UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
☒ | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the quarterly period ended September 30, 20222023
Or
☐ | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
For the transition period from to
Commission File Number: 001-35392
RADIANT LOGISTICS, INC.
(Exact name of registrant as specified in its charter)
Delaware |
| 04-3625550 |
(State or other jurisdiction of incorporation or organization) |
| (I.R.S. Employer Identification No.) |
Triton Tower Two 700 S Renton Village Place, Seventh Floor Renton, Washington 98057 |
(Address of principal executive offices) (Zip Code) |
|
(425) 462-1094 |
(Registrant’s telephone number, including area code) |
|
N/A |
(Former name, former address, and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: |
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
Common Stock, $0.001 Par Value |
| RLGT |
| NYSE American |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒☐ No ☐☒
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☐ | Accelerated filer | ☒ | |
Non-accelerated filer | ☐ | Smaller reporting company |
| |
Emerging growth company | ☐ |
|
|
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
There were 48,181,25646,942,916 shares outstanding of the registrant’s common stock as of March 20,November 3, 2023.
RADIANT LOGISTICS, INC.
TABLE OF CONTENTS
2
EXPLANATORY NOTE
As previously reported, Radiant Logistics, Inc., and its consolidated subsidiaries (the “Company”, “we” or “us”) were unable to timely file our Annual Report on Form 10-K for the fiscal year ended June 30, 2022 and our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2022 as a result of the Audit and Executive Oversight Committee of the Board of Directors of the Company, after meeting with management and consultation with Moss Adams LLP, its current registered independent public accounting firm, and BDO USA, LLP, its predecessor registered independent public accounting firm, concluding that the Company’s previously issued financial statements for the fiscal year ended June 30, 2021 included in its Annual Report on Form 10-K, each of the interim financial statements for the quarterly periods in fiscal year 2021 included in its Quarterly Reports on Form 10-Q, and each of the interim financial statements for the quarterly periods in fiscal year 2022 included in its Quarterly Reports on Form 10-Q (cumulatively, 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.
Please refer to the Explanatory Note to our Annual Report on Form 10-K for the fiscal year ended June 30, 2022, which was filed on February 27, 2023, for more information regarding the restatement. For a more detailed discussion of the correction of historical errors in the Restatement Periods, including for the quarterly period ended September 30, 2021, refer to Note 2 and 20 to the consolidated financial statements of the Company included in Part II, Item 8 of our Annual Report on Form 10-K for the fiscal year ended June 30, 2022.
3
RADIANT LOGISTICS, INC.
Condensed Consolidated Balance Sheets
|
| September 30, |
|
| June 30, |
|
| September 30, |
| June 30, |
| |||||
(In thousands, except share and per share data) |
| 2022 |
|
| 2022 |
|
| 2023 |
|
| 2023 |
| ||||
|
| (unaudited) |
|
|
|
|
| (unaudited) |
|
|
|
| ||||
ASSETS |
|
|
|
|
|
|
|
| ||||||||
Current assets: |
|
|
|
|
|
|
|
|
|
| ||||||
Cash and cash equivalents |
| $ | 23,714 |
|
| $ | 24,442 |
|
| $ | 35,867 |
|
| $ | 32,456 |
|
Accounts receivable, net of allowance of $2,842 and $2,983, respectively |
|
| 164,438 |
|
|
| 186,492 |
| ||||||||
Accounts receivable, net of allowance of $2,784 and $2,776, respectively |
|
| 116,318 |
|
|
| 126,725 |
| ||||||||
Contract assets |
|
| 49,967 |
|
|
| 61,154 |
|
|
| 6,473 |
|
|
| 6,180 |
|
Income tax receivable |
|
| 475 |
|
|
| — |
| ||||||||
Prepaid expenses and other current assets |
|
| 15,327 |
|
|
| 17,256 |
|
|
| 12,600 |
|
|
| 15,211 |
|
Total current assets |
|
| 253,446 |
|
|
| 289,344 |
|
|
| 171,733 |
|
|
| 180,572 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Property, technology, and equipment, net |
|
| 22,890 |
|
|
| 24,823 |
|
|
| 25,476 |
|
|
| 25,389 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Goodwill |
|
| 86,751 |
|
|
| 88,199 |
|
|
| 88,709 |
|
|
| 89,203 |
|
Intangible assets, net |
|
| 43,000 |
|
|
| 48,545 |
|
|
| 34,011 |
|
|
| 36,641 |
|
Operating lease right-of-use assets |
|
| 44,143 |
|
|
| 41,111 |
|
|
| 52,874 |
|
|
| 56,773 |
|
Deposits and other assets |
|
| 5,703 |
|
|
| 4,704 |
|
|
| 5,023 |
|
|
| 5,163 |
|
Long-term restricted cash |
|
| 581 |
|
|
| 625 |
| ||||||||
Total other long-term assets |
|
| 180,178 |
|
|
| 183,184 |
|
|
| 180,617 |
|
|
| 187,780 |
|
Total assets |
| $ | 456,514 |
|
| $ | 497,351 |
|
| $ | 377,826 |
|
| $ | 393,741 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Accounts payable |
| $ | 122,243 |
|
| $ | 137,853 |
|
| $ | 80,145 |
|
| $ | 84,561 |
|
Operating partner commissions payable |
|
| 19,030 |
|
|
| 18,731 |
|
|
| 14,260 |
|
|
| 18,360 |
|
Accrued expenses |
|
| 9,387 |
|
|
| 11,349 |
|
|
| 9,013 |
|
|
| 8,739 |
|
Income tax payable |
|
| 547 |
|
|
| 4,035 |
|
|
| — |
|
|
| 369 |
|
Current portion of notes payable |
|
| 4,331 |
|
|
| 4,575 |
|
|
| 2,903 |
|
|
| 4,107 |
|
Current portion of operating lease liability |
|
| 10,027 |
|
|
| 7,641 |
| ||||||||
Current portion of finance lease liability |
|
| 538 |
|
|
| 577 |
| ||||||||
Current portion of operating lease liabilities |
|
| 10,927 |
|
|
| 11,273 |
| ||||||||
Current portion of finance lease liabilities |
|
| 626 |
|
|
| 620 |
| ||||||||
Current portion of contingent consideration |
|
| 2,600 |
|
|
| 2,600 |
|
|
| 246 |
|
|
| 3,886 |
|
Other current liabilities |
|
| 297 |
|
|
| 303 |
|
|
| 254 |
|
|
| 258 |
|
Total current liabilities |
|
| 169,000 |
|
|
| 187,664 |
|
|
| 118,374 |
|
|
| 132,173 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Notes payable, net of current portion |
|
| 40,300 |
|
|
| 66,719 |
| ||||||||
Operating lease liability, net of current portion |
|
| 38,712 |
|
|
| 37,776 |
| ||||||||
Finance lease liability, net of current portion |
|
| 1,084 |
|
|
| 1,223 |
| ||||||||
Operating lease liabilities, net of current portion |
|
| 48,544 |
|
|
| 52,120 |
| ||||||||
Finance lease liabilities, net of current portion |
|
| 963 |
|
|
| 1,121 |
| ||||||||
Contingent consideration, net of current portion |
|
| 3,090 |
|
|
| 2,930 |
|
|
| 209 |
|
|
| 287 |
|
Deferred income taxes |
|
| 5,984 |
|
|
| 6,482 |
| ||||||||
Deferred tax liabilities |
|
| 2,597 |
|
|
| 2,944 |
| ||||||||
Total long-term liabilities |
|
| 89,170 |
|
|
| 115,130 |
|
|
| 52,313 |
|
|
| 56,472 |
|
Total liabilities |
|
| 258,170 |
|
|
| 302,794 |
|
|
| 170,687 |
|
|
| 188,645 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Commitments and contingencies (Note 15) |
|
|
|
|
|
|
|
|
|
|
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Equity: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Common stock, $0.001 par value, 100,000,000 shares authorized; 51,418,835 and 51,265,543 |
|
| 33 |
|
|
| 33 |
| ||||||||
Common stock, $0.001 par value, 100,000,000 shares authorized; 51,733,187 and 51,603,386 |
|
| 33 |
|
|
| 33 |
| ||||||||
Additional paid-in capital |
|
| 106,314 |
|
|
| 106,146 |
|
|
| 109,066 |
|
|
| 108,516 |
|
Treasury stock, at cost, 2,744,125 and 2,524,608 shares, respectively |
|
| (17,344 | ) |
|
| (16,004 | ) | ||||||||
Treasury stock, at cost, 4,344,206 and 4,308,857 shares, respectively |
|
| (27,297 | ) |
|
| (27,067 | ) | ||||||||
Retained earnings |
|
| 113,431 |
|
|
| 104,998 |
|
|
| 128,215 |
|
|
| 125,593 |
|
Accumulated other comprehensive loss |
|
| (4,274 | ) |
|
| (796 | ) |
|
| (3,333 | ) |
|
| (2,205 | ) |
Total Radiant Logistics, Inc. stockholders’ equity |
|
| 198,160 |
|
|
| 194,377 |
|
|
| 206,684 |
|
|
| 204,870 |
|
Non-controlling interest |
|
| 184 |
|
|
| 180 |
|
|
| 455 |
|
|
| 226 |
|
Total equity |
|
| 198,344 |
|
|
| 194,557 |
|
|
| 207,139 |
|
|
| 205,096 |
|
Total liabilities and equity |
| $ | 456,514 |
|
| $ | 497,351 |
|
| $ | 377,826 |
|
| $ | 393,741 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
43
RADIANT LOGISTICS, INC.
Condensed Consolidated Statements of Comprehensive Income
(unaudited)
| Three Months Ended September 30, |
| Three Months Ended September 30, |
| ||||||||||
(In thousands, except share and per share data) | 2022 |
|
| 2021 |
| 2023 |
|
| 2022 |
| ||||
|
|
|
| (as restated) |
| |||||||||
Revenues | $ | 330,971 |
|
| $ | 299,398 |
| $ | 210,797 |
|
| $ | 330,971 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
| ||||
Cost of transportation and other services |
| 254,491 |
|
|
| 234,680 |
|
| 149,973 |
|
|
| 254,491 |
|
Operating partner commissions |
| 30,106 |
|
|
| 27,561 |
|
| 23,782 |
|
|
| 30,106 |
|
Personnel costs |
| 19,771 |
|
|
| 15,653 |
|
| 19,627 |
|
|
| 19,771 |
|
Selling, general and administrative expenses |
| 8,770 |
|
|
| 6,790 |
|
| 9,475 |
|
|
| 8,770 |
|
Depreciation and amortization |
| 6,778 |
|
|
| 4,252 |
|
| 4,525 |
|
|
| 6,778 |
|
Change in fair value of contingent consideration |
| 160 |
|
|
| — |
|
| (246 | ) |
|
| 160 |
|
Total operating expenses |
| 320,076 |
|
|
| 288,936 |
|
| 207,136 |
|
|
| 320,076 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Income from operations |
| 10,895 |
|
|
| 10,462 |
|
| 3,661 |
|
|
| 10,895 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Other income (expense): |
|
|
|
|
|
|
|
|
|
| ||||
Interest income |
| 40 |
|
|
| 3 |
|
| 585 |
|
|
| 40 |
|
Interest expense |
| (821 | ) |
|
| (609 | ) |
| (302 | ) |
|
| (821 | ) |
Foreign currency transaction gain |
| 467 |
|
|
| 271 |
|
| 96 |
|
|
| 467 |
|
Change in fair value of interest rate swap contracts |
| 690 |
|
|
| (46 | ) |
| (202 | ) |
|
| 690 |
|
Other |
| 5 |
|
|
| 16 |
|
| 27 |
|
|
| 5 |
|
Total other income (expense) |
| 381 |
|
|
| (365 | ) | |||||||
Total other income |
| 204 |
|
|
| 381 |
| |||||||
|
|
|
|
|
|
|
|
|
|
| ||||
Income before income taxes |
| 11,276 |
|
|
| 10,097 |
|
| 3,865 |
|
|
| 11,276 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Income tax expense |
| (2,764 | ) |
|
| (2,402 | ) |
| (1,014 | ) |
|
| (2,764 | ) |
|
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| 8,512 |
|
|
| 7,695 |
|
| 2,851 |
|
|
| 8,512 |
|
Less: net income attributable to non-controlling interest |
| (79 | ) |
|
| (86 | ) |
| (229 | ) |
|
| (79 | ) |
|
|
|
|
|
|
|
|
|
|
| ||||
Net income attributable to Radiant Logistics, Inc. | $ | 8,433 |
|
| $ | 7,609 |
| $ | 2,622 |
|
| $ | 8,433 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Other comprehensive loss: |
|
|
|
|
| |||||||||
Other comprehensive income: |
|
|
|
|
| |||||||||
Foreign currency translation loss |
| (3,478 | ) |
|
| (1,039 | ) |
| (1,128 | ) |
|
| (3,478 | ) |
Comprehensive income | $ | 5,034 |
|
| $ | 6,656 |
| $ | 1,723 |
|
| $ | 5,034 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Income per share: |
|
|
|
|
|
|
|
|
|
| ||||
Basic and diluted | $ | 0.17 |
|
| $ | 0.15 |
| |||||||
Basic | $ | 0.06 |
|
| $ | 0.17 |
| |||||||
Diluted | $ | 0.05 |
|
| $ | 0.17 |
| |||||||
|
|
|
|
|
|
|
|
|
| |||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
| ||||
Basic |
| 48,745,317 |
|
|
| 49,921,061 |
|
| 47,297,957 |
|
|
| 48,745,317 |
|
Diluted |
| 50,303,012 |
|
|
| 51,116,478 |
|
| 49,076,185 |
|
|
| 50,303,012 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
54
RADIANT LOGISTICS, INC.
Condensed Consolidated Statements of Changes in Equity
Three Months Ended September 30, 20222023
(unaudited)
| RADIANT LOGISTICS, INC. STOCKHOLDERS' EQUITY |
|
|
|
| RADIANT LOGISTICS, INC. STOCKHOLDERS’ EQUITY |
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock |
|
| Additional |
| Treasury |
| Retained |
| Accumulated |
| Total Radiant |
| Non- |
| Total |
| Common Stock |
|
| Additional |
| Treasury |
| Retained |
| Accumulated |
| Total Radiant |
| Non- |
| Total |
| ||||||||||||||||||||||||||||||||||||
(In thousands, except share and per share data) | Shares |
|
| Amount |
|
| Capital |
|
| Stock |
|
| Earnings |
|
| Loss |
|
| Equity |
|
| Interest |
|
| Equity |
| Shares |
|
| Amount |
|
| Capital |
|
| Stock |
|
| Earnings |
|
| Loss |
|
| Equity |
|
| Interest |
|
| Equity |
| ||||||||||||||||||
Balance as of June 30, 2022 |
| 48,740,935 |
|
| $ | 33 |
|
| $ | 106,146 |
|
| $ | (16,004 | ) |
| $ | 104,998 |
|
| $ | (796 | ) |
| $ | 194,377 |
|
| $ | 180 |
|
| $ | 194,557 |
| |||||||||||||||||||||||||||||||||||
Balance as of June 30, 2023 |
| 47,294,529 |
|
| $ | 33 |
|
| $ | 108,516 |
|
| $ | (27,067 | ) |
| $ | 125,593 |
|
| $ | (2,205 | ) |
| $ | 204,870 |
|
| $ | 226 |
|
| $ | 205,096 |
| |||||||||||||||||||||||||||||||||||
Repurchase of common stock |
| (219,517 | ) |
|
| — |
|
|
| — |
|
|
| (1,340 | ) |
|
| — |
|
|
| — |
|
|
| (1,340 | ) |
|
| — |
|
|
| (1,340 | ) |
| (35,349 | ) |
|
| — |
|
|
| — |
|
|
| (230 | ) |
|
| — |
|
|
| — |
|
|
| (230 | ) |
|
| — |
|
|
| (230 | ) |
Issuance of common stock upon vesting of |
| 152,881 |
|
|
| — |
|
|
| (442 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (442 | ) |
|
| — |
|
|
| (442 | ) | |||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of |
| 127,868 |
|
|
| — |
|
|
| (331 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (331 | ) |
|
| — |
|
|
| (331 | ) | |||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock |
| 411 |
|
|
| — |
|
|
| 1 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| — |
|
|
| 1 |
|
| 1,933 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
Distribution to non-controlling interest |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (75 | ) |
|
| (75 | ) | |||||||||||||||||||||||||||||||||||
Share-based compensation |
| — |
|
|
| — |
|
|
| 609 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 609 |
|
|
| — |
|
|
| 609 |
|
| — |
|
|
| — |
|
|
| 881 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 881 |
|
|
| — |
|
|
| 881 |
|
Net income |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 8,433 |
|
|
| — |
|
|
| 8,433 |
|
|
| 79 |
|
|
| 8,512 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 2,622 |
|
|
| — |
|
|
| 2,622 |
|
|
| 229 |
|
|
| 2,851 |
|
Other comprehensive loss |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,478 | ) |
|
| (3,478 | ) |
|
| — |
|
|
| (3,478 | ) |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,128 | ) |
|
| (1,128 | ) |
|
| — |
|
|
| (1,128 | ) |
Balance as of September 30, 2022 |
| 48,674,710 |
|
| $ | 33 |
|
| $ | 106,314 |
|
| $ | (17,344 | ) |
| $ | 113,431 |
|
| $ | (4,274 | ) |
| $ | 198,160 |
|
| $ | 184 |
|
| $ | 198,344 |
| |||||||||||||||||||||||||||||||||||
Balance as of September 30, 2023 |
| 47,388,981 |
|
| $ | 33 |
|
| $ | 109,066 |
|
| $ | (27,297 | ) |
| $ | 128,215 |
|
| $ | (3,333 | ) |
| $ | 206,684 |
|
| $ | 455 |
|
| $ | 207,139 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
65
RADIANT LOGISTICS, INC.
Condensed Consolidated Statements of Changes in Equity (continued)
Three Months Ended September 30, 20212022
(unaudited)
| RADIANT LOGISTICS, INC. STOCKHOLDERS' EQUITY |
|
|
|
| RADIANT LOGISTICS, INC. STOCKHOLDERS’ EQUITY |
|
|
|
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock |
|
| Additional |
| Treasury |
| Retained |
| Accumulated |
| Total Radiant |
| Non- |
| Total |
| Common Stock |
|
| Additional |
| Treasury |
| Retained |
| Accumulated |
| Total Radiant |
| Non- |
| Total |
| ||||||||||||||||||||||||||||||||||||
(In thousands, except share and per share data) | Shares |
|
| Amount |
|
| Capital |
|
| Stock |
|
| Earnings |
|
| Income (Loss) |
|
| Equity |
|
| Interest |
|
| Equity |
| Shares |
|
| Amount |
|
| Capital |
|
| Stock |
|
| Earnings |
|
| Loss |
|
| Equity |
|
| Interest |
|
| Equity |
| ||||||||||||||||||
|
|
|
|
|
|
|
|
| (as restated) |
|
|
| (as restated) |
|
|
| (as restated) |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance as of June 30, 2021 |
| 49,930,389 |
|
| $ | 32 |
|
| $ | 104,228 |
|
| $ | (4,658 | ) |
| $ | 60,534 |
|
| $ | 1,141 |
|
| $ | 161,277 |
|
| $ | 293 |
|
| $ | 161,570 |
| |||||||||||||||||||||||||||||||||||
Balance as of June 30, 2022, as restated |
| 48,740,935 |
|
| $ | 33 |
|
| $ | 106,146 |
|
| $ | (16,004 | ) |
| $ | 104,998 |
|
| $ | (796 | ) |
| $ | 194,377 |
|
| $ | 180 |
|
| $ | 194,557 |
| |||||||||||||||||||||||||||||||||||
Repurchase of common stock |
| (254,894 | ) |
|
| — |
|
|
| — |
|
|
| (1,675 | ) |
|
| — |
|
|
| — |
|
|
| (1,675 | ) |
|
| — |
|
|
| (1,675 | ) |
| (219,517 | ) |
|
| — |
|
|
| — |
|
|
| (1,340 | ) |
|
| — |
|
|
| — |
|
|
| (1,340 | ) |
|
| — |
|
|
| (1,340 | ) |
Issuance of common stock upon vesting of |
| 115,616 |
|
|
| — |
|
|
| (342 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (342 | ) |
|
| — |
|
|
| (342 | ) | |||||||||||||||||||||||||||||||||||
Issuance of common stock upon vesting of |
| 152,881 |
|
|
| — |
|
|
| (442 | ) |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (442 | ) |
|
| — |
|
|
| (442 | ) | |||||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of stock |
| 21,553 |
|
|
| — |
|
|
| 124 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 124 |
|
|
| — |
|
|
| 124 |
|
| 411 |
|
|
| — |
|
|
| 1 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 1 |
|
|
| — |
|
|
| 1 |
|
Distribution to non-controlling interest |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (75 | ) |
|
| (75 | ) | |||||||||||||||||||||||||||||||||||
Share-based compensation |
| — |
|
|
| — |
|
|
| 350 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 350 |
|
|
| — |
|
|
| 350 |
|
| — |
|
|
| — |
|
|
| 609 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 609 |
|
|
| — |
|
|
| 609 |
|
Net income |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 7,609 |
|
|
| — |
|
|
| 7,609 |
|
|
| 86 |
|
|
| 7,695 |
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 8,433 |
|
|
| — |
|
|
| 8,433 |
|
|
| 79 |
|
|
| 8,512 |
|
Other comprehensive loss |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (1,039 | ) |
|
| (1,039 | ) |
|
| — |
|
|
| (1,039 | ) |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| (3,478 | ) |
|
| (3,478 | ) |
|
| — |
|
|
| (3,478 | ) |
Balance as of September 30, 2021 |
| 49,812,664 |
|
| $ | 32 |
|
| $ | 104,360 |
|
| $ | (6,333 | ) |
| $ | 68,143 |
|
| $ | 102 |
|
| $ | 166,304 |
|
| $ | 379 |
|
| $ | 166,683 |
| |||||||||||||||||||||||||||||||||||
Balance as of September 30, 2022 |
| 48,674,710 |
|
| $ | 33 |
|
| $ | 106,314 |
|
| $ | (17,344 | ) |
| $ | 113,431 |
|
| $ | (4,274 | ) |
| $ | 198,160 |
|
| $ | 184 |
|
| $ | 198,344 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.statements
76
RADIANT LOGISTICS, INC.
