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Rand Logistics, Inc. Reports Third Quarter Fiscal Year 2016 Financial Results
Globe Newswire

Total debt reduction of $12.4 million in the quarter

Net cash flow from operations increased to $14.1 million in the quarter from
$11.8 million in the prior year quarter

New vessel sailed 39 days in the quarter

NEW YORK, Feb. 09, 2016 (GLOBE NEWSWIRE) -- Rand Logistics, Inc. (NASDAQ:RLOG) (“Rand”) today announced its financial results for the fiscal year 2016 third quarter ended December 31, 2015.

Quarter Ended December 31, 2015 Versus Quarter Ended December 31, 2014
Financial Results

  • Net loss was $4.2 million, or ($0.23) per share on a fully diluted basis, from net income of $4.0 million, or $0.21 per share, in the prior year period.
  • Freight and other related revenue generated from Company-operated vessels (which excludes fuel and other surcharges) decreased $6.0 million, or 14.4%, to $36.0 million during the three-month period compared to $42.0 million during the year ago period. On a constant currency basis, freight and other related revenue decreased 6.7%, or $2.8 million. 
  • Total Sailing Days were 1,292 compared to 1,361 in the prior year.
  • Delay Days increased to 156 from 139.
  • Freight and related revenue per Sailing Day decreased $3,026, or 9.8%, to $27,808 compared to $30,834 per Sailing Day in the year ago period. On a constant currency basis, freight and related revenue per Sailing Day decreased 1.7% or $516.
  • Vessel operating expenses decreased $5.5 million, or 18.3%, to $24.4 million compared to $29.9 million during the year ago period. This decrease was primarily due to the weaker Canadian dollar and reduced fuel prices. On a constant currency basis, vessel operating expenses decreased 10.5%, or $3.1 million. Vessel operating expenses per Sailing Day decreased $3,067, or 14.0%, to $18,862 from $21,929 during the year ago period.
  • Adjusted EBITDA decreased $5.4 million, or 35.9%, to $9.7 million from $15.1 million during the year ago period. On a constant currency basis, Adjusted EBITDA decreased 32.6%, or $4.9 million. The decline in Adjusted EBITDA was largely attributable to a customer’s liquidity issue.

Nine Months Ended December 31, 2015 Versus Nine Months Ended December 31, 2014 Financial Results

  • Net income was $10.0 million, or $0.54 per share on a fully diluted basis, down from $11.3 million, or $0.60 per share, in the year ago period.
  • Freight and other related revenue generated from Company-operated vessels (which excludes fuel and other surcharges) decreased $6.0 million, or 4.8%, to $118.7 million compared to $124.7 million during the year ago period. On a constant currency basis, freight and other related revenue increased 3.2%, or $4.0 million.
  • Total Sailing Days were 3,798 compared to 3,850 in the prior year period. 
  • Delay Days decreased to 333 from 342. Delay Days as a percentage of total Sailing Days remained relatively constant year over year.
  • Freight and related revenue per Sailing Day decreased $1,123, or 3.5%, to $31,261 compared to $32,384 during the prior nine-month period. On a constant currency basis, freight and related revenue per Sailing Day increased 4.6%, or $1,485.
  • Vessel operating expenses decreased $10.5 million, or 11.5%, to $81.0 million compared to $91.5 million during the year ago period. On a constant currency basis, vessel operating expenses decreased 3.2%, or $3.0 million. Vessel operating expenses per Sailing Day decreased $2,447, or 10.3%, to $21,315 from $23,762.    
  • Adjusted EBITDA decreased $5.6 million, or 12.8%, to $38.0 million from $43.6 million during the prior year period. On a constant currency basis, Adjusted EBITDA decreased 6.1%, or $2.7 million, compared to the prior year period.

