Company Posts Record Annual Revenue, Strong Demand for Specialized
Services
NEWPORT, R.I. -- (Business Wire)
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.
Contacts:
Investor Relations
Prosek Partners
Thomas
Rozycki, 212-279-3115 x 208
Managing Director
trozycki@prosek.com
Source: Pangaea Logistics Solutions Ltd.
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