RLOGU Rand Logistics Unit 10/26/08 (MM)

Rand Logistics Inc. (Nasdaq: RLOG; RLOGW; RLOGU) (�Rand�) today announced financial and operational results for the fiscal 2009 first quarter ended June 30, 2008. Quarter ended June 30, 2008 Financial Highlights Versus Quarter ended June 30, 2007 Marine freight revenue (excluding fuel surcharge, outside charter and other surcharges) increased by 39.2% to $27.3 million, from $19.6 million. Marine freight revenue per day per vessel increased by 18.8% to $28,586, from $24,059. Vessel margin1 (after expensed winter work) increased by 125.2%, to $11.0 million, from $4.9 million. EBITDA1 increased by 180.2%, to $8.2 million from $2.9 million. Scott Bravener, President and CEO of Lower Lakes, stated, �We are very pleased with the significant marine freight revenue and EBITDA growth enjoyed during the quarter, and feel our financial results have demonstrated the significant earning power of our assets. The growth was driven by a number of factors, including increased freight rates, enhanced vessel utilization and significant improvement in boat operating metrics, particularly on the five recently acquired vessels. We are confident that our operations for the second quarter will trend as favorably. As we continue to leverage our operating efficiencies to improve vessel performance, I believe that we will extract the additional profit enhancement inherent in our business model.� Outlook Laurence S. Levy, Chairman and CEO of Rand, commented, �The second fiscal quarter ending on September 30, 2008, which is typically the strongest quarter for Rand and the industry as a whole, will be the first during which all of our vessels will be fully operational and engaged in trade patterns that best utilize their capabilities. As a result of our operating performance thus far in fiscal year 2009 and based on our confidence in the inherent strength of our business, highlighted by continued strong demand for our services, we are increasing our projected fiscal year 2009 EBITDA to the $18 to $19.5 million range. We look forward to keeping you apprised of Rand�s continued development.� Rand Logistics, Inc. Summary Statement of Operations (Unaudited) (U.S. Dollars 000�s except for Earnings (Loss) Per Share figures) � � � Three months ended Three months ended � � � June 30, 2008 � � June 30, 2007 * Revenue 43,406 25,230 � � � � � � � 43,406 25,230 Expenses Outside voyage charter fees 6,246 2,137 Vessel operating expenses 25,555 17,317 Repairs and maintenance � � 888 � � 94 � � � � 32,689 � � 19,548 � Income before general and administrative, depreciation, amortization of drydock costs and intangibles, other income and expenses and income taxes � � 10,717 � � 5,682 � � General and administrative 2,469 1,941 Depreciation and amortization of drydock costs and intangibles 2,616 2,308 Loss (gain) on foreign exchange � � 2 � � (173 ) � � � 5,087 � � 4,076 � Income before interest, other income and expenses and income taxes � � 5,630 � � 1,606 � � Net income (loss) � � 2,316 � � (1,154 ) Net earnings (loss) per share � basic $ 0.19 $ (0.12 ) Net earnings (loss) per share � diluted $ 0.18 $ (0.12 ) � * The statement of operations as of June 30, 2007 includes the results of WMS, as it was a VIE at that time. Conference Call Management will host a conference call to discuss the results at 8:30 a.m. ET on Thursday, August 14, 2008. Interested parties may participate in the conference call by dialing 800-218-0530 (303-262-2131 for international callers). When prompted, ask for the "Rand Logistics First Quarter Fiscal 2009 Earnings Conference Call." A phone replay will be available from 10:30 a.m. ET on Thursday, August 14, 2008, until 11:59 p.m. ET on Saturday, August 23, 2008. Dial 800-405-2236 (305-590-3000 for international callers) and enter the code 11118111# to access the phone replay. The conference call will be webcast simultaneously on the Rand Logistics Inc. website at www.randlogisticsinc.com under Investors: Webcasts & Presentations. The webcast replay will be archived for 12 months. Reconciliation of Non-GAAP Measure to GAAP EBITDA represents earnings before interest, income tax expense, depreciation and amortization, loss on asset disposal, and loss (gain) on foreign exchange. EBITDA is not a measure of performance or liquidity calculated in accordance with generally accepted accounting principles (�GAAP�), is unaudited and should not be considered an alternative to, or more meaningful than, net income or income from operations as an indicator of our operating performance, or cash flows from operating activities, as measures of liquidity. EBITDA has been presented as a supplemental disclosure because it is a widely used measure of performance and basis for valuation. A reconciliation of GAAP net income to EBITDA is included in the financial tables accompanying this release. 