UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
______________
 
FORM 8-K
CURRENT REPORT
 
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
 
Date of Report (Date of earliest event reported): August 12, 2019
 
PANGAEA LOGISTICS SOLUTIONS LTD.
(Exact Name of Registrant as Specified in Charter)
 
Bermuda
001-36139
N/A
(State or Other Jurisdiction
(Commission
(IRS Employer
of Incorporation)
File Number)
Identification No.)
 
c/o Phoenix Bulk Carriers (US) LLC
109 Long Wharf, Newport, Rhode Island 02840
(Address of Principal Executive Offices) (Zip Code)
 
(401) 846-7790
(Registrant’s Telephone Number, Including Area Code)

Not Applicable 
(Former Name or Former Address, if Changed Since Last Report)
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
 
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c))
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock
PANL
NASDAQ

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).

Emerging growth company o

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





Item 2.02
Results of Operations and Financial Condition.

On August 12, 2019, Registrant issued a press release announcing financial results for the three and six months ended June 30, 2019 and 2018. The full text of this press release is included as Exhibit 99.1 to this Current Report on Form 8-K.

The information in this Current Report, including the exhibit attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933.

Item 7.01
Regulation FD Disclosure.

The press release and slide presentation contain summary information regarding the Company and include financial results for the three and six months ended June 30, 2019 and 2018. The presentation, which may be distributed to potential shareholders, is attached as Exhibit 99.2 to this Current Report on Form 8-K. Statements in this Current Report on Form 8-K, may contain certain statements about the Company and its consolidated subsidiaries that do not directly or exclusively relate to historical facts. The statements are “forward-looking statements” within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements are necessarily estimates reflecting the best judgment and current expectations, plans, assumptions and beliefs about future events (in each case subject to change) of the Company’s senior management and management of its subsidiaries and involve a number of risks, uncertainties and other factors, some of which may be beyond the Company’s control that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Without limitation, any statements preceded or followed by or that include the words “targets,” “plans,” “believes,” “expects,” “intends,” “will,” “likely,” “may,” “anticipates,” “estimates,” “projects,” “should,” “would,” “expect,” “positioned,” “strategy,” “future,” “potential,” “plan,” “forecast,” or words, phrases or terms of similar substance or the negative thereof, are forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied by the forward-looking statements are discussed under the heading “Risk Factors” and “Forward-Looking Statements” in the company’s most recent annual report on Form 10-K filed with the Securities and Exchange Commission (“SEC”), as they may be updated in any future reports filed with the SEC. If one or more of these factors materialize, or if any underlying assumptions prove incorrect, the Company’s actual results, performance, or achievements may vary materially from any future results, performance or achievements expressed or implied by these forward-looking statements. Forward-looking statements included herein are made as of the date hereof, and the Company undertakes no obligation to update publicly such statements to reflect subsequent events or circumstances. The information in this Current Report, including the exhibit attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement pursuant to the Securities Act of 1933.

Item 9.01
Financial Statements, Pro Forma Financial Information and Exhibits.

(d)
Exhibits
Exhibit
Description
 

99.1
Press Release of Pangaea Logistics Solutions Ltd., dated August 12, 2019 Reporting Financial Results for the Three Months Ended June 30, 2019 (furnished pursuant to Item 2.02)

99.2
Investor Presentation of Pangaea Logistics Solutions Ltd. dated August 12, 2019





SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: August 12, 2019
 
PANGAEA LOGISTICS SOLUTIONS LTD.
 
 
 
By: 
/s/ Gianni Del Signore
 
 
Name: Gianni Del Signore
Title: Chief Financial Officer



Exhibit


Pangaea Logistics Solutions Ltd. Reports Financial Results for the Quarter Ended June 30, 2019

NEWPORT, RI - August 12, 2019 - 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, 2019.
2nd Quarter Highlights     

Net income attributable to Pangaea Logistics Solutions Ltd. of $4.0 million as compared to $5.8 million for the three months ended June 30, 2018.
Earnings per share were $0.09 as compared to $0.13 for the three months ended June 30, 2018.
Pangaea's TCE rates were $12,933 for the three months ended June 30, 2019 and $13,728 for the three months ended June 30, 2018 while the market average for the second quarter of 2018 was approximately $8,665, giving the Company an overall average premium over market rates of approximately $4,268 or 49%.
At the end of the quarter, Pangaea had $43.7 million in cash, restricted cash and cash equivalents.
Initiated and paid quarterly cash dividend of $0.035 per common share.

