Pangaea Logistics Solutions Ltd. Reports Financial Results for the Quarter Ended March 31, 2024
Pangaea Logistics Solutions reported strong financial results for the first quarter of 2024, with net income of $11.7 million, adjusted net income of $6.6 million, operating cash flow of $9.0 million, and adjusted EBITDA of $19.9 million. The company's TCE rates exceeded industry indices by 29%, driving a 23% increase in total Adjusted EBITDA. Pangaea acquired two bulk vessels for $56.6 million and saw total revenue of $104.7 million, with a positive outlook for dry bulk demand and profitability.
Strong financial performance for Q1 2024 with net income of $11.7 million and adjusted net income of $6.6 million.
Operating cash flow of $9.0 million and adjusted EBITDA of $19.9 million, driving a 23% increase in total Adjusted EBITDA.
High TCE rates exceeding industry indices by 29%, supported by long-term contracts and cargo strategy.
Acquisition of two bulk vessels for $56.6 million to enhance fleet capacity and optimize performance.
Total revenue of $104.7 million, showcasing a positive outlook for dry bulk demand and profitability.
Ratio of net debt to trailing twelve-month Adjusted EBITDA increased to 2.0x from 1.3x in the prior year period.
Decrease in total shipping days by 7% compared to the year-ago period may impact operational efficiency.
Increase in charter hire expenses per chartered-in day could lead to higher operational costs.
Total debt, including lease finance obligations, stood at $260.8 million as of March 31, 2024.
Repaid $3.4 million of long-term debt and $3.7 million of finance leases, impacting liquidity and capital allocation.
Insights
Pangaea Logistics Solutions Ltd.'s announcement of net income growth to
The Adjusted EBITDA margin expansion to
Moreover, the company's strategic fleet acquisitions and divestment of older vessels align with their long-term strategy to enhance operational efficiency and cater to market demand. These actions should support Pangaea's positioning in an industry where supply and demand dynamics heavily influence profitability.
From an investor standpoint, the declaration of a quarterly cash dividend of
Pangaea's increased market rates and strategic positioning within the ice-class fleet segment highlight its ability to capitalize on niche markets, which may provide a buffer against general market volatility. Considering the constrained supply of vessels and robust global demand for dry bulk, especially in light of rising infrastructure investment and project activity across North America, the company's focus on long-term Contracts of Affreightment (COAs) ensures steady revenue streams.
It's also important to note the company's investment in on-shore logistics, particularly the long-term lease agreement in the Port of Tampa. This expansion into port and terminal operations could provide synergies and diversification benefits that may enhance revenue streams and reduce reliance on spot market volatility.
As an investor, one should also consider the geopolitical landscape and its impact on the dry bulk segment. While currently beneficial, with increased ton-mile demand within certain shipping channels, such conditions can rapidly change, affecting rates and operations. Nevertheless, the management's confidence in both near and longer-term outlooks suggests a positive trajectory for the business.
FIRST QUARTER 2024 RESULTS
- Net income attributable to Pangaea of
$11.7 million $0.25 - Adjusted net income attributable to Pangaea of
$6 $0.14 - Operating cash flow of
$9.0 million - Adjusted EBITDA of
$19.9 million - Time Charter Equivalent ("TCE") rates earned by Pangaea of
$17,697 - Pangaea's TCE rates exceeded the average Baltic Panamax and Supramax indices by
29% - Ratio of net debt to trailing twelve-month Adjusted EBITDA of 2.0x
- Announced the acquisition of two 58,000 dwt bulk vessels for
$56.6 million
For the first quarter ended March 31, 2024, Pangaea reported non-GAAP adjusted net income of
The TCE earned was
Total Adjusted EBITDA increased by
As of March 31, 2024, the Company had
On May 7, 2024, the Company's Board of Directors declared a quarterly cash dividend of
MANAGEMENT COMMENTARY
"Our flexible, cargo-focused business model continued to drive premium earned TCE rates during the first quarter, positioning us to achieve improved operating leverage and year-over-year growth in profitability," stated Mark Filanowski, Chief Executive Officer of Pangaea Logistics Solutions. "While the first quarter is generally a seasonally softer period for dry bulk activity, our first quarter results benefited from elevated long-haul voyage demand across our ice-class fleet, together with a solid base of premium long-term COAs. As market rates have increased in recent months, we've added to our cargo commitments to fully utilize our owned fleet and we have chartered-in more vessels, positioning us to optimize our TCE performance."