Condensed Consolidated Statements of Cash Flows
(unaudited)
|
| Three Months Ended September 30, |
|
| Three Months Ended September 30, |
| ||||||||||
(In thousands) |
| 2022 |
|
| 2021 |
|
| 2023 |
|
| 2022 |
| ||||
|
|
|
|
| (as restated) |
| ||||||||||
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Net income |
| $ | 8,512 |
|
| $ | 7,695 |
|
| $ | 2,851 |
|
| $ | 8,512 |
|
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY (USED FOR) OPERATING ACTIVITIES |
|
|
|
|
|
| ||||||||||
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES |
|
|
|
|
|
| ||||||||||
Share-based compensation |
|
| 609 |
|
|
| 350 |
|
|
| 881 |
|
|
| 609 |
|
Amortization of intangible assets |
|
| 4,963 |
|
|
| 2,521 |
|
|
| 2,643 |
|
|
| 4,963 |
|
Depreciation and amortization of property, technology, and equipment |
|
| 1,815 |
|
|
| 1,731 |
|
|
| 1,882 |
|
|
| 1,815 |
|
Deferred income tax benefit |
|
| (498 | ) |
|
| (207 | ) |
|
| (348 | ) |
|
| (498 | ) |
Amortization of debt issuance costs |
|
| 110 |
|
|
| 127 |
|
|
| 124 |
|
|
| 110 |
|
Change in fair value of contingent consideration |
|
| 160 |
|
|
| — |
|
|
| (246 | ) |
|
| 160 |
|
Change in fair value of interest rate swap contracts |
|
| 202 |
|
|
| (690 | ) | ||||||||
Other |
|
| 31 |
|
|
| (33 | ) |
|
| 151 |
|
|
| (7 | ) |
CHANGES IN OPERATING ASSETS AND LIABILITIES: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Accounts receivable |
|
| 19,983 |
|
|
| (26,811 | ) |
|
| 9,760 |
|
|
| 22,716 |
|
Contract assets |
|
| 11,079 |
|
|
| (18,180 | ) |
|
| (305 | ) |
|
| 8,384 |
|
Income tax receivable/payable |
|
| (3,562 | ) |
|
| (2,410 | ) | ||||||||
Income taxes |
|
| (863 | ) |
|
| (3,562 | ) | ||||||||
Prepaid expenses, deposits, and other assets |
|
| 1,462 |
|
|
| (5,593 | ) |
|
| 2,502 |
|
|
| 1,985 |
|
Operating lease right-of-use assets |
|
| 803 |
|
|
| 2,040 |
|
|
| 2,944 |
|
|
| 2,440 |
|
Accounts payable |
|
| (16,659 | ) |
|
| 23,502 |
|
|
| (4,091 | ) |
|
| (16,659 | ) |
Operating partner commissions payable |
|
| 299 |
|
|
| 962 |
|
|
| (4,118 | ) |
|
| 299 |
|
Accrued expenses and other liabilities |
|
| (2,099 | ) |
|
| 311 |
|
|
| 298 |
|
|
| (2,077 | ) |
Operating lease liability |
|
| (2,327 | ) |
|
| (1,802 | ) | ||||||||
Net cash provided by (used for) operating activities |
|
| 24,681 |
|
|
| (15,797 | ) | ||||||||
Operating lease liabilities |
|
| (2,908 | ) |
|
| (1,871 | ) | ||||||||
Payment of contingent consideration |
|
| (3,473 | ) |
|
| — |
| ||||||||
Net cash provided by operating activities |
|
| 7,886 |
|
|
| 26,629 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Purchases of property, technology, and equipment |
|
| (949 | ) |
|
| (1,456 | ) |
|
| (2,473 | ) |
|
| (949 | ) |
Proceeds from sale of property, technology, and equipment |
|
| 18 |
|
|
| 5 |
|
|
| 4 |
|
|
| 18 |
|
Net cash used for investing activities |
|
| (931 | ) |
|
| (1,451 | ) |
|
| (2,469 | ) |
|
| (931 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Proceeds from revolving credit facility |
|
| 57,500 |
|
|
| 24,461 |
|
|
| — |
|
|
| 57,500 |
|
Repayments of revolving credit facility |
|
| (82,500 | ) |
|
| (9,461 | ) |
|
| — |
|
|
| (82,500 | ) |
Payments of debt issuance costs |
|
| (741 | ) |
|
| — |
|
|
| (106 | ) |
|
| (741 | ) |
Repayments of notes payable and finance lease liability |
|
| (1,267 | ) |
|
| (1,259 | ) | ||||||||
Repayments of notes payable and finance lease liabilities |
|
| (1,312 | ) |
|
| (1,270 | ) | ||||||||
Repurchases of common stock |
|
| (1,340 | ) |
|
| (1,675 | ) |
|
| (230 | ) |
|
| (1,340 | ) |
Distribution to non-controlling interest |
|
| (75 | ) |
|
| — |
|
|
| — |
|
|
| (75 | ) |
Proceeds from exercise of stock options |
|
| 1 |
|
|
| 126 |
|
|
| 2 |
|
|
| 1 |
|
Payments of employee tax withholdings related to restricted stock awards and stock options |
|
| (442 | ) |
|
| (344 | ) | ||||||||
Net cash (used for) provided by financing activities |
|
| (28,864 | ) |
|
| 11,848 |
| ||||||||
Payments of employee tax withholdings related to restricted stock units and stock options |
|
| (333 | ) |
|
| (442 | ) | ||||||||
Net cash used for financing activities |
|
| (1,979 | ) |
|
| (28,867 | ) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Effect of exchange rate changes on cash, cash equivalents, and restricted cash |
|
| 4,342 |
|
|
| 1,166 |
|
|
| (41 | ) |
|
| 2,397 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
NET DECREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH |
|
| (772 | ) |
|
| (4,234 | ) | ||||||||
NET INCREASE (DECREASE) IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH |
|
| 3,397 |
|
|
| (772 | ) | ||||||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD |
|
| 25,067 |
|
|
| 14,345 |
|
|
| 33,062 |
|
|
| 25,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD |
| $ | 24,295 |
|
| $ | 10,111 |
|
| $ | 36,459 |
|
| $ | 24,295 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
RECONCILIATION OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH: |
|
|
|
|
|
| ||||||||||
RECONCILIATION OF CASH, CASH EQUIVALENTS, AND RESTRICTED CASH: |
|
|
|
|
|
| ||||||||||
Cash and cash equivalents |
| $ | 23,714 |
|
| $ | 9,477 |
|
| $ | 35,867 |
|
| $ | 23,714 |
|
Long-term restricted cash |
|
| 581 |
|
|
| 634 |
| ||||||||
Total cash, cash equivalents, and restricted cash, end of period |
| $ | 24,295 |
|
| $ | 10,111 |
| ||||||||
Restricted cash |
|
| 592 |
|
|
| 581 |
| ||||||||
Total cash, cash equivalents, and restricted cash |
| $ | 36,459 |
|
| $ | 24,295 |
| ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
|
| ||||||
Income taxes paid |
| $ | 6,771 |
|
| $ | 5,002 |
|
| $ | 2,253 |
|
| $ | 6,771 |
|
Interest paid |
| $ | 652 |
|
| $ | 471 |
|
| $ | 180 |
|
| $ | 652 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
87
RADIANT LOGISTICS, INC.
Notes to the Condensed Consolidated Financial Statements
(unaudited)
(Dollars in thousands, except share and per share data)
NOTE 1 – THE COMPANY AND BASIS OF PRESENTATION
The Company
Radiant Logistics, Inc., and its consolidated subsidiaries (the “Company”), “we” or “us”) operates as a third-party logistics company, providing technology-enabled global transportation and value-added logistics solutions primarily in the United States and Canada. We serviceThe Company services a large and diversified account base across a range of industries and geographies, which we supportis supported from an extensive network of operating locations across North America as well as an integrated international service partner network located in other key markets around the globe. We provideThe Company provides these services through a multi-brand network, which includes over 100 operating locations. Included in these operating locations are a number of independent agents, who weare also referreferred to as our “strategic operating partners”,partners,” that operate exclusively on ourthe Company’s behalf, and approximately 25 Company-owned offices. As a third-party logistics company, we havethe Company has a vast carrier network of asset-based transportation companies, including motor carriers, railroads, airlines and ocean lines in ourits carrier network.
Through its operating locations across North America, the Company offers domestic and international air and ocean freight forwarding services and freight brokerage services, including truckload services, less than truckload services, and intermodal services, which is the movement of freight in trailers or containers by combination of truck and rail. The Company’s primary transportation services involve arranging shipment,shipments, on behalf of its customers, of materials, products, equipment, and other goods that are generally larger than shipments handled by integrated carriers of primarily small parcels, such as FedEx, DHL and UPS, including arranging and monitoring all aspects of material flow activity utilizing advanced information technology systems. WeThe Company also provideprovides other value-added logistics services including materials management and distribution services (collectively, “materials management and distribution” or “MM&D” services), and customs house brokerage (“CHB”) services to complement ourits core transportation service offering.
Basis of Presentation
The condensed consolidated financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) have been condensed or omitted pursuant to such rules and regulations. The Company’s management believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2022.2023.
The interim period information included in this Quarterly Report on Form 10-Q reflects all adjustments, consisting of normal recurring adjustments, that are, in the opinion of the Company’s management, necessary for a fair statement of the results of the respective interim periods. Results of operations for interim periods are not necessarily indicative of results to be expected for an entire year.
Correction of Previously Reported Interim Condensed Consolidated Quarterly Financial Statement
The interim consolidated financial statements include corrections to the three months ended September 30, 2021, which were presented in Note 20 to the audited consolidated financial statements and notes thereto for the fiscal year ended June 30, 2022, in the Company’s fiscal year 2022 Form 10-K filed on February 27, 2023. This revision corrected differences between the estimated accrual amounts and the actual revenues and expenses recorded due primarily to errors in the underlying shipment information used to calculate the original estimates of the accrued amounts. The revision resulted in an increase to net income attributable to Radiant Logistics, Inc. by $530 and an increase to basic and diluted earnings per share by $0.01 from amounts previously reported for the three months ended September 30, 2021. Previously reported net cash used for operating activities, net cash used for investing activities, and net cash provided by financing activities for the three months ended September 30, 2021 were not impacted.
9
The restated consolidated balance sheet line items as of September 30, 2021 are as follows:
|
| Originally Reported |
|
| Adjustment |
|
| Restated |
| |||
(In thousands) |
| Q1 |
|
| Q1 |
|
| Q1 |
| |||
Contract assets |
| $ | 32,625 |
|
| $ | 30,567 |
|
| $ | 63,192 |
|
Total current assets |
|
| 208,187 |
|
|
| 30,567 |
|
|
| 238,754 |
|
Total assets |
|
| 383,074 |
|
|
| 30,567 |
|
|
| 413,641 |
|
Accounts payable |
|
| 98,374 |
|
|
| 29,212 |
|
|
| 127,586 |
|
Operating partner commissions payable |
|
| 15,645 |
|
|
| 382 |
|
|
| 16,027 |
|
Accrued expenses |
|
| 7,162 |
|
|
| 49 |
|
|
| 7,211 |
|
Income tax payable |
|
| 134 |
|
|
| 227 |
|
|
| 361 |
|
Total current liabilities |
|
| 136,669 |
|
|
| 29,870 |
|
|
| 166,539 |
|
Total liabilities |
|
| 217,088 |
|
|
| 29,870 |
|
|
| 246,958 |
|
Retained earnings |
|
| 67,446 |
|
|
| 697 |
|
|
| 68,143 |
|
Total equity |
|
| 165,986 |
|
|
| 697 |
|
|
| 166,683 |
|
The restated line items of the consolidated statements of comprehensive income for the three months ended September 30, 2021 are as follows:
|
| Originally Reported |
|
| Adjustment |
|
| Restated |
| |||
(In thousands, except per share data) |
| Q1 |
|
| Q1 |
|
| Q1 |
| |||
Revenues |
| $ | 286,115 |
|
| $ | 13,283 |
|
| $ | 299,398 |
|
Cost of transportation and other services |
|
| 221,233 |
|
|
| 13,447 |
|
|
| 234,680 |
|
Operating partner commissions |
|
| 28,465 |
|
|
| (904 | ) |
|
| 27,561 |
|
Personnel costs |
|
| 15,616 |
|
|
| 37 |
|
|
| 15,653 |
|
Income from operations |
|
| 9,759 |
|
|
| 703 |
|
|
| 10,462 |
|
Income tax expense |
|
| (2,229 | ) |
|
| (173 | ) |
|
| (2,402 | ) |
Net income |
|
| 7,165 |
|
|
| 530 |
|
|
| 7,695 |
|
Net income attributable to Radiant Logistics, Inc. |
|
| 7,079 |
|
|
| 530 |
|
|
| 7,609 |
|
|
|
|
|
|
|
|
|
|
| |||
Income per share: |
|
|
|
|
|
|
|
|
| |||
Basic |
| $ | 0.14 |
|
| $ | 0.01 |
|
| $ | 0.15 |
|
Diluted |
| $ | 0.14 |
|
| $ | 0.01 |
|
| $ | 0.15 |
|
The restated line items of the consolidated cash flow statements for the three months ended September 30, 2021 are as follows:
| Originally Reported |
|
| Adjustment |
|
| Restated |
| |||
(In thousands) | Three Months Ended |
|
| Three Months Ended |
|
| Three Months Ended |
| |||
OPERATING ACTIVITIES: |
|
|
|
|
|
|
|
| |||
Net income | $ | 7,165 |
|
| $ | 530 |
|
| $ | 7,695 |
|
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH (USED FOR) OPERATING ACTIVITIES |
|
|
|
|
|
|
|
| |||
CHANGES IN OPERATING ASSETS AND LIABILITIES: |
|
|
|
|
|
|
|
| |||
Contract assets |
| (4,897 | ) |
|
| (13,283 | ) |
|
| (18,180 | ) |
Income tax receivable/payable |
| (2,583 | ) |
|
| 173 |
|
|
| (2,410 | ) |
Accounts payable |
| 10,055 |
|
|
| 13,447 |
|
|
| 23,502 |
|
Operating partner commissions payable |
| 1,866 |
|
|
| (904 | ) |
|
| 962 |
|
Accrued expenses, other liabilities, and operating lease liability |
| (1,528 | ) |
|
| 37 |
|
|
| (1,491 | ) |
Net cash (used for) operating activities |
| (15,797 | ) |
|
| — |
|
|
| (15,797 | ) |
NOTE 2 – RECENT ACCOUNTING GUIDANCE
Recent Accounting Guidance Not Yet Adopted
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments to the initial guidance: ASU 2018-19, 2019-04, 2019-05, 2020-03, and 2022-02 (collectively, Topic 326). Topic 326 requires measurement and recognition of expected credit losses for financial assets held. Topic 326 is effective for the Company in the first quarter of fiscal year 2024. The Company is currently evaluating the impact of the standard on its consolidated financial statements and disclosures.
Recently Adopted Accounting Guidance
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) and subsequent amendments to the initial guidance: ASU 2021-01, and ASU 2022-06, which provides temporary optional expedients and exceptions to the current guidance on contract modifications to ease the financial reporting burdens related to the expected market transition from London Interbank Offered Rate (LIBOR) and other interbank offered rates to alternative reference rates. The amendments are effective as of March 12, 2020 and apply to contract modifications made before December 31, 2024. The Company adopted Topic 848 on July 1, 2022. The adoption of Topic 848 had no impact on the Company’s financial statements or related disclosures.
10
NOTE 32 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a) Principles of Consolidation
The condensed consolidated financial statements include the accounts of Radiant Logistics, Inc. and its wholly-owned subsidiaries as well as a single variable interest entity, Radiant Logistics Partners, LLC (“RLP”), which is 40% owned by Radiant Global Logistics, Inc. (“RGL”) and 60% owned by Radiant Capital Partners, LLC (“RCP”,RCP,” see Note 11), an entity owned by the Company’s Chief Executive Officer. All significant intercompany balances and transactions have been eliminated.
Non-controlling interest in the condensed consolidated balance sheets represents RCP’s proportionate share of equity in RLP. Net income (loss) of non-wholly-owned consolidated subsidiaries or variable interest entities is allocated to the Company and the holder(s) of the non-controlling interest in proportion to their percentage ownership.ownership interests.
b) Use of Estimates
The preparation of condensed consolidated financial statements and related disclosures in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period. Actualperiods. Due to the inherent uncertainty involved in making estimates, actual results reported in future periods may be based upon amounts that could differ from these estimates due to the inherent uncertainty involved in making estimates and risks and uncertainties.estimates.
8
c) Cash and Cash Equivalents and Restricted Cash
The Company maintains its cash in bank deposit accounts that may, at times, may exceed federally insured limits. The Company has not experienced any losses in such accounts. Cash equivalents consist of highly liquid investments with original maturities of three months or less.
d) Restricted Cash
Restricted cash includes represents five months of interest in a debt service reserve account for apayments on the Company’s senior secured Canadian term loan which will mature on April 1, 2024.held by the lender that are required to be set aside. Restricted cash of $592 and $606 is included in prepaid expenses and other current assets in the condensed consolidated balance sheet as of September 30, 2023 and June 30, 2023, respectively. The Company combines both unrestricted and restricted cash along with the cash balance for presentation in the Condensed Consolidated Statementcondensed consolidated statements of Cash Flows.cash flows.
d)e) Accounts Receivable
The Company’s receivables are recorded whenAccounts receivable, which includes billed and representunbilled amounts, owed by third-party customers, as well as amounts owed by strategic operating partners. The carrying value of the Company’s receivables,are stated net of the allowance for doubtful accounts,credit losses and represents their estimatedthe net realizable value.amount expected to be collected. The Company evaluatesmeasures the collectabilityexpected credit losses on a collective (pool) basis based on the levels of delinquency (i.e., aging analysis) and applying an expected loss percentage rate to each pool when similar risk characteristics exist. The Company determines the allowance for credit losses by computing an expected loss percentage rate to each pool based upon its historical write-off experience, adjusted as appropriate to reflect current conditions and estimates of future economic conditions. When specific customers are identified as no longer sharing the same risk profile as their current pool, they are removed from the pool and evaluated separately. Amounts for shipments delivered but unbilled were $22,395 and $22,515 as of September 30, 2023 and June 30, 2023, respectively.
Through a contractual arrangement, the Company records trade accounts receivable on a customer-by-customer basis. The Company records an allowance for doubtful accounts to reduce the net recognized receivable to an amount the Company believes will be reasonably collected. The allowance for doubtful accounts is determined from the analysis of the aging of the accounts receivable, historical experience and knowledge of specific customers.
The Company derives a substantial portion of its revenue throughgenerated from independently owned strategic operating partner locationspartners operating under various Company brands. EachUnder these contracts, each strategic operating partner is responsible for some or all of the collection of theits customer accounts related to the underlying customers being serviced by such strategic operating partner.receivable. To facilitate this arrangement, based on contractual agreements, certain strategic operating partners are required to maintain a bad debt reserve in the form of a security deposit with the Company.Company for these receivables. The Company charges eachthe respective strategic operating partner’s bad debt reservedeposit account for any accounts receivable aged beyond 90 days along with any other amounts owed to the Company by strategic operating partners. However, the bad debt reserve account may carryIf a deficit balance whenoccurs in the strategic operating partners’ deposit account, these amounts charged to this reserve account exceed amounts otherwise available. In these circumstances, a deficit bad debt reserve account is recognizedare included as aaccounts receivable in the Company’s condensed consolidated financial statements. SomeFor those strategic operating partners are not required to establishmaintain a bad debt reserve; however, they are still responsible to make up for any deficits anddeposit, the Company may withhold all or a portion of future commissions payable to the strategic operating partner to satisfy any deficit balance. Currently, a number of the Company’s strategic operating partners have a deficit balance in their bad debt reserve accounts. The Company expects to replenish these funds through the future business operations of these strategic operating partners, or as their customers satisfy thethese amounts payable to the Company.are ultimately collected from these customers. However, to the extent any of these strategic operating partners were to cease operations or otherwise be unable to replenish these deficit accounts,amounts, the Company would be at risk of loss for any such amountsamounts. Due to the nature and generally would reservespecific risk characteristics of these accounts, the Company evaluates these accounts separately in determining an allowance for them.credit losses.
The activity in the allowance for credit losses is as follows:
(In thousands) |
|
| |
Balance as of June 30, 2023 | $ | 2,776 |
|
Write-offs |
| (190 | ) |
Recoveries |
| 197 |
|
Provision for credit losses |
| 25 |
|
Foreign currency translation |
| (24 | ) |
|
|
| |
Balance as of September 30, 2023 | $ | 2,784 |
|
e)f) Property, Technology, and Equipment
Property, technology, and equipment is stated at cost, less accumulated depreciation and amortization. Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the related assets. Upon retirement or other disposition of these assets, the cost and related accumulated depreciation orand amortization are removed from the accounts and the resulting gain or loss, if any, is reflected in other income or expense.(expense). Expenditures for maintenance, repairs and renewals of minor items are expensed as incurred. Major renewals and improvements are capitalized.
119
f)g) Goodwill
Goodwill represents the excess acquisition cost of an acquired entity over the estimated fair values assigned to the net tangible and identifiable intangible assets acquired. The Company performs its annual goodwillGoodwill is not amortized, but rather is reviewed for impairment test as of April 1 of each yearannually or more frequently if facts or circumstances indicate that theits carrying amount may not be recoverable. Based on the most recent annual impairment test and further review by management, the
The Company concludedhas determined that there wasare notwo impairment.
reporting units for the purpose of the goodwill impairment test. An entity has the option to perform a qualitative assessment to determine whether it is more-likely-than-not that the fair value of the reporting unit is less than its carrying amount prior to performing a quantitative impairment test. The qualitative assessment evaluates various factors, such as macro-economicmacroeconomic conditions, industry and market conditions, cost factors, relevantrecent events, and financial trends that may impact the fair value of the reporting unit. If it is determined that the estimated fair value of the reporting unit is more-likely-than-not less than its carrying amount, including goodwill, a quantitative assessment is required. Otherwise, no further analysis is required.
If a quantitative assessment is performed, a reporting unit’s fair value is compared to its carrying value.amount. A reporting unit’s fair value is determined based upon consideration of various valuation methodologies, including the income approach, which utilizes projected future cash flows discounted at rates commensurate with the risks involved, and multiples of current and future earnings, and market approach, which utilizes a selection of guideline public companies. If the fair value of a reporting unit is less than its carrying amount, an impairment charge is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value; however, the loss recognized cannot exceed the total amount of goodwill allocated to that reporting unit.
