Pangaea Logistics : PANL Q2 2021 Earnings Release

Pangaea Logistics Solutions Ltd. Reports Record Financial Results for the Quarter Ended June 30, 2021

NEWPORT, RI - August 10, 2021 - 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, 2021.

2nd Quarter Highlights

• Net income attributable to Pangaea Logistics Solutions Ltd. was $19.2 million for the three months ended June 30, 2021, as compared to a $3.0 million for the same period of 2020.
• • Non-GAAPadjusted net income attributable to Pangaea Logistics Solutions Ltd. was $12.9 million, as compared to Non-GAAP adjusted net income of $3.7 million for the three months ended June 30, 2020.
• Diluted net income per share was $0.44 for the three months ended June 30, 2021 ,as compared to a net income per share of $0.07 for the same period of 2020.
• Pangaea's TCE rates were $21,053 for the three months ended June 30, 2021, as compared to $10,733 for the three months ended June 30, 2020.
• Adjusted EBITDA was $21.4 million for the three months ended June 30, 2021, as compared to $10.7 million for the same period of 2020.
• At the end of the quarter, Pangaea had $40.6 million in cash and cash equivalents.
• On August 9, 2021, the Company's Board of Directors declared a quarterly cash dividend of $0.035 per common share, to be paid on September 15, 2021, to all shareholders of record as of September 1, 2021.

Subsequent Business Update

On July 6, 2021, the Company, through its wholly owned subsidiary, Bulk Nordic Five Ltd., and the existing lender agreed to amend and restate the original Bareboat Charter dated October 27, 2016. The amended agreement extends the lease maturity date to April 2028 with a purchase obligation of $6.95 million. The Company also fixed the interest rate through maturity at 3.97%. The bareboat charter party is secured by a first preferred mortgage on the m/v Bulk Destiny, the assignment of earnings, insurances and requisite compensation of the entity, and by guarantees of its shareholders.

On July 12, 2021, the Company took delivery of the m/v Bulk Promise, a 2013 Shin Kurushima Toyohashi-built 78,228 dwt dry bulk vessel for $18.3 million. The vessel was financed under a secured term loan facility for $12.8 million payable in 24 equal quarterly installments and a final balloon payment of $4.5 million at maturity. Interest on the loan is floating at the three-month LIBOR plus 2.3%.

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

"Our second quarter results were record-breaking. Market levels not seen in over a decade helped push our EBITDA above $21 million for the quarter, and our net income was $19.2 million, while EPS was $0.44 for the quarter. Our average TCE earned of $21,053 increased almost 100% compared to the second quarter of 2020, and was up approximately 27% from our TCE earned in the first quarter of 2021. Forward freight contracts, purchased to protect long cargo positions, added $6.1million of unrealized gains to net income for the quarter because FFA markets moved sharply upward and our accounting treatment requires the mark-to- market adjustment to be included in this quarter.

"We were also excited to take delivery of the first two of four Ice Class Newbuilding vessels during the second quarter. These timely deliveries expand our industry-leading ice class capabilities to meet our clients' needs and will be fully deployed during the summer Arctic shipping season. We were also happy to report the successful delivery of three second-hand vessels as part of our fleet renewal and expansion, bringing our total owned vessels to 24 after the delivery of our final two Ice Class Newbuilding vessels later this year."

"We are encouraged by the steps we've taken to deploy our capital, focus on niches, and capitalize on an improving dry bulk market. Our TCE earnings continue to improve heading into the third quarter, and we remain optimistic about the fundamentals in the dry bulk market with a historically low order book and a stable demand outlook. We will continue to be opportunistic in expanding our platform in ways that add value for our customers and, in turn, enhance shareholder value."

Results for the three months ended June 30, 2021 and 2020

Total revenue was $145.5 million for the three months ended June 30, 2021, compared with $70.4 million for the three months ended June 30, 2020. The 107% increase in revenues was mainly attributed to the increase in the average TCE rates achieved by our vessels during the second quarter of 2021 compared to the same period in 2020.

Time Charter Equivalent rate (TCE) was $21,053 per day for the three months ended June 30, 2021, compared to an average of $10,733 per day for the same period in 2020. The average supramax and panamax market index rates for the second quarter of 2021

were $24,185 per day. Pangaea's earned TCE rates lagged the market index in the quarter due to the impact of timing of pricing and duration of performing voyages in a rapidly rising market as well as the impact of performance of voyages on fixed freight rates from our long term contracts of affreightment that are less than spot market rates.

Liquidity and Cash Flows

Cash, restricted cash and cash equivalents were $40.6 million as of June 30, 2021, compared with $48.4 million on December 31, 2020.

