Company Posts Record Annual Revenue, Strong
Demand for Specialized Services
Pangaea Logistics Solutions Ltd. (“Pangaea” or the “Company”)
(NASDAQ: PANL), a global provider of comprehensive maritime
logistics solutions, announced today its results for the year
ended December 31, 2014.
2014 Full Year Highlights
- Record revenue of $398.3 million
for the year ended December 31, 2014
- Net loss attributable to Pangaea
Logistics Solutions Ltd. of $12.1 million for the year ended
December 31, 2014
- Non-GAAP adjusted net income
attributable to Pangaea Logistics Solutions Ltd.1 of $1.1 million
for the year ended December 31, 2014
- Adjusted EBITDA2 of $20.7 million for
the year ended December 31, 2014
- A 7% increase in total ship days and a
9% increase in voyage days in 2014 over 2013, demonstrating
increasing demand for services
- Average time charter equivalent rates
of $12,317 per day for the year ended December 31, 2014
- Public listing on NASDAQ in October
2014 via merger
- Delivery of three new ice-class 1A
panamax dry bulk carriers including the m/v Nordic Oshima in
September 2014, and m/v Nordic Olympic and m/v Nordic Odin in
February 2015
- Signed new long-term contracts of
affreightment (“COAs”) to further support its ice-class fleet
Edward Coll, Chairman and Chief Executive Officer of Pangaea,
stated, “Pangaea was able to achieve nearly $400 million in revenue
in 2014 despite the continued weakness of the dry bulk rate
environment. In the face of headwinds related to the sector
operating at historic lows, we have advantageously strengthened our
core businesses in backhaul and the ice-class trades to position
the Company for profitability and continued growth. This is best
illustrated by the new contracts we have recently announced, which
complement our business strategy and will add incremental profit to
the bottom line.”
Results for the Full Year Ended December 31, 2014
The Company had a net loss attributable to Pangaea Logistics
Solutions Ltd. of $12.1 million for the year ended December 31,
2014, which includes non-cash losses on impairment of vessels and
other non-recurring charges totaling $13.2 million, compared to net
income attributable to Pangaea Logistics Solutions Ltd. of $15.5
million for the year ended December 31, 2013. This decrease in
income was primarily caused by a general downturn in the shipping
markets and the losses on impairment of vessels, and costs incurred
as a publicly traded company in 2014.
“We will continue to look for opportunities in both the charter
and purchase and sale markets, as we continue to navigate this
prolonged market downturn,” Coll continued. “We remain confident
that our distinctive ice-class and backhaul businesses will provide
positive operating cash flows despite broader market trends. We
remain focused on optimizing our owned and chartered fleet
commitments, controlling costs, and conserving cash.”
Cash Flows
Cash and cash equivalents were $29.8 million as of December 31,
2014, compared with $18.9 million on December 31, 2013.
For the year ended December 31, 2014, the Company’s net cash
provided by operating activities was $24.6 million, compared to
$21.1 million for the year ended December 31, 2013.
For the years ended December 31, 2014 and 2013, net cash used in
investing activities was $39.2 million and $84.0 million,
respectively. Net cash provided by financing activities was $25.5
million and $62.1 million for the years ended December 31, 2014 and
2013, respectively. This reflects increased borrowing to finance
the purchase of additional vessels, including the m/v Nordic
Oshima.
“We gratefully acknowledge the continued participation of our
long-time lender, DVB Bank, and our other banking partners, in the
financing of our latest newbuilding deliveries,” Coll added.
The Company also announced that it determined that it was in the
mutual best interests of ASO 2020 Maritime and the Company not to
undertake the transaction proposed in the October 2014 letter of
intent.
1 Adjusted net income attributable to Pangaea Logistics
Solutions Ltd. is a non-GAAP measure. Adjusted net income
attributable to Pangaea Logistics Solutions Ltd. represents net
(loss) income attributable to Pangaea Logistics Solutions Ltd.
before loss on impairment of vessels and non-recurring charges. See
Reconciliation of Adjusted Net Income, Adjusted EBITDA, Pro Forma
Adjusted Earnings Per Share.
