Record Results of Operation Estimated for
First Fiscal Quarter
SEC Filings Expected to be Brought Current by
Calendar Year End
CEO Crain
Comments on Restatement Process
RENTON,
Wash., Nov. 9, 2022 /PRNewswire/ -- Radiant
Logistics, Inc. (NYSE American: RLGT), a third-party logistics
company providing technology-enabled global transportation and
value added logistics solutions to customers, today announced
select preliminary unaudited financial results for the three months
ended September 30, 2022, and that it
will be filing a Form 12b-25 with the U.S. Securities and Exchange
Commission, as the Company will be late in filing its Quarterly
Report on Form 10-Q for the quarter ended September 30, 2022 (the "Form 10-Q"). The delay
in the filing of the Company's Form 10-Q for the quarter ended
September 30, 2022, is a result of the previously
disclosed delay of the Company's Annual Report on Form 10-K for the
year ended June 30, 2022 and the
Company's on-going efforts to complete the restatement of its
fiscal 2021 audited financial statements, each of the interim
quarterly financial statements filed on Form 10-Q during fiscal
2021, as well as each of the interim quarterly financial statements
filed on Form 10-Q during its 2022 fiscal year (the "Restatement
Periods"). The Company currently expects that it will bring all of
its filings current before the end of the calendar year.
The financial results presented below for the quarterly period
ended September 30, 2022, reflect the
Company's preliminary, internal management prepared and unaudited
results of operations as of the date of this press release. These
financial statements have not yet been reviewed by our independent
auditors. Accordingly, not only will these preliminary results be
subject to change upon completion of standard quarterly review
procedures by our independent auditors, but they may also be
subject to change upon the completion of the audit of the Company's
full-year financial statements and any flow through effects of
adjustments arising from the restatement process, and actual
results may vary from these preliminary results.
To keep its stockholders and the public informed on its current
operations, the Company has determined to report on its preliminary
management prepared unaudited results for the Company's first
fiscal quarter ended September 30,
2022 as follows:
Financial Highlights – Three Months Ended September 30, 2022 (Preliminary)
- Revenues increased to a record $331.0
million for the first fiscal quarter ended September 30, 2022, up compared to revenues for
the comparable prior year period.
- Net revenues, a non-GAAP financial measure, increased to a
record $76.5 million for the first
fiscal quarter ended September 30,
2022, up compared to net revenues for the comparable prior
year period.
- Net income attributable to Radiant Logistics, Inc. increased to
a record $8.0 million for the first
fiscal quarter ended September 30,
2022, or $0.17 per basic and
$0.16 per fully diluted share, up
compared to net income per basic and fully diluted share for the
comparable prior year period.
- Adjusted net income, a non-GAAP financial measure, increased to
a record $13.4 million, or
$0.27 per basic and fully diluted
share for the first fiscal quarter ended September 30, 2022, up compared to adjusted net
income per basic and fully diluted share for the comparable prior
year period. Adjusted net income is calculated by applying a
normalized tax rate of 24.5% and excluding other items not
considered part of regular operating activities.
- Adjusted EBITDA, a non-GAAP financial measure, increased to a
record $18.5 million for the first
fiscal quarter ended September 30,
2022, up compared to adjusted EBITDA for the comparable
prior year period.
- Adjusted EBITDA margin (adjusted EBITDA expressed as a
percentage of net revenues), a non-GAAP financial measure,
increased to a record 24.2% for the first fiscal quarter ended
September 30, 2022, up compared to
adjusted EBITDA margin for the comparable prior year period.
Acquisition Update
On October 5, 2022, the Company
announced that it acquired Cascade Enterprises of Minnesota, Inc. ("Cascade"), a Minnesota based, privately held company that
has operated as a strategic operating partner under the Company's
Airgroup brand since 2007. The Company structured the
transaction similar to its previous transactions, with a portion of
the expected purchase price payable in subsequent periods based on
the future performance of the acquired operations. Cascade will
continue to operate under the Airgroup brand through the remainder
of 2022 and is expected to transition to the Radiant brand in early
2023 as Cascade is combined with existing Company owned operations
in the Minneapolis area.
