Pangaea Logistics Solutions Ltd. Reports Financial Results for the Three Months and Year Ended December 31, 2019

NEWPORT, R.I., March 23, 2020 /PRNewswire/ -- Pangaea Logistics Solutions Ltd. ("Pangaea" or the "Company") PANL, a global provider of comprehensive maritime logistics solutions, announced today its results for the three months and year ended December 31, 2019.

2019 Highlights

  • Net income attributable to Pangaea Logistics Solutions Ltd. of $11.7 million, as compared to $17.8 million for the year ended December 31, 2018.
    • Non-GAAP adjusted Net Income attributable to Pangaea Logistics Solutions Ltd. of $18.2 million, as compared to $22.5 million for the year ended December 31, 2018
  • Earnings per share of $0.27 as compared to $0.42 for the year ended December 31, 2018.
    • Adjusted earnings per share of $0.43 as compared to $0.53 for the year ended December 31, 2018
  • Cash flow from operations of $44.5 million, compared to $40.1 million for the prior year.
  • Pangaea's TCE rates increased 1% to $14,199 from $14,019 in 2018 while the market average for the year was approximately $10,093 per day, a premium over the market of approximately 41%.
  • Adjusted EBITDA of $51.1 million for the year ended December 31, 2019.
  • At December 31, 2019, Pangaea had $53.1 million in cash, restricted cash and cash equivalents.

4th Quarter 2019 Highlights           

  • Net loss of $4.4 million, which includes total losses on impairment and sale of vessels of $9.3 million, as compared to a net loss of $0.6 million in the same period of 2018.
    • Non-GAAP adjusted net income attributable to Pangaea Logistics Solutions Ltd. of $4.4 million, as compared to $3.7 million for the same period of 2018.
    • Adjusted Earnings per share of $0.10, as compared to $0.09 for the same period of 2018.
  • Pangaea's TCE rates increased 6% to $15,172 per day for the three months ended December 31, 2019 a premium over the market average of approximately 40%.
  • Adjusted EBITDA of $13.5 million for the fourth quarter of 2019 versus $12.2 million for the same period in 2018.
  • Net transportation and service revenue was $18.7 million in the three months ended December 31, 2018 as compared to $16.4 million in the comparable period.

Ed Coll, Pangaea's Chief Executive Officer, commented;

"We were extremely active in 2019, a year that started and ended with a challenging dry bulk charter market. Despite this environment, we continued to operate profitably. Our $18.2 million of adjusted Net Income and $51.1 million of adjusted EBITDA, adjusted for book losses on sale and impairments, is another strong result for our Company. Our vessel activity increased substantially in the third and fourth quarters, which is traditionally our busiest time of the year. Our premiums were 41% above average market levels for 2019, continuing our industry leading performance. We also pushed forward core strategic initiatives such as our fleet renewal efforts and port logistics. We ordered four new ice class vessels in 2019 to complement our high ice class fleet of vessels that are capable of performing demanding Arctic service, and we built a temporary port and performed a test shipment of valuable ore from Greenland, less than 1,000 miles from the North Pole."

Mr. Coll added, "During the year we purchased some young secondhand vessels and, at the end of the year, we took further steps to renew our fleet by selling some older vessels, putting us in a position to renew when opportunities arise. Strong cash operating income allowed total cash to stay above $50 million at year end, despite aggressive debt amortization, the purchase of new vessels, substantial newbuilding deposits, and payment of dividends to our shareholders. Our plan to reach ashore for cargo-related contract work is moving forward, with the Brayton Point Terminal now in operation, and our stevedoring operations in the Mississippi River started on December 31, 2019.  Other logistics projects are in our pipeline as we demonstrate our expertise in handling difficult challenges related to cargo movements. Collectively these efforts solidify our position and we stand ready to expand when opportunities arise."

Results for the three months and year ended December 31, 2019

Total revenue was $130.5 million for the three months ended December 31, 2019, compared with $101.8 million for the three months ended December 31, 2018. The total number of shipping days performed increased by 22% to 5,240, compared to 4,287 days during the fourth quarter of 2018 predominantly due to the increase in voyage days.

The average TCE rate achieved was $15,172 per day for the three months ended December 31, 2019, compared to an average of $14,360 per day for the same period in 2018. The achieved premium over the average market increased to $4,353 per day or 40% for the three months ended December 31, 2019.