Ed Coll, Chief Executive Officer of Pangaea Logistics Solutions, commented:

“Our second quarter results continued to outperform a turbulent market thanks to our active differentiated business model.  We reported positive net income once again, declared and payed our first dividend, and continued to expand our platform by investing in our niche trades through the ordering of two new ice class post panamax vessels and the purchase of three second-hand vessels. Among those purchased ships was Nantong K, to be renamed Bulk Friendship, which will be delivered to us in September as part of our planned fleet renewal. Our markets have demonstrated extraordinary resiliency since hitting lows early this year, but we remain cautious of the risks of uncertain times in international trading and commerce. Our committed cargo relationships help mitigate this type of risk, as does our flexible charter-in strategy that keeps our chartered-in tonnage in sync with our cargo commitments.”

Mr. Coll added, “Looking ahead, we move into our seasonally strong summer ice season in good shape, hoping to further extend our services to customers who appreciate our capabilities and performance. We will continue to carefully approach our markets to expand in areas where we can continue to achieve above market returns by providing exceptional service to meet the needs of our partners and clients.”


Results for the three months ended June 30, 2019 and 2018
Total revenue was $83.3 million for the three months ended June 30, 2019, compared with $96.8 million for the three months ended June 30, 2018. The total number of shipping days performed decreased by 17 percent to 3,562, compared to 4,283 days during the second quarter of 2018.
The average TCE rate achieved was $12,933 per day for the three months ended June 30, 2019, slightly lower than the average of $13,728 per day for the same period in 2018. The achieved premium over the average market increased to $4,268 per day or 49% for the three months ended June 30, 2019, from $3,355 per day or 32% for the three months ended June 30, 2018. The total number of shipping days decreased 17% to 3,562 in the three months ended June 30, 2019, compared to 4,283 for the same period in 2018, predominantly due to the decrease in time charter days. Net income held relatively steady at $4.0 million as compared to $5.8 million for the three months ended June 30, 2018.

Liquidity and Cash Flows
Cash, restricted cash and cash equivalents were $43.7 million as of June 30, 2019, compared with $56.1 million on December 31, 2018.
At June 30, 2019 and December 31, 2018, the Company had working capital of $28.5 million and $34.5 million, respectively. For the six months ended June 30, 2019, the Company’s net cash provided by operating activities was $19.6 million, compared to $20.8 million for the six months ended June 30, 2018.





For the six months ended June 30, 2019 and 2018, net cash used in investing activities was $33.5 million and $2.8 million, respectively. Net cash provided by financing activities was $1.5 million for the six months ended June 30, 2019 while net cash used in financing activities was $4.1 million for the six months ended June 30, 2018. These changes reflect the Company’s investment in and purchase of a new vessel in 2019, including the m/v Bulk Spirit, which was financed under a finance lease arrangement and the m/v Bulk Independence which was financed under a commercial loan facility. The financing activities also include a dividend paid to our JV partners of $ 4.7 million and a dividend paid to the common stockholders of $3.8 million.
Conference Call Details
The Company’s management team will host a conference call to discuss the Company’s financial results on August 13, 2019 at 8:00 a.m., Eastern Time (ET). 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#7487666.
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 two weeks and can be accessed by calling (855) 859-2056 (domestic) or (404) 537-3406 (international) and referencing ID#7487666.





