Press Release
RAND LOGISTICS REPORTS FISCAL YEAR 2016 FINANCIAL RESULTS
Highlights:
| | · | Fourth quarter’s operating loss reduced by 28.1% from same period last year; Adjusted EBITDA loss reduced by 43.5% |
| | · | Fiscal Year 2016 net loss equaled $5.6 million, or $0.31 per share, versus a net loss of $10.6 million, or $0.59 per share, in 2015 |
| | · | Net cash flow from operations was $23.2 million for Fiscal Year 2016 |
| | · | 2016 Sailing Season consistent with expectations thus far |
Jersey City, NJ – June 15, 2016 - Rand Logistics, Inc. (NASDAQ: RLOG) (“Rand”), a leading provider of bulk freight shipping services throughout the Great Lakes Region, today announced its financial results for the fiscal fourth quarter and fiscal year ended March 31, 2016.
Quarter Ended March 31, 2016 Versus Quarter Ended March 31, 2015
Financial Results
The Company’s fleet operates on a limited basis in its fiscal fourth quarter due to the normal closing schedule of the locks system and winter weather conditions on the Great Lakes. Vessel repairs and maintenance are completed in the Company’s fiscal fourth quarter to prepare the fleet for the upcoming sailing season. As a result, the Company incurs an operating loss in its fiscal fourth quarter.
| · | Freight and other related revenue generated from Company-operated vessels (which excludes fuel and other surcharges) increased $0.4 million, or 9.8%, to $4.9 million during the three-month period ended March 31, 2016 compared to $4.4 million during the same period in 2015. On a constant currency basis, freight and other related revenue increased 17.9%, or $0.8 million. |
| · | Total Sailing Days were 113 compared to 256 in the prior year period. |
| · | Delay Days decreased to 10 from 92. Delay Days as a percentage of total Sailing Days was 8.8% compared to 35.9% in same period last year. |
| · | Adjusted EBITDA equaled a loss of $5.6 million for the quarter ended March 31, 2016 versus a loss of $9.9 million during the quarter ended March 31, 2015. On a constant currency basis, Adjusted EBITDA loss decreased 41.0%, or $4.1 million. A reconciliation of operating income to Adjusted EBITDA is attached to this release. |
Fiscal Year Ended March 31, 2016 Versus Fiscal Year Ended March 31, 2015
Financial Results
| · | Net loss was $5.6 million, or $0.31 per share on a fully diluted basis, an improvement from a loss of $10.6 million, or $0.59 per share, in the year ago period. |
| · | Freight and other related revenue generated from Company-operated vessels (which excludes fuel and other surcharges) decreased $5.5 million, or 4.3%, to $123.6 million compared to $129.1 million during the year ago period. On a constant currency basis, freight and other related revenue increased 3.7%, or $4.7 million. A reconciliation of freight and other revenue generated to constant currency is attached to this release. |
Rand Logistics Fiscal Year 2016 Financial Results
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| · | Total Sailing Days were 3,911 compared to 4,106 in the prior year period and a theoretical maximum of 4,164. |
| · | Delay Days decreased to 343 from 434. Delay Days as a percentage of total Sailing Days was 8.8% compared to 10.6% in Fiscal Year 2015. |
| · | Freight and related revenue per Sailing Day increased $158, or 0.5%, to $31,601 compared to $31,443 during the year ago period. On a constant currency basis, freight and related revenue per Sailing Day increased 8.8%, or $2,782. |
| · | Vessel operating expenses decreased $14.5 million, or 14.8%, to $83.4 million compared to $97.8 million during the year ago period. On a constant currency basis, vessel operating expenses decreased 6.8%, or $6.7 million. Vessel operating expenses per Sailing Day decreased $2,509, or 10.5%, to $21,315 from $23,824. |
| · | Adjusted EBITDA decreased $1.3 million, or 3.7%, to $32.4 million from $33.7 million during the prior year period. On a constant currency basis, Adjusted EBITDA increased 4.2%, or $1.4 million, compared to the prior year period. A reconciliation of operating income to Adjusted EBITDA is attached to this release. |
Management Comments:
“We were generally pleased with our operating performance in fiscal 2016, which was achieved despite sub optimal weather conditions in April 2015, a 13.2% year over year decline in the average value of the Canadian dollar which negatively impacted Adjusted EBITDA by approximately $2.7 million and the filing for bankruptcy protection of one of our largest customers,” stated Ed Levy, President and CEO of Rand.
