Radiant Logistics Announces Results for the Fiscal Second Quarter Ended December 31, 2009
Recognizes a Gain of Approximately $355,000 in Settlement of Disputes in Connection with its Acquisition of Adcom Worldwide
BELLEVUE, Wash., Feb. 17 /PRNewswire-FirstCall/ -- Radiant Logistics, Inc. (OTC Bulletin Board: RLGT), a domestic and international freight forwarding and logistics services company, today reported financial results for the three and six months ended December 31, 2009.
For the three months ended December 31, 2009, Radiant reported net income of $549,000 on $39.1 million of revenues, or $0.02 per basic and fully diluted share, including a gain on litigation settlement of $355,000. For the three months ended December 31, 2008, Radiant reported a net loss of $10,216,000 on $42.5 million of revenues, or a loss of $0.29 per basic and fully diluted share, including a non-cash charge of $11.4 million for impairment of goodwill.
For the six months ended December 31, 2009, Radiant reported net income of $665,000 on $73.1 million of revenues, or $0.02 per basic and fully diluted share, including a gain on litigation settlement of $355,000. For the six months ended December 31, 2008, Radiant reported a net loss of $9,966,000 on $74.9 million of revenues, or $0.29 per basic and fully diluted share, including a non-cash charge of $11.4 million for impairment of goodwill.
In December 2009, the Company recorded a gain of $355,000 in connection with the favorable settlement of a dispute with the former owner of Adcom Worldwide related to the calculation and payment of working capital and certain related post closing items.
In December 2008, the Company recorded a non-cash charge of $11.4 million for impairment of goodwill. The goodwill charge was a result of the material decline in the market value of the Company's equity during the fourth quarter of 2008. The non-cash charge has not had any impact on its financial condition or affected the financial covenants of the Company's credit facility.
The Company also reported adjusted EBITDA (earnings before interest, taxes, depreciation amortization), excluding the non-recurring items, of $1,026,000 for the three months ended December 31, 2009, compared to adjusted EBITDA of $1,382,000 for the comparable prior year period.
The Company also reported adjusted EBITDA (earnings before interest, taxes, depreciation amortization), excluding the non-recurring items, of $1,750,000 for the six months ended December 31, 2009 compared to adjusted EBITDA of $2,176,000 for the comparable prior year period. A reconciliation of our adjusted EBITDA to the most directly comparable GAAP measure appears at the end of this release.
The Company has also provided additional prior period analysis using pro forma results of operations presented as if Radiant had acquired Adcom as of July 1, 2008 which is included in the Company's Form 10-Q for the quarter ended December 31, 2009 and filed February 16, 2010.
"Given the realities of today's economic environment, we remain very pleased with our overall operating results," said Bohn Crain, Chairman and CEO. "For the quarter ended December 31, 2009, our revenues decreased 8.0% to $39.1 million as compared to $42.5 million for the comparable prior year period. Net transportation revenues also decreased 14.7% to $11.5 million as compared to $13.5 million for the comparable prior year period. This contraction was a direct result of the slowing economy. While we were successful in off-setting much of this compression with corresponding reductions in agent commissions and significant savings in personnel costs as a result of the migration of Adcom's back-office operations to Bellevue, we did see increases in legal and other general and administrative costs that should revert to more normal levels in future periods.
Mr. Crain continued, "Also included in this quarter's results is the very favorable ruling in connection with an arbitration proceeding with the former owner of Adcom Worldwide who was seeking payments in excess of $1.0 million related to working capital balances which we acquired as part of that transaction. It was ultimately resolved that the former owner actually owed us approximately $357,000 as a result of working capital shortfall as of the closing date. After giving effect for other ancillary issues addressed in the arbitration proceeding and related legal fees, we reported a gain of approximately $355,000 as a result of the settlement. Excluding the positive impact of this gain, our adjusted EBITDA for the quarter ended December 31, 2009 decreased 25.7% to $1,026,000 from $1,382,000."
Crain concluded, "As we look forward to the balance of our fiscal year ending June 30, 2010, we remain cautiously optimistic that our non-asset based business model will continue to perform relatively well through this difficult market environment. For the fiscal year ending June 30, 2010, we are updating our prior guidance and expect to generate approximately $3.5 million in adjusted EBITDA on $140 million in annual revenues. This is before considering the impact of any future acquisitions or improvement in the general economic climate. Looking forward, our strategy remains unchanged. From our current platform, we believe profitable growth can be best achieved by continuing to bring value to the agent-based forwarder community and continuing to execute our three-prong strategy of first, providing continuous improvement to our existing network participants in terms of technology, buy rates and enhanced service offerings; second, building upon the success of our organic growth initiative by on-boarding additional agent stations; and third, opportunistically pursuing acquisition opportunities, including strategic opportunities within the community of agent-based forwarders."