Management Comments:

“Our results for the third quarter were disappointing,” commented Ed Levy, President and CEO of Rand. “Liquidity issues at one of our largest customers and their subsequent bankruptcy filing in early November impacted our profitability. To address their depleted on-hand raw material inventory and meet their winter needs before the end of the sailing season, the customer compressed a significant amount of purchasing into a 60-day window. In addition, as a result of factors beyond our control, the customer changed iron ore suppliers, which lengthened their supply chain. The sum of these factors resulted in our having inadequate vessel capacity and trade pattern flexibility to be able to economically transport all of their required tonnage prior to the end of the sailing season. Instead, in collaboration with the customer, we retained third party carriers to haul in excess of 700,000 tons for this customer, which equated to approximately $7.0 million of revenue in the quarter at no profit to us. In addition, our financial performance continues to be impacted by weakness in the Canadian dollar.”

“In January, we operated for 84 sailing days, which compared favorably to the approximate 12 sailing days budgeted for January that we had previously communicated,” Mr. Levy continued. “Most of these additional sailing days were dedicated to our customer who filed for bankruptcy protection. We expect that based on preliminary 2016 tonnage nominations and ratable demand that our 2016 sailing season profitability from this customer will be consistent with prior years.”  

“We have been fortunate to attract and retain a number of talented managers to our Company to augment the existing team and capitalize on the depth and breadth of their knowledge.” Mr. Levy added, “We are beginning to score tangible ‘wins’ in our commitment to improving return on invested capital. We have improved working capital management, are beginning to achieve reductions in procurement costs and are actively reengineering and streamlining a number of functional departments to improve process efficiencies. We believe the $12.4 million of debt reduction this past quarter is tangible evidence that the plan that we put in place nine months ago to improve return on invested capital is taking hold. Finally, we are optimistic about the contribution that our newest vessel will make in the 2016 sailing season towards achieving our goals,” Mr. Levy concluded.

Conference Call
Management will hold a conference call at 8:30 a.m. EST on Wednesday, February 10, 2016. Interested parties may participate in the conference call by dialing 888-466-4462 (719-785-1753 for international callers), and using Conference ID# 8003174. 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.

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 March 10, 2016 by dialing 877-870-5176 (858-384-5517 for international callers), and using Conference ID# 8003174.

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. 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; 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 filed with the Securities and Exchange Commission on June 11, 2015.

― financial tables to follow ―

 
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 Nine months ended Nine months ended
   December 31, 2015 December 31, 2014 December 31, 2015 December 31, 2014
REVENUE        
 Freight and related revenue$  35,928 $  41,965 $  118,731 $  124,680 
 Fuel and other surcharges   1,617    6,482    11,144    21,346 
 Outside voyage charter revenue   8,217    618    12,647    618 
TOTAL REVENUE   45,762    49,065    142,522    146,644 
          
EXPENSES        
 Outside voyage charter fees   8,250    605    12,743    605 
 Vessel operating expenses   24,370    29,846    80,956    91,485 
 Repairs and maintenance   220    60    1,117    1,237 
 General and administrative   3,811    3,498    10,210    9,697 
 Depreciation   4,782    4,613    14,092    13,983 
 Amortization of drydock costs   877    836    2,644    2,548 
 Amortization of intangibles   268    300    824    916 
 Loss on foreign exchange   92    290    397    753 
 Loss on termination of vessel lease      2,660       2,660 
     42,670    42,708    122,983    123,884 
OPERATING INCOME   3,092    6,357    19,539    22,760 
          
OTHER (INCOME) AND EXPENSES        
 Interest expense   3,079    3,359    9,060    10,823 
 Interest income   (2)   (3)   (6)   (7)
     3,077    3,356    9,054    10,816 
          
INCOME BEFORE INCOME TAXES   15    3,001    10,485    11,944 
PROVISION FOR (BENEFIT FROM) INCOME TAXES        
 Deferred   3,862    (1,259)   (466)   (211)
     3,862    (1,259)   (466)   (211)
NET (LOSS) INCOME BEFORE PREFERRED STOCK DIVIDENDS   (3,847)   4,260    10,951    12,155 
PREFERRED STOCK DIVIDENDS   351    291    1,000    872 
NET (LOSS) INCOME  APPLICABLE TO COMMON STOCKHOLDERS  $  (4,198)$  3,969 $  9,951 $  11,283 
          
