Good morning. My name is Katherine, and I will be your conference operator today. At this time, I would like to welcome everyone to the Pangaea Logistics Solutions Fourth Quarter and Full Year 2021 Earnings Teleconference. Our hosts for today's call are Mr. Mark Filanowski, 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 Time. The recording can be accessed by dialing 888-225-1540 or 402-220-4973 for International. All lines are currently muted. And after the prepared remarks, there will be a live question-and-answer session. It is now my pleasure to turn the floor over to Ms. Emily Blum with Prosek Partners.

Thank you. And thank you for joining us for this morning's fourth quarter and full year 2021 earnings conference call for Pangaea Logistics Solutions. With us today from the company are CEO, Mr. Mark Filanowski; CFO, Mr. Gianni Del Signore, and recently appointed COO, Mads Boy Petersen. Before I turn the call over to Mark, 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 Media 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 the 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'd like to turn the call over to Mr. Mark Filanowski. Mark?

Thanks, Emily. And thank you all for joining us today to discuss our 2021 annual results. Before getting to that, we want to express our deep and most sincere hopes that the tragic events in Ukraine will soon be over for the Ukrainian people. Thankfully, we have no ships or crews directly exposed in the war theater. Pangaea did have a very good year in 2021. Markets were favorable, and that might be an understatement. Our own fleet expanded with second hand and newbuilding vessels and with increased ownership of our ice class Panamax joint venture. In effect, 10 ships added to our fleet over 15 months, and we entered new terminal operations in the US Gulf. We took some aggressive steps leading into a business environment that included a strong world economic recovery, limited fleet growth and new opportunities to be pursued and our financial results demonstrate we made some right decisions. A few weeks ago, our Board increased our quarterly dividend distribution by 43%. Gianni will go over the results in detail in a few minutes. In the New Year, we've been busy meeting with investors, potential investors and analysts to describe our business as one that is sustainable with a solid and proven business plan that does not require continued high market rates to be profitable. We have a balanced approach to our business with shipping at its core. When talking about our strategy compared to - others, one of our founding directors recently said, yes, we have ships because we have customers, they have customers only because they have ships. In our approach, customers always come first. We serve niche markets like ice class, where customers have specific needs and we build ships for them. We have built expertise in hard to carry cargo because our…

Thanks, Mark. And thank you all for joining us on today's call. As Mark mentioned, 2021 was a record year for Pangaea, driven by a strong market, well timed expansion of our own fleet and executing on our chartering strategy. Our average net TCE earned of 32,563 per day increased over 100% compared to the fourth quarter of 2020. We reported adjusted EBITDA of $105 million for the year and adjusted net income of $63.3 million. We are working very hard to extract the most out of this market. We continue to deploy our assets to serve our clients cargo needs, look for ways to expand our platform and ultimately drive increased profitability. During 2021, we utilized cash from operations and access to low interest debt facilities to expand our own fleet, adding four new build vessels and three second hand vessels, increase our chartered in fleet, which requires significant working capital, pay down debt, and increase our quarterly cash dividend. Turning to our full year financials, starting on page six of our presentation. The continued improvement in the dry bulk market during the fourth quarter and an increase in our total shipping days drove increases in both voyage revenues and time charter revenues. Voyage revenues increased approximately 76% to $614 million, and charter revenues increased approximately 13% to $103 million. Our TCE rates earned for the full year of 2021 increased 102% to 25,056 compared to 12,433 for 2020. Charter expenses paid to third-party ship owners increased to $334 million from $128 million, a 162% increase due to increases in market rates to chartered in vessels and an increase in chartered in days as part of our flexible chartered in strategy, allowing us to supplement our own fleet with short term chartered in tonnage at prevailing market prices when…

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 coming quarters. I'll now open the floor for questions.

We can take our first question today from Liam Burke with B. Riley. Your line is open.

Thank you. Good morning, Mark. Good morning, Gianni.

Good morning.