Stock Buy-back
The Company purchased 219,517 shares of its common stock at an
average cost of $6.11 per share for
an aggregate cost of $1.3 million during the three months ended
September 30, 2022. An additional
352,231 shares of its common stock were repurchased during
October 2022 for a cost of
$2.1 million, such that during the
four months ended October 31, 2022,
the Company purchased an aggregate of 571,748 shares of its common
stock at an average cost of $5.97 per
share for an aggregate cost of $3.4
million. As of November 1,
2022, the Company had 48,315,935 shares outstanding.
CEO Bohn Crain comments on
preliminary results, and the Company efforts to bring its filings
current
"We are very pleased to share our preliminary results for the
September quarter, which reflects our continued trend of solid
financial performance and solid gains as compared to our comparable
prior year results, as we currently estimate our prior year
results, subject to the completion of our prior year financial
statements for the Restatement Periods" said Bohn Crain, Founder and CEO of Radiant
Logistics. "We saw improvement in all aspects of our financial
results, including in our revenues, net revenues, net income,
adjusted net income, adjusted EBITDA and adjusted EBITDA margin.
Based on our preliminary estimates, we are reporting record first
quarter results consisting of: $331.0
million of revenues; net revenues of $76.5 million; net income attributable to Radiant
Logistics, Inc. of $8.0 million;
adjusted net income of $13.4 million;
and adjusted EBITDA of $18.5 million.
We also saw improvement in our adjusted EBITDA margin.
In addition, we continue to make good progress in our balanced
approach to capital allocation through a combination of our
strategic acquisition and stock buy-back initiatives. We completed
the acquisition of our long-time strategic operating partner,
Cascade Enterprises in Minnesota
effective as of October 1, 2022, and
during the first four months ended October
31, 2022, acquired $3.4 million of our common stock at what we
believe is very attractive pricing. For the quarter we also
generated an estimated $25.6 million in cash from operations and
continue to maintain very low leverage on our balance sheet. As of
September 30, 2022, we had
$26.5 million of cash on hand and net
debt of $19.7 million.
As we have previously discussed, while we remain very optimistic
about our prospects for fiscal 2023 and beyond, we are beginning to
see signs of a slowing economy and expect operations to return to
more normalized levels and growth rates in coming quarters. We
believe we are well positioned with a durable, diverse service
offering and strong balance sheet to support our customers and
continue to execute against our broader strategic initiatives."
Crain continued: "Notwithstanding our continued strong results,
the Board and leadership team remain hyper-focused on bringing our
filings current with the SEC. We are working expeditiously to
complete our previously reported efforts to restate certain
historical financial statements related principally to the timing
of recognition of the Company's estimated accrual of in-transit
revenues and related costs, and expect to bring our filings current
with the SEC by the end of the calendar year.
As previously disclosed, on September 28,
2022, the Audit and Executive Oversight Committee (the
"Committee") of the Board of Directors of the Company, after
meeting with management and consultation with Moss Adams LLP ("Moss
Adams"), its current registered independent public accounting firm,
and BDO USA, LLP ("BDO"), its
predecessor registered independent public accounting firm,
concluded that the Company's previously issued financial statements
for the Restatement Periods should be restated to correct
historical errors related principally to the timing of recognition
of the Company's estimated accrual of in-transit revenues and
related costs.
Based on our work to date, the Company still believes the net
effect of the restatements to fully diluted earnings per share
during the Restatement Periods will be relatively modest as
compared to our originally reported results. This reflects
our best estimate of the adjustments that will flow though our
financial statements and remain subject to further adjustment
pending the completion of our work with the auditors to finalize
the restated amounts. In any event, it is worth re-enforcing that,
irrespective of the restatement process, we expect to report record
results in terms of revenue and earnings for fiscal 2022 while
maintaining historically low leverage on our balance sheet and
enjoy good financial flexibility to continue to execute our
strategy moving forward. I would characterize the work to be done
around accruing for in-transit revenues as unfortunate growing
pains, but we remain very optimistic about our prospects and
opportunities to continue to leverage our best-in-class technology,
robust North American footprint, extensive global network of
service partners and recent acquisition of Navegate to continue to
build on the great platform we have created here at Radiant."