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 ten self-unloading bulk carriers, including eight River Class vessels and one River Class integrated tug/barge unit, and three conventional bulk carriers, of which one is operated under a contract of affreightment. 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 dictates that only ships that are built, crewed and owned by U.S. citizens can operate between U.S. ports � and the Canada Marine Act � which requires Canadian commissioned ships to operate between Canadian ports. Forward-Looking Statements This press release may contain forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) concerning the Company and its operating subsidiaries. Forward-looking statements are statements that are not historical facts, but instead statements based upon the current beliefs and expectations of management of the Company. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from the results included in such forward-looking statements. RAND LOGISTICS, INC. Consolidated Statements of Operations (Unaudited) (U.S. Dollars 000�s except for Earnings (Loss) Per Share figures) � � � � � � � � � � Three Months Ended Three months Ended June 30, 2008 June 30, 2007 * � � � � � � � � REVENUE � � $ 43,406 � $ 25,230 � EXPENSES Outside voyage charter fees 6,246 2,137 Vessel operating expenses 25,555 17,317 Repairs and maintenance 888 94 General and administrative 2,469 1,941 Depreciation 1,618 1,543 Amortization of drydock costs 567 358 Amortization of intangibles 431 358 Amortization of chartering agreement costs - 49 � (Gain) loss on foreign exchange � � 2 � � (173) � � � � 37,776 � � 23,624 INCOME BEFORE OTHER INCOME AND EXPENSES AND INCOME TAXES � � 5,630 � � 1,606 � OTHER INCOME AND EXPENSES Interest expense � 1,674 1,012 Interest income � (5) (65) Interest rate swap contract � � (1,234) � � (79) � � � � 435 � � 868 � � � INCOME BEFORE INCOME TAXES � � 5,195 � � 738 PROVISION (RECOVERY) FOR INCOME TAXES Current � - (43) Deferred � � � 2,516 � � 361 NET INCOME BEFORE MINORITY INTEREST 2,679 420 MINORITY INTEREST � � - � � 321 NET INCOME � � 2,679 � � 99 PREFERRED STOCK DIVIDENDS 363 296 STOCK WARRANT INDUCEMENT DISCOUNT � � - � � 957 NET INCOME (LOSS) APPLICABLE TO COMMON STOCKHOLDERS � $ 2,316 � $ (1,154) � Net earnings (loss) per share basic $ 0.19 $ (0.12) Net earnings (loss) per share diluted $ 0.18 $ (0.12) Weighted average shares basic 12,105,051 9,312,241 Weighted average shares diluted 14,796,536 9,312,241 � * The statement of operations as of June 30, 2007 includes the results of WMS, as it was a VIE at that time. Rand Logistics, Inc. Selected Financial Information Reconciliation of Income before Interest, Other Income and Expenses and Income Taxes to EBITDA (U.S. Dollars 000�s) � � � � � � Three Months ended June 30, 2008 Three Months ended June 30, 2007 � Rand Logistics Impact of Rand Logistics Impact of Inc. FIN46R Consolidated Inc. FIN46R Consolidated � � � � � � � � � � � � Income before interest, other income and expenses and income taxes 5,630 - 5,630 1,123 483 1,606 � Loss (gain) on foreign exchange 2 - 2 (173 ) - (173 ) Depreciation and amortization of drydock costs and intangibles � 2,616 � - � 2,616 � 1,994 � � 314 � 2,308 � � EBITDA 8,248 � - � 8,248 � 2,944 � � 797 � 3,741 � RAND LOGISTICS, INC. Consolidated Balance Sheets (Unaudited) (U.S. Dollars 000�s except for Earnings (Loss) Per Share figures) � � � June 30, March 31, 2008 2008 ASSETS � � � � CURRENT Cash and cash equivalents $ 7,354 $ 5,626 Accounts receivable, net 20,888 3,468 Prepaid expenses and other current assets 4,806 3,122 Income taxes receivable 193 193 Interest rate swap contract 335 - � Deferred income taxes � � 444 � � 1,355 Total current assets 34,020 13,764 � PROPERTY AND EQUIPMENT, NET 101,322 96,349 DEFERRED INCOME TAXES 19,317 20,318 DEFERRED DRYDOCK COSTS, NET 8,906 9,082 INTANGIBLE ASSETS, NET 17,542 17,979 GOODWILL � � 10,193 � � 10,193 � � � � Total assets � $ 191,300 � $ 167,685 LIABILITIES CURRENT Bank indebtedness $ 18,055 $ 269 Accounts payable 17,520 14,985 Accrued liabilities 7,748 7,243 Acquired Management Bonus Program 3,000 3,000 Interest rate swap contract 382 1,274 Income taxes payable 422 422 Deferred income taxes 1,416 1,508 � Current portion of long-term debt � � 4,716 � � 3,521 Total current liabilities 53,259 32,222 LONG-TERM DEBT 66,024 66,896 OTHER LIABILITES 232 - DEFERRED INCOME TAXES � � 15,419 � � 14,703 � � Total liabilities � � 134,934 � � 113,821 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, Issued and outstanding 12,105,051 shares 1 1 Additional paid-in capital 58,416 58,350 Accumulated deficit (18,149) (20,465) � Accumulated other comprehensive income (loss) � � 1,198 � � 1,078 � � Total stockholders� equity � � 56,366 � � 53,864 Total liabilities and stockholders� equity � $ 191,300 � $ 167,685 1 Vessel Margin and EBITDA for the quarter ended June 30, 2007 excludes the results of the previously consolidated VIE, for which Rand received no economic benefit from earnings.