NASDAQ:PANL Pangaea Logistics Solutions Q1 2024 Earnings Report $4.17 +0.06 (+1.46%) Closing price 05/2/2025 04:00 PM EasternExtended Trading$4.20 +0.03 (+0.72%) As of 05/2/2025 04:50 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Pangaea Logistics Solutions EPS ResultsActual EPS$0.14Consensus EPS $0.09Beat/MissBeat by +$0.05One Year Ago EPS$0.11Pangaea Logistics Solutions Revenue ResultsActual Revenue$104.75 millionExpected Revenue$117.47 millionBeat/MissMissed by -$12.72 millionYoY Revenue GrowthN/APangaea Logistics Solutions Announcement DetailsQuarterQ1 2024Date5/9/2024TimeAfter Market ClosesConference Call DateFriday, May 10, 2024Conference Call Time8:00AM ETUpcoming EarningsPangaea Logistics Solutions' Q1 2025 earnings is scheduled for Thursday, May 8, 2025, with a conference call scheduled on Friday, May 9, 2025 at 8:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptSlide DeckPress Release (8-K)Quarterly Report (10-Q)Earnings HistoryCompany ProfileSlide DeckFull Screen Slide DeckPowered by Pangaea Logistics Solutions Q1 2024 Earnings Call TranscriptProvided by QuartrMay 10, 2024 ShareLink copied to clipboard.There are 8 speakers on the call. Operator00:00:00Good morning. My name is Britney, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pangaea Logistics Solutions First Quarter 2024 Earnings Teleconference. Today's call is being recorded and will be available for replay beginning at 11 am EST. The recording can be accessed by dialing 877-856 8,964 for domestic and or 402-220 1608 for international. Operator00:00:35All lines are currently muted and after the prepared remarks there will be a live question and answer session. You. It is now my pleasure to turn the floor over to Stephen Neely with Vallum Associates. Speaker 100:01:03Thank you, operator, and welcome to the Pangaea Logistics Solutions Q1 2024 results conference call. Leading the call with me today is CEO, Mark Filanowski Chief Financial Officer, Gianni DelSignore and COO, Mats Petersen. Today's discussion contains forward looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the SEC. Except as required by law, we undertake no obligation to update our forward looking statements. Speaker 100:01:41At the conclusion of our prepared remarks, we will open the line for questions. With that, I would like to turn the call over to Mark. Speaker 200:01:49Thank you, Stefan, and welcome to those joining us on the call today. After the market closed yesterday, we issued a release detailing our Q1 2024 results. Our flexible cargo focused business model continued to deliver premium TCE rates over the prevailing market. During the Q1, it also allowed us to drive improved operating leverage compared to the prior year, which resulted in higher adjusted EBITDA and improved margins year over year. While the Q1 is normally a seasonally soft period for global dry bulk demand, We benefited from elevated long haul voyage demand across our ice class fleet together with a solid base of premium long term COAs. Speaker 200:02:39As market rates began to rise later in the quarter, we added to our cargo commitments to increase utilization of our owned fleet and chartered in more vessels, which positioned us to optimize our TCE returns. When combined, these factors resulted in our TCE rates for the quarter exceeding the benchmark index by nearly 30%. We reported adjusted net income of $6,600,000 for the Q1 and adjusted EBITDA of 19,900,000 dollars Adjusted EBITDA improved by 23% year over year as our adjusted EBITDA margins strengthened by 400 basis points compared to the Q1 of 2023. Our improved profitability was supported by a 41% year over year increase in published market rates for Supramax and Panamax vessels, which also supported the 23% increase in our own earned TCE rates year over year in the Q1. At a macro level, the global demand for dry bulk remains strong and the supply of vessels remains constrained. Speaker 200:03:53These dynamics give us confidence in both the near term and long term outlook for our business. Specifically, in the near term, geopolitical disruptions have resulted in an increase in ton mile demand with certain shipping channels. We are also seeing regionally strong demand in key bulk trades associated with the current level of infrastructure investment in North America. On the supply front, the number of new builds coming into service remains limited relative to historical levels, which will continue to put pressure on dry bulk capacity. In combination, we see the supply and demand factors for drybulk being structurally supportive for higher market rates for the remainder of 2024 and beyond. Speaker 200:04:43With that said, volatility will continue to be a prevailing theme, but one that our cargo focused business model uniquely positions us to successfully navigate. While certain aspects of the dry bulk markets have seen pricing moderate since late in Q1, others have continued to progressively improve. Through today, we've booked over 2,890 shipping days at an average TCE rate of $16,200 per day versus a market rate of approximately $15,000 per day so far in the Q2 2024. Strategically, we continue to prioritize capital investment in fleet expansion and renewal, while continuing to scale our onshore logistics capabilities. In addition to these organic and inorganic investments, we'll seek to further fortify our balance sheet, all while continuing to support a consistent return of capital program as demonstrated by our consistent quarterly cash dividend. Speaker 200:05:49Regarding