On June 30, 2021 and December 31, 2020, the Company had working capital of $46.6 million and $2.2 million, respectively. Net cash provided by operating activities during the six months ended June 30, 2021 was $19.5 million compared to net cash provided by operating activities of $6.9 million for the six months ended June 30, 2020.

Net cash used in investing activities during the six months ended June 30, 2021 was $108.7 million compared to net cash provided by investing activities of $5.8 million for the same period in 2020. During the six months ended June 30, 2021, the Company purchased four vessels for $105.4 million and paid $2.7 million as advances for the purchase of one additional vessel which was delivered on July 12, 2021. Additionally, the Company paid $0.3 million as an advance towards two newbuildings to be delivered in the fourth quarter of 2021.

Net cash provided by financing activities during the six months ended June 30, 2021 was $81.3 million compared to net cash used in financing activities of $16.2 million for the same period of 2020. During the six months ended June 30, 2021 and 2020, proceeds from long-term debt and finance leases were $143.4 million. During the six months ended June 30, 2021 and 2020, net cash used to repay long-term debt was $55.6 million and $6.6 million, respectively, net cash used to repay finance leases was $3.8 million and $9.1 million, respectively, and the Company made cash dividend payments of $2.4 million and $0.5 million, respectively.

Conference Call Details

The Company's management team will host a conference call to discuss the Company's financial results on August 11, 2021 at 8:00 a.m., Eastern Time (ET). To access the teleconference, please dial 877-876-9176 (domestic) or 785-424-1670 (international) approximately ten minutes before the teleconference's scheduled start time and reference Conference ID:PANLQ221.

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 following the teleconference and will be accessible by calling 888-276-5315 (domestic) or 402-220-2332 (international).

Pangaea Logistics Solutions Ltd. Consolidated Statements of Operations (unaudited)

	Three Months Ended June 30,		Six Months Ended June 30,
		2021			2020			2021			2020
Revenues:
Voyage revenue	$	117,395,377	$	66,857,166	$	225,625,680	$	153,381,057
Charter revenue		28,148,988			3,539,004			44,891,212			12,895,050
Total revenue		145,544,365			70,396,170	270,516,892	166,276,107
Expenses:
Voyage expense		46,112,779			31,757,910			93,951,636			79,553,822
Charter hire expense		62,604,014			15,203,731	116,239,356			47,529,178
Vessel operating expense		9,772,966			9,325,060			18,268,469			19,258,922
General and administrative		6,029,793			3,872,388			10,234,691			7,865,631
Depreciation and amortization		4,868,730			4,345,707			9,287,824			8,587,958
Loss on impairment of vessels		-			1,801,039			-			1,801,039
Loss on sale of vessels		-			297,475			-			219,485
Total expenses		129,388,282			66,603,310	247,981,976	164,816,035
Income from operations		16,156,083			3,792,860			22,534,916			1,460,072
Other income (expense):
Interest expense, net		(2,621,110)			(1,944,741)			(4,577,916)			(4,088,704)
Income attributable to Non-controlling interest recorded as		(179,080)			(55,809)			(449,745)			(28,166)
long-term liability
Unrealized gain (loss) on derivative instruments, net		6,303,776			1,404,317			8,326,148			(1,512,777)
Other (loss) income		(82,496)			98,635			250,962			695,191
Total other income (expense), net		3,421,090			(497,598)			3,549,449			(4,934,456)
Net income (loss)		19,577,173			3,295,262			26,084,365			(3,474,384)
Income attributable to non-controlling interests		(349,898)			(290,086)			(1,002,919)			(315,815)
Net income (loss) attributable to Pangaea Logistics Solutions	$	19,227,275	$	3,005,176	$	25,081,446	$	(3,790,199)
Ltd.
Earnings (loss) per common share:
Basic	$	0.44	$	0.07	$	0.57	$	(0.09)
Diluted	$	0.43		$	0.07		$	0.56		$	(0.09)
Weighted average shares used to compute earnings per
common share:
Basic		43,998,424			43,445,789			43,989,515			43,442,773
Diluted		44,688,602			43,445,789			44,731,058			43,442,773

Pangaea Logistics Solutions Ltd.

