Rand Logistics Reports Fiscal Year 2018 First Quarter Financial Results
August 14 2017 - 8:28PM
Operating income was $2.7 million for the
quarter versus $0.6 million last year
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 year 2018
first quarter, ended June 30, 2017.
Quarter Ended June 30, 2017 Versus Quarter Ended June
30, 2016 Financial Results
- Freight and related revenue generated from Company-operated
vessels (which excludes fuel and other surcharges) decreased $2.8
million, or 8.5%, to $30.3 million compared to $33.1 million during
the prior year period.
- Total Sailing Days were 1,005 compared to 969 in the prior year
period.
- Delay Days increased to 101 from 61. Weather and vessel delays
accounted for the majority of the increase. Delay Days as a
percentage of total Sailing Days was 10.0% compared to 6.3% in the
same period last year.
- Freight and related revenue per Sailing Day decreased $4,035,
or 11.8%, to $30,129 compared to $34,164 during the prior year
period.
- Vessel operating expenses increased $0.1 million, or 0.8%, to
approximately $18.9 million compared to $18.8 million during the
prior year period. Vessel operating expenses per Sailing Day
decreased $554, or 2.8%, to $18,891 from $19,445.
- Vessel margin per day decreased $1,855 from $14,438 last year
to $12,582 this year.
- Adjusted EBITDA, before lender fees, decreased $1.0 million to
$10.2 million, from $11.2 million during the prior year
period. A reconciliation of operating income to Adjusted
EBITDA is attached to this release.
Management Comments
“Our results for the first quarter were consistent with our
expectations,” commented Ed Levy, President and Chief Executive
Officer of Rand. “Our Canadian flagged vessels experienced a 15.8%
quarter over quarter increase in Sailing Days. Compared to the same
quarter last year, in local currency, our Canadian fleet
experienced a 17% increase in vessel margin primarily due to the
increase in Sailing Days. Vessel margin per day increased by
approximately 1%. In US dollars, vessel margin per day from our
Canadian flagged vessels decreased by 3%. We experienced a
15.6% decrease in US flagged vessel Sailing Days on a comparable
quarter basis, which along with increased vessel delays resulted in
a decline in vessel margin. As previously disclosed, planned vessel
life extension projects completed after April 1, 2017 on certain of
our US flagged self-unloading vessels resulted in a delayed start
to the sailing season. These vessel projects are expected to extend
the useful life of the fleet. We were pleased with our operating
performance once the entire fleet was deployed. Specifically, May
and June 2017 EBITDA, before one-time financing charges, increased
by approximately 9% versus the same period last year.”
Mr. Levy continued, “Demand for our services is improved versus
this time last year, and our contractual revenue backlog for the
remainder of the sailing season is strong. We expect to sail 14 of
our 15 vessels for the remainder of the season. Based on our
improved scheduling technology, we have been able to add
approximately 18% of additional spot business, boosting our percent
of time in revenue loaded condition. We are also encouraged by
the nearly 5.4% increase in the value of the Canadian dollar versus
the US dollar since the start of our fiscal year. Each $0.01
increase in the value of the Canadian dollar versus the US dollar
results in an approximately $275,000 increase in our US dollar
reported EBITDA.”
Mr. Levy concluded, “The Company with the help of its advisors
remains actively engaged in discussions regarding a
recapitalization transaction. There is no assurance that such a
transaction will occur.”
Conference Call
Management will host a conference call to discuss the results at
8:30 a.m. EDT on Tuesday, August 15, 2017. Interested parties may
participate in the conference call by dialing 1-888-438-5524
(1-719-325-2161 for international callers) and using Conference ID#
4391719. 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
September 15, 2017 by dialing 1-844-512-2921 (1-412-317-6671 for
international callers), and using Conference ID#
4391719.
Non-GAAP Financial Measures/Financial
TablesThis 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.
Forward-Looking StatementsThis 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 made 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
including future cost reduction initiatives; Rand’s anticipated
financial position and liquidity, including Rand's ability to
regain or remain in compliance with its debt covenants and
consummate a recapitalization transaction, acquisition and
divestiture opportunities, 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 any 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; changes in fuel price and fuel
surcharges; adequacy of capital resources, including the ability to
refinance or 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 dry-docking and
insurance costs; the ability to comply with or regain compliance
with applicable regulations, Nasdaq listing requirements, and our
debt covenants, including our ability to consummate a
recapitalization transaction; changes in laws, regulations or tax
rates, or the outcome of pending legislative or regulatory
initiatives; and potential liability from pending or future
litigation.
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 July 6, 2017
and in Rand’s Quarterly Report on Form 10-Q filed with the
Securities and Exchange Commission on August 14, 2017.
About Rand LogisticsRand 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 three 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.
