RADIANT LOGISTICS ANNOUNCES RESULTS FOR THE SECOND FISCAL QUARTER ENDED DECEMBER 31, 2023
- Debt-free and generated $12.1 million in cash from operations
- Acquired two logistics companies to solidify its cruise logistics service offerings in south Florida
- Repurchased 532,401 shares of its common stock
- Revenues decreased by 27.7% to $201.1 million for the second fiscal quarter
- Gross profit decreased by 16.7% to $58.8 million for the second fiscal quarter
- Net income and adjusted EBITDA decreased significantly
Insights
The reported decrease in revenues and profits for Radiant Logistics indicates a significant downturn in their recent financial performance. The 27.7% drop in revenues and the corresponding decline in net income by 79.2% is a stark contrast to the company's previous year's results. This decline reflects broader market challenges, including weak freight demand and excess capacity, which are critical factors contributing to the company's performance dip.
From a financial perspective, the company's balance sheet remains robust, with a notable $32.9 million in cash and no debt, which is an encouraging sign for liquidity and financial stability. The cash generated from operations, amounting to $12.1 million, despite the downturn, suggests that the company is still generating positive cash flows, which is critical for sustaining operations and pursuing growth strategies.
The stock buy-back initiative, involving the purchase of over half a million shares, is a strategic move that can signal confidence to the market about the company's valuation. However, investors should be cautious as buy-backs can also reduce the amount of cash available for other investments or for cushioning against ongoing market headwinds.
The logistics industry is facing a challenging period characterized by overcapacity and weakened demand, which is reflected in the performance of companies like Radiant Logistics. The company's focus on the cruise industry, through acquisitions of Daleray Corporation and Select Logistics, could be a strategic move to diversify and strengthen its position in a niche market. The structured transactions based on future performance indicate a cautious approach to expansion, aligning payouts with actual growth.
However, the cruise industry itself has been volatile, especially in the wake of the pandemic. Radiant's decision to double down in this sector suggests a long-term strategic bet that the cruise industry will rebound and grow. This focus could differentiate Radiant from competitors if the bet pays off, but it also exposes the company to sector-specific risks.
The state of the freight market, as discussed by Radiant Logistics' CEO, is indicative of cyclical economic pressures that are affecting the logistics sector at large. The excess capacity and reduced freight demand point to broader economic trends, such as a potential slowdown in global trade or shifts in supply chain dynamics. The company's anticipation of market normalization in the latter half of 2024 suggests an expectation of economic recovery or adjustment within the industry.
It is important to note that while the balance sheet remains strong, the significant decrease in adjusted EBITDA margin by 950 basis points is a concern as it reflects reduced operational efficiency and profitability. Stakeholders should monitor whether this is a temporary dip due to market conditions or a sign of deeper operational issues.
Continues to deliver solid financial results in face of continued market headwinds;
Generated
Debt free and well positioned for further growth
Financial Highlights – Three Months Ended December 31, 2023
- Revenues decreased to
$201.1 million $77.0 million 27.7% , compared to revenues of$278.1 million - Gross profit decreased to
$58.8 million $11.8 million 16.7% , compared to gross profit of$70.6 million - Adjusted gross profit, a non-GAAP financial measure, decreased to
$62.0 million $12.0 million 16.2% , compared to adjusted gross profit of$74.0 million - Net income attributable to Radiant Logistics, Inc. decreased to
$1.0 million $0.02 $3.8 million 79.2% , compared to$4.8 million $0.10 - Adjusted net income, a non-GAAP financial measure, decreased to
$5.5 million $0.12 $0.11 $5.6 million 50.5% , compared to adjusted net income of$11.1 million $0.23 24.5% and excluding other items not considered part of regular operating activities. - Adjusted EBITDA, a non-GAAP financial measure, decreased to
$7.7 million $8.5 million 52.5% , compared to adjusted EBITDA of$16.2 million - Adjusted EBITDA margin (adjusted EBITDA expressed as a percentage of adjusted gross profit), a non-GAAP financial measure, decreased to
12.4% or 950 basis points, for the second fiscal quarter ended December 31, 2023, compared to adjusted EBITDA margin of21.9% for the comparable prior year period.