The Company performs its annual goodwill impairment test as of April 1 of each year or more frequently if facts or circumstances indicate that the carrying amount may not be recoverable. As of September 30, 2022,2023, management believes there are no indications of impairment.impairment exists.
g)h) Long-Lived Assets
Long-lived assets, such as property, technology, and equipment, and definite-lived intangible assets, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. If circumstances require a long-lived asset or asset group to be tested for possible impairment, the Company compares the undiscounted expected future cash flows to be generated by that asset or asset group to its carrying amount. If the carrying amount of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent the carrying amount of the asset or asset group exceeds the fair value. Fair values of long-lived assets are determined through various techniques, such as applying probability weighted, expected present value calculations to the estimated future cash flows using assumptions a market participant would utilize or through the use of a third-party independent appraiser or valuation specialist.No impairment losses of long-lived assets were recorded during the three months ended September 30, 2022 and 2021.
IntangibleDefinite-lived intangible assets consist of customer related intangible assets, trade names and trademarks, licenses, developed technology, and non-compete agreements arising from the Company’s acquisitions. Customer related intangible assets and trademarks and trade names are amortized using the straight-line method over periods of up to 15 years, licenses are amortized using the straight-line method over ten years, developed technology is amortized using the straight-line method over five years, and non-compete agreements are amortized using the straight-line method over periods of up to five years, and developed technology is amortized using the straight-line method over five years.
h)i) Business Combinations
The Company accounts for business acquisitions using the acquisition method as required by FASB ASC Topic 805, Business Combinations.. The assets acquired and liabilities assumed in business combinations, including identifiable intangible assets, are recorded based upon their estimated fair values as of the acquisition date. The excess of the purchase price over the estimated fair value of the net tangible and identifiable intangible assets acquired is recorded as goodwill. Acquisition expenses are expensed as incurred. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed as of the acquisition date, the estimates are inherently uncertain and subject to refinement.
The fair values of intangible assets are generally estimated using a discounted cash flow approach with Level 3 inputs. The estimate of fair value of an intangible asset is equal to the present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. To estimate fair value, the Company generally uses risk-adjusted cash flows discounted at rates considered appropriate given the inherent risks associated with each type of asset. The Company believes the level and timing of cash flows appropriately reflects market participant assumptions.
For acquisitions that involve contingent consideration, the Company records a liability equal to the fair value of the contingent consideration obligation as of the acquisition date. The Company determines the acquisition date fair value of the contingent consideration based on the likelihood of paying the additional consideration. The fair value is generally estimated using projected future operating results and the corresponding future earn-out payments that can be earned upon the achievement of specified operating objectivesresults and financial resultsobjectives by acquired companies using Level 3 inputs and the amounts are then discounted to present value. These liabilities are measured quarterly at fair value, and any change in the fair value of the contingent consideration liability is recognized in the condensed consolidated statements of comprehensive income. Amounts are generally due annually on November 1st and 90 days following the quarter of the final earn-out period of each respective acquisition.
1210
During the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding adjustment to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recognized in the condensed consolidated statements of comprehensive income.
i)j) Revenue Recognition
The Company recognizes revenue to depict the transfer of promised goods or services to its customers in an amount that reflects the consideration to which the Company expects to be entitled to in exchange for those goods and services. The Company’s revenues are primarily from transportation services, which include providing for the arrangement of freight, both domestically and internationally, through modes of transportations,transportation, such as air freight, ocean freight, truckload, less than truckload, and intermodal. The Company generates its transportation services revenue by purchasing transportation from direct carriers and reselling those services to its customers.
In general, each shipment transaction or service order constitutes a separate contract with the customer. A performance obligation is created once a customer agreement with an agreed upon transaction price exists. The transaction price is typically fixed and not contingent upon the occurrence or non-occurrence of any other event. The transaction price is generally due 30 to 45 days from the date of invoice. The Company’s transportation transactions provide for the arrangement of the movement of freight to a customer’s agreed upon destination. The transportation services, including certain ancillary services, such as loading/unloading, freight insurance and customs clearance, that are provided to the customer represent a single performance obligation as these promises aren’tthe ancillary services are not distinct in the context of the contract.contract and therefore combined with the performance obligation for transportation services. This performance obligation is satisfied over time and recognized in revenue upon the transfer of control of the services over the requisite transit period as the customer’s goods move from point of origin to point of destination. The Company determines the period to recognize revenue in transit based upon the actual departure date and the delivery date, if available, or estimated pick-up date based on the actual delivery date and estimatedif delivery has not occurred as of the reporting date. Certain shipments may require the Company to estimate revenue, in which case it uses the average transit period by mode.revenue per shipment, per mode of transportation. Determination of the estimated revenue, transit period and the percentage of completion of the shipment as of the reporting date requires management to make judgments that affect the timing and amount of revenue recognition. The Company has determined that revenue recognition over the transit period provides a reasonable estimate of the transfer of services to its customers as it depicts the pattern of the Company’s performance under the contracts with its customers. The timing of revenue recognition, billings, cash collections, and allowance for credit losses results in billed and unbilled receivables. The Company receives the unconditional right to bill when shipments are delivered to their destination. The Company has elected to not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied as of the end of the period as the Company’s contract with its transportation customers have an expected duration of one year or less. The corresponding direct costs of revenue, including primarily purchased transportation costs and commissions, have been expensed ratably as incurred.
The Company also provides MM&D services for its customers under contracts generally ranging from a few months to five years and include renewal provisions. These MM&D service contracts provide for inventory management, order fulfilmentfulfillment and warehousing of the Customer’scustomer’s product and arrangement of transportation of the customer’s product. The Company’s performance obligations are satisfied over time as the customers simultaneously receive and consume the services provided by the Company as they are performed.it performs. Revenue is recognized in the amount for which the Company has the right to invoice the customer, as this amount corresponds directly with the value provided to the customer for the Company’s performance completed to date. The transaction price is based on the consideration specified in the contract with the customer and contains fixed and variable consideration. In general, the fixed consideration component of a contract represents reimbursement for facility and equipment costs incurred to satisfy the performance obligation and is recognized on a straight-line basis over the term of the contract. The variable consideration component is comprised of cost reimbursement per unit pricing for time and pricing for materials used and is determined based on cost plus a mark-up for hours of services provided and materials used and is recognized over time based on the level of activity volume.
Other services include primarily CHB services sold on a standalone basisseparately as a single performance obligation. The Company recognizes revenue from this performance obligation at a point in time, which is the completion of the services. Duties and taxes collected from the customer and paid to the customs agent on behalf of the customers are excluded from revenue. The Company also captures revenue through fees related to the use of its technology platform. The technology-related revenue includes platform fees, operational fees, and purchase order management fees.
The Company uses independent contractors and third-party carriers in the performance of its transportation services. The Company evaluates who controls the transportation services to determine whether its performance obligation is to transfer services to the customer or to arrange for services to be provided by another party. The Company determined it acts as the principal for its transportation services performance obligation since it is in control of establishing the prices for the specified services, managing all aspects of the shipments process and assuming the risk of loss for delivery and collection. Such transportation services revenue is presented on a gross basis in the condensed consolidated statements of comprehensive income.
1311
A summary of the Company’s gross revenues disaggregated by major service lines and geographic markets (reportable segments), and timing of revenue recognition for the three months ended September 30, 2022 and 2021 are as follows:
| Three Months Ended September 30, 2022 |
| |||||||||||||
(In thousands) | United States |
|
| Canada |
|
| Corporate/ Eliminations |
|
| Total |
| ||||
Major service lines: |
|
|
|
|
|
|
|
|
|
|
| ||||
Transportation services | $ | 284,482 |
|
| $ | 31,852 |
|
| $ | (197 | ) |
| $ | 316,137 |
|
Value-added services (1) |
| 5,536 |
|
|
| 9,298 |
|
|
| — |
|
|
| 14,834 |
|
Total | $ | 290,018 |
|
| $ | 41,150 |
|
| $ | (197 | ) |
| $ | 330,971 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Timing of revenue recognition: |
|
|
|
|
|
|
|
|
|
|
| ||||
Services transferred over time | $ | 286,332 |
|
| $ | 41,150 |
|
| $ | (197 | ) |
| $ | 327,285 |
|
Services transferred at a point in time |
| 3,686 |
|
|
| — |
|
|
| — |
|
|
| 3,686 |
|
Total | $ | 290,018 |
|
| $ | 41,150 |
|
| $ | (197 | ) |
| $ | 330,971 |
|
| Three Months Ended September 30, 2021 |
| |||||||||||||
(In thousands) | United States |
|
| Canada |
|
| Corporate/ Eliminations |
|
| Total |
| ||||
| (as restated) |
|
|
|
|
|
|
|
| (as restated) |
| ||||
Major service lines: |
|
|
|
|
|
|
|
|
|
|
| ||||
Transportation services | $ | 260,924 |
|
| $ | 29,333 |
|
| $ | (18 | ) |
| $ | 290,239 |
|
Value-added services (1) |
| 2,713 |
|
|
| 6,446 |
|
|
| — |
|
|
| 9,159 |
|
Total | $ | 263,637 |
|
| $ | 35,779 |
|
| $ | (18 | ) |
| $ | 299,398 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Timing of revenue recognition: |
|
|
|
|
|
|
|
|
|
|
| ||||
Services transferred over time | $ | 262,762 |
|
| $ | 35,779 |
|
| $ | (18 | ) |
| $ | 298,523 |
|
Services transferred at a point in time |
| 875 |
|
|
| — |
|
|
| — |
|
|
| 875 |
|
Total | $ | 263,637 |
|
| $ | 35,779 |
|
| $ | (18 | ) |
| $ | 299,398 |
|
(1)Value-added services include MM&D, CHB, technology platform fees, and other services.
Practical Expedients
The Company has elected to not disclose the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied as of the end of the period as the Company’s contracts with its transportation customers have an expected duration of one year or less.
For the performance obligation to transfer MM&D services in contracts with customers, revenue is recognized in the amount for which the Company has the right to invoice the customer, as this amount corresponds directly with the value provided to the customer for the Company’s performance completed to date.
The Company also applies the practical expedient that permits the recognition of employee sales commissions related to transportation services as an expense when incurred since the amortization period of such costs is less than one year. These costs are included in the condensed consolidated statements of comprehensive income.
Contract Assets
Contract assets represent estimated amounts for which the Company has the right to consideration for transportation services related to the services provided while a shipment is stillcompleted portion of in-transit shipments at period end, but for which it has not yet completed the performance obligation, where the customer has not yet been invoiced and unbilled amounts for which the Company has the right to consideration for services on completed shipments.obligations. Upon completion of the performance obligations, which can vary in duration based upon the methodmode of transport and billingtransportation, the customer, these amounts become classified withinbalance is included in accounts receivable.
Operating Partner and Other Commissions
The Company enters into contractual arrangements with strategic operating partners that operate, on behalf of the Company, an office in a specific location that engages primarily in arranging, domestic and international, transportation services. In return, the strategic operating partner is compensated through the payment of sales commissions, which are based on individual shipments. The Company estimates and accrues the strategic operating partner’spartners’ commission obligation ratably as the goods are transferred to the customer.
14The Company records employee sales commissions related to transportation services as an expense when incurred since the amortization period of such costs is less than one year.
j)k) Defined Contribution Savings PlansPlan
The Company has an employee savings plan under which the Company provides safe harbor matching contributions. The Company’s contributions under the plan were $465 and $463 for the three months ended September 30, 2023 and 2022, and $356 for the three months ended September 30, 2021.respectively.
k)l) Income Taxes
Income taxes are accounted for using the asset and liability method. Deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
The Company records a liability for unrecognized tax benefits resulting from uncertain income tax positions taken or expected to be taken in an income tax return. Interest and penalties, if any, are recorded as a component of interest expense or other expense, respectively. Currently, the Company does not have any accruals for uncertain tax positions.
l)m) Share-Based Compensation
The Company grants restricted stock awards, restricted stock units, performance unit awards, and stock options to certain directors, officers, and employees. The share-based compensation cost is measured at the grant date based on the fair value of the award and is expensed ratably over the vesting period. The fair value of each restricted stock and performance unit awards is the market price of the Company’s common stock as of the grant date, and the fair value of each stock option grant is estimated as of the grant date using the Black-Scholes option pricing model. Determining the fair value of share-basedstock option awards at the grant date requires judgment about, among other things, stock volatility, the expected life of the award, and other inputs.
Share-based compensation is recorded over the requisite service period, generally defined as the vesting period. The Company records share-based compensation for service-based restricted stock awards and stock options on a straight-line basis over the requisite service period of the entire award. Certain restricted stock units also have performance-based conditions and will vest upon achievement of pre-established individual and Company performance goals as measured after a three-year period. The Company accounts for forfeitures as they occur. The Company issues new shares of common stock to satisfy option exercises and vesting of awards granted under its stock plans. Share-based compensation expense is reflected in personnel costs in the condensed consolidated statements of comprehensive income as part of personnel costs.income.
m)n) Basic and Diluted Income per Share Allocable to Common Stockholders
Basic income per common share is computed by dividing net income allocable to common stockholders by the weighted average number of common shares outstanding. Diluted income per common share is computed by dividing net income allocable to common stockholders by the weighted average number of common shares outstanding, plus the number of additional common shares that would have been outstanding if theafter giving effect to all potential common shares,dilutive securities, such as restricted stock awardsunits and stock options, had been issued and were considered dilutive.options.
12
n)o) Foreign Currency Translation
For the Company’s foreign subsidiaries that prepare financial statements in currencies other than U.S. dollars, the local currency is the functional currency. All assets and liabilities are translated at period end exchange rates and all income statement amountsrevenue and expenses are translated at the weighted average rates for the period. Translation adjustments are recorded in accumulatedforeign currency translation in other comprehensive income (loss).income. Gains and losses on transactions of monetary items denominated in a foreign currency are recognized inwithin other income (expense) inexpense on the condensed consolidated statements of comprehensive income.
o)p) Leases
The Company determines if an arrangement is a lease at inception. Assets and obligations related to operating leases are included in operating lease right-of-use (“ROU”) assets; current portion of operating lease liability;liabilities; and operating lease liability,liabilities, net of current portion in ourthe condensed consolidated balance sheets. Assets and obligations related to finance leases are included in property, technology, and equipment, net; current portion of finance lease liability;liabilities; and finance lease liability,liabilities, net of current portion in ourthe condensed consolidated balance sheets.
ROU assets represent ourthe right to use an underlying asset for the lease term and lease liabilities represent ourthe obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company’s leases do not provide an implicit rate, the incremental borrowing rate based on the information available at commencement date is used in determining the present value of lease payments. We useThe Company uses the implicit rate when readily determinable. Our leaseLease terms may include options to extend or terminate the lease, whenwhich the Company has generally not included in its calculation of ROU assets or lease liabilities as it is not reasonably certain that wethe option will exercise that option. We perform an impairment analysis on ROU assets asbe exercised in the normal course of April 1 of each year or more frequently if facts or circumstances indicate, and as of September 30, 2022, there was business.no impairment to ROU assets.
15
TheFor the Company’s lease agreements withcontaining fixed payments for both lease and non-lease components, are all each accountedthe Company accounts for the components as a single lease component.component, as permitted. For leases with an initial term of twelve months or less, the Company elected the exemption from recording ROU assets and lease liabilities for all leases that qualify, and records rent expense on a straight-line basis over the lease term. Expenses for these short-term leases for the three months ended September 30, 20222023 and 20212022 are immaterial.
Certain leases include variable payments, which may vary based upon changes in facts or circumstances after the start of the lease. We exclude variableVariable payments, from lease ROU assets and lease liabilities, to the extent they are not considered fixed, and instead expenseare expensed as incurred. Variable lease costs for the three months ended September 30, 20222023 and 20212022 are immaterial.
For finance leases, interest expense on the lease liability is recognized using the effective interest method and amortization of the ROU asset is recognized on a straight-line basis over the shorter of the estimated useful life of the asset or the lease term.
p)q) Derivatives
Derivative instruments are recognized as either assets or liabilities and measured at fair value. The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation.
For derivative instruments designated as cash flow hedges, gains and losses are initially reported as a component of other comprehensive income and subsequently recognized in earnings with the corresponding hedged item. Gains and losses representing hedge components excluded from the assessment of effectiveness are recognized in earnings. As of September 30, 2022,2023, the Company does not have any derivatives designated as hedges.
For derivative instruments that are not designated as hedges, gains and losses from changes in fair valuesvalue of interest rate swap contracts are recognized in other income (expense) in the condensed consolidated statements of comprehensive income.
q)r) Treasury Stock
TreasuryThe Company accounts for treasury stock isunder the cost method, and repurchases are reflected as a reductionreductions of stockholders’ equity at cost. As of September 30, 2022,2023, there have been no reissuances of treasury stock.
r) Reclassificationss) Reclassification of Previously Issued Financial Statements
Certain amounts forin the prior periodsperiod have been reclassified in the condensed consolidated financial statements to conform to the current year presentation. There has been no impact on previously reported net income or shareholders’stockholders’ equity from such reclassifications.reclassification.
13
t) Recently Adopted Accounting Guidance
In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (and issued subsequent ASUs on ASC 326), which changes estimates for credit losses related to financial assets measured at amortized cost, including loan receivables, trade receivables and other contracts, such as off-balance sheet credit exposure, specifically, loan commitments and standby letters of credit, financial guarantees, and other similar instruments. The guidance replaced the current incurred loss accounting model with an expected loss model, which is referred to as the current expected credit loss (“CECL”) model. The CECL model requires the measurement of the lifetime expected credit losses on financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The standard requires a cumulative effect adjustment to retained earnings to the first reporting period in which the guidance is effective. The Company, as a smaller reporting company as of the relevant measuring period, qualified for an extension of the adoption of ASU 2016-13 to July 1, 2023.
The Company adopted ASU 2016-13 on July 1, 2023 for all financial assets measured at amortized cost, consisting primarily of trade accounts receivable, which are short-term and for which the Company has not historically experienced significant credit losses. Based on the immaterial effect of ASU 2016-13 on the financial statements, a cumulative effect adjustment was not considered necessary.
NOTE 3 – REVENUE
A summary of the Company’s gross revenues disaggregated by major service lines and geographic markets (reportable segments), and timing of revenue recognition for the three months ended September 30, 2023 and 2022 are as follows:
| Three Months Ended September 30, 2023 |
| |||||||||||||
(In thousands) | United States |
|
| Canada |
|
| Corporate/ Eliminations |
|
| Total |
| ||||
Major service lines: |
|
|
|
|
|
|
|
|
|
|
| ||||
Transportation services | $ | 176,823 |
|
| $ | 21,183 |
|
| $ | (37 | ) |
| $ | 197,969 |
|
Value-added services (1) |
| 3,454 |
|
|
| 9,374 |
|
|
| — |
|
|
| 12,828 |
|
Total | $ | 180,277 |
|
| $ | 30,557 |
|
| $ | (37 | ) |
| $ | 210,797 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Timing of revenue recognition: |
|
|
|
|
|
|
|
|
|
|
| ||||
Services transferred over time | $ | 178,641 |
|
| $ | 30,533 |
|
| $ | (37 | ) |
| $ | 209,137 |
|
Services transferred at a point in time |
| 1,636 |
|
|
| 24 |
|
|
| — |
|
|
| 1,660 |
|
Total | $ | 180,277 |
|
| $ | 30,557 |
|
| $ | (37 | ) |
| $ | 210,797 |
|
| Three Months Ended September 30, 2022 |
| |||||||||||||
(In thousands) | United States |
|
| Canada |
|
| Corporate/ Eliminations |
|
| Total |
| ||||
Major service lines: |
|
|
|
|
|
|
|
|
|
|
| ||||
Transportation services | $ | 286,474 |
|
| $ | 31,852 |
|
| $ | (197 | ) |
| $ | 318,129 |
|
Value-added services (1) |
| 3,544 |
|
|
| 9,298 |
|
|
| — |
|
|
| 12,842 |
|
Total | $ | 290,018 |
|
| $ | 41,150 |
|
| $ | (197 | ) |
| $ | 330,971 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Timing of revenue recognition: |
|
|
|
|
|
|
|
|
|
|
| ||||
Services transferred over time | $ | 287,846 |
|
| $ | 41,129 |
|
| $ | (197 | ) |
| $ | 328,778 |
|
Services transferred at a point in time |
| 2,172 |
|
|
| 21 |
|
|
| — |
|
|
| 2,193 |
|
Total | $ | 290,018 |
|
| $ | 41,150 |
|
| $ | (197 | ) |
| $ | 330,971 |
|
14
NOTE 4 – EARNINGS PER SHARE
The computations of the numerator and denominator of basic and diluted income per share are as follows:
| Three Months Ended September 30, |
| Three Months Ended September 30, |
| ||||||||||
(In thousands, except share data) | 2022 |
|
| 2021 |
| 2023 |
|
| 2022 |
| ||||
|
|
|
| (as restated) |
| |||||||||
Numerator: |
|
|
|
|
|
|
|
|
|
| ||||
Net income attributable to Radiant Logistics, Inc. | $ | 8,433 |
|
| $ | 7,609 |
| $ | 2,622 |
|
| $ | 8,433 |
|
|
|
|
|
|
|
|
|
| ||||||
Denominator: |
|
|
|
|
|
|
|
| ||||||
Weighted average common shares outstanding, basic |
| 48,745,317 |
|
|
| 49,921,061 |
|
| 47,297,957 |
|
|
| 48,745,317 |
|
Dilutive effect of share-based awards |
| 1,557,695 |
|
|
| 1,195,417 |
|
| 1,778,228 |
|
|
| 1,557,695 |
|
|
|
|
|
|
|
|
|
| ||||||
Weighted average common shares outstanding, diluted |
| 50,303,012 |
|
|
| 51,116,478 |
|
| 49,076,185 |
|
|
| 50,303,012 |
|
|
|
|
|
|
|
|
|
| ||||||
Potentially dilutive common shares excluded |
| 100,000 |
|
|
| 134,783 |
|
| 100,000 |
|
|
| 100,000 |
|
NOTE 5 – LEASES
The Company has operatingfinance leases for equipment, and financeoperating leases for office space, warehouse space, trailers, and other equipment. Leaseequipment with lease terms expireexpiring at various dates through May 2032 with options to renew for varying terms at the Company’s sole discretion. The Company has not included these options to extend or terminate in its calculation of right-of-use assets or lease liabilities as it is not reasonably certain to exercise these options.
