NEWPORT, R.I., Aug. 15,
2016 /PRNewswire/ -- Pangaea Logistics Solutions Ltd.
("Pangaea" or the "Company") (NASDAQ: PANL), a global provider of
comprehensive maritime logistics solutions, announced today its
results for the three months ended June 30, 2016.
Second Quarter Highlights
- Net income attributable to Pangaea Logistics Solutions Ltd. was
$0.1 million, compared to net income
of $5.5 million in the second quarter
of 2015
- Pro forma adjusted earnings per common share1 of
$0.004 for 2016 compared to pro forma
adjusted earnings per common share of $0.15 in the second quarter of 2015
- Adjusted EBITDA2 decreased to $4.3 million for 2016, compared with $10.3 million for the second quarter of 2015
- Cash flow from operations was $10.0
million for the six months ended June
30, 2016, compared with $12.8
million for the six months ended June
30, 2015
- At the end of the second quarter, Pangaea had $32.4 million in cash and cash equivalents
- General and administrative expenses decreased 25% to
$2.9 million from $3.9 million in the second quarter of 2015.
Edward Coll, Chairman and Chief
Executive Officer of Pangaea Logistics Solutions, commented, "This
quarter saw us continue to use our unique business model, coupled
with rigorous expense management, to remain profitable in the face
of a very difficult shipping market. Despite the ongoing challenges
presented by the declining growth in demand for the cargoes we
carry, combined with too many ships on the water, we have
maintained a healthy balance sheet and generated positive
cash flow from our operations. This is a testament to both
our strategy and our world class team."
Results for the Three Months Ended June 30, 2016 and 2015
For the three months ended June 30, 2016, the Company
reported net income of $0.1 million,
or $0.004 per common share compared
to net income of $5.5 million, or
$0.15 per common share for the same
period of 2015.
Adjusted EBITDA was $4.3 million
in the three months ended June 30, 2016 and $10.3 million for the three months ended
June 30, 2015. The change was primarily attributable to
the continued weakness in the drybulk shipping market and to the
reduction in the TCE rate attributable to the amended COA that
employs three of the Company's vessels on a continuous basis.
Pangaea's strategy of relying on COAs and minimizing risks
associated with falling market rates by chartering vessels into our
fleet only as necessary to perform under the COAs and firm
contracts has continued to serve the Company well. This flexible
fleet strategy reduces the risk of idle time in an environment with
limited profitable fronthaul employment.
____________________________________________________________________
1 Earnings per share represents total earnings allocated
to common stock divided by the weighted average number of common
shares outstanding. Pro forma adjusted earnings per share
represents adjusted total earnings allocated to common stock
divided by the weighted average number of shares. See
Reconciliation of Adjusted EBITDA and 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, and other non-operating
income and/or expense, if any. See Reconciliation of Adjusted
EBITDA and Pro Forma Adjusted Earnings Per Share.
Total revenue for the three months ended June 30, 2016
declined 13% to $57.0 million from
$65.1 million in 2015. This decline
in total revenue was primarily attributable to the weak market.
Markets
Mr. Coll noted, "Although rates have improved slightly from
earlier this year the market continues to be very challenged. While
we are optimistic that the market has bottomed and begun to
rationalize, the timing of a recovery remains impossible to
predict. Beyond the already difficult dry bulk market fundamentals,
macroeconomic and geopolitical uncertainty and shocks such as
Brexit continue to be headwinds. However, thanks to our financial
strength, unique expertise in less-commoditized trades and deep
relationships with customers, financial sponsors, and other
stakeholders, we have been able to continue to selectively grow our
business. We are confident these steps will not only produce
results in the near-term, but will also be rewarded even more
richly in the long-term when the cycle turns."
Cash Flows
Cash and cash equivalents were $32.4
million as of June 30, 2016, compared with $37.5 million on December
31, 2015.
For the six months ended June 30, 2016, the Company's net
cash provided by operating activities was $10.0 million, compared to $12.8 million for the six months ended
June 30, 2015.
