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Rand Logistics Reports Third Quarter Fiscal 2011 Financial Results

Stocks in this article: RLOG

NEW YORK, Feb. 14, 2011 (GLOBE NEWSWIRE) -- Rand Logistics, Inc. (Nasdaq:RLOG) ("Rand") today announced financial and operational results for the third quarter of fiscal 2011 ended December 31, 2010.

Quarter Ended December 31, 2010 Financial Highlights Versus Quarter Ended December 31, 2009

  • Marine freight revenue (excluding fuel and other surcharges, and outside charter revenue) was $27.3 million, a decrease of 4.4% from $28.6 million. The decrease in marine freight revenue was primarily attributable to 15 less sailing days and both less favorable weather conditions and commodity mix. The decrease was partially offset by a stronger Canadian dollar.  
  • Marine freight revenue per sailing day decreased by $823, or 3.1%, to $26,030 from $26,853. This decrease was attributable to inefficiencies in our trade patterns that resulted from the mechanical incidents in the prior quarter.  
  • Vessel operating expenses per sailing day increased by $476, or 2.2%, to $22,275 from $21,799. This increase was primarily attributable to higher fuel costs and a stronger Canadian dollar.  
  • Operating income plus depreciation and amortization decreased by $470,000 to $7.9 million from $8.4 million.

Nine Months Ended December 31, 2010 Financial Highlights Versus Nine Months Ended December 31, 2009

  • Marine freight revenue (excluding fuel and other surcharges, and outside charter revenue) was $86.0 million, an increase of 6.4% from $80.9 million. The increase in marine freight revenue was primarily attributable to 177 more sailing days in the nine month period this year versus last year, price increases and a stronger Canadian dollar, partially offset by inefficiencies in trade patterns resulting from the major mechanical incidents experienced in the first half of the year.  
  • Marine freight revenue per sailing day increased by $113 or 0.4%, to $27,281 from $27,168, as a result of a stronger Canadian dollar. This increase was partially offset by inefficiencies in trade patterns due to mechanical incidents that occurred in the first half of the year.  
  • Vessel operating expenses per sailing day increased by $2,788, or 13.7%, to $23,181 from $20,393. The increase was primarily attributable to repair costs below the insurance deductible and associated inefficiencies due to the mechanical incidents on five of our vessels, a one-time insurance assessment, an increase in fuel expense and a stronger Canadian dollar.  
  • Operating income plus depreciation and amortization (excluding a GE Amendment Fee of $446,000 in fiscal 2010) decreased $2.6 million to $24.9 million from $27.5 million. The reduction in operating income resulting from the previously disclosed operational incidents totaled $4.9 million, including $1.1 million repair costs below insurance deductibles, $2.5 million of lost margin resulting from 113 days of downtime and a one-time insurance assessment of $1.3 million.

Subsequent Events

On February 11, 2011, Rand acquired two Jones Act compliant, self-unloading integrated tug/barge units from KK Integrated Shipping (KKIS). Management anticipates that this acquisition will be accretive to Rand's fiscal year ending March 31, 2012 results and will add between $0.25 and $0.30 in free cash flow per share. The acquisition was structured with $35.5 million cash paid at closing (including $31.0 million financed with third party debt), $5.1 million of attractively priced junior seller paper and 1,305,963 shares of the Company's common stock. Further details regarding this transaction are included in the Company's Form 10-Q, filed with the Securities and Exchange Commission today, February 14, 2011.

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