Good morning. My name is Maria and I'll be your conference operator today. At this time, I would like to welcome everyone to the Pangaea Logistics Solutions Third Quarter 2019 Earnings Teleconference. Our host for today's call are, Mr. Ed Coll, Chairman and Chief Executive Officer; and Mr. Gianni Del Signore, Chief Financial Officer.Today's call is being recorded and will be available for replay beginning at 11:00 AM Eastern time. The recording can be accessed by dialing 800-585-8367 or 404-537-3406 and referencing ID number 6638359. Are 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 Mr. Sean Silva with Prosek Partners.

Thank you, Maria. And thank you for joining us for this morning's third quarter 2019 earnings conference call for Pangea Logistics Solutions. With us today from the company are Chairman and CEO, Mr. Ed Coll; and Chief Financial Officer, Mr. Gianni Del Signore. 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 the Private Securities Litigation Reform Act of 1995 about Pangaea Logistics Solutions. Forward-looking statements are statements that are not based on historical facts. Such for 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 fillings 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, Sean, and good morning to all of you and thanks for joining the call. This morning, I’ll provide an update on our operations and the overall market before turning the call over to Gianni, our CFO, to provide a more detailed overview of the third quarter financials. We will then open the line for questions.We hope you had time to view our press release and the accompanying presentation which were issued last evening. Our strong Q3 results validate our business model as our long-term contracts of affreightment, specialized fleet and cargo-focused strategy allowed us to maintain strong margins even as improved market conditions tightened the spread of our TCE rate premium, which still outperformed at approved market by 16%. Our consistent outperformance at the prevailing market is important. But more importantly, we continue to operate profitably driven by the differentiators I just mentioned.In fact, we are now marching toward five straight years of reported annual profits. We're really different.During the quarter, we benefited from both improved market conditions and the arrival of summer ice season. The BDI rose from a seasonal low of 1,354 at the end of the second quarter to 1,823 at the end of the third quarter. And BDI’s average of 2,023 during Q1 was up 24% year-over-year. The ice season which is seasonally one of our strongest, once again meaningfully impacted our results as our ice class fleet provided our clients with specialized services required for demanding conditions.We will also continue to execute our strategy by prudently allocating our capital across various initiatives, which I will cover in a minute. We've generated strong momentum year-to-date which we will carry into the fourth quarter and into 2020. I will now summarize our results for the quarter.We recorded total revenue of $118.9 million compared to $95.3 million…

Thank you, Ed. And thank you all for joining us on today's call. I'll first walk through a few operational highlights, followed by our financials. As discussed on our prior calls, we've been generating record levels of cash flow for multiple quarters, and have been focused on effectively allocating our cash resources into operating initiatives and expansion opportunities. We are selectively deploying our capital in ways that complement our current business and secure our position for the future.As I’ve mentioned, we've expanded our fleet with acquisitions of secondhand vessels, we've increased our orders for ice class vessels to maintain our industry-leading position, and we've reacted to customers’ needs by increasing our charted-in fleet. We expect these initiatives will continue to pay off in our results. In addition, we are able to reward our shareholders in the form of a cash dividend, again this quarter.Further we expand on Ed’s comment about fleet renewal, in October we entered into agreement to sell two older vessels, the Bulk Juliana and the Bulk Patriot which we expect to complete in the fourth quarter. The sales of these unencumbered vessels will generate approximately $11 million in cash and a book loss of approximately $8.6 million which will be reflected in our Q4 financials.It has always been a part of our strategy to continually rebalance our owned and charted-in fleet and manage our average fleet age, while reinvesting the cash generated.With that, I’ll now turn to our financials. Total revenue for the third quarter of 2019 increased to a $118.9 million compared to $95.3 million. The total number of shipping days performed increased by 12% to 4,636 days compared to 4,157 days during the third quarter of 2018.Voyage revenue which are revenues generated from carrying cargo for our clients increased by 27% to $103.8 million, compared…

Thank you, Gianni. As you can see from our strong results and the expansion of our platform, we have a reason to remain optimistic about the path forward. We thank our customers, business partners and shareholders for their continued commitment and partnership, and we look forward to updating you further in the coming quarters.I'll now open the floor for questions.

We have a question from the line of Poe Fratt of Noble Capital Markets.

Ed you mentioned you thought that 2020 was going to be bumpy and you mentioned IMO 2020. Could you sort of expand on that comment and sort of give us an idea of sort of what you are thinking of looking into 2020 and any change on your customer behavior looking at 2020?

