Pangaea Logistics Solutions Ltd. 10-K

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common shares have been traded on The Nasdaq Capital Market under the symbol PANL since our common shares began public trading on October 3, 2014.The Company's internet address is www.pangaeals.com. Holders of Record As of the close of business on March 14, 2023, there were approximately 14 stockholders of record of our common stock. The actual number of stockholders is greater than this number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers and other nominees. This number of holders of record also does not include stockholders whose shares may be held in trust by other entities. Dividends Under our By-laws, our board of directors may declare dividends or distributions out of contributed surplus and may also pay interim dividends to be paid in cash, shares of the Company’s stock or any combination thereof. Our board of directors’ objective is to generate competitive returns for our shareholders. Any dividends declared will be in the sole discretion of the board of directors and will depend upon earnings, restrictions in our debt agreements described later in this prospectus, market prospects, current capital expenditure programs and investment opportunities, the provisions of Bermuda law affecting the payment of distributions to shareholders and other factors. Under Bermuda law, the board of directors has no discretion to declare or pay a dividend if there are reasonable grounds for believing that the Company is, or would after the payment be, unable to pay its liabilities as they become due or the realizable value of the Company’s assets would thereby be less than its liabilities. In addition, since we are a holding company with no material assets other than the shares of our subsidiaries through which we conduct our operations, our ability to pay dividends will depend on our subsidiaries’ distributing to us their earnings and cash flows. The Company paid a quarterly cash dividend ranging from $0.035 to $0.10 per common share commencing in May 2019. In March 2020 the Company suspended its dividend due to the uncertainty caused by COVID-19 global pandemic and resumed its quarterly cash dividends payouts in December 2020. We cannot assure you that we will be able to pay regular quarterly dividends, and our ability to pay dividends will be subject to the limitations set forth above and in the section of this Form 10-K titled “Risk Factors.” The Company has dividends payable of $0.6 million at December 31, 2022. On February 15, 2023, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per common share, to be paid on March 15, 2023, to all shareholders of record as of March 1, 2023. Use of Proceeds Not applicable Purchases of Equity Securities by Issuer and Affiliates Not applicable Securities Authorized for Issuance Under Equity Compensation Plan See Part III, Item 12 for information regarding securities authorized for issuance under our equity compensation plan. 49 ITEM 6. SELECTED FINANCIAL DATA (in thousands, except shipping days data) As of and for the years ended December 31, 2022 2021 Selected Data from the Consolidated Statements of Income Voyage revenue $ 640,034 $ 614,482 Charter revenue 59,673 103,622 Total revenue 699,707 718,104 Voyage expense 262,089 219,623 Charter hire expense 222,332 334,953 Vessel operating expenses 56,859 42,715 Total cost of transportation and service revenue 541,280 597,291 Vessel depreciation and amortization 29,377 22,874 Gross Profit 129,050 97,939 Other operating expenses 20,216 19,067 Loss on impairment of vessels 3,008 — Loss on sale of vessels 318 — Income from operations 105,508 78,872 Total other expense, net (20,000) (6,499) Net income 85,508 72,374 Income attributable to noncontrolling interests (6,016) (5,147) Net income attributable to Pangaea Logistics Solutions Ltd. $ 79,491 $ 67,227 Net income from continuing operations per common share information Basic income per share $ 1.79 $ 1.53 Diluted income per share $ 1.76 $ 1.50 Weighted-average common shares Outstanding - basic 44,399 43,997 Weighted-average common shares Outstanding - diluted 45,060 44,849 Cash dividends declared per share $ 0.30 $ 0.11 Adjusted EBITDA (1) 140,898 105,079 Shipping Days (2) Voyage days 15,237 15,932 Time charter days 2,478 3,963 Total shipping days 17,715 19,895 TCE Rates ($/day) $ 24,434 $ 25,056 Selected Data from the Consolidated Balance Sheets Cash and cash equivalents $ 128,385 $ 56,209 Total assets $ 748,241 $ 707,024 Total secured debt, including obligations under finance leases $ 299,481 $ 306,719 Total shareholders' equity $ 368,722 $ 300,681 Selected Data from the Consolidated Statements of Cash Flows Net cash provided by operating activities $ 134,801 $ 61,745 Net cash used in investing activities $ (28,509) $ (197,792) Net cash (used in) provided by financing activities $ (34,117) $ 143,859 Amounts in the table above have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding. 50 (1) Adjusted EBITDA represents operating earnings before interest expense, income taxes, depreciation and amortization, loss on sale and leaseback of vessels, share-based compensation and other non-operating income and/or expense, if any. Adjusted EBITDA is included because it is used by management and certain investors to measure operating performance and is also reviewed periodically as a measure of financial performance by Pangaea's Board of Directors. Adjusted EBITDA 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 Adjusted EBITDA used here may not be comparable to the definition of EBITDA used by other companies. (2) Shipping days are defined as the aggregate number of days in a period during which its owned or chartered-in vessels are performing either a voyage charter (voyage days) or time charter (time charter days). The reconciliation of gross profit to net transportation and service revenue and income from operations to Adjusted EBITDA is as follows: (in thousands) Years Ended December 31, 2022 2021 Net Transportation and Service Revenue (3) Gross Profit (4) $ 129,050 $ 97,939 Add: Vessel Depreciation and Amortization 29,377 22,874 Net transportation and service revenue $ 158,427 $ 120,813 Adjusted EBITDA Net Income $ 85,508 $ 72,374 Interest expense, net 21,490 11,514 Depreciation and amortization 29,490 22,974 EBITDA $ 136,487 $ 106,862 Loss on sale of vessel 318 — Loss on impairment of vessels 3,008 — Share-based compensation 1,768 2,103 Unrealized gain on derivative instruments, net (682) (3,886) Adjusted EBITDA $ 140,898 $ 105,079 Amounts in the table above have been calculated based on unrounded numbers. Accordingly, certain amounts may not appear to recalculate due to the effect of rounding. (3) Net transportation and service revenue represents total revenue less the total direct costs of transportation and services, which includes charter hire, voyage and vessel operating expenses. Net transportation and service revenue is included because it is used by management and certain investors to measure performance by comparison to other logistic service providers. Net transportation and service 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 transportation and service revenue used here may not be comparable to an operating measure used by other companies. (4) Gross profit represents total revenue less total cost of transportation and service revenue and less vessel depreciation and amortization. 51