations. For the nine months ended September 30, 2017, the Company's net cash
provided by operating activities was $13.7
million, compared to $18.3
million for the nine months ended September 30, 2016. This is due to the growth in
both shipping days and market rates, which resulted in an increase
in working capital requirements.
For the nine months ended September 30,
2017 and 2016, net cash used in investing activities was
$48.2 million and $3.7 million, respectively. Net cash
provided by financing activities was $41.4
million for the nine months ended September 30, 2017 and net cash used for
financing activities was $24.0
million for the nine months ended September 30, 2016. These changes reflect
the Company's investment in and purchase of vessels, including the
m/v Bulk Destiny and m/v Bulk Beothuk, which were financed
under sale and leaseback arrangements; and the m/v Bulk Endurance
and the m/v Bulk Freedom, which were financed under commercial loan
facilities.
The Company also noted that the private placement of common
stock to inside investors, as previously announced in a Current
Report on Form 8-K, was completed on August 9, 2017. The
Company issued 2,597,778 shares for cash proceeds of $1.5 million and a $4.4
million reduction in dividends payable.
Conference Call Details
The Company's management team will host a conference call to
discuss the Company's financial results on November 10, 2017
at 8:00 a.m., Eastern Time
(ET). To access the conference call, please dial (888)
895-3561 (domestic) or (904) 685-6494 (international) approximately
ten minutes before the scheduled start time and reference ID#
3091109.
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 two weeks and
can be accessed by calling (800) 585-8367 (domestic) or (404)
537-3406 (international) and referencing ID# 3091109.
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 and, when
applicable, loss on impairment of vessels and certain non-recurring
items. See Reconciliation of Income from
Operations to Adjusted EBITDA.
Pangaea Logistics
Solutions Ltd.
|
Consolidated
Statements of Income
|
|
|
Three Months
Ended
September 30,
|
|
Nine Months
Ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
Voyage
revenue
|
$
|
93,688,834
|
|
$
|
65,986,320
|
|
$
|
251,608,298
|
|
$
|
161,509,615
|
Charter
revenue
|
13,334,202
|
|
4,797,572
|
|
31,293,637
|
|
10,173,501
|
|
107,023,036
|
|
70,783,892
|
|
282,901,935
|
|
171,683,116
|
Expenses:
|
|
|
|
|
|
|
|
Voyage
expense
|
44,305,446
|
|
29,166,651
|
|
124,174,513
|
|
74,434,257
|
Charter hire
expense
|
34,764,942
|
|
19,655,327
|
|
91,140,160
|
|
43,199,730
|
Vessel operating
expense
|
9,144,472
|
|
7,483,507
|
|
26,810,071
|
|
22,277,417
|
General and
administrative
|
4,762,860
|
|
3,179,287
|
|
11,418,900
|
|
9,151,608
|
Depreciation and
amortization
|
3,950,661
|
|
3,532,171
|
|
11,604,168
|
|
10,576,223
|
Loss on sale and
leaseback of vessels
|
70,000
|
|
—
|
|
9,275,042
|
|
—
|
Total
expenses
|
96,998,381
|
|
63,016,943
|
|
274,422,854
|
|
159,639,235
|
|
|
|
|
|
|
|
|
Income from
operations
|
10,024,655
|
|
7,766,949
|
|
8,479,081
|
|
12,043,881
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
Interest expense,
net
|
(2,106,139)
|
|
(1,258,105)
|
|
(5,981,237)
|
|
(4,158,143)
|
Interest expense on
related party debt
|
(79,713)
|
|
(79,712)
|
|
(236,538)
|
|
(235,212)
|
Unrealized (loss)
gain on derivative instruments, net
|
(59,138)
|
|
161,002
|
|
430,869
|
|
1,212,434
|
Other income
(expense)
|
977,795
|
|
(8,097)
|
|
1,885,801
|
|
(42,754)
|
Total other expense,
net
|
(1,267,195)
|
|
(1,184,912)
|
|
(3,901,105)
|
|
(3,223,675)
|
|
|
|
|
|
|
|
|
Net income
|
8,757,460
|
|
6,582,037
|
|
4,577,976
|
|
8,820,206
|
Income attributable
to non-controlling interests
|
(1,576,209)
|
|
(517,701)
|
|
(787,063)
|
|
(1,429,132)
|
Net income
attributable to Pangaea Logistics Solutions
Ltd.
