Radiant Logistics' fiscal Q3 earnings rose 2.2% year-over-year to US$1.1M as revenues rose 18.2% to US$86M; company says it is making good progress in network expansion
Cindy Allen
BELLEVUE, Washington
,
May 15, 2014
(press release)
–
Radiant Logistics, Inc. (NYSE MKT: RLGT), a domestic and international logistics services company, today reported financial results for the three and nine months ended March 31, 2014.
Third fiscal quarter Financial Highlights (Quarter Ended March 31, 2014) CEO Comments "We also continue to make good progress in our network expansion and in March of this year opened new operations in Philadelphia and completed a transaction with Phoenix Cartage and Airfreight, LLC ("PCA"). Prior to the acquisition, PCA operated as part of a competing national transportation group but saw value in transitioning to the Radiant network. We believe the transaction is representative of the broader pipeline of opportunities available to us in the marketplace and is further evidence of our ability to attract large individual contributors from competing networks who can benefit from the Radiant platform similar to our Laredo transaction (December 2011) and our NY-JFK transaction (February 2012)." "In addition we recently had some positive developments on the legal front. On April 25, 2014, a jury returned a verdict in the Company's favor in the amount of $1.5 million in connection with our claims for statutory and common law misappropriation of our trade secrets in the State of California, in the case emanating from our DBA acquisition in 2011. Notwithstanding this positive development, the ultimate resolution of this dispute is not expected to occur until the appeals process has been exhausted by the non-prevailing party. Accordingly, we do not expect resolution of this matter in the near term and will not record the benefit of any such award into our financial statements until such time as the dispute has been fully adjudicated." Crain concluded: "We are providing guidance for the upcoming quarter ending June 30, 2014 and excluding the benefit of any further acquisitions or any gain on litigation, we are projecting adjusted EBITDA in the range of $3.4 - $3.9 million on approximately $88.1 - $92.8 million in revenues which equates to adjusted net income available to common shareholders in the range of $1.4 - $1.7 million, or $0.04 - $0.05 per basic and $0.04 per fully diluted share. As with our previous communications, we would also like to remind investors that our free cash flow is generally higher than our net income because we have significant non-cash depreciation and amortization expenses flowing through our financial statements as a result of the mechanics of accounting for acquisitions and the fact that we have minimal maintenance capital expenditure requirements." Third Fiscal Quarter ended March 31, 2014 – Financial Results For the three months ended March 31, 2014, Radiant reported net income attributable to common shareholders of $1,137,000 on $86.0 million of revenues, or $0.03 per basic and fully diluted share. For the three months ended March 31, 2013, Radiant reported net income attributable to common shareholders of $882,000 on $72.8 million of revenues, or $0.03 per basic and fully diluted share. For the three months ended March 31, 2014, Radiant reported adjusted net income attributable to common shareholders of $1,418,000, or $0.04 per basic and fully diluted share. For the three months ended March 31, 2013, Radiant reported adjusted net income attributable to common shareholders of $1,482,000, or $0.04 per basic and fully diluted share. The Company also reported adjusted EBITDA of $3,503,000 for the three months ended March 31, 2014, compared to adjusted EBITDA of $2,988,000 for the three months ended March 31, 2013. A reconciliation of the Company's adjusted net income and adjusted EBITDA to the most directly comparable GAAP measure for the three months ending March 31, 2014 and 2013 appears at the end of this release. Nine Months ended March 31, 2014 – Financial Results For the nine months ended March 31, 2014, Radiant reported net income attributable to common shareholders of $2,424,000 on $246.9 million of revenues, or $0.07 per basic and fully diluted share, including a loss on write-off of debt discount of $1,238,000. For the