“We were able to offset these factors that were beyond our control by improving both the operating reliability of our fleet and the mix of commodities that we carried,” Levy continued. “A highlight of our fiscal year was the introduction of our newest vessel into service in November 2015. We are pleased with this vessel’s performance and contributions to date and believe that we have the opportunity to realize further improvements in certain of our key operating metrics in the year ahead.”
“For the month of April 2016, we sailed for 242 days compared to 318 days in the same period in 2015.The start of the 2016 sailing season has been consistent with our expectations and weather conditions were much improved in comparison to both 2014 and 2015. As a result, in April 2016, Delays Days equaled 5.8% of total sailing days versus 18.6% in April 2015. The current demand environment is consistent with our expectations, and we are benefitting from several of the cost initiatives that we identified.”
Levy concluded, “Looking ahead, our primary focus remains creating efficient trade patterns to maximize the percentage of time that our vessels are in revenue generating condition and to effectively analyze and react to operating data on a real time basis to ensure that we are achieving our operational performance objectives. We remain focused on maximizing return on invested capital and paying down debt.”
Conference Call
Management will host a conference call to discuss the results at 8:30 a.m. ET on Thursday, June 16, 2016. Interested parties may participate in the conference call by dialing 888-438-5453 (719-325-2458 for international callers), and using Conference ID# 2405928. The conference call will be webcast simultaneously on the Rand Logistics, Inc. website at www.randlogisticsinc.com/presentations.html. A presentation file related to the conference call will be posted to the same site.
Rand Logistics Fiscal Year 2016 Financial Results
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A replay of the conference call will be available at www.randlogisticsinc.com/presentations.html and will be archived for 12 months. A replay will also be available until July 16, 2016 by dialing 877-870-5176 (858-384-5517 for international callers), and using Conference ID# 2405928.
Non-GAAP Financial Measures/Financial Tables
This press release contains certain non-GAAP financial measures. Reconciliations of these and other non-GAAP measures to the comparable GAAP measures are included in the attached financial tables.
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 three 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.
Forward-Looking Statements
This press release contains forward-looking statements which reflect management’s current views with respect to certain future events and Rand’s operations, performance and financial condition. Forward-looking statements are only as of the date of this press release. Forward-looking statements include, but are not limited to: Rand’s future operating or financial results; Rand’s anticipated plans, goals or objectives of our management for operations and services; Rand’s anticipated financial position and liquidity, growth opportunities and growth rates, acquisition and divestiture opportunities, business prospects, regulatory and competitive outlook, investment and expenditure plans, investment results, strategic alternatives, business strategies, and other similar statements of expectations or objectives; and Rand’s outlook and financial and other guidance. 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 certain of our markets; the weather conditions on the Great Lakes; our ability to maintain and replace our vessels as they age; changes in customer demand; changes in shipping regulations; fluctuations in currencies and interest rates; adequacy of capital resources, including the ability to obtain financing in the future; expectations of vessels’ useful lives and the estimated obligations, and the timing thereof, relating to vessel repair or maintenance work; expected capital spending or operating expenses, including drydocking and insurance costs; the ability to comply with applicable regulations and Rand’s debt covenants; changes in laws, regulations or tax rates, or the outcome of pending legislative or regulatory initiatives; and potential liability from pending or future litigation.
www.randlogisticsinc.com
Rand Logistics Fiscal Year 2016 Financial Results
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The risks included are not exhaustive. 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 filed with the Securities and Exchange Commission on June 15, 2016.
