Rand Logistics Experiences Several Operating Incidents Impacting Fiscal Year 2011 Financial Guidance
NEW YORK, Sept. 27, 2010 (GLOBE NEWSWIRE) -- Rand Logistics, Inc. (Nasdaq:RLOG) ("Rand") today announced that since its first quarter earnings call, it has experienced several unrelated operating incidents which collectively will result in a shortfall in the Company's forecasted fiscal year 2011 financial results. The financial impact of these incidents, including the insurance deductibles for repair costs, the foregone time and revenue, and the inefficiencies created in trade patterns, will cause the aforementioned shortfall. Given the unprecedented number and timing of these incidents and the Company's expectation that the overall impact is non-recurring, they do not affect management's prior guidance of $0.90 to $1.00 of free cash flow per share commencing with the repowered Michipicoten reentering service in the spring of 2011, assuming no drastic change in economic conditions.
Scott Bravener, President of Lower Lakes, stated, "We are extremely disappointed with the unprecedented number and the financial impact of the operating incidents that have occurred during the current sailing season. Our review of the Saginaw incident in our first fiscal quarter and the recent incidents has revealed no common deficiency in maintenance, oversight or processes. Including our upcoming winter investments, we will have spent approximately $60 million on fleet modernization over the last five years and four of our vessels will have been repowered since 2000. We have evaluated, and continue to review, all aspects of our operations, oversight and maintenance procedures to minimize the risk and cost of future incidents. While we cannot eliminate all incidents, I believe that we have the processes in place to reduce their future occurrence to a level consistent with our historic experience.
"While the incidents that have occurred in the current sailing season will negatively impact fiscal year 2011 financial results, we continue to see an improvement in overall customer demand and market conditions as compared to our prior sailing season. We believe that the long term fundamentals of the business and our end markets remain strong and as a result these incidents will not have an impact on our future earnings potential."
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