NEWPORT, R.I., May 10,
2018 /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 March 31, 2018.
1st Quarter 2018 Highlights
- $12.1 million Adjusted
EBITDA(1)
- Net income attributable to Pangaea Logistics Solutions Ltd. of
$4.3 million or $0.10 per share.
- Net revenue(2) increased over 40% from the prior
year, to $16.3 million
- TCE rates up 39% to $13,849/day
Results for the three months ended March 31, 2018 and
2017
"During the first quarter of 2018, we continued a transition to
a stronger shipping market, with cargo owners and traders shifting
their sourcing and transportation requirements in response to
higher shipping costs and potential impacts of tariff and sanction
threats," said Ed Coll, Chief
Executive Officer of Pangaea Logistics Solutions Ltd. "This kind of
disruption presents us with strong opportunities to bring
meaningful growth to our business in the right places, not in
simple volume movements. This market plays to our practice of
responding to our customers' needs and providing them with the most
effective and efficient logistics and cargo services. We are
in the process of extending and expanding important contracts,
cautiously investing in new assets, adding people and capabilities
in important places, and re-enforcing our presence in growing
markets."
In highlighting the Company's improved performance, Mr. Coll
noted, "Our high ice class Panamax fleet is an important leg of our
specialized logistics business, serving customers who cannot move
valuable cargo without our help. This year we saw a robust
ice season for our Copenhagen
office and over the past three summers we have performed extensive
transportation activity from Baffin Island, Canada, shipping iron ore from Arctic regions
to Europe, starting each July. We
are excited to announce a recently signed ten year contract to
support our Baffin Island customer's mining business, which will
utilize our entire panamax ice fleet for at least 25% of available
days during each year. We will also be providing non-owned,
chartered-in tonnage as part of our overall logistics approach for
this customer."
For the first quarter of 2018, the Company reported net income
of $4.3 million, compared to net
income of $1.3 million in the first
quarter of 2017. Drybulk market rates improved considerably in the
first quarter as compared to the same period of 2017, which
resulted in improved TCE rates and Adjusted EBITDA, which was
$12.1 million for the three months
ended March 31, 2018, compared with
$7.9 million for the three months
ended March 31, 2017.
The average TCE rate was $13,849
per day for the three months ended March 31,
2018, compared to $9,945 per
day for the same period in 2017. Total revenue for the three months
ended March 31, 2018 was $79.0 million, compared to $84.5 million for the same period in 2017, a 6%
decrease. The total number of shipping days decreased 19% to 3,524
in the three months ended March 31,
2018, compared to 4,342 for the same period in 2017, largely
due to the completion of the Charleston project. The revenue
decrease is predominantly due to that decrease in total shipping
days, and was offset by a large increase in TCE rates.
(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.
(2) Net revenue represents total revenue less the
total direct costs of transportation and services, which includes
charter hire, voyage and vessel operating expenses.
Mr. Coll additionally commented, "Overall, our ship days
activity was lower in the first quarter of 2018 than last year,
when we were in the middle of performing our 14-month long
Charleston contract that used four to five ships every day in the
first quarter of 2017. However, by the end of this quarter,
our operating fleet of owned and chartered-in ships was back up to
over 50 vessels, and growing. We continue to be optimistic
about the market."
Liquidity and Cash Flows
Cash and cash equivalents were $28.2
million as of March 31, 2018, compared with
$38.5 million on December 31, 2017.
At March 31, 2018 and December 31, 2017, the Company
had working capital of $14.3 million
and $13.0 million, respectively. For
the three months ended March 31,
2018, the Company's net cash provided by operating
activities was $2.8 million, compared
to $2.4 million for the three months
ended March 31, 2017.
For the three months ended March 31,
2018 and 2017, net cash used in investing activities was
$0.4 million and $38.7 million, respectively. Net cash used
in financing activities was $8.7
million for the three months ended March 31, 2018 while net cash provided by
financing activities was $35.7
million for the three months ended March 31, 2017. These changes reflect the
Company's investment in and purchase of vessels in Q1 2017,
including the m/v Bulk Destiny, which was financed under a
sale and leaseback arrangement; and the m/v Bulk Endurance which
was financed under a commercial loan facility.
Conference Call Details
The Company's management team will host a conference call to
discuss the Company's financial results on May 11, 2018 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#
5796949.
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# 5796949.