In July 2022, the Company commenced a new lease for warehouse space in Calgary, Alberta with a 17-month lease term ending November 30, 2023. The Company also extended the lease for the warehouse space in Delta, British Columbia and the lease for warehouse space in Brampton, Ontario for an additional 3 years ending October 31, 20252033.
16
In August 2022, the Company commenced a new lease for warehouse space in Toronto, Ontario with an these commitments total $18-month26,355 lease term ending January 31, 2024.and are excluded from the tables below.
The components of lease expense wereare as follows:
| Three Months Ended September 30, |
| Three Months Ended September 30, |
| ||||||||||
(In thousands) | 2022 |
|
| 2021 |
| 2023 |
|
| 2022 |
| ||||
Operating: |
|
|
|
| ||||||||||
Operating lease cost | $ | 3,014 |
|
| $ | 2,324 |
| $ | 3,719 |
|
| $ | 3,014 |
|
|
|
|
|
|
|
|
|
| ||||||
Financing: |
|
|
|
| ||||||||||
Finance leases: |
|
|
|
| ||||||||||
Amortization of leased assets |
| 153 |
|
|
| 154 |
|
| 208 |
|
|
| 153 |
|
Interest on lease liabilities |
| 19 |
|
|
| 28 |
|
| 20 |
|
|
| 19 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total finance lease cost | $ | 172 |
|
| $ | 182 |
| $ | 228 |
|
| $ | 172 |
|
Supplemental cash flow information related to leases wasare as follows:
| Three Months Ended September 30, |
| |||||
(In thousands) | 2022 |
|
| 2021 |
| ||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
| ||
Operating cash flows arising from operating leases | $ | 2,327 |
|
| $ | 1,802 |
|
Operating cash flows arising from finance leases |
| 19 |
|
|
| 29 |
|
Financing cash flows arising from finance leases |
| 156 |
|
|
| 183 |
|
|
|
|
|
|
| ||
Right-of-use assets obtained in exchange for new lease liabilities: |
|
|
|
|
| ||
Operating leases | $ | 5,868 |
|
| $ | 65 |
|
| Three Months Ended September 30, |
| |||||
(In thousands) | 2023 |
|
| 2022 |
| ||
Cash paid for amounts included in the measurement of lease liabilities: |
|
|
|
|
| ||
Operating cash flows paid for operating leases | $ | 3,683 |
|
| $ | 2,429 |
|
Operating cash flows paid for interest portion of finance leases |
| 20 |
|
|
| 19 |
|
Financing cash flows paid for principal portion of finance leases |
| 151 |
|
|
| 159 |
|
|
|
|
|
|
| ||
Right-of-use assets obtained in exchange for lease liabilities: |
|
|
|
|
| ||
Operating leases | $ | 9 |
|
| $ | 7,568 |
|
1715
Supplemental balance sheet information related to leases wasare as follows:
| September 30, |
|
| June 30, |
| September 30, |
|
| June 30, |
| ||||
(In thousands) | 2022 |
|
| 2022 |
| 2023 |
|
| 2023 |
| ||||
Operating lease: |
|
|
|
| ||||||||||
Operating leases: |
|
|
|
| ||||||||||
Operating lease right-of-use assets | $ | 44,143 |
|
| $ | 41,111 |
| $ | 52,874 |
|
| $ | 56,773 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Current portion of operating lease liability |
| 10,027 |
|
|
| 7,641 |
| |||||||
Operating lease liability, net of current portion |
| 38,712 |
|
|
| 37,776 |
| |||||||
Current portion of operating lease liabilities |
| 10,927 |
|
|
| 11,273 |
| |||||||
Operating lease liabilities, net of current portion |
| 48,544 |
|
|
| 52,120 |
| |||||||
|
|
|
|
|
|
|
|
|
|
| ||||
Total operating lease liabilities | $ | 48,739 |
|
| $ | 45,417 |
| $ | 59,471 |
|
| $ | 63,393 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Finance lease: |
|
|
|
|
| |||||||||
Finance leases: |
|
|
|
|
| |||||||||
Property, technology, and equipment, net | $ | 1,878 |
|
| $ | 2,039 |
| $ | 1,663 |
|
| $ | 1,878 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Current portion of finance lease liability |
| 538 |
|
|
| 577 |
| |||||||
Finance lease liability, net of current portion |
| 1,084 |
|
|
| 1,223 |
| |||||||
Current portion of finance lease liabilities |
| 626 |
|
|
| 620 |
| |||||||
Finance lease liabilities, net of current portion |
| 963 |
|
|
| 1,121 |
| |||||||
|
|
|
|
|
|
|
|
|
|
| ||||
Total finance lease liabilities | $ | 1,622 |
|
| $ | 1,800 |
| $ | 1,589 |
|
| $ | 1,741 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average remaining lease term: |
|
|
|
|
|
|
|
|
|
| ||||
Operating leases | 5.0 years |
|
| 5.5 years |
| 6.1 years |
|
| 6.2 years |
| ||||
Finance leases | 3.1 years |
|
| 3.4 years |
| 3.0 years |
|
| 3.2 years |
| ||||
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average discount rate: |
|
|
|
|
|
|
|
|
|
| ||||
Operating leases |
| 4.50 | % |
|
| 4.33 | % |
| 5.30 | % |
|
| 5.29 | % |
Finance leases |
| 4.48 | % |
|
| 4.54 | % |
| 4.94 | % |
|
| 4.93 | % |
As of September 30, 2022,2023, maturities of lease liabilities for each of the next five fiscal years ending June 30 and thereafter are as follows:
(In thousands) | Operating |
|
| Finance |
| Operating |
|
| Finance |
| ||||
2023 (remaining) |
| 8,941 |
|
|
| 453 |
| |||||||
2024 |
| 11,474 |
|
|
| 568 |
| |||||||
2024 (remaining) | $ | 10,317 |
|
| $ | 519 |
| |||||||
2025 |
| 10,939 |
|
|
| 538 |
|
| 13,430 |
|
|
| 668 |
|
2026 |
| 9,211 |
|
|
| 175 |
|
| 12,014 |
|
|
| 297 |
|
2027 |
| 7,679 |
|
|
| — |
|
| 10,532 |
|
|
| 73 |
|
2028 |
| 6,570 |
|
|
| 73 |
| |||||||
Thereafter |
| 6,268 |
|
|
| — |
|
| 17,564 |
|
|
| 87 |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total lease payments |
| 54,512 |
|
|
| 1,734 |
|
| 70,427 |
|
|
| 1,717 |
|
|
|
|
|
|
|
|
|
| ||||||
Less imputed interest |
| (5,773 | ) |
|
| (112 | ) |
| (10,956 | ) |
|
| (128 | ) |
|
|
|
|
|
|
|
|
| ||||||
Total lease liability | $ | 48,739 |
|
| $ | 1,622 |
| |||||||
Total lease liabilities | $ | 59,471 |
|
| $ | 1,589 |
|
18
16
NOTE 6 – PROPERTY, TECHNOLOGY, AND EQUIPMENT
|
|
| September 30, |
|
| June 30, |
|
|
| September 30, |
|
| June 30, |
| ||||
(In thousands) | Useful Life |
| 2022 |
|
| 2022 |
| Useful Life |
| 2023 |
|
| 2023 |
| ||||
Computer software | 3 - 5 years |
| $ | 26,375 |
|
| $ | 26,324 |
| 3 − 5 years |
| $ | 27,325 |
|
| $ | 26,964 |
|
Trailers and related equipment | 3 - 15 years |
|
| 6,620 |
|
|
| 6,639 |
| |||||||||
Office and warehouse equipment | 3 - 15 years |
|
| 9,826 |
|
|
| 10,307 |
| 3 − 15 years |
|
| 14,571 |
|
|
| 14,179 |
|
Leasehold improvements | (1) |
|
| 7,260 |
|
|
| 7,588 |
| (1) |
|
| 9,576 |
|
|
| 9,083 |
|
Trailers and related equipment | 3 − 15 years |
|
| 6,997 |
|
|
| 7,015 |
| |||||||||
Computer equipment | 3 - 5 years |
|
| 4,259 |
|
|
| 4,272 |
| 3 − 5 years |
|
| 4,925 |
|
|
| 4,529 |
|
Furniture and fixtures | 3 - 15 years |
|
| 1,514 |
|
|
| 1,514 |
| 3 − 15 years |
|
| 1,848 |
|
|
| 1,743 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Property, technology, and equipment |
|
|
| 55,854 |
|
|
| 56,644 |
|
|
| 65,242 |
|
|
| 63,513 |
| |
Less: accumulated depreciation and amortization |
|
|
| (32,964 | ) |
|
| (31,821 | ) |
|
|
| (39,766 | ) |
|
| (38,124 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
Property, technology, and equipment, net |
|
| $ | 22,890 |
|
| $ | 24,823 |
|
|
| $ | 25,476 |
|
| $ | 25,389 |
|
Depreciation and amortization expenses related to property, technology, and equipment were $1,8151,882 and $1,7311,815 for the three months ended September 30, 20222023 and 2021,2022, respectively. Computer software includes approximately $1,252883 and $1,032548 of software in development as of September 30, 20222023 and June 30, 2022,2023, respectively.
NOTE 7 – GOODWILL AND INTANGIBLE ASSETS
Goodwill
The table below reflects the changesChanges in the carrying amount of goodwill for the three months ended September 30, 2022:are as follows:
(In thousands) | Total |
|
|
| ||
Balance as of June 30, 2022 | $ | 88,199 |
| |||
Balance as of June 30, 2023 | $ | 89,203 |
| |||
Foreign currency translation loss |
| (1,448 | ) |
| (494 | ) |
|
|
|
|
| ||
Balance as of September 30, 2022 | $ | 86,751 |
| |||
Balance as of September 30, 2023 | $ | 88,709 |
|
We considered uncertainties as partIntangible Assets
Intangible assets consist of our determination as to whether any triggering events occurred during the three months ended September 30, 2022, which would indicate an impairment of goodwill is more-likely-than-not. Based on our assessment, there were no triggering events identified that would have an adverse impact on our business; and therefore, following:no
| September 30, 2023 |
| |||||||||||
(In thousands) | Weighted |
| Gross |
|
| Accumulated |
|
| Net |
| |||
Customer related | 7.6 years |
| $ | 117,107 |
|
| $ | (88,913 | ) |
| $ | 28,194 |
|
Trade names and trademarks | 7.4 years |
|
| 15,420 |
|
|
| (12,605 | ) |
|
| 2,815 |
|
Developed technology | 3.2 years |
|
| 4,091 |
|
|
| (1,500 | ) |
|
| 2,591 |
|
Licenses | 3.5 years |
|
| 766 |
|
|
| (498 | ) |
|
| 268 |
|
Covenants not to compete | 1.3 years |
|
| 1,433 |
|
|
| (1,290 | ) |
|
| 143 |
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
| $ | 138,817 |
|
| $ | (104,806 | ) |
| $ | 34,011 |
|
impairment was identified for our goodwill as of September 30, 2022.
The evaluation of impairment of goodwill requires the use of estimates about future operating results. Changes in forecasted operations can materially affect these estimates, which could materially affect our results of operations and financial condition. The estimates of expected future cash flows require significant judgment and are based on assumptions we determined to be reasonable; however, they are unpredictable and inherently uncertain, including, estimates of future growth rates, operating margins and assumptions about the overall economic climate as well as the competitive environment within which we operate. There can be no assurance that our estimates and assumptions made for purposes of our impairment assessments as of the time of evaluation will prove to be accurate predictions of the future. If our assumptions regarding business plans, competitive environments, or anticipated growth rates are not correct, we may be required to record non-cash impairment charges in future periods, whether in connection with our normal review procedures periodically, or earlier, if an indicator of an impairment is present prior to such evaluation.
1917
Intangible Assets
| June 30, 2023 |
| |||||||||||
(In thousands) | Weighted |
| Gross |
|
| Accumulated |
|
| Net |
| |||
Customer related | 7.5 years |
| $ | 117,645 |
|
| $ | (87,175 | ) |
| $ | 30,470 |
|
Trade names and trademarks | 7.6 years |
|
| 15,547 |
|
|
| (12,637 | ) |
|
| 2,910 |
|
Developed technology | 3.4 years |
|
| 4,091 |
|
|
| (1,295 | ) |
|
| 2,796 |
|
Licenses | 3.7 years |
|
| 785 |
|
|
| (490 | ) |
|
| 295 |
|
Covenants not to compete | 1.6 years |
|
| 1,433 |
|
|
| (1,263 | ) |
|
| 170 |
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
| $ | 139,501 |
|
| $ | (102,860 | ) |
| $ | 36,641 |
|
The Company is in
Amortization expense amounted to $2,643 and $4,963 for the process of rebranding certain trade names. We will rebrand certainthree months ended September 30, 2023 and 2022, respectively. Certain acquired trade names have been rebranded in connection with the Company’s long-term growth strategy and make it more consistentfor consistency across ourthe business and to better serve ourits customers. WeThe Company will gradually phase out certain trade names and will predominantly use Radiant to refer to the Company. The rebranding has resulted in the reduction of the related useful lives of certain trade names and accelerated amortization expenses startingexpense from June 2022 to December 2022.
Intangible assets consisted of the following as of September 30, 2022 and June 30, 2022, respectively:
| September 30, 2022 |
| |||||||||||
(In thousands) | Weighted |
| Gross |
|
| Accumulated |
|
| Net |
| |||
Customer related | 7.2 years |
| $ | 113,104 |
|
| $ | (79,591 | ) |
| $ | 33,513 |
|
Trade names and trademarks | 4.9 years |
|
| 15,327 |
|
|
| (9,838 | ) |
|
| 5,489 |
|
Licenses | 4.5 years |
|
| 752 |
|
|
| (414 | ) |
|
| 338 |
|
Developed technology (1) | 4.2 years |
|
| 4,091 |
|
|
| (682 | ) |
|
| 3,409 |
|
Covenants not to compete | 2.3 years |
|
| 1,433 |
|
|
| (1,182 | ) |
|
| 251 |
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
| $ | 134,707 |
|
| $ | (91,707 | ) |
| $ | 43,000 |
|
| June 30, 2022 |
| |||||||||||
(In thousands) | Weighted |
| Gross |
|
| Accumulated |
|
| Net |
| |||
Customer related | 7.2 years |
| $ | 114,974 |
|
| $ | (78,736 | ) |
| $ | 36,238 |
|
Trade names and trademarks | 3.8 years |
|
| 15,700 |
|
|
| (7,670 | ) |
|
| 8,030 |
|
Licenses | 4.8 years |
|
| 808 |
|
|
| (424 | ) |
|
| 384 |
|
Developed technology (1) | 4.4 years |
|
| 4,091 |
|
|
| (477 | ) |
|
| 3,614 |
|
Covenants not to compete | 2.6 years |
|
| 1,433 |
|
|
| (1,154 | ) |
|
| 279 |
|
|
|
|
|
|
|
|
|
|
|
| |||
|
|
| $ | 137,006 |
|
| $ | (88,461 | ) |
| $ | 48,545 |
|
(1)Developed technology was acquired as one of the assets obtained in the acquisition of Navegate, Inc., which is described in Note 17.
Total amortization expense amounted to $4,963 and $2,521 for the three months ended September 30, 2022 and 2021, respectively. Future amortization expense for each of the next five fiscal years ending June 30 are as follows:
(In thousands) |
|
|
|
|
|
|
|
| ||
2023 (remaining) |
| $ | 10,069 |
| ||||||
2024 |
|
| 9,854 |
| ||||||
2024 (remaining) |
| $ | 7,455 |
| ||||||
2025 |
|
| 7,863 |
|
|
| 8,112 |
| ||
2026 |
|
| 3,078 |
|
|
| 3,419 |
| ||
2027 |
|
| 2,506 |
|
|
| 2,844 |
| ||
2028 |
|
| 2,222 |
|
NOTE 8 – NOTES PAYABLE
Notes payable consist of the following:
| September 30, |
|
| June 30, |
| September 30, |
|
| June 30, |
| ||||
(In thousands) | 2022 |
|
| 2022 |
| 2023 |
|
| 2023 |
| ||||
Revolving Credit Facility | $ | 37,525 |
|
| $ | 62,525 |
| |||||||
Senior Secured Loans |
| 7,248 |
|
|
| 8,902 |
| |||||||
Senior secured loans | $ | 2,972 |
|
| $ | 4,204 |
| |||||||
Unamortized debt issuance costs |
| (142 | ) |
|
| (133 | ) |
| (69 | ) |
|
| (97 | ) |
|
|
|
|
|
|
|
|
| ||||||
Total notes payable |
| 44,631 |
|
|
| 71,294 |
|
| 2,903 |
|
|
| 4,107 |
|
Less: current portion |
| (4,331 | ) |
|
| (4,575 | ) |
| (2,903 | ) |
|
| (4,107 | ) |
|
|
|
|
|
|
|
|
| ||||||
Total notes payable, net of current portion | $ | 40,300 |
|
| $ | 66,719 |
| $ | — |
|
| $ | — |
|
20
Future maturities of notes payable for each of the next five fiscal years ending June 30 and thereafter are as follows:
(In thousands) |
|
| |
2023 (remaining) | $ | 3,221 |
|
2024 |
| 4,027 |
|
2025 |
| — |
|
2026 |
| — |
|
2027 |
| — |
|
Thereafter |
| 37,525 |
|
|
|
| |
Total | $ | 44,773 |
|
(In thousands) |
|
| |
2024 (remaining) | $ | 2,972 |
|
|
|
| |
Total | $ | 2,972 |
|
Revolving Credit Facility
The Company entered into a $200,000 syndicated, revolving credit facility (the “Revolving Credit Facility”) pursuant to a Credit Agreement dated as of August 5, 2022.2022, and amended as of September 27, 2023. The Revolving Credit Facility is segregated into two tranches, a $150,000 tranche that may be loaned in U.S. Dollars and a $50,000 tranche that may be loaned in either U.S. Dollars or Canadian Dollars. The Revolving Credit Facility includes a $75,000 accordion feature to support future acquisition opportunities. The Revolving Credit Facility was entered into with Bank of America, N.A. and BMO Capital Markets Corp. as joint book runners and joint lead arrangers, Bank of America, N.A. as Administrative Agent, Swingline Lender and Letter of Credit Issuer, Bank of Montreal as syndication agent, KeyBank National Association and MUFG Union Bank, N.A. as co-documentation agents and Bank of America, N. A., Bank of Montreal, KeyBank National Association, MFUGMUFG Union Bank, N.A. and Washington Federal Bank, National Association as lenders (such named lenders are collectively referred to herein as “Lenders”). This replaces the $
150,00018
The Revolving Credit Facility has a term of five years and is collateralized by a first-priority security interest in the accounts receivable and other assets of the Company and theits guarantors named below on a parity basis with the security interest held by Fiera Private Debt Fund IV LP and Fiera Private Debt Fund V LP described below. Borrowings under the Credit Facilityin U.S. Dollars accrue interest (at the Company’s option), at a) the Lenders’ base rate plus 0.75% and can be subsequently adjusted based on the Company’s consolidated net leverage ratio under the facility at the Lenders’ base rate plus 0.50% to 1.50%; b) Term SOFR plus 1.65% and can be subsequently adjusted based on the Company’s consolidated net leverage ratio under the facility at Term SOFRSecured Overnight Financing Rate (“SOFR”) plus 1.40% to 2.40%; andor c) Term SOFR Daily Floating Rate plus 1.65% and can be subsequently adjusted based on the Company’s consolidated net leverage ratio under the facility at Term SOFR Daily Floating Rate plus 1.40% to 2.40%. Borrowings in Canadian Dollars accrue interest (at the Company’s option) at a) Term Canadian Overnight Repo Rate Average (“CORRA”) plus 0.29547% to 0.32138% depending on the term, plus 1.40% to 2.40%; or b) Daily Simple CORRA plus 0.29547% plus 1.40% to 2.40%. Rates are adjusted based on the Company’s consolidated net leverage ratio. The Company’s U.S. and Canadian subsidiaries are guarantors of the Revolving Credit Facility. As of September 30, 2022,2023, the interest rateone-month SOFR was 4.345.32%.
For general borrowings under the Revolving Credit Facility, the Company is subject to the maximum consolidated net leverage ratio of 3.00 and minimum consolidated interest coverage ratio of 3.00. Additional minimum availability requirements and financial covenants apply in the event the Company seeks to use advances under the Revolving Credit Facility to pursue acquisitions or repurchase its common stock.
Senior Secured Loans
In connection with the Company’s acquisition of Radiant Canada, (formerly, Wheels International Inc.), Radiant Canada obtained a CAD$29,000 senior secured Canadian term loan from Fiera Private Debt Fund IV LP (“FPD IV” formerly, Integrated Private Debt Fund IV LP) pursuant to a CAD$29,000 Credit Facilities Loan Agreement. The Company and itsCompany’s U.S. and Canadian subsidiaries are guarantors of the Radiant Canada obligations thereunder. The loan matures on April 1, 2024 and accrues interest at a rate of 6.65% per annum. The Company is required to maintain five months interest in a debt service reserve account to be controlled by FPD IV. As of September 30, 2022,2023, the amount of $581592 is recorded as long-term restricted cash presented within prepaid expenses and other current assets in the accompanying condensed consolidated financial statements. The Company made interest-only payments for the first twelve months followed by monthly principal and interest payments of CAD$390 that will be paid through maturity. As of September 30, 2022,2023, $5,0771,969 was outstanding under this term loan.
In connection with the Company’s acquisition of Lomas, Radiant Canada obtained a CAD$10,000 senior secured Canadian term loan from Fiera Private Debt Fund V LP (formerly, Integrated Private Debt Fund V LP) pursuant to a CAD$10,000 Credit Facilities Loan Agreement. The Company and itsCompany’s U.S. and Canadian subsidiaries are guarantors of the Radiant Canada obligations thereunder. The loan matures on June 1, 2024 and accrues interest at a fixed rate of 6.65% per annum. The loan repayment consists of monthly principal and interest payments of CAD$149. As of September 30, 2022,2023, $2,1711,003 was outstanding under this term loan.
