FOURTH QUARTER 2021 EARNINGS CONFERENCE CALL PRESENTATION 1
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. 2
BUSINESS HIGHLIGHTS •Adjusted EBITDAof $38.0 million •Net income of $15.2 million •$56.2 million cash, restricted cash and cash equivalents Q4‐2021 Results •24 drybulk ships and one barge in owned and controlled fleet at December 31, 2021 Fleet •Operating 57 vessels on average during Q4 2021 •6.4 million tons carried; 118 voyages performed for 65 clients Operations 1) Adjusted EBITDA represents net income (or loss), determined in accordance with U.S. GAAP, excluding 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. Consistent Performance Working Fleet Extensive and varied experience 3
Customer Focus: Long‐term, fixed contract employment and recurring business with new and longstanding customers Targeted Business: Specialty tonnage provides consistent returns through fluctuating market cycles – 16% premium over average market rates in Q4‐21. Rate Environment: The Baltic Dry Index average decreased in the fourth quarter. (1) Per reported indices DRIVERS OF PERFORMANCE 4 0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000 5500 Baltic Dry Index (1)
4th Quarter Highlights • Net income of $15.2 million, as compared to a net income of $7.6 million in the same period of 2020. o Non‐GAAP adjusted net income attributable to Pangaea Logistics Solutions Ltd. of $24.9 million, as compared to $6.2 million for the same period of 2020. o Adjusted Earnings per share of $0.56, as compared to $0.14 for the same period of 2020. • Income from operations of $30.8 million, up from $8.3 million for December 31, 2020. • Diluted net income per share were $0.34 as compared to $0.17 for the three months ended December 31, 2020. • Pangaea's TCE rates were $32,563 for the three months ended December 31, 2021 and $14,640 for the three months ended December 31, 2020, a 122% increase, giving the Company an overall average premium over market rates of $4,459 or 16%. Adjusted EBITDA of $38.0 million for the fourth quarter of 2021 versus $12.9 million for the same period in 2020. Subsequent Business Update • In November 2021 the Company entered into a memorandum of agreement to purchase a Panamax vessel to add to its operating fleet for $19.9 million. The vessel was delivered to the Company on February 17, 2022 and renamed the m/v Bulk Concord. • As previously announced the Company declared a $0.05 per share dividend which was paid to shareholders on March 15, 2022 to shareholders of record on March 1, 2022. FINANCIAL HIGHLIGHTS 5
1) Adjusted EBITDA represents net income (or loss), determined in accordance with U.S. GAAP, excluding 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. SELECTED INCOME STATEMENT DATA 6 (in thousands,may not foot due to rounding) Three months ended December 31, Three months ended December 31, 2021 2020 2021 2020 (unaudited) (unaudited) (unaudited) (unaudited) Revenues: Voyage revenue $ 202,504 $ 98,237 $ 614,482 $ 349,738 Charter revenue 32,055 14,617 103,622 33,158 Total revenue 234,558 112,853 718,104 382,896 Expenses: Voyage expense 65,266 41,598 219,623 161,881 Charter hire expense 114,992 45,270 334,953 127,769 Vessel operating expenses 12,693 9,088 42,715 38,047 General and administrative 4,290 4,357 18,966 15,915 Depreciation and amortization 6,523 4,237 22,974 17,055 Loss on impairment of vessels ‐ ‐ ‐ 1,801 Loss on sale of vessels ‐ 25 ‐ 730 Total expenses 203,764 104,576 639,232 363,199 Income from operations 30,794 8,277 78,872 19,697 Total other income (expense), net (13,201) (397) (6,499) (7,005) Net income 17,594 7,880 72,374 12,692 Income attributable to noncontrolling interests (2,444) (290) (5,147) (1,340) Net income attributable to Pangaea Logistics Solutions Ltd. $ 15,150 $ 7,590 $ 67,227 $ 11,352 Adjusted EBITDA (1) $ 38,013 $ 12,924 $ 105,079 $ 42,581