Supplemental Pro Forma Information
We believe that supplemental disclosure of our adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization adjusted for stock-based compensation, goodwill impairment and other non-cash costs is a useful measure for investors because it eliminates the effect of certain non-cash costs and provides an important metric for our business. Adjusted EBITDA is a non-GAAP measure of income. A reconciliation of adjusted EBITDA amounts to Net income, the most directly comparable GAAP measure, for the three and six months ended December 31, 2009 and 2008 is shown below:
(Amounts in
000's) THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- -----
Net income (loss) $549 $(10,216) $665 $(9,966)
Interest expense – net 27 67 82 92
Income tax expense
(benefit) 337 (383) 408 (230)
Depreciation and
amortization 386 473 796 788
--- --- --- ---
EBITDA 1,299 (10,059) 1,951 (9,316)
Share-based compensation
and other non-cash
charges 82 38 154 89
Gain on litigation
settlement (355) - (355) -
Goodwill impairment - 11,403 - 11,403
--- ------ --- ------
Adjusted EBITDA $1,026 $1,382 $1,750 $2,176
====== ====== ====== ======
This supplemental pro forma financial information is presented for
informational purposes only and is not a substitute for the historical
financial information presented in accordance with accounting principles
generally accepted in the United States. A reconciliation of adjusted
EBITDA amounts to Net income, the most directly comparable GAAP measure,
for the fiscal year ending June 30, 2010 is shown below:
Financial Outlook
FISCAL YEAR
(Amounts in 000's) ENDED
JUNE 30, 2010
-------------
Net income $1,087
Interest expense – net 200
Income tax expense 668
Depreciation and amortization 1,600
-----
EBITDA 3,555
Stock-based compensation
and other non-cash charges 300
Gain on litigation settlement (355)
----
Adjusted EBITDA $3,500
======
Investor Conference Call
Radiant will host a conference call for shareholders and the investing community on Friday, February 19, 2010 at 4:00 pm, ET to discuss the contents of the 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 345067.
About Radiant Logistics (OTC BB: RLGT)
Radiant Logistics (www.radiant-logistics.com) is a non-asset based logistics company providing domestic and international freight forwarding and related services through a network of approximately 70 company owned and exclusive agent offices across North America. Operating under the Airgroup, Adcom Worldwide and Radiant Logistics brands, the company services a diversified account base including manufacturers, distributors and retailers using a network of independent carriers and international agents positioned strategically around the world. For more information about Radiant Logistics, please contact Bohn Crain at (425) 943-4599.
This press release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, regarding future operating performance, events, trends and plans. All statements other than statements of historical fact contained herein, including, without limitation, statements regarding the our future financial position, business strategy, budgets, projected revenues and costs, and plans and objectives of management for future operations, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "will," "expects," "intends," "plans," "projects," "estimates," "anticipates," or "believes" or the negative thereof or any variation thereon or similar terminology or expressions. We have based these forward-looking statements on our current expectations and projections about future events. 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. Important factors that could cause our actual results to differ from our expectations, include but are not limited to, our ability to: use Airgroup as a "platform" upon which we can build a profitable global transportation and supply chain management company; retain and build upon the relationships we have with our exclusive agency offices; continue the development of our back office infrastructure and transportation and accounting systems in a manner sufficient to service our expanding revenues and base of exclusive agency locations; maintain the future operations of Adcom in a manner consistent with its past practices, integrate the operations of Adcom with our existing operations, continue growing our business and maintain historical or increased gross profit margins; locate suitable acquisition opportunities; secure the financing necessary to complete any acquisition opportunities we locate; assess and respond to competitive practices in the industries in which we compete, mitigate, to the best extent possible, our dependence on current management and certain of our larger exclusive agency locations; assess and respond to the impact of current and future laws and governmental regulations affecting the transportation industry in general and our operations in particular; as well as those risk factors disclosed in Item 1A of our Report on Form 10-K for the year ended June 30, 2009 and other filings with the Securities and Exchange Commission and other public documents and press releases which can be found on our web-site (www.radiant-logistics.com). Readers are cautioned not to place undue reliance on our forward-looking statements, as they speak only as of the date made. Such statements are not guarantees of future performance or events and we undertake no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances occurring after the date hereof.