The loans may be prepaid in whole at any time providing the Company gives at least 30 days prior written notice and pays the difference between (i) the present value of the loan interest and the principal payments foregone discounted at the Government of Canada Bond Yield for the term from the date of prepayment to the maturity date, and (ii) the face value of the principal amount being prepaid.
21
The covenants of the Revolving Credit Facility, described above, also apply to the FPD IV and FPD V term loans. As of September 30, 2022,2023, the Company was in compliance with all of its covenants. The restatement described in Explanatory Note has no impact on the Company’s compliance with debt covenant ratios. Although the restatement delayed the process of providing audited financial statements for the fiscal year ended June 30, 2022 and unaudited financial statements for the three months ended September 30, 2022 to the lender, a waiver was received to extend the period within which financial statements may be submitted to the lender.
NOTE 9 – DERIVATIVES
All derivatives are recognized on the Company’s condensed consolidated balance sheets at their fair values and consist of interest rate swap contracts. On March 20, 2020, and effective April 17, 2020, Radiantthe Company entered into an interest rate swap contract with Bank of America to trade variable interest cash inflows at one-month LIBOR for a $20,000 notional amount, for fixed interest cash outflows at 0.635%. On April 1, 2020, and effective April 2, 2020, Radiantthe Company entered into an interest rate swap contract with Bank of America to trade the variable interest cash inflows at one-month LIBOR for a $10,000 notional amount, for fixed interest cash outflows at 0.5865%. Both interest rate swap contracts mature and terminate on March 13, 2025.
The Company uses an interest rate swapswaps for the management of interest rate risk exposure, as the interest rate swapswaps effectively convertsconvert a portion of the Company’s Revolving Credit Facility from a floating to a fixed rate. The interest rate swap is an agreementswaps are agreements between the Company and Bank of America to pay, in the future, a fixed-ratefixed rate payment in exchange for Bank of America paying the Company a variable payment. The net payment obligation is based on the notional amount of the swap contractcontracts and the prevailing market interest rates. The Company may terminate the swap contractcontracts prior to itstheir expiration, date, at which point a realized gain or loss would be recognized. The value of the Company’s commitment would increase or decrease based primarily on the extent to which interest rates move against the rate fixed for each swap. As of September 30, 2022, theThe derivative instruments had a total notional amount of $30,000 and a fair value of $2,5362,027 and $2,229 recorded in deposits and other assets in the condensed consolidated balance sheets. Assheets as of September 30, 2023 and June 30, 2022, the derivative instruments had a total notional amount of $2023, respectively.30,000
and a fair value of $1,846 recognized in deposits and other assets on the condensed consolidated balance sheets. BothNeither interest rate swap contracts are notcontract is designated as hedges;a hedge, and gains and losses from changes in fair value are recognized in other income (expense) in the condensed consolidated statements of comprehensive income. See Note 12 for discussion of fair value of the derivative instruments.
19
NOTE 10 – STOCKHOLDERS’ EQUITY
The Company is authorized to issue 5,000,000 shares of preferred stock, par value at $0.001 per share and 100,000,000 shares of common stock, $0.001 per share. No shares of preferred stock are issued or outstanding aton September 30, 20222023 or June 30, 2022.2023.
Common Stock
The Company’s board of directors authorized the repurchase of up to 5,000,000 shares of the Company’s common stock through December 31, 2023. Under the stock repurchase program, the Company is authorized to repurchase, from time to time, shares of its outstanding common stock in the open market at prevailing market prices or through privately negotiated transactions as permitted by securities laws and other legal requirements. The program does not obligate the Company to repurchase any specific number of shares and could be suspended or terminated at any time without prior notice. Under this repurchase program, the Company purchased 35,349 shares of its common stock at an average cost of $6.52 per share for an aggregate cost of $230, and 219,517 shares of its common stock at an average cost of $6.11 per share for an aggregate cost of $1,340 during the three months ended September 30, 2022. The Company purchased 254,894 shares of its common stock at an average cost of $6.57 per share for an aggregate cost of $1,675 during the three months ended September 30, 2021.2023 and 2022, respectively.
NOTE 11 – VARIABLE INTEREST ENTITY AND RELATED PARTY TRANSACTIONS
RLP is owned 40% by RGLa wholly-owned subsidiary of the Company and 60% by RCP, a company for which the Chief Executive Officer of the Company is the sole member. RLP is a certified minority business enterprise that was formed for the purpose of providing the Company with a national accounts strategy to pursue corporate and government accounts with diversity initiatives. RCP’s ownership interest entitles it to 60% of the profits and distributable cash, if any, generated by RLP. The operations of RLP are intended to provide certain benefits to the Company, including expanding the scope of services offered by the Company and participating in supplier diversity programs not otherwise available to the Company. In the course of evaluating and approving the ownership structure, operations and economics emanating from RLP, a committee consisting of the independent Board members of the Company, considered, among other factors, the significant benefits provided to the Company through association with a minority business enterprise, particularly as many of the Company’s largest current and potential customers have a need for diversity offerings. In addition, the committee concluded that the economic relationship with RLP was on terms no less favorable to the Company than terms generally available from unaffiliated third parties.
22
Certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties are considered variable interest entities. The Company has power over significant activities of RLP including the fulfillment of its contracts and financing its operations. Additionally, the Company also pays expenses and collects receivables on behalf of RLP. Thus, the Company is the primary beneficiary, RLP qualifies as a variable interest entity, and RLP is consolidated in these condensed consolidated financial statements.
RLP recorded $382 and $132 in net income of which RCP’s distributable share was $229 and $79 for the three months ended September 30, 2022. RLP recorded $144 in net income, of which RCP’s distributable share was $86 for the three months ended September 30, 2021.2023 and 2022, respectively. The non-controlling interest recorded as a reduction of net income available to common stockholders in the condensed consolidated statements of comprehensive income represents RCP’s distributive share.
NOTE 12 – FAIR VALUE MEASUREMENT
The accounting guidance for fair value, among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The framework for measuring fair value consists of a three-level valuation hierarchy that prioritizes the inputs to valuation techniques used to measure fair value based upon whether such inputs are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions made by the reporting entity. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability and include situations where there is little, if any, market activity for the asset or liability. The fair value measurement level within the hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
Assets and liabilities measured at fair value are based on one or more of the following three valuation techniques:
20
Items Measured at Fair Value on a Recurring Basis
The following table sets forth the Company’s financial assets (liabilities) measured at fair value on a recurring basis:
| Fair Value Measurements as of September 30, 2023 |
| ||||||||||||||
(In thousands) |
| Fair Value Measurements as of September 30, 2022 |
|
| Level 3 |
|
| Total |
| |||||||
|
| Level 3 |
|
| Total |
| ||||||||||
Contingent consideration |
| $ | (5,690 | ) |
| $ | (5,690 | ) |
| $ | (455 | ) |
| $ | (455 | ) |
Interest rate swap contracts (derivatives) |
|
| 2,536 |
|
|
| 2,536 |
|
|
| 2,027 |
|
|
| 2,027 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
| Fair Value Measurements as of June 30, 2022 |
|
| Fair Value Measurements as of June 30, 2023 |
| ||||||||||
|
| Level 3 |
|
| Total |
| ||||||||||
(In thousands) |
| Level 3 |
|
| Total |
| ||||||||||
Contingent consideration |
| $ | (5,530 | ) |
| $ | (5,530 | ) |
| $ | (4,173 | ) |
| $ | (4,173 | ) |
Interest rate swap contracts (derivatives) |
|
| 1,846 |
|
|
| 1,846 |
|
|
| 2,229 |
|
|
| 2,229 |
|
23
The following table provides a reconciliation of the financial assets (liabilities) measured at fair value using significant unobservable inputs (Level 3):
(In thousands) |
| Contingent |
|
| Interest Rate Swap Contracts |
|
| Contingent |
|
| Interest Rate Swap Contracts |
| ||||
Balance as of June 30, 2021 |
| $ | (7,263 | ) |
| $ | 6 |
| ||||||||
Balance as of June 30, 2023 |
| $ | (4,173 | ) |
| $ | 2,229 |
| ||||||||
Contingent consideration paid |
|
| 2,500 |
|
|
| — |
|
|
| 3,473 |
|
|
| — |
|
Change in fair value |
|
| (767 | ) |
|
| 1,840 |
|
|
| 246 |
|
|
| (202 | ) |
|
|
|
|
|
|
|
|
|
|
| ||||||
Balance as of June 30, 2022 |
| $ | (5,530 | ) |
| $ | 1,846 |
| ||||||||
Change in fair value |
|
| (160 | ) |
|
| 690 |
| ||||||||
|
|
|
|
|
| |||||||||||
Balance as of September 30, 2022 |
| $ | (5,690 | ) |
| $ | 2,536 |
| ||||||||
Balance as of September 30, 2023 |
| $ | (455 | ) |
| $ | 2,027 |
|
The Company has contingent obligations to transfer cash payments and equity shares to former shareholders of acquired operations in conjunction with certain acquisitions if specified operating results and financial objectives are met over their stated earn-out periods.period. Contingent consideration is measured quarterly at fair value, and any change in the fair value of the contingent liability is included in the condensed consolidated statements of comprehensive income. The change in fair value in each period is principally attributable to a net increasechange in management’s estimates of future earn-out payments through the remainder of the earn-out periods.
The Company uses projected future financial results based on recent and historical data to value the anticipated future earn-out payments. To calculate fair value, the future earn-out payments were then discounted using Level 3 inputs. The Company has classified the contingent consideration as Level 3 due to the lack of relevant observable market data over fair value inputs. The Company believes the discount rate used to discount the earn-out payments reflects market participant assumptions. Changes in assumptions and operating results could have a significant impact on the earn-out amount up to a maximum of $5,973through earn-out periods measured through January 2023,September 2024, although there are no maximums on certain earn-out payments.
For contingent consideration the following table provides quantitative information about the significant unobservable inputs used in fair value measurement:
(In thousands) |
| Fair Value |
|
| Valuation Methodology |
| Unobservable Inputs |
| ||||
Cascade |
| $ | ( | ) |
|
|
|
|
| >$ |
| |
|
|
|
|
|
|
|
|
|
|
| % |
As discussed in Note 9, derivative instruments are carried at fair value on the condensed consolidated balance sheets. InterestThe fair market value of interest rate swap contractsswaps are included in deposits and other assets on September 30, 2022 and on June 30, 2022.determined using Level 3 unobservable inputs, specifically a pricing service proprietary to Bank of America.
21
Fair Value of Financial Instruments
The carrying valuesamounts of the Company’s cash equivalents, receivables, contract assets, accounts payable, commissions payable, accrued expenses, and the income tax receivable and payable approximate the fair values due to the relatively short maturities of these instruments. The carrying valueamounts of the Company’s Revolving Credit Facility and notes payable would not differ significantly from fair value (based on Level 2 inputs) if recalculated based on current interest rates. During the three months ended September 30, 2023, there were no transfers of financial instruments between Levels 1, 2, and 3.
NOTE 13 – INCOME TAXES
For the three months ended September 30, 2023 and 2022, and 2021, respectively, the Company’scomponents of income tax expense is composed of the following:are as follows:
| Three Months Ended September 30, |
| |||||
(In thousands) | 2022 |
|
| 2021 |
| ||
|
|
|
| (as restated) |
| ||
Current income tax expense (benefit) | $ | 3,262 |
|
| $ | 2,609 |
|
Deferred income tax expense (benefit) |
| (498 | ) |
|
| (207 | ) |
|
|
|
|
|
| ||
Income tax expense | $ | 2,764 |
|
| $ | 2,402 |
|
| Three Months Ended September 30, |
| |||||
(In thousands) | 2023 |
|
| 2022 |
| ||
Current income tax expense | $ | 1,362 |
|
| $ | 3,262 |
|
Deferred income tax benefit |
| (348 | ) |
|
| (498 | ) |
|
|
|
|
|
| ||
Income tax expense | $ | 1,014 |
|
| $ | 2,764 |
|
24
The Company’s effective tax rates prior to discrete items for the three months ended September 30, 20222023 and 20212022 are higher than the U.S. federal statutory rates primarily due to the jurisdictional mix of income and state taxes. Income tax expense for the three months ended September 30, 20222023 results in an effective tax rate of 24.3827.68%, which is higher than the U.S. federal statutory rate due to jurisdictional mix of income and state taxes, and reduced by share-based compensation benefits, which is discretely recognized inthrough the quarterthree months ended September 30, 2023 and is not a component of the Company’s annualized forecasted effective tax rate for the fiscal year ending June 30, 2023.2024. The actual income tax through the three months ended September 30, 20212022 was 24.8724.38%, which was higher than the U.S. federal statutory rate due to earnings in foreign operationsjurisdictional mix of income and state taxes, and reduced by share-based compensation benefits.benefits, which was discretely recognized in the quarter and was not a component of the Company’s annualized forecasted effective tax rate. The Company does notnot have any uncertain tax positions.
NOTE 14 – SHARE-BASED COMPENSATION
On November 17, 2021, the Company’s stockholders, upon recommendation of the Board of the Company, approved theThe Radiant Logistics, Inc. 2021 Omnibus Incentive Plan (the “2021 plan”) at the 2021 annual meeting of stockholders. The Board previously approved the 2021 Plan, subject to approval bypermits the Company’s stockholders, on September 27, 2021.
Audit and Executive Committee to grant share-based awards to eligible employees, non-employee directors, and consultants of the Company. The 2021 Planplan became effective immediately upon approval by the Company’s stockholders and will expire on November 16, 2031, unless terminated earlier by the Board. The 2021 plan replaces the 2012 Radiant Logistics, Inc. Stock Option and Performance Award Plan (the “2012 plan”). The remaining shares available for grant under the 2012 plan will roll over into the 2021 plan, and no new awards will be granted under the 2012 plan. The terms of the 2012 plan, as applicable, will continue to govern awards outstanding under the 2012 plan, until exercised, expired, paid or otherwise terminated or canceled. Other than the 2021 plan, we havethere are no other equity compensation plans under which equity awards can be granted.
The 2021 Plan will permit the Company’s Audit and Executive Oversight Committee to grant to eligible employees, non-employee directors and consultants of the Company non-statutory and incentive stock options, stock appreciation rights (also known as SARs), restricted stock awards, restricted stock units (also known as RSUs), deferred stock units (also known as DSUs), performance awards, non-employee director awards, other cash-based awards and other share-based awards. Subject to adjustment, the maximum number of shares of our common stock to be authorized for issuance under the 2021 Plan is 3,250,000 shares, plus (i) shares of our common stock remaining available for issuance under the 2012 Plan as of the date of stockholder approval of the 2021 Plan, but not subject to outstanding awards as of such date, plus (ii) the number of additional shares of our common stock subject to awards outstanding under the 2012 Plan as of the date of stockholder approval of the 2021 Plan that are subsequently forfeited, cancelled, expire or otherwise terminate without the issuance of such shares of our common stock after such date (which may otherwise be returned and available for grant under the term of the 2012 Plan and 2021 Plan).
Restricted Stock AwardsUnits
The Company recognized share-based compensation expense related to restricted stock awardsunits of $863 and $591 for the three months ended September 30, 2023 and 2022, and $327 for the three months ended September 30, 2021.respectively. As of September 30, 2022,2023, the Company had approximately $4,9185,447 of total unrecognized share-based compensation cost for restricted stock awards. Such costs areunits expected to be recognized over a weighted average period of approximately 2.231.87 years.
The following table summarizes restricted stock awardunit activity under the plans:
| Number of |
|
| Weighted Average |
| Number of |
|
| Weighted Average |
| ||||
Unvested balance as of June 30, 2022 |
| 962,998 |
|
| $ | 6.17 |
| |||||||
Unvested balance as of June 30, 2023 |
| 1,360,796 |
|
| $ | 6.54 |
| |||||||
Vested |
| (218,693 | ) |
|
| 5.57 |
|
| (184,523 | ) |
|
| 4.99 |
|
Granted |
| 333,803 |
|
|
| 6.90 |
|
| 172,686 |
|
|
| 6.74 |
|
Forfeited |
| (5,678 | ) |
|
| 5.80 |
|
| (3,930 | ) |
|
| 6.71 |
|
|
|
|
|
|
|
|
|
|
| |||||
Unvested balance as of September 30, 2022 |
| 1,072,430 |
|
| $ | 6.52 |
| |||||||
Unvested balance as of September 30, 2023 |
| 1,345,029 |
|
| $ | 7.05 |
|
The table above includes a total of 607,068 restricted stock units with performance-based conditions as of September 30, 2023. These awards will vest upon achievement of pre-established individual and Company performance goals as measured after a three-year period.
22
Stock Options
Stock options are granted at exercise prices equal to the fair value of the common stock at the date of the grant and have a term of ten years. Generally, grants under each plan vest 20% annually over a five-year period from the date of grant. The Company recognized share-based compensation expense related to stock options of $18 for each of the three months ended September 30, 20222023 and $23 for the three months ended September 30, 2021.The aggregate intrinsic value of options exercised was $2 for the three months ended September 30, 2022 and $14 for the three months ended September 30, 2021.2022. As of September 30, 2022,2023, the Company had approximately $262190 of total unrecognized share-based compensation cost for stock options. Such costs areoptions expected to be recognized over a weighted average period of approximately 3.682.68 years.
25
The following table summarizes stock option activity under the plans:
| Number of |
|
| Weighted |
|
| Weighted |
|
| Aggregate |
| ||||
Outstanding as of June 30, 2022 |
| 1,105,084 |
|
| $ | 4.06 |
|
|
| 3.09 |
|
| $ | 3,719 |
|
Exercised |
| (411 | ) |
|
| 1.75 |
|
|
| — |
|
|
| 2 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Outstanding as of September 30, 2022 |
| 1,104,673 |
|
| $ | 4.06 |
|
|
| 2.84 |
|
| $ | 1,990 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Exercisable as of September 30, 2022 |
| 1,024,673 |
|
| $ | 3.79 |
|
|
| 2.38 |
|
| $ | 1,990 |
|
| Number of |
|
| Weighted |
|
| Weighted |
|
| Aggregate |
| ||||
Outstanding as of June 30, 2023 |
| 946,514 |
|
| $ | 4.37 |
|
|
| 2.40 |
|
| $ | 2,302 |
|
Exercised |
| (3,104 | ) |
|
| 2.21 |
|
|
| — |
|
|
| 12 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Outstanding as of September 30, 2023 |
| 943,410 |
|
| $ | 4.37 |
|
|
| 2.15 |
|
| $ | 1,396 |
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Exercisable as of September 30, 2023 |
| 883,410 |
|
| $ | 4.16 |
|
|
| 1.77 |
|
| $ | 1,396 |
|
NOTE 15 – COMMITMENTS AND CONTINGENCIES
Legal Proceedings
The Company is involved in various claims and its subsidiaries may be subject to legal actions and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened legal proceedings, except as described below, that are considered other than routine legal proceedings. The Company records accrualsbelieves that the ultimate disposition or resolution of its routine legal proceedings, in the aggregate, are not material to its financial position, results of operations and liquidity.
The Company initiated claims against a former customer for estimated losses relatingunpaid accounts receivable. In response, the former customer has claimed damages against the Company for alleged fines and penalties, detention and demurrage charges paid or due to claimscarriers, and lawsuits when available information indicates that a lossfor damaged or lost product. The matter is probablein its preliminary stage and the amount of theCompany is not yet able to reasonably estimate a possible loss or range of loss, can be reasonably estimated. Legal expenses are expensed as incurred. There were no potentiallyif any. The Company intends to defend against these claims. The outcome of litigation is inherently unpredictable and subject to significant uncertainties. An adverse outcome could have a material legal proceedings as of September 30, 2022.
On December 8, 2021, the Company detected a ransomware incident impacting certain ofimpact on the Company’s operationalresults of operations and information technology systems. While the Company’s systems recovery efforts are complete, and the Company’s operations are fully functional, the incident did result in a loss of revenue as well as certain incremental costs. In addition, following an extensive forensic investigation by a full team of cybersecurity experts, the Company confirmed that some data extraction related to the Company’s customers and employees occurred from the Company’s servers before the Company took its systems offline. We notified law enforcement, provided notice to customers apprising them of the situation and are providing any notices that may be required by applicable law related to potential Personal Identifiable Information (PII data) exposure. Although the Company acted promptly and as efficiently as possible any failure of the Company to comply with data privacy or other laws and regulations related to this event could result in claims, legal or regulatory proceedings, inquiries, or investigations. See Note 18 regarding the ransomware incident.cash flows.
Contingent Consideration and Earn-out Payments
The Company’s agreements with respect to previous acquisitions contain future consideration provisions, which provide for the selling equity owners to receive additional consideration if specified operating objectivesresults and financial resultsobjectives are achieved in future periods. Earn-out payments are generally due annually on November 1st,1st and 90 days following the quarter of the final earn-out period for each respective acquisition.
The following table represents the estimated discounted earn-out payments to be paid in each of the following fiscal years:
|
| 2023 |
|
| 2024 |
|
| Total |
| |||
Earn-out payments: |
|
|
|
|
|
|
|
|
| |||
Cash |
| $ | 2,551 |
|
| $ | 3,139 |
|
| $ | 5,690 |
|
|
|
|
|
|
|
|
|
|
| |||
Total estimated earn-out payments |
| $ | 2,551 |
|
| $ | 3,139 |
|
| $ | 5,690 |
|
|
| 2024 |
|
| 2025 |
|
| Total |
| |||
Earn-out payments: |
|
|
|
|
|
|
|
|
| |||
Cash |
| $ | 246 |
|
| $ | 209 |
|
| $ | 455 |
|
|
|
|
|
|
|
|
|
|
| |||
Total estimated earn-out payments |
| $ | 246 |
|
| $ | 209 |
|
| $ | 455 |
|
Other Contractual Commitments
26As of September 30, 2023, the Company has $2,292 of non-cancelable contractual commitments related to warehouse equipment and leasehold improvements associated with operating leases that have not yet commenced. The amounts are expected to be paid within one year.
23
NOTE 16 – OPERATING AND GEOGRAPHIC SEGMENT INFORMATION
Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker or decision-making group in making decisions regarding allocation of resources and assessing performance. The Company’s chief operating decision-maker is the Chief Executive Officer. The Company has two operating and reportable segments: United States and Canada.
The Company evaluates the performance of the segments primarily based on their respective revenues and income from operations. In addition, the Company includes the costs of the Company’s executives, board of directors, professional services, such as legal and consulting, amortization of intangible assets, and certain other corporate costs associated with operating as a public company as Corporate.