About Radiant Logistics (NYSE American: RLGT)
Radiant Logistics, Inc. (www.radiantdelivers.com) is a
third-party logistics company providing technology-enabled global
transportation and value-added logistics solutions to customers
based primarily in the United
States and Canada. Through
its comprehensive service officering, Radiant provides domestic and
international freight forwarding along with truck and rail
brokerage services to a diversified account base including
manufacturers, distributors and retailers which it supports from an
extensive network of Radiant and agent-owned offices throughout
North America and other key
markets around the world. Radiant's value-added logistics services
include warehouse and distribution, customs brokerage, order
fulfillment, inventory management and technology services.
This announcement contains "forward-looking statements"
within the meaning set forth in United
States securities laws and regulations – that is, statements
related to future, not past, events. In this context,
forward-looking statements often address our expected future
business, financial performance and financial condition, and often
contain words such as "anticipate," "believe," "estimates,"
"expect," "future," "intend," "may," "plan," "see," "seek,"
"strategy," or "will" or the negative thereof or any variation
thereon or similar terminology or expressions. These
forward-looking statements are not guarantees and are subject to
known and unknown risks, uncertainties and assumptions about us
that may cause our actual results, levels of activity, performance
or achievements to be materially different from any future results,
levels of activity, performance or achievements expressed or
implied by such forward-looking statements. We have developed our
forward-looking statements based on management's beliefs and
assumptions, which in turn rely upon information available to them
at the time such statements were made. Such forward-looking
statements reflect our current perspectives on our business, future
performance, existing trends and information as of the date of this
announcement. These include, but are not limited to, our beliefs
about future revenue and expense levels, growth rates, prospects
related to our strategic initiatives and business strategies, along
with express or implied assumptions about, among other things: our
continued relationships with our strategic operating partners; the
performance of our historic business, as well as the businesses we
have recently acquired, at levels consistent with recent trends and
reflective of the synergies we believe will be available to us as a
result of such acquisitions; our ability to successfully integrate
our recently acquired businesses; our ability to locate suitable
acquisition opportunities and secure the financing necessary to
complete such acquisitions; transportation costs remaining in-line
with recent levels and expected trends; our ability to mitigate, to
the best extent possible, our dependence on current management and
certain of our larger strategic operating partners; our compliance
with financial and other covenants under our indebtedness; the
absence of any adverse laws or governmental regulations affecting
the transportation industry in general, and our operations in
particular; the impact of COVID-19 on our operations and financial
results; the global economic climate and current conflict in
Ukraine amplify many of these
risks the Company's ongoing assessment of the ransomware incident,
adverse legal, reputational and financial effects on the Company
resulting from the ransomware incident or future cyber incidents
and the effectiveness of the Company's business continuity plans in
response to cyber incidents, like the ransomware incident; and such
other factors that may be identified from time to time in our
Securities and Exchange Commission ("SEC") filings and other public
announcements, including those set forth under the caption "Risk
Factors" in our Form 10-K for the year ended June 30, 2021. In addition, the global economic
climate and current conflict in Ukraine amplify many of these risks. Our
forward-looking statements are also based upon management's beliefs
and assumptions regarding, among others: the nature and estimated
amount of adjustments to our financial statements covering the
Restatement Periods as the final adjustments may vary from the
amounts estimated in prior SEC Reports, and such variance may be
material; the nature and estimated amount of adjustments to our
published estimated results for the first quarter of fiscal 2023
covered in this Press Release, with the recognition that such
adjustments may be material; the timing for completion of the
restated financial statements included within the Restatement
Periods and the associated Securities and Exchange Commission
filings within which the restated financial statements are to be
included, including the Form 10-Q that is the subject matter of
this Press Release; and such other factors that may be identified:
(i) in our Form 10-K for the fiscal year ended June 30, 2021, including those set forth under
the caption "Risk Factors" in such Form 10-K; and (ii) in such
other Securities and Exchange Commission filings and other public
announcements, following our Form 10-K for the fiscal year ended
June 30, 2021. For the purpose of our
forward-looking statements, we assume that we will within the
short-term remediate any temporary compliance issues we are
presently experiencing with the NYSE as we contemplate being able
to regain compliance with all applicable SEC and exchange
compliance requirements once we are able to file the delinquent
Form 10-K and Form 10-Q with the SEC. We also assume that we will
be able to secure whatever waivers and/or consents as may be
necessary, if at all, to maintain compliance under our senior
credit facility as a consequence of our inability to timely provide
financial statements to our senior lenders, as well as the
modifications that may be required of past compliance
certifications that we have provided to our senior lenders during
the Restatement Periods. All subsequent written and oral
forward-looking statements attributable to us, or persons acting on
our behalf, are expressly qualified in their entirety by the
foregoing. Readers are cautioned not to place undue reliance on our
forward-looking statements, as they speak only as of the date made.