Pangaea Logistics Solutions Ltd.
Consolidated Statements of Income
(unaudited)
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
Revenues:
 
 
 
 
 
 
 
Voyage revenue
$
77,430,067

 
$
81,847,649

 
$
143,281,414

 
$
152,166,843

Charter revenue
5,860,548

 
14,975,553

 
19,553,386

 
23,629,652

 
83,290,615

 
96,823,202

 
162,834,800

 
175,796,495

Expenses:
 
 
 
 
 
 
 
Voyage expense
37,224,412

 
38,027,489

 
69,398,519

 
68,195,517

Charter hire expense
18,317,345

 
30,683,892

 
43,264,714

 
53,379,827

Vessel operating expense
11,074,547

 
10,046,709

 
20,828,922

 
19,895,874

General and administrative
5,358,991

 
4,378,671

 
9,392,671

 
8,506,969

Depreciation and amortization
4,491,327

 
4,391,069

 
8,868,515

 
8,729,257

Loss on sale and leaseback of vessels

 
860,426

 

 
860,426

Total expenses
76,466,622

 
88,388,256

 
151,753,341

 
159,567,870

 
 
 
 
 
 
 
 
Income from operations
6,823,993

 
8,434,946

 
11,081,459

 
16,228,625

 
 
 
 
 
 
 
 
Other expense:
 
 
 

 
 
 
 
Interest expense, net
(2,101,052
)
 
(2,091,989
)
 
(4,308,220
)
 
(4,152,725
)
Interest expense on related party debt
(11,138
)
 
(53,914
)
 
(38,036
)
 
(117,373
)
Unrealized gain (loss) on derivative instruments, net
215,171

 
553,701

 
2,504,957

 
(8,904
)
Other income
232,092

 
30,000

 
399,912

 
458,332

Total other expense, net
(1,664,927
)
 
(1,562,202
)
 
(1,441,387
)
 
(3,820,670
)
 
 
 
 
 
 
 
 
Net income
5,159,066

 
6,872,744

 
9,640,072

 
12,407,955

Income attributable to non-controlling interests
(1,126,565
)
 
(1,099,721
)
 
(1,905,017
)
 
(2,309,938
)
Net income attributable to Pangaea Logistics Solutions Ltd.
$
4,032,501

 
$
5,773,023

 
$
7,735,055

 
$
10,098,017

 
 
 
 
 
 
 
 
Earnings per common share:
 
 
 
 
 
 
 
Basic
$
0.09

 
$
0.14

 
$
0.18

 
$
0.24

Diluted
$
0.09

 
$
0.13

 
$
0.18

 
$
0.24

 
 
 
 
 
 
 
 
Weighted average shares used to compute earnings per common share:
 
 
 
 
 
 
 
Basic
42,767,785

 
42,252,552

 
42,684,966

 
42,259,594

Diluted
43,293,022

 
42,763,925

 
43,202,187

 
42,632,688







Pangaea Logistics Solutions Ltd.
Consolidated Balance Sheets

 
June 30, 2019
 
December 31, 2018
 
(unaudited)
 
 
Assets
 
 
 
Current assets
 
 
 
Cash and cash equivalents
$
41,161,115

 
$
53,614,735

Accounts receivable (net of allowance of $2,183,096 at
June 30, 2019 and $2,357,130 December 31, 2018)
15,995,543

 
28,481,787

Bunker inventory
17,446,489

 
19,222,087

Advance hire, prepaid expenses and other current assets
18,495,225

 
12,187,551

Total current assets
93,098,372

 
113,506,160

 
 
 
 
Restricted cash
2,500,000

 
2,500,000

Fixed assets, net
301,096,555

 
281,355,366

Investment in newbuildings in-process
7,657,000

 

Finance lease right of use assets, net
54,864,199

 
56,113,096

Total assets
$
459,216,126

 
$
453,474,622

 
 
 
 
Liabilities and stockholders' equity
 
 
 
Current liabilities
 
 
 
Accounts payable, accrued expenses and other current liabilities
$
31,169,464

 
$
31,897,507

Related party debt
1,185,782

 
2,877,746

Deferred revenue
8,814,462

 
14,717,072

Current portion of secured long-term debt
14,952,927

 
20,127,742

Current portion of finance lease liabilities
6,632,119

 
5,364,963

Dividend payable
1,864,431

 
4,063,598

Total current liabilities
64,619,185

 
79,048,628

 
 