CONTACT:
Edward Levy, President and CEO
mailto:elevy@randlogisticsinc.com
Mark S. Hiltwein, Vice President and CFO
(212) 863-9427
mshiltwein@randlogisticsinc.com
Annemarie Dobler, Corporate Communications Director
apdobler@randlogisticsinc.com
― financial tables to follow ―
www.randlogisticsinc.com
Rand Logistics Fiscal Year 2016 Financial Results
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| RAND LOGISTICS, INC. |
| Consolidated Statements of Operations (Unaudited) |
| (U.S. Dollars 000’s except for Shares and Per Share data) |
| | | | Year ended | | | Year ended | |
| | | | March 31, 2016 | | | March 31, 2015 | |
| REVENUE | | | | | | | |
| | Freight and related revenue | | $ | 123,591 | | | $ | 129,107 | |
| | Fuel and other surcharges | | | 11,547 | | | | 22,110 | |
| | Outside voyage charter revenue | | | 13,306 | | | | 1,743 | |
| TOTAL REVENUE | | | 148,444 | | | | 152,960 | |
| | | | | | | | | | |
| EXPENSES | | | | | | | | | |
| | Outside voyage charter fees | | | 13,416 | | | | 1,711 | |
| | Vessel operating expenses | | | 83,362 | | | | 97,821 | |
| | Repairs and maintenance | | | 5,849 | | | | 6,463 | |
| | General and administrative | | | 13,935 | | | | 13,275 | |
| | Depreciation | | | 18,915 | | | | 18,292 | |
| | Amortization of drydock costs | | | 3,507 | | | | 3,343 | |
| | Amortization of intangibles | | | 1,081 | | | | 1,198 | |
| | Loss on foreign exchange | | | (68 | ) | | | 873 | |
| | Loss on termination of vessel lease | | | — | | | | 2,660 | |
| | | | | 139,997 | | | | 145,636 | |
| OPERATING INCOME | | | 8,447 | | | | 7,324 | |
| | | | | | | | | | |
| OTHER (INCOME) AND EXPENSES | | | | | | | | |
| | Interest expense | | | 12,461 | | | | 14,007 | |
| | Interest income | | | (14 | ) | | | (18 | ) |
| | Loss on extinguishment of debt | | | — | | | | 2,331 | |
| | | | | 12,447 | | | | 16,320 | |
| | | | | | | | | | |
| LOSS BEFORE INCOME TAXES | | | (4,000 | ) | | | (8,996 | ) |
| PROVISION FOR INCOME TAXES | | | | | | | | |
| | Current | | | 51 | | | | 7 | |
| | Deferred | | | 181 | | | | 417 | |
| | | | | 232 | | | | 424 | |
| NET LOSS BEFORE PREFERRED STOCK DIVIDENDS | | | (4,232 | ) | | | (9,420 | ) |
| PREFERRED STOCK DIVIDENDS | | | 1,333 | | | | 1,168 | |
| NET LOSS APPLICABLE TO COMMON STOCKHOLDERS | | $ | (5,565 | ) | | $ | (10,588 | ) |
| | | | | | | | | | |
| Net loss per share basic and diluted | | $ | (0.31 | ) | | $ | (0.59 | ) |
| Weighted average shares basic and diluted | | | 18,045,935 | | | | 17,847,939 | |
Rand Logistics Fiscal Year 2016 Financial Results
Page | 6
| RAND LOGISTICS, INC. |
| Consolidated Balance Sheets |
| (U.S. Dollars 000’s except for Shares and Per Share data) |
| | | | March 31, 2016 | | | March 31, 2015 | |
| ASSETS | | | | | | | |
| CURRENT | | | | | | | |
| | Cash and cash equivalents | | $ | 77 | | | $ | 3,298 | |
| | Accounts receivable, net | | | 2,697 | | | | 2,764 | |
| | Income taxes receivable | | | 47 | | | | 91 | |