Acquisition Update
Effective October 1, 2023, the Company acquired the operations of Daleray Corporation ("Daleray"), a
On February 7, 2024, the Company announced that it acquired Select Logistics, Inc. and Select Cartage, Inc. (collectively "Select"), both
Stock Buy-Back
We purchased 532,401 shares of our common stock at an average cost of
As of December 31, 2023, the Company had 46,921,448 shares outstanding.
CEO Bohn Crain Comments on Results
"Our results for the quarter ended December 31, 2023 continue to reflect the difficult freight markets being experienced by the entire industry as well as our operations," said Bohn Crain, Founder and CEO of Radiant Logistics. "This extended period of weak freight demand combined with excess capacity continues to negatively impact not only our current results, but also the year-over-year comparison to our record results for prior year period. With that said, we remain optimistic that we are at or near the bottom of this cycle and would expect markets to begin to find their way to more sustainable and normalized levels towards the back half of calendar 2024."
Mr. Crain continued, "Notwithstanding the tough year over year comparisons, we continue to deliver meaningfully positive results and have generated
As previously discussed, we believe we are well positioned to navigate through these slower freight markets as we find our way back to more normalized market conditions. At the same time, we remain focused on delivering profitable growth through a combination of organic and acquisition initiatives and thoughtfully re-levering our balance sheet through a combination of agent station conversions, synergistic tuck-in acquisitions, and stock buy-backs. Through this approach we believe, over time, will continue to deliver meaningful value for our shareholders, operating partners, and the end customers that we serve. In this regard, we are very excited about our recent agent station conversions with the acquisition of Daleray and the Select businesses, which will combine to solidify our offering in support of the cruise line industry in
Second Fiscal Quarter Ended December 31, 2023 – Financial Results
For the three months ended December 31, 2023, Radiant reported net income attributable to Radiant Logistics, Inc. of
For the three months ended December 31, 2023, Radiant reported adjusted net income, a non-GAAP financial measure, of
For the three months ended December 31, 2023, Radiant reported adjusted EBITDA, a non-GAAP financial measure, of
Six Months Ended December 31, 2023 – Financial Results
For the six months ended December 31, 2023, Radiant reported net income attributable to Radiant Logistics, Inc. of
For the six months ended December 31, 2023, Radiant reported adjusted net income, a non-GAAP financial measure, of
For the six months ended December 31, 2023, Radiant reported adjusted EBITDA, a non-GAAP financial measure, of
Earnings Call and Webcast Access Information
Radiant Logistics, Inc. will host a conference call on Thursday, February 8, 2024 at 4:30 PM Eastern to discuss the contents of this release. The conference call is open to all interested parties, including individual investors and press. Bohn Crain, Founder and CEO will host the call.
Conference Call Details
DATE/TIME: | Thursday, February 8, 2024 at 4:30 PM Eastern |
DIAL-IN | US (888) 506-0062; Intl. (973) 528-0011 (Participant Access Code: 241021) |
REPLAY | February 9, 2024 at 9:30 AM Eastern to February 22, 2024 at 4:30 PM Eastern, US (877) 481-4010; Intl. (919) 882-2331 (Replay ID number: 49820) |
Webcast Details
This call is also being webcast and may be accessed via Radiant's web site at www.radiantdelivers.com or at https://www.webcaster4.com/Webcast/Page/2191/49820.