|
$
|
7,181,251
|
|
$
|
6,064,336
|
|
$
|
3,790,913
|
|
$
|
7,391,074
|
|
|
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
|
|
|
|
Basic
|
$
|
0.18
|
|
$
|
0.17
|
|
$
|
0.10
|
|
$
|
0.21
|
Diluted
|
$
|
0.17
|
|
$
|
0.17
|
|
$
|
0.10
|
|
$
|
0.21
|
|
|
|
|
|
|
|
|
Weighted average
shares used to compute earnings
|
|
|
|
|
|
|
|
per common
share
|
|
|
|
|
|
|
|
Basic
|
40,796,867
|
|
35,165,532
|
|
37,225,825
|
|
35,148,793
|
Diluted
|
41,074,592
|
|
35,347,403
|
|
37,674,123
|
|
35,299,839
|
Pangaea Logistics
Solutions Ltd.
|
Consolidated
Balance Sheets
|
|
|
September 30,
2017
|
|
December 31,
2016
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
29,336,687
|
|
$
|
22,322,949
|
Restricted
cash
|
4,000,000
|
|
6,100,000
|
Accounts receivable
(net of allowance of $4,183,826 at
September 30, 2017 and $4,752,265 at December 31, 2016)
|
30,915,458
|
|
20,476,797
|
Bunker
inventory
|
16,470,391
|
|
13,202,937
|
Advance hire, prepaid
expenses and other current assets
|
13,465,163
|
|
6,441,583
|
Total current
assets
|
94,187,699
|
|
68,544,266
|
|
|
|
|
Fixed assets,
net
|
290,837,537
|
|
275,265,672
|
Investments in
newbuildings in-process
|
—
|
|
18,383,964
|
Vessels under capital
lease
|
30,285,569
|
|
—
|
Total
assets
|
$
|
415,310,805
|
|
$
|
362,193,902
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable,
accrued expenses and other current liabilities
|
$
|
30,160,371
|
|
$
|
23,231,179
|
Related party
debt
|
6,929,885
|
|
15,972,147
|
Deferred
revenue
|
7,913,518
|
|
6,422,982
|
Current portion of
secured long-term debt
|
17,830,996
|
|
19,627,846
|
Current portion of
capital lease obligations
|
1,759,303
|
|
—
|
Dividend
payable
|
7,238,401
|
|
12,624,825
|
Total current
liabilities
|
71,832,474
|
|
77,878,979
|
|
|
|
|
Secured long-term
debt, net
|
113,430,205
|
|
107,637,851
|
Obligations under
capital lease
|
25,472,098
|
|
—
|
|
|
|
|
Commitments and
contingencies (Note 7)
|
|
|
|
|
|
|
|
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;
43,795,182 shares issued and outstanding at September 30, 2017;
36,590,417 shares issued and outstanding at December 31,
2016
|
4,380
|
|
3,659
|
Additional paid-in
capital
|
154,781,731
|
|
133,677,321
|
Accumulated
deficit
|
(13,618,666)
|
|
(17,409,579)
|
Total Pangaea
Logistics Solutions Ltd. equity
|
141,167,445
|
|
116,271,401
|
Non-controlling
interests
|
63,408,583
|
|
60,405,671
|
Total stockholders'
equity
|
204,576,028
|
|
176,677,072
|
Total liabilities
and stockholders' equity
|
$
|
415,310,805
|
|
$
|
362,193,902
|
Pangaea Logistics
Solutions Ltd.
|
Consolidated
Statements of Cash Flows
|
|
|
Nine Months Ended
September 30,
|
|
2017
|
|
2016
|
Operating
activities
|
|
|
|
Net income
|
$
|
4,577,976
|
|
$
|
8,820,206
|
Adjustments to
reconcile net income to net cash provided by operations:
|
|
|
|
Depreciation and
amortization expense
|
11,604,168
|
|
10,576,223
|
Amortization of
deferred financing costs
|
527,348
|
|
513,311
|
Amortization of
prepaid rent
|
91,453
|
|
—
|
Unrealized gain on
derivative instruments
|
(430,869)
|
|
(1,212,434)
|
(Gain) loss from
equity method investee
|
(282,362)
|
|
68,477
|
(Recovery of)
provision for doubtful accounts
|
(10,356)
|
|
982,393
|
Loss on sale and
leaseback of vessel
|
9,134,908
|
|
—
|
Share-based
compensation
|
878,759
|
|
274,286
|
Change in operating
assets and liabilities:
|
|
|
|
Decrease in
restricted cash
|
—
|
|
499,269
|
Accounts
receivable
|
(10,428,305)
|
|
3,824,491
|
Bunker
inventory
|
(3,267,454)
|
|
(1,845,707)
|
Advance hire, prepaid
expenses and other current assets
|
(7,118,526)
|
|
(2,471,301)
|
Drydocking
costs
|
(1,043,164)
|
|
(42,478)
|
Accounts payable,
accrued expenses and other current liabilities
|
8,021,053
|
|
(743,918)
|
Deferred
revenue
|
1,490,536
|
|
(925,490)
|
Net cash provided by
operating activities
|
13,745,165
|
|
18,317,328
|
|
|
|
|
Investing
activities
|
|
|
|
Purchase of
vessels
|
(47,328,517)
|
|
(3,372,433)
|
Purchase of building
and equipment
|
—
|
|
(315,818)
|
Purchase of
non-controlling interest in consolidated subsidiary
|
(832,572)
|
|
—
|
Net cash used in
investing activities
