RADIANT LOGISTICS, INC. 
By BELLEVUE, Wash., Feb. 11, 2013 /PRNewswire/ -- Radiant Logistics, Inc. (NYSE MKT: RLGT), a domestic and international logistics services company, today reported financial results for the three and six months ended December 31, 2012.
(Logo: http://photos.prnewswire.com/prnh/20110606/CL14193LOGO )
Second Fiscal Quarter Financial Highlights (Quarter Ended December 31, 2012)
-- Total revenues increased 7.7% to $78.2 million in the second fiscal
quarter of 2013 from $72.6 million for the comparable prior year period.
-- Net income attributable to common shareholders was $21,000, or $0.00 per
basic and diluted share, for the second fiscal quarter of 2013, compared
to net income attributable to common shareholders of $417,000, or $0.01
per basic and diluted share, for the comparable prior year period.
-- During the second fiscal quarter of 2013, the Company received an
arbitration award of $699,000, which was taken as an off-set to amounts
otherwise due the former shareholders of DBA and recorded as a gain, net
of legal expenses of $368,000.
-- During the second fiscal quarter of 2013, the Company recorded a
one-time pre-tax restructuring charge of approximately $1.4 million from
the termination of redundant facilities resulting from the recent
acquisition of its Los Angeles based operating partner Marvir Logistics.
Cost synergies of approximately $1,000,000 per year are expected in
connection with this restructuring.
-- Adjusted net income attributable to common shareholders was $911,000, or
$0.03 per basic and diluted share, for the second fiscal quarter of
2013, compared to adjusted net income attributable to common
shareholders of $1,278,000, or $0.04 per basic and diluted share, for
the comparable prior year period. Both periods are calculated by
applying a normalized tax rate of 38% and excluding other items not
considered part of regular operating activities.
-- Adjusted EBITDA was $2,034,000 for the second fiscal quarter of 2013,
compared to adjusted EBITDA in the prior year comparable period of
$1,941,000.
CEO Comments
"We made significant progress across a number of different fronts in this most recent quarter ended December 31, 2012," said Bohn Crain, Chairman and CEO. "We have been working diligently to address the challenges presented to us in connection with the DBA acquisition and view both the recent arbitration award and the Los Angeles restructuring as very positive developments as we head into calendar 2013. We expect to realize approximately $1.0 million per year in annualized savings from the elimination of redundant operating facilities in Los Angeles and have recorded a one-time, pre-tax restructuring charge of approximately $1.4 million in connection with our exit of the legacy facility operated by DBA."
"One of the benefits of our acquisition strategy is the ability to capture meaningful cost synergies as we consolidate and streamline our operations. We have been able to take advantage of similar cost savings opportunities in eliminating redundant back-office operations when acquiring other agent based networks like Adcom Worldwide in September of 2008 and DBA Distribution Services in April of 2011. But, the Marvir transaction (in combination with our legacy DBA operation in Los Angeles) represented our first real opportunity to fundamentally change our cost structure through station-level consolidation."
Crain continued: "As we have previously discussed, we do not believe that our results through December 31, 2012 are representative of the future earning power of the business, particularly with the costs of transitioning DBA's legacy back-office operations to Bellevue and the restructuring of our Los Angeles operations now behind us. Considering these along with Hurricane Sandy and the impact of other non-recurring items on our year-to-date results, we are withdrawing our full year guidance for our fiscal year ended June 30, 2013 and providing forward guidance for the upcoming quarter ending March 31, 2013 (our seasonally slowest quarter) with adjusted EBITDA in the range of $2.5 - $3.0 million on approximately $80.0 million in revenues which we believe better represents the go-forward earnings power of the business and equates to adjusted net income in the range of $1.2 - $1.5 million, or $0.03 - $0.04 per diluted share. A reconciliation of the Company's adjusted EBITDA to the most directly comparable GAAP measure appears later in this release."
Second Fiscal Quarter ended December 31, 2012 - Financial Results
For the three months ended December 31, 2012, Radiant reported net income attributable to common shareholders of $21,000 on $78.2 million of revenues, or $0.00 per basic and fully diluted share, including a gain of $368,000 in connection with the DBA arbitration award and a loss of $1,439,000 associated with the lease termination for redundant facilities in Los Angeles. For the three months ended December 31, 2011, Radiant reported net income attributable to common shareholders of $417,000 on $72.6 million of revenues, or $0.01 per basic and fully diluted share.
