Rand Logistics, Inc. - FORM 8-K - EX-99.1 - June 7, 2012

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Rand Logistics, Inc.
 
RAND LOGISTICS REPORTS FISCAL YEAR 2012 FINANCIAL RESULTS
 
Operating Income Plus Depreciation and Amortization Increased by 69.4% Year-Over-Year

New York, NY – June 7, 2012 - Rand Logistics, Inc. (Nasdaq: RLOG) (“Rand”) today announced financial and operational results for the fiscal year ended March 31, 2012.
 
Fiscal Year Ended March 31, 2012 Financial Highlights
Versus Fiscal Year Ended March 31, 2011
 
•
Marine freight revenue (excluding fuel and other surcharges, and outside charter revenue) was $107.6 million, an increase of 19.0% from $90.4 million. This increase was attributable to 383 additional Sailing Days and contractual price increases, and was somewhat offset by inefficiencies experienced earlier in the year in matching fleet configuration with customer requirements, delays in completing required winter work that resulted in several vessels sailing later than their scheduled departure dates, and one of our vessels being out of service for 61 days due to its repowering.
•
Marine freight revenue per Sailing Day increased by $1,830, or 6.8%, to $28,922 per Sailing Day compared to $27,092 per Sailing Day.
•
Vessel operating expenses per Sailing Day increased by $3,021, or 13.1%, to $26,142 per Sailing Day from $23,121 per Sailing Day. This increase was primarily attributable to higher fuel costs and the stronger Canadian dollar.
•
Operating income increased by $8.4 million, or 125.4%, to $15.2 million compared to $6.8 million.
•
Operating income plus depreciation and amortization increased by 69.4% or $12.8 million, to $31.2 million from $18.4 million, despite $0.9 million of losses incurred on the three recently acquired vessels and the costs incurred to prepare a vessel on long-term lay-up for future retirement.
 
Management Comments

Scott Bravener, President of Lower Lakes, stated, “Fiscal year 2012 was transformational for our Company, with the acquisition of five vessels in calendar 2011 and the completion of the repowering of our last remaining steam powered vessel to diesel. We are pleased that we were able to increase operating income plus depreciation and amortization by 69.4% year-over-year. We believe that this increase illustrates our continued ability to improve the operating efficiency of our fleet and to capture the operating leverage inherent in our business.”
 
Outlook

Laurence S. Levy, Chairman and CEO of Rand, commented, “We are satisfied with our fiscal year 2012 accomplishments and continue to be excited by the prospects for further stockholder value creation in the near term. We have again demonstrated our ability to effectively integrate acquired assets into our business, achieve the projections on which our capital investments were predicated, and grow our core business at an attractive rate. We also succeeded in securing important new business, achieved meaningful improvements in certain of our key performance metrics, and completed a number of capital projects which improved the operating efficiency of our fleet and extended the average life of our vessels.”
 
“Our outlook for fiscal year 2013 remains consistent with our previous guidance, given our current order book and our first quarter results to date. Based on contracts in hand, our expanded fleet is fully-booked for the 2012 sailing season. We believe that we are well positioned to accelerate stockholder value creation given our non-duplicatable asset portfolio, the long-term nature of our customer contracts, attractive market supply/demand dynamics, and our favorable cost structure. Given the current size and scale of our business and our capital expenditure expectations in fiscal 2014 and beyond, we believe that we are at a unique inflection point, which, by virtue of the inherent operating leverage in our business, is likely to result in our return on equity growing at a higher rate than our profits over the next several years.”
 
