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Operator: Good morning. My name is Chelsea, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pangaea Logistics Solutions First Quarter 2025 Earnings Teleconference. Today’s call is being recorded and will be available for replay beginning at 11.00 AM Eastern Standard Time. The recording can be accessed by dialing 888-215-1487 domestically or 402-220-4938 internationally. All lines are currently muted and after the prepared remarks, there will be a live question-and-answer session. [Operator Instructions]. It is now my pleasure to turn the floor over to Stefan Neely with Vallum Advisors.

Stefan Neely: Thank you, operator, and welcome to the Pangaea Logistics Solutions first quarter 2025 results conference call. Leading the call with me today is CEO, Mark Filanowski; Chief Financial Officer, Gianni Del Signore; and COO, Mads 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. At the conclusion of our prepared remarks, we will open the line for questions. With that, I’d like to turn the call over to Mark.

Mark Filanowski: Thank you, Stefan, and welcome to those joining us on the call today. After the market closed yesterday, we issued a press release detailing our first quarter 2025 results. Our first quarter performance reflects the continued disciplined execution of our cargo-focused business model. Despite seasonal softness early in the quarter, we delivered TCE rates that were 33% above the prevailing market, demonstrating the strength and differentiation of our commercial strategy. This outperformance was supported by our long-term contracts of affreightment, which provided pricing stability through the winter months and allowed us to effectively manage market volatility later in the quarter. For the first quarter of 2025, we reported an adjusted net loss of approximately $2 million and adjusted EBITDA of $14.8 million as average market pricing declined 37% compared to the prior year period.

Despite this pressure, our results benefited from our countercyclical positioning and integrated fleet strategy. Total shipping days rose 24.6% year-over-year, primarily driven by the addition of SSI handy fleet vessels. On a comparable basis, shipping days increased by 41%, underscoring the meaningful contribution of the acquisition to our operational scale. Importantly, we completed 160 days of planned off-hire for vessel dry dockings during the quarter, taking advantage of softer demand to complete a significant portion of our 2025 dry docking schedule. With only four dockings remaining for the rest of the year, we are well positioned to optimize fleet availability during periods of stronger demand. Since the beginning of the year, our teams have made substantial progress integrating the SSI fleet into our operating platform.

Integration efforts are proceeding as planned. And as we fully align the new vessels with our existing routes, we expect to unlock further operating efficiencies and enhance returns across our broader fleet. We have seen vessel operating expenses decrease in areas like insurance, where our larger footprint reduces premiums and allows us to assume some added risks and we are working on other operating cost synergies available as we exchange ideas with new relationships. By year-end, we hope to have implemented cost savings of at least 2.5 million annually. We have successfully expanded the capabilities of the handy fleet, both geographically and cargo-wise. Looking at the market environment, the dry bulk sector continues to experience elevated levels of volatility and uncertainty.

While our operations are not directly impacted by proposed tariffs, including recently discussed port fees for Chinese built or controlled vessels, we are closely monitoring potential indirect effects. Based on our review of the revised U.S. trade representative port fees proposal, we do not expect any material impact to our owned fleet given our geographic focus and operating model. However, broader market dislocations could occur as global vessel deployment patterns shift in response to the evolving landscape. It’s important to note that over 95% of our tonnage is tied to non-agricultural bulks, including iron ore, coal, cement and aggregates, primarily across Atlantic, European and Caribbean trade routes. This unique footprint continues to insulate us from some of the demand and policy volatility facing many other dry bulk operators.

Turning to the second quarter. Demand trends have remained steady across our key routes, though pricing continues to reflect global macro and trade policy uncertainties. As of today, we have booked 4,275 shipping days for the second quarter, generating a TCE of $12,524 per day. As we advance through 2025, we remain focused on a prudent capital allocation. As we announced yesterday, our Board of Directors has authorized a new share repurchase program of up to $15 million in addition to declaration of a $0.05 dividend. This approach gives us added flexibility to return capital to shareholders through open market repurchases of Pangaea shares, which we feel are undervalued after recent share price movements. In light of the recent pressure on the dry bulk market and ongoing trade uncertainty, we are maintaining a disciplined capital allocation strategy, prioritizing balance sheet strength, while continuing to deliver long-term value through shareholder returns.

We will also continue to opportunistically evaluate strategic fleet transactions that support long-term efficiency, extend asset life and preserve a competitive age profile. At the same time, we are investing in our port and logistics business, which remains a critical contributor to our margin profile. Our expansion at the Port of Tampa is progressing on schedule and new operations in Port Charles, Louisiana and Port of Aransas in Texas demonstrate our commitment to this exciting supply chain expansion of our business offerings. With that, I’d like to turn the call over to Gianni to review our first quarter financial results.

