Rand Logistics, Inc. - FORM 8-K - EX-99.1 - August 6, 2012

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Rand Logistics, Inc.
 
RAND LOGISTICS REPORTS FIRST QUARTER FISCAL YEAR 2013 FINANCIAL RESULTS
Operating Income Plus Depreciation and Amortization Increased by 26.8% Year-Over-Year

New York, NY – August 6, 2012 - Rand Logistics, Inc. (Nasdaq: RLOG) (“Rand”) today announced financial and operational results for its fiscal year 2013 first quarter ended June 30, 2012.
 
Quarter Ended June 30, 2012 Financial Highlights
Versus Quarter Ended June 30, 2011
 
•  
Marine freight revenue (excluding fuel and other surcharges, and outside charter revenue) increased by $5.6 million, or 18.4%, to $36.3 million from $30.7 million. This increase was attributable to 109 additional Sailing Days and contractual price increases.
•  
Marine freight revenue per Sailing Day increased by $2,122, or 7.4%, to $30,943 per Sailing Day compared to $28,821 per Sailing Day. This increase was somewhat offset by slightly reduced backhauls and a weaker Canadian dollar.
•  
Vessel operating expenses per Sailing Day increased by $1,411, or 5.3%, to $28,243 per Sailing Day from $26,832 per Sailing Day. This increase was attributable in part to higher fuel costs.
•  
Operating income increased by $1.8 million, or 30.3%, to $7.6 million compared to $5.8 million.
•  
Operating income plus depreciation and amortization increased by $2.6 million, or 26.8%, to $12.3 million from $9.7 million.

Management Comments

Scott Bravener, President of Lower Lakes, stated, “Overall, we are pleased with our first quarter results. Our improvement was driven in part by a full quarter of operation from the vessel that was repowered last year that we only operated for 30 days in the first quarter of fiscal year 2012. Overall, our fleet, with the exception of one vessel, performed close to or surpassed expectations for the quarter.  We expect that the vessel that performed below expectations will return to budgeted contribution levels by mid-August. Our business visibility remains solid and demand for our services in our markets continues to be strong. Based on current market conditions, we do not believe that the tonnage that we carry in the 2012 sailing season will deviate materially from the levels that our earnings guidance was predicated on.”

Laurence S. Levy, Chairman and CEO of Rand, commented, “Our operating income plus depreciation and amortization continues to benefit from increased scheduling efficiencies due to the growth of the fleet. This improvement validates the assumptions upon which our recent acquisitions were predicated. Our results for the quarter exclude any benefit from the self unloading ATB unit we acquired in December 2011, which we expect to introduce into service later this quarter. Based on customer contracts in hand, we expect that this vessel will be fully utilized as soon as it commences sailing.”

“We continue to 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.”
 
 
 
 
 
Rand Logistics, Inc.
Summary Statements of Operations (Unaudited)
(U.S. Dollars 000's except for Shares and Per Share data)
 
   
Three months ended
    
Three months ended
  
   
June 30, 2012
    
June 30, 2011
  
Revenue
            
  Freight and related revenue
   $ 36,327     $ 30,694  
  Fuel and other surcharges
     12,475       11,332  
  Outside voyage charter revenue
     810       310  
      49,612       42,336  
Expenses
                
  Outside voyage charter fees
     822       307  
  Vessel operating expenses
     33,157       28,576  
  Repairs and maintenance
     387       826  
  General and administrative
     2,970       2,976  
  Depreciation and amortization of drydock costs and intangibles
     4,693       3,867  
  Loss (gain) on foreign exchange
     4       (31 )
      42,033       36,521  
Operating Income
     7,579       5,815  
                 
Net income applicable to common stockholders
   $ 2,337     $ 2,669  
Net income per share – basic and diluted
   $ 0.13     $ 0.18  
 
Management will host a conference call to discuss the results at 8:30 a.m. ET on Tuesday, August 7, 2012. Interested parties may participate in the conference call by dialing 877-218-9317 (706-758-6006 for international callers), Conference ID# 12399827. 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 October 7, 2012. Dial 855-859-2056 (404-537-3406 for international callers), Conference ID# 12399827, 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:
Rand Logistics, Inc.
Laurence S. Levy, Chairman & CEO
Edward Levy, President
(212) 644-3450 
 -OR-
INVESTOR RELATIONS COUNSEL:
Lesley Snyder
(212) 863-9413
LSnyder@randlogisticsinc.com
 