"Global demand for dry bulk remains strong and the supply of vessels remains constrained, giving us confidence in both the near and longer-term outlooks for our business," continued Filanowski. "While the current geopolitical environment has resulted in an increase in ton-mile demand within certain shipping channels, we're seeing solid demand within our key bulk trades given rising infrastructure investment and project activity across
"Amid the supportive backdrop for dry bulk demand, we remain committed to a returns-focused approach to capital allocation that supports long-term value creation," continued Filanowski. "In 2024, our capital deployment priorities are on the build-out of our on-shore logistics business, together continued investment in our fleet. To that end, we recently executed a long-term lease agreement in the Port of
"Market conditions have remained strong into the second quarter. Through today we've booked over 2,890 shipping days at an average TCE rate of
STRATEGIC UPDATE
Pangaea remains committed to developing a leading dry bulk logistics and transportation services company of scale, providing its customers with specialized shipping and supply chain and logistics offerings in commodity and niche markets, which drive premium returns measured in time charter equivalent per day.
Leverage integrated shipping and logistics model. In addition to operating the largest high ice class dry bulk fleet of Panamax and post-Panamax vessels globally, Pangaea also performs stevedoring services, together with port and terminal operations capabilities. Following the acquisition of marine port terminal operations in
Continue to drive strong fleet utilization. In the first quarter, Pangaea's 24 owned vessels were fully utilized and supplemented with an average of 17 chartered-in vessels to support cargo and COA commitments. Going forward, the Company will continue to opportunistically evaluate the composition of its fleet in order to meet the growing needs of new and existing customers.
Continue to upgrade fleet, while divesting older, non-core assets. In May 2024, the Company announced that it had entered into two memoranda agreements for the acquisition of two 2016 built 58,000 dwt dry bulk vessels for a combined purchase price of
FIRST QUARTER 2024 CONFERENCE CALL
The Company's management team will host a conference call to discuss the Company's financial results on Friday, May 10, 2024 at 8:00 a.m., Eastern Time (ET). Accompanying presentation materials will be available in the Investor Relations section of the Company's website at https://www.pangaeals.com/investors/.
To participate in the live teleconference: | |
Domestic Live: | 1-888-632-3384 |
International Live: | 1-785-424-1794 |
Conference ID: | PANLQ124 |
To listen to a replay of the teleconference, which will be available through May 17, 2024: | |
Domestic Replay: | 1-877-856-8964 |
International Replay: | 1-402-220-1608 |
Pangaea Logistics Solutions Ltd. | |||
Three Months Ended March 31, | |||
2024 | 2023 | ||
Revenues: | |||
Voyage revenue | $ 87,290,563 | $ 107,950,123 | |
Charter revenue | 15,031,027 | 5,748,952 | |
Terminal & Stevedore Revenue | 2,426,963 | — | |
Total revenue | 104,748,553 | 113,699,075 | |
Expenses: | |||
Voyage expense | 37,114,664 | 56,814,631 | |
Charter hire expense | 27,142,850 | 22,590,840 | |
Vessel operating expense | 12,669,257 | 13,606,815 | |
Terminal & Stevedore Expenses | 2,079,187 | — | |
General and administrative | 7,278,003 | 5,691,733 | |
Depreciation and amortization | 7,436,473 | 7,326,860 | |
Loss on sale of vessel | — | 1,172,196 | |
Total expenses | 93,720,434 | 107,203,075 | |
Income from operations | 11,028,119 | 6,496,000 | |
Other income (expense): | |||
Interest expense | (3,850,730) | (4,250,514) | |
Interest income | 875,084 | 1,049,846 | |
(Income) loss attributable to Non-controlling interest recorded as long-term liability | (815,102) | 144,736 | |
Unrealized gain (loss) on derivative instruments, net | 5,084,339 | (423,569) | |
Other income | 343,924 | 386,413 | |
Total other income (expense), net | 1,637,515 | (3,093,088) | |