2 Adjusted EBITDA is a non-GAAP measure and represents operating
earnings before interest expense, income taxes, depreciation and
amortization, loss on impairment of vessels and other non-operating
income and/or expense, if any. See Reconciliation of Adjusted Net
Income, Adjusted EBITDA, Pro Forma Adjusted Earnings Per Share.
Pangaea Logistics Solutions
Ltd.Consolidated Statements of Operations
Year ended December 31,
2014
2013 Revenues: Voyage revenue
$
345,235,869 $ 336,160,290 Charter revenue
53,040,336 56,310,682
398,276,205 392,470,972 Expenses: Voyage expense
189,474,578 196,035,698 Charter hire expense
149,653,797 130,879,639 Vessel operating expenses
29,583,386 22,958,049 General and administrative
12,831,330 11,599,121 Depreciation and amortization
11,668,128 9,614,859 Loss on impairment of vessels
11,506,631 - Gain on sale of vessels
(3,947,600 ) - Total expenses
400,770,250 371,087,366 (Loss) income from operations
(2,494,045 ) 21,383,606 Other income
(expense): Interest expense, net
(5,644,057 )
(5,487,246 ) Interest expense related party debt
(263,648
) (411,784 ) Imputed interest on related party long-term
debt
(322,946 ) (1,117,231 ) Unrealized (loss) gain
on derivative instruments
(1,230,132 ) 1,101,239
Other (expense) income
(3,693,118 )
45,937 Total other expense, net
(11,153,901 )
(5,869,085 ) Net (loss) income
(13,647,946 )
15,514,521 Loss (income) attributable to non-controlling interests
1,519,497 (62,152 ) Net (loss) income
attributable to Pangaea Logistics Solutions Ltd.
$
(12,128,449 ) $ 15,452,369 (Loss)
earnings per common share: Basic
$ (1.61 ) $
(0.65 ) Diluted
$ (1.61 ) $ (0.65 )
Weighted average shares used to compute (loss) earnings per common
share Basic and diluted
18,726,308
13,421,955
Pangaea Logistics Solutions
Ltd.Consolidated Balance Sheets
December 31, 2014 December 31, 2013
Assets
Current Assets Cash and cash equivalents
$ 29,817,507
$ 18,927,927 Restricted cash
1,000,000 500,000 Accounts
receivable (net of allowance of $4,029,669 at December 31, 2014 and
$1,662,593 at December 31, 2013)
27,362,216 44,688,470
Bunker inventory
15,601,659 21,072,192 Advance hire, prepaid
expenses and other current assets
6,568,234 12,877,771
Vessels held for sale, net
4,523,804 -
Total current assets
84,873,420 98,066,360
Fixed assets, net
207,667,613 197,153,889 Investment in
newbuildings in-process
38,471,430 31,900,000 Other
noncurrent assets
1,450,802 3,253,022
Total assets $ 332,463,265 $
330,373,271
Liabilities, convertible redeemable
preferred stock and stockholders' equity Current
liabilities Accounts payable, accrued expenses and other current
liabilities
$ 40,201,794 $ 45,878,378 Related party
debt
59,102,077 7,616,248 Deferred revenue
11,748,926
16,155,498 Current portion long-term debt
17,807,674
16,065,483 Line of credit
3,000,000 3,000,000 Dividend
payable
12,824,825 23,177,503
Total current liabilities
144,685,296 111,893,110
Secured long-term debt, net
87,430,416 83,302,421 Related
party long-term debt, net
- 17,303,918 Commitments
and contingencies Convertible redeemable preferred stock of
Bulk Partners (Bermuda) Ltd., net of issuance costs ($1,000 par
value, 112,500 shares authorized, 0 and 89,114 shares issued and
outstanding at December 31, 2014 and 2013, respectively
-
103,236,399 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 34,756,980 shares issued and outstanding at