Gianni Del Signore: Thank you, Mark, and welcome to those joining us on the call today. Our first quarter financial results reflect continued TCE outperformance relative to the broader market. First quarter TCE rates were $11,390 per day, a premium of approximately 33% over the average published market rates for Panamax, Supramax and Handysize vessels in the period, driven by strong execution across our core contracts and the expanded scale of our owned fleet. While total shipping days increased year-over-year by 41% to 5,210, TCE rates earned declined by 36%, reflecting the decline in average market year-over-year. Our adjusted EBITDA for the first quarter was $14.8 million, a decrease of approximately $5.2 million relative to the prior year period.

Total charter hire expense decreased by 35% year-over-year, primarily due to a 37% decrease in prevailing market rates, partly offset by a 14% increase in chartered-in days. Our charter-in cost on a per day basis was $10,108 in the first quarter of 2025. And through today, we booked approximately 1,795 days at $11,472 per day for the second quarter of 2025. Vessel operating expenses, net of technical management fees, increased by approximately 75% year-over-year, primarily due to the acquisition of the SSI fleet, which increased total owned days by 61% to 3,690. On a per day basis, vessel operating expenses, net of technical management fees, increased by only 4% from an average of $5,300 per day last year to $5,528 per day in the first quarter of 2025.

In total, our reported GAAP net loss attributable to Pangaea for the first quarter was approximately $2 million or a loss of $0.03 per diluted share compared to net income of $11.7 million or $0.25 per diluted share in the first quarter of last year. When excluding the impact of the unrealized losses from derivative instruments as well as other non-GAAP adjustments, our reported adjusted net loss attributable to Pangaea during the quarter was $2.1 million or a loss of $0.03 per diluted share compared to adjusted net income of $6.6 million or $0.14 per diluted share in the first quarter of last year. Turning to cash flow and liquidity. Total cash from operations decreased by $13.2 million year-over-year to net cash used in operations of $4.3 million due to a decrease in operating earnings and a $5.2 million increase in dry docking costs year-over-year.

We repaid over $11 million in long-term debt and finance lease obligations and our interest expense was $6.1 million, an increase of $2.3 million due to the new debt facilities entered into during the second half of last year and the assumed debt and finance leases associated with the SSI acquisition. We ended the quarter with $63.9 million in cash and total debt including finance lease obligations of approximately $390 million. In the near-term, our capital allocation strategy will remain focused on preserving balance sheet optionality, a sustainable shareholder return program along with targeted capital-light investments in our stevedoring and logistics operations and ongoing renewal and modernization of our dry bulk fleet. Additionally, we remain committed to a consistent and sustainable return of capital strategy.

With that, we will now open the line for questions.

Operator: [Operator Instructions]. And our first question will come from Liam Burke with B. Riley Securities. Please go ahead.

Liam Burke: Thank you. Good morning, Mark. Good morning, Gianni. Good morning, Mads.

Mark Filanowski: Good morning, Liam.

Liam Burke: Mark, you modified your returning cash to shareholder strategy by adding a buyback. Your dividend now is $0.05 versus $0.10 a quarter. Do you plan on — I know the Board evaluates it every quarter, but is that a dividend you’d expect to pay through the cycle or are you going to go to more of a variable model there?

Mark Filanowski: Liam, we haven’t talked about the variable model yet. We’ve talked a lot about different ways to get returns to shareholders. My favorite is to reinvest in the business and add productive people and productive assets to the organization. And eventually, the stock market will recognize the inherent value in the operation and the shares. But sometimes, stock market doesn’t agree with me. We paid a pretty nice dividend over the years — over the past few years. And that was one way to get return to shareholders. We’ve also been talking with people like you and other shareholders about the wisdom of a stock buyback. So with the share value dropping substantially over the past couple of months, we thought it was time to try a buyback and see if we can return value to shareholders in that way.

We have new Directors on the Board, have new opinions. And so I think we’ll go another quarter, see how this — the shares react, what — how investors react regarding the new dividend rate and take it quarter-by-quarter and see how we go.

Liam Burke: Great. Thank you. You’re still yielding 4.5% even at the new $0.05 per quarter. You called out an expense reduction program by the end of the year. Is that integration savings with the SSI fleet or is that just ongoing review of the operations and being able to pull out excess cost?

Mark Filanowski: A little bit of both, Liam. We didn’t enter the SSI transaction looking for significant cost savings, but there are some easy targets to attack when you’ve got a larger fleet and a larger operation that scale just gives you a little bit more power to drive cost decreases. One area was insurance, where we looked at P&I, we looked at hull and we went to market a little more aggressively than we were able to in the past and drove some cost decreases. We’ll — we’re learning from each other in regarding purchasing and other ways to save money and with a larger fleet and a larger operation and it’s working out.