nine months ended March 31, 2013, Radiant reported net income attributable to common shareholders of $1,306,000 on $230.1 million of revenues, or $0.04 per basic and fully diluted share, including transition and lease termination costs of $1,544,000. For the nine months ended March 31, 2014, Radiant reported adjusted net income attributable to common shareholders of $4,731,000, or $0.14 per basic and $0.13 per fully diluted share. For the nine months ended March 31, 2013, Radiant reported adjusted net income attributable to common shareholders of $3,702,000, or $0.11 per basic and fully diluted share. The Company also reported adjusted EBITDA of $10,254,000 for the nine months ended March 31, 2014, compared to adjusted EBITDA of $7,651,000 for the nine months ended March 31, 2013. A reconciliation of the Company's adjusted net income and adjusted EBITDA to the most directly comparable GAAP measure for the nine months ending March 31, 2014 and 2013 appears at the end of this release. Network Expansion – Philadelphia, PA Effective March 1, 2014, the Company opened company-owned operations in Philadelphia, PA and acquired select customer relationships from Phoenix Cartage and Airfreight, LLC, a privately held company that provides customized, time-critical domestic and international logistics solutions to a diversified account base that includes customers in the life sciences, pharmaceutical, store fixture, retail and consumer goods industries from its mid-Atlantic gateway location near the Philadelphia International Airport (PHL). Other Significant Events On April 25, 2014, a jury returned a verdict in the Company's favor in the amount of $1.5 million in connection with its claims for statutory and common law misappropriation of its trade secrets in the State of California in the case Bretta Santini Pollara v. Radiant Logistics, Inc., United States District Court, Central District of California. Notwithstanding this positive development, the verdict remains subject to a motion for judgment notwithstanding the verdict made by the defendants. Any procedural motions that are decided in a manner inconsistent with the jury verdict will likely be appealed. The ultimate resolution of this dispute is not expected to occur in the near term given that the non-prevailing party will likely make further appeal. Accordingly, the Company will not record the benefit of any such award into its financial statements until such time as the dispute has been fully adjudicated. Reconciliation of Non-GAAP Financial Measures This press release contains certain non-GAAP financial measures as defined under the Securities Exchange Commission ("SEC") rules such as adjusted net income, adjusted net income per share and earnings before interest, taxes, depreciation and amortization ("EBITDA"). We believe that supplemental disclosure of these amounts are important metrics used by management to evaluate and understand the performance of the ongoing operations of Radiant's business that eliminates depreciation, amortization and certain other non-cash costs and other significant items that are not part of regular operating activities. A reconciliation of adjusted net income, adjusted net income per share and adjusted EBITDA for the outlook period ending June 30, 2014 is as follows: (in thousands, except for earnings per share) Outlook Net income attributable to Radiant Logistics, Inc. $ 1,017 - $1,302 Less: Preferred Dividend Requirement $ (511) Net income attributable to common shareholders $ 506 - $791 Net income per common share Basic and Diluted $ 0.01 - $0.02 Weighted average shares outstanding: Basic shares 34,150,000 Diluted shares 37,050,000 Reconciliation of net income to adjusted net income: Net income attributable to common shareholders $ 506 – $791 Adjustments to net income: Income tax expense $ 691 - $881 Non-recurring legal and other $ 100 Depreciation and amortization $ 1,320 Adjusted net income before taxes $ 2,617 - $3,092 Less: Provision for income taxes at 40% before preferred dividend requirement of $511 $ (1,251) - (1,441) Adjusted net income $ 1,366 - $1,651 Adjusted net income per common share: Basic $ 0.04 - $0.05 Diluted $ 0.04 - $0.04 Reconciliation of net income to adjusted EBITDA: Outlook Net Income attributable to common shareholders $ 506 – $791 Preferred dividends $ 511 Net income attributable to Radiant Logistics, Inc. $ 1,017 – $1,302 Adjustments to net income: Income tax expense $ 691 – $881 Depreciation and amortization $ 1,320 Net interest expense $ 87 EBITDA $ 3,115 -$3,590 Share-based compensation $ 195 Non-recurring legal and other $ 100 Change in contingent consideration $ 35 Adjusted EBITDA $ 3,445 - $3,920 This supplemental financial information is presented for informational purposes only and is not a substitute for the financial information presented in accordance with accounting principles generally accepted in the United States. Investor Conference Call Radiant will host a conference call for shareholders and the investing community on Thursday, May 15, 2014 at 4:00 pm, ET to discuss the contents of this release. The call can be accessed by dialing (877) 407-8031, or (201) 689-8031 for international participants, and is expected to last approximately 30 minutes. Callers are requested to dial in 5 minutes before the start of the call. An audio replay will be available for one week after the teleconference by dialing (877) 660-6853, or (201) 612-7415 for international callers, and using account number 286 and conference ID number 13582279. This call is also being webcast and may be accessed via Radiant's web site at www.radiantdelivers.com. About Radiant Logistics (NYSE MKT: RLGT) Radiant Logistics, Inc. (www.radiantdelivers.com) is a non-asset based transportation and logistics company providing domestic and international freight forwarding services and an expanding array of value-added solutions, including customs and property brokerage, order fulfillment, inventory management and warehousing. The company operates through a network of company-owned and independent agent offices across North America under the Radiant, Airgroup, Adcom, DBA and On Time network brands servicing a diversified account base including manufacturers, distributors and retailers using a network of independent carriers and international agents positioned strategically around the world. This announcement contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results may differ significantly from management's expectations. These forward-looking statements involve risks and uncertainties that include, among others, risks related to trends in the domestic and global economy, our ability to attract new and retain existing agency relationships, acquisitions and integration of acquired entities, availability of capital to support our acquisition strategy, our ability to maintain and improve back office infrastructure and transportation and accounting information systems in a manner sufficient to service our revenues and network of operating locations, outcomes of legal proceedings, competition, management of growth, potential fluctuations in operating results, and government regulation. More information about factors that potentially could affect Radiant Logistics, Inc. financial results is included Radiant Logistics, Inc.'s filings with the Securities and Exchange Commission, including its most recent Annual Report on Form 10-K and subsequent filings. RADIANT LOGISTICS, INC. Consolidated Balance Sheets (unaudited) March 31, June 30, 2014 2013 ASSETS Current assets: Cash and cash equivalents $ 3,968,161 $ 1,024,192 Accounts receivable, net of allowance of $916,417 and $1,445,646, respectively 53,280,722 52,131,462 Current portion of employee and other receivables 264,725 328,123 Income tax deposit 162,136 - Prepaid expenses and other current assets 2,123,517 2,477,904 Deferred tax asset 856,926 908,564 Total current assets 60,656,187 56,870,245 Furniture and equipment, net 1,327,858 1,289,818 Acquired intangibles, net 16,147,139 9,231,163 Goodwill 28,623,045 15,952,544 Employee and other receivables, net of current portion 26,892 72,433 Deposits and other assets 609,349 336,613 Total long-term assets 45,406,425 25,592,753 Total assets $ 107,390,470 $ 83,752,816 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accrued transportation costs $ 37,833,939 $ 35,767,785 Commissions payable 5,447,156 6,086,324 Other accrued costs 2,488,639 2,176,567 Income taxes payable - 361,571 Current portion of notes payable 767,091 767,091 Current portion of contingent consideration 1,610,000 305,000 Current portion of lease termination liability 