our current fleet of owned vessels, we have been focused on refreshing our fleet to keep an average vessel age of approximately 10 years, while continuing to ensure that we are able to meet unique cargo needs of our customers. We continue to strategically evaluate additional vessel acquisitions and divestitures through this lens and last night we announced we had entered into an agreement to purchase 258,000 deadweight ton sister ships built in 2016. We are purchasing these ships for a combined price of $56,600,000 and we expect to take delivery during the Q3 of this year. Within our port and logistics business, we have made strides to organically expand that business in the U. S. Speaker 200:06:39Gulf Coast region through strategic joint operations, partnerships and site leases. During the Q1, we executed a long term lease agreement in the Port of Tampa to handle dry bulk commodities that are complementary to those carried on our fleet vessels. In conjunction with signing this lease, we also committed investment capital in some port operations infrastructure in partnership with JV Partners at the Port. This investment will allow us to expand our ability to offer a wider scope of cargo focused services across the strategically important Gulf Coast region to both new and existing customers. The investment will provide a meaningful growth avenue for our terminal and stevedore business, which we expanded into Florida in June of last year. Speaker 200:07:29In summary, our cargo focused business model continues to deliver strong premium returns, which we are strategically investing in key growth opportunities, both in our logistics business and in our owned vessel fleet. Coupled with the supportive macro environment for dry bulk rates, we believe that we are well positioned to continue to deliver attractive shareholder returns through opportunistic capital deployment. I'll now hand it over to Johnny for a discussion of our Q1 financial results. Speaker 300:08:03Thank you, Mark, and welcome to all of those joining us today. Our Q1 financial results continue to emphasize the flexibility of our business model as we were able to deliver premium returns despite a year over year reduction in total shipping days. Our results highlight the value that our chartered in strategy and cargo focus model creates within the context of our overall operating leverage. First quarter TCE rates were approximately $17,697 per day, a premium of approximately 29% over the average published market rates for Supramax and Panamax vessels in the period, which is supported by long haul ice class performance early in the quarter and forward bookings which locked in rates for cargo performance. Our adjusted EBITDA increased by nearly 23 percent year over year to $19,900,000 Our adjusted EBITDA margin also improved year over year to 19% as we managed our vessel utilization in accordance to the prevailing market rates to maximize our TCE rate returns and operating leverage. Speaker 300:09:19While our chartered in days decreased by 14% year over year, our total charter hire expense increased by 20% compared to the Q1 of 2023 due to the 41% increase in the prevailing market rates. Our charter in cost on a per day basis was $17,580 in the Q1 of 2024. And through today, we booked approximately 1400 days at approximately $16,700 per day. As I mentioned, we pushed some of our cargo commitments forward toward charter hire vessels intra quarter in the face of higher market rates, which allowed us to maximize our returns on our total fleet in accordance with our short term charter in strategy. Furthermore, our improved profitability for the Q1 was bolstered by lower vessel operating expenses, net of technical management fee, which decreased by 6% year over year from an average of $5,632 per day last year to $5,300 per day in the Q1 of 2024. Speaker 300:10:26The decrease continues to highlight the success of our efforts to manage vessel operating cost. As we have mentioned in the past, we utilize forward freight agreements and bunker swaps to selectively hedge our exposure to the market on our long term cargo contracts and forward bookings. This approach helps us lock in future cash flows and minimize the impact of market volatility, but can lead to fluctuations in our reported results on a period to period basis. Given the market volatility during the Q1, our reported net income reflects an unrealized gain of approximately $5,100,000 relating to mark to market adjustments of bunker swaps, forward freight agreements and our interest rate cap. In total, our reported GAAP net income attributable to Pangaea for the Q1 was $11,700,000 or $0.25 per diluted share compared to $3,500,000 or $0.08 per diluted share in the Q1 of last year. Speaker 300:11:27When excluding the impact of the unrealized losses from derivative instruments that I mentioned, as well as other non GAAP adjustments, our reported adjusted net income attributable to Pangaea during the quarter was 6,600,000 dollars or $0.14 per diluted share, an increase of $1,500,000 or $0.03 per diluted share versus the Q1 of last year. Moving on to cash flows, total cash from operations decreased by $2,600,000 year over year to $9,000,000 as the improvement in profitability was offset by the timing of customer receipts and supplier payments reflected in net working capital. At quarter end, the company had $95,900,000 in cash in total debt, including finance lease obligations of approximately $258,000,000 Of the $258,000,000 in debt, $20,000,000 represents a