Good morning. My name is Stephanie, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pangaea Logistics Solutions’ Second Quarter 2020 Earnings Teleconference. Our hosts 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 domestic or 404-537-3406 international and referencing ID 8947025. 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 Ms. Tiya Gulanikar with Prosek Partners.

Thank you, Stephanie, and thank you for joining us for this morning’s second quarter 2020 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 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 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 Web site at sec.gov. Now, I would like to turn the call over to Pangaea Logistics Solutions’ Chairman and CEO, Mr. Ed Coll, Ed?

Thanks, Tiya, and good morning to all of you and thank you for joining us on 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 second quarter financials. We’ll then open the line for questions. I’d like to begin by expressing well wishes to you and your families. I hope that you are all healthy and safe and our thoughts are with all of those who have been impacted by COVID-19. We’re especially grateful to our dedicated crew members working aboard our vessels as they support the global supply chain. Pangaea remains committed to the health and well being of our employees. And as a company, we’ll continue to follow all local and international regulatory guidance and best practices when it comes to operating our business safely. We hope you had time to view our press release and accompanying presentation which were issued last evening. Our strong second quarter results reflected our remarkable turnaround from the first quarter of 2020. Adhering to our strategy, we navigated the dry bulk market that tested historic lows in April and May. We limited our exposure to the market by adjusting our fleet composition. We redelivered chartered vessels to their owners and replaced them when needed at lower cost and sync with cargo demands. As we said in the past, our client-focused business is the model that prioritizes the cargo. We continue to remain profitability in a volatile market environment and we think the second quarter exemplified this. Our TCE rate, while lower year-over-year, continued to outperform against the average of the Baltic, Panamax and Supramax market indexes. We exceeded the average market rates by $5,185 per day, an industry leading…

Thank you, Ed, and thank you all for joining us on today's call. Again, we hope everyone remains healthy and safe as we continue to adapt or in some cases return to new normal work environments. We thank our employees and crew for their extra efforts during these unprecedented times. Before walking through our financials, I'd like to expand upon Ed's earlier comment in how we navigated another challenging market that demonstrated our unique strategy. As Ed said, the second quarter tested historic lows in April and May with the BDI hitting 393. However, heading into the quarter, we were actively reducing our exposure to the market following our nimble cargo-driven chartering strategy. We balanced our fleet by redelivering vessels to their owners on schedule, in chartered and new tonnage at a lower cost to match our clients’ cargo requirements. We reduced our chartered-in cost per day down to 7,690 in Q2 of 2020 from 10,764 in Q1 of 2020. We have also taken additional steps to renew our fleet, reduce our average fleet age and strengthen our financial position. In January, we accelerated our purchase option on the Bulk Beothuk finance lease facility to pay off one of our most expensive debt facilities. During the quarter, we entered into an agreement to sell the vessel which resulted in a non-cash loss on impairment of 1.8 million. However, we are happy to report the sale was finalized in August generating 4.6 million of cash. With that, I will now turn to our second quarter financials. Voyage revenue, which are revenues generated from carrying cargo for our clients, was 66.8 million, a decrease of approximately 14% compared to 77.4 million for the same period in 2019. This was predominantly due to lower average market rates. Our TCE rates decreased 17% to…

Thank you, Gianni. 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.

[Operator Instructions]. Your first question comes from the line of Poe Fratt with Noble Capital Markets.

Good morning, Ed. Good morning, Gianni. I had a couple questions just about the tone of business right now and sort of Ed, if you could describe – you sort of talked about it little bit, but the markets rebounded quickly. We did see very low levels in the second quarter but we’re seeing a much stronger market in the third quarter. Do you – what would you attribute some of the turnaround to? And then also, if you could sort of talk about any changes in trade routes or trade flows or anything that you potentially took advantage of in the second quarter and then potentially is durable into the second half of the year?

Okay. So what I can say is that a lot of the rebound has to do as usual with China. They didn’t sit still while all this stuff was going on. They stimulated their economy. There’s a lot of stockpiling there because I think that they are nervous about their relationship with the United States. And so the price of iron ore delivered in China is still over $100 which is very healthy. So I think there’s that piece of it and I think it’s a lot of Chinese growth. We have lots of continued problems in United States, but the market is much healthier. And in the second quarter we do what we normally do when we have a dramatic change in the market. We go to ground. We reduce the fleet. We deliver vessels. And that’s what we’ve done. The third quarter, which I think we’ve mentioned in the release, that’s normally our strongest quarter. Then I think that’s playing out that way because we have [indiscernible] island in the summer and we have a lot of ships in there that are profitable. And the number of ships we have on the water now has grown quite a bit going into third quarter. The fourth quarter I would say, we’re cautiously optimistic that that pattern will continue. So I believe that by the end of the year, we’ll end up with a decent year certainly compared to our competitors I would say.