About Radiant Logistics (NYSE American: RLGT)
Radiant Logistics, Inc. (www.radiantdelivers.com) operates as a third-party logistics company, providing technology-enabled global transportation and value-added logistics solutions primarily to customers in
This report contains "forward-looking statements" within the meaning set forth in
RADIANT LOGISTICS, INC. Condensed Consolidated Balance Sheets | ||||||||
December 31, | June 30, | |||||||
(In thousands, except share and per share data) | 2023 | 2023 | ||||||
(unaudited) | ||||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 32,883 | $ | 32,456 | ||||
Accounts receivable, net of allowance of | 106,297 | 126,725 | ||||||
Contract assets | 7,227 | 6,180 | ||||||
Income tax receivable | 2,139 | — | ||||||
Prepaid expenses and other current assets | 12,799 | 15,211 | ||||||
Total current assets | 161,345 | 180,572 | ||||||
Property, technology, and equipment, net | 26,327 | 25,389 | ||||||
Goodwill | 89,251 | 89,203 | ||||||
Intangible assets, net | 31,746 | 36,641 | ||||||
Operating lease right-of-use assets | 50,042 | 56,773 | ||||||
Deposits and other assets | 4,333 | 5,163 | ||||||
Total other long-term assets | 175,372 | 187,780 | ||||||
Total assets | $ | 363,044 | $ | 393,741 | ||||
LIABILITIES AND EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 71,213 | $ | 84,561 | ||||
Operating partner commissions payable | 14,476 | 18,360 | ||||||
Accrued expenses | 8,625 | 8,739 | ||||||
Income tax payable | — | 369 | ||||||
Current portion of notes payable | 1,826 | 4,107 | ||||||
Current portion of operating lease liabilities | 10,535 | 11,273 | ||||||
Current portion of finance lease liabilities | 583 | 620 | ||||||
Current portion of contingent consideration | — | 3,886 | ||||||
Other current liabilities | 300 | 258 | ||||||
Total current liabilities | 107,558 | 132,173 | ||||||
Operating lease liabilities, net of current portion | 46,119 | 52,120 | ||||||
Finance lease liabilities, net of current portion | 704 | 1,121 | ||||||
Contingent consideration, net of current portion | 90 | 287 | ||||||
Deferred tax liabilities | 1,456 | 2,944 | ||||||
Total long-term liabilities | 48,369 | 56,472 | ||||||
Total liabilities | 155,927 | 188,645 | ||||||
Equity: | ||||||||
Common stock, | 33 | 33 | ||||||
Additional paid-in capital | 109,728 | 108,516 | ||||||
Treasury stock, at cost, 4,841,258 and 4,308,857 shares, respectively | (30,148) | (27,067) | ||||||
Retained earnings | 129,200 | 125,593 | ||||||
Accumulated other comprehensive loss | (1,936) | (2,205) | ||||||
Total Radiant Logistics, Inc. stockholders' equity | 206,877 | 204,870 | ||||||
Non-controlling interest | 240 | 226 | ||||||
Total equity | 207,117 | 205,096 | ||||||
Total liabilities and equity | $ | 363,044 | $ | 393,741 | ||||
RADIANT LOGISTICS, INC. Condensed Consolidated Statements of Comprehensive Income (unaudited) | |||||||||||||||
Three Months Ended December 31, | Six Months Ended December 31, | ||||||||||||||
(In thousands, except share and per share data) | 2023 | 2022 | 2023 | 2022 | |||||||||||
Revenues | $ | 201,082 | $ | 278,119 | $ | 411,880 | $ | 609,090 | |||||||
Operating expenses: | |||||||||||||||
Cost of transportation and other services | 139,085 | 204,091 | 289,057 | 458,582 | |||||||||||
Operating partner commissions | 25,818 | 30,512 | 49,601 | 60,617 | |||||||||||
Personnel costs | 19,760 | 20,641 | 39,387 | 40,412 | |||||||||||
Selling, general and administrative expenses | 10,595 | 8,667 | 20,069 | 17,437 | |||||||||||
Depreciation and amortization | 4,364 | 6,914 | 8,890 | 13,693 | |||||||||||
Change in fair value of contingent consideration | (204) | 150 | (450) | 310 | |||||||||||
Total operating expenses | 199,418 | 270,975 | 406,554 | 591,051 | |||||||||||
Income from operations | 1,664 | 7,144 | 5,326 | 18,039 | |||||||||||
Other income (expense): | |||||||||||||||
Interest income | 621 | 59 | 1,207 | 98 | |||||||||||
Interest expense | (291) | (742) | (593) | (1,563) | |||||||||||
Foreign currency transaction gain (loss) | (79) | 4 | 15 | 471 | |||||||||||
Change in fair value of interest rate swap contracts | (531) | (104) | (733) | 587 | |||||||||||
Other | 135 | 24 | 162 | 29 | |||||||||||
Total other income (expense) | (145) | (759) | 58 | (378) | |||||||||||
Income before income taxes | 1,519 | 6,385 | 5,384 | 17,661 | |||||||||||
Income tax expense | (404) | (1,460) | (1,418) | (4,224) | |||||||||||
Net income | 1,115 | 4,925 | 3,966 | 13,437 | |||||||||||
Less: net income attributable to non-controlling interest | (130) | (89) | (359) | (168) | |||||||||||
Net income attributable to Radiant Logistics, Inc. | $ | 985 | $ | 4,836 | $ | 3,607 | $ | 13,269 | |||||||
Other comprehensive income: | |||||||||||||||
Foreign currency translation gain (loss) | 1,397 | 901 | 269 | (2,577) | |||||||||||
Comprehensive income | $ | 2,512 | $ | 5,826 | $ | 4,235 | $ | 10,860 | |||||||
Income per share: | |||||||||||||||
Basic | $ | 0.02 | $ | 0.10 | $ | 0.08 | $ | 0.27 | |||||||
Diluted | $ | 0.02 | $ | 0.10 | $ | 0.07 | $ | 0.27 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 46,990,818 | 48,243,204 | 47,144,388 | 48,494,260 | |||||||||||
Diluted | 48,907,452 | 49,427,420 | 48,991,819 | 49,865,216 | |||||||||||
Reconciliation of Non-GAAP Measures
RADIANT LOGISTICS, INC.
