Rand Logistics Inc.
FOR IMMEDIATE RELEASE
RAND LOGISTICS ANNOUNCES FISCAL YEAR 2007 RESULTS
New York, NY - June 29, 2007 - Rand Logistics Inc. (Nasdaq:RLOG; RLOGW; RLOGU)
("Rand") today announced financial results for the fourth quarter and fiscal
year ended March 31, 2007.
The GAAP results for the year ended March 31, 2006 reflect Rand prior to its
March 3, 2006 acquisition of Lower Lakes Towing Ltd. and Grand River Navigation
Company, Inc. Since the Company did not have any operations during that period,
the results do not provide a meaningful basis for comparison of financial
results. The pro forma results give effect to the acquisition of Lower Lakes
Towing Ltd. and Grand River Navigation Company, Inc. (collectively "Lower Lakes
Entities") as of the beginning of the fiscal year ended March 31, 2006.
Fiscal Year 2007 Financial and Operational Highlights
Versus pro forma Year ended March 31, 2006
o Revenue increased $21.4 million, or 40%, to $74.3 million (excluding
outside voyage charter revenue).
o Total actual vessel sailing days increased 22% from 2,232 days for
the year ended March 31, 2006 to 2,714 days for the year ended March
31, 2007, due primarily to the addition of three vessels on August
1st under a time charter agreement. Excluding the three time
chartered vessels, total actual vessel sailing days decreased 1%
from 2,232 days for the year ended March 2006 to 2,207 for the year
ended March 2007.
o For the year ended March 31, 2007, EBITDA was $5.3 million, compared
to $5.8 million in fiscal year 2006. The decrease in EBITDA was
primarily due to an increase in Rand public company G&A expenses.
EBITDA included $1.7 million related to a variable interest entity
("VIE") for which Rand was the primary beneficiary under FIN-46R,
although Rand has no ownership interest in that entity.
o Excluding the VIE and Rand's public company G&A expenses, EBITDA
increased 10%, to $7.4 million for the Lower Lakes Entities,
including the vessels operated under the time charter with Wisconsin
and Michigan Steamship. It should be noted, however, full year
EBITDA for the Lower Lakes Entities was negatively impacted by
finance charges of $1.2 million included as part of our time charter
payments to Wisconsin and Michigan Steamship. In addition, EBITDA
for the Lower Lakes Entities was adversely affected by one time
operational issues of $1.6 million.
Fourth Quarter Financial and Operational Highlights
Versus pro forma three-month period ended March 31, 2006
o Revenue increased $350,000 to $3.4 million (excluding outside voyage
charter revenue), during the off-season quarter, reflecting the
winter lay-up season.
o Total actual vessel sailing days increased from 124 in the three
months ended March 31, 2006 to 148 days for the three months ended
March 31, 2007 in the weather limited quarter, due primarily to the
addition of three vessels on August 1st under the time charter
agreement.
o The Company incurred an EBITDA loss of $8.2 million for the quarter
ended March 31, 2007, including an increase of $1.1 million of Rand
public company expenses, of which $0.7 million was associated with a
restricted stock grant. EBITDA included $0.7 million related to a
VIE for which Rand was the primary beneficiary under FIN-46R,
although Rand has no ownership interest in that entity.
o Excluding the VIE and Rand's public company G&A expenses, EBITDA
decreased by $3.3 million, to a loss of $7.1 million for the Lower
Lakes Entities. The increase in the loss was primarily related to
the increased cost associated with the time charter vessels.
Scott Bravener, President and CEO of Lower Lakes, stated, "Our strong revenue
growth of $21 million during this fiscal year was driven by both internal growth
and external expansion from the three vessels added through our mid-season 2006
time charter agreement. Our fourth quarter results reflect the incremental
winter lay-up costs of the three vessels operated under the new time charter
agreement. Despite the recently disclosed lay-up of our three time chartered
vessels beginning in early May due a work stoppage by the American Maritime
Officers Union against WMS, we are working diligently to meet our customers'
shipping requirements. Notwithstanding the work stoppage, to date, we have been
able to satisfy our customers shipping requirements."
Laurence S. Levy, Chairman and CEO of Rand, commented, "Despite the anticipated
impact from the higher winter lay-up costs arising from the time charter
agreement during our fourth fiscal quarter, as well as some repairs which
impacted our third quarter, we are pleased with the results of our first fiscal
year subsequent to the Lower Lakes acquisition. It should also be noted that
Fiscal 2007 was a transitional year for Rand with the acquisition integration,
the mid-season time charter agreement, as well as the substantial upgrades to
subsidiaries' business software, IT infrastructure, and internal controls to
meet both increased public reporting responsibilities and upcoming
Sarbanes-Oxley requirements. We are also pleased that Rand became a
Nasdaq-listed company in Fiscal 2007."