SELECTED BALANCE SHEET & CASH FLOW DATA 7 The amounts in the table above have been calculated based on unrounded numbers. Accordingly, certain amounts may not sum due to the effect of rounding. (in thousands) December 31, 2021 December 31, 2020 Current Assets Cash and cash equivalents 56,209$ 46,897$ Restricted cash ‐ 1,500 Accounts receivable, net 54,259 29,152 Other current assets 73,495 33,792 Total current assets 183,964 111,342 Fixed assets, including finance lease right of use assets, net 517,109 321,982 Advances for vessel purchases 1,990 ‐ Investment in newbuildings in‐process ‐ 15,391 Other Non‐current Assets 3,962 1,690 Total assets 707,024$ 450,404$ Current liabilities Accounts payable, accrued expenses and other current liabilities 49,154$ 32,400$ Related party debt 243 243 Current portion long‐term debt and finance lease liabilities 29,923 64,361 Other current liabilities 32,419 13,805 Total current liabilties 111,739 110,809 Secured long‐term debt and finance lease liabilities, net 276,796 95,028 Other long‐term liabilities 17,807 10,135 Total Pangaea Logistics Solutions Ltd. equity 247,202 182,766 Non‐controlling interests 53,479 51,666 Total stockholders' equity 300,681 234,431 Total liabilities and stockholders' equity 707,024$ 450,404$ Cash flows for the years ended: December 31, 2021 December 31, 2020 Net cash provided by operating activities 61,745$ 20,836$ Net cash (used in) provided by investing activities (197,792)$ (6,888)$ Net cash provided by (used in) financing activities 143,859$ (18,606)$
TOTAL SHIPPING DAYS 8 Capital Efficiency: Leveraged owned fleet by chartering‐in market vessels Flexibility: Short‐term charters allow us to react quickly and take advantage of arbitrage opportunities 1,573 1,623 1,566 1,461 1,372 1,615 1,968 2,081 3,002 1,977 3,168 3,407 3,296 3,108 3,337 3,118 ‐ 1,000 2,000 3,000 4,000 5,000 6,000 Q1‐20 Q2‐20 Q3‐20 Q4 ‐20 Q1‐21 Q2‐21 Q3‐21 Q4‐21 D ay s Owned Days Charter‐in Days
PANGAEA AVERAGE TCE vs. MARKET AVERAGE TCE 9 **Average of the published Panamax and Supramax index net of commission $10,508 $10,733 $13,316 $14,640 $16,524 $21,053 $28,770 $32,563 $5,920 $5,548 $10,286 $10,326 $16,261 $24,185 $32,033 $28,104 $‐ $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Q1‐2020 Q2‐2020 Q3‐2020 Q4‐2020 Q1‐2021 Q2‐2021 Q3‐2021 Q4‐2021 Pangaea Average TCE Market Average TCE
1) Adjusted EBITDA is a non‐GAAP measure and represents operating earnings before interest expense, income taxes, depreciation and amortization, share‐based compensation, loss on sale and leaseback of vessels 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. FINANCIAL PERFORMANCE Q4‐2020 THROUGH Q4‐2021 10 ‐ 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 Q1‐20 Q2‐20 Q3‐20 Q4 ‐20 Q1‐21 Q2‐21 Q3‐21 Q4‐21 ADJUSTED EBITDA(1) $‐ $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Q1‐20 Q2‐20 Q3‐20 Q4 ‐20 Q1‐21 Q2‐21 Q3‐21 Q4‐21 TCE(2)
ADJUSTED EARNINGS PER COMMON SHARE 11 (1) Adjusted earnings per��share represents net income attributable to Pangaea Logistics Solutions Ltd. plus, when applicable, loss on sale and leaseback of vessel, loss on impairment of vessel, gains and losses on derivative instruments, and certain non‐recurring charges, divided by the weighted average number of shares of common stock. Adjusted EPS total of $0.56 for Q4‐2021 0.03 0.09 0.20 0.10 (0.09) 0.09 0.19 0.14 0.09 0.29 0.48 0.56 (0.10) ‐ 0.10 0.20 0.30 0.40 0.50 0.60 Q1‐19 Q2‐19 Q3‐19 Q4‐19 Q1‐20 Q2‐20 Q3‐20 Q4 ‐20 Q1‐21 Q2‐21 Q3‐21 Q4‐21 Historical Adjusted EPS (1) $0.42 $0.33 $1.42
TCE OUTLOOK 12 * Q1 22 estimated TCE performance based on shipping days performed through March 15, 2022 **Average of the published Panamax and Supramax index net of commission $14,360 $12,029 $12,933 $15,915 $15,172 $10,508 $10,733 $13,316 $14,640 $16,524 $21,053 $28,770 $32,563 $26,512 * ‐ 1,000 2,000 3,000 4,000 5,000 6,000 $‐ $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 Q4 ‐ 2018 Q1‐2019 Q2‐2019 Q3‐2019 Q4‐2019 Q1‐2020 Q2‐2020 Q3‐2020 Q4‐2020 Q1‐2021 Q2‐2021 Q3‐2021 Q4‐2021 Q1‐2022e Shipping Days Pangaea TCE Market Average TCE**