Mark, if we can talk about slide 12 where you're looking at your TCE outlook, it looks like you are back on pace to exceed the - understanding we - it's early in the year. Would you expect with a somewhat less volatile BSI to be able to continue to outpace the rest of the year? Or do you anticipate you know, what geopolitical events to create some sort of headwind there?

Thanks for the question, Liam. We're always looking forward at our booked cargoes that we have on hand at any point in time comparing it to the market is difficult in a very volatile business. We're booking cargoes three, four months ahead of time and performing them later in possibly a different market. So it does - we do move with the index over time. Sometimes we're below, rarely. But generally, we're above. We have that historical advantage of having ice class fleet, which produces premium earnings in most markets. That helps out quite a bit. We're also taking more difficult cargoes than many other shipping companies will take, and we get paid a little premium for that. We've got a great trading platform, including doing stuff on the side of the ship on shore, and sometimes those revenues and extra margins come in the form of higher freight rates. So that helps push up – push us up above the index as well. So yeah, we expect to be above the index for the rest of the year on average, but maybe not every quarter.

Got it. Thank you. And you invested $195 million in new vessels or your fleet renewal program. This year, I mean, probably be safe to assume that you wouldn't match that number. So cash flows, all things being equal, will be a lot stronger or you'll have more excess cash available. What would your priorities be here?

Liam, you know in this business, you never have excess cash, right?

Sorry, for this statement…

But yeah, we – so don't see as much reinvestment this year as we did last year. The new building ships, they were ordered 2 years before. So they came on stream last year. We saw opportunities last year to buy other ships and then an opportunity came up to buy effectively two ships from our joint venture partner, which has turned out to be a great investment for us. In the coming year, we're always looking at new ships. We're always looking at the existing fleet, maybe we'll sell a ship or two or buy a ship or two, but we don't have as big an ambition as we did over the last couple of years in this kind of market.

Great. Thank you, Mark.

We'll go now to Poe Fratt with Noble Capital. Your line is open.

Yeah. Good morning, Mark. Good morning, Gianni and just you know, remember you had today. What - if you look at the impact of what's going on in the market, you know, the shift away from Russian cargoes, you are changing your technical managers. Can you just talk about what potentially would be the impact looking into the second quarter, it looks like there's not much of an impact in the first quarter, given what your forward cover and your TCE rate is?

Yeah. Thanks, Poe. The change in the technical managers is unfortunate, but we don't believe it will be costly. It's a little disruptive. We realized early on that we needed to make that change, if not because of the sanctions and maybe because of perception, but then sanctions did catch up with us. So we'll move the management to another company that isn't subject to sanctions. Crew members will temporarily at least, hopefully, more permanent, will remain on board. We don't have to change crews. We've made some arrangements with the existing crew to stay on for the most part, and this – so that helps quite a bit in the potential disruption. In terms of cargoes, we - like I mentioned, we book cargoes well in advance, and we've got commitments going forward. We've sorted through those commitments in response to the sanctions, everyone is a different story. Some cargoes we've had to cancel because of sanctions, other cargoes where there is no sanction, we're committed to carry that cargo and we're doing it even if it's lifted out of a Russian port, we're committed to do it. There is no sanctions on that cargo or in the ownership change, we'll do that cargo. We won't do any cargo which breaks sanctions. Going forward, things will pivot, they've already pivoted. We see cargoes moving from different places into Europe, and we will participate in that - the ships we have in the trades that move cargos out of the Baltic. They are totally functional in every capacity and every measurement in other markets, so that we will use them accordingly.

And then it sounds like the markets in the reset mode, but it sounds like you're pretty comfortable that the market - the view that ton miles might lengthen or might increase over the next year or so seems to be a reasonable assumption?