Net income | 12,665,634 | 3,402,912 | |
(Income) loss attributable to non-controlling interests | (991,458) | 71,355 | |
Net income attributable to Pangaea Logistics Solutions Ltd. | $ 11,674,176 | $ 3,474,267 | |
Earnings per common share: | |||
Basic | $ 0.26 | $ 0.08 | |
Diluted | $ 0.25 | $ 0.08 | |
Weighted average shares used to compute earnings per common share: | |||
Basic | 45,214,519 | 44,712,290 | |
Diluted | 45,914,772 | 45,116,719 | |
Pangaea Logistics Solutions Ltd. | |||
March 31, 2024 | December 31, 2023 | ||
(unaudited) | (audited) | ||
Assets | |||
Current assets | |||
Cash and cash equivalents | $ 95,873,255 | $ 99,037,866 | |
Accounts receivable (net of allowance of | 41,997,734 | 47,891,501 | |
Inventories | 22,151,644 | 16,556,266 | |
Advance hire, prepaid expenses and other current assets | 35,534,470 | 28,340,246 | |
Total current assets | 195,557,103 | 191,825,879 | |
Fixed assets, net | 469,077,334 | 474,265,171 | |
Finance lease right of use assets, net | 29,829,974 | 30,393,823 | |
Goodwill | 3,104,800 | 3,104,800 | |
Other non-current Assets | 5,735,863 | 5,590,295 | |
Total assets | $ 703,305,074 | $ 705,179,968 | |
Liabilities and stockholders' equity | |||
Current liabilities | |||
Accounts payable, accrued expenses and other current liabilities | $ 32,953,336 | $ 35,836,262 | |
Deferred revenue | 13,773,306 | 15,629,886 | |
Current portion of secured long-term debt | 29,999,163 | 30,751,726 | |
Current portion of finance lease liabilities | 21,644,835 | 21,970,124 | |
Dividend payable | 966,786 | 1,146,321 | |
Total current liabilities | 99,337,426 | 105,334,319 | |
Secured long-term debt, net | 65,929,536 | 68,446,309 | |
Finance lease liabilities, net | 139,980,818 | 143,266,867 | |
Long-term liabilities - other | 18,751,642 | 17,936,540 | |
Commitments and contingencies | |||
Stockholders' equity: | |||
Preferred stock, | — | — | |
Common stock, | 4,685 | 4,648 | |
Additional paid-in capital | 165,993,186 | 164,854,546 | |
Retained earnings | 166,006,383 | 159,026,799 | |
Total Pangaea Logistics Solutions Ltd. equity | 332,004,254 | 323,885,993 | |
Non-controlling interests | 47,301,398 | 46,309,940 | |
Total stockholders' equity | 379,305,652 | 370,195,933 | |
Total liabilities and stockholders' equity | $ 703,305,074 | $ 705,179,968 | |
Pangaea Logistics Solutions, Ltd. | |||
Three Months Ended March 31, | |||
2024 | 2023 | ||
Operating activities | |||
Net income | $ 12,665,634 | $ 3,402,912 | |
Adjustments to reconcile net income to net cash provided by operations: | |||
Depreciation and amortization expense | 7,436,473 | 7,326,860 | |
Amortization of deferred financing costs | 205,472 | 239,207 | |
Amortization of prepaid rent | 30,467 | 30,484 | |
Unrealized (gain) loss on derivative instruments | (5,084,339) | 423,569 | |
Income from equity method investee | (343,924) | (386,413) | |
Earnings attributable to non-controlling interest recorded as other long term | 815,102 | (144,736) | |
Provision (recovery) for doubtful accounts | 358,080 | (170,525) | |
Loss on sale of vessel | — | 1,172,196 | |
Drydocking costs | (1,267,661) | (1,347,899) | |
Share-based compensation | 1,138,677 | 856,434 | |
Change in operating assets and liabilities: | |||
Accounts receivable | 5,535,687 | 3,485,973 | |
Inventories | (5,595,378) | 2,370,157 | |
Advance hire, prepaid expenses and other current assets | (3,850,938) | (2,917,384) | |
Accounts payable, accrued expenses and other current liabilities | (1,187,491) | 1,695,595 | |
Deferred revenue | (1,856,580) | (4,464,780) | |
Net cash provided by operating activities | 8,999,281 | 11,571,650 | |
Investing activities | |||
Purchase of vessels and vessel improvements | (130,000) | (75,291) | |
Purchase of fixed assets and equipment | (73,618) | — | |
Contributions to non-consolidated subsidiaries | — | (63,917) | |
Proceeds from sale of vessel | — | 8,933,700 | |
Net cash (used in) provided by investing activities | (203,618) | 8,794,492 | |
Financing activities | |||
Payments of long-term debt | (3,356,824) | (5,765,505) | |
Payments of finance lease obligations | (3,729,323) | (4,060,499) | |
