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Rand Logistics, Inc. Reports Second Quarter Fiscal Year 2016 Financial Results

Globe Newswire

Second quarter net income before tax increased 12.5%

Adjusted EBITDA of $16.1 million decreased by $1.3 million; increased by $0.3 million on a constant currency basis

Net cash generated in operating activities through six months equaled $12.2 million, an increase of $1.3 million or 11.9%

NEW YORK, Nov. 04, 2015 (GLOBE NEWSWIRE) -- Rand Logistics, Inc. (NASDAQ:RLOG) (“Rand”) today announced its financial results for the fiscal year 2016 second quarter ended September 30, 2015.

Quarter Ended September 30, 2015 versus Quarter Ended September 30, 2014 Financial Results

  • Net income increased to $11.5 million, or $0.58 per share on a fully diluted basis, from $5.5 million, or $0.29 per share, in the prior year period. Before a tax benefit of approximately $0.22, net income per share increased to $0.36 on a fully diluted basis or 12.5% over the prior year period.
  • Freight and other related revenue from company operated vessels (which excludes fuel and other surcharges) decreased $2.3 million, or 4.9%, to $43.8 million during the three-month period compared to $46.1 million in the year ago period. On a constant currency basis, freight and other related revenue increased 4.0%, or $1.9 million. 
  • Total Sailing Days were 1,278 compared to 1,351 in the prior year. The 73-day decline in sailing days was comprised of 92 lost days attributable to our time chartered bulk carriers. Although these vessels did not operate for the entire quarter, we continued to receive daily charter payments at a reduced rate. These lost days were partially offset by a 19 day reduction in days out of service. 
  • Delay Days decreased to 68 from 72. Delay Days as a percentage of total Sailing Days remained relatively constant year over year.
  • Freight and related revenue per Sailing Day increased $176, or 0.5%, to $34,300 compared to $34,124 per Sailing Day in the year ago period. On a constant currency basis, freight and related revenue per Sailing Day increased 10.0%, or $3,409.
  • Vessel operating expenses decreased $3.6 million, or 10.7%, to $30.0 million compared to $33.6 million during the year ago period. Vessel operating expenses per Sailing Day decreased $1,381, or 5.6%, to $23,498 from $24,879 during the year ago period. On a constant currency basis, vessel operating expenses per Sailing Day decreased 0.9%, or $0.3 million.  
  • Adjusted EBITDA decreased $1.3 million, or 7.3%, to $16.1 million from $17.4 million during the year ago period. On a constant currency basis, Adjusted EBITDA increased 2.0%, or $0.3 million.

Six Months Ended September 30, 2015 versus Six Months Ended September 30, 2014 Financial Results

  • Net income increased to $14.1 million, or $0.73 per share on a fully diluted basis, from $7.3 million, or $0.39 per share, in the prior year period.  Before a tax benefit of approximately $0.22 per share, net income per share increased to $0.51 per share on a fully diluted basis, or 15.9% versus the prior year period.
  • Freight and other related revenue (which excludes fuel and other surcharges) increased marginally to $82.8 million compared to $82.7 million during the year ago period. On a constant currency basis, freight and other related revenue increased 8.2%, or $6.8 million. 
  • Total Sailing Days were 2,506 compared to 2,489 in the prior year period. 
  • Delay Days decreased to 177, or 7.1% of Sailing Days, from 203, or 8.1% of Sailing Days.
  • Freight and related revenue per Sailing Day decreased $190, or 0.6%, to $33,042 compared to $33,232 during the prior six-month period. On a constant currency basis, freight and related revenue per Sailing Day increased 7.4%, or $2,468.
  • Vessel operating expenses decreased $5.0 million, or 8.2%, to $56.6 million compared to $61.6 million during the year ago period.  On a constant currency basis, vessel operating expenses increased 0.3%, or $0.2 million. Vessel operating expenses per Sailing Day decreased $2,185, or 8.8%, to $22,580 from $24,765.    
  • Adjusted EBITDA decreased $0.2 million, or 0.6%, to $28.4 million from $28.6 million during the prior year period. On a constant currency basis, Adjusted EBITDA increased 7.9%, or $2.2 million, compared to the prior year period.

Management Comments:

“The 2015 sailing season has remained consistent with our initial outlook,” commented Ed Levy, President and CEO of Rand. “We continue to focus our efforts on the factors of our business that we can control. We have experienced continued improvement in the key operating and financial metrics that drive our business, including lower vessel delays and days out of service, combined with improvements in tons hauled, freight and related revenue, and vessel margin per day. The year to date financial impact of these improvements has been masked by a 14% decline in the value of the Canadian dollar versus the US dollar compared to last sailing season.”

Mr. Levy concluded, “With recent additions to our management team, we are further sharpening our focus on cost containment and expense management in order to drive free cash flow per share, with the goal of paying down debt and reducing our cost of capital. The introduction of our newest vessel into service later this month is another key element in our plan to improve our return on invested capital. We believe that these initiatives will become more evident in our financial results as we move through the remainder of this fiscal year and into the 2016 sailing season.”