 
 
Secured long-term debt, net
102,394,123

 
95,374,270

Finance lease liabilities
54,508,878

 
45,684,727

 
 
 
 
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; 44,451,940 shares issued and outstanding at June 30, 2019; 43,998,560 shares issued and outstanding at December 31, 2018
4,445

 
4,400

Additional paid-in capital
156,855,761

 
155,946,452

Retained earnings
11,916,436

 
5,737,199

Total Pangaea Logistics Solutions Ltd. equity
168,776,642

 
161,688,051

Non-controlling interests
68,917,298

 
71,678,946

Total stockholders' equity
237,693,940

 
233,366,997

Total liabilities and stockholders' equity
$
459,216,126

 
$
453,474,622







Pangaea Logistics Solutions Ltd.
Consolidated Statements of Cash Flows
(unaudited)

 
Six Months Ended June 30,
 
2019
 
2018
Operating activities
 
 
 
Net income
$
9,640,072

 
$
12,407,955

Adjustments to reconcile net income to net cash provided by operations:
 

 
 
Depreciation and amortization expense
8,868,515

 
8,729,257

Amortization of deferred financing costs
365,564

 
331,061

Amortization of prepaid rent
59,299

 
60,968

Unrealized (gain) loss on derivative instruments
(2,504,957
)
 
8,904

Gain from equity method investee
(247,312
)
 
(90,000
)
Provision for doubtful accounts
320,491

 
(148,458
)
Loss on sale of vessel

 
860,426

Drydocking costs
(1,545,094
)
 
(1,497,979
)
Recognized cost for restricted stock issued as compensation
1,045,507

 
839,396

Change in operating assets and liabilities:
 
 
 
Accounts receivable
12,165,753

 
2,855,167

Bunker inventory
1,775,598

 
(2,033,966
)
Advance hire, prepaid expenses and other current assets
(6,002,847
)
 
(844,650
)
Accounts payable, accrued expenses and other current liabilities
1,546,305

 
844,340

Deferred revenue
(5,902,610
)
 
(1,516,665
)
Net cash provided by operating activities
19,584,284

 
20,805,756

 
 
 
 
Investing activities
 

 
 

Purchase of vessels and vessel improvements
(25,557,060
)
 
(2,517,355
)
Purchase of building and equipment
(281,011
)
 
(360,286
)
Proceeds from sale of equipment

 
31,594

Net cash used in investing activities
(33,495,071
)
 
(2,846,047
)
 
 
 
 
Financing activities
 
 
 
Proceeds from long-term debt
14,000,000

 

Payments of related party debt
(1,691,964
)
 
(2,487,226
)
Payments of financing fees and issuance costs
(277,577
)
 
(367,052
)
Payments of long-term debt
(12,242,949
)
 
(12,145,694
)
Proceeds from finance leases
13,000,000

 
13,000,000

Dividends paid to non-controlling interests
(4,666,665
)
 
(904,803
)
Payments of finance lease obligations
(2,908,693
)
 
(1,014,939
)
Accrued common stock dividends paid
(3,754,985
)
 

Cash paid for incentive compensation shares relinquished

 
(101,075
)
Proceeds from private placement of common stock, net of issuance costs

 
(50,812
)
Net cash provided by (used in) financing activities
1,457,167

 
(4,071,601
)
 
 
 
 
Net (decrease) increase in cash, cash equivalents and restricted cash
(12,453,620
)
 
13,888,108

Cash, cash equivalents and restricted cash at beginning of period
56,114,735

 
38,531,812

Cash, cash equivalents and restricted cash at end of period
$
43,661,115

 
$
52,419,920






Supplemental cash flow information and disclosure of noncash items
 
 
 
Cash paid for interest
$
4,414,197

 
$
3,809,699

 
 
 
 