As of and for the Three Months Ended September 30, 2022 |
|
|
|
|
|
|
| Corporate/ |
|
|
|
| ||||||||||||||||||||
As of and for the Three Months Ended September 30, 2023 |
|
|
|
|
|
|
| Corporate/ |
|
|
|
| ||||||||||||||||||||
(In thousands) |
| United States |
|
| Canada |
|
| Eliminations |
|
| Total |
|
| United States |
|
| Canada |
|
| Eliminations |
|
| Total |
| ||||||||
Revenues |
| $ | 290,018 |
|
| $ | 41,150 |
|
| $ | (197 | ) |
| $ | 330,971 |
|
| $ | 180,277 |
|
| $ | 30,557 |
|
| $ | (37 | ) |
| $ | 210,797 |
|
Income from operations |
|
| 12,027 |
|
|
| 5,436 |
|
|
| (6,568 | ) |
|
| 10,895 |
| ||||||||||||||||
Other income (expense) |
|
| 311 |
|
|
| 161 |
|
|
| (91 | ) |
|
| 381 |
| ||||||||||||||||
Income before income taxes |
|
| 12,338 |
|
|
| 5,597 |
|
|
| (6,659 | ) |
|
| 11,276 |
| ||||||||||||||||
Income (loss) from operations |
|
| 7,722 |
|
|
| 1,932 |
|
|
| (5,993 | ) |
|
| 3,661 |
| ||||||||||||||||
Other income |
|
| 53 |
|
|
| 70 |
|
|
| 81 |
|
|
| 204 |
| ||||||||||||||||
Income (loss) before income taxes |
|
| 7,775 |
|
|
| 2,002 |
|
|
| (5,912 | ) |
|
| 3,865 |
| ||||||||||||||||
Depreciation and amortization |
|
| 1,525 |
|
|
| 758 |
|
|
| 4,495 |
|
|
| 6,778 |
|
|
| 925 |
|
|
| 956 |
|
|
| 2,644 |
|
|
| 4,525 |
|
Total assets |
|
| 368,204 |
|
|
| 88,310 |
|
|
| — |
|
|
| 456,514 |
|
|
| 273,368 |
|
|
| 104,458 |
|
|
| — |
|
|
| 377,826 |
|
Property, technology, and equipment, net |
|
| 10,812 |
|
|
| 12,078 |
|
|
| — |
|
|
| 22,890 |
|
|
| 10,160 |
|
|
| 15,316 |
|
|
| — |
|
|
| 25,476 |
|
Goodwill |
|
| 67,226 |
|
|
| 19,525 |
|
|
| — |
|
|
| 86,751 |
|
|
| 68,823 |
|
|
| 19,886 |
|
|
| — |
|
|
| 88,709 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||
As of and for the Three Months Ended September 30, 2021 |
| United States |
|
| Canada |
|
| Corporate/ |
|
| Total |
| ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
| |||||||||||||||||||||||
As of and for the Three Months Ended September 30, 2022 |
|
|
|
|
|
|
| Corporate/ |
|
|
|
| ||||||||||||||||||||
(In thousands) |
| (as restated) |
|
|
|
|
| (as restated) |
|
| United States |
|
| Canada |
|
| Eliminations |
|
| Total |
| |||||||||||
Revenues |
| $ | 263,637 |
|
| $ | 35,779 |
|
| $ | (18 | ) |
| $ | 299,398 |
|
| $ | 290,018 |
|
| $ | 41,150 |
|
| $ | (197 | ) |
| $ | 330,971 |
|
Income from operations |
|
| 11,719 |
|
|
| 3,410 |
|
|
| (4,667 | ) |
|
| 10,462 |
| ||||||||||||||||
Income (loss) from operations |
|
| 13,791 |
|
|
| 5,436 |
|
|
| (8,332 | ) |
|
| 10,895 |
| ||||||||||||||||
Other income (expense) |
|
| 198 |
|
|
| 89 |
|
|
| (652 | ) |
|
| (365 | ) |
|
| 311 |
|
|
| 161 |
|
|
| (91 | ) |
|
| 381 |
|
Income before income taxes |
|
| 11,917 |
|
|
| 3,499 |
|
|
| (5,319 | ) |
|
| 10,097 |
| ||||||||||||||||
Income (loss) before income taxes |
|
| 14,102 |
|
|
| 5,597 |
|
|
| (8,423 | ) |
|
| 11,276 |
| ||||||||||||||||
Depreciation and amortization |
|
| 932 |
|
|
| 798 |
|
|
| 2,522 |
|
|
| 4,252 |
|
|
| 1,056 |
|
|
| 758 |
|
|
| 4,964 |
|
|
| 6,778 |
|
Total assets |
|
| 328,877 |
|
|
| 84,764 |
|
|
| — |
|
|
| 413,641 |
|
|
| 360,706 |
|
|
| 95,808 |
|
|
| — |
|
|
| 456,514 |
|
Property, technology, and equipment, net |
|
| 12,089 |
|
|
| 11,511 |
|
|
| — |
|
|
| 23,600 |
|
|
| 10,812 |
|
|
| 12,078 |
|
|
| — |
|
|
| 22,890 |
|
Goodwill |
|
| 50,801 |
|
|
| 21,290 |
|
|
| — |
|
|
| 72,091 |
|
|
| 67,226 |
|
|
| 19,525 |
|
|
| — |
|
|
| 86,751 |
|
27
NOTE 17 – BUSINESS COMBINATION
Fiscal Year 2022 Acquisition
On December 3, 2021, and effective as of November 30, 2021, the Company entered into a Stock Purchase Agreement, pursuant to which it acquired all of the issued and outstanding common shares of Navegate, Inc. (“Navegate”), a Minnesota based, privately held company from Saltspring Capital, LLC. Navegate is a technology-enabled supply chain management and third-party logistics services company that combines a robust digital platform and decades of expertise to manage international, cross-border, and domestic freight from purchase order to final delivery. Navegate’s combination of technology-enabled services, customs brokerage expertise, and a full complement of international and domestic services significantly reduces costs and leads to better compliance and risk mitigation for its customers. Navegate will operate as a wholly-owned subsidiary of Radiant Logistics, Inc. The goodwill recognized is attributable to expanded service lines and geographic footprint. The acquisition of Navegate was accounted for as purchases of a business under ASC 805, Business Combinations.
As consideration for the acquisition, the Company paid $35,000 in cash upon closing. The transaction was financed through proceeds received from the Company's existing credit facility. A net working capital settlement of $3,852 was finalized in the third quarter of fiscal year 2022 and was paid to Saltspring Capital, LLC. The aggregate purchase price of $38,852 was allocated to the assets acquired and liabilities assumed based upon their estimated fair values at the date of the acquisition.
The following table summarizes the fair value of the consideration transferred for the acquisition and the allocation of the purchase price to the fair values of the assets acquired and liabilities assumed at the acquisition date:
(In thousands) | Purchase Price Allocation |
|
| Adjustments |
|
| Final Purchase Price Allocation |
| |||
Cash | $ | 35,000 |
|
| $ | — |
|
| $ | 35,000 |
|
Net working capital adjustment |
| — |
|
|
| 3,852 |
|
|
| 3,852 |
|
Current assets |
| 19,187 |
|
|
| — |
|
|
| 19,187 |
|
Technology and equipment |
| 1,434 |
|
|
| — |
|
|
| 1,434 |
|
Intangible assets |
| 17,834 |
|
|
| 1,188 |
|
|
| 19,022 |
|
Other long-term assets |
| 1,621 |
|
|
| — |
|
|
| 1,621 |
|
Liabilities assumed |
| (18,836 | ) |
|
| — |
|
|
| (18,836 | ) |
|
|
|
|
|
|
|
|
| |||
Total identifiable net assets |
| 21,240 |
|
|
| 1,188 |
|
|
| 22,428 |
|
Goodwill |
| 13,760 |
|
|
| 2,664 |
|
|
| 16,424 |
|
| $ | 35,000 |
|
| $ | 3,852 |
|
| $ | 38,852 |
|
The fair values of the intangible assets were estimated by the Company with the assistance of valuation specialists. The fair value was estimated using a discounted cash flow approach with Level 3 inputs. Under this method, an intangible asset’s fair value is equal to the present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. To calculate fair value, the Company used risk-adjusted cash flows discounted at rates considered appropriate given the inherent risks associated with each type of asset. The Company believes the level and timing of cash flows appropriately reflect market participant assumptions. The goodwill is recorded in the U.S. operating segment and is expected to be deductible for income tax purposes over a period of 15 years.
Intangible assets acquired and their respective useful lives are estimated as follows:
(In thousands) | Purchase Price Allocation |
|
| Adjustments |
|
| Final Purchase Price Allocation |
|
| Useful Life | |||
Customer related | $ | 12,392 |
|
| $ | 910 |
|
| $ | 13,302 |
|
| 14.9 years |
Developed technology |
| 3,942 |
|
|
| 149 |
|
|
| 4,091 |
|
| 4.9 years |
Trade name |
| 1,500 |
|
|
| 129 |
|
|
| 1,629 |
|
| 9.9 years |
| $ | 17,834 |
|
| $ | 1,188 |
|
| $ | 19,022 |
|
|
|
Navegate results were immaterial to the condensed consolidated financial statements and thus no proforma presentation was necessary.
NOTE 18 – RANSOMWARE INCIDENT
The Company filed an 8-K on December 13, 2021, disclosing some of the Company’s systems were affected by a ransomware incident that encrypted information on its systems and disrupted customer and employee access to its applications and services. The Company immediately took steps to isolate the impact and prevent additional systems from being affected, including taking its network offline as a precaution. Promptly upon our detection of this incident, we initiated response and containment protocols and our security teams, supplemented by leading cyber defense firms, worked to remediate this incident. We notified law enforcement, contacted our customers to apprise them of the situation and will provide any notices that may be required by applicable law.
28
We undertook extensive efforts to identify, contain and recover from this incident quickly and securely. We systematically brought our information systems back online in a controlled, phased approach. Our teams worked to maintain our business operations and minimize the impact on our customers, operating partners, and employees.
NOTE 1917 – SUBSEQUENT EVENTS
Fiscal Year 2024 Acquisition of Cascade Enterprises of Minnesota, Inc.
On October 1, 2022,2, 2023, the Company through its wholly-owned subsidiary, acquired the assets and operations of its of Cascade Enterprises of Minnesota, Inc.Daleray Corporation (“Cascade”Daleray”), a Minneapolis, MinnesotaFort Lauderdale, Florida based, privately held company that has operated as a strategic operating partner under the Company’s AirgroupDistribution By Air brand since 2007. Cascade will continue2014. The Company structured the transaction similar to operate underits previous transactions, with a portion of 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 Minneapolis and will be able to leverage the Company’s GTM platform to strengthen our purchase order and vendor management service offering. As consideration for the acquisition, the Company paid $3,250 in cash upon closing, and the seller is entitled to additional contingent considerationprice payable in subsequent periods based on the future performance of the acquired operation.
The following table summarizes the fair value of the consideration transferred for the acquisition and the preliminary allocation of the purchase price to the fair values of the assets acquired and liabilities assumed at the acquisition date:
(In thousands) | Preliminary Purchase Price Allocation |
| |
Cash | $ | 3,250 |
|
Contingent consideration |
| 1,987 |
|
Deposits and other assets |
| 3 |
|
Operating lease right-of-use asset |
| 34 |
|
Intangible assets |
| 3,468 |
|
Operating lease liability |
| (34 | ) |
|
|
| |
Total identifiable net assets |
| 3,471 |
|
Goodwill |
| 1,766 |
|
| $ | 5,237 |
|
The fair values of the intangible assets were estimated by the Company with the assistance of valuation specialists. The fair value was estimated using a discounted cash flow approach with Level 3 inputs. Under this method, an intangible asset’s fair value is equal to the present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. To calculate fair value, the Company used risk-adjusted cash flows discounted at rates considered appropriate given the inherent risks associated with each type of asset. The Company believes the level and timing of cash flows appropriately reflect market participant assumptions. The goodwill is recorded in the U.S. operating segment and is expected to be deductible for income tax purposes over a period of ten years.
Intangible assets acquired and their respective useful lives are estimated as follows:
(In thousands) | Preliminary Purchase Price Allocation |
|
| Useful Life | |
Customer related | $ | 3,468 |
|
| 10 years |
|
| 3,468 |
|
|
|
The preliminary fair value estimates for the assets acquired and liabilities assumed are based upon preliminary calculations and valuations. The estimates and assumptions are subject to change as additional information is obtained for the estimates during the respective measurement periods (up to one year from the acquisition date). The primary areas of the preliminary estimates not yet finalized relate to identifiable intangible assets.
Leases
In September 2022, the Company entered into a new lease for warehouse space in Brampton, Ontario commencing in November 2022. The lease term expires in January 2033.
In October 2022, the Company entered into a new lease for warehouse space in Calgary, Alberta commencing in January 2024. The lease term expires in December 2030.
In November 2022, the Company entered into a new lease for warehouse space in Surrey, British Columbia commencing in May 2024. The lease term expires in April 2033.
In January 2023, the Company entered into an agreement to lease an additional floor at its office in Renton, Washington. The lease term expires in November 2033.
Total undiscounted future lease payments for the above-mentioned leases are approximately $54,032.
29
Repurchase of Common Stock
Pursuant to the stock repurchase program described in Note 10, we havethe Company purchased 620,347446,652 shares of Common Stock subsequent to September 30, 20222023 and through the date of this reportNovember 3, 2023 for a totalan aggregate cost of $3,6602,561,957 inclusive of transaction costs, bringing the total Common Stock repurchased under the plan to .3,364,472 shares.
3024
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This report 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 report. 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 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 or any other health pandemic or environment event on our operations and financial results; continued disruptions in the global supply chain; higher inflationary pressures particularly surrounding the costs of fuel; labor and other components of our operations; potential adverse legal, reputational and financial effects on the Company resulting from the ransomware incident that we reported in December of 2021 or future cyber incidents and the effectiveness of the Company’s business continuity plans in response to cyber incidents, like the ransomware incident; the commercial, reputational and regulatory risks to our business that may arise as a consequence of our need to restate our financial statements; our longer-term relationship with our senior lenders as a consequence of our need to restate our financial statements; our temporary loss of the use of a Registration Statement on Form S-3 to register securities in the future; any disruption to our business that may occur on a longer-term basis should we be unable to remediate during fiscal year 20232024 certain material weaknesses in our internal controls over financial reporting, 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 Part 1 Item 1A of this report. In addition, the global economic climate and additional or unforeseen effects from the COVID-19 pandemic or other unexpected health pandemics, may amplify many of these risks. 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.
25
The following discussion and analysis of our financial condition and result of operations should be read in conjunction with the condensed consolidated financial statements and the related notes and other information included elsewhere in this report.
Overview
We operateRadiant Logistics, Inc., and its consolidated subsidiaries (the “Company,” “we” or “us”), operates as a third-party logistics company, providing multi-modaltechnology-enabled global transportation and value-added logistics servicessolutions primarily in the United States and Canada. We service a large and diversified account base consistingacross a range of consumer goods, foodindustries and beverage, manufacturing and retail customers,geographies, which we supportis supported from an extensive network of operating locations across North America as well as an integrated international service partner network located in other key markets around the globe. We provideThe Company provides these services through a multi-brand network, which includes over 100 operating locations. Included in these operating locations are a number of independent agents, who weare also referreferred to as our “strategic operating partners”,partners,” that operate exclusively on ourthe Company's behalf, and approximately 25 Company-owned offices. As a third-party logistics company, we havethe Company has a vast carrier network of asset-based transportation companies, including motor carriers, railroads, airlines and ocean lines in ourits carrier network. We believe shippers value our services because we are able to objectively arrange the most efficient and cost-effective means, type and provider of transportation service without undue influence caused by the ownership of transportation assets. In addition, our minimal investment in physical assets affords us the opportunity for a higher return on invested capital and net cash flows than our asset-based competitors.
31
Through our operating locations across North America, we offer domestic, international air and ocean freight forwarding services and freight brokerage services, including truckload services, LTLless than truckload (“LTL”) services, and intermodal services, which is the movement of freight in trailers or containers by combination of truck and rail. Our primary business operations involve arranging the shipment, on behalf of our customers, of materials, products, equipment, and other goods that are generally larger than shipments handled by integrated carriers of primarily small parcels, such as FedEx, DHL, and UPS. Our services includeUPS, including arranging and monitoring all aspects of material flow activity utilizing advanced information technology systems. We also provide other value-added logistics services including materials management and distribution (“MMservices (collectively, “materials management and distribution” or “MM&D”) services, services), customs house brokerage (“CHB”) services and technology platformsglobal trade management (“GTM”) services to complement our core transportation service offering.
The Company expects to grow its business organically and by completing acquisitions of other companies with complementary geographical and logistics service offerings. The Company’s organic growth strategy will continue to focus on strengthening existing and expanding new customer relationships leveraging the benefit of the Company’s truck brokerage and intermodal service offerings,technology platform, while continuing its efforts on the organic build-out of the Company’s network of strategic operating partner locations. In addition, as the Company continues to grow and scale its business, the Company believes that it is creating density in its trade lanes, which creates opportunities for the Company to more efficiently source and manage its transportation capacity.
In addition to its focus on organic growth, the Company will continue to search for acquisition candidates that bring critical mass from a geographic and purchasing power standpoint, along with providing complementary service offerings to the current platform. As the Company continues to grow and scale its business, it also remains focused on leveraging its back-office infrastructure and technology systems to drive productivity improvement across the organization.
Impact of Notable External Conditions
The COVID-19 pandemic continues to impact our business operationsglobal economic and financial results. Although the effects have lessened over time, there is uncertaintytrade environments remain uncertain, including continued inflation, geopolitical tensions and changes in the nature and degree of its continued effects over time with new strains frequently being discovered and additional booster shots being recommended. As the world continues to respond to COVID-19, we continue to follow guidelines ensuring the safety of our employees, while striving to protect the health and well-being of the communities in which we operate.
Additionally, the transportation industry is faced with economic inflation and possible recession. A prolonged period of inflation could result in increased interest rates, higher fuel prices, and decreased consumer spending, whichbehavior could have a negative impact on our business and financial results. The results of these impacts could include supply chain instability, longer lead times, delayed orders, and continued issues with capacity constraints in driver, truck, and shipping container availability.
Lastly, since Russia’s invasion of Ukraine, global supply chains have experienced increased fuel prices. While the Company does not have direct exposure to these geographies, we cannot predict how global supply chain activities, or the economy at large may be impacted by a prolonged war in Ukraine or sanctions imposed in response to the war.
Performance Metrics
Our principal source of income is derived from freight forwarding and freight brokerage services we provide to our customers. As a third-party logistics provider, we arrange for the shipment of our customers’ freight from point of origin to point of destination. Generally, we quote our customers a turnkey cost for the movement of their freight. Our price quote will often depend upon the customer’s time-definite needs (first day through fifth day delivery), special handling needs (heavy equipment, delicate items, environmentally sensitive goods, electronic components, etc.), and the means of transport (motor carrier, air, ocean or rail). In turn, we assume the responsibility for arranging and paying for the underlying means of transportation.
Our transportation revenue represents the total dollar value of services we sell to our customers. Our cost of transportation includes direct costs of transportation, including motor carrier, air, ocean, and rail services. Our adjusted transportation gross profit (gross transportation revenue less the direct cost of transportation), a non-GAAP financial measure, is the primary indicator of our ability to source, add value and resell services provided by third parties,third-parties, and is considered by management to be a key performance measure. In addition, management believes measuring its operating costs as a function of adjusted transportation gross profit provides a useful metric, as our ability to control costs as a function of adjusted transportation gross profit directly impacts operating earnings.results.
26
Our operating results will be affected as acquisitions occur. Since all acquisitions are maderecorded using the acquisition method of accounting for business combinations, our financial statements will only include the results of operations and cash flows of acquired companies for periods subsequent to the date of acquisition.
Adjusted gross profit, a non-GAAP financial measure, is our total revenue minus our total cost of transportation and other services (excluding depreciation and amortization, which are reported separately), and adjusted gross profit percentage is adjusted gross profit as a percentage of our total revenue. We believe that these provide investors with meaningful information to understand our results of operations and the ability to analyze financial and business trends on a period-to-period basis.
32
Our GAAP-based net income will be affected by non-cash charges relating to the amortization of customer related intangible assets and other intangible assets attributable to completed acquisitions. Under applicable accounting standards, purchasers are required to allocate the total consideration in a business combination to the identified assets acquired and liabilities assumed based on their fair values at the time of acquisition. The excess of the consideration paid over the fair value of the identifiable net assets acquired is to be allocated to goodwill, which is tested at least annually for impairment. Applicable accounting standards require that we separately account for and value certain identifiable intangible assets based on the unique facts and circumstances of each acquisition. As a result of our acquisition strategy, our net income will include material non-cash charges relating to the amortization of customer related intangible assets and other intangible assets acquired in our acquisitions. Although these charges may increase as we complete more acquisitions, we believe we will be growing the value of our intangible assets (e.g., customer relationships). Thus, we believe that earnings before interest, taxes, depreciation and amortization, or EBITDA, is a useful financial measure for investors because it eliminates the effect of these non-cash costs and provides an important metric for our business.
EBITDA is a non-GAAP measure of income and does not include the effects of interest, taxes, and excludes the non-cash“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 share-based compensation expense, changes in fair value of contingent consideration, expenses specifically attributable to acquisitions, ransomware incident related costs, changes in fair value of interest rate swap contracts, restatement costs, transition and lease termination costs, foreign currency transaction gains and losses, share-based compensation expense,extraordinary items, litigation expenses unrelated to our core operations, 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 condensed consolidated financial statements. The Company’s financial covenants with its lenders define an adjusted EBITDA as a key component of its covenant calculations. The Company’s ability to grow adjusted EBITDA is closely monitored by management as it’s directly tied to financial borrowing capacity and also is a frequent point of discussion with its investors as well as the Company’s earnings calls.
Our operating results are also subject to seasonal trends when measured on a quarterly basis. The impact of seasonality on our business will depend on numerous factors, including the markets in which we operate, holiday seasons, consumer demand, and economic conditions. Since our revenue is largely derived from customers whose shipments are dependent upon consumer demand and just-in-time production schedules, the timing of our revenue is often beyond our control. Factors such as shifting demand for retail goods and/or manufacturing production delays could unexpectedly affect the timing of our revenue. As we increase the scale of our operations, seasonal trends in one area of our business may be offset to an extent by opposite trends in another area. We cannot accurately predict the timing of these factors, nor can we accurately estimate the impact of any particular factor, and thus we can give no assurance any historical seasonal patterns will continue in future periods.
