Good morning, my name is Maria, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pangaea Logistics Solutions Third Quarter 2018 Earnings Teleconference. Our host for today's call are Mr. Ed Coll, Chairman and Chief Executive Officer; and Mr. Gianni DelSignore, Chief Financial Officer. Today's call is being recorded and will be available for replay beginning at 11:00 a.m. Eastern Time. The recording can be accessed by dialing 800-585-8367 for domestic, or 404-537-3406, international, and referencing ID number 3187345. [Operator Instructions] It is now my pleasure to turn the floor over to Ms. Kathleen Bentley with Prosek Partners.

Thank you, Maria, and thank you for joining us for this morning's third quarter 2018 earnings conference call for Pangaea Logistics Solutions. With us today from the company are Chairman and CEO, Mr. Ed Coll; and Chief Financial Officer, Mr. Gianni DelSignore. Before I turn the call over to Ed, I'd like to read the safe harbor statement. This conference could contain forward-looking statements within the meaning of Private Securities Litigation Reform Act of 1995 about Pangaea Logistics Solutions. Forward-looking statements are statements that are not based on historical facts. Such forward-looking statements are based upon the current beliefs and expectations of Pangaea Logistics Solutions' management and are subject to risks and uncertainties, which could cause the actual results to differ from the forward-looking statements. Such risks are more fully discussed in Pangaea Logistics Solutions' filings with the Securities and Exchange Commission. The information set forth herein should be understood in light of such risks. Pangaea Logistics Solutions does not assume any obligation to update the information contained in this conference call. Also, please recall that a supplemental slide presentation will accompany this call. Those slides can be found attached to the 8-K that was filed with last evening's release, which is available on the Investors section of www.pangaeals.com under company filings or on the SEC's website at sec.gov. Now I would like to turn the call over to Pangaea Logistics Solutions' Chairman and CEO, Mr. Ed Coll. Ed?

Thanks, Kathleen, and good morning to all of you, and thank you for joining us on the call. This morning, I'll provide an update of our operations in the overall market before turning the call over to Gianni, our CFO, to provide a more detailed overview of the third quarter financials. We'll then open the line for questions. We hope that you had time to review our press release and accompanying presentation, which we issued last evening. During the third quarter, the drybulk industry maintained its strong momentum as the Baltic Dry Index increased to an average of 1,627, up from 1,162 during the third quarter of 2017. We expect these trends to continue into 2019 given the strong global supply/demand dynamics that we are seeing. The industry is improving performance corresponded with strong results of our own both on the 3 and 9 month basis. We attribute this to 3 key drivers, which Gianni will discuss in more detail, shortly. First, the strength of the summer ice season. Having 8 to 10 ships in ice all summer, summer which embarked on extensive voyages of the Northern Sea route was a meaningful cash infusion for us. The Baffin land, in particular, was an important performance driver during the third quarter. Second, food and balance sheet management generating meaningful cash levels provided us with significant financial flexibility, particularly in the way we chose to acquire ships and efficiently deploy our working capital. Third, our sale leaseback transactions advanced our commercial strategy of remaining nimble having flexibility in our chartered fleet and being well positioned to react in an improving market. Combined, these drivers generated a level of performance that we're quite proud of. I'll start with net income. On the 3-month basis, net income attributable to Pangaea was $8.3 million, or…

