Pangaea Logistics Solutions(PANL) - 2024 Q1 - Quarterly Results

Executive Summary & Q1 2024 Highlights This section summarizes key financial and operational achievements for Q1 2024, including significant profit growth and strategic vessel acquisitions First Quarter 2024 Highlights Pangaea Logistics Solutions Ltd. reported strong first-quarter 2024 results, with non-GAAP adjusted net income of $6.6 million and a significant 23.1% year-over-year increase in TCE rates to $17,697 per day, exceeding benchmark indices by 29% Q1 2024 Key Financial Highlights | Metric | Q1 2024 | Q1 2023 | YoY Change | | :--------------------------------- | :---------- | :---------- | :--------- | | Non-GAAP Adjusted Net Income | $6.6 million | $5.1 million | +29.4% | | Adjusted Net Income per Diluted Share | $0.14 | $0.11 | +27.3% | | Total Revenue | $104.7 million | $113.7 million | -7.9% | | TCE Rates (per day) | $17,697 | $14,372 | +23.1% | | Adjusted EBITDA | $19.9 million | $16.2 million | +22.8% | | Net Debt to Trailing 12-Month Adjusted EBITDA | 2.0x | 1.3x | +0.7x | - Announced the acquisition of two 58,000 dwt bulk vessels for $56.6 million in May 2024, with expected delivery in Q3 2024[9][14] Q1 2024 Financial Performance This section details the company's financial results for Q1 2024, covering income, balance sheet, and cash flow statements Q1 2024 Financial Results Overview The company's first-quarter 2024 financial performance was characterized by a significant increase in TCE rates and Adjusted EBITDA, despite a slight decline in total revenue and shipping days Q1 2024 Financial Performance Metrics | Metric | Q1 2024 | Q1 2023 | YoY Change | | :--------------------------------- | :---------- | :---------- | :--------- | | Total Revenue | $104.7 million | $113.7 million | -7.9% | | TCE Rates (per day) | $17,697 | $14,372 | +23.1% | | Total Shipping Days | 3,685 | 3,962 | -7% | | Adjusted EBITDA | $19.9 million | $16.2 million | +22.8% | | Adjusted EBITDA Margin | 19.0% | 14.3% | +4.7 pp | | Cash and Cash Equivalents | $95.9 million | $129.1 million | -25.7% | | Total Debt (incl. lease finance) | $260.8 million | N/A | N/A | | Net Debt to Trailing 12-Month Adjusted EBITDA | 2.0x | 1.3x | +0.7x | | Long-term Debt Repaid | $3.4 million | $5.8 million | -41.4% | | Finance Leases Repaid | $3.7 million | $4.1 million | -9.8% | | Cash Dividends Paid | $4.9 million | $4.6 million | +6.5% | Consolidated Statements of Operations For the three months ended March 31, 2024, Pangaea reported a net income attributable to Pangaea Logistics Solutions Ltd. of $11.7 million, a significant increase from $3.5 million in the prior year Consolidated Statements of Operations (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 ($) | Q1 2023 ($) | YoY Change | | :----------------------------------------- | :---------- | :---------- | :--------- | | Total Revenue | $104,748,553 | $113,699,075 | -7.9% | | Voyage Revenue | $87,290,563 | $107,950,123 | -19.1% | | Charter Revenue | $15,031,027 | $5,748,952 | +161.5% | | Terminal & Stevedore Revenue | $2,426,963 | — | N/A | | Total Expenses | $93,720,434 | $107,203,075 | -12.6% | | Income from Operations | $11,028,119 | $6,496,000 | +69.8% | | Unrealized gain (loss) on derivative instruments, net | $5,084,339 | $(423,569) | N/A | | Net Income | $12,665,634 | $3,402,912 | +272.2% | | Net Income attributable to Pangaea Logistics Solutions Ltd. | $11,674,176 | $3,474,267 | +236.0% | | Diluted EPS | $0.25 | $0.08 | +212.5% | Consolidated Balance Sheets As of March 31, 2024, total assets slightly decreased to $703.3 million from $705.2 million at December 31, 2023, while total stockholders' equity increased to $379.3 million Consolidated Balance Sheets (March 31, 2024 vs. December 31, 2023) | Metric | March 31, 2024 ($) | December 31, 2023 ($) | Change | | :----------------------------------------- | :--------------- | :---------------- | :----- | | Total Current Assets | $195,557,103 | $191,825,879 | +1.9% | | Cash and Cash Equivalents | $95,873,255 | $99,037,866 | -3.2% | | Total Assets | $703,305,074 | $705,179,968 | -0.3% | | Total Current Liabilities | $99,337,426 | $105,334,319 | -5.7% | | Secured Long-Term Debt, net | $65,929,536 | $68,446,309 | -3.6% | | Finance Lease Liabilities, net | $139,980,818 | $143,266,867 | -2.3% | | Total Stockholders' Equity | $379,305,652 | $370,195,933 | +2.5% | | Retained Earnings | $166,006,383 | $159,026,799 | +4.4% | Consolidated Statements of Cash Flows Net cash provided by operating activities decreased to $9.0 million in Q1 2024 from $11.6 million in Q1 2023, with investing activities shifting to a net cash outflow Consolidated Statements of Cash Flows (Q1 2024 vs. Q1 2023) | Metric | Q1 2024 ($) | Q1 2023 ($) | Change | | :----------------------------------------- | :---------- | :---------- | :----- | | Net Cash Provided by Operating Activities | $8,999,281 | $11,571,650 | -22.2% | | Net Cash (Used in) Provided by Investing Activities | $(203,618) | $8,794,492 | N/A | | Net Cash Used in Financing Activities | $(11,960,274) | $(19,601,075) | +39.0% | | Net (Decrease) Increase in Cash and Cash Equivalents | $(3,164,611) | $765,067 | N/A | | Cash and Cash Equivalents at End of Period | $95,873,255 | $129,149,673 | -25.7% | Management Perspective & Strategic Initiatives This section outlines management's view on market conditions, business model effectiveness, and strategic priorities for fleet and logistics expansion Management Commentary CEO Mark Filanowski highlighted the effectiveness of Pangaea's cargo-focused business model in driving premium TCE rates and profitability, even in a seasonally softer quarter - Flexible, cargo-focused business model continued to drive premium earned TCE rates, positioning the company for improved operating leverage and year-over-year growth in profitability[8] - Global demand for dry bulk remains strong and the supply of vessels remains constrained, giving confidence in both the near and longer-term outlooks for the business, supporting structurally higher TCE rates in 2024 and beyond[8] - Capital deployment priorities for 2024 are on the build-out of the onshore logistics business and continued investment in the fleet, including a recent long-term lease agreement in the Port of Tampa, Florida[8] - Booked over 2,890 shipping days at an average TCE rate of $16,300 per day into the second quarter, indicating continued strong market conditions[10] Strategic Update Pangaea is focused on developing a leading dry bulk logistics and transportation company by leveraging its integrated shipping and logistics model, ensuring strong fleet utilization, and strategically upgrading its fleet - Investing in the expansion of the logistics business in the Port of Tampa, Florida, through strategic joint operations partnerships and a land lease commitment, building on prior marine port terminal acquisitions[12] - Maintained full utilization of its 24 owned vessels in the first quarter, supplemented with an average of 17 chartered-in vessels to support cargo and COA commitments[13] - Announced the acquisition of two 2016-built 58,000 dwt dry bulk vessels for $56.6 million in May 2024, with delivery expected in Q3 2024, as part of a strategy to upgrade the fleet and opportunistically divest older, non-core assets[14] Non-GAAP Financial Measures This section provides reconciliations and definitions for key non-GAAP metrics used to assess the company's core business performance Reconciliation of Non-GAAP Measures This section provides the reconciliation tables for key non-GAAP financial measures, including Net Transportation and Service Revenue, Adjusted EBITDA, and Adjusted EPS, to their most directly comparable GAAP figures Net Transportation and Service Revenue Reconciliation | Metric | Q1 2024 ($) | Q1 2023 ($) | | :-------------------------------- | :---------- | :---------- | | 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 | $20,686,789 | Adjusted EBITDA Reconciliation | Metric | Q1 2024 ($) | Q1 2023 ($) | | :----------------------------------------- | :---------- | :---------- | | Net Income | $12,665,634 | $3,402,912 | | EBITDA | $23,892,855 | $13,785,704 | | Non-GAAP Adjustments (Net) | $(3,945,662) | $2,452,199 | | Adjusted EBITDA | $19,947,193 | $16,237,903 | Adjusted EPS Reconciliation | Metric | Q1 2024 ($) | Q1 2023 ($) | | :---------------------------------------------------- | :---------- | :---------- | | Net Income attributable to Pangaea Logistics Solutions Ltd. | $11,674,176 | $3,474,267 | | Non-GAAP Adjusted Net Income attributable to Pangaea | $6,589,837 | $5,070,032 | | Adjusted EPS - diluted | $0.14 | $0.11 | Information About Non-GAAP Financial Measures This section clarifies that non-GAAP financial measures are supplementary to GAAP, used for internal decision-making and evaluating core business performance by excluding non-normal course charges - Non-GAAP financial measures are used for internal financial and operational decision-making and to evaluate period-to-period comparisons of core business performance, excluding charges not incurred in the normal course of business[25][26] - Gross Profit represents total revenue less net transportation and service revenue and less vessel depreciation and amortization[27] - Net transportation and service revenue represents total revenue less the total direct costs of transportation and services, including charter hire, voyage, vessel operating, and terminal & stevedore expenses[28] - Adjusted EBITDA excludes interest expense, interest income, income taxes, depreciation and amortization, loss on impairment, loss on sale and leaseback of vessels, share-based compensation, other non-operating income/expense, and other non-recurring items from net income[29] - Adjusted EPS adjusts net income attributable to Pangaea Logistics Solutions Ltd. for items such as loss on sale of vessel, unrealized gains and losses on derivative instruments, and certain non-recurring charges[29] Company Information & Disclosures This section presents an overview of Pangaea's business, details for the Q1 2024 conference call, and important investor relations and forward-looking statement disclaimers About Pangaea Logistics Solutions Ltd. Pangaea Logistics Solutions Ltd. is a global provider of seaborne dry bulk logistics and transportation services, including terminal and stevedoring services - Provides seaborne dry bulk logistics and transportation services, as well as terminal and stevedoring services[31] - Services industrial customers requiring transportation of various dry bulk cargoes, including grains, coal, iron ore, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite, and limestone[31] - Offers comprehensive services including cargo loading/discharge, port/terminal operations, vessel chartering, voyage planning, and vessel technical management[31] First Quarter 2024 Conference Call Pangaea's management team will host a conference call on Friday, May 10, 2024, at 8:00 a.m. ET to discuss the Q1 2024 financial results - Conference call to discuss Q1 2024 financial results on Friday, May 10, 2024, at 8:00 a.m. Eastern Time (ET)[15] - Accompanying presentation materials will be available in the Investor Relations section of the Company's website at https://www.pangaeals.com/investors/[15](index=15&type=chunk) - Live teleconference access: Domestic 1-888-632-3384, International 1-785-424-1794, Conference ID: PANLQ124. Replay available through May 17, 2024[16] Investor Relations & Forward-Looking Statements This section provides contact details for investor relations and includes a standard forward-looking statements disclaimer, highlighting various risk factors that could cause actual results to differ materially from expectations - Investor Relations Contacts: Gianni Del Signore (Chief Financial Officer) and Stefan C. Neely (Vallum Advisors)[32] - Contains "forward-looking statements" subject to a number of risk factors and uncertainties that could cause actual results to differ materially, including strength of world economies, fluctuations in charter rates, changes in operating expenses, and geopolitical conditions[32] - The Company disclaims any obligation to publicly update or revise these statements, except as required by law[32]