balloon payment that is due this month at maturity of the loan. This credit facility is currently locked in at a fixed rate of 3.96%. Once paid, the bulk pride, bulk independence and bulk endurance will be debt free vessels in our fleet and we are actively working with a new lender to refinance the Bulk Endurance only, which will generate approximately $15,000,000 of cash is expected to be finalized in the coming weeks. Speaker 300:12:51During the quarter, we continued to see relatively muted impact from higher interest rates due to our fixed rate and cap rate debt, as well as benefits from interest yielding deposits, which generated nearly $1,000,000 in interest income. At the end of the Q1, the ratio of net debt to trailing 12 month adjusted EBITDA was 2 times. As Mark mentioned, our capital allocation focus in 2024 is investing in growth by expanding our onshore footprint and owned vessel capacity and our current balance sheet and liquidity profile allows us the flexibility to deploy capital in ways that maximize overall returns on investment. Importantly, I would reiterate that we continue to prioritize a consistent return of capital strategy. We believe that our current dividend is one that can be sustained through the market cycle. Speaker 300:13:41With that, we will now open the line for questions. Operator00:13:57And we will take our first question from Liam Burke with B. Riley. Your line is now open. Speaker 400:14:02Yes. Good morning, Mark. Good morning, Johnny. Good morning, Mads. Speaker 200:14:07Hi, Liam. Thanks for joining Speaker 400:14:10us. Mark, in the Q1, you chartered in about 17 vessels, which is way, way on the low end of typically when you flex your fleet. Typically I think of vessels in the 20 ish range. But then Gianni gave us sort of a partial chartered in number for the Q2. Do you anticipate chartering in more than 17 vessels in the quarter and is that reflective of the end user demand? Speaker 200:14:41Thanks for the question, Liam. But yes, you have it right. In the Q1, early in the quarter, the market wasn't it didn't look so great to us and we slimmed down the fleet. But toward the end of the quarter, the market started to come back and we started to expand the chartered in fleet. So looking forward, yes, the chartered in base should go up as the market moves up. Speaker 400:15:12And Gianni quoted a price quarter to date on your chartered end day rates and they were lower than the Q1. So is that trend continuing where we could see a little margin lift there? Speaker 500:15:28Yes. Hi Liam, Matt We hope so, of course. It is all the reflection of where we take the ship. If you take the ship out in the Far East and you move it into the Atlantic, it has different cost than when we pick them up in the Atlantic. So I don't know if there's a real trend there that you can project unfortunately. Speaker 500:15:47It all very specific to the individual opportunity. Great. Speaker 400:15:52Thanks, Mads. And then just real quickly, you bought the 2 new vessels that will be delivered in the second half. You have a balloon payment. You have a large cash balance that can address your refinancing. You refinance only 1 vessel. Speaker 400:16:06I presume that refinance will go to the acquisition of the 2 new vessels? Speaker 600:16:15Yes. So I think the balloon comes due next week actually. So we are like you said, we are in a position we will pay off the balloon and then we are refinancing just the bulk endurance. So we'll add the bulk independence and the bulk pride as debt free vessels in the fleet. And yes, we'll use a portion of that to offset some of the equity on the 2 new vessels. Speaker 600:16:40But we do intend to finance the new vessels as well, but delivery is looking like sometime in Q3. So we have a little bit of time to plan how we want to handle that. But I expect we'll also finance a certain level on those vessels as well. Operator00:17:05Thank you. We'll take our next question from Poe Fratt with AGP. Your line is now open. Speaker 700:17:11Hey, good morning. Can you give us a little more detail on the acquisitions? What's the vintage on the 2 sister ships? Speaker 500:17:23Sure. They are built in 2016. So that is typically that 7 to 10 year range. That is why we have historically done most of our secondhand acquisitions. So we feel that these ships are a great fit for our business model. Speaker 500:17:41It's not often that 2 sister ships come up like that, but that fits the bill. So we are pretty excited about that transaction and we can't wait to put them to work in our business. Speaker 700:17:52And then, Mads, will these be essentially substituted for chartered in tonnage or do you think it's more expansionary? Speaker 500:18:04Well, I think we did sell the ship in I think it was December of last year, right? So that's a bit of a sort of a fleet renewal maintenance part of it. But I don't think we don't anticipate a 1 to 1 reduction of the channeled in fleet. The 2 things shouldn't be Speaker 200:18:24that closely linked. It's a continual cycle, Paul. A larger fleet gives us a little bit more ability to find more cargo commitments, which allows us to leverage the owned fleet with more chartered in ships. So it is there is a little bit of growth element to this and a little bit of fleet replacement element. Speaker 500:18:47And if anything, I think also probably it's a reflection in the belief we have in our model and the demand that we're experiencing from across the business that we want to make sure that we have good ships that