We disclaim any obligation to publicly update any forward-looking
statements, whether as a result of new information, future events
or otherwise.
RADIANT LOGISTICS,
INC.
|
Condensed
Consolidated Balance Sheet
|
(preliminary)
|
|
|
|
September 30,
|
|
(In thousands, except
share and per share data)
|
|
2022
|
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
|
$
|
26,544
|
|
Accounts receivable,
net of allowance of $2,842
|
|
|
164,439
|
|
Contract
assets
|
|
|
49,967
|
|
Prepaid expenses and
other current assets
|
|
|
15,327
|
|
Total current
assets
|
|
|
256,277
|
|
|
|
|
|
Property, technology,
and equipment, net
|
|
|
22,890
|
|
|
|
|
|
Goodwill
|
|
|
86,751
|
|
Intangible assets,
net
|
|
|
43,000
|
|
Operating lease
right-of-use assets
|
|
|
44,143
|
|
Deposits and other
assets
|
|
|
5,660
|
|
Long-term restricted
cash
|
|
|
625
|
|
Total other long-term
assets
|
|
|
180,179
|
|
Total
assets
|
|
$
|
459,346
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
|
$
|
127,084
|
|
Operating partner
commissions payable
|
|
|
17,021
|
|
Accrued
expenses
|
|
|
9,387
|
|
Income tax
payable
|
|
|
711
|
|
Current portion of
notes payable
|
|
|
4,331
|
|
Current portion of
operating lease liability
|
|
|
10,027
|
|
Current portion of
finance lease liability
|
|
|
538
|
|
Current portion of
contingent consideration
|
|
|
2,600
|
|
Other current
liabilities
|
|
|
297
|
|
Total current
liabilities
|
|
|
171,996
|
|
|
|
|
|
Notes payable, net of
current portion
|
|
|
40,300
|
|
Operating lease
liability, net of current portion
|
|
|
38,712
|
|
Finance lease
liability, net of current portion
|
|
|
1,084
|
|
Contingent
consideration, net of current portion
|
|
|
3,090
|
|
Deferred income
taxes
|
|
|
6,207
|
|
Total long-term
liabilities
|
|
|
89,393
|
|
Total
liabilities
|
|
|
261,389
|
|
|
|
|
|
Equity:
|
|
|
|
Common stock, $0.001
par value, 100,000,000 shares authorized; 51,418,835
shares issued, and 48,674,710 shares
outstanding
|
|
|
33
|
|
Additional paid-in
capital
|
|
|
106,314
|
|
Treasury stock at
cost, 2,744,125 shares
|
|
|
(17,344)
|
|
Retained
earnings
|
|
|
113,044
|
|
Accumulated other
comprehensive loss
|
|
|
(4,274)
|
|
Total Radiant
Logistics, Inc. stockholders' equity
|
|
|
197,773
|
|
Non-controlling
interest
|
|
|
184
|
|
Total
equity
|
|
|
197,957
|
|
Total liabilities and
equity
|
|
$
|
459,346
|
|
RADIANT LOGISTICS,
INC.