I think so, Poe. But we see coal cargo is moving on smaller ships from Indonesia back to Europe. The Far East market is very hot right now, taking cargo in different places than it used to take it before the war. The cargo that used to come out of Ukraine and now to Russia in the Black Sea, it's still needed somewhere. So it's coming from different places, probably adding ton miles. When all of this disruption gets all sorted out, like I said in my remarks, I don't know what's going to happen to overall worldwide demand if it still put us into a - all these changes and disruptions will put us into a worldwide recession or not. We're certainly hoping not, and so we think that overall it will be good for shipping.

Okay. And there's been a lot of disruption, not necessarily in the cargoes, it seems like you carry. But if you look at the nickel market or the energy markets, there's been a spike that's put a lot of pressure on some trading companies. I did notice that your provision for doubtful accounts went up. Just - it looks like it went up $1.5 million in the fourth quarter. Can you just talk about whether you're seeing any stress on counterparties?

We've always been cognizant that, that you work hard to make a little bit of money, but if you never collect it, it's not worth it. So we've had a lot of focus on counterparties over the last - forever. But let Gianni talk to you about that specific question.

Yeah, yeah. I think Poe, it's a good question. I think if you look at our one function of our reserve policy is a specific reserve and then the secondary is a general reserve. And the general reserve is largely based on the size of the receivables. So we've seen a significant increase in receivables, a significant increase in freight value. So I think there's some increase in that general reserve. But there's - I don't think there's certainly nothing specific or that we're concerned of, but we watch our customers closely and we watch credit risk very, very closely.

Okay. And then when you look at energy markets, bunker fuel prices have spiked, they're moderating a little bit, it seems like. But can you just address how you're managing this current price environment with bunker fuels and whether you're able to manage it, how you're managing it, Mark?

Sure, Poe. Mads is very close to that whole part of our business. So why don't I let him explain to you what we do and where we are.

Thanks, Mark. And hi, Poe. So essentially, we have a hedging policy in place for all our commitments cargo wise where we have exposure to rising fuel costs. And that, of course, in a period over the last month has been extremely beneficial for us that we have protection in place for the scenario that we have just gone through now, right. We don't expect any sort of less volatility in fuel prices. So the combination of our hedge policy and our major COAs having bunker escalation clauses, sort of means that we don't have, I would say, any significant direct exposure for rising fuel costs. And it's a pretty efficient way to sort of - to manage a risk actually, so...

Got you. And as I recall, you had 75% to 80% of your fuel needs in general?

Yes, that's sort of been generally the number will go a little bit up, a little bit down, but it's in that region, typically.

And I miss I should congratulate you on becoming the COO and moving to a new court at some point at that.

Thank you, Poe.

And then when you look at the fleet renewal, Liam talked about, you were very active last year, more on the buy side. Is this the time where you start to look at some of your older assets and maybe opportunistic - opportunistically sell some of those assets. Could you just talk about the other side of the equation as far as fleet management?

Yes. Poe, I think you hit one of the issues we're looking at right on the head with the values of the older ships having come up substantially. We are looking at taking advantage of that rise. But at the same time, newer ships have risen in value too. So we don't want to lose those operating days, and it's tough to give up debt free ships too in this kind of market. So we are studying that, made no decisions on which ships to sell and how to sell them, but we are looking at it, yes.

Okay. And then just one quick one, Gianni, the Bulk Concord delivered the middle of February, you typically finance 60% of your acquisition costs. Any comment on financing the Bulk Concord?

Yeah. I mean, sure, we can discuss it, the transaction is complete. We took delivery in February. The purchase price was 19.9 and we went back to the purchase price sale-leaseback market and raised $15 million of sort of debt facility structured as a lease. So it's in line with some of our previous transactions, gives us a good runway to operate that ship.

Great. So we'll see that in the first quarter then as far as just the flowing through.

Yes.

Okay, great. Thank you so much.

Thank you, Poe.

And it does appear that we have no further questions at this time.

Thank you very much for attending our conference call today. We hope you have a good rest of the day. Thank you very much.

This does conclude today's program. Thank you for your participation. You may disconnect at any time.