Cash and cash equivalents
$
41,161,115

 
$
48,919,920

Restricted cash
2,500,000

 
3,500,000

 
$
43,661,115

 
$
52,419,920


Pangaea Logistics Solutions Ltd.
Reconciliation of Non-GAAP Measures
(unaudited)

 
 
Three Months Ended June 30,
 
Six Months Ended June 30,
 
 
2019
 
2018
 
2019
 
2018
Net Revenue
 
 
 
 
 
 
 
 
Income from operations
 
$
6,823,993

 
$
8,434,946

 
$
11,081,459

 
$
16,228,625

General and administrative
 
5,358,991

 
4,378,671

 
9,392,671

 
8,506,969

Depreciation and amortization
 
4,491,327

 
4,391,069

 
8,868,515

 
8,729,257

Net Revenue
 
$
16,674,311

 
$
18,065,112

 
$
29,342,645

 
$
34,325,277

 
 
 
 
 
 
 
 
 
Adjusted EBITDA
 
 
 
 
 
 
 
 
Income from operations
 
$
6,823,993

 
$
8,434,946

 
$
11,081,459

 
$
16,228,625

Depreciation and amortization
 
4,491,327

 
4,391,069

 
8,868,515

 
8,729,257

Adjusted EBITDA
 
$
11,315,320

 
$
13,686,441

 
$
19,949,974

 
$
25,818,308


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 non-GAAP net revenue and non-GAAP adjusted EBITDA. This is considered a non-GAAP financial measure 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 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 non-GAAP financial measures provide meaningful supplemental information regarding the performance of our core business by excluding charges that are not incurred in the normal course of business. Non-GAAP financial measures also facilitate management's internal planning and comparisons to our historical performance and liquidity. We believe certain 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.

Net revenue. Net revenue represents total revenue less the total direct costs of transportation and services, which includes charter hire, voyage and vessel operating expenses. Net revenue is included because it is used by management and certain investors to measure performance by comparison to other logistic service providers. Net revenue is not an item recognized by the generally accepted accounting principles in the United States of America, or U.S. GAAP, and should not be considered as an alternative to net income, operating income, or any other indicator of a company's operating performance required by U.S. GAAP. Pangaea’s definition of net revenue used here may not be comparable to an operating measure used by other companies.






Adjusted EBITDA and adjusted EPS. Adjusted EBITDA represents income or loss from operations before depreciation, amortization and, when applicable, loss on sale and leaseback of vessel, loss on impairment of vessels and certain non-recurring income and/or expense. Earnings per share represents net income divided by the weighted average number of common shares outstanding. Adjusted earnings per share represents net income attributable to Pangaea Logistics Solutions Ltd. plus, when applicable, loss on sale and leaseback of vessel, loss on impairment of vessel and certain non-recurring income and/or expenses, divided by the weighted average number of shares of common stock.

There are limitations related to the use of net revenue versus income from operations, adjusted EBITDA versus income from operations, and adjusted EPS versus EPS calculated in accordance with GAAP. In particular, Pangaea’s definition of adjusted EBITDA used here are not comparable to EBITDA.

The table set forth above provides a reconciliation of the non-GAAP financial measures presented during the period 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.



Investor Relations Contacts

Sean Silva
Prosek Partners
646 493 9632
ssilva@prosek.com

Tom Rozycki
Prosek Partners
646 818 9208
trozycki@prosek.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.


secondquarter2019earning
SECOND QUARTER 2019 EARNINGS CONFERENCE CALL PRESENTATION 1


 
SAFE HARBOR This presentation includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding future financial performance, future growth and future acquisitions. These statements are based on Pangaea’s and managements’ current expectations or beliefs and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive and/or regulatory factors, and other risks and uncertainties affecting the operation of Pangaea’s business. These risks, uncertainties and contingencies include: business conditions; weather and natural disasters; changing interpretations of GAAP; outcomes of government reviews; inquiries and investigations and related litigation; continued compliance with government regulations; legislation or regulatory environments; requirements or changes adversely affecting the business in which Pangaea is engaged; fluctuations in customer demand; management of rapid growth; intensity of competition from other providers of logistics and shipping services; general economic conditions; geopolitical events and regulatory changes; and other factors set forth in Pangaea’s filings with the Securities and Exchange Commission and the filings of its predecessors. The information set forth herein should be read in light of such risks. Further, investors should keep in mind that certain of Pangaea’s financial results are unaudited and do not conform to SEC Regulation S-X and as a result such information may fluctuate materially depending on many factors. Accordingly, Pangaea’s financial results in any particular period may not be indicative of future results. Pangaea is not under any obligation to, and expressly disclaims any obligation to, update or alter its forward-looking statements, whether as a result of new information, future events, changes in assumptions or otherwise. 2