| | Prepaid expenses and other current assets | | | 6,320 | | | | 5,957 | |
| | Deferred income taxes | | | — | | | | 347 | |
| Total current assets | | | 9,141 | | | | 12,457 | |
| | | | | | | | | | |
| PROPERTY AND EQUIPMENT, NET | | | 228,504 | | | | 206,276 | |
| OTHER ASSETS | | | 102 | | | | 569 | |
| DEFERRED DRYDOCK COSTS, NET | | | 6,660 | | | | 7,590 | |
| INTANGIBLE ASSETS, NET | | | 10,807 | | | | 13,205 | |
| GOODWILL | | | | 10,193 | | | | 10,193 | |
| | | | | | | | | | |
| Total assets | | $ | 265,407 | | | $ | 250,290 | |
| LIABILITIES | | | | | | | | | |
| CURRENT | | | | | | | | | |
| | Accounts payable | | | 17,822 | | | | 15,350 | |
| | Accrued liabilities | | | 8,144 | | | | 7,628 | |
| | Other current liability | | | 776 | | | | 166 | |
| | Income taxes payable | | | 34 | | | | — | |
| | Current portion of deferred payment liability | | | 564 | | | | 536 | |
| Total current liabilities | | | 27,340 | | | | 23,680 | |
| LONG-TERM PORTION OF DEFERRED PAYMENT LIABILITY | | | — | | | | 564 | |
| LONG-TERM DEBT, NET OF CURRENT PORTION | | | 114,520 | | | | 101,213 | |
| SUBORDINATED DEBT | | | 78,126 | | | | 72,500 | |
| OTHER LIABILITIES | | | — | | | | 479 | |
| DEFERRED INCOME TAXES | | | 5,825 | | | | 5,607 | |
| | | | | | | | | | |
| Total liabilities | | | 225,811 | | | | 204,043 | |
| COMMITMENTS AND CONTINGENCIES | | | | | | | | |
| STOCKHOLDERS' EQUITY | | | | | | | | |
| | Preferred stock, $.0001 par value, | | | | | | | | |
| | Authorized 1,000,000 shares, Issued and outstanding 295,480 shares | | | 14,674 | | | | 14,900 | |
| | Common stock, $.0001 par value, | | | | | | | | |
| | Authorized 50,000,000 shares, Issuable and outstanding 18,359,397 shares at March 31, 2016 and 18,035,427 shares at March 31, 2015 | | | 1 | | | | 1 | |
| | Additional paid-in capital | | | 90,993 | | | | 90,130 | |
| | Accumulated deficit | | | (56,537 | ) | | | (50,972 | ) |
| | Accumulated other comprehensive loss | | | (9,535 | ) | | | (7,812 | ) |
| | | | | | | | | | |
| Total stockholders’ equity | | | 39,596 | | | | 46,247 | |
| | | | | | | | | | |
| Total liabilities and stockholders’ equity | | $ | 265,407 | | | $ | 250,290 | |
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Rand Logistics Fiscal Year 2016 Financial Results
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| RAND LOGISTICS, INC | | | | | | | | |
| Non-GAAP Financial Measures / Financial Tables | | FY2016 - Q4 |
| (U.S. Dollars 000's except for Shares and Per Share data) | | | | | | | | |
| | | FY2016 Actual | FY2015 Actual | Increase/(Decrease) | FX Impact (Unfavorable)/Favorable | Constant Currency Increase/(Decrease) 1 |
| | | | | Change $ | Change % | Change $ | Change $ | Change % |
| | | | | | | | | |
| Average Fx Rate | | 0.728 | 0.806 | | | | | |
| | | | | | | | | |
| Sailing Days | | 113 | 256 | (143) | -55.9% | | | |
| | | | | | | | | |
| Financial Highlights (US$ '000s) | | | | | | | | |
| Freight and Related Revenue | | $4,860 | $4,427 | $433 | 9.8% | -$358 | $791 | 17.9% |