For the three months ended December 31, 2012, Radiant reported adjusted net income attributable to common shareholders of $911,000, or $0.03 per basic and fully diluted share. For the three months ended December 31, 2011, Radiant reported adjusted net income attributable to common shareholders of $1,278,000, or $0.04 per basic and per fully diluted share.
The Company also reported adjusted EBITDA of $2,034,000 for the three months ended December 31, 2012, compared to adjusted EBITDA of $1,941,000 for the three months ended December 31, 2011.
Six Months ended December 31, 2012 - Financial Results
For the six months ended December 31, 2012, Radiant reported net income attributable to common shareholders of $424,000 on $157.3 million of revenues, or $0.01 per basic and fully diluted share, including a gain $368,000 in connection with the DBA arbitration and a loss of $1,439,000 associated with the lease termination for redundant facilities in Los Angeles. For the six months ended December 31, 2011, Radiant reported net income of $1,073,000 on $144.4 million of revenues, or $0.03 per basic and fully diluted share.
For the six months ended December 31, 2012, Radiant reported adjusted net income attributable to common shareholders of $2,294,000, or $0.07 per basic and $0.06 per fully diluted share. For the six months ended December 31, 2011, Radiant reported adjusted net income attributable to common shareholders of $2,494,000, or $0.08 per basic and $0.07 per fully diluted share.
The Company also reported adjusted EBITDA, of $4,540,000 for the six months ended December 31, 2012, compared to adjusted EBITDA of $3,580,000 for the comparable prior year period.
A reconciliation of the Company's adjusted net income and adjusted EBITDA to the most directly comparable GAAP measure for both the three and six month periods ending December 31, 2012 appears at the end of this release.
Network Expansion - Agent Station Conversions
On November 1, 2012, the Company completed the acquisition of the assets of its operating partner, Marvir Logistics, a privately held company based in Los Angeles, California that had operated under the Company's Airgroup brand since 2006. The Company structured the transaction similar to its previous transactions with a portion of the expected purchase price payable in subsequent periods based on the future performance of the acquired operation. The transaction is expected to provide meaningful cost synergies as it is combined with existing Company owned operations in Los Angeles.
On December 31, 2012, the Company completed the acquisition of its operating partner, International Freight Systems (IFS) of Oregon, a privately-held company based in Portland, Oregon, that had operated its airfreight division under the Company's Airgroup brand since January of 2007. The Company structured the transaction similar to its previous acquisitions with a portion of the expected purchase price payable in subsequent periods based on the future performance of the acquired operation. The transaction is expected to enhance the Company's ocean freight forwarding capabilities and industry knowledge in support of the forest products industry.
Other Significant Events
In December of 2012, the Company was awarded $699,000 in damages from the former shareholders of DBA Distribution Services, Inc., a company it purchased in March 2011, where, the arbitrator found that the DBA Shareholders breached certain representations and warranties of the purchase agreement. In addition, the arbitrator found that Paul Pollara breached his noncompetition obligation to Radiant and enjoined Mr. Pollara from engaging in any activity in contravention of his obligations of noncompetition and nonsolicitation, including activities that relate to Santini Productions and his spouse, Bretta Santini Pollara until March 31, 2016. The Award was taken as an off-set against amounts otherwise due the former DBA Shareholders and recognized, net of associated legal costs, as a gain of $368,000 for the quarter ended December 31, 2012.
In December of 2012, the Company completed the integration of the recently acquired operations of Marvir Logistics with its legacy operations in Los Angeles, California. The Company expects to realize annualized cost savings in excess of $1,000,000 per year principally from the lease termination for redundant operating facilities in Los Angeles. The Company recorded a one-time pre-tax restructuring charge of approximately $1.4 million for the quarter ended December 31, 2012. The charge primarily relates to the abandonment and sub-lease of the Company's legacy facility operated by DBA.