Reconciliation of Gross Profit to Adjusted Gross Profit, Net Income Attributable to Radiant Logistics, Inc.
to Adjusted Net Income, EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin
(unaudited)
As used in this report adjusted gross profit, adjusted net income, EBITDA, adjusted EBITDA, and adjusted EBITDA margin are not measures of financial performance or liquidity under United States Generally Accepted Accounting Principles ("GAAP"). Adjusted gross profit, adjusted net income, EBITDA, adjusted EBITDA, and adjusted EBITDA margin are presented herein because they are important metrics used by management to evaluate and understand the performance of the ongoing operations of Radiant's business. For adjusted net income, management uses a
We commonly refer to the term "adjusted gross profit" when commenting about our Company and the results of operations. Adjusted gross profit is a non-GAAP measure calculated as revenues less directly related operations and expenses attributed to the Company's services. Adjusted gross profit is calculated as GAAP gross profit exclusive of depreciation and amortization, which are reported separately. We believe adjusted gross profit is a better measurement than are total revenues when analyzing and discussing the effectiveness of our business and is used as a portion of a key metric the Company uses to discuss its progress.
EBITDA is a non-GAAP measure of income and does not include the effects of interest, taxes, and the "non-cash" effects of depreciation and amortization on long-term assets. Companies have some discretion as to which elements of depreciation and amortization are excluded in the EBITDA calculation. We exclude all depreciation charges related to property, technology, and equipment and all amortization charges (including amortization of leasehold improvements). We then further adjust EBITDA to exclude 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, 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.
We believe that these non-GAAP financial measures, as presented, represent a useful method of assessing the performance of our operating activities, as they reflect our earnings trends without the impact of certain non-cash charges and other non-recurring charges. These non-GAAP financial measures are intended to supplement the GAAP financial information by providing additional insight regarding results of operations to allow a comparison to other companies, many of whom use similar non-GAAP financial measures to supplement their GAAP results. However, these non-GAAP financial measures will not be defined in the same manner by all companies and may not be comparable to other companies. Adjusted gross profit, adjusted net income, EBITDA, adjusted EBITDA, and adjusted EBITDA margin should not be considered in isolation or as a substitute for any of the condensed consolidated statements of comprehensive income prepared in accordance with GAAP, or as an indication of Radiant's operating performance or liquidity.
