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EX-99.1 - EXHIBIT 99.1 PRESS RELEASE - Pangaea Logistics Solutions Ltd. | q22016pressrelease.htm |
8-K - 8-K Q2-2016 EARNINGS - Pangaea Logistics Solutions Ltd. | q22016form8k.htm |
Second Quarter
2016 Results
August 2016
2
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.
3
Second Quarter 2016 Highlights
• Net income attributable to Pangaea Logistics Solutions 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 for the six months ended June 30, 2016 was
$10.0 million, compared with $12.8 million for the first half of 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
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 giving effect to the mergers as if they had been consummated as of January 1, 2014. 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.
3 Gross margin percentage is a non-GAAP measure representing the ratio of total revenue less voyage, charter hire and vessel operating expenses, to total revenue.
4
Financial Performance - Trailing Four Quarters
1) 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.
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.
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
$7,000,000
$8,000,000
$9,000,000
Q3-15 Q4-15 Q1-16 Q2-16
Adjusted EBITDA (1)
$-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
$14,000
Q3-15 Q4-15 Q1-16 Q2-16
TCE (2)
$(6,000,000)
$(5,000,000)
$(4,000,000)
$(3,000,000)
$(2,000,000)
$(1,000,000)
$-
$1,000,000
$2,000,000
$3,000,000
$4,000,000
Q3-15 Q4-15 Q1-16 Q2-16
Net Income
5
• The Company’s unique ability to limit the impact of weak market rates on its
operations by dynamically adjusting its fleet size. This a function of its
flexible, cargo-focused, business model, which uses a mix of owned and
chartered-in vessels.
• Reduction in cost of bunkers consumed on voyages. Bunker prices were on
average 19% lower in the second quarter of 2016 than in the second quarter
of 2015.
• General and administrative costs decreased 25% to $2.9 million from $3.9
million in 2015 as the Company continued its expense management
measures while weakness in the overall shipping market continues.
Drivers of Second Quarter 2016 Performance
6
Defensible Pillars of Profitability
• Execution specialization:
- Material cost savings & enhanced profit through granular operating knowledge & risk
sensitive approach
- Secured & defended by 200+ years of expertise & embedded relationships; key
managers average 20 years in the industry
• Backhaul specialization:
- Generating profit from a cost center
- Secured & defended by reputation, long-term contracts & repeat customers
- Minimal ballast time
• Ice-class specialization:
- Capturing profit from limited supply of tonnage & lower costs
- Secured & defended by expertise & ownership of specialized fleet
- Own & operate a significant portion of the world’s 1A ice-class dry tonnage
• Broader logistics solutions:
- Design & implement loading & discharge efficiencies in critical ports
- Expand markets & improve business terms for customers
7
Selected Income Statement Data
2016 2015
(unaudited) (unaudited)
Revenues:
Voyage revenue 53,548,976$ 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 expenses 7,904,828 7,116,502
General and administrative 2,935,950 3,916,119
Depreciation and amortization 3,528,596 3,271,238
Total expenses 56,177,327 58,106,243
Income from operations 784,378 6,996,529
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$
Three months ended June 30,
8
Selected Balance Sheet and Cash Flow Data
Net cash provided by operating activities 9,985,074$ 12,810,782$
used in investing ctivities (432,432) (40,634,87 )
et cash provided by financing activities (14,649, 74$ 32,161,158$
June 30, 2016 December 31, 2015
Current Assets
Cash and cash equivalents 32,423,408$ 37,520,240$
Accounts receivable, net 14,480,516 19,617,943
Other current assets 13,655,869 12,173,223
Total current assets 60,559,793 69,311,406
Fixed assets, net 282,077,776 255,145,807
Investment in newbuildings in-process 8,848,000 42,505,783
Total assets 351,485,569$ 366,962,996$
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
Current portion long-term debt 20,091,616 19,499,262
Other current liabilities 16,974,382 17,173,620
Total current liabilties 66,448,182 72,150,503
Secured long-term debt, net 117,209,252 129,496,153
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$