| | | | | | | | | |
| Fuel and Other Surcharges | | $403 | $764 | -$361 | -47.3% | -$47 | -$314 | -41.0% |
| | | | | | | | | |
| Total Revenue | | $5,922 | $6,316 | -$394 | -6.2% | -$519 | $125 | 2.0% |
| | | | | | | | | |
| Total Operation Expenses | | $2,406 | $6,336 | -$3,930 | -62.0% | -$219 | -$3,711 | -58.6% |
| | | | | | | | | |
| Vessel Margin | | -$1,875 | -$6,371 | $4,496 | -70.6% | $58 | $4,438 | -69.7% |
| | | | | | | | | |
| General & Admin Expense | | $3,725 | $3,578 | $147 | 4.1% | -$181 | $329 | 9.2% |
| | | | | | | | | |
| Loss/(Gain) on foreign exchange | | -$465 | $120 | -$585 | -487.5% | $24 | -$609 | -507.6% |
| | | | | | | | | |
Adjusted EBITDA 3 | | -$5,614 | -$9,930 | $4,316 | -43.5% | $241 | $4,075 | -41.0% |
| | | | | | | | | |
| Per Day Statistics | | | | | | | | |
| Marine Freight Revenue/Day | | $43,009 | $17,293 | $25,716 | 148.7% | -$3,172 | $28,888 | 167.0% |
| | | | | | | | | |
| Total Revenue/Day | | $52,407 | $24,670 | $27,737 | 112.4% | -$4,592 | $32,329 | 131.0% |
| | | | | | | | | |
| Vessel Margin/Day | | -$16,593 | -$24,887 | $8,294 | -33.3% | $515 | $7,779 | -31.3% |
| | | | | | | | | |
| | | | | | | | | |
| Non-GAAP Reconciliation (US$ '000s) | | | | | | | | |
| | | | | | | | | |
| Vessel margin | | -$1,875 | -$6,371 | | | | | |
| Outside Charter net margin | | -$14 | $19 | | | | | |
| General & Admin Expense | | $3,725 | $3,578 | | | | | |
| Adjusted EBITDA | | -$5,614 | -$9,930 | | | | | |
Loss/(gain)on foreign exchange 2 | | -$465 | $120 | | | | | |
| EBITDA | | -$5,149 | -$10,050 | | | | | |
| Depreciation, Amortization of Dry-dock & Intangibles | | $5,943 | $5,386 | | | | | |
| Operating Income | | -$11,092 | -$15,436 | | | | | |
| | | | | | | | | |
| Note: |
| 1. The constant currency information presented is calculated by translating current period results using prior period foreign currency exchange rates. |
| |
| 2. Loss (gain) on foreign exchange during the three month period ended March 31, 2016 was primarily a non-cash gain on translation of approximately $39.8 million USD denominated debt incurred in March 2014 and carried on the balance sheet of the Canadian subsidiary. |
| |
| 3. Adjusted EBITDA is defined as operating income plus depreciation, amortization of drydock costs, amortization of intangibles, loss (gain) on foreign exchange, certain one-time equity-based severance costs and loss on termination of vessel lease. |
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| RAND LOGISTICS, INC | | | | | | | | |
| Non-GAAP Financial Measures / Financial Tables | | FY2016 - March 2016 YTD |
| (U.S. Dollars 000's except for Shares and Per Share data) | | | | | | | | |
| | | FY2016 Actual | FY2015 Actual | Increase/(Decrease) | FX Impact (Unfavorable)/Favorable | Constant Currency Increase/(Decrease) 1 |
| | | | | Change $ | Change % | Change $ | Change $ | Change % |
| | | | | | | | | |
| Average Fx Rate | | 0.764 | 0.880 | | | | | |
| | | | | | | | | |