Mr. Levy concluded, "We remain optimistic about Rand's prospects due to the
strength and growth of our base business, where we continue to see strong demand
for our shipping capacity, as well as our focused pursuit of external expansion.
We are actively pursuing opportunities with predictable cash flows, defined
markets and barriers to entry, that focus on shipping or related areas of
business. We look forward to reporting on Rand's continued development."
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Pro Forma Summary Statement of Operations (unaudited)
Pro Forma
Year ended Year ended
March 31, 2007 March 31, 2006
-------------- --------------
- --------------------------------------------------------------------------------------------------------------------
Revenue - Company operated vessels 74,251 52,900
Revenue - Outside voyage charter revenue 4,935 5,337
- --------------------------------------------------------------------------------------------------------------------
79,186 58,237
Expenses
Outside voyage charter fees 4,935 5,337
Vessel operating expenses 57,474 40,556
Non operational repairs and maintenance 3,382 2,225
- --------------------------------------------------------------------------------------------------------------------
65,791 48,118
- --------------------------------------------------------------------------------------------------------------------
Income before general and administrative, depreciation, amortization of drydock
costs and intangibles, other income and expenses and income taxes 13,395 10,119
- --------------------------------------------------------------------------------------------------------------------
General and administrative 8,069 4,271
Depreciation and amortization of drydock costs and intangibles 6,963 5,322
Loss (gain) on foreign exchange 128 31
- --------------------------------------------------------------------------------------------------------------------
15,160 9,624
- --------------------------------------------------------------------------------------------------------------------
Income before interest, other income and expenses and income taxes (1,765) 495
- --------------------------------------------------------------------------------------------------------------------
Net income (4,521) (828)
- --------------------------------------------------------------------------------------------------------------------
Net income (loss) per share - basic ($ 0.63) ($ 0.36)
Net income (loss) per share - diluted ($ 0.63) ($ 0.36)
The information in the table above gives effect to the acquisition of Lower
Lakes Towing Ltd. and Grand River Navigation Company, Inc. for the twelve months
ended March 31, 2006. However, the general and administrative expenses shown in
the pro forma periods reflect the actual expenses incurred by Lower Lakes and
Rand prior to the acquisitions. There have been no adjustments to reflect higher
general and administrative expense at the Company during the pro forma period.
Conference Call
Management will conduct a conference call focusing on the financial results on:
Monday, July 2, 2007
9:00am ET
Dial-in number: 706-679-3155
Conference ID: 5409782
A phone replay will be available from 12:00 noon ET on Monday, July 2, 2007
until midnight ET on Monday, July 9, 2007. Dial 800-642-1687 (706-645-9291 for
international callers) and enter the code 5409782 for the phone replay.
Additionally, the Company will file a transcript of the call with the Securities
and Exchange Commission, which will be available at www.sec.gov.
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.
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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 eleven self unloading bulk carriers, including nine River
Class vessels and one River Class integrated tug/barge unit. 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: -OR- INVESTOR RELATIONS COUNSEL:
Rand Logistics, Inc. The Equity Group Inc.
Laurence S. Levy, Chairman & CEO Loren G. Mortman
Edward Levy, President (212) 836-9604
212-644-3450 LMortman@equityny.com
www.theequitygroup.com
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Rand Logistics, Inc.
