Rand Logistics Inc.
RAND LOGISTICS REPORTS RECORD EBITDA OF $13.2 MILLION FOR THE
SECOND QUARTER OF FISCAL 2009, UP 347 PERCENT
Company Posts Record EPS of $0.38 for the Quarter, $0.58 YTD
New York, NY – November 13, 2008 – Rand Logistics Inc. (Nasdaq: RLOG) (“Rand”) today announced financial and operational results for the second quarter of fiscal 2009 ended September 30, 2008.
Second Quarter Fiscal 2009 Business Highlights
| | · | Marine freight revenue (excluding fuel surcharges, outside charter and other surcharges) increased by 45.9% to $32.3 million, from $22.2 million in the prior year quarter |
| | · | Vessel margins1 increased by 176.9%, to $16.1 million, from $5.8 million in the prior year quarter due to increased operating leverage |
| | · | EBITDA1 increased by 347.2% to $13.2 million from $3.0 million in the second quarter of fiscal 2009 |
| | · | Fiscal 2009 EBITDA projected to meet or exceed the high end of management’s EBITDA guidance provided last quarter of $18.0 million to $19.5 million |
Year To Date Fiscal 2009 Financial Results
For the six months ended September 30, 2008, marine freight revenue (excluding fuel surcharges, outside charter and other surcharges) increased 42.8% to $59.6 million, compared to $41.8 million for the same period last year. EBITDA was $21.5 million for the six months ended September 30, 2008, compared to $5.9 million in the same period last year. The $15.6 million increase in EBITDA was due to ongoing operational improvements, the successful integration of strategic acquisitions, vessel upgrades and infrastructure investments.
Management Comments
Scott Bravener, President and CEO of Lower Lakes, stated, “Our second quarter results illustrate the underlying strength of our business. We achieved record EBITDA this quarter of $13.2 million, versus $3.0 million in the prior year quarter, fueled by increased freight rates, better vessel utilization and continued operating improvements. Demand for our services in our second quarter was strong in the Great Lakes region where we operate, and we employed all twelve vessels this quarter. For the quarter ended September 30, 2008, vessel margin per day (before SG&A) equaled $14,069 versus $6,772 for the same quarter last year, an increase of 107.8%. We believe these strong operating trends will continue, as we further improve the performance of our fleet.”
1 Vessel Margin and EBITDA for the quarter ended September 30, 2007 excludes the results of the previously consolidated VIE, for which Rand received no economic benefit from earnings.
Outlook
Laurence S. Levy, Chairman and CEO of Rand, added, “Our results this quarter are indicative of the normalized earnings capability of our assets, as we continue to realize their full potential. We believe that our business remains well protected as a result of the diversity of the end markets and customers that we serve, our low cost operating position and long-term contractual nature of our revenues. Although end market demand has softened somewhat, we are 100% contractually committed for the balance of this sailing season and based on our existing contracts and our knowledge of customer demand, we expect that our vessels will be fully utilized for the 2009 sailing season. Year-to-date, we have generated EBITDA of $21.5 million, exceeding our internal expectations, and we believe that we will meet or exceed the high end of our previously stated EBITDA guidance of $18.0 million to $19.5 million. The fundamentals of our business remain solid, and we continue to extract operating efficiencies from our fleet.”
Rand Logistics, Inc.