Conference Call Details
The Company's management team will host a conference call to
discuss the Company's financial results tomorrow,
August 16, 2016 at 8:00 a.m., Eastern Time (ET). Following a
recorded discussion of the quarterly results, Edward Coll, Chairman and Chief Executive
Officer, and Anthony Laura, Chief
Financial Officer, will be available to answer questions from
attending participants. 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# 53702106.
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 one week and
can be accessed by calling (800) 585-8367 (domestic) or (404)
537-3406 (international) and referencing ID# 53702106.
Pangaea Logistics
Solutions Ltd.
|
Condensed
Consolidated Statements of Income
|
(unaudited)
|
|
|
|
Three Months Ended
June 30,
|
|
2016
|
|
2015
|
|
|
|
|
Revenues:
|
|
|
|
Voyage
revenue
|
$
|
53,548,976
|
|
|
$
|
60,902,796
|
|
Charter
revenue
|
3,412,729
|
|
|
4,199,976
|
|
|
56,961,705
|
|
|
65,102,772
|
|
Expenses:
|
|
|
|
Voyage
expense
|
26,766,724
|
|
|
28,129,297
|
|
Charter hire
expense
|
15,041,229
|
|
|
15,195,199
|
|
Vessel operating
expense
|
7,904,828
|
|
|
7,116,502
|
|
General and
administrative
|
2,935,950
|
|
|
3,916,119
|
|
Depreciation and
amortization
|
3,528,596
|
|
|
3,271,238
|
|
Loss on sale of
vessels
|
—
|
|
|
477,888
|
|
Total
expenses
|
56,177,327
|
|
|
58,106,243
|
|
|
|
|
|
Income from
operations
|
784,378
|
|
|
6,996,529
|
|
|
|
|
|
Other (expense)
income:
|
|
|
|
Interest expense,
net
|
(1,530,425)
|
|
|
(1,279,933)
|
|
Interest expense on
related party debt
|
(75,010)
|
|
|
(110,763)
|
|
Unrealized gain on
derivative instruments
|
1,387,391
|
|
|
363,096
|
|
Other income
(expense)
|
67,661
|
|
|
60,935
|
|
Total other expense,
net
|
(150,383)
|
|
|
(966,665)
|
|
|
|
|
|
Net income
|
633,995
|
|
|
6,029,864
|
|
Income attributable
to noncontrolling interests
|
(504,361)
|
|
|
(569,227)
|
|
Net income
attributable to Pangaea Logistics Solutions Ltd.
|
$
|
129,634
|
|
|
$
|
5,460,637
|
|
|
|
|
|
Earnings per common
share:
|
|
|
|
Basic
|
$
|
—
|
|
|
$
|
0.15
|
|
Diluted
|
$
|
—
|
|
|
$
|
0.15
|
|
|
|
|
|
Weighted average
shares used to compute earnings
|
|
|
|
per common
share
|
|
|
|
Basic
|
35,150,453
|
|
|
35,240,373
|
|
Diluted
|
35,337,290
|
|
|
35,240,373
|
|
Pangaea Logistics
Solutions Ltd.