27
Results of Operations
Three months ended September 30, 20222023 and 20212022 (unaudited)
The following table summarizes revenues, cost of transportation and other services, and adjusted gross profit by reportable operating segments for the three months ended September 30, 20222023 and 2021:2022:
| Three Months Ended September 30, 2022 |
|
| Three Months Ended September 30, 2021 |
| Three Months Ended September 30, 2023 |
|
| Three Months Ended September 30, 2022 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | United |
|
| Canada |
|
| Corporate/ |
|
| Total |
|
| United |
|
| Canada |
|
| Corporate/ |
|
| Total |
| United |
|
| Canada |
|
| Corporate/ |
|
| Total |
|
| United |
|
| Canada |
|
| Corporate/ |
|
| Total |
| ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| (as restated) |
|
|
|
|
|
|
|
| (as restated) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||
Transportation | $ | 284,482 |
|
| $ | 31,852 |
|
| $ | (197 | ) |
| $ | 316,137 |
|
| $ | 260,924 |
|
| $ | 29,333 |
|
| $ | (18 | ) |
| $ | 290,239 |
| $ | 176,823 |
|
| $ | 21,183 |
|
| $ | (37 | ) |
| $ | 197,969 |
|
| $ | 286,474 |
|
| $ | 31,852 |
|
| $ | (197 | ) |
| $ | 318,129 |
|
Value-added services |
| 5,536 |
|
|
| 9,298 |
|
|
| — |
|
|
| 14,834 |
|
|
| 2,713 |
|
|
| 6,446 |
|
|
| — |
|
|
| 9,159 |
|
| 3,454 |
|
|
| 9,374 |
|
|
| — |
|
|
| 12,828 |
|
|
| 3,544 |
|
|
| 9,298 |
|
|
| — |
|
|
| 12,842 |
|
|
| 290,018 |
|
|
| 41,150 |
|
|
| (197 | ) |
|
| 330,971 |
|
|
| 263,637 |
|
|
| 35,779 |
|
|
| (18 | ) |
|
| 299,398 |
|
| 180,277 |
|
|
| 30,557 |
|
|
| (37 | ) |
|
| 210,797 |
|
|
| 290,018 |
|
|
| 41,150 |
|
|
| (197 | ) |
|
| 330,971 |
|
Cost of transportation and other services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Transportation |
| 222,684 |
|
|
| 24,920 |
|
|
| (197 | ) |
|
| 247,407 |
|
|
| 206,612 |
|
|
| 24,889 |
|
|
| (18 | ) |
|
| 231,483 |
|
| 127,950 |
|
|
| 16,249 |
|
|
| (37 | ) |
|
| 144,162 |
|
|
| 224,310 |
|
|
| 24,920 |
|
|
| (197 | ) |
|
| 249,033 |
|
Value-added services |
| 3,169 |
|
|
| 3,915 |
|
|
| — |
|
|
| 7,084 |
|
|
| 1,746 |
|
|
| 1,451 |
|
|
| — |
|
|
| 3,197 |
|
| 1,532 |
|
|
| 4,279 |
|
|
| — |
|
|
| 5,811 |
|
|
| 1,543 |
|
|
| 3,915 |
|
|
| — |
|
|
| 5,458 |
|
|
| 225,853 |
|
|
| 28,835 |
|
|
| (197 | ) |
|
| 254,491 |
|
|
| 208,358 |
|
|
| 26,340 |
|
|
| (18 | ) |
|
| 234,680 |
|
| 129,482 |
|
|
| 20,528 |
|
|
| (37 | ) |
|
| 149,973 |
|
|
| 225,853 |
|
|
| 28,835 |
|
|
| (197 | ) |
|
| 254,491 |
|
Adjusted gross profit (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Transportation |
| 61,798 |
|
|
| 6,932 |
|
|
| — |
|
|
| 68,730 |
|
|
| 54,312 |
|
|
| 4,444 |
|
|
| — |
|
|
| 58,756 |
|
| 48,873 |
|
|
| 4,934 |
|
|
| — |
|
|
| 53,807 |
|
|
| 62,164 |
|
|
| 6,932 |
|
|
| — |
|
|
| 69,096 |
|
Value-added services |
| 2,367 |
|
|
| 5,383 |
|
|
| — |
|
|
| 7,750 |
|
|
| 967 |
|
|
| 4,995 |
|
|
| — |
|
|
| 5,962 |
|
| 1,922 |
|
|
| 5,095 |
|
|
| — |
|
|
| 7,017 |
|
|
| 2,001 |
|
|
| 5,383 |
|
|
| — |
|
|
| 7,384 |
|
| $ | 64,165 |
|
| $ | 12,315 |
|
| $ | — |
|
| $ | 76,480 |
|
| $ | 55,279 |
|
| $ | 9,439 |
|
| $ | — |
|
| $ | 64,718 |
| $ | 50,795 |
|
| $ | 10,029 |
|
| $ | — |
|
| $ | 60,824 |
|
| $ | 64,165 |
|
| $ | 12,315 |
|
| $ | — |
|
| $ | 76,480 |
|
Adjusted gross profit percentage |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Transportation |
| 21.7 | % |
|
| 21.8 | % |
| N/A |
|
| 21.7 | % |
|
| 20.8 | % |
|
| 15.2 | % |
| N/A |
|
| 20.2 | % |
| 27.6 | % |
|
| 23.3 | % |
| N/A |
|
| 27.2 | % |
|
| 21.7 | % |
|
| 21.8 | % |
| N/A |
|
| 21.7 | % | ||||||||
Value-added services |
| 42.8 | % |
|
| 57.9 | % |
| N/A |
|
| 52.2 | % |
|
| 35.6 | % |
|
| 77.5 | % |
| N/A |
|
| 65.1 | % |
| 55.6 | % |
|
| 54.4 | % |
| N/A |
|
| 54.7 | % |
|
| 56.5 | % |
|
| 57.9 | % |
| N/A |
|
| 57.5 | % |
Transportation revenue was $316.1$198.0 million and $290.2$318.1 million for the three months ended September 30, 20222023 and 2021,2022, respectively. The increasedecrease of $25.9$120.1 million, or 8.9%,37.8% is primarily attributabledue to a reduction in the recent acquisitionnumber of Navegate.strategic operating partners, as well as a significant decrease in international and ocean rates, including significantly lower ocean volumes. Adjusted transportation gross profit was $68.7$53.8 million and $58.8$69.1 million for the three months ended September 30, 20222023 and 2021,2022, respectively. Net transportation
33
margins increased from 20.2%21.7% to 21.7%27.2%, primarily due to decreaseda higher mix of domestic shipments, which have higher gross profit margin characteristics than ocean rates associated with purchased transportation and an increase in domestic business, which has higher margin characteristics.shipments.
Value-added services revenue was $14.8$12.8 million for each of the three months ended September 30, 2023 and $9.22022. Adjusted value-added services gross profit was $7.0 million for the three months ended September 30, 2022 and 2021, respectively. The increase of $5.7 million, or 60.9%, is primarily attributed to the recent acquisition of Navegate as well as increases in the value-added services associated with our Canada segment. Adjusted value-added services gross profit was $7.8 million for the three months ended September 30, 2022,2023, compared to $6.0$7.4 million for the comparable prior year period. Adjusted value-added services gross profit percentage decreased from 65.1%57.5% to 52.2%, primarily due to the acquisition of Navegate, which has lower value-added services margin characteristics.54.7%.
The following table provides a reconciliation for the three months ended September 30, 20222023 and 20212022 of adjusted gross profit to gross profit, the most directly comparable GAAP measure:
(In thousands) | Three Months Ended September 30, |
| Three Months Ended September 30, |
| ||||||||||
Reconciliation of adjusted gross profit to GAAP gross profit | 2022 |
|
| 2021 |
| 2023 |
|
| 2022 |
| ||||
|
|
| (as restated) |
| ||||||||||
Revenues | $ | 330,971 |
|
| $ | 299,398 |
| $ | 210,797 |
|
| $ | 330,971 |
|
Cost of transportation and other services (exclusive of depreciation and |
| (254,491 | ) |
|
| (234,680 | ) |
| (149,973 | ) |
|
| (254,491 | ) |
Depreciation and amortization |
| (1,756 | ) |
|
| (2,998 | ) |
| (3,333 | ) |
|
| (3,347 | ) |
GAAP gross profit | $ | 74,724 |
|
| $ | 61,720 |
| $ | 57,491 |
|
| $ | 73,133 |
|
Depreciation and amortization |
| 1,756 |
|
|
| 2,998 |
|
| 3,333 |
|
|
| 3,347 |
|
Adjusted gross profit | $ | 76,480 |
|
| $ | 64,718 |
| $ | 60,824 |
|
| $ | 76,480 |
|
|
|
|
|
|
|
|
|
| ||||||
GAAP gross margin (GAAP gross profit as a percentage of revenues) |
| 22.6 | % |
|
| 20.6 | % |
| 27.3 | % |
|
| 22.1 | % |
Adjusted gross profit percentage (adjusted gross profit as a percentage of revenues) |
| 23.1 | % |
|
| 21.6 | % |
| 28.9 | % |
|
| 23.1 | % |
28
The following table compares condensed consolidated statements of comprehensive income data by reportable operating segments for the three months ended September 30, 20222023 and 2021:2022:
| Three Months Ended September 30, 2022 |
|
| Three Months Ended September 30, 2021 |
| Three Months Ended September 30, 2023 |
|
| Three Months Ended September 30, 2022 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | United |
|
| Canada |
|
| Corporate/ |
|
| Total |
|
| United |
|
| Canada |
|
| Corporate/ |
|
| Total |
| United |
|
| Canada |
|
| Corporate/ |
|
| Total |
|
| United |
|
| Canada |
|
| Corporate/ |
|
| Total |
| ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| (as restated) |
|
|
|
|
| (as restated) |
|
| (as restated) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Adjusted gross profit (1) | $ | 64,165 |
|
| $ | 12,315 |
|
| $ | — |
|
| $ | 76,480 |
|
| $ | 55,279 |
|
| $ | 9,439 |
|
| $ | — |
|
| $ | 64,718 |
| $ | 50,795 |
|
| $ | 10,029 |
|
| $ | — |
|
| $ | 60,824 |
|
| $ | 64,165 |
|
| $ | 12,315 |
|
| $ | — |
|
| $ | 76,480 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Operating partner commissions |
| 30,106 |
|
|
| — |
|
|
| — |
|
|
| 30,106 |
|
|
| 27,561 |
|
|
| — |
|
|
| — |
|
|
| 27,561 |
|
| 23,782 |
|
|
| — |
|
|
| — |
|
|
| 23,782 |
|
|
| 30,106 |
|
|
| — |
|
|
| — |
|
|
| 30,106 |
|
Personnel costs |
| 15,100 |
|
|
| 4,405 |
|
|
| 266 |
|
|
| 19,771 |
|
|
| 10,914 |
|
|
| 3,779 |
|
|
| 960 |
|
|
| 15,653 |
|
| 13,126 |
|
|
| 4,955 |
|
|
| 1,546 |
|
|
| 19,627 |
|
|
| 14,009 |
|
|
| 4,405 |
|
|
| 1,357 |
|
|
| 19,771 |
|
Selling, general and administrative expenses |
| 5,407 |
|
|
| 1,716 |
|
|
| 1,647 |
|
|
| 8,770 |
|
|
| 4,153 |
|
|
| 1,452 |
|
|
| 1,185 |
|
|
| 6,790 |
|
| 5,240 |
|
|
| 2,186 |
|
|
| 2,049 |
|
|
| 9,475 |
|
|
| 5,203 |
|
|
| 1,716 |
|
|
| 1,851 |
|
|
| 8,770 |
|
Depreciation and amortization |
| 1,525 |
|
|
| 758 |
|
|
| 4,495 |
|
|
| 6,778 |
|
|
| 932 |
|
|
| 798 |
|
|
| 2,522 |
|
|
| 4,252 |
|
| 925 |
|
|
| 956 |
|
|
| 2,644 |
|
|
| 4,525 |
|
|
| 1,056 |
|
|
| 758 |
|
|
| 4,964 |
|
|
| 6,778 |
|
Change in fair value of contingent |
| — |
|
|
| — |
|
|
| 160 |
|
|
| 160 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
| — |
|
|
| — |
|
|
| (246 | ) |
|
| (246 | ) |
|
| — |
|
|
| — |
|
|
| 160 |
|
|
| 160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Total operating expenses |
| 52,138 |
|
|
| 6,879 |
|
|
| 6,568 |
|
|
| 65,585 |
|
|
| 43,560 |
|
|
| 6,029 |
|
|
| 4,667 |
|
|
| 54,256 |
|
| 43,073 |
|
|
| 8,097 |
|
|
| 5,993 |
|
|
| 57,163 |
|
|
| 50,374 |
|
|
| 6,879 |
|
|
| 8,332 |
|
|
| 65,585 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Income (loss) from operations |
| 12,027 |
|
|
| 5,436 |
|
|
| (6,568 | ) |
|
| 10,895 |
|
|
| 11,719 |
|
|
| 3,410 |
|
|
| (4,667 | ) |
|
| 10,462 |
|
| 7,722 |
|
|
| 1,932 |
|
|
| (5,993 | ) |
|
| 3,661 |
|
|
| 13,791 |
|
|
| 5,436 |
|
|
| (8,332 | ) |
|
| 10,895 |
|
Other income (expense) |
| 311 |
|
|
| 161 |
|
|
| (91 | ) |
|
| 381 |
|
|
| 198 |
|
|
| 89 |
|
|
| (652 | ) |
|
| (365 | ) |
| 53 |
|
|
| 70 |
|
|
| 81 |
|
|
| 204 |
|
|
| 311 |
|
|
| 161 |
|
|
| (91 | ) |
|
| 381 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Income (loss) before income taxes |
| 12,338 |
|
|
| 5,597 |
|
|
| (6,659 | ) |
|
| 11,276 |
|
|
| 11,917 |
|
|
| 3,499 |
|
|
| (5,319 | ) |
|
| 10,097 |
|
| 7,775 |
|
|
| 2,002 |
|
|
| (5,912 | ) |
|
| 3,865 |
|
|
| 14,102 |
|
|
| 5,597 |
|
|
| (8,423 | ) |
|
| 11,276 |
|
Income tax expense |
| — |
|
|
| — |
|
|
| (2,764 | ) |
|
| (2,764 | ) |
|
| — |
|
|
| — |
|
|
| (2,402 | ) |
|
| (2,402 | ) |
| — |
|
|
| — |
|
|
| (1,014 | ) |
|
| (1,014 | ) |
|
| — |
|
|
| — |
|
|
| (2,764 | ) |
|
| (2,764 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Net income (loss) |
| 12,338 |
|
|
| 5,597 |
|
|
| (9,423 | ) |
|
| 8,512 |
|
|
| 11,917 |
|
|
| 3,499 |
|
|
| (7,721 | ) |
|
| 7,695 |
|
| 7,775 |
|
|
| 2,002 |
|
|
| (6,926 | ) |
|
| 2,851 |
|
|
| 14,102 |
|
|
| 5,597 |
|
|
| (11,187 | ) |
|
| 8,512 |
|
Less: net income attributable to non- |
| (79 | ) |
|
| — |
|
|
| — |
|
|
| (79 | ) |
|
| (86 | ) |
|
| — |
|
|
| — |
|
|
| (86 | ) | |||||||||||||||||||||||||||||||
Less: Net income attributable to non- |
| (229 | ) |
|
| — |
|
|
| — |
|
|
| (229 | ) |
|
| (79 | ) |
|
| — |
|
|
| — |
|
|
| (79 | ) | |||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Net income (loss) attributable to Radiant | $ | 12,259 |
|
| $ | 5,597 |
|
| $ | (9,423 | ) |
| $ | 8,433 |
|
| $ | 11,831 |
|
| $ | 3,499 |
|
| $ | (7,721 | ) |
| $ | 7,609 |
| $ | 7,546 |
|
| $ | 2,002 |
|
| $ | (6,926 | ) |
| $ | 2,622 |
|
| $ | 14,023 |
|
| $ | 5,597 |
|
| $ | (11,187 | ) |
| $ | 8,433 |
|
34
| Three Months Ended September 30, 2022 |
|
| Three Months Ended September 30, 2021 |
| Three Months Ended September 30, 2023 |
|
| Three Months Ended September 30, 2022 |
| ||||||||||||||||||||||||||||||||||||||||||||
Operating expenses as a percent of adjusted gross profit: | United |
|
| Canada |
|
| Corporate/ |
| Total |
|
| United |
|
| Canada |
|
| Corporate/ |
| Total |
| United |
|
| Canada |
|
| Corporate/ |
| Total |
|
| United |
|
| Canada |
|
| Corporate/ |
| Total |
| ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
| (as restated) |
|
|
|
|
|
|
| (as restated) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||
Operating partner commissions |
| 46.9 | % |
|
| 0.0 | % |
| N/A |
|
| 39.4 | % |
|
| 49.9 | % |
|
| 0.0 | % |
| N/A |
|
| 42.6 | % |
| 46.8 | % |
|
| 0.0 | % |
| N/A |
|
| 39.1 | % |
|
| 46.9 | % |
|
| 0.0 | % |
| N/A |
|
| 39.4 | % |
Personnel costs |
| 23.5 | % |
|
| 35.8 | % |
| N/A |
|
| 25.9 | % |
|
| 19.7 | % |
|
| 40.0 | % |
| N/A |
|
| 24.2 | % |
| 25.8 | % |
|
| 49.4 | % |
| N/A |
|
| 32.3 | % |
|
| 21.8 | % |
|
| 35.8 | % |
| N/A |
|
| 25.9 | % |
Selling, general and administrative |
| 8.4 | % |
|
| 13.9 | % |
| N/A |
|
| 11.5 | % |
|
| 7.5 | % |
|
| 15.4 | % |
| N/A |
|
| 10.5 | % |
| 10.3 | % |
|
| 21.8 | % |
| N/A |
|
| 15.6 | % |
|
| 8.1 | % |
|
| 13.9 | % |
| N/A |
|
| 11.5 | % |
Depreciation and amortization |
| 2.4 | % |
|
| 6.2 | % |
| N/A |
|
| 8.9 | % |
|
| 1.7 | % |
|
| 8.5 | % |
| N/A |
|
| 6.6 | % |
| 1.8 | % |
|
| 9.5 | % |
| N/A |
|
| 7.4 | % |
|
| 1.6 | % |
|
| 6.2 | % |
| N/A |
|
| 8.9 | % |
Operating partner commissions increased $2.5decreased $6.3 million, or 9.2%21.0%, to $30.1$23.8 million for the three months ended September 30, 2022.2023. The increasedecrease is primarily due to increaseda reduction in the number of strategic operating partners and decreased adjusted gross profit generated from other strategic operating partner locationspartners. . As a percentage of adjusted gross profit, operating partner commissions decreased 32226 basis points to 39.4%39.1% from 42.6%39.4% for the three months ended September 30, 2023 and 2022, and 2021, respectively, as a result of a higher percentage of adjusted gross profit from company-owned locations, which are not paid a commission.respectively.
Personnel costs increased $4.1decreased $0.2 million, or 26.3%0.7%, to $19.8$19.6 million for the three months ended September 30, 2022. The increase is primarily due to increased workforce supporting the expansion of business volumes in both the U.S. and Canada, and the inclusion of payroll associated with our recent acquisition of Navegate.2023. As a percentage of adjusted gross profit, due to expansion of business volumes and adjusted gross profit, personnel costs increased 166642 basis points to 25.9%32.3% from 24.2%25.9% for the three months ended September 30, 20222023 and 2021,2022, respectively.
Selling, general and administrative (“SG&A”) expenses increased $2.0$0.7 million, or 29.2%8.0%, to $8.8$9.5 million for the three months ended September 30, 2022.2023. The increase is primarily due to the inclusion of Navegate, increased IT related initiatives, increased professional services fees and facilities costs, bank fees, and travel expenses.costs. As a percentage of adjusted gross profit, SG&A increased 98411 basis points to 11.5%15.6% from 10.5%11.5% for the three months ended September 30, 20222023 and 2021,2022, respectively.
Depreciation and amortization costs increased $2.5decreased $2.3 million, or 59.4%33.2%, to $6.8$4.5 million for the three months ended September 30, 2022.2023. The increasedecrease is primarily dueattributable to the acquisition of Navegate and the accelerated amortization of certain trade namesintangible assets in the prior year resulting from the rebranding of certain trade names. As a percentage of adjusted gross profit, depreciation and amortization costs decreased 142 basis points to 7.4% from 8.9% for the three months ended September 30, 2023 and 2022, respectively.
Our increasedecrease in net income is driven principally by increaseddecreased adjusted gross profit, increased other income (expense), and partially offset by increaseddecreased operating expensespartner commissions and income tax expense compared to the comparable prior year period.
Our future financial results may be impacted by amortization of intangible assets resulting from acquisitions, gains or losses from changes in fair value of contingent consideration, and changes in fair value of interest rate swap contracts that are difficult to predict.