 
 
 
 
Rand Logistics, Inc.
Summary Statements of Operations
(U.S. Dollars 000's except for Shares and Per Share data)
 
   
Year ended
    
Year ended
  
   
March 31, 2012
    
March 31, 2011
  
Revenue
            
  Freight and related revenue
   $ 107,618     $ 90,433  
  Fuel and other surcharges
     38,886       20,471  
  Outside voyage charter revenue
     1,321       7,074  
      147,825       117,978  
Expenses
                
  Outside voyage charter fees
     1,312       7,052  
  Vessel operating expenses
     97,274       77,177  
  Repairs and maintenance
     7,179       5,456  
  General and administrative
     11,024       9,892  
  Depreciation and amortization of drydock costs and intangibles
     15,948       11,655  
  Gain on foreign exchange
     (159 )     (18 )
      132,578       111,214  
Operating Income
     15,247       6,764  
                 
Net income (loss) applicable to common stockholders
   $ 5,317     $ (2,245 )
Net income (loss) per share – basic and diluted
   $ 0.33     $ (0.16 )
 
Management will host a conference call to discuss the results at 8:30 a.m. ET on Friday, June 8, 2012. Interested parties may participate in the conference call by dialing 877-218-9317 (706-758-6006 for international callers), Conference ID# 85727208. Please dial in 10 minutes before the call is scheduled to begin.
 
A telephonic replay of the conference call may be accessed approximately two hours after the completion of the call through August 8, 2012. Dial 855-859-2056 (404-537-3406 for international callers), Conference ID# 85727208, to access the phone replay.
 
The conference call will be webcast simultaneously on the Rand Logistics, Inc. website at www.randlogisticsinc.com/presentations.html.  The webcast replay will be archived for 12 months.
  
 
 
 
 
Forward-Looking Statements
This press release contains forward-looking statements. For all forward-looking statements, we claim the protection of the Safe Harbor for Forward-Looking Statements contained in the Private Securities Litigation Reform Act of 1995.  Forward-looking statements are inherently subject to risks and uncertainties, many of which cannot be predicted with accuracy or are otherwise beyond our control and some of which might not even be anticipated.  Future events and actual results, affecting our strategic plan as well as our financial position, results of operations and cash flows, could differ materially from those described in or contemplated by the forward-looking statements.  Important factors that contribute to such risks include, but are not limited to, the effect of the economic downturn in our markets; the weather conditions on the Great Lakes; and our ability to maintain and replace our vessels as they age.
 
For a more detailed description of these uncertainties and other factors, please see the "Risk Factors" section in Rand's Annual Report on Form 10-K to be filed with the Securities and Exchange Commission on June 8, 2012.
 
About Rand Logistics
Rand Logistics, Inc. is a leading provider of bulk freight shipping services throughout the Great Lakes region. Through its subsidiaries, the Company operates a fleet of four conventional bulk carriers and twelve self-unloading bulk carriers including four tug/barge units. The Company is the only carrier able to offer significant domestic port-to-port services in both Canada and the U.S. on the Great Lakes. The Company's vessels operate under the U.S. Jones Act -- which reserves domestic waterborne commerce to vessels that are U.S. owned, built and crewed, -- and the Canada Coasting Trade Act -- which reserves domestic waterborne commerce to Canadian registered and crewed vessels that operate between Canadian ports.

CONTACT:
-OR-
INVESTOR RELATIONS COUNSEL:
Rand Logistics, Inc.
  
Lesley Snyder
Laurence S. Levy, Chairman & CEO
  
(212) 863-9413
Edward Levy, President
  
LSnyder@randlogisticsinc.com
(212) 644-3450
    
 
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Rand Logistics, Inc.
Consolidated Statements of Operations
(U.S. Dollars 000's except for Shares and Per Share data)
 
   
Year ended
    
Year ended
  
   
March 31, 2012
    
March 31, 2011
  
REVENUE
            
Freight and related revenue
   $ 107,618     $ 90,433  
Fuel and other surcharges
     38,886       20,471  
Outside voyage charter revenue
     1,321       7,074  
TOTAL REVENUE
     147,825       117,978  
                 
EXPENSES
                
Outside voyage charter fees
     1,312       7,052  
Vessel operating expenses
     97,274       77,177  
Repairs and maintenance
     7,179       5,456  
General and administrative
     11,024       9,892  
Depreciation
     11,581       7,684  
Amortization of drydock costs
     3,048       2,779  
Amortization of intangibles
     1,319       1,192  
Gain on foreign exchange
     (159 )     (18 )
      132,578       111,214  
OPERATING INCOME
     15,247       6,764  
                 