we can serve our customers with as their volumes grow. Speaker 700:19:06Understood. And then that sort of ties into Mark earlier in the call said that you've flexed down your fleet early in the quarter because you didn't like what you saw or you thought the market was soft. And just to clarify, was that on the cargo side? You just didn't see the cargo volume to support chartered in vessels or it certainly wasn't from a rate perspective, right? You're looking more from Speaker 200:19:37the end cargo volume. Really, it's the opportunities we see when we're out looking at cargo, we didn't see much opportunity for us to expand the fleet and make money and to position the ships that we're chartering in, in the right places to make a profit on them. So it's a constant daily study of what the market is and what we can do with it. Speaker 700:20:13Understood. And then if you could talk about your forward cover, your forward cover of 2,890 days 16 1,300, that's a pretty meaningful drop from the Q1 TCE rate average. Can you just talk about sort of the context of how we should look at the rest of the quarter and sort of where your average TCE for the quarter might end up? Speaker 500:20:45Yes. I think that's a good question, Phil. And just going back to what Mark said earlier about with the previous question about growing the charter fleet. So the way that we historically do this is by when we grow that part of the business is through backhauls. So we will have some ships that are doing backhaul voyages. Speaker 500:21:09And of course, that is not as high a number as when they do sort of our traditional landing business or frontal, right. So there's an element to that and the quarter is not finished. So we like to think that over the year, for sure, these backhaul investments we're making now will contribute positively. Speaker 700:21:30Okay. Yes, I mean should I be concerned that you're chartering in at 16 1,700 and you're booking at 16,300? Speaker 500:21:40We do it every quarter, yes, you should. But that's not what we anticipate going forward for sure, right? This is, obviously, mostly of A. We have some cargo on the books that were fixed at different levels, but also a pretty meaningful investment in positioning voyages in the quarter. Speaker 700:22:00Okay. And then, Gianni, working capital was pretty negative for the quarter. Could you just talk about, will that balance out over the Q2 or just the rest of the year, sort of how we look at working capital in the Q2? And then if you could just give us a snapshot on where your mark to market on all your derivatives look right now, that would be helpful. Speaker 600:22:27Yes. So working capital, the largest impact there has been the recognition of the balloon payment on the debt that comes due next week. And that's sort of been there since we were anticipating that for a while. But cash balance is remaining strong. We even if it continues to maintain and grow. Speaker 600:22:52So we're allocating it towards chartering ships, towards building up towards acquisitions, etcetera. So once we handle the balloon payments, we refinance, I think we'll see it as far as that working capital ratio, we'll see that improve. Speaker 700:23:14Okay. And then how do your derivatives look so far in the quarter relative to the unrealized gains that you had in the Q1 flat? Should we expect some unrealized losses? Or how does the derivative book look right now? Speaker 300:23:35Yes. Well, there's 3 of that mark Speaker 600:23:38to market gain, right, there's 3 components to that. There's the interest rate cap, there's bunker derivatives and then there's FSAs. Interest rate cap, what happened at the end of last year, we knew there was some maybe negative pressure on the cap because of what expectations were on interest rates. That didn't materialize. We did see a pickup in value from year end to the Q1 there. Speaker 600:24:09And then bulk orders and FFA, I think they've remained relatively flat. So and even looking ahead with the interest rate cap, I think that also has remained relatively flat. So I don't expect significant volatility when it comes to our derivative book for Q2. Speaker 700:24:26Great. That's really helpful. Thank you. Operator00:24:30Thank you. We have no further questions on the line at this time. I'll turn the program back over to Mark Filanowski for any additional or closing remarks. Speaker 200:24:41Once again, thank you for joining our call. Should you have any questions, please feel free to contact us at investors atpangayals.com and a member of our team will follow-up with you. This concludes our call today. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallPangaea Logistics Solutions Q1 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsSlide DeckPress Release(8-K)Quarterly report(10-Q) Pangaea Logistics Solutions Earnings HeadlinesEquities Analysts Offer Predictions for PANL Q1 EarningsApril 29, 2025 | americanbankingnews.comResearch Analysts Issue Forecasts for PANL Q3 EarningsApril 26, 2025 | americanbankingnews.comHere’s How to Claim Your Stake in Elon’s Private Company, xAII predict this single breakthrough could make Elon the world’s first trillionaire — and mint more new millionaires than any tech advance in history. And for a limited time, you have the chance to claim a stake in this project, even though it’s housed inside Elon’s private company, xAI.May 5, 2025 | Brownstone Research (Ad)3 High-Yield Stocks With Over 8% DividendsApril 21, 2025 | 247wallst.comPangaea Logistics Solutions (PANL): Among Top Dividend Stocks that Pay More than the US Average Rental YieldMarch 25, 2025 | msn.comPangaea: 'Tough cargos' on cold seas drove strong Q4March 17, 2025 | bizjournals.comSee More Pangaea Logistics Solutions Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Pangaea Logistics Solutions? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Pangaea Logistics Solutions and other key companies, straight to your email. Email Address About Pangaea Logistics SolutionsPangaea Logistics Solutions (NASDAQ:PANL), together with its subsidiaries, provides seaborne dry bulk logistics and transportation services to industrial customers worldwide. It offers various dry bulk cargoes, such as grains, coal, iron ore, pig iron, hot briquetted iron, bauxite, alumina, cement clinker, dolomite, and limestone. The company's ocean logistics services comprise cargo loading, cargo discharge, vessel chartering, voyage planning, and technical vessel management. It owns and operates a fleet of vessels. The company was founded in 1996 and is headquartered in Newport, Rhode Island.View Pangaea Logistics Solutions ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Amazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2Palantir Earnings: 1 Bullish Signal and 1 Area of ConcernVisa Q2 Earnings Top Forecasts, Adds $30B Buyback PlanMicrosoft Crushes Earnings, What’s Next for MSFT Stock?Qualcomm's Earnings: 2 Reasons to Buy, 1 to Stay AwayAMD Stock Signals Strong Buy Ahead of Earnings Upcoming Earnings Advanced Micro Devices (5/6/2025)American Electric Power (5/6/2025)Constellation Energy (5/6/2025)Marriott International (5/6/2025)Energy Transfer (5/6/2025)Mplx (5/6/2025)Brookfield Asset Management (5/6/2025)Arista Networks (5/6/2025)Duke Energy (5/6/2025)Zoetis (5/6/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 8 speakers on the call. Operator00:00:00Good morning. My name is Britney, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pangaea Logistics Solutions First Quarter 2024 Earnings Teleconference. Today's call is being recorded and will be available for replay beginning at 11 am EST. The recording can be accessed by dialing 877-856 8,964 for domestic and or 402-220 1608 for international. Operator00:00:35All lines are currently muted and after the prepared remarks there will be a live question and answer session. You. It is now my pleasure to turn the floor over to Stephen Neely with Vallum Associates. Speaker 100:01:03Thank you, operator, and welcome to the Pangaea Logistics Solutions Q1 2024 results conference call. Leading the call with me today is CEO, Mark Filanowski Chief Financial Officer, Gianni DelSignore and COO, Mats Petersen. Today's discussion contains forward looking statements about future business and financial expectations. Actual results may differ significantly from those projected in today's forward looking statements due to various risks and uncertainties, including the risks described in our periodic reports filed with the SEC. Except as required by law, we undertake no obligation to update our forward looking statements. Speaker 100:01:41At the conclusion of our prepared remarks, we will open the line for questions. With that, I would like to turn the call over to Mark. Speaker 200:01:49Thank you, Stefan, and welcome to those joining us on the call today. After the market closed yesterday, we issued a release detailing our Q1 2024 results. Our flexible cargo focused business model continued to deliver premium TCE rates over the prevailing market. During the Q1, it also allowed us to drive improved operating leverage compared to the prior year, which resulted in higher adjusted EBITDA and improved margins year over year. While the Q1 is normally a seasonally soft period for global dry bulk demand, We benefited from elevated long haul voyage demand across our ice class fleet together with a solid base of premium long term COAs. Speaker 200:02:39As market rates began to rise later in the quarter, we added to our cargo commitments to increase utilization of our owned fleet and chartered in more vessels, which positioned us to optimize our TCE returns. When combined, these factors resulted in our TCE rates for the quarter exceeding the benchmark index by nearly 30%. We reported adjusted net income of $6,600,000 for the Q1 and adjusted EBITDA of 19,900,000 dollars Adjusted EBITDA improved by 23% year over year as our adjusted EBITDA margins strengthened by 400 basis points compared to the Q1 of 2023. Our improved profitability was supported by a 41% year over year increase in published market rates for Supramax and Panamax vessels, which also supported the 23% increase in our own earned TCE rates year over year in the Q1. At a macro level, the global demand for dry bulk remains strong and the supply of vessels remains constrained. Speaker 200:03:53These dynamics give us confidence in both the near term and long term outlook for our business. Specifically, in the near term, geopolitical disruptions have resulted in an increase in ton mile demand with certain shipping channels. We are also seeing regionally strong demand in key bulk trades associated with the current level of infrastructure investment in North America. On the supply front, the number of new builds coming into service remains limited relative to historical levels, which will continue to put pressure on dry bulk capacity. In combination, we see the supply and demand factors for drybulk being structurally supportive for higher market rates for the remainder of 2024 and beyond. Speaker 200:04:43With