Consolidated Balance Sheets

		June 30, 2021			December 31, 2020
		(unaudited)
Assets
Current assets
Cash and cash equivalents	$	40,614,572	$	46,897,216
Restricted cash		-			1,500,000
Accounts receivable (net of allowance of $1,679,305 and $1,896,038 at June		30,761,336			29,152,153
30, 2021 and December 31, 2020, respectively)
Bunker inventory		23,183,558			15,966,247
Advance hire, prepaid expenses and other current assets		38,575,365			19,515,945
Total current assets		133,134,831			113,031,561
Fixed assets, net		388,565,554			276,741,751
Investment in newbuildings in-process		7,602,391			15,390,635
Finance lease right of use assets, net		46,129,067			45,240,198
Total assets	$	575,431,843	$	450,404,145
Liabilities and stockholders' equity
Current liabilities
Accounts payable, accrued expenses and other current liabilities	$	44,688,612	$	32,400,288
Related party debt		242,852			242,852
Deferred revenue		15,825,938			12,799,561
Current portion of secured long-term debt		14,312,255			57,382,674
Current portion of finance lease liabilities		11,323,580			6,978,192
Dividend payable		98,864			1,005,763
Total current liabilities		86,492,101			110,809,330
Secured long-term debt, net		100,919,806			47,761,898
Finance lease liabilities, net		116,132,843			47,266,104
Long-term liabilities - other		15,010,955			10,135,408
Commitments and contingencies
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;
45,641,441 shares issued and outstanding at June 30, 2021; 45,447,751		4,564			4,545
shares issued and outstanding at December 31, 2020
Additional paid-in capital		160,817,940			159,581,415
Retained earnings		46,718,409			23,179,805
Total Pangaea Logistics Solutions Ltd. equity		207,540,913			182,765,765
Non-controlling interests		49,335,225			51,665,640
Total stockholders' equity		256,876,138			234,431,405
Total liabilities and stockholders' equity	$	575,431,843	$	450,404,145

Pangaea Logistics Solutions, Ltd.

Consolidated Statements of Cash Flows

			Six Months Ended June 30,
			2021			2020
Operating activities			Unaudited			Unaudited
Net income (loss)	$	26,084,365	$	(3,474,384)
Adjustments to reconcile net income to net cash provided by	operations:
Depreciation and amortization expense			9,287,824			8,587,958
Amortization of deferred financing costs			477,263			346,985
Amortization of prepaid rent			57,628			61,136
Unrealized (gain) loss on derivative instruments			(8,326,148)			1,512,777
Income from equity method investee			(250,962)			(795,988)
Earnings attributable to non-controlling interest recorded as other long term liability	449,745			28,166
Provision (recovery) for doubtful accounts			285,466			(185,331)
Loss on impairment of vessels			-			1,801,039
Loss on sale of vessel			-			219,485
Drydocking costs			(5,551,513)			(2,882,109)
Share-based compensation			1,365,734			1,523,486
Change in operating assets and liabilities:
Accounts receivable			(1,894,649)			10,296,790
Bunker inventory			(7,217,311)			9,352,691
Advance hire, prepaid expenses and other current assets	(10,482,310)			3,991,371
Accounts payable, accrued expenses and other current liabilities	12,222,358			(14,444,003)
Deferred revenue			3,026,377			(9,033,002)
Net cash provided by operating activities			19,533,867			6,907,067
Investing activities
Purchase of vessels and vessel improvements			(108,540,199)			(1,652,366)
Investment in newbuildings in-process			-			(33,445)
Purchase of fixed assets and equipment			(112,196)			(7,801)
Proceeds from sale of vessels			-			8,099,667
Purchase of derivative instrument			-			(628,000)
Net cash provided by (used in) investing activities			(108,652,395)			5,778,055
Financing activities
Proceeds from long-term debt			66,350,000			-
Payments of financing fees and issuance costs			(1,167,783)			(149,118)
Payments of long-term debt			(55,620,110)			(6,568,134)
Proceeds from finance leases			77,084,500			-
Payments of finance lease obligations			(3,824,259)			(9,091,570)
Dividends paid to non-controlling interests			(3,333,334)			-
Accrued common stock dividends paid			(2,449,741)			(536,461)
Cash paid for incentive compensation shares relinquished			(129,190)			(154,126)
Contributions from non-controlling interest recorded as long-term liability	4,621,398			322,750
Payments to non-controlling interest recorded as long-term liability	(195,597)			(70,487)
Net cash provided by (used in) financing activities			81,335,884			(16,247,146)
Net decrease in cash, cash equivalents and restricted cash			(7,782,644)			(3,562,024)
Cash, cash equivalents and restricted cash at beginning of period		48,397,216			53,055,091
Cash, cash equivalents and restricted cash at end of period	$	40,614,572	$	49,493,067
Supplemental cash flow information
Cash and cash equivalents	$	40,614,572	$	46,993,067
Restricted cash			-			2,500,000
	$	40,614,572	$	49,493,067