Net income per share basic $  (0.23)$  0.22 $  0.55 $  0.63 
Net income per share diluted   (0.23)   0.21    0.54    0.60 
Weighted average shares basic    18,091,303    17,837,696    17,984,278    17,837,007 
Weighted average shares diluted   18,091,303    20,362,406    20,396,052    20,377,191 
          


RAND LOGISTICS, INC.
Consolidated Balance Sheets (Unaudited)
(U.S. Dollars 000’s except for Shares and Per Share data)
      
      
   December 31, 2015 March 31, 2015
ASSETS    
CURRENT    
 Cash and cash equivalents$  2,353 $  3,298 
 Accounts receivable, net   13,482    2,764 
 Income taxes receivable   91    91 
 Prepaid expenses and other current assets   5,183    5,957 
 Deferred income taxes   318    347 
Total current assets   21,427    12,457 
      
PROPERTY AND EQUIPMENT, NET   216,015    206,276 
OTHER ASSETS   123    569 
DEFERRED DRYDOCK COSTS, NET   5,823    7,590 
INTANGIBLE ASSETS, NET   10,988    13,205 
GOODWILL   10,193    10,193 
      
Total assets $  264,569 $  250,290 
LIABILITIES    
CURRENT    
 Accounts payable   11,232    15,350 
 Accrued liabilities   9,437    7,628 
 Other current liability   173    166 
 Current portion of deferred payment liability   567    536 
Total current liabilities   21,409    23,680 
LONG-TERM PORTION OF DEFERRED PAYMENT LIABILITY   135    564 
LONG-TERM DEBT, NET OF CURRENT PORTION   106,222    101,213 
SUBORDINATED DEBT   78,126    72,500 
OTHER LIABILITIES   445    479 
DEFERRED INCOME TAXES   4,890    5,607 
      
Total liabilities   211,227    204,043 
COMMITMENTS AND CONTINGENCIES    
STOCKHOLDERS' EQUITY    
 Preferred stock, $.0001 par value,    
 Authorized 1,000,000 shares, Issued and outstanding 299,060 shares   14,853    14,900 
 Common stock, $.0001 par value,    
 Authorized 50,000,000 shares, Issuable and outstanding 18,281,008 shares at December 31, 2015 and 18,035,427 shares at March 31, 2015   1    1 
 Additional paid-in capital   90,597    90,130 
 Accumulated deficit   (41,021)   (50,972)
 Accumulated other comprehensive loss   (11,088)   (7,812)
      
Total stockholders’ equity   53,342    46,247 
      
Total liabilities and stockholders’ equity$  264,569 $  250,290 
      


RAND LOGISTICS, INC           
Non-GAAP Financial Measures / Financial Tables FY2016 - Q3   
(U.S. Dollars 000's except for Shares and Per Share data)           
  FY2016 ActualFY2015 ActualIncrease/(Decrease)FX Impact (Unfavorable)/FavorableConstant Currency Increase/(Decrease) 1   
    Change $Change %Change $Change $Change %   
            
Average Fx Rate    0.749     0.881          
            
Sailing Days    1,292    1,361    (69) -5.1%      
            
Financial Highlights (US$ '000s)           
Freight and Related Revenue $35,928 $41,965 $-6,037  -14.4%$-3,243 $-2,794  -6.7%   
            
Fuel and Other Surcharges $1,617 $6,482 $-4,865  -75.1%$-408 $-4,457  -68.8%   
            
Total Revenue $45,762 $49,065 $-3,303  -6.7%$-5,118 $1,815  3.7%   
            
Vessel Operating Expenses $24,370 $29,846 $-5,476  -18.3%$-2,354 $-3,122  -10.5%   
            
Vessel Margin $12,955 $18,541 $-5,586  -30.1%$-1,278 $-4,308  -23.2%   
            
General & Admin Expense $3,268 $3,498 $-230  -6.6%$-776 $546  15.6%   
            
Loss/(Gain) on foreign exchange $92 $290 $-198  -68.2%$-14 $-184  -63.6%   
            
Adjusted EBITDA $9,654 $15,056 $-5,402  -35.9%$-496 $-4,906  -32.6%   
            
Per Day Statistics           
Marine Freight Revenue/Day $27,808 $30,834 $-3,026  -9.8%$-2,510 $-516  -1.7%   
            