324,377 305,496 Total current liabilities 48,471,202 45,769,834 Notes payable and other long-term debt, net of current portion and debt discount 5,193,580 17,213,424 Contingent consideration, net of current portion 10,640,000 3,720,000 Lease termination liability, net of current portion 294,226 505,353 Deferred rent liability 566,676 583,401 Deferred tax liability 2,874,718 73,433 Other long-term liabilities 2,610 2,610 Total long-term liabilities 19,571,810 22,098,221 Total liabilities 68,043,012 67,868,055 Stockholders' equity: Preferred stock, $0.001 par value, 5,000,000 shares authorized; 839,200 and 0 shares issued and outstanding, respectively, liquidation preference of $20,980,000 839 - Common stock, $0.001 par value, 100,000,000 shares authorized; 34,116,244 and 33,348,166 shares and outstanding, respectively 15,571 14,803 Additional paid-in capital 34,337,719 13,873,157 Deferred compensation (10,469) (14,252) Retained earnings 4,946,954 1,943,530 Total Radiant Logistics, Inc. stockholders' equity 39,290,614 15,817,238 Non-controlling interest 56,844 67,523 Total stockholders' equity 39,347,458 15,884,761 Total liabilities and stockholders' equity $ 107,390,470 $ 83,752,816 RADIANT LOGISTICS, INC. Consolidated Statements of Operations (unaudited) THREE MONTHS ENDED NINE MONTHS ENDED MARCH 31, MARCH 31, 2014 2013 2014 2013 Revenues $ 86,032,714 $ 72,790,313 $ 246,878,094 $ 230,116,528 Cost of transportation 62,043,074 51,183,245 175,302,070 164,745,770 Net revenues 23,989,640 21,607,068 71,576,024 65,370,758 Agent commissions 12,867,599 12,478,403 39,408,451 38,957,449 Personnel costs 5,396,347 4,511,174 15,284,150 12,813,670 Selling, general and administrative expenses 2,815,653 1,819,987 7,766,698 6,547,208 Depreciation and amortization 1,232,603 931,974 3,304,357 3,067,145 Transition and lease termination costs — — — 1,544,454 Change in contingent consideration (1,145,000) (675,000) (1,357,567) (950,000) Total operating expenses 21,167,202 19,066,538 64,406,089 61,979,926 Income from operations 2,822,438 2,540,530 7,169,935 3,390,832 Other income (expense): Interest income 1,965 3,547 6,593 12,679 Interest expense (88,887) (492,414) (1,105,343) (1,500,435) Loss on write-off of debt discount — — (1,238,409) — Gain on litigation settlement, net — — — 368,162 Other 16,482 26,292 109,228 238,030 Total other expense (70,440) (462,575) (2,227,931) (881,564) Income before income tax expense 2,751,998 2,077,955 4,942,004 2,509,268 Income tax expense (1,087,343) (1,166,927) (1,889,259) (1,109,275) Net income 1,664,655 911,028 3,052,745 1,399,993 Less: Net income attributable to non-controlling interest (16,541) (29,218) (49,321) (94,250) Net income attributable to Radiant Logistics, Inc. 1,648,114 881,810 3,003,424 1,305,743 Less: Preferred stock dividends (511,388) — (579,887) — Net income attributable to common stockholders $ 1,136,726 $ 881,810 $ 2,423,537 $ 1,305,743 Net income per common share - basic and diluted $ 0.03 $ 0.03 $ 0.07 $ 0.04 Weighted average shares outstanding: Basic shares 33,713,462 33,091,774 33,549,740 33,048,832 Diluted shares 35,335,320 35,098,612 35,497,675 35,121,335 RADIANT LOGISTICS, INC. As used in this report, Adjusted Net Income and Adjusted Net Income per Share, EBITDA and Adjusted EBITDA are not measures of financial performance or liquidity under United States Generally Accepted Accounting Principles ("GAAP"). Adjusted Net Income and Adjusted Net Income per Share, EBITDA and Adjusted EBITDA are presented herein because they are important metrics used by management to evaluate and understand the performance of the ongoing operations of Radiant's business. For Adjusted Net Income, management uses a 40% tax rate for calculating the provision for income taxes before preferred dividend requirement to normalize Radiant's tax rate to that of its competitors and to compare Radiant's reporting periods with difference effective tax rates. In addition, in arriving at Adjusted Net Income and Adjusted Net Income per Share, the Company adjusts for significant items that are not part of regular operating activities. These adjustments include acquisition costs, transition, severance and lease termination costs, non-recurring litigation expenses as well as depreciation and amortization and certain other non-cash charges. Adjusted EBITDA