that said, volatility will continue to be a prevailing theme, but one that our cargo focused business model uniquely positions us to successfully navigate. While certain aspects of the dry bulk markets have seen pricing moderate since late in Q1, others have continued to progressively improve. Through today, we've booked over 2,890 shipping days at an average TCE rate of $16,200 per day versus a market rate of approximately $15,000 per day so far in the Q2 2024. Strategically, we continue to prioritize capital investment in fleet expansion and renewal, while continuing to scale our onshore logistics capabilities. In addition to these organic and inorganic investments, we'll seek to further fortify our balance sheet, all while continuing to support a consistent return of capital program as demonstrated by our consistent quarterly cash dividend. Speaker 200:05:49Regarding our current fleet of owned vessels, we have been focused on refreshing our fleet to keep an average vessel age of approximately 10 years, while continuing to ensure that we are able to meet unique cargo needs of our customers. We continue to strategically evaluate additional vessel acquisitions and divestitures through this lens and last night we announced we had entered into an agreement to purchase 258,000 deadweight ton sister ships built in 2016. We are purchasing these ships for a combined price of $56,600,000 and we expect to take delivery during the Q3 of this year. Within our port and logistics business, we have made strides to organically expand that business in the U. S. Speaker 200:06:39Gulf Coast region through strategic joint operations, partnerships and site leases. During the Q1, we executed a long term lease agreement in the Port of Tampa to handle dry bulk commodities that are complementary to those carried on our fleet vessels. In conjunction with signing this lease, we also committed investment capital in some port operations infrastructure in partnership with JV Partners at the Port. This investment will allow us to expand our ability to offer a wider scope of cargo focused services across the strategically important Gulf Coast region to both new and existing customers. The investment will provide a meaningful growth avenue for our terminal and stevedore business, which we expanded into Florida in June of last year. Speaker 200:07:29In summary, our cargo focused business model continues to deliver strong premium returns, which we are strategically investing in key growth opportunities, both in our logistics business and in our owned vessel fleet. Coupled with the supportive macro environment for dry bulk rates, we believe that we are well positioned to continue to deliver attractive shareholder returns through opportunistic capital deployment. I'll now hand it over to Johnny for a discussion of our Q1 financial results. Speaker 300:08:03Thank you, Mark, and welcome to all of those joining us today. Our Q1 financial results continue to emphasize the flexibility of our business model as we were able to deliver premium returns despite a year over year reduction in total shipping days. Our results highlight the value that our chartered in strategy and cargo focus model creates within the context of our overall operating leverage. First quarter TCE rates were approximately $17,697 per day, a premium of approximately 29% over the average published market rates for Supramax and Panamax vessels in the period, which is supported by long haul ice class performance early in the quarter and forward bookings which locked in rates for cargo performance. Our adjusted EBITDA increased by nearly 23 percent year over year to $19,900,000 Our adjusted EBITDA margin also improved year over year to 19% as we managed our vessel utilization in accordance to the prevailing market rates to maximize our TCE rate returns and operating leverage. Speaker 300:09:19While our chartered in days decreased by 14% year over year, our total charter hire expense increased by 20% compared to the Q1 of 2023 due to the 41% increase in the prevailing market rates. Our charter in cost on a per day basis was $17,580 in the Q1 of 2024. And through today, we booked approximately 1400 days at approximately $16,700 per day. As I mentioned, we pushed some of our cargo commitments forward toward charter hire vessels intra quarter in the face of higher market rates, which allowed us to maximize our returns on our total fleet in accordance with our short term charter in strategy. Furthermore, our improved profitability for the Q1 was bolstered by lower vessel operating expenses, net of technical management fee, which decreased by 6% year over year from an average of $5,632 per day last year to $5,300 per day in the Q1 of 2024. Speaker 300:10:26The decrease continues to highlight the success of our efforts to manage vessel operating cost. As we have mentioned in the past, we utilize forward freight agreements and bunker swaps to selectively hedge our exposure to the market on our long term cargo contracts and forward bookings. This approach helps us lock in future cash flows and minimize the impact of market volatility, but can lead to fluctuations in our reported results on a period to period basis. Given the market volatility during the Q1, our reported net income reflects an unrealized gain of approximately $5,100,000 relating to mark to market adjustments of bunker swaps, forward freight agreements and our interest rate cap. In total, our reported GAAP net income attributable to Pangaea for the Q1 was $11,700,000 or $0.25 