Liam Burke: Thank you, Mark.

Operator: Thank you. Our next question will come from Poe Fratt with AGP. Please go ahead.

Poe Fratt: Hey, good morning. Can you just help me, Mark, help me understand the dividend cut. You’ve consistently said in previous presentations that you’ve wanted to maintain a dividend over the cycle that’s sustainable. That dividend was $0.10 a quarter. Now you’re changing it to $0.05 a quarter. And now you’re saying it’s sustainable over the cycle. What changed?

Mark Filanowski: Well, a lot of things change, Poe. As I explained, we have a different thought process on the Board regarding the viability of a share buyback. We want to keep a consistent dividend and it doesn’t necessarily mean a consistent amount. It is — our operation does sustainably produce cash flow that’s available for different ways to return capital to shareholders. And that’s what we’re trying to do is come up with a prudent approach to address the need for shareholders to have some kind of return on their shares. We saw an opportunity here, a potential opportunity to do something good for shareholders by announcing the share buyback. So like I mentioned, there’s different ways to provide a return and we’re trying a couple of different ways this time.

Poe Fratt: So can you, Mark, tell me how the share buyback will work? Are you going to be in the market every quarter buying the difference $3.2 million that you’re going to save on paying the dividend? A lot of companies announced share buybacks, but never fall through with them. Could you just talk about how you’re going to approach the stock buyback?

Mark Filanowski: We’re approaching at least one bank this week after this call to set-up a program, Poe. The Board has asked us to review with them in advance any potential share buybacks based on price availability of capital, etcetera. So it will be — it won’t be a constant rolling program. It will be when the Board feels it’s the right time to purchase shares in the market.

Poe Fratt : And then, Mark, in the context of — with the SSI transaction, you now have a large shareholder that also large shareholder is represented, obviously, on the Board, but they also bought shares in early April. Do you — are you concerned at all about the increased concentration in ownership? I mean, one of the things that the market often has said is that your public float is limited. And can you just talk about how that was considered in this decision?

Mark Filanowski: Yes. The $15 million isn’t a large share of our outstanding float. We estimate our float to be around 40%. And we think there’s an opportunity there to buy shares without decreasing the float substantially. And regarding the concentration of the largest shareholder who now has 28%, there is a cap there of 30% that came about as a result of the negotiations regarding that deal. So I don’t think it will go up substantially as a result of any share buyback we might do.

Poe Fratt: Great. And then, Gianni, you often in previous quarters have talked about not only your forward cover that you talked about, you booked 47 vessels at $12,500 roughly. Where will shipping days end in the second quarter, sort of what percentage of your shipping days — expected shipping days in the second quarter have been booked?

Gianni Del Signore: Yes. So I think we gave out the indication so far for the quarter. We had 4,275 days at $12,500. I think our total fleet right now is somewhere around 65 vessels total. And I think that’s been right around where we’ve been for the quarter. So the 65 vessel average fleet over the quarter is our projected total for this quarter.

Poe Fratt: So you’re like 80% booked for the quarter. You also — in previous quarters, Gianni, at least the last couple of quarters, you talked about your — how your chartered hire expenses were running. Do you have a figure for how many days you’ve chartered-in for the quarter and the cost…?

Gianni Del Signore: Yes, I can. Absolutely. It was — I think I mentioned it in my prepared remarks earlier, but we booked 1,795 days at $11,472. So we still have about our margin on our chartered-in fleet is around $1,052 or 1,052 margin on our chartered-in fleet.

Poe Fratt: Great. Sorry, I missed that. And then, Mads, can you talk about the operating efficiencies that were mentioned in the press release about integrating the handies? Can you — beyond the insurance, can you just talk about whether there are additional operating efficiencies that you’re — and sort of the nature of those? And then also, where do you stand towards that 2.5 million? Is — are you quarter of the way towards realizing that or are we going to see that over the rest of the year, the 2.5 million of cost savings?

Mads Petersen: Yes. So on the trading synergies, I think it’s mostly outside what Mark mentioned on the cost side, which is a continuous process across all the ships in the fleet, you always try to optimize that. It’s mainly around the commercial synergies where we have been able to use the handy vessels in some of the trades, we have historically done on especially our Super fleet. And so that’s both geographical in terms of trading in areas where you need a little bit of ice experience or it’s a commodity or another geographical focus. That’s primarily where the synergies have come and the sort of — which is also what the — as Mark also mentioned was the primary driver, right? It wasn’t a cost reduction ambition only. It was really to grow the top-line rather than just reduce cost.