Summary Statement of Operations (Unaudited)
(U.S. Dollars 000’s except for Earnings (Loss) Per Share figures)
| | | Three months ended September 30 | | | Six months ended September 30 | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
| Revenue | | $ | 52,289 | | | $ | 28,877 | | | $ | 95,695 | | | $ | 54,107 | |
| | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | | | | | |
| Outside voyage charter fees | | | 6,062 | | | | 2,434 | | | | 12,308 | | | | 4,571 | |
| Vessel operating expenses | | | 30,357 | | | | 19,783 | | | | 55,911 | | | | 37,100 | |
| Repairs and maintenance | | | - | | | | - | | | | 888 | | | | 94 | |
| | | | 36,419 | | | | 22,217 | | | | 69,107 | | | | 41,765 | |
| Income before general and administrative, depreciation, amortization of drydock costs and intangibles, other income and expenses and income taxes | | | 15,870 | | | | 6,660 | | | | 26,588 | | | | 12,342 | |
| | | | | | | | | | | | | | | | | |
| General and administrative | | | 2,662 | | | | 2,802 | | | | 5,131 | | | | 4,743 | |
| Depreciation and amortization of drydock costs and intangibles | | | 2,791 | | | | 2,483 | | | | 5,408 | | | | 4,791 | |
| Loss (gain) on foreign exchange | | | (43 | ) | | | (46 | ) | | | (41 | ) | | | (219 | ) |
| | | | 5,410 | | | | 5,239 | | | | 10,498 | | | | 9,315 | |
| Income before interest, other income and expenses and income taxes | | | 10,460 | | | | 1,421 | | | | 16,090 | | | | 3,027 | |
| | | | | | | | | | | | | | | | | |
| Net income (loss) | | $ | 4,782 | | | $ | (683 | ) | | $ | 7,098 | | | $ | (1,837 | ) |
| Net earnings (loss) per share – basic | | $ | 0.38 | | | $ | (0.06 | ) | | $ | 0.58 | | | $ | (0.17 | ) |
| Net earnings (loss) per share – diluted | | $ | 0.34 | | | $ | (0.06 | ) | | $ | 0.52 | | | $ | (0.17 | ) |
Conference Call
Management will host a conference call to discuss the results at 8:30 a.m. ET on Thursday, November 13, 2008. Interested parties may participate in the conference call by dialing 800-257-2101 (303-228-2961 for international callers). When prompted, ask for the "Rand Logistics Second Quarter Fiscal 2009 Earnings Conference Call."
A phone replay will be available from 10:30 a.m. ET on Thursday, November 13, 2008, until 11:59 p.m. ET on Saturday, November 22, 2008. Dial 800-405-2236 (305-590-3000 for international callers) and enter the code 11122201# to access the phone replay.
The conference call will be webcast simultaneously on the Rand Logistics Inc. website at www.randlogisticsinc.com under Investors: Webcasts & Presentations. The webcast replay will be archived for 12 months.
Reconciliation of Non-GAAP Measure to GAAP
EBITDA represents earnings before interest, income tax expense, depreciation and amortization, loss on asset disposal, and loss (gain) on foreign exchange. EBITDA is not a measure of performance or liquidity calculated in accordance with generally accepted accounting principles (“GAAP”), is unaudited and should not be considered an alternative to, or more meaningful than, net income or income from operations as an indicator of our operating performance, or cash flows from operating activities, as measures of liquidity. EBITDA has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation. A reconciliation of GAAP net income to EBITDA is included in the financial tables accompanying this release.
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 ten self-unloading bulk carriers, including eight River Class vessels and one River Class integrated tug/barge unit, and three conventional bulk carriers, of which one is operated under a contract of affreightment. 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 dictates that only ships that are built, crewed and owned by U.S. citizens can operate between U.S. ports – and the Canada Marine Act – which requires Canadian commissioned ships to operate between Canadian ports.
Forward-Looking Statements
This press release may contain forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) concerning the Company and its operating subsidiaries. Forward-looking statements are statements that are not historical facts, but instead statements based upon the current beliefs and expectations of management of the Company. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from the results included in such forward-looking statements.
CONTACT:Rand Logistics, Inc.Laurence S. Levy, Chairman & CEOEdward Levy, President212-644-3450 | | -OR- | | INVESTOR RELATIONS COUNSEL:The Piacente Group, Inc. Lesley Snyder(212) 481-2050Lesley@tpg-ir.com |
Rand Logistics, Inc.
