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, 2024, 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. 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 $1.1 million at December 31, 2023. On February 15, 2024, the Company's Board of Directors declared a quarterly cash dividend of $0.10 per common share, to be paid on March 15, 2024, to all shareholders of record as of March 1, 2024. 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. ITEM 6. SELECTED FINANCIAL DATA 60 (in thousands, except shipping days data) As of and for the years ended December 31, 2023 2022 Selected Data from the Consolidated Statements of Income Voyage revenue $ 468,581 $ 640,034 Charter revenue 23,716 59,673 Terminal & stevedore revenue 6,971 — Total revenue 499,268 699,707 Voyage expense 227,435 262,089 Charter hire expense 111,034 222,332 Vessel operating expenses 55,784 56,859 Terminal Expenses 5,809 — Total cost of transportation and service revenue 400,061 541,280 Vessel depreciation and amortization 29,339 29,377 Gross Profit 69,868 129,050 Other operating expenses 23,512 20,216 Loss on impairment of vessels — 3,008 Loss on sale of vessels 1,739 318 Income from operations 44,617 105,508 Total other expense, net (16,079) (20,000) Net income 28,538 85,508 Income attributable to noncontrolling interests (2,214) (6,016) Net income attributable to Pangaea Logistics Solutions Ltd. $ 26,323 $ 79,490 Net income from continuing operations per common share information Basic income per share $ 0.59 $ 1.79 Diluted income per share $ 0.58 $ 1.76 Weighted-average common shares Outstanding - basic 44,774 44,399 Weighted-average common shares Outstanding - diluted 45,475 45,060 Cash dividends declared per share $ 0.40 $ 0.30 Adjusted EBITDA (1) 79,724 140,898 Shipping Days (2) Voyage days 14,922 15,237 Time charter days 1,789 2,478 Total shipping days 16,711 17,715 TCE Rates ($/day) $ 15,849 $ 24,434 Selected Data from the Consolidated Balance Sheets Cash and cash equivalents $ 99,038 $ 128,385 Total assets $ 705,180 $ 748,241 Total secured debt, including obligations under finance leases $ 264,435 $ 299,481 Total shareholders' equity $ 370,196 $ 368,722 Selected Data from the Consolidated Statements of Cash Flows Net cash provided by operating activities $ 53,787 $ 134,801 Net cash used in investing activities $ (15,982) $ (28,509) Net cash used in by financing activities $ (67,152) $ (34,117) 61 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. (1) Adjusted EBITDA represents operating earnings before interest expense, interest income, income taxes, depreciation and amortization, loss on sale of vessels, share-based compensation and other non-operating income and/or expense, and other non-recurring items, 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, 2023 2022 Net Transportation and Service Revenue (3) Gross Profit (4) $ 69,868 $ 129,050 Add: Vessel Depreciation and Amortization 29,339 29,377 Net transportation and service revenue $ 99,207 $ 158,427 Adjusted EBITDA Net Income $ 28,538 $ 85,508 Interest expense, net 13,916 21,490 Depreciation and amortization 30,070 29,490 EBITDA $ 72,524 $ 136,487 Loss on sale of vessel 1,739 318 Loss on impairment of vessels — 3,008 Share-based compensation 2,088 1,768 Unrealized gain on derivative instruments, net 2,925 (682) Other non-recurring items 448 — Adjusted EBITDA $ 79,724 $ 140,898 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, and terminal & stevedore 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. 62