Total revenue was $412.2 million for the year ended December 31, 2019, compared with $373.0 million for the year ended December 31, 2018. The Company reported net income of $11.7 million or $0.27 per common share compared to net income of 17.8 million, or $0.42 per common share for the previous year. This decrease was largely driven by book loss on sale of vessels and impairments recognized in 2019. Adjusted net income was $18.2 million for 2019 compared to $22.5 million for 2018.

The average TCE rate achieved was $14,199 per day for the year ended December 31, 2019, compared to an average of $14,019 per day for the year ended December 31, 2018. The Baltic Dry Index ("BDI"), a measure of dry bulk market performance, averaged 1,329 for 2019, down from an average of 1,345 for 2018. The Company's average TCE rates increased 1% in 2019 over the average for 2018, and exceeded the published market rates by an average of 41% over the two year period.

Liquidity and Cash Flows

Cash, cash equivalents and restricted cash were $53.1 million as of December 31, 2019, compared to $56.1 million on December 31, 2018.

At December 31, 2019 and December 31, 2018, the Company had working capital of $36.1 million and $34.5 million, respectively. For the twelve months end December 31, 2019, the Company's net cash provided by operating activities was $44.5 million, compared to $40.1 million for the twelve months ended December 31, 2018.

For the twelve months ended December 31, 2019 and 2018, net cash used in investing activities was $46.6 million and $17.5 million, respectively. For the twelve months ended December 31, 2019 and 2018, net cash used in financing activities was $0.9 million and was $5.0 million, respectively. These changes reflect the Company's investment in newbuilding vessels, and the purchase of second hand vessels, including the m/v Bulk Spirit and m/v Bulk Friendship which were financed under the finance lease arrangements and the m/v Bulk Independence which was financed under a commercial loan facility. The financing activities also include a dividend paid to our joint venture partners of $4.7 million and dividends paid to the common stockholders of $8.1 million.

Subsequent Event

On March 20, 2020, due to the unprecedented and uncertain conditions caused by the coronavirus (COVID-19) global pandemic, and the potential impact responses might have on the Company's short term earnings and cash flow, the Board of Pangaea Logistics Solutions Ltd., as a precautionary measure, will not declare and pay a dividend for the first quarter of 2020. The Board will continue to consider a dividend on a quarterly basis as negative impacts of the global pandemic on the Company's operations are more clearly assessed and risks are addressed or dissipate. Separately, the Board authorized a stock repurchase plan which allows for the purchase of up to $3.0 million of its common stock through December 31, 2020. The timing and number of shares repurchased under the program, if any, will be at the sole discretion of the Company subject to certain conditions approved by the board of directors.

Conference Call Details

The Company's management team will host a conference call to discuss the Company's financial results on March 24, 2020 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# 9578734.

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# 9578734.

 

Pangaea Logistics Solutions Ltd.

Consolidated Statements of Operation





Three months ended December 31,



Twelve months ended December 31,



2019



2018



2019



2018



(unaudited)



(unaudited)









Revenues:















Voyage revenue

$

118,627,059





$

85,773,670





$

365,714,864





$

319,753,056



Charter revenue

11,850,564





16,055,369





46,482,955





53,217,317



Total revenue

130,477,623





101,829,039





412,197,819





372,970,373



















Expenses:















Voyage expense

50,977,508





40,265,848





165,478,629





145,146,359



Charter hire expense

47,705,639





35,045,423





132,950,418





116,958,024



Vessel operating expenses

13,105,772





10,070,292





45,266,464





39,830,110



General and administrative

5,217,757





4,272,662





17,378,681





16,483,991



Depreciation and amortization

5,008,398





4,480,491





18,529,476





17,620,725



Loss on impairment of vessels

4,751,143









4,751,143







   Loss on sale of vessels

4,584,796









4,584,796







   Loss on sale and leaseback of vessels













860,426



Total expenses

131,351,013





94,134,716





388,939,607





336,899,635



















(Loss)/income from operations

(873,390)





7,694,323





23,258,212





36,070,738



















Other (expense) income:















Interest expense, net

(2,419,947)





(2,310,167)





(9,227,784)





(8,694,481)



Interest expense, related party

(1,303)





(41,414)





(50,241)





(202,748)



Unrealized gain/(loss) on derivative instruments

549,935





(4,346,456)





2,753,834





(3,868,948)



Other (expense)/income

(265,259)





180,272





314,847





677,085



Total other expense, net

(2,136,574)





(6,517,765)





(6,209,344)





(12,089,092)



















Net (loss)/income

(3,009,964)





1,176,558





17,048,868





23,981,646



Income attributable to noncontrolling interests

(1,388,693)





(1,794,506)





(5,390,910)





(6,224,626)



Net (loss)/income attributable to Pangaea Logistics Solutions Ltd.