|
(48,161,089)
|
|
(3,688,251)
|
|
|
|
|
Financing
activities
|
|
|
|
Proceeds of related
party debt
|
—
|
|
1,522,500
|
Payments of related
party debt
|
—
|
|
(2,500,497)
|
Proceeds from
long-term debt
|
25,000,000
|
|
1,375,971
|
Payments of financing
and issuance costs
|
(896,175)
|
|
(45,755)
|
Payments of long-term
debt
|
(20,635,670)
|
|
(20,809,044)
|
Proceeds from sale
and leaseback of vessel
|
28,000,000
|
|
—
|
Payments of capital
lease obligations
|
(768,599)
|
|
—
|
Decrease (increase)
in restricted cash
|
2,100,000
|
|
(5,000,000)
|
Proceeds from
non-controlling interests
|
—
|
|
1,600,000
|
Proceeds from private
placement of common stock, net of issuance costs
|
9,631,530
|
|
—
|
Accrued common stock
dividends paid
|
(1,001,424)
|
|
(100,000)
|
Net cash provided by
(used in) financing activities
|
41,429,662
|
|
(23,956,825)
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
7,013,738
|
|
(9,327,748)
|
Cash and cash
equivalents at beginning of period
|
22,322,949
|
|
37,520,240
|
Cash and cash
equivalents at end of period
|
$
|
29,336,687
|
|
$
|
28,192,492
|
|
|
|
|
Supplemental cash
flow information and disclosure of noncash items
|
|
|
|
Cash paid for
interest
|
$
|
5,052,102
|
|
$
|
3,520,635
|
Conversion of
dividend into common stock
|
$
|
4,385,000
|
|
$
|
—
|
Extinguishment of
related party loan
|
$
|
9,278,800
|
|
$
|
—
|
Pangaea Logistics
Solutions Ltd.
|
Reconciliation of
Income from Operations to Adjusted EBITDA
|
|
|
|
Three Months Ended
September 30,
|
|
|
2017
|
|
2016
|
Adjusted EBITDA
(in millions)
|
|
|
|
|
Income from
operations
|
|
10,024,655
|
|
7,766,949
|
Depreciation and
amortization
|
|
3,950,661
|
|
3,528,596
|
Loss on sale and
leaseback of vessel
|
|
70,000
|
|
—
|
Adjusted
EBITDA
|
|
$
|
14,045,316
|
|
$
|
11,295,545
|
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
Adjusted EBITDA. This is considered a non-GAAP financial
measure as defined in Rule 101 of Regulation G promulgated by the
Securities and Exchange Commission. Generally, a non-GAAP
financial measure is a numerical measure of a company's historical
or future performance, financial position, or cash flows that
either excludes or includes amounts that are not normally excluded
or included in the most directly comparable measure calculated and
presented in accordance with GAAP. The presentation of this
non-GAAP financial information is not intended to be considered in
isolation or as a substitute for, or superior to, the financial
information prepared and presented in accordance with GAAP.
We use non-GAAP financial measures for internal financial and
operational decision making purposes and as a means to evaluate
period-to-period comparisons of the performance and results of
operations of our core business. Our management believes that
non-GAAP financial measures provide meaningful supplemental
information regarding the performance of our core business by
excluding charges that are not incurred in the normal course of
business. Non-GAAP financial measures also facilitate management's
internal planning and comparisons to our historical performance and
liquidity. We believe certain non-GAAP financial measures are
useful to investors as they allow for greater transparency with
respect to key metrics used by management in its financial and
operational decision making and are used by our institutional
investors and the analyst community to help them analyze the
performance and operational results of our core business.
Adjusted EBITDA. Adjusted EBITDA represents income or
loss from operations before depreciation, amortization and, when
applicable, loss on sale and leaseback of vessel, loss on
impairment of vessels and certain non-recurring charges.
There are limitations related to the use of Adjusted EBITDA
versus income from operations 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
Thomas Rozycki
Prosek Partners
212-279-3115
trozycki@prosek.com
Sean Silva
Prosek Partners
212-279-3115
ssilva@prosek.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.
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SOURCE Pangaea Logistics Solutions Ltd.