NEWPORT, R.I.,– 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 and year ended December 31, 2019.
2019 Highlights
4th Quarter 2019 Highlights
Ed Coll, Pangaea’s Chief Executive Officer, commented;
“We were extremely active in 2019, a year that started and ended with a challenging dry bulk charter market. Despite this environment, we continued to operate profitably. Our $18.2 million of adjusted Net Income and $51.1 million of adjusted EBITDA, adjusted for book losses on sale and impairments, is another strong result for our Company. Our vessel activity increased substantially in the third and fourth quarters, which is traditionally our busiest time of the year. Our premiums were 41% above average market levels for 2019, continuing our industry leading performance. We also pushed forward core strategic initiatives such as our fleet renewal efforts and port logistics. We ordered four new ice class vessels in 2019 to complement our high ice class fleet of vessels that are capable of performing demanding Arctic service, and we built a temporary port and performed a test shipment of valuable ore from Greenland, less than 1,000 miles from the North Pole.”
Mr. Coll added, “During the year we purchased some young secondhand vessels and, at the end of the year, we took further steps to renew our fleet by selling some older vessels, putting us in a position to renew when opportunities arise. Strong cash operating income allowed total cash to stay above $50 million at year end, despite aggressive debt amortization, the purchase of new vessels, substantial newbuilding deposits, and payment of dividends to our shareholders. Our plan to reach ashore for cargo-related contract work is moving forward, with the Brayton Point Terminal now in operation, and our stevedoring operations in the Mississippi River started on December 31, 2019. Other logistics projects are in our pipeline as we demonstrate our expertise in handling difficult challenges related to cargo movements. Collectively these efforts solidify our position and we stand ready to expand when opportunities arise.”
Results for the three months and year ended December 31, 2019
Total revenue was $130.5 million for the three months ended December 31, 2019, compared with $101.8 million for the three months ended December 31, 2018. The total number of shipping days performed increased by 22% to 5,240, compared to 4,287 days during the fourth quarter of 2018 predominantly due to the increase in voyage days.
The average TCE rate achieved was $15,172 per day for the three months ended December 31, 2019, compared to an average of $14,360 per day for the same period in 2018. The achieved premium over the average market increased to $4,353 per day or 40% for the three months ended December 31, 2019.
Total revenue was $412.2 million for the year ended December 31, 2019, compared with $373.0 million for the year ended December 31, 2018. The Company reported net income of $11.7 million or $0.27 per common share compared to net income of 17.8 million, or $0.42 per common share for the previous year. This decrease was largely driven by book loss on sale of vessels and impairments recognized in 2019. Adjusted net income was $18.2 million for 2019 compared to $22.5 million for 2018.
The average TCE rate achieved was $14,199 per day for the year ended December 31, 2019, compared to an average of $14,019 per day for the year ended December 31, 2018. The Baltic Dry Index (“BDI”), a measure of dry bulk market performance, averaged 1,329 for 2019, down from an average of 1,345 for 2018. The Company’s average TCE rates increased 1% in 2019 over the average for 2018, and exceeded the published market rates by an average of 41% over the two year period.
Liquidity and Cash Flows
Cash, cash equivalents and restricted cash were $53.1 million as of December 31, 2019, compared to $56.1 million on December 31, 2018.
At December 31, 2019 and December 31, 2018, the Company had working capital of $36.1 million and $34.5 million, respectively. For the twelve months end December 31, 2019, the Company’s net cash provided by operating activities was $44.5 million, compared to $40.1 million for the twelve months ended December 31, 2018.
For the twelve months ended December 31, 2019 and 2018, net cash used in investing activities was $46.6 million and $17.5 million, respectively. For the twelve months ended December 31, 2019 and 2018, net cash used in financing activities was $0.9 million and was $5.0 million, respectively. These changes reflect the Company’s investment in newbuilding vessels, and the purchase of second hand vessels, including the m/v Bulk Spirit and m/v Bulk Friendship which were financed under the finance lease arrangements and the m/v Bulk Independence which was financed under a commercial loan facility. The financing activities also include a dividend paid to our joint venture partners of $4.7 million and dividends paid to the common stockholders of $8.1 million.
Subsequent Event
On March 20, 2020, due to the unprecedented and uncertain conditions caused by the coronavirus (COVID-19) global pandemic, and the potential impact responses might have on the Company’s short term earnings and cash flow, the Board of Pangaea Logistics Solutions Ltd., as a precautionary measure, will not declare and pay a dividend for the first quarter of 2020. The Board will continue to consider a dividend on a quarterly basis as negative impacts of the global pandemic on the Company’s operations are more clearly assessed and risks are addressed or dissipate. Separately, the Board authorized a stock repurchase plan which allows for the purchase of up to $3.0 million of its common stock through December 31, 2020. The timing and number of shares repurchased under the program, if any, will be at the sole discretion of the Company subject to certain conditions approved by the board of directors.
Conference Call Details
The Company’s management team will host a conference call to discuss the Company’s financial results on March 24, 2020 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# 9578734.
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.