Pangaea Logistics Solutions Ltd. (“Pangaea” or the “Company”)
(NASDAQ:PANL), a global provider of comprehensive maritime
logistics solutions, announced today the results for Bulk Partners
(Bermuda) Ltd., (“Bulk Partners”) for the third quarter
ended September 30, 2014. Future reporting will be from
Pangaea, the 100% parent of Bulk Partners as of October 1,
2014.
Third Quarter 2014 Highlights & Recent
Developments
- Revenue of $91.2 million for
the third quarter of 2014
- 25% increase in voyage days,
demonstrating increasing demand for services
- Completed public listing; began trading
under NASDAQ: PANL
- Took delivery of m/v Nordic Oshima, a
76,180 dwt ice-class 1A panamax dry bulk carrier
- Signed two new long-term contracts of
affreightment (“COAs”) to support its ice-class fleet
Edward Coll, Chairman and Chief Executive Officer of Pangaea
Logistics Solutions, stated, “The third quarter of 2014 presented a
challenging rate environment, continuing what we experienced during
the second quarter. Despite these headwinds, we were able
to effectively leverage our relationships in the industry and
create revenue opportunities where others could not. Further, we
are incredibly pleased to have begun publicly trading and look
forward to building increased shareholder value.”
Third Quarter and Nine-Months 2014 Financial Results
For the quarter ended September 30, 2014, total revenue
was $91.2 million. Total revenue was $295.2 million for the
nine months ended September 30, 2014.
Bulk Partners reported a loss from operations of $1.9 million
for the third quarter of 2014, and income from operations of $11.5
million for the nine months ended September 30, 2014.
Bulk Partners reported a net loss after non-controlling
interests of $2.9 million for the third quarter, and net
income after non-controlling interests of $4.9 million for the nine
months ended September 30, 2014.
“Our voyage days increased 25% in the quarter over the same
period last year, demonstrating strong demand for our services,”
Coll added. “That said, operating margins were under significant
pressure due to weakened market rates in the vast majority of the
dry shipping segments.”
Assuming the merger had been consummated as of January 1, 2014,
the Company’s pro forma earnings per share for the nine months
ended September 30, 2014 was $0.11 basic and diluted, which were
calculated based on 34,696,997 shares.
Cash Flows
For the nine months ended September 30, 2014, Bulk
Partners’ net cash provided by operating activities was $16.4
million, compared to $18.9 million for the nine months
ended September 30, 2013.
For the nine months ended September 30, 2014 and 2013, net
cash used in investing activities was $30.1 million and
$75.7 million, respectively. Net cash provided by financing
activities was $14.9 million and $60.9 million for the nine
months ended September 30, 2014 and 2013, respectively. This
reflects increased borrowing to finance the purchase of additional
vessels and take delivery of the m/v Nordic Oshima.
“We continue to invest operating cash flow in newbuilding
vessels in the ice-class trade, a market that is well-protected
from the newbuilding backlog and where we have distinct strategic
advantages,” Coll said.
Recent Developments
The following events took place after the close of the third
quarter:
- On October 1, 2014, Bulk Partners
completed its merger with Quartet. The combined company is a wholly
owned subsidiary of Pangaea Logistics Solutions. On October 3,
2014, the Company’s common shares commenced trading on NASDAQ under
the ticker symbol PANL.
- On October 8, 2014, Pangaea announced
that ASO 2020 Maritime, an affiliate of the Alexander S. Onassis
Public Benefit Foundation, executed a letter of intent to acquire a
stake in Pangaea.
- On October 28, 2014, the Company
announced the delivery of the m/v Nordic Oshima, a 76,180 dwt
ice-class 1A panamax dry bulk carrier. Pangaea took delivery of the
vessel on September 25, 2014 from Oshima Shipbuilding Co.,
Ltd.
- On November 14, 2014, the Company
announced long-term COAs that will help support the activities of
its specialized ice-class 1A panamax vessels.
- The first contract is a new agreement
with an existing client to carry cargo in the Baltic region through
2017. Beginning in 2015, the contract will provide an estimated 240
cargo days of coverage and will contribute revenue of approximately
$10 million per year.