means earnings before preferred stock dividends, interest, income taxes, depreciation and amortization, which is then further adjusted for changes in contingent consideration, expenses specifically attributable to acquisitions, severance and lease termination costs, extraordinary items, share based compensation expense, non-recurring litigation expenses and other non-cash charges. We believe that adjusted EBITDA, as presented, represents a useful method of assessing the performance of our operating activities, as it reflects our earnings trends without the impact of certain non-cash charges and other non-recurring charges. We understand that although securities analysts frequently use EBITDA in their evaluation of companies, it is not necessarily comparable to other similarly titled captions of other companies due to potential inconsistencies in the method of calculation. Adjusted Net Income and Adjusted Net income per Share, EBITDA and Adjusted EBITDA should not be considered in isolation or as a substitute for any of the consolidated statements of operations prepared in accordance with GAAP, or as an indication of Radiant's operating performance or liquidity. THREE MONTHS ENDED NINE MONTHS ENDED MARCH 31, MARCH 31, 2014 2013 2014 2013 Net income attributable to common stockholders $ 1,136,726 $ 881,810 $ 2,423,537 $ 1,305,743 Net income per common share - basic and diluted $ 0.03 $ 0.03 $ 0.07 $ 0.04 Weighted average shares outstanding: Basic shares 33,713,462 33,091,774 33,549,740 33,048,832 Diluted shares 35,335,320 35,098,612 35,497,675 35,121,335 Reconciliation of net income to adjusted net income: Net income attributable to common stockholders $ 1,136,726 $ 881,810 $ 2,423,537 $ 1,305,743 Adjustments to net income: Income tax expense 1,087,343 1,166,927 1,889,259 1,109,275 Depreciation and amortization 1,232,603 931,974 3,304,357 3,067,145 Change in contingent consideration (1,145,000) (675,000) (1,357,567) (950,000) Gain on litigation settlement, net — — — (368,162) Lease termination costs — — — 1,439,018 Acquisition related costs 167,214 13,606 307,669 52,943 Severance and transition costs associated with acquisitions — — — 105,436 Non-recurring legal costs 225,915 78,577 293,149 201,990 Amortization of loan fees and OID — 71,554 172,412 206,289 Loss on write-off of debt discount — — 1,238,409 — Adjusted Net Income before income taxes 2,704,801 2,469,448 8,271,225 6,169,677 Provision for income taxes at 40% before preferred dividend requirement (1,286,476) (987,779) (3,540,445) (2,467,871) Adjusted net income $ 1,418,325 $ 1,481,669 $ 4,730,780 $ 3,701,806 Adjusted net income per common share: Basic $ 0.04 $ 0.04 $ 0.14 $ 0.11 Diluted $ 0.04 $ 0.04 $ 0.13 $ 0.11 THREE MONTHS ENDED NINE MONTHS ENDED MARCH 31, MARCH 31, Reconciliation of net income to adjusted EBITDA 2014 2013 2014 2013 Net income attributable to common stockholders $ 1,136,726 $ 881,810 $ 2,423,537 $ 1,305,743 Preferred stock dividends 511,388 — 579,887 — Net income attributable to Radiant Logistics, Inc. 1,648,114 881,810 3,003,424 1,305,743 Income tax expense 1,087,343 1,166,927 1,889,259 1,109,275 Depreciation and amortization 1,232,603 931,974 3,304,357 3,067,145 Net interest expense 86,922 488,867 1,098,750 1,487,756 EBITDA 4,054,982 3,469,578 9,295,790 6,969,919 Share-based compensation 199,741 101,014 476,928 305,758 Change in contingent consideration (1,145,000) (675,000) (1,357,567) (950,000) Acquisition related costs 167,214 13,606 307,669 52,943 Non-recurring legal costs 225,915 78,577 293,149 201,990 Lease termination costs — — — 1,439,018 Loss on write-off of debt discount — — 1,238,409 — Gain on litigation settlement, net — — — (368,162) Adjusted EBITDA $ 3,502,852 $ 2,987,775 $ 10,254,378 $ 7,651,466 As a % of Net Revenues 14.6 % 13.8 % 14.3 % 11.7 %
Fiscal Quarter Ending
June 30, 2014
Fiscal Quarter Ending
June 30, 2014
Reconciliation of Net Income to Adjusted Net Income, EBITDA, Adjusted EBITDA, and Reconciliation of Net
Income per share to Adjusted Net Income per share
(unaudited)
* All content is copyrighted by Industry Intelligence, or the original respective author or source. You may not recirculate, redistrubte or publish the analysis and presentation included in the service without Industry Intelligence's prior written consent. Please review our terms of use.