― 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 |
|
|
June 30, 2017 |
June 30, 2016 |
REVENUE |
|
|
|
|
Freight and related
revenue |
$ |
30,280 |
|
33,105 |
|
|
Fuel and other surcharges |
|
2,062 |
|
712 |
|
TOTAL REVENUE |
|
32,342 |
|
33,817 |
|
|
|
|
|
EXPENSES |
|
|
|
|
Vessel operating
expenses |
|
18,985 |
|
18,842 |
|
|
Repairs and
maintenance |
|
712 |
|
985 |
|
|
General and
administrative |
|
4,703 |
|
3,875 |
|
|
Depreciation |
|
5,334 |
|
5,298 |
|
|
Amortization of drydock
costs |
|
758 |
|
853 |
|
|
Amortization of
intangibles |
|
246 |
|
253 |
|
|
(Gain) on foreign
exchange, net |
|
(1,081 |
) |
(1,123 |
) |
|
Restructuring
charges |
|
— |
|
2,375 |
|
|
Impairment charges on retired asset |
|
— |
|
1,872 |
|
TOTAL EXPENSES |
|
29,657 |
|
33,230 |
|
OPERATING INCOME |
|
2,685 |
|
587 |
|
OTHER
(INCOME) AND EXPENSES |
|
|
|
|
Interest expense |
|
8,007 |
|
3,620 |
|
|
Interest and other income |
|
— |
|
(2 |
) |
Total Other Income and Expenses |
|
8,007 |
|
3,618 |
|
|
|
|
|
LOSS BEFORE INCOME TAXES |
|
(5,322 |
) |
(3,031 |
) |
RECOVERY FOR INCOME TAXES |
|
|
|
|
Deferred |
|
(209 |
) |
(449 |
) |
Recovery of Income Taxes |
|
(209 |
) |
(449 |
) |
NET LOSS BEFORE PREFERRED STOCK DIVIDENDS |
|
(5,113 |
) |
(2,582 |
) |
PREFERRED STOCK DIVIDENDS |
|
470 |
|
386 |
|
LOSS APPLICABLE TO COMMON STOCKHOLDERS |
$ |
(5,583 |
) |
(2,968 |
) |
|
|
|
|
Net
loss income per share basic and diluted |
$ |
(0.30 |
) |
(0.16 |
) |
Weighted
average shares basic and diluted |
|
18,527,475 |
|
18,320,051 |
|
|
|
|
|
RAND LOGISTICS, INC. |
|
Consolidated Balance Sheets
(Unaudited) |
|
(U.S. Dollars 000’s except for Shares and Per
Share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017 |
|
March 31, 2017 |
|
ASSETS |
|
|
|
|
|
CURRENT |
|
|
|
|
|
|
Cash and cash
equivalents |
$ |
1,036 |
|
$ |
335 |
|
|
|
Accounts receivable,
net |
|
15,729 |
|
|
4,101 |
|
|
|
Income taxes
receivable |
|
46 |
|
|
46 |
|
|
|
Prepaid
expenses and other current assets |
|
6,696 |
|
|
6,209 |
|
|
Total
current assets |
|
23,507 |
|
|
10,691 |
|
|
|
|
|
|
|
|
|
PROPERTY
AND EQUIPMENT, NET |
|
222,838 |
|
|
214,046 |
|
|
OTHER
ASSETS |
|
29 |
|
|
41 |
|
|
DEFERRED
DRYDOCK COSTS, NET |
|
11,607 |
|
|
8,802 |
|
|
INTANGIBLE
ASSETS, NET |
|
4,647 |
|
|
4,827 |
|
|
GOODWILL |
|
10,193 |
|
|
10,193 |
|
|
|
|
|
|
|
|
|
Total assets |
$ |
272,821 |
|
$ |
248,600 |
|
|
LIABILITIES |
|
|
|
|
|
CURRENT |
|
|
|
|
|
|
Accounts payable |
|
11,841 |
|
|
9,070 |
|
|
|
Accrued
liabilities |
|
13,223 |
|
|
15,220 |
|
|
|
Other current
liability |
|
412 |
|
|
404 |
|
|
|
Long term debt,
classified as current |
|
143,756 |
|
|
119,702 |
|
|
|
Subordinated debt, classified as current |
|
85,632 |
|
|
80,577 |
|
|
Total
current liabilities |
|
254,864 |
|
|
224,973 |
|
|
DEFERRED INCOME TAXES |
|
4,283 |
|
|
4,367 |
|
|
|
|
|
|
|
|
|
Total liabilities |
|
259,147 |
|
|
229,340 |
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
Preferred stock, $.0001
par value, |
|
|
|
|
|
|
Authorized 1,000,000
shares, Issued and outstanding 295,480 shares atJune 30, 2017 and
at March 31, 2017 |
|
14,674 |
|
|
14,674 |
|
|
|
Common stock, $.0001
par value, |
|
|
|
|
|
|
Authorized 50,000,000
shares, Issuable and outstanding 18,633,149shares at June 30, 2017
and March 31, 2017 |
|
1 |
|
|
1 |
|
|
|
Additional paid-in
capital |
|
91,357 |
|
|
91,348 |
|
|
|
Accumulated
deficit |
|
(81,991 |
) |
|
(76,408 |
) |
|
|
Accumulated other comprehensive loss |
|
(10,367 |
) |
|
(10,355 |
) |
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
13,674 |
|
|
19,260 |
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
$ |
272,821 |
|
$ |
248,600 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FX Impact
Summary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RAND LOGISTICS,
INC |
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP
Financial Measures / Financial Tables |
|
FY2018 - Q1 |
|
|
|
(U.S. Dollars
