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Rand Logistics Inc. (Nasdaq: RLOG; RLOGW; RLOGU) (“Rand”) today announced operational and financial results for the second quarter and six months ended September 30, 2007, and provided an update on recent business developments and their expected contribution to future results. Business Highlights EBITDA increased 22% excluding the three vessels Rand operates on time charter from Wisconsin and Michigan Steamship (WMS) (which were affected by a now concluded work stoppage) and before the operating G&A expense increase (a significant part of which is non-recurring). This EBITDA increase illustrates the positive operating leverage that Rand is realizing from better pricing and higher fleet utilization. The WMS vessels that experienced a work stoppage from May through July 31 started sailing on dates between late August and late October, and are now fully operational with a lower cost structure. The Company expects them to contribute positively to Rand’s results over the next year. The Company acquired two conventional bulk carriers (the Voyageur acquisition) in late August for approximately $23.7 million. The vessels are fully committed with take-or-pay contracts. Rand expects that the purchase price multiple for the two vessels was approximately 5 times EBITDA. Rand has spent over $1 million to improve its management infrastructure. Many of these costs are non-recurring, and the Company now has the capacity to run an expanded company without substantially increasing overhead costs. The underlying economics of the business are strong. In the U.S., the Company’s results are significantly ahead of last year. There is more demand than capacity in the markets Rand serves, and the rates the Company charges are increasing. Rand is also benefitting from the strength of the Canadian dollar, which accounts for over half of the Company’s revenue and cash flow. Second Quarter Results In the second quarter ended September 30, 2007, revenue was $26.4 million (excluding outside voyage charter revenue) compared to $26.1 million in the prior year quarter. The three vessels that Rand operates under a time charter agreement with WMS contributed only $1.8 million of revenue during the period compared to $5.5 million in the prior year due to the aforementioned work stoppage. EBITDA was $3.9 million, compared to $6.2 million in the prior year quarter. EBITDA included $0.9 million related to a variable interest entity (“VIE”) versus $0.7 million in the prior year quarter for which Rand was the primary beneficiary under FIN-46R, although Rand has no ownership interest in that entity. Excluding the VIE, EBITDA was $3.0 million, compared to $5.5 million in the prior year quarter. The decline in EBITDA was primarily due to: a) A $2.8 million negative EBITDA differential due to the WMS time chartered vessels which generated an EBITDA loss of $1.4 million, versus a positive EBITDA of $1.4 million in the quarter ended September 30, 2006, as Rand continued to incur certain contractual costs without generating revenue during the work stoppage; and b) A $1.0 million increase in G&A costs, largely related to employment related costs and training of a larger finance and administrative staff, the implementation of SOX compliant business software and IT infrastructure and expensed legal costs arising from agreements associated with the August 2007 acquisition of the bulk carriers. Management believes that many of these costs are not recurring in nature. Captain Scott Bravener, President and CEO of Lower Lakes stated, “During the second quarter, our Canadian fleet operated effectively and we continued to achieve improvements in the performance of our US fleet, which substantially exceeded both operational and financial performance in the comparable period last year. EBITDA growth excluding WMS and G&A exceeded revenue growth due to higher freight rates, better vessel utilization and the benefit from investments we have made. I see no reason why this trend will not continue into the future and may in fact accelerate as we are able to bring the three WMS vessels and two bulk carriers up to their full potential. We have not been adversely affected by increased fuel prices, as these are passed along to our customers under the fuel surcharges in our customer contracts.” Outlook Laurence S. Levy, Chairman and CEO of Rand, added, “Rand’s financial results next year will be more indicative of the Company’s earnings power. Included in the year will be a full year of operations from the three WMS time chartered vessels, as well as the two newly acquired bulk carriers. We have had strong contract renewals for next year and have enhanced our capacity utilization.” Mr. Levy concluded, “Longer-term, we remain optimistic about Rand’s outlook, due to the strength and growth of our base business, where market demand continues to exceed capacity, as well as our active pipeline of in-market acquisition opportunities that capitalize on our position on the Great Lakes
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