Consolidated Statements of Operations
Year ended Three months ended Year ended
March 31, 2007 March 31, 2006 December 31, 2005
-------------- -------------- -----------------
REVENUE $ 79,186 $ 1,730 $ --
- --------------------------------------------------------------------------------------------------------------------
EXPENSES
Outside voyage charter fees 4,935 532 --
Vessel operating expenses 57,474 1,280 --
Repairs and maintenance 3,382 1,196 --
General and administrative 8,069 1,112 324
Depreciation 5,142 305 --
Amortization of drydock costs 388 -- --
Amortization of intangibles 1,433 121 --
Loss (gain) on foreign exchange 128 (54) --
- --------------------------------------------------------------------------------------------------------------------
80,951 4,492 324
- --------------------------------------------------------------------------------------------------------------------
LOSS BEFORE OTHER INCOME AND EXPENSES AND INCOME TAXES (1,765) (2,762) (324)
- --------------------------------------------------------------------------------------------------------------------
OTHER INCOME AND EXPENSES
Interest expense 3,778 151 --
Interest income (349) (292) (582)
Loss on hedging transaction 135 -- --
Amortization of chartering agreement costs 144 -- --
- --------------------------------------------------------------------------------------------------------------------
3,708 (141) (582)
====================================================================================================================
(LOSS) INCOME BEFORE INCOME TAXES (5,473) (2,621) 258
(RECOVERY OF) PROVISION FOR INCOME TAXES (2,160) (1,222) 169
- --------------------------------------------------------------------------------------------------------------------
NET (LOSS) INCOME $ (3,313) $ (1,399) $ 89
====================================================================================================================
MINORITY INTEREST 224 -- --
COMMON STOCK DIVIDENDS (250) -- --
PREFERRED STOCK DIVIDENDS $ (1,182) $ (90) $ --
====================================================================================================================
NET (LOSS) INCOME APPLICABLE TO COMMON STOCKHOLDERS $ (4,521) $ (1,489) $ 89
====================================================================================================================
Net (loss) earnings per share basic and diluted $ (.63) $ (.27) $ .02
====================================================================================================================
Weighted average shares basic and diluted 7,225,083 5,600,000 5,600,000
====================================================================================================================
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Rand Logistics, Inc.
Selected Financial Information (unaudited)
Reconciliation of Income before Interest,
Other Income and Expenses and Income Taxes to EBITDA
(2006 Figures are Pro Forma)
Variable
Rand Logistics Interest Entity Consolidated Pro Forma
Year ended Year ended Year ended Year ended
March 31, 2007 March 31, 2007 March 31, 2007 March 31, 2006
------------------------------------------------------------------------
Income before interest, other income and expenses and
income taxes (2,845) 1,080 (1,765) 495
Loss (gain) on foreign exchange 128 0 128 31
Depreciation and amortization of dry-dock costs and
intangibles 6,312 651 6,963 5,322
- ------------------------------------------------------------------------------------------------------------------------------------
EBITDA 3,595 1,731 5,326 5,848
------------------------------------------------------------------------
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Rand Logistics, Inc.
Consolidated Balance Sheets
March 31, March 31,
2007 2006
--------- ---------
ASSETS
CURRENT
Cash and cash equivalents $ 7,207 $ 2,574
Accounts receivable 2,702 2,107
Prepaid expenses and other current assets 3,122 1,460
Income taxes receivable 263 --
Deferred income taxes 1,219 1,161
- ------------------------------------------------------------------------------------------------------------------
Total current assets 14,513 7,302
BLOCKED ACCOUNT 2,700 --
PROPERTY AND EQUIPMENT, NET 66,859 48,161
DEFERRED INCOME TAXES 13,574 9,386
DEFERRED DRYDOCK COSTS, NET 5,895 1,614
INTANGIBLE ASSETS, NET 13,334 13,942
GOODWILL 6,363 6,363
- ------------------------------------------------------------------------------------------------------------------
Total assets $ 123,238 $ 86,768
==================================================================================================================
LIABILITIES
CURRENT
Bank indebtedness $ 5,097 $ --
Accounts payable 11,445 7,617
Accrued liabilities 3,237 2,615
Interest rate swap contract 135 --
Income taxes payable 385 51
Deferred income taxes 589 406
Current portion of long-term debt 4,398 1,772
Current portion of long-term capital lease obligation - vessel lease -- 2,108
- ------------------------------------------------------------------------------------------------------------------
Total current liabilities 25,286 14,569
LONG-TERM DEBT 34,864 20,379
ACQUIRED MANAGEMENT BONUS PROGRAM 3,000 3,000
DEFERRED INCOME TAXES 13,624 12,063
- ------------------------------------------------------------------------------------------------------------------
Total liabilities 76,774 50,011
==================================================================================================================
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, Issued and outstanding 8,127,177 shares
Additional Paid-in Capital 38,407 24,629
Accumulated deficit (5,947) (1,426)
Accumulated other comprehensive loss (1,073) (1,347)
Minority interest of variable interest entity 176 --
- ------------------------------------------------------------------------------------------------------------------
Total stockholders' equity 46,464 36,757
- ------------------------------------------------------------------------------------------------------------------
Total liabilities and stockholders' equity $ 123,238 $ 86,768
==================================================================================================================
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