per diluted share compared to $3,500,000 or $0.08 per diluted share in the Q1 of last year. Speaker 300:11:27When excluding the impact of the unrealized losses from derivative instruments that I mentioned, as well as other non GAAP adjustments, our reported adjusted net income attributable to Pangaea during the quarter was 6,600,000 dollars or $0.14 per diluted share, an increase of $1,500,000 or $0.03 per diluted share versus the Q1 of last year. Moving on to cash flows, total cash from operations decreased by $2,600,000 year over year to $9,000,000 as the improvement in profitability was offset by the timing of customer receipts and supplier payments reflected in net working capital. At quarter end, the company had $95,900,000 in cash in total debt, including finance lease obligations of approximately $258,000,000 Of the $258,000,000 in debt, $20,000,000 represents a balloon payment that is due this month at maturity of the loan. This credit facility is currently locked in at a fixed rate of 3.96%. Once paid, the bulk pride, bulk independence and bulk endurance will be debt free vessels in our fleet and we are actively working with a new lender to refinance the Bulk Endurance only, which will generate approximately $15,000,000 of cash is expected to be finalized in the coming weeks. Speaker 300:12:51During the quarter, we continued to see relatively muted impact from higher interest rates due to our fixed rate and cap rate debt, as well as benefits from interest yielding deposits, which generated nearly $1,000,000 in interest income. At the end of the Q1, the ratio of net debt to trailing 12 month adjusted EBITDA was 2 times. As Mark mentioned, our capital allocation focus in 2024 is investing in growth by expanding our onshore footprint and owned vessel capacity and our current balance sheet and liquidity profile allows us the flexibility to deploy capital in ways that maximize overall returns on investment. Importantly, I would reiterate that we continue to prioritize a consistent return of capital strategy. We believe that our current dividend is one that can be sustained through the market cycle. Speaker 300:13:41With that, we will now open the line for questions. Operator00:13:57And we will take our first question from Liam Burke with B. Riley. Your line is now open. Speaker 400:14:02Yes. Good morning, Mark. Good morning, Johnny. Good morning, Mads. Speaker 200:14:07Hi, Liam. Thanks for joining Speaker 400:14:10us. Mark, in the Q1, you chartered in about 17 vessels, which is way, way on the low end of typically when you flex your fleet. Typically I think of vessels in the 20 ish range. But then Gianni gave us sort of a partial chartered in number for the Q2. Do you anticipate chartering in more than 17 vessels in the quarter and is that reflective of the end user demand? Speaker 200:14:41Thanks for the question, Liam. But yes, you have it right. In the Q1, early in the quarter, the market wasn't it didn't look so great to us and we slimmed down the fleet. But toward the end of the quarter, the market started to come back and we started to expand the chartered in fleet. So looking forward, yes, the chartered in base should go up as the market moves up. Speaker 400:15:12And Gianni quoted a price quarter to date on your chartered end day rates and they were lower than the Q1. So is that trend continuing where we could see a little margin lift there? Speaker 500:15:28Yes. Hi Liam, Matt We hope so, of course. It is all the reflection of where we take the ship. If you take the ship out in the Far East and you move it into the Atlantic, it has different cost than when we pick them up in the Atlantic. So I don't know if there's a real trend there that you can project unfortunately. Speaker 500:15:47It all very specific to the individual opportunity. Great. Speaker 400:15:52Thanks, Mads. And then just real quickly, you bought the 2 new vessels that will be delivered in the second half. You have a balloon payment. You have a large cash balance that can address your refinancing. You refinance only 1 vessel. Speaker 400:16:06I presume that refinance will go to the acquisition of the 2 new vessels? Speaker 600:16:15Yes. So I think the balloon comes due next week actually. So we are like you said, we are in a position we will pay off the balloon and then we are refinancing just the bulk endurance. So we'll add the bulk independence and the bulk pride as debt free vessels in the fleet. And yes, we'll use a portion of that to offset some of the equity on the 2 new vessels. Speaker 600:16:40But we do intend to finance the new vessels as well, but delivery is looking like sometime in Q3. So we have a little bit of time to plan how we want to handle that. But I expect we'll also finance a certain level on those vessels as well. Operator00:17:05Thank you. We'll take our next question from Poe Fratt with AGP. Your line is now open. Speaker 700:17:11Hey, good morning. Can you give us a little more detail on the acquisitions? What's the vintage on the 2 sister ships? Speaker 500:17:23Sure. They are built in 2016. So that is typically that 7 to 10 year range. That is why we have historically done most of our secondhand acquisitions. So we feel that these ships are a great fit for our business model. Speaker 500:17:41It's not often that 2 sister ships come up like that, but that fits the bill. So we are pretty excited about that transaction and we can't wait to put them to work in our business. Speaker 700:17:52And then, Mads, will these be essentially substituted for chartered in