000's except for Shares and Per Share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
FY2017 Actual |
FY2016Actual |
Increase/(Decrease) |
FX Impact(Unfavorable)/Favorable |
Constant CurrencyIncrease/(Decrease)
1 |
|
|
|
|
|
|
|
Change $ |
Change % |
Change $ |
Change $ |
Change % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average Fx Rate |
|
|
0.744 |
|
0.776 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sailing Days |
|
|
1,005 |
|
969 |
|
36 |
3.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial Highlights (US$ '000s) |
|
|
|
|
|
|
|
|
|
|
|
Freight and Related Revenue |
|
$30,280 |
$33,105 |
-$2,825 |
-8.5 |
% |
-$809 |
-$2,016 |
-6.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fuel and Other Surcharges |
|
$2,062 |
$712 |
$1,350 |
189.5 |
% |
-$109 |
$1,459 |
204.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue |
|
$32,342 |
$33,817 |
-$1,475 |
-4.4 |
% |
-$918 |
-$557 |
-1.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Operation Expenses |
|
$18,985 |
$18,842 |
$142 |
0.8 |
% |
-$538 |
$680 |
3.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel Margin |
|
$12,645 |
$13,990 |
-$1,345 |
-9.6 |
% |
-$368 |
-$977 |
-7.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General & Admin Expense |
|
$4,702 |
$3,875 |
$828 |
21.4 |
% |
-$52 |
$880 |
22.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on foreign exchange |
|
-$1,081 |
-$1,123 |
$42 |
-3.7 |
% |
$24 |
$18 |
-1.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA after gain on foreign exchange & before Lender
and Legal Fees |
|
$10,174 |
$11,238 |
-$1,064 |
-9.5 |
% |
$810 |
-$1,874 |
-16.7 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Day Statistics |
|
|
|
|
|
|
|
|
|
|
|
Marine Freight Revenue/Day |
|
$30,129 |
$34,164 |
-$4,035 |
-11.8 |
% |
-$805 |
-$3,230 |
-9.5 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue/Day |
|
$32,181 |
$34,899 |
-$2,718 |
-7.8 |
% |
-$914 |
-$1,805 |
-5.2 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel Margin/Day |
|
$12,582 |
$14,438 |
-$1,855 |
-12.9 |
% |
-$366 |
-$1,489 |
-10.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP Reconciliation (US$ '000s) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel margin |
|
$12,645 |
$13,990 |
|
|
|
|
|
|
|
|
General & Admin Expense |
|
$4,702 |
$3,875 |
|
|
|
|
|
|
|
|
Adjusted EBITDA 3 |
|
$7,943 |
$10,115 |
|
|
|
|
|
|
|
|
Gain on foreign exchange 2 |
|
-$1,081 |
-$1,123 |
|
|
|
|
|
|
|
|
Lender & Legal Fees |
|
$1,150 |
$0 |
|
|
|
|
|
|
|
|
Adjusted EBITDA after gain on foreign exchange & before Lender
and Legal Fees |
|
$10,174 |
$11,238 |
|
|
|
|
|
|
|
|
Impairment Charges on Assets held for Sale |
|
$0 |
$1,872 |
|
|
|
|
|
|
|
|
Restructuring Charges |
|
$0 |
$2,375 |
|
|
|
|
|
|
|
|
Lender & Legal Fees |
|
$1,150 |
$0 |
|
|
|
|
|
|
|
|
Depreciation, Amortization of Dry-dock & Intangibles |
|
$6,339 |
$6,404 |
|
|
|
|
|
|
|
|
Operating Income |
|
$2,685 |
$588 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Note: |
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1. The constant currency information presented is calculated
by translating current period results using prior period foreign
currency exchange rates. |
|
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2. Gain on foreign exchange during the three month period
ended June 30, 2017 includes a non-cash loss on translation of
approximately $43.7 million USD denominated debt incurred in March
2014 and carried on thebalance sheet of the Canadian
subsidiary. |
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3. Adjusted EBITDA is defined as operating income plus
depreciation, amortization of drydock costs, amortization of
intangibles, gain on foreign exchange, restructuring charges and
impairment charges on retiredvessel. |
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CONTACT:
Rand Logistics, Inc.
Annemarie Dobler, Corporate Communications Director
(212) 863-9429
annemarie.dobler@randlog.com