- The second contract is with a new,
blue-chip client to carry cargo from 2015 to 2018. Pangaea’s
ice-hardened fleet is contracted to transport cargo for an
estimated 600 days each summer in the far northern latitudes,
contributing revenue of approximately $22 million per year.
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.
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. 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 drybulk 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.
Bulk Partners (Bermuda) LTD. Consolidated
Statements of Income Three
months ended September 30, Nine months ended September 30,
2014 2013
2014 2013
(unaudited) (unaudited)
(unaudited) (unaudited) Revenues: Voyage revenue $
80,604,263 $ 80,371,836 $ 252,084,882 $ 246,642,009 Charter revenue
10,600,956 14,797,016 43,112,456 34,328,821 91,205,219 95,168,852
295,197,338 280,970,830 Expenses: Voyage expense 46,598,184
45,193,740 136,624,745 147,119,813 Charter hire expense 34,315,719
31,984,645 112,271,588 86,098,418 Vessel operating expense
7,935,565 6,148,253 22,587,314 15,710,044 General and
administrative 2,790,350 2,747,691 7,719,226 8,592,008 Depreciation
and amortization 3,118,973 2,518,726 8,415,174 7,060,351 Gain on
sale of vessels (1,661,368) - (3,947,600) - Total expenses
93,097,423 88,593,055 283,670,447 264,580,634 (Loss) income
from operations (1,892,204) 6,575,797 11,526,891 16,390,196
Other (expense) income: Interest expense (1,348,252) (1,419,338)
(4,338,904) (3,889,788) Interest expense related party debt
(108,422) (194,543) (170,784) (357,341) Imputed interest on related
party long-term debt - (317,942) (322,947) (793,222) Unrealized
(loss) gain on derivative instruments (551,354) 1,854,930
(2,123,246) 183,287 Other income (expense) 83,803 (515,677) 8,030
(197,127) Total other expense, net (1,924,225) (592,570)
(6,947,851) (5,054,191) Net (loss) income (3,816,429)
5,983,227 4,579,040 11,336,005 Loss (income) attributable to
noncontrolling interests 906,822 (113,827) 334,563 (820,323) Net
(loss) income attributable to Pangaea Logistics Solutions Ltd. $
(2,909,607) $ 5,869,400 $ 4,913,603 $ 10,515,682 Loss per
common share: Basic $ (64.68) $ (7.77) $ (15.92) $ (63.30) Diluted
$ (64.68) $ (7.77) $ (15.92) $ (63.30) Weighted average
shares used to compute loss per common share, basic and diluted
87,329 87,329 87,329 87,329
Bulk Partners
(Bermuda) LTD. Consolidated Balance Sheets
September 30, December 31,
2014 2013
(unaudited) Assets Current assets Cash and cash
equivalents
$ 20,157,708 $ 18,927,927 Restricted cash
500,000 500,000
Accounts receivable (net of allowance of
$2,047,603 atSeptember 30, 2014 and $1,662,593 at December 31,
2013)
30,462,924 44,688,470 Other receivables
287,668
133,646 Bunker inventory
21,050,009 21,072,192 Advance hire,
prepaid expenses and other current assets
10,916,092
12,744,125 Total current assets
83,374,401 98,066,360
Fixed assets, net
225,179,262 197,153,889 Investment in
newbuildings in-process
25,576,943 31,900,000 Other
noncurrent assets
1,495,078 3,253,022
Total assets
$ 335,625,684 $ 330,373,271
Liabilities, convertible redeemable
preferred stockand stockholders' equity
Current liabilities Accounts payable and accrued expenses
$
40,623,223 $ 45,878,378 Related party debt
46,371,713
7,616,248 Deferred revenue
5,862,960 16,155,498 Current
portion long-term debt
18,686,730 16,065,483 Line of credit
3,000,000 3,000,000 Dividend payable
29,381,125
23,177,503 Other current liablities
263,982 - Total current
liabilties
144,189,733 111,893,110 Secured long-term
debt, net
91,719,946 83,302,421 Related party long-term
debt, net
- 17,303,918 Commitments and contingencies
Convertible redeemable preferred stock,
net of issuance costs($1,000 par value, 112,500 shares authorized,
89,114and 64,047 shares issued and outstanding at September 30,