|
Condensed
Consolidated Statement of Comprehensive Income
|
(preliminary)
|
|
|
Three Months Ended
September 30,
|
|
(In thousands, except
share and per share data)
|
2022
|
|
Revenues
|
$
|
330,971
|
|
|
|
|
Operating
expenses:
|
|
|
Cost of transportation
and other services
|
|
254,491
|
|
Operating partner
commissions
|
|
30,106
|
|
Personnel
costs
|
|
19,771
|
|
Selling, general and
administrative expenses
|
|
8,769
|
|
Depreciation and
amortization
|
|
6,778
|
|
Change in fair value
of contingent consideration
|
|
160
|
|
Total operating
expenses
|
|
320,075
|
|
|
|
|
Income from
operations
|
|
10,896
|
|
|
|
|
Other income
(expense)
|
|
|
Interest
income
|
|
40
|
|
Interest
expense
|
|
(821)
|
|
Foreign currency
transaction gain
|
|
467
|
|
Change in fair value
of interest rate swap contracts
|
|
690
|
|
Other
|
|
5
|
|
Total other income
(expense)
|
|
381
|
|
|
|
|
Income before income
taxes
|
|
11,277
|
|
|
|
|
Income tax
expense
|
|
(3,152)
|
|
|
|
|
Net income
|
|
8,125
|
|
Less: net income
attributable to non-controlling interest
|
|
(79)
|
|
|
|
|
Net income attributable
to Radiant Logistics, Inc.
|
$
|
8,046
|
|
|
|
|
Other comprehensive
loss:
|
|
|
Foreign currency
translation loss
|
|
(3,478)
|
|
Comprehensive
income
|
$
|
4,647
|
|
|
|
|
Income per
share:
|
|
|
Basic
|
$
|
0.17
|
|
Diluted
|
$
|
0.16
|
|
|
|
|
Weighted average common
shares outstanding:
|
|
|
Basic
|
|
48,745,317
|
|
Diluted
|
|
50,303,117
|
|
Reconciliation of Non-GAAP Measures
RADIANT
LOGISTICS, INC.
Reconciliation of Total Revenues to Net Revenues, Net Income
Attributable to Radiant Logistics, Inc.
to Adjusted Net Income, EBITDA, Adjusted EBITDA, and Adjusted
EBITDA Margin
(Preliminary)
As used in this report, Net Revenues, Adjusted Net Income,
EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin are not
measures of financial performance or liquidity under United States
Generally Accepted Accounting Principles ("GAAP"). Net Revenues,
Adjusted Net Income, EBITDA, Adjusted EBITDA, and Adjusted EBITDA
Margin are presented herein because they are important metrics used
by management to evaluate and understand the performance of the
ongoing operations of Radiant's business. For Adjusted Net Income,
management uses a 24.5% tax rate to calculate the provision for
income taxes to normalize Radiant's tax rate to that of its
competitors and to compare Radiant's reporting periods with
different effective tax rates. In addition, in arriving at Adjusted
Net Income, the Company adjusts for certain non-cash charges and
significant items that are not part of regular operating
activities. These adjustments include income taxes, depreciation
and amortization, change in fair value of contingent consideration,
transition costs, lease termination costs, acquisition related
costs, litigation costs, amortization of debt issuance costs,
change in fair value of interest rate swap contracts, and gain on
forgiveness of debt.
We commonly refer to the term "net revenues" when commenting
about our Company and the results of operations. Net revenues are a
Non-GAAP measure calculated as revenues less directly related
operations and expenses attributed to the Company's services. We
believe net revenues are a better measurement than are total
revenues when analyzing and discussing the effectiveness of our
business and is used as a portion of a key metric the Company uses
to discuss its progress.
