Good morning. My name is Chrystelle and I will be your conference operator today. At this time, I would like to welcome everyone to the Pangaea Logistics Solutions First Quarter 2021 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 A.M. Eastern Standard Time. The recording can be accessed by dialing 800-585-8367 domestic or 404-537-3406 International and referencing ID number 7074367. 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. Sean Silva from Prosek Partners.

Thank you and thank you for joining us for this morning's first quarter 2021 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. 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 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 thanks to all who have joined us today. I hope that you and your families are healthy and safe. This morning, I'll provide an update on our operations and the overall market. Before turning the call over to Gianni or CFO to provide a more detailed overview of the first quarter financials. We will then open line for questions. We hope that you've had time to review our press release and accompany presentation which were issued last evening. Our first quarter results benefited from an unexpected increase in the drybulk market for the first quarter of 2021. As we've seen freight rates rise to multiyear highs in the quarter that is usually week for drybulk. Our quarterly results improved considerably year-over-year as our average net TCE -- earned 6000 -- 16,524 per day increased approximately 57% compared to the first quarter of 2020. And we generated net income of $5.8 million compared to a net loss of $6.8 million in the first quarter of 2020. As we said in the past, our client focused business model that prioritizes cargo, helps us to maintain profitability involved in markets by reacting quickly to such changes. While our earned TCE for the first quarter, is the highest earned in many years, and we continue to outperform the market. The rapidly rising market resulted in a smaller TCE premium over the market averages. This is a normal consequence of a rapidly rising market as spot fixtures become old quickly and our contracted cargo tends to lag instead of lead the average of this kind of market, as you can see, both are still profitable even in this market. As the market started to show signs of improvement in the first quarter, we continued to position the company to capitalize on a…

Thank you, Ed and thank you all for joining us on today's call. Before walking through our financials, I'd like to expand on a few recent transactions and highlight our results for the quarter. As Ed mentioned, we are excited about our recent acquisitions, which resulted in one of the more active periods for Pangaea in recent years. We've deployed our capital opportunistically to renew our own fleet and expand our operating leverage as efficiently as possible. In April, we completed the financing on the Bulk Courageous with an existing lender for $12 million over seven years with an interest rate of LIBOR plus 2.75%. We also finalized the refinancing of our four ice class Panamax vessels to new lenders. This new $53 million senior secured loan facility is payable over six years and interest was fixed at 3.375%. Further in April, we signed a term sheet with an existing lender to finance the Bulk Promise for up to $12.8 million, payable over six years at LIBOR plus 2.3%, which we expect to close in line with delivery of the vessel. Turning to our first quarter financials, starting on page six of our presentation, the welcomed improvement in the market during the first quarter resulted in increases in both voyage revenues and time charter revenues. Voyage revenues increased approximately 25% and charter revenues, which are opportunistic and more closely tied to market rates, increased approximately 79%. Our TCE rates earned increased 57% to $16,524 for the first quarter of 2021 compared to $10,508 for the same period of 2020. Charter expenses paid to third-party ship owners increased to $53.6 million from $32.3 million due to increases in market rates to chartering vessels and an increase in chartering days due to the sale of vessels in 2020. The sale of owned…

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 Market.

Good Morning Ed. Good morning, Gianni. Ed, I was wondering, if you could highlight any changes that you're seeing either in trade flows or any potential impact from the higher cargo or higher shipping rates that we're seeing?

Well, I think that you're in a situation Poe where I wouldn't want to call it a perfect storm. But a lot of things are hitting at the same time. And one of the things that we've seen is, for example, the just in time deliveries on container ships. That's been of course completely messed up logistically, a lot of the cargo that used to flow into containers that now is floated the multipurpose ship market. And that's taken and even into bulk carriers. So you have that -- you have that going on. You have continued to have certain congestion in the market that helps take capacity out of the market. And you're seeing a lot of disruptions because of the logistics chain and you have also a very large increase and commodity prices, which everyone is aware of. So, it's certainly for the next year or two, it looks like, things are going to be pretty robust in this business. There's no question about it. And you know what happens beyond that? The fact that no one can really build ships at the moment, if you want to build a ship, you can't get a delivery from yard till 2024 because there's so many container ships ordered. We have a good runway on our own ships. We brought down the average age. So that's pretty, pretty good. And our timing has been pretty good. We'll pick up seven ships this year on the owned site. And things are very promising.