tonnage or do you think it's more expansionary? Speaker 500:18:04Well, I think we did sell the ship in I think it was December of last year, right? So that's a bit of a sort of a fleet renewal maintenance part of it. But I don't think we don't anticipate a 1 to 1 reduction of the channeled in fleet. The 2 things shouldn't be Speaker 200:18:24that closely linked. It's a continual cycle, Paul. A larger fleet gives us a little bit more ability to find more cargo commitments, which allows us to leverage the owned fleet with more chartered in ships. So it is there is a little bit of growth element to this and a little bit of fleet replacement element. Speaker 500:18:47And if anything, I think also probably it's a reflection in the belief we have in our model and the demand that we're experiencing from across the business that we want to make sure that we have good ships that we can serve our customers with as their volumes grow. Speaker 700:19:06Understood. And then that sort of ties into Mark earlier in the call said that you've flexed down your fleet early in the quarter because you didn't like what you saw or you thought the market was soft. And just to clarify, was that on the cargo side? You just didn't see the cargo volume to support chartered in vessels or it certainly wasn't from a rate perspective, right? You're looking more from Speaker 200:19:37the end cargo volume. Really, it's the opportunities we see when we're out looking at cargo, we didn't see much opportunity for us to expand the fleet and make money and to position the ships that we're chartering in, in the right places to make a profit on them. So it's a constant daily study of what the market is and what we can do with it. Speaker 700:20:13Understood. And then if you could talk about your forward cover, your forward cover of 2,890 days 16 1,300, that's a pretty meaningful drop from the Q1 TCE rate average. Can you just talk about sort of the context of how we should look at the rest of the quarter and sort of where your average TCE for the quarter might end up? Speaker 500:20:45Yes. I think that's a good question, Phil. And just going back to what Mark said earlier about with the previous question about growing the charter fleet. So the way that we historically do this is by when we grow that part of the business is through backhauls. So we will have some ships that are doing backhaul voyages. Speaker 500:21:09And of course, that is not as high a number as when they do sort of our traditional landing business or frontal, right. So there's an element to that and the quarter is not finished. So we like to think that over the year, for sure, these backhaul investments we're making now will contribute positively. Speaker 700:21:30Okay. Yes, I mean should I be concerned that you're chartering in at 16 1,700 and you're booking at 16,300? Speaker 500:21:40We do it every quarter, yes, you should. But that's not what we anticipate going forward for sure, right? This is, obviously, mostly of A. We have some cargo on the books that were fixed at different levels, but also a pretty meaningful investment in positioning voyages in the quarter. Speaker 700:22:00Okay. And then, Gianni, working capital was pretty negative for the quarter. Could you just talk about, will that balance out over the Q2 or just the rest of the year, sort of how we look at working capital in the Q2? And then if you could just give us a snapshot on where your mark to market on all your derivatives look right now, that would be helpful. Speaker 600:22:27Yes. So working capital, the largest impact there has been the recognition of the balloon payment on the debt that comes due next week. And that's sort of been there since we were anticipating that for a while. But cash balance is remaining strong. We even if it continues to maintain and grow. Speaker 600:22:52So we're allocating it towards chartering ships, towards building up towards acquisitions, etcetera. So once we handle the balloon payments, we refinance, I think we'll see it as far as that working capital ratio, we'll see that improve. Speaker 700:23:14Okay. And then how do your derivatives look so far in the quarter relative to the unrealized gains that you had in the Q1 flat? Should we expect some unrealized losses? Or how does the derivative book look right now? Speaker 300:23:35Yes. Well, there's 3 of that mark Speaker 600:23:38to market gain, right, there's 3 components to that. There's the interest rate cap, there's bunker derivatives and then there's FSAs. Interest rate cap, what happened at the end of last year, we knew there was some maybe negative pressure on the cap because of what expectations were on interest rates. That didn't materialize. We did see a pickup in value from year end to the Q1 there. Speaker 600:24:09And then bulk orders and FFA, I think they've remained relatively flat. So and even looking ahead with the interest rate cap, I think that also has remained relatively flat. So I don't expect significant volatility when it comes to our derivative book for Q2. Speaker 700:24:26Great. That's really helpful. Thank you. Operator00:24:30Thank you. We have no further questions on the line at this time. I'll turn the program back over to Mark Filanowski for any additional or closing remarks. Speaker 200:24:41Once again, thank you for joining our call. Should you have any questions, please feel free to contact us at investors atpangayals.com and a member of our team will follow-up with you. This concludes our call today. You may now disconnect.Read morePowered by