Pangaea Logistics
Solutions Ltd.
|
Consolidated
Statements of Income
|
|
|
Three Months Ended
March 31,
|
|
2018
|
|
2017
|
|
|
|
|
Revenues:
|
|
|
|
Voyage
revenue
|
$
|
70,319,194
|
|
|
$
|
77,688,449
|
|
Charter
revenue
|
8,654,099
|
|
|
6,766,672
|
|
|
78,973,293
|
|
|
84,455,121
|
|
Expenses:
|
|
|
|
Voyage
expense
|
30,168,028
|
|
|
41,271,919
|
|
Charter hire
expense
|
22,695,935
|
|
|
23,201,155
|
|
Vessel operating
expense
|
9,849,165
|
|
|
8,591,243
|
|
General and
administrative
|
4,128,298
|
|
|
3,514,764
|
|
Depreciation and
amortization
|
4,338,188
|
|
|
3,941,795
|
|
Loss on sale and
leaseback of vessels
|
—
|
|
|
4,289,998
|
|
Total
expenses
|
71,179,614
|
|
|
84,810,874
|
|
|
|
|
|
Income (loss) from
operations
|
7,793,679
|
|
|
(355,753)
|
|
|
|
|
|
Other (expense)
income:
|
|
|
|
Interest expense,
net
|
(2,060,736)
|
|
|
(1,630,988)
|
|
Interest expense on
related party debt
|
(63,459)
|
|
|
(77,979)
|
|
Unrealized (loss)
gain on derivative instruments, net
|
(562,605)
|
|
|
1,966,387
|
|
Other
income
|
428,332
|
|
|
94,650
|
|
Total other (expense)
income, net
|
(2,258,468)
|
|
|
352,070
|
|
|
|
|
|
Net income
(loss)
|
5,535,211
|
|
|
(3,683)
|
|
(Income) loss
attributable to non-controlling interests
|
(1,210,217)
|
|
|
1,350,525
|
|
Net income
attributable to Pangaea Logistics Solutions Ltd.
|
$
|
4,324,994
|
|
|
$
|
1,346,842
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
Basic
|
$
|
0.10
|
|
|
$
|
0.04
|
|
Diluted
|
$
|
0.10
|
|
|
$
|
0.04
|
|
|
|
|
|
Weighted average
shares used to compute earnings
|
|
|
|
per common
share
|
|
|
|
Basic
|
42,019,779
|
|
|
35,280,806
|
|
Diluted
|
42,655,038
|
|
|
35,805,205
|
|
Pangaea Logistics
Solutions Ltd.
|
Consolidated
Balance Sheets
|
|
|
March 31,
2018
|
|
December 31,
2017
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
28,205,463
|
|
|
$
|
34,531,812
|
|
Accounts receivable
(net of allowance of $2,135,877 at
March 31, 2018 and December 31, 2017)
|
21,682,912
|
|
|
21,089,425
|
|
Bunker
inventory
|
14,293,347
|
|
|
15,356,712
|
|
Advance hire, prepaid
expenses and other current assets
|
9,797,784
|
|
|
12,032,272
|
|
Total current
assets
|
73,979,506
|
|
|
83,010,221
|
|
|
|
|
|
Restricted
cash
|
4,000,000
|
|
|
4,000,000
|
|
Fixed assets,
net
|
304,114,813
|
|
|
306,292,655
|
|
Vessels under capital
lease
|
29,704,830
|
|
|
29,994,212
|
|
Total
assets
|
$
|
411,799,149
|
|
|
$
|
423,297,088
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable,
accrued expenses and other current liabilities
|
$
|
21,793,353
|
|
|
$
|
29,181,276
|
|
Related party
debt
|
4,468,457
|
|
|
7,009,597
|
|
Deferred
revenue
|
6,581,760
|
|
|
5,815,924
|
|
Current portion of
secured long-term debt
|
18,706,122
|
|
|
18,979,335
|
|
Current portion of
capital lease obligations
|
1,812,475
|
|
|
1,785,620
|
|
Dividend
payable
|
6,333,598
|
|
|
7,238,401
|
|
Total current
liabilities
|
59,695,765
|
|
|
70,010,153
|
|
|
|
|
|
Secured long-term
debt, net
|
113,170,604
|
|
|
117,615,634
|
|
Obligations under
capital lease
|
24,552,298
|
|
|
25,015,659
|
|
|
|
|
|
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; 44,096,911 shares issued
and outstanding at March 31, 2018; 43,794,526 shares issued and
outstanding at December 31, 2017
|
4,410
|
|
|
4,379
|
|
Additional paid-in
capital
|
155,556,362
|
|
|
154,943,728
|
|
Accumulated
deficit
|
(7,694,827)
|
|
|
(9,596,785)
|
|
Total Pangaea
Logistics Solutions Ltd. equity
|
147,865,945
|
|
|
145,351,322
|
|
Non-controlling
interests
|
66,514,537
|
|
|
65,304,320
|
|
Total stockholders'
equity
|
214,380,482
|
|
|
210,655,642
|
|
Total liabilities
and stockholders' equity
|
$
|
411,799,149
|
|
|
$
|
423,297,088
|
|
On January 1, 2018, the
Company adopted ASU No. 2014-09, Revenue from
Contracts with Customers (ASC 606) using the modified
retrospective transition method applied to voyage contracts that
were not substantially complete at the end of 2017. The
Company recorded a $2.4 million
adjustment to decrease retained earnings at the beginning of 2018,
which reflects the cumulative impact of adopting this standard.