But we are trying to do that. And it’s — vessel technical management and operations is a lot. Many, many components goes into that and everything is being scrutinized, as we always did. But, of course, the fact that we have access to more experienced, larger pool of crew and more additional resources makes that sort of synergy and cost optimization possible. But that’s a continuous process and it will — some of these things are bigger undertakings that take a little bit longer to realize, but some of them we are working on crystallizing in the shorter horizon.

Poe Fratt: Great. And then on the terminal side, you’re talking about the expansion of the Tampa and then down in Texas. Could you just maybe quantify what that could mean to second — I’m sorry, second half operating results? Is it going to move the needle on the terminaling revenue or is it just an incremental add-on that will add maybe 10% to revenues?

Gianni Del Signore: Yes. I think highly dependent on the start date, we’re still projecting within this year, late Q3, Q4 start. So it will be incremental to this year. It will add about 150, 200 of EBITDA for this year. Really, that’s going to be a project that will be in full swing for 2026 in Tampa and then also in Texas and that’s where we’ll see the real contribution for that.

Poe Fratt: And then anything else on the horizon on the terminaling business to further expand?

Mark Filanowski: No, Poe, we’ll add the Tampa, Lake Charles and Port Aransas terminals this year. What we found is that once we’re in a place, more stuff comes to us. So we have no – nothing on the books in addition to those 3 for this year. But once they’re up and running, business kind of shows up, additive business.

Poe Fratt: Great. Thanks for your time.

Mark Filanowski: Thanks, Poe.

Operator: Thank you. [Operator Instructions]. And our next question will come from Michael Matheson with Sidoti & Company. Please go ahead.

Michael Matheson: Congratulations on your performance in a difficult quarter.

Mark Filanowski: Thank you, Mike.

Michael Matheson: I just have a couple of questions. First, in Q1, long-term contracts really helped you out in a difficult TCE environment. What percent of Q2 and onward is already booked on a long-term basis?

Mark Filanowski: Gianni?

Gianni Del Signore: Yes. So when we look at the balance of the year, really our contract cover kicks in during ice season, the summer ice season in Q3. So we’re heading into that in Q3 and that covers our ice class vessels. And then on average, we’ve discussed our contract cover on average for the year. And across our owned fleet, it averages around 30%. So when we look over a longer period of time, that’s typically the contract cover that we’ll have on our fleet and I think that remains true for this year as well.

Mark Filanowski: Okay, great. Looking at uses of cash, we’ve already talked about dividends versus buybacks. It’s clear what your strategy is there. Of course, you’re also consistently paying down debt. Can we expect further debt paydowns or do dividends and share buybacks take priority?

Gianni Del Signore: No, I think we — as far as our debt paydown, the $11 million we paid in Q1, that is a pretty consistent number for the next almost 2 years right through the end of 2026. Our first meaningful balloon payment is in early 2027. I think we’re amortizing debt at a decent rate. We have well-priced debt on our fixed rate facilities and others that are capped. So I think we’re pretty comfortable with our debt payment profile going forward and I don’t see us really going after anything in a meaningful way until that balloon payment comes due.

Mark Filanowski: Great. Well, thank you. And good luck.

Gianni Del Signore: Thank you.

Operator: Thank you. We do have a follow-up question from Poe Fratt with AGP.

Poe Fratt: Yes. Gianni, could you just clarify that last comment on the 30% of your capacity is generally sold or committed? Is that 30% of your owned fleet or 30% of what you typically run quarter-to-quarter when you include the chartered-in capacity?

Gianni Del Signore: No. When we think about long-term contract cover, it’s on the owned fleet. That 30% number is on the owned fleet only. And then the charter-in fleet presents arbitrage opportunities and they’re traded to make the owned fleet more efficient, to position vessels appropriately. But when we think about long-term contract cover, that’s on the owned fleet is the number we’re discussing.

Poe Fratt: Great. Yes, I just wanted to clarify that. And then, Mark, going back to your prepared remarks or when you talked about the dividend and the stock buyback, you indicated that your preference is growth. Can you talk about the S&P market right now and how you’re viewing the S&P market?

Mark Filanowski: Yes. Second-hand prices are still pretty expensive, Poe, in relation to what the market returns today. So we’ve held off buying any new ships until that equation gets a little more favorable to owners. So we just added 15 ships at the end of the year. So it’s time to sort of catch our breath and wait for the market to make a turn one way or the other.

Poe Fratt: Great. That’s helpful.

Operator: Thank you. And at this time, there are no further questions in the queue. So I’d like to turn the call back over to Mark Filanowski for any closing remarks.

Mark Filanowski: Thanks, everyone, for joining us today for interesting times. Flexibility and adaptability are the key to success in this environment and we’re pretty good at that. So please feel free to contact us with any further questions at investors@pangaeals.com. Thanks, again.

Operator: Thank you. Ladies and gentlemen, this concludes today’s program and we appreciate your participation. You may disconnect at any time.