|
Condensed
Consolidated Balance Sheets
|
|
|
June 30,
2016
|
|
December 31,
2015
|
|
(unaudited)
|
|
|
Assets
|
|
|
|
Current
assets
|
|
|
|
Cash and cash
equivalents
|
$
|
32,423,408
|
|
|
$
|
37,520,240
|
|
Restricted
cash
|
1,503,341
|
|
|
2,003,341
|
|
Accounts receivable
(net of allowance of $4,761,813 at
|
|
|
|
June 30, 2016 and
$5,067,194 at December 31, 2015)
|
14,480,516
|
|
|
19,617,943
|
|
Bunker
inventory
|
8,390,900
|
|
|
7,490,590
|
|
Advance hire, prepaid
expenses and other current assets
|
3,761,628
|
|
|
2,679,292
|
|
Total current
assets
|
60,559,793
|
|
|
69,311,406
|
|
|
|
|
|
Fixed assets,
net
|
282,077,776
|
|
|
255,145,807
|
|
Investments in
newbuildings in-process
|
8,848,000
|
|
|
42,505,783
|
|
Total
assets
|
$
|
351,485,569
|
|
|
$
|
366,962,996
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
Current
liabilities
|
|
|
|
Accounts payable,
accrued expenses and other current liabilities
|
$
|
18,405,761
|
|
|
$
|
22,156,202
|
|
Related party
debt
|
10,976,423
|
|
|
13,321,419
|
|
Deferred
revenue
|
4,349,557
|
|
|
4,448,795
|
|
Current portion
long-term debt
|
20,091,616
|
|
|
19,499,262
|
|
Dividend
payable
|
12,624,825
|
|
|
12,724,825
|
|
Total current
liabilities
|
66,448,182
|
|
|
72,150,503
|
|
|
|
|
|
Secured long-term
debt, net
|
117,209,252
|
|
|
129,496,153
|
|
|
|
|
|
Commitments and
contingencies (Note 7)
|
|
|
|
|
|
|
|
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; 36,525,053 shares issued
and outstanding at June 30, 2016; 36,503,837 shares issued and
outstanding and December 31, 2015
|
3,653
|
|
|
3,650
|
|
Additional paid-in
capital
|
133,349,031
|
|
|
133,075,409
|
|
Accumulated
deficit
|
(23,539,795)
|
|
|
(24,866,534)
|
|
Total Pangaea
Logistics Solutions Ltd. equity
|
109,812,889
|
|
|
108,212,525
|
|
Non-controlling
interests
|
58,015,246
|
|
|
57,103,815
|
|
Total stockholders'
equity
|
167,828,135
|
|
|
165,316,340
|
|
Total liabilities
and stockholders' equity
|
$
|
351,485,569
|
|
|
$
|
366,962,996
|
|
Pangaea Logistics
Solutions Ltd.
|
Condensed
Consolidated Statements of Cash Flows
|
|
|
|
Six Months Ended
June 30,
|
|
2016
|
|
2015
|
Operating
activities
|
|
|
|
Net income
|
$
|
2,238,169
|
|
|
$
|
15,359,523
|
|
Adjustments to
reconcile net income to net cash provided by operations:
|
|
|
|
Depreciation and
amortization expense
|
7,044,052
|
|
|
6,261,832
|
|
Amortization of
deferred financing costs
|
354,431
|
|
|
404,968
|
|
Unrealized gain on
derivative instruments
|
(1,051,432)
|
|
|
(1,186,551)
|
|
Loss (gain) from
equity method investee
|
30,380
|
|
|
(61,357)
|
|
Provision for
doubtful accounts
|
931,962
|
|
|
513,112
|
|
Loss on sales of
vessels
|
—
|
|
|
566,756
|
|
Write off unamortized
financing costs of repaid debt
|
—
|
|
|
25,557
|
|
Share-based
compensation
|
176,068
|
|
|
305,825
|
|
Change in operating
assets and liabilities:
|
|
|
|
Decrease in
restricted cash
|
500,000
|
|
|
—
|
|
Accounts
receivable
|
4,205,465
|
|
|
5,844,479
|
|
Bunker
inventory
|
(900,310)
|
|
|
2,990,288
|
|
Advance hire, prepaid
expenses and other current assets
|
(1,082,336)
|
|
|
1,821,996
|
|
Drydocking
costs
|
(42,478)
|
|
|
—
|
|
Accounts payable,
accrued expenses and other current liabilities
|
(2,319,659)
|
|
|
(14,144,360)
|
|
Deferred
revenue
|
(99,238)
|
|
|
(5,891,286)
|
|
Net cash provided by
operating activities
|
9,985,074
|
|
|
12,810,782
|
|
|
|
|
|
Investing
activities
|
|
|
|
Purchase of
vessels
|
(319,432)
|
|
|
(44,770,740)
|
|
Proceeds from sales
of vessels
|
—
|
|
|
4,523,804
|
|