Consolidated Statements of Operations (Unaudited)
(U.S. Dollars 000’s except for Earnings (Loss) Per Share figures)
| | | Three months ended September 30, 2008 | | | Three months ended September 30, 2007 | | | Six months ended September 30, 2008 | | | Six months ended September 30, 2007 | |
| REVENUE | | $ | 52,289 | | | $ | 28,877 | | | $ | 95,695 | | | $ | 54,107 | |
| | | | | | | | | | | | | | | | | |
| EXPENSES | | | | | | | | | | | | | | | | |
| Outside voyage charter fees | | | 6,062 | | | | 2,434 | | | | 12,308 | | | | 4,571 | |
| Vessel operating expenses | | | 30,357 | | | | 19,783 | | | | 55,911 | | | | 37,100 | |
| Repairs and maintenance | | | - | | | | - | | | | 888 | | | | 94 | |
| General and administrative | | | 2,662 | | | | 2,802 | | | | 5,131 | | | | 4,743 | |
| Depreciation | | | 1,785 | | | | 1,620 | | | | 3,403 | | | | 3,163 | |
| Amortization of drydock costs | | | 566 | | | | 415 | | | | 1,134 | | | | 773 | |
| Amortization of intangibles | | | 440 | | | | 401 | | | | 871 | | | | 759 | |
| Amortization of chartering agreement costs | | | - | | | | 47 | | | | - | | | | 96 | |
| Gain on foreign exchange | | | (43 | ) | | | (46 | ) | | | (41 | ) | | | (219 | ) |
| | | | 41,829 | | | | 27,456 | | | | 79,605 | | | | 51,080 | |
| INCOME BEFORE OTHER INCOME AND EXPENSES AND INCOME TAXES | | | 10,460 | | | | 1,421 | | | | 16,090 | | | | 3,027 | |
| | | | | | | | | | | | | | | | | |
| OTHER (INCOME) AND EXPENSES | | | | | | | | | | | | | | | | |
| Interest expense | | | 1,799 | | | | 1,105 | | | | 3,473 | | | | 2,117 | |
| Interest income | | | (1 | ) | | | (77 | ) | | | (6 | ) | | | (142 | ) |
| Interest rate swap contracts | | | 662 | | | | 87 | | | | (572 | ) | | | 8 | |
| | | | 2,460 | | | | 1,115 | | | | 2,895 | | | | 1,983 | |
INCOME BEFORE INCOME TAXES | | | 8,000 | | | | 306 | | | | 13,195 | | | | 1,044 | |
| PROVISION (RECOVERY) FOR INCOME TAXES | | | | | | | | | | | | | | | | |
| Current | | | - | | | | 10 | | | | - | | | | (33 | ) |
| Deferred | | | 2,807 | | | | 11 | | | | 5,323 | | | | 372 | |
| NET INCOME BEFORE MINORITY INTEREST | | | 5,193 | | | | 285 | | | | 7,872 | | | | 705 | |
| MINORITY INTEREST | | | - | | | | (353 | ) | | | - | | | | (32 | ) |
| NET INCOME | | | 5,193 | | | | 638 | | | | 7,872 | | | | 737 | |
| PREFERRED STOCK DIVIDENDS | | | 411 | | | | 296 | | | | 774 | | | | 592 | |
| STOCK WARRANT INDUCEMENT DISCOUNT | | | - | | | | 1,025 | | | | - | | | | 1,982 | |
| NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS | | $ | 4,782 | | | $ | (683 | ) | | $ | 7,098 | | | $ | (1,837 | ) |
| | | | | | | | | | | | | | | | | |
| Net earnings (loss) per share basic | | $ | 0.38 | | | $ | (0.06 | ) | | $ | 0.58 | | | $ | (0.17 | ) |
| Net earnings (loss) per share diluted | | $ | 0.34 | | | $ | (0.06 | ) | | $ | 0.52 | | | $ | (0.17 | ) |
| Weighted average shares basic | | | 12,436,508 | | | | 11,917,519 | | | | 12,271,685 | | | | 10,618,842 | |
| Weighted average shares diluted | | | 15,345,199 | | | | 11,917,519 | | | | 15,075,817 | | | | 10,618,842 | |
Rand Logistics, Inc.
Selected Financial Information (Unaudited)
Reconciliation of Income before Interest, Other Income and Expenses and Income Taxes to EBITDA
(U.S. Dollars 000’s)
| | | Three Months ended September 30, 2008 | | | Three Months ended September 30, 2007 | |
| | | | | | | | | | | | | | | | | | | |
| | | Rand Logistics | | | Impact of | | | | | | Rand Logistics | | | Impact of | | | | |
| | | Inc. | | | FIN46R | | | Consolidated | | | Inc. | | | FIN46R | | | Consolidated | |
| | | | | | | | | | | | | | | | | | | |
| Income (loss) before interest, other income and expenses and income taxes | | $ | 10,460 | | | | - | | | $ | 10,460 | | | $ | 831 | | | $ | 590 | | | $ | 1,421 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Loss (gain) on foreign exchange | | | (43 | ) | | | - | | | | (43 | ) | | | (46 | ) | | | - | | | | (46 | ) |
| Depreciation and amortization of drydock costs and intangibles | | | 2,791 | | | | - | | | | 2,791 | | | | 2,168 | | | | 315 | | | | 2,483 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| EBITDA | | $ | 13,208 | | | | - | | | $ | 13,208 | | | $ | 2,953 | | | $ | 905 | | | $ | 3,858 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Six Months ended September 30, 2008 | | | Six Months ended September 30, 2007 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | | Rand Logistics | | | Impact of | | | | | | | Rand Logistics | | | Impact of | | | | | |
| | | Inc. | | | FIN46R | | | Consolidated | | | Inc. | | | FIN46R | | | Consolidated | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) before interest, other income and expenses and income taxes | | $ | 16,090 | | | | - | | | $ | 16,090 | | | $ | 1,954 | | | $ | 1,073 | | | $ | 3,027 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| Loss (gain) on foreign exchange | | | (41 | ) | | | - | | | | (41 | ) | | | (219 | ) | | | - | | | | (219 | ) |
| Depreciation and amortization of drydock costs and intangibles | | | 5,408 | | | | - | | | | 5,408 | | | | 4,162 | | | | 629 | | | | 4,791 | |
| | | | | | | | | | | | | | | | | | | | | | | | | |
| EBITDA | | $ | 21,457 | | | | - | | | $ | 21,457 | | | $ | 5,897 | | | $ | 1,702 | | | $ | 7,599 | |
Rand Logistics, Inc.