 
BUSINESS HIGHLIGHTS Q2-2019 Results •Adjusted EBITDA of $11.3 million Consistent •Net income of $4.0 million •$43.7 million cash, restricted cash and cash Performance equivalents Fleet Working Fleet •21 drybulk ships and one barge in owned and controlled fleet Operations Extensive and varied •Operating 40 vessels on average during Q2-2019 •6 million tons carried; 104 voyages performed for experience 50 clients 1) Adjusted EBITDA is a non-GAAP measure and represents income or loss from operations before depreciation and amortization, loss on sale and leaseback of vessel, and when applicable, loss on impairment of vessels and certain non-recurring items. 3


 
DRIVERS OF PERFORMANCE Customer Focus: Long-term, fixed contract employment and recurring business with new and longstanding customers Targeted Business: Specialty tonnage provides superior returns – 49% premium over average market rates in Q2 – 2019 Rate Environment: The Baltic Dry Index average declined quarter over quarter, but rates improved as Q2 progressed. (1) Per reported indices 4


 
FINANCIAL HIGHLIGHTS • Net income attributable to Pangaea Logistics Solutions Ltd. approximately $4.0 million for three months ended June 30, 2019 as compared to approximately $5.8 million for the same period of 2018. • Earnings per share were $0.09 as compared to $0.13 for the three months ended June 30, 2018. • Pangaea's TCE rates were $12,933 for the three months ended June 30, 2019 while the market average for the second quarter of 2019 was approximately $8,665, giving the Company an overall average premium over market rates of approximately $4,268 or 49%. The Company's long-term COAs, cargo focus, and specialized fleet give rise to this premium. • At the end of the quarter, Pangaea had $43.7 million in cash, restricted cash and cash equivalents. • Initiated and paid quarterly cash dividend of $0.035 per common share 5


 
SELECTED INCOME STATEMENT DATA (in thousands) Three months ended March 30, Six months ended September 30, 2019 2018 2019 2018 (unaudited) (unaudited) (unaudited) (unaudited) Revenues: Voyage revenue $ 77,430 $ 81,848 $ 143,281 $ 152,167 Charter revenue 5,861 14,976 19,553 23,630 83,291 96,823 162,835 175,796 Expenses: Voyage expense 37,224 38,027 69,399 68,196 Charter hire expense 18,317 30,684 43,265 53,380 Vessel operating expenses 11,075 10,047 20,829 19,896 General and administrative 5,359 4,379 9,393 8,507 Depreciation and amortization 4,491 4,391 8,869 8,729 Loss on sale of vessels - 860 - 860 Total expenses 76,467 88,388 151,753 159,568 Income from operations 6,824 8,435 11,081 16,229 Total other expense, net (1,665) (1,562) (1,441) (3,821) Net income 5,159 6,873 9,640 12,408 Income attributable to noncontrolling interests (1,127) (1,100) (1,905) (2,310) Net income attributable to Pangaea Logistics Solutions Ltd. $ 4,032 $ 5,773 $ 7,735 $ 10,098 Adjusted EBITDA(1) $ 11,315 $ 13,686 $ 19,950 $ 25,818 1) Adjusted EBITDA is a non-GAAP measure and represents income or loss from operations before depreciation and amortization, loss on sale and leaseback of vessel, and when applicable, loss on impairment of vessels and certain non-recurring items. 6