| Sailing Days | | 3,911 | 4,106 | (195) | -4.7% | | | |
| | | | | | | | | |
| Financial Highlights (US$ '000s) | | | | | | | | |
| Freight and Related Revenue | | $123,591 | $129,107 | -$5,516 | -4.3% | -$10,264 | $4,748 | 3.7% |
| | | | | | | | | |
| Fuel and Other Surcharges | | $11,547 | $22,110 | -$10,563 | -47.8% | -$1,948 | -$8,615 | -39.0% |
| | | | | | | | | |
| Total Revenue | | $148,444 | $152,960 | -$4,516 | -3.0% | -$14,552 | $10,036 | 6.6% |
| | | | | | | | | |
| Vessel Operating Expenses | | $83,362 | $97,821 | -$14,459 | -14.8% | -$7,791 | -$6,668 | -6.8% |
| | | | | | | | | |
| Vessel Margin | | $45,927 | $46,933 | -$1,006 | -2.1% | -$4,112 | $3,105 | 6.6% |
| | | | | | | | | |
| General & Admin Expense | | $13,377 | $13,275 | $102 | 0.8% | -$1,422 | $1,524 | 11.5% |
| | | | | | | | | |
| Loss/(Gain) on foreign exchange | | -$68 | $873 | -$941 | -107.8% | -$10 | -$931 | -106.7% |
| | | | | | | | | |
Adjusted EBITDA 3 | | $32,440 | $33,690 | -$1,250 | -3.7% | -$2,661 | $1,410 | 4.2% |
| | | | | | | | | |
| Per Day Statistics | | | | | | | | |
| Marine Freight Revenue/Day | | $31,601 | $31,443 | $158 | 0.5% | -$2,624 | $2,782 | 8.8% |
| | | | | | | | | |
| Total Revenue/Day | | $37,956 | $37,253 | $703 | 1.9% | -$3,721 | $4,424 | 11.9% |
| | | | | | | | | |
| Vessel Operating Expenses/Day | | $21,315 | $23,824 | -$2,509 | -10.5% | -$1,991 | -$518 | -2.2% |
| | | | | | | | | |
| Vessel Margin/Day | | $11,743 | $11,430 | $313 | 2.7% | -$1,051 | $1,364 | 11.9% |
| | | | | | | | | |
| | | | | | | | | |
| Non-GAAP Reconciliation (US$ '000s) | | | | | | | | |
| | | | | | | | | |
| Vessel margin | | $45,927 | $46,933 | | | | | |
| Outside Charter net margin | | -$110 | $32 | | | | | |
| General & Admin Expense | | $13,377 | $13,275 | | | | | |
| | | | | | | | | |
| Adjusted EBITDA | | $32,440 | $33,690 | | | | | |
Loss/(gain) on foreign exchange 2 | | -$68 | $873 | | | | | |
| EBITDA | | $32,508 | $32,817 | | | | | |
| One-time equity based severance costs | | $558 | $0 | | | | | |
| Loss on termination of vessel lease | | $0 | $2,660 | | | | | |
| Depreciation, Amortization of Dry-dock & Intangibles | | $23,503 | $22,833 | | | | | |
| Operating Income | | $8,447 | $7,324 | | | | | |
| | | | | | | | | |
| Note: |
| 1. The constant currency information presented is calculated by translating current period results using prior period foreign currency exchange rates. |
| |
| 2. Loss (gain) on foreign exchange during the year ended March 31, 2016 was primarily a non-cash gain on translation of approximately $39.8 million USD denominated debt incurred in March 2014 and carried on the balance sheet of the Canadian subsidiary. |
| |
| 3. Adjusted EBITDA is defined as operating income plus depreciation, amortization of drydock costs, amortization of intangibles, loss (gain) on foreign exchange, certain one-time equity-based severance costs and loss on termination of vessel lease. |
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