Conference Call
Management will hold a conference call to discuss these results at 8:30 a.m. EST on Thursday, November 5, 2015. Interested parties may participate in the conference call by dialing 888-510-1785 (719-457-1035 for international callers), and using Conference ID# 7534445. The conference call will be webcast simultaneously on the Rand Logistics, Inc. website at www.randlogisticsinc.com/presentations.html.

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 December 5, 2015 by dialing 877-870-5176 (858- 384-5517 for international callers), and using Conference ID# 7534445.

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 Six months ended Six months ended
  September 30,
2015
 September 30,
2014
 September 30,
2015
 September 30,
2014
REVENUE        
Freight and related revenue $  43,835  $  46,102  $  82,803  $  82,715 
Fuel and other surcharges   5,563    8,168    9,527    14,864 
Outside voyage charter revenue   2,535       4,430    
TOTAL REVENUE   51,933    54,270    96,760    97,579 
         
EXPENSES        
Outside voyage charter fees   2,652       4,493    
Vessel operating expenses   30,030    33,612    56,586    61,639 
Repairs and maintenance   57    (5)   897    1,177 
General and administrative   3,099    3,299    6,399    6,199 
Depreciation   4,603    4,693    9,310    9,370 
Amortization of drydock costs   885    856    1,767    1,712 
Amortization of intangibles   272    308    556    616 
Loss (gain)  on foreign exchange   14    1,261    305    463 
    41,612    44,024    80,313    81,176 
OPERATING INCOME   10,321    10,246    16,447    16,403 
         
OTHER (INCOME) AND EXPENSES        
Interest expense   2,962    3,707    5,981    7,464 
Interest income      (2)   (4)   (4)
    2,962    3,705    5,977    7,460 
         
INCOME BEFORE INCOME TAXES   7,359    6,541    10,470    8,943 
(BENEFIT FROM) PROVISION FOR INCOME TAXES        
Deferred   (4,508)   705    (4,328)   1,048 
    (4,508)   705    (4,328)   1,048 
NET INCOME BEFORE PREFERRED STOCK DIVIDENDS   11,867    5,836    14,798    7,895 
PREFERRED STOCK DIVIDENDS   328    290    649    581 
NET INCOME  APPLICABLE TO COMMON STOCKHOLDERS $  11,539  $  5,546  $  14,149  $  7,314 
         
Net income per share basic  $  0.64  $  0.31  $  0.79  $  0.41 
Net income per share diluted   0.58    0.29    0.73    0.39 
Weighted average shares basic    17,960,000    17,845,496    17,930,473    17,836,768 
Weighted average shares diluted   20,379,355    20,298,940    20,349,828    20,295,799 


RAND LOGISTICS, INC.
Consolidated Balance Sheets (Unaudited)
(U.S. Dollars 000’s except for Shares and Per Share data)
 
  September 30, 2015 March 31, 2015
ASSETS    
CURRENT    
Cash and cash equivalents $  2,258  $  3,298 
Accounts receivable, net   22,325    2,764 
Income taxes receivable   91    91 
Prepaid expenses and other current assets   6,603    5,957 
Deferred income taxes   329    347 
Total current assets   31,606    12,457 
     
PROPERTY AND EQUIPMENT, NET   222,392    206,276 
OTHER ASSETS   202    569 
DEFERRED DRYDOCK COSTS, NET   6,566    7,590 
INTANGIBLE ASSETS, NET   11,797    13,205 
GOODWILL   10,193    10,193 
     
Total assets  $  282,756  $  250,290 
LIABILITIES    
CURRENT    
Accounts payable   17,000    15,350 
Accrued liabilities   7,691    7,628 
Other current liability   158    166 
Current portion of deferred payment liability   556    536 
Total current liabilities   25,405    23,680 
LONG-TERM PORTION OF DEFERRED PAYMENT LIABILITY   281    564 
LONG-TERM DEBT, NET OF CURRENT PORTION   118,663    101,213 
SUBORDINATED DEBT   78,126    72,500 
OTHER LIABILITIES   455    479 
DEFERRED INCOME TAXES   961    5,607 
     
Total liabilities   223,891    204,043 
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, Issuable and outstanding 18,062,513 shares at September 30, 2015 and 18,035,427 shares at March 31, 2015   1    1 
Additional paid-in capital   90,227    90,130 
Accumulated deficit   (36,823)   (50,972)
Accumulated other comprehensive loss   (9,440)   (7,812)
     
Total stockholders’ equity   58,865    46,247 
     
Total liabilities and stockholders’ equity $ 282,756  $ 250,290 


RAND LOGISTICS, INC
Non-GAAP Financial Measures / Financial Tables
(U.S. Dollars 000’s except for Shares and Per Share data)
 
  FY2016 - Q2
         
  Q2 FY2016
Actual
Q2 FY2015 ActualIncrease/(Decrease)FX Impact (Unfavorable)/
Favorable
Constant Currency Increase/(Decrease) 1
    Change $Change %Change $Change $Change %
         