$

(4,398,657)





$

(617,948)





$

11,657,958





$

17,757,020



















Earnings per common share:















Basic

$

(0.10)





$

(0.01)





$

0.27





$

0.42



Diluted

$





$





$

0.27





$

0.42



















Weighted average shares used to compute earnings per common share















Basic

42,819,589





42,369,661





42,752,413





42,248,776



Diluted

42,819,589





42,369,661





43,267,178





42,783,586



 

 

Pangaea Logistics Solutions Ltd.

Consolidated Balance Sheets





December 31, 2019



December 31, 2018

Assets







Current Assets







Cash and cash equivalents

$

50,555,091





$

53,614,735



Accounts receivable (net of allowance of $1,908,841 and $2,357,130 at December 31, 2019 and 2018, respectively)

28,309,402





28,481,787



Bunker inventory

21,001,010





19,222,087



Advance hire, prepaid expenses and other current assets

18,770,825





12,187,551



Vessels held for sale, net

8,319,152







Total current assets

126,955,480





113,506,160











Restricted cash

2,500,000





2,500,000



Fixed assets, net

281,474,857





281,891,685



Investment in newbuildings in-process

15,357,189







Finance lease right of use assets, net

53,615,305





55,576,777



Total assets

$

479,902,831





$

453,474,622











Liabilities and stockholders' equity







Current liabilities







Accounts payable, accrued expenses and other current liabilities

$

39,973,635





$

31,897,507



Related party notes payable

332,987





2,877,746



Deferred revenue

14,376,394





14,717,072



Current portion of long-term debt

22,990,674





20,127,742



Current portion of finance lease liabilities

12,549,208





5,364,963



Dividends payable

631,961





4,063,598



Total current liabilities

90,854,859





79,048,628











Secured long-term debt, net

83,649,717





95,374,270



Finance lease liabilities



57,498,217





45,684,727



Long-term liabilities - other

4,828,364















Stockholders' equity:







Preferred stock, $0.0001 par value, 1,000,000 shares authorized and no share issued or outstanding







Common stock, $0.0001 par value, 100,000,000 shares authorized, 44,886,122 and 43,998,560 shares issued and outstanding at December 31, 2019 and 2018, respectively

4,489





4,400



Additional paid-in capital

157,504,895





155,946,452



Retained Earnings

12,736,580





5,737,199



Total Pangaea Logistics Solutions Ltd. equity

170,245,964





161,688,051



Non-controlling interests

72,825,710





71,678,946



Total stockholders' equity

243,071,674





233,366,997



Total liabilities and stockholders' equity

$

479,902,831





$

453,474,622



 

 

Pangaea Logistics Solutions Ltd.

Consolidated Statements of Cash Flows





Years ended December 31,



2019



2018

Operating activities







Net income

$

17,048,868





$

23,981,646



Adjustments to reconcile net income to net cash provided by operations:







Depreciation and amortization expense

18,529,476





17,620,725



Amortization of deferred financing costs

727,020





693,788



Amortization of prepaid rent

118,597





121,937



Unrealized (gain)/loss on derivative instruments

(2,753,834)





3,868,948



Income from equity method investee

(156,137)





(224,001)



Earnings attributable to noncontrolling interest recorded as interest expense

44,950







Provision for doubtful accounts

898,357





268,990



Loss on impairment of vessels

4,751,143







Loss on sales of vessels

4,584,796







Loss on sales and leaseback of vessels





860,426



Drydocking costs

(1,633,771)





(2,135,670)



Recognized cost for restricted stock issued as compensation

1,737,315





1,200,214



Change in operating assets and liabilities:







Accounts receivable

(725,972)





(7,661,352)



Bunker inventory

(2,425,497)





(3,865,375)



Advance hire, prepaid expenses and other current assets

(6,247,268)





1,624,441



Accounts payable, accrued expenses and other current liabilities

10,301,367





(392,160)



Deferred revenue

(340,678)





4,172,392



Net cash provided by operating activities

44,458,732





40,134,949











Investing activities







Purchase of vessels and vessel improvements

(41,350,536)





(17,126,213)



Proceeds from sale of vessels

10,388,723







Deposits on newbuildings in-process

(15,357,189)







Purchase of building and equipment

(283,244)





(414,922)



Proceeds from sale of equipment





31,594



Net cash used in investing activities

(46,602,246)





(17,509,541)











Financing activities







Proceeds of related party debt







Payments on related party notes payable

(2,595,000)