OTHER (INCOME) AND EXPENSES
                
Interest expense
     9,327       5,737  
Interest income
     (6 )     (43 )
Loss from a loss contingency on guaranty
     -       1,280  
Gain on interest rate swap contracts
     (771 )     (465 )
      8,550       6,509  
                 
INCOME BEFORE INCOME TAXES
     6,697       255  
PROVISION (RECOVERY) FOR INCOME TAXES
                
Current
     208       (14 )
Deferred
     (1,634 )     154  
      (1,426 )     140  
NET INCOME BEFORE PREFERRED STOCK DIVIDENDS
     8,123       115  
PREFERRED STOCK DIVIDENDS
     2,806       2,360  
NET INCOME (LOSS)  APPLICABLE TO COMMON STOCKHOLDERS
   $ 5,317     $ (2,245 )
                 
Net income (loss) per share basic and diluted
   $ 0.33     $ (0.16 )
Weighted average shares basic and diluted
     16,336,930       13,632,961  
 
 
 
 
 
Rand Logistics, Inc.
Consolidated Balance Sheets
 (U.S. Dollars 000's except for Shares and Per Share data)
 
     
March 31,
    
March 31,
  
     
2012
    
2011
  
 ASSETS
              
 CURRENT
            
 
 Cash and cash equivalents
   $ 5,563     $ 4,508  
 
 Accounts receivable
     5,343       6,991  
 
 Prepaid expenses and other current assets
     6,510       4,474  
 
 Income taxes receivable
     -       49  
 
 Deferred income taxes
     284       161  
 Total current assets
     17,700       16,183  
                   
 PROPERTY AND EQUIPMENT, NET
     200,862       166,692  
 LOAN TO EMPLOYEE
     250       250  
 OTHER ASSETS
     1,528       363  
 DEFERRED INCOME TAXES
     1,318       -  
 DEFERRED DRYDOCK COSTS, NET
     9,879       6,523  
 INTANGIBLE ASSETS, NET
     16,101       15,306  
 GOODWILL
     10,193       10,193  
                   
 Total assets 
   $ 257,831     $ 215,510  
 LIABILITIES
                
 CURRENT
                
 
 Bank indebtedness
   $ -     $ -  
 
 Accounts payable
     19,301       12,386  
 
 Accrued liabilities
     18,175       22,218  
 
 Interest rate swap contracts
     1,088       1,895  
 
 Income taxes payable
     76       -  
 
 Deferred income taxes
     418       603  
 
 Subordinated note
     -       1,482  
 
 Current portion of deferred payment liability
     431       382  
 
 Current portion of long-term debt
     9,686       7,178  
 Total current liabilities
     49,175       46,144  
 LONG-TERM PORTION OF DEFERRED PAYMENT LIABILITY
     2,063       2,507  
 LONG-TERM DEBT
     123,915       104,993  
 OTHER LIABILITIES
     242       238  
 DEFERRED INCOME TAXES
     3,091       3,299  
                   
 Total liabilities
     178,486       157,181  
 COMMITMENTS AND CONTINGENCIES
                
 STOCKHOLDERS' EQUITY
                
 
 Preferred stock, $.0001 par value,
     14,900       14,900  
 
Authorized 1,000,000 shares, Issued and outstanding 300,000 shares
  
 
 Common stock, $.0001 par value,
     1       1  
 
Authorized 50,000,000 shares, Issuable and outstanding 17,676,278 shares
  
 
 Additional paid-in capital
     87,853       71,503  
 
 Accumulated deficit
     (25,349 )     (30,666 )
 
 Accumulated other comprehensive income
     1,940       2,591  
                   
 Total stockholders’ equity
     79,345       58,329  
                   
 Total liabilities and stockholders’ equity
   $ 257,831     $ 215,510  


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Rand Logistics, Inc. Reports