Rand Logistics (RLOG) Misses Q1 EPS Views

Rand Logistics (NASDAQ: RLOG) reported Q1 EPS of ($0.16), $0.21 worse than the analyst estimate of $0.05. Revenue for the quarter came in at $33.8 million versus the consensus estimate of $38.8 million.

Management Comments

“Our operating performance in our first quarter of fiscal 2017 reflected a choppy demand environment which led to the slow start of the sailing season,” commented Ed Levy, President and CEO of Rand. “Marine freight and vessel margin per day for the first fiscal quarter of 2017 increased by 7.7% and 14.1%, respectively versus the same quarter last year. We sailed two less vessels this quarter compared to the same quarter last year, yet our pro forma EBITDA was comparable after adjusting for certain onetime items. This speaks to a more disciplined operating approach which is yielding an increase in the percentage of time that our vessels are operating in revenue loaded condition. We also continue to improve the operating reliability of our fleet. Specifically, vessel delays as a percent of total sailing days decreased from 8.9% in the quarter ended June 30, 2015 to 6.3% in our most recently completed quarter.”

Mr. Levy added, “We are encouraged by business conditions as we look out to the remainder of the 2016 sailing season for the primary commodities that we carry and are reaffirming our expectation to sail at least 3,405 days this fiscal year. We expect to reintroduce one of our two laid up bulk carriers in the next 30 days for the remainder of the sailing season. In addition, since the beginning of the second quarter, we have been awarded new business that previously had not been factored into our fiscal year 2017 expectations. At the present time, we have no plans to use third-party carriers to accommodate the needs of one of our largest customers this sailing season, which should improve margins. We also look forward to the continued contributions from our newest vessel after solid performance in its first full quarter of operation since being introduced.”

Mr. Levy concluded, “We are pleased with the progress that we are making in our process reengineering and cost savings initiatives. We are increasing our previously disclosed annual cost savings targets by $1 million, to $3 to $5 million of savings, which we hope to realize over the next 12 months. We are realizing savings in a number of areas including insurance, provisions, spare parts and general and administration expenses. Our cost savings program is part of our initiative to improve return on invested capital and reduce our debt outstanding.”

For earnings history and earnings-related data on Rand Logistics (RLOG) click here.

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