 
SELECTED BALANCE SHEET & CASH FLOW DATA (in thousands) June 30, 2019 December 31, 2018 (unaudited) Current Assets Cash and cash equivalents $ 41,161 $ 53,615 Accounts receivable, net 15,996 28,482 Other current assets 35,941 31,410 Total current assets 93,098 113,506 Restricted Cash 2,500 2,500 Fixed assets, including finance lease right of use assets, net 301,097 281,356 Investment in newbuildings in-process 7,657 - Right of Use Asset 54,864 56,113 Total assets $ 459,216 $ 453,475 Current liabilities Accounts payable, accrued expenses and other current liabilities $ 31,169 $ 31,898 Related party debt 1,186 2,878 Current portion of long-term debt and finance lease liabilities 21,585 25,493 Other current liabilities 10,679 18,781 Total current liabilities 64,619 79,049 Secured long-term debt and capital lease obligations, net 156,903 141,059 Total Pangaea Logistics Solutions Ltd. equity 168,777 161,688 Non-controlling interests 68,917 71,679 Total stockholders' equity 237,694 233,367 Total liabilities and shareholders' equity $ 459,216 $ 453,475 Cash flow data June 30, 2019 June 30, 2018 (unaudited) (unaudited) Net cash provided by operations $ 19,584 $ 20,806 Net cash used in investing activities $ (33,495) $ (2,846) Net cash provided by (used in) financing activities $ 1,457 $ (4,072) The amounts in the table below have been calculated based on unrounded numbers. Accordingly, certain amounts may not sum due to the effect of rounding. 7


 
TOTAL SHIPPING DAYS 6,000 5,000 4,000 3,741 3,461 3,000 2,645 2,537 2,556 Days 2,220 1,742 1,904 2,000 1,000 1,820 1,564 1,575 1,620 1,638 1,703 1,731 1,718 - Q3-17 Q4-17 Q1-18 Q2-18 Q3-18 Q4-18 Q1-19 Q2-19 Owned Days Charter-in Days Capital Efficiency: Leveraged owned fleet by chartering-in market vessels Flexibility: Short-term charters allow us to react quickly and take advantage of arbitrage opportunities 8


 
PANGAEA TCE v. AVERAGE MARKET TCE $16,000 24% 30% 32% 21% $14,000 49% 15% $2,801 26% $2,440 68% $12,000 $3,187 $3,355 $1,605 $2,471 $4,268 $10,000 $4,869 $8,000 $6,000 $11,395 $11,559 $10,905 $10,662 $10,373 $9,351 $4,000 $8,665 $7,160 $2,000 $- Q3 - 2017 Q4 - 2017 Q1 - 2018 Q2 - 2018 Q3 - 2018 Q4 - 2018 Q1-2019 Q2-2019 Pangaea TCE $11,822 $12,510 $13,849 $13,728 $13,835 $14,36 $12,029 $12,933 Consistently outperforming against average Panamax and Supramax index *Average of the published Panamax and Supramax index net of commission 9


 
FINANCIAL PERFORMANCE Q3-2017 THROUGH Q2-2019 1) Adjusted EBITDA is a non-GAAP measure and represents income or loss from operations before depreciation and amortization, loss on sale and leaseback of vessels, and when applicable, loss on impairment of vessels and certain non-recurring items. 2) TCE is defined as total revenues less voyage expenses divided by the number of shipping days, which is consistent with industry standards. TCE rate is a common shipping industry performance measure used primarily to compare daily earnings generated by vessels on time charters with daily earnings generated by vessels on voyage charters, because charter hire rates for vessels on voyage charters are generally not expressed in per-day amounts while charter hire rates for vessels on time charters generally are expressed in per-day amounts. 10


 
ADJUSTED EARNINGS PER COMMON SHARE Adjusted EPS total of $0.64 since Q2 2018 (1) Adjusted earnings per share represents net income attributable to Pangaea Logistics Solutions Ltd. plus, when applicable, loss on sale and leaseback of vessel, loss on impairment of vessel, gains and losses on derivative instruments, and certain non-recurring charges, divided by the weighted average number of shares of common stock. 11