(4,131,851)



Proceeds from long-term debt

14,000,000







Payments of financing and issuance costs

(2,960,899)





(728,041)



Payments of long-term debt

(20,627,742)





(21,058,742)



Proceeds from finance leases

25,600,000





27,750,000



Payments on finance lease obligation

(6,602,265)





(3,501,589)



Dividends paid to non-controlling interests

(4,666,665)





(904,803)



Common stock accrued dividends paid

(8,090,213)





(2,270,000)



Cash paid for incentive compensation shares relinquished

(179,279)





(146,647)



Contributions from noncontrolling interests recorded as long-term liability

4,783,414







Proceeds from private placement of common stock, net of issuance costs





(50,812)



Net cash used in financing activities

(916,130)





(5,042,485)











Net (decrease)/increase in cash, cash equivalents and restricted cash

(3,059,644)





17,582,923



Cash, cash equivalents and restricted cash at beginning of period

56,114,735





38,531,812



Cash, cash equivalents and restricted cash at end of period

$

53,055,091





$

56,114,735











Supplemental cash flow items:







Cash paid for interest

 

$

9,250,743





$

8,636,458



 

 

 

Pangaea Logistics Solutions Ltd.

Reconciliation of Non-GAAP Measures





For the three months ended



For the twelve months ended



December 31, 2019



December 31, 2018



December 31, 2019



December 31, 2018



(unaudited)



(unaudited)









Net Transportation and Service Revenue (1)

















Gross Profit

$

13,712,008





$

11,996,943





$

50,107,841





$

53,527,602



Add:















Vessel Depreciation and amortization

4,976,696





4,450,533





18,394,467





17,508,278



Net transportation and service revenue

$

18,688,704





$

16,447,476





$

68,502,308





$

71,035,880



















Adjusted EBITDA (in millions)















(Loss)/income from operations

$

(873,390)





$

7,694,323





$

23,258,212





$

36,070,738



Depreciation and amortization

5,008,398





4,480,491





18,529,476





17,620,725



Loss on impairment of vessels

4,751,143









4,751,143







Loss on sale of vessels

4,584,796









4,584,796







Loss on sale and leaseback of vessel













860,426



Adjusted EBITDA

$

13,470,947





$

12,174,814





$

51,123,627





$

54,551,889



















Earnings Per Common Share















Net (loss)/Income attributable to Pangaea Logistics Solutions Ltd.

$

(4,398,657)





$

(617,948)





$

11,657,958





$

17,757,020



















Weighted average number of common shares - basic

42,819,589





42,369,661





42,752,413





42,248,776



Weighted average number of common shares - diluted

42,819,589





42,369,661





43,267,178





42,783,586



















Earnings per common share - basic

$

(0.10)





$

(0.01)





$

0.27





$

0.42



Earnings per common share - diluted

$





$





$

0.27





$

0.42



















Adjusted EPS















Net Income attributable to Pangaea Logistics Solutions Ltd.

$

(4,398,657)





$

(617,948)





$

11,657,958





$

17,757,020



Non-GAAP















Add:















Loss on impairment of vessels

4,751,143









4,751,143







Loss on sale of vessels

4,584,796









4,584,796







Loss on sale and leaseback of vessels













860,426



Unrealized gain/(loss) on derivative instruments

549,935





(4,346,456)





2,753,834





(3,868,948)



Non-GAAP adjusted net income attributable to Pangaea Logistics Solutions Ltd.

$

4,387,347





$

3,728,508





$

18,240,063





$

22,486,394



















Weighted average number of common shares - basic

42,819,589





42,369,661





42,752,413





42,248,776



Weighted average number of common shares - diluted

42,819,589





42,369,661





43,267,178





42,783,586



















Adjusted EPS - basic

$

0.10





$

0.09





$

0.43





$

0.53



Adjusted EPS - diluted

$

0.10





$

0.09





$

0.42





$

0.53



 

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.

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 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 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. 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

Sean Silva



Tiya Gulanikar

Prosek Partners



Prosek Partners

646-818-9122



646-818-9288

ssilva@prosek.com



tgulanikar@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.

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/pangaea-logistics-solutions-ltd-reports-financial-results-for-the-three-months-and-year-ended-december-31-2019-301028481.html

SOURCE Pangaea Logistics Solutions Ltd.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Date
ticker
name
Actual EPS
EPS Surprise
Actual Rev
Rev Surprise
Posted In: EarningsSmall CapPress ReleasesConference Call AnnouncementsTransportation/Trucking/Railroad
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!