Thank you, Paul, for the question. I think we've been pretty consistent with our view. And I'm pretty sure that it's going to turn out to be the right field. First of all, we’ve environmentally, if you take a step back, really the use of compliant fuel is good for the environment. That’s simple. And so as a company that cares about the environment, we are first of all going to care about doing the right thing.Secondly, as a business, the idea of investing huge amounts of capital into scrubbers we see it as a very risky idea and difficult to quantify too many factors that you have no control over. And we think it's a poor use of capital. It's better just to comply. And the economic reason to say that is simply because there are so few percentage of the dry bulk fleet that actually is going to do it at the markets levels -- the rate levels, are going to adjust to whatever the bunker price is in the future are. And if you put open loop scrubbers on their ships, which continually every day get banned more and more around the world, no one quite knows if you're actually dumping -- first of all, environmentally, you're dumping sulfuric acid into the ocean, which I can't believe is a good thing, but also your equipment that you are running sulfuric acid through, it really is a question of how long that can last. So we are not at all a fan of that. And we trade in pristine areas, right, so it makes our decision easier. We're up in the Arctic. We’re up in places that are very sensitive environmentally, and we simply would not jeopardize environmentally the things that we're doing, it’s is very important for us.

And so -- was that comment Ed in specifically two IMO than it sounds like a little more than just some of the things that are going on globally as far as trade tension or other economic -- the economic environment?

Well, look, globally, people are going to do what they do, I mean, it's a different calculation if we had to keep a fleet of Capesize ships that have a lot of time and see and a lot of consumption, your calculation is probably different. We are having to work day-to-day because we are owning 22 ships, but we have 65 ships on the water. So we have a lot of chartered ships to make these adjustments to compliant fuels, a lot of work for the chartering and operations guys in the Group to get it right. And I'm sure we will get it correct. But in the big picture the shipping industry is getting dragged kicking and swimming into trying to be environmentally correct. And that's not going to change, it's going to happen. Right? And so, the easiest thing to do is just complying.

And then from the customer standpoint, just cargo flows, any changes that you are seeing into 2020.

The markets have been remarkably resilient, right, and we deal with a lot of specialized situations and a lot of different types of cargo and it’s remarkably resilient. So we get inquiry every day to do different things in different parts of the world and for us it’s creating value for the enterprise where we can create margins and help people and more and more our business is that way, doing things where we can create value and help customers. What we did in Greenland recently we're very proud of. We went up there in built a port where no one even lives but there is nothing there at all. And we made that happen and with guys living there on barges and that’s going to turn out, I’m confident into a long-term thing for the company. So we do things a little bit differently. As we're not so exposed to the spot market, a lot of things that we've seen happen are a lot to do with trade and with the trade wars and it's because people can't make decisions, right? It’s how can people make the economic decisions when the things change every two hours, right, and you can't believe when they do change and next week it will be something different. So if that could actually get normalized, I think the market will react positively. But right now everyone is just going ad hoc.

Yes, it’s sort of been reactive, reaction mood as opposed to been over the plan is to say. When you look at what do you are doing at breaking point and the early phase there, can you just either put a color on sort of how we should measure the progress at breaking point going forward, and sort of what -- if you could put a color on to -- or some text on to the economics of that, the sort of your contribution and sort of how it might impact your operating results as you look into 2020 and beyond?

Where we are in that project is, we have an expertise in international trade across a lot of different commodities and we know how to work that. Our partner in managing the terminal is a stevedoring company that's pretty highly respected and they know their part of it. So I would say that the terminal is highly sought after because of the U.S. East Coast, there are not -- there’s simply a not a lot of terminals available for people to grow business and is not of a land available. So I will bet you, a year from now the terminal is completely full. So we are very excited about the way that’s developing, and so how it affects the bottom line. So it’s a bit too early to tell, but I think it'll continue over a number of years to be a positive. A positive thing for the company and that's an area where we're going to continue to work to, to get into different parts of the logistics chain.

Great, thank you. And then when you look at Gianni on the on the new builds, you already put down a $7.5 million -- or $7.7 million deposit, will you continue to fund the construction and then reimburse once or essentially effectively reimburse once the sale leaseback on delivery or sort of can you talk about the mechanics of how that the capital is going to build or how those new builds are going to be funded?

Yes, no problem. Yes, I think this one is one where we are we're excited to do two things. One, we're able to support our clients, right. So we're building these ships for a need of one of our core clients, and we want to be there to support them grow with their business. So allowing us to do that in a very efficient way is what we’ve basically tried to accomplish in.The next installment, we did make the first installment on the first two, we will make the first installment on the second two option vessels. And then the nice thing about the financing is, there'll be a draw down during construction phase. So the next installment for us or installment two on the four vessels will be approximately 5% as we draw down a portion of the financing. So it's an efficient way for us to do this. And that's I mean, I think that's always been our goal is to serve our clients and grow the business as efficiently as possible, and do it in a way that doesn't put undue pressure on a company.