 
 
 
 
Rand Logistics, Inc.
Consolidated Statements of Operations (Unaudited)
(U.S. Dollars 000's except for Shares and Per Share data)
 
   
Three months ended
    
Three months ended
  
   
June 30, 2012
    
June 30, 2011
  
REVENUE
            
Freight and related revenue
   $ 36,327     $ 30,694  
Fuel and other surcharges
     12,475       11,332  
Outside voyage charter revenue
     810       310  
TOTAL REVENUE
     49,612       42,336  
                 
EXPENSES
                
Outside voyage charter fees
     822       307  
Vessel operating expenses
     33,157       28,576  
Repairs and maintenance
     387       826  
General and administrative
     2,970       2,976  
Depreciation
     3,488       2,791  
Amortization of drydock costs
     879       739  
Amortization of intangibles
     326       337  
Loss (gain) on foreign exchange
     4       (31 )
      42,033       36,521  
OPERATING INCOME
     7,579       5,815  
                 
OTHER (INCOME) AND EXPENSES
                
Interest expense
     2,704       2,001  
Interest income
     (4 )     (1 )
Gain on interest rate swap contracts
     (270 )     (45 )
      2,430       1,955  
                 
INCOME BEFORE INCOME TAXES
     5,149       3,860  
PROVISION FOR INCOME TAXES
                
Current
     -       57  
Deferred
     2,054       474  
      2,054       531  
NET INCOME BEFORE PREFERRED STOCK DIVIDENDS
     3,095       3,329  
PREFERRED STOCK DIVIDENDS
     758       660  
NET INCOME APPLICABLE TO COMMON STOCKHOLDERS
   $ 2,337     $ 2,669  
                 
Net income per share basic and diluted
   $ 0.13     $ 0.18  
Weighted average shares basic and diluted
     17,720,071       14,858,952  
 
 
 
 
 
Rand Logistics, Inc.
Consolidated Balance Sheets (Unaudited)
 (U.S. Dollars 000's except for Shares and Per Share data)
 
     
June 30,
    
March 31,
  
     
2012
    
2012
  
ASSETS
            
CURRENT
            
 
Cash and cash equivalents
   $ 4,157     $ 5,563  
 
Accounts receivable
     25,551       5,343  
 
Prepaid expenses and other current assets
     7,449       6,510  
 
Deferred income taxes
     286       284  
Total current assets
     37,443       17,700  
                   
PROPERTY AND EQUIPMENT, NET
     204,271       200,862  
LOAN TO EMPLOYEE
     250       250  
OTHER ASSETS
     1,360       1,528  
DEFERRED INCOME TAXES
     760       1,318  
DEFERRED DRYDOCK COSTS, NET
     11,309       9,879  
INTANGIBLE ASSETS, NET
     15,229       16,101  
GOODWILL
     10,193       10,193  
                   
Total assets 
   $ 280,815     $ 257,831  
LIABILITIES
                
CURRENT
                
 
Bank indebtedness
   $ 23,804     $ -  
 
Accounts payable
     20,340       19,301  
 
Accrued liabilities
     17,811       18,175  
 
Interest rate swap contracts
     809       1,088  
 
Income taxes payable
     32       76  
 
Deferred income taxes
     237       418  
 
Current portion of deferred payment liability
     431       431  
 
Current portion of long-term debt
     9,599       9,686  
Total current liabilities
     73,063       49,175  
LONG-TERM PORTION OF DEFERRED PAYMENT LIABILITY
     1,958       2,063  
LONG-TERM DEBT
     119,972       123,915  
OTHER LIABILITIES
     242       242  
DEFERRED INCOME TAXES
     4,543       3,091  
                   
Total liabilities
     199,778       178,486  
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 17,724,306 shares
  
 
Additional paid-in capital
     88,269       87,853  
 
Accumulated deficit
     (23,012 )     (25,349 )
 
Accumulated other comprehensive income
     879       1,940  
                   
Total stockholders’ equity
     81,037       79,345  
 
                
Total liabilities and stockholders’ equity
   $ 280,815     $ 257,831  

Rand Logistics, Inc. Reports