RADIANT LOGISTICS, INC.
Consolidated Balance Sheets
December 31, June 30,
2009 2009
---- ----
ASSETS
Current assets -
Cash and cash equivalents $478,132 $890,572
Accounts receivable, net of
allowance of $824,997 and $754,578
respectively 21,641,624 17,275,387
Current portion of employee loan
receivable and other receivables 396,478 613,288
Income tax deposit 31,518 535,074
Prepaid expenses and other current
assets 542,503 305,643
Deferred tax asset 454,054 427,713
------- -------
Total current assets 23,544,309 20,047,677
---------- ----------
Furniture and equipment, net 567,778 760,507
------- -------
Acquired intangibles, net 2,587,065 3,179,043
Goodwill 494,291 337,000
Employee loan receivable, net of
current portion 49,900 40,000
Investment in real estate 40,000 40,000
Deposits and other assets 100,499 359,606
------- -------
Total long term assets 3,271,755 3,955,649
--------- ---------
Total assets $27,383,842 $24,763,833
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities -
Accounts payable and accrued
transportation costs 15,637,117 13,249,628
Commissions payable 1,143,059 1,323,004
Other accrued costs 579,021 472,202
Due to former Adcom shareholder 1,515,324 2,153,721
--------- ---------
Total current liabilities 18,874,521 17,198,555
---------- ----------
Long term debt 8,707,239 7,869,110
Deferred tax liability 117,196 352,387
------- -------
Total long term liabilities 8,824,435 8,221,497
--------- ---------
Total liabilities 27,698,956 25,420,052
---------- ----------
Stockholders' equity (deficit):
Preferred stock, $0.001 par value,
5,000,000 shares authorized; no
shares issued or outstanding - -
Common stock, $0.001 par value,
50,000,000 shares authorized.
Issued and outstanding: December
31, 2009 – 32,397,810; June 30,
2009 – 34,106,960 16,157 16,157
Additional paid-in capital 7,998,362 7,889,458
Treasury stock, at cost, 2,304,150
and 595,000 shares, respectively (629,886) (138,250)
Retained deficit (7,760,332) (8,425,491)
---------- ----------
Total Radiant Logistics, Inc.
stockholders’ deficit (375,699) (658,126)
-------- --------
Non-controlling interest 60,585 1,907
------ -----
Total stockholders’ equity (deficit) (315,114) (656,219)
-------- --------
Total liabilities and stockholders’
equity (deficit) $27,383,842 $24,763,833
=========== ===========
RADIANT LOGISTICS, INC.
Consolidated Statements of Income (Operations)
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
----------------- -----------------
2009 2008 2009 2008
---- ---- ---- ----
Revenue $39,115,845 $42,513,263 $73,144,179 $74,907,962
Cost of
transportation 27,611,567 29,023,751 51,091,017 50,235,011
---------- ---------- ---------- ----------
Net revenues 11,504,278 13,489,512 22,053,162 24,672,951
Agent
commissions 7,838,360 9,000,585 15,293,565 16,553,457
Personnel costs 1,531,465 2,110,217 2,953,862 3,723,841
Selling, general
and administrative
expenses 1,153,161 1,026,362 2,249,433 2,125,384
Depreciation and
amortization 385,937 472,709 795,717 788,066
Goodwill
impairment - 11,403,342 - 11,403,342
Restructuring
charges - - - 220,000
--- --- --- -------
Total operating
expenses 10,908,923 24,013,215 21,292,577 34,814,090
---------- ---------- ---------- ----------
Income (loss)
from operations 595,355 (10,523,703) 760,585 (10,141,139)
Other income
(expense):
Interest
income 9,563 5,429 3,273 6,417
Interest
expense (36,756) (72,381) (85,791) (98,077)
Other 454 108 98,765 35,104
Gain on
litigation
settlement 354,670 - 354,670 -
------- --- ------- ---
Total other
income
(expense) 327,931 (66,844) 370,917 (56,556)
------- ------- ------- -------
Income (loss)
before income
tax (expense)
benefit 923,286 (10,590,547) 1,131,502 (10,197,695)
Income tax
(expense)
benefit (336,539) 382,690 (407,665) 230,031
-------- ------- -------- -------
Net income
(loss) 586,747 (10,207,857) 723,837 (9,967,664)
Less: Net (income)
Loss attributable
to non-
controlling
interest (37,638) (7,843) (58,678) 2,147
------- ------ ------- -----
Net income (loss)
attributable
to Radiant
Logistics, Inc. $549,109 $(10,215,700) $665,159 $(9,965,517)
======== ============ ======== ===========
Net income
(loss) per
common share
– basic $.02 $(.29) $.02 $(.29)
==== ===== ==== =====
Net income
(loss) per
common share
– diluted $.02 $(.29) $.02 $(.29)
==== ===== ==== =====
Weighted average
shares outstanding:
Basic
shares 32,533,680 34,701,960 32,950,810 34,698,563
Diluted
shares 32,723,181 34,701,960 33,135,684 34,698,563
The accompanying notes form an integral part of these condensed
consolidated financial statements.