Total Revenue/Day $35,419 $36,051 $-631  -1.8%$-3,962 $3,330  9.2%   
            
Vessel Margin/Day $10,027 $13,623 $-3,596  -26.4%$-989 $-2,607  -19.1%   
            
            
Non-GAAP Reconciliation (US$ '000s)           
            
Vessel margin $12,955 $18,541         
Outside Charter net margin $-33 $13         
General & Admin Expense $3,268 $3,498         
Adjusted EBITDA $9,654 $15,056         
Loss on foreign exchange 2 $92 $290         
One-time equity based severance costs $543 $0         
Loss on termination of vessel lease $0 $2,660         
Depreciation, Amortization of Dry-dock & Intangibles $5,927 $5,749         
Operating Income $3,092 $6,357         
            
            
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 December 31, 2015 was primarily a non-cash loss on translation of approximately $39.8 million USD denominated debt incurred in March 2014 and carried on the balance sheet of the Canadian subsidiary.   
            
            
            
RAND LOGISTICS, INC           
Non-GAAP Financial Measures / Financial Tables FY2016 - December 2015 YTD   
(U.S. Dollars 000's except for Shares and Per Share data)           
  FY2016 ActualFY2015 ActualIncrease/(Decrease)FX Impact (Unfavorable)/FavorableConstant Currency Increase/(Decrease) 1   
    Change $Change %Change $Change $Change %   
            
Average Fx Rate    0.776     0.905          
            
Sailing Days    3,798    3,850    (52) -1.4%      
            
Financial Highlights (US$ '000s)           
Freight and Related Revenue $118,731 $124,680 $-5,949  -4.8%$-9,906 $3,957  3.2%   
            
Fuel and Other Surcharges $11,144 $21,346 $-10,202  -47.8%$-1,901 $-8,301  -38.9%   
            
Total Revenue $142,522 $146,644 $-4,122  -2.8%$-14,033 $9,911  6.8%   
            
Vessel Operating Expenses $80,956 $91,485 $-10,529  -11.5%$-7,572 $-2,957  -3.2%   
            
Vessel Margin $47,802 $53,304 $-5,502  -10.3%$-4,170 $-1,332  -2.5%   
            
General & Admin Expense $9,652 $9,697 $-45  -0.5%$-1,241 $1,196  12.3%   
            
Adjusted EBITDA $38,054 $43,620 $-5,566  -12.8%$-2,902 $-2,664  -6.1%   
            
Per Day Statistics           
Marine Freight Revenue/Day $31,261 $32,384 $-1,123  -3.5%$-2,608 $1,485  4.6%   
            
Total Revenue/Day $37,526 $38,089 $-564  -1.5%$-3,695 $3,131  8.2%   
            
Vessel Operating Expenses/Day $21,315 $23,762 $-2,447  -10.3%$-1,992 $-454  -1.9%   
            
Vessel Margin/Day $12,586 $13,845 $-1,259  -9.1%$-1,098 $-161  -1.2%   
            
            
Non-GAAP Reconciliation (US$ '000s)           
            
Vessel margin $47,802 $53,304         
Outside Charter net margin $-96 $13         
General & Admin Expense $9,652 $9,697         
            
Adjusted EBITDA $38,054 $43,620         
Loss on foreign exchange 2 $397 $753         
One-time equity based severance costs $558 $0         
Loss on termination of vessel lease $0 $2,660         
Depreciation, Amortization of Dry-dock & Intangibles $17,560 $17,447         
Operating Income $19,539 $22,760         
            
            
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 December 31, 2015 was primarily a non-cash loss on translation of approximately $39.8 million USD denominated debt incurred in March 2014 and carried on the balance sheet of the Canadian subsidiary.   
    
    
CONTACT:     
				
Rand Logistics, Inc.        					
Edward Levy, President and CEO            			
(212) 863-9405
elevy@randlogisticsinc.com
Mark S. Hiltwein, Vice President and CFO
(212) 863-9427
mshiltwein@randlogisticsinc.com
Annemarie Dobler, Corporate Communications Director
(212) 863-9429
apdobler@randlogisticsinc.com
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