29
The following table provides a reconciliation for the three months ended September 30, 20222023 and 20212022 of adjusted EBITDA to net income (loss), the most directly comparable GAAP measure:
| Three Months Ended September 30, 2022 |
|
| Three Months Ended September 30, 2021 |
| Three Months Ended September 30, 2023 |
|
| Three Months Ended September 30, 2022 |
| ||||||||||||||||||||||||||||||||||||||||||||||||||||
(In thousands) | United |
|
| Canada |
|
| Corporate/ |
|
| Total |
|
| United |
|
| Canada |
|
| Corporate/ |
|
| Total |
| United |
|
| Canada |
|
| Corporate/ |
|
| Total |
|
| United |
|
| Canada |
|
| Corporate/ |
|
| Total |
| ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
| (as restated) |
|
|
|
|
| (as restated) |
|
| (as restated) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||
Net income (loss) attributable to Radiant Logistics, Inc. | $ | 12,259 |
|
| $ | 5,597 |
|
| $ | (9,423 | ) |
| $ | 8,433 |
|
| $ | 11,831 |
|
| $ | 3,499 |
|
| $ | (7,721 | ) |
| $ | 7,609 |
| $ | 7,546 |
|
| $ | 2,002 |
|
| $ | (6,926 | ) |
| $ | 2,622 |
|
| $ | 14,023 |
|
| $ | 5,597 |
|
| $ | (11,187 | ) |
| $ | 8,433 |
|
Income tax expense |
| — |
|
|
| — |
|
|
| 2,764 |
|
|
| 2,764 |
|
|
| — |
|
|
| — |
|
|
| 2,402 |
|
|
| 2,402 |
|
| — |
|
|
| — |
|
|
| 1,014 |
|
|
| 1,014 |
|
|
| — |
|
|
| — |
|
|
| 2,764 |
|
|
| 2,764 |
|
Depreciation and amortization |
| 1,525 |
|
|
| 758 |
|
|
| 4,495 |
|
|
| 6,778 |
|
|
| 932 |
|
|
| 798 |
|
|
| 2,522 |
|
|
| 4,252 |
|
| 1,040 |
|
|
| 956 |
|
|
| 2,644 |
|
|
| 4,640 |
|
|
| 1,056 |
|
|
| 758 |
|
|
| 4,964 |
|
|
| 6,778 |
|
Net interest expense |
| — |
|
|
| — |
|
|
| 781 |
|
|
| 781 |
|
|
| — |
|
|
| — |
|
|
| 606 |
|
|
| 606 |
|
| — |
|
|
| — |
|
|
| (283 | ) |
|
| (283 | ) |
|
| — |
|
|
| — |
|
|
| 781 |
|
|
| 781 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
EBITDA |
| 13,784 |
|
|
| 6,355 |
|
|
| (1,383 | ) |
|
| 18,756 |
|
|
| 12,763 |
|
|
| 4,297 |
|
|
| (2,191 | ) |
|
| 14,869 |
|
| 8,586 |
|
|
| 2,958 |
|
|
| (3,551 | ) |
|
| 7,993 |
|
|
| 15,079 |
|
|
| 6,355 |
|
|
| (2,678 | ) |
|
| 18,756 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Share-based compensation |
| 327 |
|
|
| 60 |
|
|
| 222 |
|
|
| 609 |
|
|
| 187 |
|
|
| 66 |
|
|
| 97 |
|
|
| 350 |
|
| 383 |
|
|
| 73 |
|
|
| 425 |
|
|
| 881 |
|
|
| 233 |
|
|
| 60 |
|
|
| 316 |
|
|
| 609 |
|
Change in fair value of contingent |
| — |
|
|
| — |
|
|
| 160 |
|
|
| 160 |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
| — |
|
|
| — |
|
|
| (246 | ) |
|
| (246 | ) |
|
| — |
|
|
| — |
|
|
| 160 |
|
|
| 160 |
|
Acquisition related costs |
| — |
|
|
| — |
|
|
| 27 |
|
|
| 27 |
|
|
| — |
|
|
| — |
|
|
| 99 |
|
|
| 99 |
|
| — |
|
|
| — |
|
|
| 69 |
|
|
| 69 |
|
|
| — |
|
|
| — |
|
|
| 27 |
|
|
| 27 |
|
Litigation costs |
| — |
|
|
| — |
|
|
| 120 |
|
|
| 120 |
|
|
| — |
|
|
| — |
|
|
| 154 |
|
|
| 154 |
|
| — |
|
|
| — |
|
|
| 364 |
|
|
| 364 |
|
|
| — |
|
|
| — |
|
|
| 120 |
|
|
| 120 |
|
Change in fair value of interest rate swap |
| — |
|
|
| — |
|
|
| (690 | ) |
|
| (690 | ) |
|
| — |
|
|
| — |
|
|
| 46 |
|
|
| 46 |
|
| — |
|
|
| — |
|
|
| 202 |
|
|
| 202 |
|
|
| — |
|
|
| — |
|
|
| (690 | ) |
|
| (690 | ) |
Restatement costs |
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| — |
|
|
| 154 |
|
|
| 154 |
| |||||||||||||||||||||||||||||||
Foreign currency transaction gain |
| (310 | ) |
|
| (157 | ) |
|
| — |
|
|
| (467 | ) |
|
| (182 | ) |
|
| (89 | ) |
|
| — |
|
|
| (271 | ) |
| (24 | ) |
|
| (72 | ) |
|
| — |
|
|
| (96 | ) |
|
| (310 | ) |
|
| (157 | ) |
|
| — |
|
|
| (467 | ) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | 13,801 |
|
| $ | 6,258 |
|
| $ | (1,544 | ) |
| $ | 18,515 |
|
| $ | 12,768 |
|
| $ | 4,274 |
|
| $ | (1,795 | ) |
| $ | 15,247 |
| $ | 8,945 |
|
| $ | 2,959 |
|
| $ | (2,737 | ) |
| $ | 9,167 |
|
| $ | 15,002 |
|
| $ | 6,258 |
|
| $ | (2,591 | ) |
| $ | 18,669 |
|
Adjusted EBITDA as a % of adjusted |
| 21.5 | % |
|
| 50.8 | % |
| N/A |
|
| 24.2 | % |
|
| 23.1 | % |
|
| 45.3 | % |
| N/A |
|
| 23.6 | % | |||||||||||||||||||||||||||||||||||
Adjusted EBITDA as a % of |
| 17.6 | % |
|
| 29.5 | % |
| N/A |
|
| 15.1 | % |
|
| 23.4 | % |
|
| 50.8 | % |
| N/A |
|
| 24.4 | % |
35
Liquidity and Capital Resources
Generally, our primary sources of liquidity are cash generated from operating activities and borrowings under our Revolving Credit Facility, as described below. These sources also fund a portion of our capital expenditures and contractual contingent consideration obligations. Our level of cash and financing capabilities along with cash flows from operations have historically been sufficient to meet our operating and capital needs. As of September 30, 2022,2023, we have $23.7$35.9 million in unrestricted cash on hand to serve as adequate working capital.
Net cash provided by operating activities were $24.7was $7.9 million and $26.6 million for the three months ended September 30, 2022. Net cash used for operating activities were $15.8 million for the three months ended September 30, 2021.2023 and 2022, respectively. The cash used or provided by operating activities primarily consisted of net income adjusted for depreciation and amortization and changes in accounts receivable, contract assets, accounts payable, income taxes, operating partner commissions payable, and accrued and other liabilities.payment of contingent consideration. Cash flow from operating activities for the three months ended September 30, 2022 increased2023 decreased by $40.5$18.7 million, compared with the same period in fiscal year 2022,2023, primarily due to increased depreciation anddecreased net income, amortization of intangible assets, and net changes in operatingaccounts receivable, contract assets, and liabilities.accounts payable.
Net cash used for investing activities were $0.9was $2.5 million and $1.5$0.9 million for the three months ended September 30, 2023 and 2022, and 2021, respectively. The primary use of cash was for purchases of property, technology, and equipment. Cash paid for purchases of property, technology, and equipment were $0.9$2.5 million and $1.5$0.9 million for the three months ended September 30, 20222023 and 2021,2022, respectively. Proceeds from sale of property, technology, and equipment were nominal for both of the three months ended September 30, 20222023 and 2021.2022.
Net cash used for financing activities was $2.0 million and $28.9 million for the three months ended September 30, 2022. Net cash provided by financing activities2023 and 2022, respectively. There were $11.8 millionno repayments or borrowings under the Revolving Credit Facility for the three months ended September 30, 2021. Net2023, compared to net repayments of the Revolving Credit Facility wereof $25.0 million for the three months ended September 30, 2022, compared to net proceeds from the Revolving Credit Facility2022. Payments of $15.0debt issuance costs were $0.1 million and $0.7 million for the three months ended September 30, 2021.2023 and 2022, respectively. Repayments of notes payable and finance lease liabilityliabilities were $1.3 million for each of the three months ended September 30, 2023 and 2022. Payments for repurchases of common stock was $0.2 million and $1.3 million for the three months ended September 30, 20222023 and 2021. Payments for repurchases of common stock were $1.3 million and $1.7 million for the three months ended September 30, 2022, and 2021, respectively. Distributions to non-controlling interest were $0.1 million for the three months ended September 30, 2022. Payments of employee tax withholdings related to restricted stock awardsunits and stock options were $0.4$0.3 million and $0.3$0.4 million for the three months ended September 30, 2023 and 2022, and 2021, respectively.
30
Revolving Credit Facility
The Company entered into a $200 million syndicated, revolving credit facility (the “Revolving Credit Facility”) pursuant to a Credit Agreement dated as of August 5, 2022.2022, and amended as of September 27, 2023. The Revolving Credit Facility is segregated into two tranches, a $150 million tranche that may be loaned in U.S. Dollars and a $50 million tranche that may be loaned in either U.S. Dollars or Canadian Dollars. The Revolving Credit Facility includes a $75 million accordion feature to support future acquisition opportunities. On September 30, 2022, the borrowings outstanding on theThe Revolving Credit Facility was $37.5 million. The Credit Facility was entered into with Bank of America, N.A. and BMO Capital Markets Corp. as joint book runners and joint lead arrangers, Bank of America, N.A. as Administrative Agent, Swingline Lender and Letter of Credit Issuer, Bank of Montreal as syndication agent, KeyBank National Association and MUFG Union Bank, N.A. as co-documentation agents and Bank of America, N. A., Bank of Montreal, KeyBank National Association, MFUGMUFG Union Bank, N.A. and Washington Federal Bank, National Association as lenders (such named lenders are collectively referred to herein as “Lenders”). This replaces the $150 million Revolving Credit Facility dated March 13, 2020.
The Revolving Credit Facility has a term of five years and is collateralized by a first-priority security interest in the accounts receivable and other assets of the Company and the guarantors named below on a parity basis with the security interest held by Fiera Private Debt Fund IV LP and Fiera Private Debt Fund V LP described below. Borrowings under the Credit Facilityin U.S. Dollars accrue interest (at the Company’s option), at a) the Lenders’ base rate plus 0.75% and can be subsequently adjusted based on the Company’s consolidated net leverage ratio under the facility at the Lenders’ base rate plus 0.50% to 1.50%; b) Term SOFR plus 1.65% and can be subsequently adjusted based on the Company’s consolidated net leverage ratio under the facility at Term SOFRSecured Overnight Financing Rate (“SOFR”) plus 1.40% to 2.40%; andor c) Term SOFR Daily Floating Rate plus 1.65% and can be subsequently adjusted based on the Company’s consolidated net leverage ratio under the facility at Term SOFR Daily Floating Rate plus 1.40% to 2.40%. Borrowings in Canadian Dollars accrue interest (at the Company’s option) at a) Term Canadian Overnight Repo Rate Average (“CORRA”) plus 0.29547% to 0.32138% depending on the term, plus 1.40% to 2.40%; or b) Daily Simple CORRA plus 0.29547% plus 1.40% to 2.40%. Rates are adjusted based on the Company’s consolidated net leverage ratio. The Company’s U.S. and Canadian subsidiaries are guarantors of the Revolving Credit Facility.
For general borrowings under the Revolving Credit Facility, the Company is subject to the maximum consolidated net leverage ratio of 3.00 and minimum consolidated interest coverage ratio of 3.00. Additional minimum availability requirements and financial covenants apply in the event the Company seeks to use advances under the Revolving Credit Facility to pursue acquisitions or repurchase its common stock.
As of September 30, 2023, there were no borrowings outstanding on the Revolving Credit Facility.
Senior Secured Loans
In connection with the Company’s acquisition of Radiant Canada, (formerly, Wheels International Inc.), Radiant Canada obtained a CAD$29 million senior secured Canadian term loan from Fiera Private Debt Fund IV LP (“FPD IV” formerly, Integrated Private Debt Fund IV LP) pursuant to a CAD$29,000,000 Credit Facilities Loan Agreement. The Company and itsCompany’s U.S. and Canadian subsidiaries are guarantors of the Radiant Canada obligations thereunder. The loan matures on April 1, 2024 and accrues interest at a rate of 6.65% per annum. The Company is required to maintain five months interest in a debt service reserve account to be controlled by FPD IV.
36
In connection with the Company’s acquisition of Lomas, Radiant Canada obtained a CAD$10 million senior secured Canadian term loan from Fiera Private Debt Fund V LP (formerly, Integrated Private Debt Fund V LP) pursuant to a CAD$10,000,000 Credit Facilities Loan Agreement. The Company and itsCompany’s U.S. and Canadian subsidiaries are guarantors of the Radiant Canada obligations thereunder. The loan matures on June 1, 2024 and accrues interest at a fixed rate of 6.65% per annum. The loan repayment consists of monthly blended principal and interest payments.
The loans may be prepaid in whole at any time providing the Company gives at least 30 days prior written notice and pays the difference between (i) the present value of the loan interest and the principal payments foregone discounted at the Government of Canada Bond Yield for the term from the date of prepayment to the maturity date, and (ii) the face value of the principal amount being prepaid.
For additional information regarding our indebtedness, see Note 8 to our unaudited condensed consolidated financial statements.
Item 3. Quantitative and Qualitative Disclosure Aboutabout Market Risk
We are exposed to market risks in the ordinary course of business. These risks are primarily related to foreign exchange risk. We have currency exposure arising from both sales and purchases denominated in foreign currencies, as well as intercompany transactions. Significant changes in exchange rates between foreign currencies in which we transact business and the U.S. dollar may adversely affect our results of operations and financial condition. Historically, we have not entered into any hedging activities, and, to the extent that we continue not to do so in the future, we may be vulnerable to the effects of currency exchange rate fluctuations. A portion of our business is conducted in Canada. If foreign exchange rates were 1.0% higher or lower, our net income for the three months ended September 30, 2023 would have changed by approximately $0.05$0.02 million.
We are also subject to risks related to an increase in interest rates. For every $1.0 million outstanding on our Revolving Credit Facility, we will incur approximately $0.04$0.05 million of interest expense. For every 1.0% increase in interest rates, our interest expense per $1.0 million in borrowings will increase by approximately $0.01 million.
31
Item 4. Controls and Procedures
Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.
An evaluation of the effectiveness of our “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act) as of September 30, 2022,2023 was carried out by our management under the supervision and with the participation of our CEO and CFO. Based on this evaluation, our CEO and CFO concluded that our disclosure controls and procedures were ineffective as of September 30, 20222023 due to the existence of material weaknesses described below.
Material Weakness over Recording and Processing of Revenue Transactions and Remediation Efforts
As of June 30, 2021, we concluded that a material weakness existed in our internal control over financial reporting related to the recording and processing of revenues transactions, including the timing of the Company’s estimated accrual of in-transit revenues and related costs. This material weakness relates to the conditions that led to the restatement of previously issued consolidated financial statements as discussed in Note 2 of the consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended June 30, 2022.
In response to this material weakness, the Company began takinghas continued making progress with corrective action during fiscal year 2022 to address the material weakness and provide reasonable assurance that future errors in revenue transactions would be prevented and/or detected in a timely manner. The Company’s corrective actions include, but are not limited to, workingto:
As of September 30, 2022,2023, remediation is on-going.ongoing. As such, we concluded the Company does not have effective internal controls over the recording and processing of revenues. Specifically, the controls as currently designed are not sufficient to prevent or detect a material misstatement in revenues as the design of the controls lacks the level of precision necessary to ensure the completeness and accuracy of revenue.
Therevenues. While existing controls have been enhanced, and new controls have been implemented, there is a need for additional enhancements around the design of those controls, including, but not limited to, the formalization of the documentation retained to evidence the performance of these controls. Further testing procedures are also needed to verify their effectiveness over multiple periods of operation. As such, the Company will continue evaluatingconcluded that the appropriate corrective actionsmaterial weakness related to remediatethe recording and processing of revenue transactions has not been fully remediated. We anticipate fully remediating the material weakness during fiscal year 2024.
Material Weaknesses over Information Technology General Controls (“ITGCs”) and Remediation Efforts
As of June 30, 2023, we concluded that material weaknesses exist surrounding our ITGCs, specifically relating to strengthen our internal controlschange management and user access rights.
The material weaknesses related to the ineffective design and operation of ITGCs over the recordinginformation technology (“IT”) systems supporting the Company’s Transportation Management (“TM”) systems as well as its Enterprise Resource Planning (“ERP”) system. Business process controls (automated and manual) that are dependent on effective IT systems, or that rely on data produced from systems impacted by the ineffective ITGCs, are also deemed ineffective. The Company identified material weaknesses in their internal control over financial reporting associated with (i) not designing and maintaining effective ITGCs over privileged user accounts and developers for its TM systems used to account for revenue and related cost of revenues.transportation and its ERP system used in the preparation of the condensed consolidated financial statements and (ii) not designing and maintaining effective controls to timely detect and independently review instances where individuals with access to create and implement systems changes to the TM and ERP systems.
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In response to the material weaknesses, the Company removed certain elevated logical access privileges from user accounts and is actively enhancing existing controls that may include the addition of new controls to further strengthen our technology environment. For user access rights, this includes the implementation of additional software specifically designed to control access, which will be deployed before the end of the second quarter in fiscal year 2024. We expect the material weaknesses to be resolved in fiscal year 2024. The Company will need the refined and new controls to operate effectively for a specific period before concluding that the material weaknesses have been resolved.
Changes in Internal Control over Financial Reporting
Except for the remediation activities regarding material weaknessweaknesses described above, there have not been any other changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended September 30, 20222023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is involved in various claims and its subsidiaries may be subject to legal actions and claims arising from contracts or other matters from time to time in the ordinary course of business. Management is not aware of any pending or threatened legal proceedings, except as described below, that are considered other than routine legal proceedings. The Company records accrualsbelieves that the ultimate disposition or resolution of its routine legal proceedings, in the aggregate, are not material to its financial position, results of operations and liquidity.
The Company initiated claims against a former customer for estimated losses relatingunpaid accounts receivable. In response, the former customer has claimed damages against the Company for alleged fines and penalties, detention and demurrage charges paid or due to claimscarriers, and lawsuits when available information indicates that a lossfor damaged or lost product. The matter is probablein its preliminary stage and the amount of theCompany is not yet able to reasonably estimate a possible loss or range of loss, can be reasonably estimated. Legal expenses are expensed as incurred. There were no potentiallyif any. The Company intends to defend against these claims. The outcome of litigation is inherently unpredictable and subject to significant uncertainties. An adverse outcome could have a material legal proceedings as of September 30, 2022.
On December 8, 2021, the Company detected a ransomware incident impacting certain ofimpact on the Company’s operationalresults of operations and information technology systems. While the Company’s systems recovery efforts are complete, and the Company’s operations are fully functional, the incident did result in a loss of revenue as well as certain incremental costs. In addition, following an extensive forensic investigation by a full team of cybersecurity experts, the Company confirmed that some data extraction related to the Company’s customers and employees occurred from the Company’s servers before the Company took its systems offline. We notified law enforcement, provided notice to customers apprising them of the situation and are providing any notices that may be required by applicable law related to potential Personal Identifiable Information (PII data) exposure. Although the Company acted promptly and as efficiently as possible any failure of the Company to comply with data privacy or other laws and regulations related to this event could result in claims, legal or regulatory proceedings, inquiries, or investigations.cash flows.
Item 1A. Risk Factors
There have been no material changes in the risk factors disclosed by us under Part I, Item 1A. Risk Factors contained in the Annual Report on Form 10-K for the fiscal year ended June 30, 2022.2023.
Item 2. Unregistered Sale of Equity Securities and Use of Proceeds
TheIn February 2022, the Company’s board of directors authorized the repurchase of up to 5,000,000 shares of the Company’s common stock through December 31, 2023. Under this repurchase program, the Company purchased the following shares of common stock during the three months ended September 30, 2022. As of September 30, 2022, future repurchases of up to 2,255,875 shares were available in the share repurchase program.2023:
Issuer Purchases of Equity Securities | Issuer Purchases of Equity Securities |
| Issuer Purchases of Equity Securities |
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Period | Total Number of Shares Purchased |
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| Average Price Paid per Share |
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| Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
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| Maximum Number (or Approximate Dollar Value) of Shares That May Yet Be Purchased Under the Plans or Programs |
| Total Number of Shares Purchased |
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| Average Price Paid per Share |
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| Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs |
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| Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs |
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July 1 - 31, 2022 |
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| — |
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August 1 - 31, 2022 |
| — |
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| — |
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| — |
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September 1 - 30, 2022 |
| 219,517 |
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| 6.11 |
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| 219,517 |
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| — |
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July 1 − 31, 2023 |
| — |
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| $ | — |
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| — |
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| 2,463,692 |
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August 1 − 31, 2023 |
| 2,030 |
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| 6.51 |
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| 2,030 |
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| 2,461,662 |
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September 1 − 30, 2023 |
| 33,319 |
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| 6.52 |
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| 33,319 |
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| 2,428,343 |
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Total |
| 219,517 |
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| $ | 6.11 |
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| 219,517 |
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| — |
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| 35,349 |
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| $ | 6.52 |
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| 35,349 |
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| 2,428,343 |
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Item 5. Other Information
38On September 29, 2023, the Company adopted a repurchase plan intended to satisfy Rule 10b5-1(c)(1) under the Securities Exchange Act of 1934, providing for the acquisition of shares of Radiant common stock from October 2, 2023 to November 13, 2023, or until the aggregate cost of repurchases total $7,500,000.
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ITEM 6. EXHIBITS
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Exhibit Number |
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10.1 |
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| 10/4/2023 | |
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31.1 | X |
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31.2 | X |
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32.1 | X |
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101.INS | Inline XBRL Instance | X |
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101.SCH | Inline XBRL Taxonomy Extension Schema | X |
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101.CAL | Inline XBRL Taxonomy Extension Calculation | X |
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101.DEF | Inline XBRL Taxonomy Extension Definition | X |
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101.LAB | Inline XBRL Taxonomy Extension Label | X |
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101.PRE | Inline XBRL Taxonomy Extension Presentation | X |
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104 |
| Cover Page Interactive Data (embedded within the Inline XBRL document) |
| X |
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3934
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
RADIANT LOGISTICS, INC. | ||
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Date: | /s/ Bohn H. Crain | |
Bohn H. Crain | ||
Chief Executive Officer | ||
(Principal Executive Officer) | ||
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Date: | /s/ Todd E. Macomber | |
Todd E. Macomber | ||
Senior Vice President and Chief Financial Officer | ||
(Principal Financial Officer and Principal Accounting Officer) |
4035