Thank you, Ed. And thank you all for joining us on today's call. Before walking through our financials, I wanted to expand further on Ed's earlier comments about our business model and capital management strategy. Our sale leaseback strategy has afforded us a level of financial flexibility that has been optimal to our balance sheet. Our recently announced acquisition of the Bulk Spirit, which we expect to take delivery of in the first quarter of 2019, is a great example. We feel comfortable in our current position, which gives us the opportunity to explore various options to finance the Bulk Spirit. And as we deploy capital, we strive to be diligent, and do so in ways that protect and enhance shareholder value. Further, even in today's current environment, where market rates continue to improve, we feel that our nimble chartering strategy helps protect our margins. As such, you can see why we're optimistic about the year ahead. With that, I'll now turn to our financials, which begin on Slide 8 of the presentation. Total revenue for the quarter was $95.3 million, compared to $107 million for the same period in 2017. The total number of shipping days decreased by 20% to 4,240, compared to 5,305 for the same period in 2017. Further breakdown, you'll see our voyage revenues, which are revenues generated from carrying cargo for our clients, represented 85% of our total revenue. The 13% decline from $93.7 million to $81.8 million was predominantly driven by a 21% decrease in voyage days, which are still seeing the impact of 2 COAs that began in 2017 and were completed prior to the start of 2018. Charter revenue, which is tied to market rates and generally opportunistic for us, increased to $13.5 million from $13.3 million, or 1%, compared to the…

Thank you, Gianni. As you can see from our results and hear from the optimism in our tone, we're pleased with the market's recovery over the past quarters and our ability to capitalize on the upward trajectory. We look forward to providing you with updates of our business continued progress over the coming quarters and we'll now open the floor to questions.

Thank you. The floor is now open for questions. [Operator Instructions] Our first question comes from the line of Poe Fratt of NOBLE Capital Markets.

Hey good morning. Really another solid quarter. Hey, Ed, I just wanted to sort of explore sort of how the tone of market is right now? And sort of what happened in the third quarter too? There is a -- there are some people out there who are thinking maybe that because of the tariffs and because of the trade issues that some demand was pulled forward into the third or early fourth quarter and just to avoid any, whether it's tariffs or any other trade issues. Is that something you're seeing in your current discussions with people looking to move cargo? Have you seen a low at all in this quarter? And I guess, and start there if you don't mind.

Okay. Thanks for the question. And It's a good question. But maybe on a broader picture, you might see something like that, because I would view it as the uncertainty, as uncertainty is, in one hand, it's never good for the trading markets but, of course, it also creates opportunities. We have not in our world seen a slowdown in demand nor have we seen people running to do things early because of tariffs. And it's -- I think, it's a difficult situation for everyone, not just in shipping but in trading and in every area of the world economy, because of the uncertainty, it's also in oil prices. So it's -- that makes you, kind of, cautious to think that -- but we don't see it in our day-to-day demand. We don't see any slowdown in the demand across the world. And as you know, we're more in, we're not giant iron ore movers or big coal movers, but the type of materials that we move, we've not seen anything on the horizon that indicates a slowdown.

And then, how is the visibility into for the rest of the quarter and into the next year even, Ed?

I think that you're looking at fourth quarter. I think, it's pretty strong despite the movements, you have the soybean thing going on, in general, right, the move to South America, which is interesting. But coming into next year, it also looks pretty good. I think everyone can see that at a certain point that there should be some sort of correction in the world economy, whether that's in 2020 or 2022, no one knows. But what's interesting in, on the supply side, it's very healthy between the lack of new buildings and the fact that as we go forward more people will have to scrap their ships, because [indiscernible] up against having to pay for ballast water treatment eventually. And so the supply side looks pretty good. There is so far not a big jump in new building orders, which cost a lot of money. We have a lot of people that don't have the money to do that anyway. And then you basically have a lot of the private equity guys who have been pretty badly damaged in recent years and are very cautious. So you, on the supply side, I think, it looks pretty good. So even if there is a, eventually a correction in demand, the market should remain pretty strong for the foreseeable future.

And then if I could ask about the new vessel, the, what is it, the Spirit. And the previous acquisition you made you highlighted that it would back out chartered in capacity on a very specific route. Is there a specific need? Or do you see this new vessels going a, a specific need? Or is it more just broadly oriented towards growing the fleet?