RADIANT LOGISTICS, INC.
Reconciliation of EBITDA to Net Income and Net Cash Provided By Operating
Activities
(UNAUDITED)
As used in this report, adjusted EBITDA means earnings before interest,
income taxes, depreciation and amortization adjusted for stock-based
compensation 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. Adjusted EBITDA
is also used by our creditors in assessing debt covenant compliance. 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. EBITDA is not intended
as an alternative to cash flow provided by operating activities as a
measure of liquidity, as an alternative to net income as an indicator
of our operating performance, nor as an alternative to any other
measure of performance in conformity with accounting principles generally
accepted in the United States of America.
The following is a reconciliation of adjusted EBITDA to both net income
and cash flow provided by operating activities:
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------ ------------
2009 2008 2009 2008
---- ---- ---- ----
Adjusted EBITDA $1,026,166 $1,381,957 $1,750,106 $2,176,191
Stock-based
compensation
and other non-
cash charges (82,058) (37,344) (153,717) (88,671)
Gain on
litigation
settlement 354,670 - 354,670 -
Goodwill
impairment - (11,403,342) - (11,403,342)
--- ----------- --- -----------
EBITDA 1,298,778 (10,058,729) 1,951,059 (9,315,822)
Depreciation
and
amortization (385,937) (472,709) (795,717) (788,066)
Interest
expense, net (27,193) (66,952) (82,518) (91,660)
Income tax
(expense)
benefit (336,539) 382,690 (407,665) 230,031
------- -------- ------- -------
Net income
(loss) 549,109 (10,215,700) 665,159 (9,965,517)
ADJUSTMENTS TO
RECONCILE NET
INCOME (LOSS)
TO NET CASH
PROVIDED BY
(USED FOR)
OPERATING
ACTIVITIES:
Non-cash
compensation
expense (stock
options) 54,697 32,779 108,904 80,692
Stock issued
for investor
relations
services - - - 12,084
Amortization of
intangibles 283,654 348,045 591,978 565,060
Deferred income
tax expense
(benefit) (201,469) (518,926) (261,532) 566,866
Depreciation
and
amortization
of bank fees 121,262 129,229 222,719 230,984
Goodwill
impairment - 11,403,342 - 11,403,342
Gain on
litigation
settlement (354,670) - (354,670) -
Change in non-
controlling
interest of
subsidiaries 37,638 7,844 58,678 (2,147)
Provision for
doubtful
accounts 38,195 53,682 143,608 149,095
CHANGE IN
OPERATING
ASSETS AND
LIABILITIES:
Accounts
receivable (2,270,906) 3,820,991 (4,436,656) 3,657,072
Employee
receivable
and other
receivables 43,794 3,423 218,741 (36,813)
Prepaid
expenses and
other assets 35,933 9,065 (99,071) 161,670
Accounts
payable &
accrued
transporta-
tion costs 1,561,598 (6,212,557) 2,383,214 (6,518,887)
Commissions
payable (621,658) (1,065,356) (179,945) 224,201
Other accrued
costs 36,781 (99,852) (172,669) 130,571
Income tax
deposit 374,348 (1,604,225) 503,556 (2,450,756)
------- ---------- ------- ----------
Total
adjust-
ments (860,803) 6,307,484 (1,273,145) 8,173,034
--------- --------- ---------- ---------
Net cash used
for operating
activities $(311,694) $(3,908,216) $(607,986) $(1,792,483)
========= =========== ======== ===========
SOURCE Radiant Logistics, Inc.
Share this article