December 31, 2014, 13,421,955 shares issued and outstanding at
December 31, 2013
3,476 1,342 Additional paid-in capital
133,955,445 85,987 Accumulated deficit
(36,142,727 ) (5,933,870 )
Total Pangaea
Logistics Solutions Ltd. equity (deficit) 97,816,194
(5,846,541 ) Non-controlling interests
2,531,359
20,483,964 Total stockholders' equity
100,347,553 14,637,423
Total liabilities, convertible
redeemable preferred stock and stockholders'
equity $ 332,463,265 $ $330,373,271
Pangaea Logistics Solutions,
Ltd.Consolidated Statements of Cash Flows
Years Ended December 31, 2014
2013
Operating activities
Net (loss) income
$ (13,647,946 ) $ 15,514,521
Adjustments to reconcile net (loss) income to net cash provided by
operations: Depreciation and amortization expense
11,668,128
9,614,859 Amortization of deferred financing costs
954,604
949,929 Unrealized loss (gain) on derivative instruments
1,230,132 (1,101,239 ) Loss (income) from equity method
investee
265,443 (10,224 ) Provision for doubtful accounts
2,764,836 652,318 Gain on sales of vessels
(3,947,600
) - Charge for impairment of vessels
11,506,631 -
Write off unamortized financing costs of repaid debt
471,834
- Amortization of discount on related party long-term debt
322,946 1,117,231 Share-based compensation
1,816 -
Change in operating assets and liabilities: Increase in restricted
cash
(500,000 ) - Accounts receivable
14,561,418 (15,445,496 ) Bunker inventory
5,470,533
(7,215,740 ) Advance hire, prepaid expenses and other current
assets
4,291,713 (2,643,908 ) Account payable, accrued
expenses and other current liabilities
(6,413,198 )
16,952,155 Deferred revenue
(4,406,572 )
2,733,051 Net cash provided by operating activities
24,594,718 21,117,457
Investing activities
Purchase of vessels
(43,914,439 ) (49,736,191 )
Proceeds from sales of vessels
23,279,387 - Deposits on
newbuildings in-process
(13,101,430 ) (31,900,000 )
Drydocking costs
(4,880,041 ) (731,285 ) Purchase of
building and equipment
(560,955 ) (112,899 ) Deposits
on vessel purchase
- (1,500,000 ) Net
cash used in investing activities
(39,177,478 )
(83,980,375 )
Financing activities Proceeds from
mergers
5,035,636 - Proceeds of related party debt
17,651,149 29,554,972 Payments on related party debt
(225,291 ) (5,274,075 ) Proceeds from long-term debt
35,500,000 32,205,000 Payments of financing and issuance
costs
(484,380
) (1,799,314 ) Payments on long-term debt
(30,051,021
) (14,401,426 ) Merger costs
(1,853,753 ) -
Proceeds from issuance of convertible redeemable preferred stock
- 21,899,180 Common stock dividends paid
(100,000
) (100,000 ) (Increase) decrease in restricted cash 187,500
Distributions to non-controlling interest
-
(176,667 ) Net cash provided by financing activities
25,472,340
62,095,170 Net increase (decrease) in cash and cash
equivalents
10,889,580 (767,748 ) Cash and cash equivalents
at beginning of period
18,927,927
19,695,675 Cash and cash equivalents at end of period
$ 29,817,507 $ 18,927,927
Pangaea Logistics Solutions,
Ltd.Reconciliation of Adjusted Net Income, Adjusted EBITDA, Pro
Forma Adjusted Earnings/(Loss) Per Share
Year ended December 31, (In thousands of U.S. Dollars except
for share and per share data)
2014 2013
Net (loss) income attributable to
Pangaea Logistics Solutions Ltd. and Adjusted net
income
attributable to Pangaea Logistics Solutions Ltd.
Net (loss) income attributable to Pangaea Logistics Solutions Ltd.