Average Fx Rate    0.764     0.918       
         
Sailing Days    1,278    1,351    (73) -5.4%   
         
Financial Highlights (US$ '000s)        
Freight and Related Revenue $43,835 $46,102 $-2,267  -4.9%$-4,132 $1,865  4.0%
         
Fuel and Other Surcharges $5,563 $8,168 $-2,605  -31.9%$-1,041 $-1,564  -19.1%
         
Total Revenue $51,933 $54,270 $-2,337  -4.3%$-5,687 $3,350  6.2%
         
Total Operation Expenses $30,030 $33,612 $-3,582  -10.7%$-3,264 $-318  -0.9%
         
Vessel Margin $19,311 $20,663 $-1,352  -6.5%$-1,902 $550  2.7%
         
General & Admin Expense $3,099 $3,299 $-200  -6.1%$-265 $65  2.0%
         
Adjusted EBITDA $16,095 $17,364 $-1,269  -7.3%$-1,611 $342  2.0%
         
Per Day Statistics        
Marine Freight Revenue/Day $34,300 $34,124 $176  0.5%$-3,233 $3,409  10.0%
         
Total Revenue/Day $40,637 $40,170 $467  1.2%$-4,450 $4,917  12.2%
         
Vessel Margin/Day $15,110 $15,295 $-185  -1.2%$-1,488 $1,303  8.5%
         
                     
Non-GAAP Reconciliation (US$ '000s)   
     
Vessel margin $19,311 $20,663  
Outside Charter net margin $-117 $0  
General & Admin Expense $3,099 $3,299  
Adjusted EBITDA $16,095 $17,364  
Loss on foreign exchange 2 $14 $1,261  
Depreciation, Amortization of Dry-dock & Intangibles $5,760 $5,857  
Operating Income $10,321 $10,246  
                   
                     
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 September 30, 2015 was primarily a non-cash loss on translation of approximately $39.8 million USD denominated debt incurred and carried on the balance sheet of the Canadian subsidiary.
 
RAND LOGISTICS, INC
Non-GAAP Financial Measures / Financial Tables
(U.S. Dollars 000’s except for Shares and Per Share data)
   
  FY2016 - September 2015 YTD
         
  YTD FY2016 
Actual
YTD FY2015 ActualIncrease/(Decrease)
FX Impact (Unfavorable)/
Favorable
Constant Currency Increase/(Decrease)
    Change $Change %Change $Change $Change %
         
Average Fx Rate    0.789     0.918       
         
Sailing Days    2,506    2,489    17  0.7%   
         
Financial Highlights (US$ '000s)        
Freight and Related Revenue $82,803 $82,715 $88  0.1%$-6,663 $6,751  8.2%
         
Fuel and Other Surcharges $9,527 $14,864 $-5,337  -35.9%$-1,493 $-3,844  -25.9%
         
Total Revenue $96,760 $97,579 $-819  -0.8%$-8,915 $8,096  8.3%
         
Vessel Operating Expenses $56,586 $61,639 $-5,053  -8.2%$-5,218 $165  0.3%
         
Vessel Margin $34,847 $34,763 $84  0.2%$-2,892 $2,976  8.6%
         
General & Admin Expense $6,399 $6,199 $200  3.2%$-450 $650  10.5%
         
Adjusted EBITDA $28,385 $28,564 $-179  -0.6%$-2,424 $2,245  7.9%
         
Per Day Statistics        
Marine Freight Revenue/Day $33,042 $33,232 $-190  -0.6%$-2,658 $2,468  7.4%
         
Total Revenue/Day $38,611 $39,204 $-593  -1.5%$-3,557 $2,964  7.6%
         
Vessel Operating Expenses/Day $22,580 $24,765 $-2,185  -8.8%$-2,080 $-105  -0.4%
         
Vessel Margin/Day $13,905 $13,967 $-62  -0.4%$-1,154 $1,092  7.8%
         
                       
Non-GAAP Reconciliation (US$ '000s)   
     
Vessel margin $34,847 $34,763  
Outside Charter net margin $-63 $0  
General & Admin Expense $6,399 $6,199  
     
Adjusted EBITDA $28,385 $28,564  
Loss on foreign exchange $305 $463  
Depreciation, Amortization of Dry-dock & Intangibles $11,633 $11,698  
Operating Income $16,447 $16,403  
                   
                       
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 September 30, 2015 was primarily a non-cash loss on translation of approximately $39.8 million USD denominated debt incurred and carried on the balance sheet of the Canadian subsidiary.

CONTACT:                                                    Rand Logistics, Inc.                                                          Edward Levy, President and CEO                                               (212) 863-9405elevy@randlogisticsinc.comMark S. Hiltwein, Vice President and CFO(212) 863-9427mshiltwein@randlogisticsinc.comAnnemarie Dobler, Corporate Communications(212) 863-9429apdobler@randlogisticsinc.com

Source:Rand Logistics, Inc.