Consolidated Balance Sheets (Unaudited)
(U.S. Dollars 000’s except for Earnings (Loss) Per Share figures)
| | | September 30, | | | March 31, | |
| ASSETS | | 2008 | | | 2008 | |
| CURRENT | | | | | | |
| Cash and cash equivalents | | $ | 8,350 | | | $ | 5,626 | |
| Accounts receivable, net | | | 19,739 | | | | 3,468 | |
| Prepaid expenses and other current assets | | | 4,033 | | | | 3,122 | |
| Income taxes receivable | | | 193 | | | | 193 | |
| Interest rate swap contract | | | 154 | | | | - | |
| Deferred income taxes | | | 517 | | | | 1,355 | |
| Total current assets | | | 32,986 | | | | 13,764 | |
| | | | | | | | | |
| PROPERTY AND EQUIPMENT, NET | | | 96,549 | | | | 96,349 | |
| DEFERRED INCOME TAXES | | | 15,003 | | | | 20,318 | |
| DEFERRED DRYDOCK COSTS, NET | | | 8,091 | | | | 9,082 | |
| INTANGIBLE ASSETS, NET | | | 16,428 | | | | 17,979 | |
| GOODWILL | | | 10,193 | | | | 10,193 | |
Total assets | | $ | 179,250 | | | $ | 167,685 | |
| LIABILITIES | | | | | | | | |
| CURRENT | | | | | | | | |
| Bank indebtedness | | $ | 13,905 | | | $ | 269 | |
| Accounts payable | | | 9,492 | | | | 14,985 | |
| Accrued liabilities | | | 8,426 | | | | 7,243 | |
| Acquired Management Bonus Program | | | 463 | | | | 3,000 | |
| Interest rate swap contract | | | 844 | | | | 1,274 | |
| Income taxes payable | | | 421 | | | | 422 | |
| Deferred income taxes | | | 1,012 | | | | 1,508 | |
| Current portion of long-term debt | | | 4,580 | | | | 3,521 | |
| Total current liabilities | | | 39,143 | | | | 32,222 | |
| LONG-TERM DEBT | | | 62,977 | | | | 66,896 | |
| OTHER LIABILITIES | | | 232 | | | | - | |
| DEFERRED INCOME TAXES | | | 14,309 | | | | 14,703 | |
Total liabilities | | | 116,661 | | | | 113,821 | |
| COMMITMENTS AND CONTINGENCIES | | | | | | | | |
| STOCKHOLDERS' EQUITY | | | | | | | | |
| Preferred stock, $.0001 par value, Authorized 1,000,000 shares, Issued and outstanding 300,000 shares | | | 14,900 | | | | 14,900 | |
| Common stock, $.0001 par value, Authorized 50,000,000 shares, Issued and outstanding 12,602,893 shares | | | 1 | | | | 1 | |
| Additional paid-in capital | | | 61,283 | | | | 58,350 | |
| Accumulated deficit | | | (13,367 | ) | | | (20,465 | ) |
| Accumulated other comprehensive income (loss) | | | (228 | ) | | | 1,078 | |
Total stockholders’ equity | | | 62,589 | | | | 53,864 | |
| Total liabilities and stockholders’ equity | | $ | 179,250 | | | $ | 167,685 | |