Great. That’s helpful, Ed. And can you put a little more – maybe quantify sort of what you’re expecting as far as the third quarter? Have you lengthened your chartered-in book? What kind of expectations should we have for shipping days? And then – even I know it’s always hard to forecast or predict, but do you think the TCE outperformance typically narrows as the market goes up. Any ways into think that’s not going to happen in the third and fourth quarter?

In the third quarter, I would say we probably assume that service is going to continue to be very wide because of what we are able to achieve in the ice class fleet and what we are able to achieve in our Jamaica business. So in the fourth quarter, I can’t say – but you’re right. Normally that spread for the second quarter was over 90%, that probably over time will narrow but that’s actually healthier for the business. If you have a $5,000 market and you outperform it by 90% something, it’s nice but it doesn’t really get you where you want to be. And so it’s better if you have a $12,000 market and you maybe outperform it by 70%. One of the things that we see, a lot of the project business that we’ve been working on has gotten stalled because of the COVID and that will come back. But the uncertainty that we’ve had in the economy here has made it difficult for people to make decisions on any longer-term projects. And we’ve had some stuff that we’re doing, for example, with the Air Force and with the government and they’ve just stopped, and you were in that situation. So hopefully there could be some normalization in our domestic economy here that will help with some of those projects, because they have to happen eventually. In the meantime, our clients are healthy. As I mentioned, the iron ore prices is very healthy and that’s good for our clients and backend [ph]. The aluminum business is very healthy as well, so that’s good for our guys in Jamaica. And we see these projects coming, but again it’s hard for them to get going until we have political stability here. So it’s gratifying that you have things in, let’s say in China, that have supported the market at the moment.

Great. And then as far as the level of shipping days in the third quarter, typically it picks up and I guess if we could just talk about your chartered-in book, has it lengthened at all to allow you to take advantage of some of the low rates like you saw in the second quarter or typically you don’t go too long out, but were you able to capture some low rates and potentially charter in some tonnage at attractive rates, Ed?

Yes, we were. The easiest way to look at that is I checked this morning and I think we’re running 59 ships on the water and that’s a lot more than it was two months ago and that’s a natural evolution.

Okay, great. And when you look at – Gianni, if we could look at any potential refinancing activity that you’re looking at over the second half of the year, I think at some point you’re going to have to talk about the joint venture debt maybe pushing out maturities there or refinancing some of the joint venture debt. Can you just talk about any potential activity we’re looking at over the second half of the year?

Yes, sure. And you hit it right on the head, right, with the joint venture. But luckily we do have – we’re fortunate we have some flexibility. We can sort of choose our own path. And we’re looking at the very low rate environment right now, but we don’t really see any upward pressure there. And we’re going to choose a point to certainly refinance. But the big one ahead of us is within the joint venture. We had some flexibility there. But I expect in the second half, we certainly will – we’ll work to do some refinancing.

Okay. And then you highlighted OpEx. Can you talk about OpEx over the second half of the year? And then also you mentioned in your comments bunker fuel prices were very favorable. My sense is they haven’t recovered, so potentially they could be stable into the third quarter too. Is that a reasonable expectation?

Who knows where the market goes, but yes. As of today, I think that’s what we’re expecting in the future. And as far as your comment on OpEx, we did have a plan to renew our fleet and we’ve sort of followed through on that plan. We completed the sale of Bulk Beothuk here in August, but I think that’s a natural evolution of the fleet as we look to lower the average age and find a little more efficiency in the fleet that we did see the OpEx number come down. So we’re happy that our efforts are actually paying off. And we will look for new – we’re always looking for new opportunities to acquire vessels that fit our profile. And as we renew the fleet, we hope we can keep that number at a reasonable point.

Okay. And then Ed mentioned this morning you’re running 59 vessels. Is that – do you have an average for the quarter yet, or is that a reasonable number to use as far as your potential shipping days for the quarter, as far as an average fleet of 59 or is it going to be – maybe if you can give a little color on that?

Well, we’re already halfway through the quarter, right. So I would suspect that that’s probably the right number to work, give or take a couple of ships. And as you know, OEs [ph] redelivering and pulling in ships, et cetera, et cetera. So I think that’s probably a reasonable assumption to observe. Again, we’re halfway through the quarter.

Poe, the other – the Q3 ice season, we do charter in additional tonnage to support that contract. So I think we’ll see that number stay pretty steady for Q3.

Okay, great. Thank you so much. And really strong results does prove the model once again can deliver in a pretty tough time, so congratulations.

Thank you very much.

Thanks, Poe. I appreciate it.

At this time, there are no additional questions. I’d like to turn it back over to management.

Well, thank you everyone for joining us today and please continue to stay safe and all the best to your families.

Thank you. This concludes today’s conference call. You may now disconnect.