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Rand Logistics Reports Second Quarter Fiscal 2011 Financial Results

NEW YORK, Nov. 10, 2010 (GLOBE NEWSWIRE) -- Rand Logistics, Inc. (Nasdaq:RLOG) ("Rand") today announced financial and operational results for the second quarter of fiscal 2011 ended September 30, 2010.

Quarter Ended September 30, 2010 Financial Highlights Versus Quarter Ended September 30, 2009
  • Marine freight revenue (excluding fuel and other surcharges, and outside charter revenue) was $30.3 million, an increase of 7.7% from $28.1 million. The increase in marine freight revenue was due in large part to an 8.1% increase in sailing days.
  • Marine freight revenue per sailing day decreased by $101, or 0.4%, to $28,035 from $28,136. This decrease was attributable to inefficiencies in trade patterns due to recent mechanical incidents, offset by a stronger Canadian dollar and price increases.
  • Vessel operating expenses per sailing day increased by $4,534, or 23.1%, to $24,142 from $19,608. This increase was primarily attributable to the costs of mechanical incidents, assessments from one of our insurance carriers, the higher costs of a stronger Canadian dollar and higher fuel costs.
  • Operating income plus depreciation and amortization decreased by $4.0 million to $8.2 million from $12.2 million.

Six Months Ended September 30, 2010 Financial Highlights Versus Six Months Ended September 30, 2009
  • Marine freight revenue (excluding fuel and other surcharges, and outside charter revenue) was $58.7 million, an increase of 12.3% from $52.3 million. The increase in marine freight revenue was attributable to a stronger Canadian dollar and price increases offset by inefficiencies in our trade patterns due to recent mechanical incidents.
  • Marine freight revenue per sailing day increased by $561 or 2.1%, to $27,905 from $27,344, as a result of a 10.0% increase in sailing days, a stronger Canadian dollar and price increases constrained by inefficiencies in our trade patterns due to recent mechanical incidents.
  • Vessel operating expenses per sailing day increased by $4,023, or 20.5%, to $23,633 from $19,610, primarily attributable to the costs of the recent mechanical incidents, assessments from one of our insurance carriers, the higher costs of a stronger Canadian dollar and higher fuel costs.
  • Operating income plus depreciation and amortization (excluding a GE Amendment Fee of $446,000 in fiscal 2010) decreased by $2.1 million to $17.0 million from $19.1 million.

Management Comments

Scott Bravener, President of Lower Lakes, stated, "As previously announced, we experienced unrelated mechanical incidents on five of our vessels during the first half of fiscal year 2011. The financial impact of these incidents, including repair costs after net insurance reimbursements, the foregone time and revenue, and the inefficiencies created in trade patterns, will result in a shortfall of full year fiscal 2011 results compared to the prior year. Given the unprecedented number and timing of these incidents, we expect that the cumulative magnitude is non-recurring. While we cannot eliminate all incidents, I believe that we have the processes in place to reduce future occurrences of such mechanical incidents to a level more consistent with our historic experience. We are extremely disappointed with the financial impact of the mechanical incidents that have occurred during the current sailing season, but believe there to be 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. In response to $1.3 million of insurance assessments incurred, we continue to evaluate our risk and insurance programs to ensure we have optimal coverage to carefully balance premiums, coverage and variability of earnings impact from incidents."

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