Okay. Great. And then, when you look at how active you've been on the M&A side, Ed, do you see additional opportunities out there, or when you previously talked about an acquisitions, you've also talked about trying to identify a certain trade or a specific need? Have you identified that with the super digger that you just acquired?

I think that, yes, I mean, we have -- there's enough business now that's coming to fruition, from our regular customers that were quite comfortable bringing in another ship, the basic problem that you have now is, there's very little for sale, except for junk. And we just don't want do it, we won’t by bad chefs. So as tempting as that maybe in a rising market to do it, it's not our style. So that's one piece. But, yeah -- but we can support the capacity. I mean, and for me, the big thing is, if you – we have a very low price owned fleet, and roughly $10,000 a day breakeven, and in this market it's pretty good business, and so that's, I think that's where we're going, if we can find the right ship at the right breakeven cost, that’s a good ship. From a good CR [ph] with a good survey position, then I think we would consider to do something, but it gets more and more difficult. The prices continue to rise now. And what's available, as I mentioned is not -- it’s not that intriguing. You're basically looking for a car that your grandmother drove to search once a week on a Sunday. And that's hard to find in a market like this, but we're always looking.

And then conversely Ed, is it -- is the market good enough, or you potentially sell some of your older assets, or has that -- are you comfortable with where the age profile, your fleet as it stands right now?

I think we're okay with it, because most of those ships have -- we know what we have, our ships, even the older ones are in great shape. And they, again, they have low breakeven costs and we need them in order to operate. So the issue with the older ships is that you will not dollar-for-dollar get the benefit out of it. This are round numbers. So if you were just to say on an old rebuild ship, which is the oldest ship we have in the fleet, that -- let's say costs $10 million, and you can make $20 million, that's a lot of money. And but if you go to the second-hand market to sell it, you will not get the premium of the earnings, you might get a $0.5 million more for it than you would have before, but it's not following dollar-for-dollar. So what we've done is you go down the value curve to get the best value in terms of ageing and condition, similarly if you go to the top of the chain much more modern, very modern ships, you will be paying a very strong premium. So we go down across the board with those things and try to pick up the best value. I wouldn't be a seller of those ships now, you wouldn't get enough money to make more money by keeping them.

Absolutely. And then Gianni on the -- to be named to super that you discard? Have you -- I know it's fairly early, but have you potentially lined up financing on that vessel?

Yes. So we're currently working on it, Poe, but my expectation is it'll look very similar to what we did on the Bulk Courageous and the Bulk Promise. So I think we're in a good position, we're working with our relationships that we have with existing lenders. And I think that that's the expectation on her.

Great. And then if you could talk about, you poured covered, you have 3,200 days that 21,500, that's pretty healthy delta versus your average first quarter TCE. If you flow that through to all your owned fleet, the delta is about 8 million quarter-over-quarter. Will there of cash, because your operating expenses shouldn't change that much. Are there going to be offsets to that delta that you're seeing on the owned TCE rates? Can you just help me understand sort of how we should be looking at the second quarter? And then especially because you're running 57, so there isn't much of a drop off at all in your chartered in fleet. And then maybe you could comment on what you're seeing as far as chartered in rates, and sort of an outlook for how that within the next quarter or two looks?

Well, one of the things that just to say, and we said it in the release was that we've always had very strong premium margins. This year I don't think that will be quite the same, but our earnings are going to be extremely good in my opinion. The chartered fleet is market reactive, and our strategy has not changed with the charter fleet. We get the business first and then we chartered and make that judgment, and so we can still turn a healthy margin on the chartered, the chartered fleet. So that's not a problem. One of the things it's actually happened in the trade, which I don't remember seeing it this way before. The market in the Far East is extremely strong. And normally it's a discounted market. And with all of the business that's coming into the US, the outbound market from the US is actually softer. So when you bring in backhaul, you're getting paid more to the backhaul now becomes the front haul the money like believe it or not. So you can fix business on Supramaxes from the east made to the states in the high 20s it’s coming in. And so it's just -- it's turned on its head a little bit with those disruptions. That's where we live. We live in that market. So it's okay for us with that situation. And in terms of the earnings again with jumping to eight ships, we have a very low breakeven for our existing fleet. We have contract coverage for the summer, that’s a premium, even a premium to today's market. So, and usually as we get into the third quarter, that's when our back end business comes into fruition. It'll be a very good time for us. So yes, I think we're pretty excited about the way this is unfolding at this point.

Okay, and then maybe, Ed, if we could look at it from the standpoint of – are there any existing contracts or any time charters that you have on your own fleet that would hold you back or not make you – not enable us to realize the full benefits of the stronger market?