(In thousands) | Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||
Reconciliation of adjusted gross profit to GAAP gross profit | 2023 | 2022 | 2023 | 2022 | |||||||||||
Revenues | $ | 201,082 | $ | 278,119 | $ | 411,880 | $ | 609,090 | |||||||
Cost of transportation and other services (exclusive of depreciation | (139,085) | (204,091) | (289,057) | (458,582) | |||||||||||
Depreciation and amortization | (3,205) | (3,469) | (6,538) | (6,816) | |||||||||||
GAAP gross profit | $ | 58,792 | $ | 70,559 | $ | 116,285 | $ | 143,692 | |||||||
Depreciation and amortization | 3,205 | 3,469 | 6,538 | 6,816 | |||||||||||
Adjusted gross profit | $ | 61,997 | $ | 74,028 | $ | 122,823 | $ | 150,508 | |||||||
GAAP gross margin (GAAP gross profit as a percentage of revenues) | 29.2 | % | 25.4 | % | 28.2 | % | 23.6 | % | |||||||
Adjusted gross profit percentage (adjusted gross profit as a percentage of revenues) | 30.8 | % | 26.6 | % | 29.8 | % | 24.7 | % | |||||||
(In thousands) | Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||
Reconciliation of GAAP net income to adjusted EBITDA | 2023 | 2022 | 2023 | 2022 | |||||||||||
Net income attributable to Radiant Logistics, Inc. | $ | 985 | $ | 4,836 | $ | 3,607 | $ | 13,269 | |||||||
Income tax expense | 404 | 1,460 | 1,418 | 4,224 | |||||||||||
Depreciation and amortization (1) | 4,479 | 7,142 | 9,118 | 13,921 | |||||||||||
Net interest expense | (330) | 683 | (614) | 1,465 | |||||||||||
EBITDA | 5,538 | 14,121 | 13,529 | 32,879 | |||||||||||
Share-based compensation | 695 | 679 | 1,575 | 1,288 | |||||||||||
Change in fair value of contingent consideration | (204) | 150 | (450) | 310 | |||||||||||
Acquisition related costs | 252 | 22 | 321 | 49 | |||||||||||
Litigation costs | 741 | 247 | 1,105 | 366 | |||||||||||
Transition, lease termination, and other costs | 76 | 30 | 76 | 30 | |||||||||||
Change in fair value of interest rate swap contracts | 531 | 104 | 733 | (587) | |||||||||||
Restatement costs | — | 854 | — | 1,007 | |||||||||||
Foreign currency transaction loss (gain) | 79 | (4) | (16) | (471) | |||||||||||
Adjusted EBITDA | $ | 7,708 | $ | 16,203 | $ | 16,873 | $ | 34,871 | |||||||
Adjusted EBITDA margin (adjusted EBITDA as a % of adjusted gross profit) | 12.4 | % | 21.9 | % | 13.7 | % | 23.2 | % | |||||||
(1) | Depreciation and amortization for the purposes of calculating adjusted EBITDA, a non-GAAP financial measure, includes depreciation expenses recognized on certain computer software as a service. |
(In thousands, except share and per share data) | Three Months Ended December 31, | Six Months Ended December 31, | |||||||||||||
Reconciliation of GAAP net income to adjusted net income | 2023 | 2022 | 2023 | 2022 | |||||||||||
GAAP net income attributable to Radiant Logistics, Inc. | $ | 985 | $ | 4,836 | $ | 3,607 | $ | 13,269 | |||||||
Adjustments to net income: | |||||||||||||||
Income tax expense | 404 | 1,460 | 1,418 | 4,224 | |||||||||||
Depreciation and amortization | 4,364 | 6,914 | 8,890 | 13,693 | |||||||||||
Change in fair value of contingent consideration | (204) | 150 | (450) | 310 | |||||||||||
Acquisition related costs | 252 | 22 | 321 | 49 | |||||||||||
Litigation costs | 741 | 247 | 1,105 | 366 | |||||||||||
Transition, lease termination, and other costs | 76 | 30 | 76 | 30 | |||||||||||
Change in fair value of interest rate swap contracts | 531 | 104 | 733 | (587) | |||||||||||
Restatement costs | — | 854 | — | 1,007 | |||||||||||
Amortization of debt issuance costs | 130 | 140 | 255 | 250 | |||||||||||
Adjusted net income before income taxes | 7,279 | 14,757 | 15,955 | 32,611 | |||||||||||
Provision for income taxes at | (1,783) | (3,615) | (3,909) | (7,990) | |||||||||||
Adjusted net income | $ | 5,496 | $ | 11,142 | $ | 12,046 | $ | 24,621 | |||||||
Adjusted net income per common share: | |||||||||||||||
Basic | $ | 0.12 | $ | 0.23 | $ | 0.26 | $ | 0.51 | |||||||
Diluted | $ | 0.11 | $ | 0.23 | $ | 0.25 | $ | 0.49 | |||||||
Weighted average common shares outstanding: | |||||||||||||||
Basic | 46,990,818 | 48,243,204 | 47,144,388 | 48,494,260 | |||||||||||
Diluted | 48,907,452 | 49,427,420 | 48,991,819 | 49,865,216 | |||||||||||
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SOURCE Radiant Logistics, Inc.
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