Comparative financial statements have not been restated and are
reported under the accounting standards in effect for those
periods.
Pangaea Logistics
Solutions Ltd.
|
Consolidated
Statements of Cash Flows
|
|
|
Three Months Ended
March 31,
|
|
2018
|
|
2017
|
Operating
activities
|
|
|
|
Net income
(loss)
|
$
|
5,535,211
|
|
|
$
|
(3,683)
|
|
Adjustments to
reconcile net income to net cash provided by operations:
|
|
|
|
Depreciation and
amortization expense
|
4,338,188
|
|
|
3,941,795
|
|
Amortization of
deferred financing costs
|
166,221
|
|
|
174,342
|
|
Amortization of
prepaid rent
|
30,484
|
|
|
30,485
|
|
Unrealized loss
(gain) on derivative instruments
|
562,605
|
|
|
(1,966,387)
|
|
Gain from equity
method investee
|
(90,000)
|
|
|
(80,681)
|
|
Provision for
doubtful accounts
|
—
|
|
|
147,745
|
|
Loss on sale of
vessel
|
—
|
|
|
4,289,998
|
|
Drydocking
costs
|
(1,497,979)
|
|
|
(63,808)
|
|
Recognized cost for
restricted stock issued as compensation
|
612,665
|
|
|
446,978
|
|
Change in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(593,487)
|
|
|
(2,324,202)
|
|
Bunker
inventory
|
1,063,365
|
|
|
(2,166,797)
|
|
Advance hire, prepaid
expenses and other current assets
|
4,026,194
|
|
|
(69,870)
|
|
Accounts payable,
accrued expenses and other current liabilities
|
(7,400,141)
|
|
|
(838,732)
|
|
Deferred
revenue
|
(3,962,909)
|
|
|
913,854
|
|
Net cash provided by
operating activities
|
2,790,417
|
|
|
2,431,037
|
|
|
|
|
|
Investing
activities
|
|
|
|
Purchase of vessels
and vessel improvements
|
(298,418)
|
|
|
(37,902,753)
|
|
Purchase of building
and equipment
|
(110,417)
|
|
|
(7,245)
|
|
Proceeds from sale of
equipment
|
31,594
|
|
|
—
|
|
Purchase of
non-controlling interest in consolidated subsidiary
|
—
|
|
|
(799,289)
|
|
Net cash used in
investing activities
|
(377,241)
|
|
|
(38,709,287)
|
|
|
|
|
|
Financing
activities
|
|
|
|
Payments of related
party debt
|
(2,541,140)
|
|
|
—
|
|
Proceeds from
long-term debt
|
—
|
|
|
19,500,000
|
|
Payments of financing
and issuance costs
|
(91,329)
|
|
|
(763,381)
|
|
Payments of long-term
debt
|
(4,765,747)
|
|
|
(4,059,488)
|
|
Proceeds from sale
and leaseback of vessel
|
—
|
|
|
21,000,000
|
|
Payments of capital
lease obligations
|
(436,506)
|
|
|
—
|
|
Dividends paid to
non-controlling interests
|
(904,803)
|
|
|
—
|
|
Net cash (used in)
provided by financing activities
|
(8,739,525)
|
|
|
35,677,131
|
|
|
|
|
|
Net decrease in cash,
cash equivalents and restricted cash
|
(6,326,349)
|
|
|
(601,119)
|
|
Cash, cash
equivalents and restricted cash at beginning of period
|
38,531,812
|
|
|
28,422,949
|
|
Cash, cash
equivalents and restricted cash at end of period
|
$
|
32,205,463
|
|
|
$
|
27,821,830
|
|
|
|
|
|
Supplemental cash
flow information and disclosure of noncash items
|
|
|
|
Cash paid for
interest
|
$
|
1,758,934
|
|
|
$
|
1,420,287
|
|
Pangaea Logistics
Solutions Ltd.