Dividends paid to non-controlling interests | — | (5,000,000) | |
Accrued common stock dividends paid | (4,874,127) | (4,647,788) | |
Cash paid for incentive compensation shares relinquished | — | (127,283) | |
Net cash used in financing activities | (11,960,274) | (19,601,075) | |
Net (decrease) increase in cash and cash equivalents | (3,164,611) | 765,067 | |
Cash and cash equivalents at beginning of period | 99,037,866 | 128,384,606 | |
Cash and cash equivalents at end of period | $ 95,873,255 | $ 129,149,673 | |
Pangaea Logistics Solutions Ltd. | ||||
Three Months Ended March 31, | ||||
2024 | 2023 | |||
Net Transportation and Service Revenue | ||||
Gross Profit | $ 18,333,600 | $ 13,387,407 | ||
Add: | ||||
Vessel Depreciation and Amortization | 7,408,995 | 7,299,382 | ||
Net transportation and service revenue | $ 25,742,595 | $ 20,686,789 | ||
Adjusted EBITDA | ||||
Net Income | 12,665,634 | 3,402,912 | ||
Interest expense, net | 2,975,646 | 3,200,668 | ||
Income (loss) attributable to Non-controlling interest recorded as long-term liability interest expense | 815,102 | (144,736) | ||
Depreciation and amortization | 7,436,473 | 7,326,860 | ||
EBITDA | 23,892,855 | 13,785,704 | ||
Non-GAAP Adjustments: | ||||
Loss on sale of vessels | — | 1,172,196 | ||
Share-based compensation | 1,138,677 | 856,434 | ||
Unrealized (gain) loss on derivative instruments, net | (5,084,339) | 423,569 | ||
Adjusted EBITDA | $ 19,947,193 | $ 16,237,903 | ||
Earnings Per Common Share | ||||
Net income attributable to Pangaea Logistics Solutions Ltd. | $ 11,674,176 | $ 3,474,267 | ||
Weighted average number of common shares outstanding - basic | 45,214,519 | 44,712,290 | ||
Weighted average number of common shares outstanding - diluted | 45,914,772 | 45,116,719 | ||
Earnings per common share - basic | $ 0.26 | $ 0.08 | ||
Earnings per common share - diluted | $ 0.25 | $ 0.08 | ||
Adjusted EPS | ||||
Net Income attributable to Pangaea Logistics Solutions Ltd. | $ 11,674,176 | $ 3,474,267 | ||
Non-GAAP | ||||
Add: | ||||
Loss on sale of vessels | — | 1,172,196 | ||
Unrealized (gain) loss on derivative instruments | (5,084,339) | 423,569 | ||
Non-GAAP adjusted net income attributable to Pangaea Logistics Solutions Ltd. | $ 6,589,837 | $ 5,070,032 | ||
Weighted average number of common shares - basic | 45,214,519 | 44,712,290 | ||
Weighted average number of common shares - diluted | 45,914,772 | 45,116,719 | ||
Adjusted EPS - basic | $ 0.15 | $ 0.11 | ||
Adjusted EPS - diluted | $ 0.14 | $ 0.11 | ||
INFORMATION ABOUT NON-GAAP FINANCIAL MEASURES. As used herein, "GAAP" refers to accounting principles generally accepted in
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 and terminal & stevedore 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
Adjusted EBITDA and adjusted EPS. Adjusted EBITDA represents net income (or loss), determined in accordance with
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 during the period to the most directly comparable financial measures prepared in accordance with GAAP.
About Pangaea Logistics Solutions Ltd.
Pangaea Logistics Solutions Ltd. (NASDAQ: PANL) and its subsidiaries (collectively, "Pangaea" or the "Company") provides seaborne drybulk logistics and transportation services as well as terminal and stevedoring services. Pangaea utilizes its logistics expertise to service a broad base of industrial customers who require the transportation of a wide variety of drybulk cargoes, including grains, coal, iron ore, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite and limestone. The Company addresses the logistics needs of its customers by undertaking a comprehensive set of services and activities, including cargo loading, cargo discharge, port and terminal operations, vessel chartering, voyage planning, and vessel technical management. Learn more at www.pangaeals.com.
Investor Relations Contacts
Gianni Del Signore | Stefan C. Neely | |
Chief Financial Officer | Vallum Advisors | |
401-846-7790 | ||
Investors@pangaeals.com | PANL@val-adv.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
FAQ
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