$ (12,128 ) $ 15,452 Non-GAAP plus loss on impairment of vessels
11,507 - plus non-recurring charges 1,699 -
Non-GAAP Adjusted net income attributable to Pangaea
Logistics Solutions Ltd. $ 1,077 $ 15,452
Adjusted
EBITDA
(Loss) income from operations $ (2,494 ) $
21,384
Non-GAAP plus depreciation & amortization 11,668 9,615 plus
loss on impairment of vessels 11,507 -
Non-GAAP Adjusted EBITDA $ 20,681 $
30,999
(Loss) Per Common
Share
Net (loss) income attributable to Pangaea Logistics Solutions Ltd.
(12,128 ) Net income attributable to Bulk Partners (Bermuda) Ltd.
15,452 less adjustments related to pre-merger capital structure
(18,080 ) (24,241 ) Total (loss) allocated to common
stock $ (30,209 ) $ (8,788 ) Weighted average number of common
shares outstanding 18,726,308 13,421,955 (Loss) per common share $
(1.61 ) $ (0.65 )
Pro Forma
Adjusted EPS
Total (loss) allocated to common stock $ (30,209 ) $ (8,788 )
Non-GAAP plus loss on impairment of vessels 11,507 - plus
non-recurring charges 1,699 - plus adjustments related to
pre-merger capital structure 18,080 24,241
Non-GAAP Pro forma adjusted total earnings allocated to
common stock $ 1,077 $ 15,542 Non-GAAP Pro forma
weighted average number of common shares outstanding 34,697,161
34,696,997 Non-GAAP Pro forma adjusted EPS $ 0.03 $ 0.45
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 (1) non-GAAP adjusted net (loss) income attributable to
Pangaea Logistics Solutions Ltd. (2) non-GAAP adjusted EBITDA and
(3) non-GAAP pro forma adjusted earnings per share (“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 these 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 these
non-GAAP financial measures provide meaningful supplemental
information regarding the performance of our core business by
excluding non-cash losses on impairment of vessels and
non-recurring charges that may not be indicative of our recurring
core business operating results. These non-GAAP financial measures
also facilitate management's internal planning and comparisons to
our historical performance and liquidity. We believe these 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.
Non-GAAP Adjusted net income attributable to Pangaea
Logistics Solutions Ltd., Adjusted EBITDA, and pro forma adjusted
EPS. Adjusted net income attributable to Pangaea Logistics
Solutions Ltd. Is defined represents as net (loss) income
attributable to Pangaea Logistics Solutions Ltd. calculated in
accordance with GAAP, plus non-cash losses on impairment of vessels
and non-recurring charges. Adjusted EBITDA represents operating
earnings before interest expense, income taxes, depreciation,
amortization and loss on impairment of vessels. Earnings/(loss) per
share represents total earnings/(loss) allocated to common stock
divided by the weighted average number of common shares
outstanding. Pro forma adjusted earnings/(loss) per share
represents adjusted total earnings/(loss) allocated to common stock
divided by the weighted average number of shares giving effect to
the mergers as if they had been consummated as of January 1,
2013.
There are limitations related to the use of non-GAAP Adjusted
net income attributable to Pangaea Logistics Solutions Ltd.,
Adjusted EBITDA, and pro forma adjusted EPS versus net income,
income from operations, and EPS calculated in accordance with GAAP.
In particular, Pangaea’s definition of Adjusted net income
attributable to Pangaea Logistics Solutions Ltd., Adjusted EBITDA,
and pro forma adjusted EPS used here is not comparable to net
income, EBITDA, and EPS . Management provides specific information
in order to reconcile the GAAP or non-GAAP measure to Adjusted net
income attributable to Pangaea Logistics Solutions Ltd., Adjusted
EBITDA, and pro forma adjusted EPS.
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.
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 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.
Investor RelationsProsek PartnersThomas Rozycki,
212-279-3115 x 208Managing Directortrozycki@prosek.com
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