Deposits on
newbuildings in-process
|
(83,000)
|
|
|
(85,000)
|
|
Purchase of building
and equipment
|
(30,000)
|
|
|
(52,936)
|
|
Purchase of
non-controlling interest
|
—
|
|
|
(250,000)
|
|
Net cash used in
investing activities
|
(432,432)
|
|
|
(40,634,872)
|
|
|
|
|
|
Financing
activities
|
|
|
|
Proceeds of related
party debt
|
—
|
|
|
2,506,667
|
|
Payments of related
party debt
|
(2,500,496)
|
|
|
(1,216,250)
|
|
Proceeds from
long-term debt
|
1,096,000
|
|
|
45,000,000
|
|
Payments of financing
and issuance costs
|
(34,425)
|
|
|
(729,866)
|
|
Payments of long-term
debt
|
(13,110,553)
|
|
|
(9,777,473)
|
|
Payments on line of
credit
|
—
|
|
|
(3,000,000)
|
|
Common stock
dividends paid
|
(100,000)
|
|
|
(100,000)
|
|
Distribution to
non-controlling interest
|
—
|
|
|
(521,920)
|
|
Net cash (used in)
provided by financing activities
|
(14,649,474)
|
|
|
32,161,158
|
|
|
|
|
|
Net (decrease)
increase in cash and cash equivalents
|
(5,096,832)
|
|
|
4,337,068
|
|
Cash and cash
equivalents at beginning of period
|
37,520,240
|
|
|
29,817,507
|
|
Cash and cash
equivalents at end of period
|
$
|
32,423,408
|
|
|
$
|
34,154,575
|
|
|
|
|
|
Disclosure of
noncash items
|
|
|
|
Cash paid for
interest
|
$
|
2,381,513
|
|
|
$
|
2,407,348
|
|
Pangaea Logistics
Solutions Ltd.
|
Reconciliation of
Adjusted EBITDA and Pro Forma Adjusted Earnings Per
Share
|
|
|
|
|
Three months ended
June 30,
|
|
|
2016
|
|
2015
|
Adjusted EBITDA
(in millions)
|
|
|
|
|
Income from
operations
|
|
784,378
|
|
|
6,996,529
|
|
Depreciation and
amortization
|
|
3,528,596
|
|
|
3,271,238
|
|
Adjusted
EBITDA
|
|
$
|
4,312,974
|
|
|
$
|
10,267,767
|
|
|
|
|
|
|
Earnings Per
Common Share
|
|
|
|
|
Net income
attributable to Pangaea Logistics Solutions Ltd.
|
|
$
|
129,634
|
|
|
$
|
5,460,637
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding - basic
|
|
35,150,453
|
|
|
35,240,373
|
|
Weighted average
number of common shares outstanding - diluted
|
|
35,337,290
|
|
|
35,240,373
|
|
|
|
|
|
|
Earnings per common
share - basic
|
|
$
|
0.004
|
|
|
$
|
0.155
|
|
Earnings per common
share - diluted
|
|
$
|
0.004
|
|
|
$
|
0.155
|
|
|
|
|
|
|
Pro Forma
Adjusted EPS
|
|
|
|
|
Net income
attributable to Pangaea Logistics Solutions Ltd.
|
|
$
|
129,634
|
|
|
$
|
5,460,637
|
|
Non-GAAP
Adjustments:
|
|
|
|
|
Add: loss on
impairment of vessels
|
|
—
|
|
|
—
|
|
Add: non-recurring
charges
|
|
—
|
|
|
—
|
|
Non-GAAP pro forma
adjusted total earnings allocated to common stock
|
|
$
|
129,634
|
|
|
$
|
5,460,637
|
|
|
|
|
|
|
Non-GAAP pro forma
weighted average number of common shares
|
|
35,150,453
|
|
|
35,240,373
|
|
Non-GAAP pro forma
adjusted EPS
|
|
$
|
0.004
|
|
|
$
|
0.15
|
|
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 condensed consolidated financial
statements prepared and presented in accordance with GAAP, this
earnings release discusses non-GAAP financial measures, including
(1) non-GAAP adjusted EBITDA and (2) 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. represents net 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 per
share represents total earnings allocated to common stock divided
by the weighted average number of common shares outstanding.
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. 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.
Investor Relations Contacts
Thomas Rozycki
Prosek Partners
212-279-3115 ext. 208
trozycki@prosek.com
Josh Clarkson
Prosek Partners
212-279-3115 ext. 259
jclarkson@prosek.com
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