|
Reconciliation of
Income from Operations to Net Revenue and Adjusted
EBITDA
|
|
|
|
Three Months Ended
March 31,
|
|
|
2018
|
|
2017
|
|
|
|
|
|
Net
Revenue
|
|
|
|
|
Income from
operations
|
|
$
|
7,793,679
|
|
|
$
|
(355,753)
|
|
General and
administrative
|
|
4,128,298
|
|
|
3,514,764
|
|
Depreciation and
amortization
|
|
4,338,188
|
|
|
3,941,795
|
|
Loss on sale and
leaseback of vessels
|
|
—
|
|
|
4,289,998
|
|
Net
Revenue
|
|
$
|
16,260,165
|
|
|
$
|
11,390,804
|
|
|
|
|
|
|
Adjusted EBITDA
(in millions)
|
|
|
|
|
Income from
operations
|
|
$
|
7,793,679
|
|
|
$
|
(355,753)
|
|
Depreciation and
amortization
|
|
4,338,188
|
|
|
3,941,795
|
|
Loss on sale and
leaseback of vessel
|
|
—
|
|
|
4,289,998
|
|
Adjusted
EBITDA
|
|
$
|
12,131,867
|
|
|
$
|
7,876,040
|
|
|
|
|
|
|
Earnings Per
Common Share - basic
|
|
|
|
|
Net income
attributable to Pangaea Logistics Solutions Ltd.
|
|
$
|
4,324,994
|
|
|
$
|
1,346,842
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding - basic
|
|
42,019,779
|
|
|
35,280,806
|
|
Weighted average
number of common shares outstanding - diluted
|
|
42,655,038
|
|
|
35,805,205
|
|
|
|
|
|
|
Earnings per common
share - basic
|
|
$
|
0.10
|
|
|
$
|
0.04
|
|
Earnings per common
share - diluted
|
|
$
|
0.10
|
|
|
$
|
0.04
|
|
|
|
|
|
|
Adjusted
EPS
|
|
|
|
|
Net Income
attributable to Pangaea Logistics Solutions Ltd.
|
|
$
|
4,324,994
|
|
|
$
|
1,346,842
|
|
Non-GAAP
|
|
|
|
|
Add: loss on sale and
leaseback of vessels
|
|
—
|
|
|
4,289,998
|
|
less: loss on sale
and leaseback of vessels attributable to noncontrolling
interests
|
|
—
|
|
|
(2,157,633)
|
|
Non-GAAP adjusted net
income attributable to Pangaea Logistics Solutions Ltd.
|
|
$
|
4,324,994
|
|
|
$
|
3,479,207
|
|
|
|
|
|
|
Weighted average
number of common shares - basic
|
|
42,019,779
|
|
|
35,280,806
|
|
Weighted average
number of common shares - diluted
|
|
42,655,038
|
|
|
35,805,205
|
|
|
|
|
|
|
Adjusted EPS -
basic
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
Adjusted EPS -
diluted
|
|
$
|
0.10
|
|
|
$
|
0.10
|
|
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 and 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.
Net revenue. Net revenue represents total revenue less
the total direct costs of transportation and services, which
includes charter hire, voyage and vessel operating expenses. Net
revenue is included because it is used by management and certain
investors to measure performance by comparison to other logistic
service providers. Net 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
revenue used here may not be comparable to an operating measure
used by other companies.
Adjusted EBITDA and adjusted EPS. 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. 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 and
leaseback of vessel, loss on impairment of vessel 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
Thomas Rozycki
Prosek Partners
212-279-3115
trozycki@prosek.com
Kathleen Bentley
Prosek Partners
646-503-5179
kbentley@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.