EBITDA is a non-GAAP measure of income and does not include the
effects of interest, taxes, and the "non-cash" effects of
depreciation and amortization on long-term assets. Companies have
some discretion as to which elements of depreciation and
amortization are excluded in the EBITDA calculation. We exclude all
depreciation charges related to property, technology and equipment,
and all amortization charges (including amortization of leasehold
improvements). We then further adjust EBITDA to exclude changes in
fair value of contingent consideration, expenses specifically
attributable to acquisitions, transition and lease termination
costs, foreign currency transaction gains and losses, extraordinary
items, share-based compensation expense, litigation expenses
unrelated to our core operations, gain on forgiveness of debt, and
other non-cash charges. While management considers EBITDA, and
adjusted EBITDA useful in analyzing our results, it is not intended
to replace any presentation included in our consolidated financial
statements.
We believe that these non-GAAP financial measures, as presented,
represent a useful method of assessing the performance of our
operating activities, as they reflect our earnings trends without
the impact of certain non-cash charges and other non-recurring
charges. These non-GAAP financial measures are intended to
supplement the GAAP financial information by providing additional
insight regarding results of operations to allow a comparison to
other companies, many of whom use similar non-GAAP financial
measures to supplement their GAAP results. However, these non-GAAP
financial measures will not be defined in the same manner by all
companies and may not be comparable to other companies. Net
Revenues, Adjusted Net Income, EBITDA, Adjusted EBITDA, and
Adjusted EBITDA Margin should not be considered in isolation or as
a substitute for any of the consolidated statements of
comprehensive income prepared in accordance with GAAP, or as an
indication of Radiant's operating performance or liquidity.
(In
thousands)
|
Three Months Ended
September 30,
|
|
|
2022
|
|
Net Revenues
(Non-GAAP measure)
|
Preliminary
|
|
Total
revenues
|
$
|
330,971
|
|
Cost of transportation
and other services
|
|
254,491
|
|
|
|
|
Net revenues
|
$
|
76,480
|
|
Net margin
|
|
23.1
|
%
|
(In
thousands)
|
Three Months Ended
September 30,
|
|
|
2022
|
|
Reconciliation of
GAAP net income to adjusted EBITDA
|
Preliminary
|
|
Net income attributable
to Radiant Logistics, Inc.
|
$
|
8,046
|
|
Income tax
expense
|
|
3,152
|
|
Depreciation and
amortization
|
|
6,778
|
|
Net interest
expense
|
|
781
|
|
|
|
|
EBITDA
|
|
18,757
|
|
|
|
|
Share-based
compensation
|
|
609
|
|
Change in fair value
of contingent consideration
|
|
160
|
|
Acquisition related
costs
|
|
27
|
|
Litigation
costs
|
|
120
|
|
Change in fair value
of interest rate swap contracts
|
|
(690)
|
|
Foreign currency
transaction gain
|
|
(467)
|
|
|
|
|
Adjusted
EBITDA
|
$
|
18,516
|
|
Adjusted EBITDA margin
(Adjusted EBITDA as a % of Net Revenues)
|
|
24.2
|
%
|
(In thousands, except
share and per share data)
|
Three Months Ended
September 30,
|
|
|
2022
|
|
Reconciliation of
GAAP net income to adjusted net income
|
Preliminary
|
|
GAAP net income
attributable to Radiant Logistics, Inc.
|
$
|
8,046
|
|
Adjustments to net
income:
|
|
|
Income tax
expense
|
|
3,152
|
|
Depreciation and
amortization
|
|
6,778
|
|
Change in fair value
of contingent consideration
|
|
160
|
|
Acquisition related
costs
|
|
27
|
|
Litigation
costs
|
|
120
|
|
Change in fair value
of interest rate swap contracts
|
|
(690)
|
|
Amortization of debt
issuance costs
|
|
110
|
|
|
|
|
Adjusted net income
before income taxes
|
|
17,703
|
|
|
|
|
Provision for income
taxes at 24.5%
|
|
(4,337)
|
|
|
|
|
Adjusted net
income
|
$
|
13,366
|
|
|
|
|
Adjusted net income per
common share:
|
|
|
Basic
|
$
|
0.27
|
|
Diluted
|
$
|
0.27
|
|
|
|
|
Weighted average common
shares outstanding:
|
|
|
Basic
|
|
48,745,317
|
|
Diluted
|
|
50,303,117
|
|
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SOURCE Radiant Logistics, Inc.