2014December 31, 2013, respectively)
103,236,399 103,236,399 Stockholders' equity
(deficit):
Common stock ($1.00 par value, 199,829
shares authorized87,329 shares issued and outstanding at September
30, 2014,December 31, 2013 and December 31, 2012191,606 shares
issued and outstanding on pro forma basis
87,329 87,329 Additional paid-in capital
- -
Accumulated deficit
(7,324,015) (5,933,870)
Total Pangaea
Logistics Solutions Ltd. deficit (7,236,686) (5,846,541)
Non-controlling interest
3,716,292 20,483,964 Total
stockholders' (deficit) equity
(3,520,394) 14,637,423
Total liabilities, convertible reemable preferred stock
and stockholders' (deficit) equity $
335,625,684 # $ 330,373,271 Bulk
Partners (Bermuda) LTD. Consolidated Statements of Cash
Flows Nine months ended
September 30, 2014 2013
(unaudited)
(unaudited)
Operating activities Net income
$
4,579,040 $ 11,336,005 Adjustments to reconcile net income to
net cash provided by operations: Depreciation and amortization
expense
8,415,174 7,060,351 Amortization of deferred
financing costs
627,961 658,089 Unrealized loss (gain) on
derivative instruments
2,123,246 (183,287) Provision for
doubtful accounts
(385,010) - Write off of unamortized
financing costs
241,522 - Amortization of discount on
related party long-term debt
322,947 - Imputed interest on
related party long-term debt
- 793,222 Change in operating
assets and liabilities: Accounts receivable
14,610,555
1,018,218 Other receivables
(154,022) (56,781) Bunker
inventory
22,183 (4,490,193) Advance hire, prepaid expenses
and other current assets
1,770,164 687,302 Other non-current
assets
(236,223) - Account payable, accrued expenses and
other current liabilities
(4,570,546) 2,343,788 Other
current liabilities
(657,491) (381,011) Deferred revenue
(10,292,538) 147,241 Net cash provided by operating
activities
16,416,962 18,932,944
Investing
activites Purchase of vessels
(38,288,452) (75,588,933)
Sale of vessels
19,331,787 - Deposits on newbuildings
in-process
(6,960,499) - Drydocking costs
(3,639,677)
- Purchase of building and equipment
(558,376) (92,388) Net
cash used in investing activities
(30,115,217) (75,681,321)
Financing activities Proceeds of related party debt
4,750,000 21,559,972 Payments on related party debt
(54,507) (203,582) Proceeds from long-term debt
35,500,000 32,205,000 Payments of financing and issuance
costs
(366,800) (1,595,450) Payments on long-term debt
(24,800,657) (9,713,178) Proceeds from issuance of
convertible redeemable preferred stock
- 18,199,180 Common
stock dividends paid
(100,000) (100,000) Decrease (increase)
in restricted cash
- 687,500 Distributions to
non-controlling interest
- (176,667) Net cash provided by
financing activities
14,928,036 60,862,775 Net
increase in cash and cash equivalents
1,229,781 4,114,398
Cash and cash equivalents at beginning of period
18,927,927
19,695,675 Cash and cash equivalents at end of period
$
20,157,708 $ 23,810,073
Bulk Partners
(Bermuda) LTD. Consolidated Statements of Cash Flows
Nine months ended September
30, 2014 2013
(unaudited) (unaudited)
Disclosure of noncash items Dividends declared, not
paid
$ 6,303,622 $ 5,769,050 Issuance of convertible
redeemable preferred stock
as settlement of accrued dividends
$ - $ 213,152 Issuance of convertible redeemable preferred
stock in settlement of notes payable
$ - $ 1,385,503
Beneficial conversion feature of convertible redeemable preferred
stock at issuance date
$ - $ 5,748,464 Modification of
Shareholder loan to on Demand
$ 16,433,108 Imputed
interest on related party long-term debt
$ 322,947 $ 793,222
Discount on related party long-term debt
$ - $ 17,080,063
Cash paid for interest
$ 3,660,117 $ 4,366,007
Investor RelationsProsek PartnersThomas Rozycki,
212-279-3115 x208Managing Directortrozycki@prosek.com
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