So if I look at it Gianni, you're going to be essentially paying the 5% of -- I'm sorry 25% of the amount due on launch?

So the installments are 10%, 20% and then at delivery the balance. So we’ve made the first 10% deposit at the next launching we will make 5% deposit and then the balance of that installment will be met by financing through the sale lease back.

Okay, so you will contribute 5%, and then you will draw it down for the other %15?

Correct. Okay. And then remember, we're also as we said we're doing this in a joint venture. So we have partners, so that's another way to keep this as efficient as possible for us.

And would you remind me they try to enter ownership, how much of that JV you own, is it 50-50 or sort of?

Yes, it's 50-50. So that one is 50-50 JV.

Sorry about that. And then when do you expect launch at this point in time, is it -- can you put a little bit -- I know delivery is, for the first two, first half of 2021 and then the second two are September of ‘21 if I recall correctly?

Yes.

When do you think launch is going to be?

I think we're currently thinking about 12 months from now is one thing we’ll have to think and then delivery early or second quarter of 2021.

Okay. And then would you look at the decision to sell the Juliana and Patriot, are there -- will you continue to sell older tonnage and then acquire sort something we should where these sales sort of one offs based on interest we got?

Yes, I will defer, something to add on the decision-making process but I think just from a holistic perspective is as I’ve mentioned earlier in his comments. One, we look at the ratio owned versus chartered. We will get at the vessel needs going forward and then just trying to bring the average age or manage the average age of the fleet. So I think we look at it and we're opportunistic, we will sell when we see an opportunity, we are not committed to any specific vessel that comes down to meeting the needs of our customers. So if we see an opportunity to sell, we will do that but I think I would probably give you better answer as such far as looking ahead and then our decision making across that.

I think as a general view, we need to -- with older ships and we can use some to a certain point and we have been fortunate to be able to do well with them. The ships that have been reported, sold, they are debt free. But they are old. So your decision-making process is sort of to make an investments or keeping an old ship or do you want to take the cash and roll it into renewing your fleet. And I think it’s pretty straightforward that you want to renew your fleet and you want to get your younger ships and that’s the process we’re going through. It’s opportunistic with the older ships. The market is still pretty okay. There is a market for these ships at decent prices. We never know what the future is going to bring. Our goal is to be opportunistic and then replace those ships going forward with the younger ones.

And then when you look at sort of you chartered-in capacity over the next quarter or even into 2020, do you -- how are you managing that balance Ed?

As you know our strategy always ships that we own, we own for purpose, and then the other one is, charter ships are normally flexible in their duration, so that we can maneuver in the market when it changes. So going forward, we will continue that strategy which is it’s been successful and I would say that as we run through the third quarter and into the present situation the fleet has grown a lot, a number of ships that are under water collectively that have grown a lot. As we go into Q1, it’s just totally I guess but I think it maybe a little bit less because we're cycling out of the summer ice season with Nordic and with Baffin Island. But that's okay, if you look at the forward curve, Q1, and the market perceives it to be softer. I'm not quite sure that that's true, it isn't. But we'll be reactive to that. And, our view always is that, it doesn't matter if we have 40 ships or we have 80 ships, it's all about what we earn with them, you know, and so I think, their company runs very efficiently in terms of number of personnel, in terms of cost for running the ships. And in addition to doing all the project work, so, I think that's basically where we are. We're certainly not going to go out and take ships on long-term period, we've never done that. That's not really what we do. And as we get into more projects then we will get more ships.

Great. And Gianni, if I could just ask you about G&A. It looked like it was down -- not, I want sequentially but year-over-year and you may have touched on this in your comments. But was there anything unusual in G&A that pushed it down and sort of what's a reasonable run rate going forward?

No, I don't think. I think with G&A and actually some of other things about operating -- OpEx on our vessels sometimes looking at it quarter-to-quarter is not the best view and looking at it the full year is sort of a better view in support of those numbers. So there's nothing really unusual. It's more of a timing issue, or time and recognition of expenses in the quarter versus last year. But for year-to-date and for the full year, no unusual or we are not expecting any significant changes.

It should be close to last year's G&A level if you look at sort of a 15.5 million or 16.5 million range that was running at capacity.

Yes, absolutely. I think that'd be a fair assessment of the full year and what we're expecting.

And there are no further questions at this time. I’d like to turn the call back over tomanagement for any additional or closing remarks.

Well, thank you all for taking the time to join us this morning, and have a good day.

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