No, we tend to not put our ship side on plain charter. When we do, it's normally to, you know, to position them or keep a – to a second leg or something of that nature. So we don't have any long-term contracts where we put ships side on period, own ships at all. We don't, we generally don't do that. We trade them ourselves. And, you know, as you know, we're not a tonnage provider. That's not our business.

Yes. And then, if you wouldn't mind commenting on the charter – charter higher expenses, what you're seeing and whether we should expect or like increase in charter higher expenses in the second quarter over the first quarter, just because of the stronger market in general?

Yes. Poe, I think you certainly will see a slight increase, I mean, our strategy has always been reacting to the market in a weaker market. We tend to charter for single trip charters, as the market improves, we do period charters, but they are generally shorter term, that three to six month max. So as a charter fleet renews, it stayed relatively stable to your point, as far as our fleet size, but vessels are being renewed. So we are – we will be seeing slight increases, the market improves. But I think we'll stay – will stay on par or better, because a lot of – the other things to consider what our chartering strategy is and it’s going back to do we think the – do we think our cargo book or our contracts are holding us back. And the way we look at it is twofold. One, if it's dedicated to COA, that’s fixed price, we usually have a ship that's, assigned to it. And some of the other contracts, they usually backhaul in nature, and we're able to charter the vessel that's positioned well for us, but maybe not necessarily in the market, and will slaughter into one of these backhaul COAs or forward bookings. And that'll put us in a in a pretty healthy market. So we'll – on the run, we’ll still make – we’ll still make a good premiums. We’ll still make a good margin, we’ll still make profit – will be profitable. And that's sort of how we look at it. So yes, they may be priced a month or a quarter or a year in advance. But the nature of that voyage, generally we're pretty comfortable, because we will be able to capture on the second and third legs with our additional capacity.

Great. And then Ed, I was trying to sort of calibrate your comments about stronger market? And I think in the last call, you talked about how shippers are looking and shifting away from just in time or looking at vessel availability is really good and maybe trying to make longer term commitments. Do you think the -- versus last quarter, do you think the visibility and the market has improved?

Well, I think everyone is very bullish I would say, that's part of that looking at pathway. I don't see -- once in a while, you will see people go and take ships on longer period. And that's really not what we do, but we watch it. And so you'll see some of the real big guys may do it. But it still hasn't clicked in that way. A lot of these guys were short in the first -- going into the first quarter and they had to scramble, the cargo guys. We're short because everyone expected the first quarter not to be great. And I think they're coming to the realization that it's a pass-through. So if someone has to pay a lot more for a ship, well, then that's just what it costs and it gets pass-through to the customers. So people can get used to that. Are they buying in long-term? Not in a way that you would see really. And then if you kind of go out for a long period, and you have -- and at some point, you have a correction in the market, you really have to worry about counterparty risk. So that's why we would prefer to try to control our own destiny with these types of things.

Great. And then lastly, if you could talk about the dividend increase and sort of whether we should be doing it is sort of quarter-to-quarter review, and then or is there goal that try to increase it every year. And then maybe also talk about the dividend increase in the context of considering buying shares back, especially since there's been a major seller out there as far as it's been unwinding for the last six weeks or so?

Well, I think the share price has risen in our opinion, not nearly where it should be. But we've -- that's been our experience. The people that have been selling, I think they thought it would take them a lot longer to be sellers. And they've I think, at this point, unwound quite a bit of shares and the shares are coming into holders, many more holders, and it gets creating a lot more volume and liquidity. So I think that part is okay. And with the dividends, I think we're cautious. We feel that we can do this. And we'll constantly review it to see if it makes sense to change it.

And Poe, just to just to add on the share buyback, I think our views on share buyback has always been to not take more shares out of the market and further reduce the liquidity and the sort of public float out there. So it's really never been a consideration for us, historically. So yeah, I think as we look forward to I think that still remains true, but that may change depending on how we see the stock trade.

Yeah. Yeah, I was just thinking in the context of that they -- generally people hadn't included those shares in public float, just because they were so closely held was pretty long standing position. So I was just wondering, if you had considered as they were unwinding at least potentially even buying some shares back. So that's helpful. Great. Thank you so much.

Thank you.

Thanks. Poe.

There are no further questions at this time. I will now turn the call back to management for closing remarks.

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

Thank you. This concludes today's Pangaea Logistics Solutions first quarter 2021 earnings call. You may now disconnect.