Well, we always want to keep a balance between owned ships and chartered shifts. I mean, that's our strategy. So we're continuing to always search for value. And so that particular ship, she's a little smaller than most people would want, but she has a very good deadweight/draft ratio for our trades. And she has a very low consumption, and built in Oshima, where practically half of our ships are, good quality ship. And we added, we were able to get a discounted price, a sharp price for it. That ship will go into our general trading patterns. And we are looking forward, because we had 2 long-term ships that we have now gotten rid of. And so this is effectively a replacement. And those were Chinese ships that we didn't prefer to be -- to own. And we did a joint venture with them. And we know that coming to the end of next year, we have a couple of older ships that we probably will get rid of. So it's part of replacement in a way going forward and taking the step-by-step process to replace older shifts with younger ships for general trading.

Great. And then as far as just your posturing on -- for -- advance with IMO 2020, you also mentioned the ballast water treatment. Anything from a CapEx standpoint that you're going to need to do in 2019? And then if you could, sort of, highlight, sort of, dry-docking activities you expect to experience in 2019? And if there is any in the fourth quarter?

I think this is a very hot decision for everyone in the world. And everyone has a bit of a different view it seems about it. When we come down to it we look at each individual ship in the fleet and every ship has a story and, for example, I think, it came up the other day that Norway will not allow ships with scrubbers into parts of their country. And where we trade in the ice with some modern ships, we may find also that they are just -- having a scrubber or something that they are going to say you can't come up here with the scrubber. You're just going to have to burn a better quality of fuel. And then of course, you have the -- you have a problem with -- continued problem now developing with the quality of fuel and so the whole field is very fuzzy and I think we are just being prudent on how we approach it. We have no current plans to do anything on that front capital-wise in 2019. We're watching and we're waiting. People were telling all sorts of stories, but I watch -- you watch what the spreads are for the fuel prices in there now or if they're not widening. So -- we are just watchful, I mean, capital is deared and we just don't want to splash it around.

Okay. And if I may, Gianni, the financing for the Bulk Spirit, I don't think I have seen anything as far as how you intend to finance that? Or if you do it all?

Yes. Poe, like I said in -- earlier in our comments, we're looking at options. But as always, we'll do what makes sense. We'll do what is best at the time and I think if you look at our historical, sort of, view on financing, we expect to do something similar, but there is nothing set yet. We've some time until delivery in the first quarter. But we're going to do whatever makes sense and whatever is best for the long-term view of the company.

And then I noticed that you highlighted some of the changes on the balance sheet. If you look at the fourth quarter and then into 2019, what's the priority as far as excess cash? You're running pretty high cash balance right now too. What -- sort of, if you could please walk us through that, your priorities. Is it paying down some of this, and I noticed the dividend balance went down a little bit. Can you just, sort of, comment on where you're, if you waterfall for what, kind of, balance sheet changes on the liability side we'll see in 2019?

Sure. I think the overarching comment there is, as I'd said, it's, capital is precious to us and being able to have the working capital to be flexible in our chartering strategy to be nimble, we need to have the flexibility to add ships to our fleet, we need the working capital to do so. So that's always our top priority. If we see demand from our cargo book or we see an opportunity out there that we really want to capitalize on we need to have the cash to do so. So that's always at the forefront. And then we have our normal debt service, which, we are servicing our debt. We have $20 million of debt repayments per year for the next 2 years. And then we have a couple of balloons coming up in 2021 and 2022. So we have that ahead of us, we have some, we have a bit of runway, but we have that ahead of us. And yes, related party loans, we did repay those, we did, these have been sitting on our balance sheet for many years and it's time that we start to slowly, if we can, and we have the capacity to pay that. So we'll keep doing that and I think that's always been our priority and that's the waterfall that we would allocate it.

Great. Thanks so much.

And at this time, there are no further questions. I would like to turn the floor back over to management for any additional or closing remarks.

Well, thank you all for taken the time to join us this morning. And everyone, have a great day.

Thank you ladies and gentleman, this does conclude today's conference call. You may now disconnect.