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, to the most directly comparable GAAP measure is as follows:
(in thousands, except for earnings per share)
Outlook
March 31, 2013
--------------
Net income $560 - $870
Net income per common share $0.02 - $0.03
Basic
Diluted $0.02 - $0.03
Weighted average shares
outstanding:
Basic shares 33,036,270
Diluted shares 35,493,359
Reconciliation of net income to
adjusted net income:
Net income $560 - $870
Adjustments to net income:
Income tax expense (benefit) 340 - 530
Depreciation and amortization 875
Non-recurring legal costs 100
Amortization of loan fees and
original issue discount 75
---
Adjusted net income before taxes $1,950 - $2,450
Provision for income taxes at
38% 741 - 931
---------
Adjusted net income $1,209 - $1,519
===============
Adjusted net income per common
share:
Basic $0.04 - $0.05
Diluted $0.03 - $0.04
Reconciliation of net income to
adjusted EBITDA:
Outlook
March 31, 2013
--------------
Net income $560 - $870
Adjustments to net income:
Income tax expense (benefit) 340 - 530
Depreciation and amortization 875
Net interest expense 500
---
EBITDA $2,275 - $2,775
Share-based compensation 125
Non-recurring legal costs 100
Adjusted EBITDA $ $2,500 - $3,000
=== ===============
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 Wednesday, February 13, 2013 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 408613.
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 and fulfillment services through a network of company-owned and independent agent offices across North America. The company operates under the Radiant, Airgroup, Adcom, and Distribution By Air 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)
DECEMBER 31, JUNE 30,
2012 2012
---- ----
ASSETS
Current assets:
Cash and cash equivalents $1,724,587 $66,888
Accounts receivable, net of allowance of $1,634,630 and $1,311,670, respectively 44,908,885 51,939,016
Current portion of employee and other receivables 311,421 201,451
Income tax deposit 150,544 11,248
Prepaid expenses and other current assets 2,589,033 2,573,531
Deferred tax asset 1,067,979 684,231
--------- -------
Total current assets 50,752,449 55,476,365
---------- ----------
Furniture and equipment, net 1,548,941 1,735,157
--------- ---------
Acquired intangibles, net 10,742,889 11,722,812
Goodwill 15,924,138 14,951,217
Employee and other receivables, net of current portion 114,039 162,088
Deposits and other assets 400,106 422,500
Deferred tax asset 701,171 33,259
Total long term assets 27,882,343 27,291,876
---------- ----------
Total assets $80,183,733 $84,503,398
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued transportation costs $36,647,528 $41,406,451
Commissions payable 2,380,405 2,929,449
Other accrued costs 2,036,562 2,041,596
Current portion of notes payable to former shareholders of DBA 767,092 767,092
Amounts due to former shareholders of acquired operations 1,645,904 2,664,224
Current portion of lease termination liability 836,153 -
Current portion of contingent consideration 460,000 -
Other current liabilities - 64,392
Total current liabilities 44,773,644 49,873,204
---------- ----------
Notes payable and other long-term debt, net of current portion and debt discount 16,003,020 16,257,695
Contingent consideration, net of current portion 6,115,000 6,200,000
Lease termination liability, net of current portion 649,045 -
Deferred rent liability 588,906 680,521
Other long term liabilities 36,318 89,887
------ ------
Total long term liabilities 23,392,289 23,228,103
---------- ----------
Total liabilities 68,165,933 73,101,307
---------- ----------
RADIANT LOGISTICS, INC.Consolidated Balance Sheets (continued)(unaudited)
DECEMBER 31, JUNE 30,
2012 2012
---- ----
Stockholders' equity:
Radiant Logistics, Inc. stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized; no shares issued or - -
outstanding
Common stock, $0.001 par value, 100,000,000 and 50,000,000 shares authorized, 14,497 14,481
33,041,430 and 33,025,865 shares issued and outstanding, respectively
Additional paid-in capital 13,225,488 13,003,987
Deferred compensation (16,773) -
Retained deficit (1,289,995) (1,713,928)
---------- ----------
Total Radiant Logistics, Inc. stockholders' equity 11,933,217 11,304,540
---------- ----------
Non-controlling interest 84,583 97,551
------ ------
Total stockholders' equity 12,017,800 11,402,091
---------- ----------
Total liabilities and stockholders' equity $80,183,733 $84,503,398
=========== ===========
RADIANT LOGISTICS, INC.Consolidated Statements of Operations(unaudited)
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------ ------------
2012 2011 2012 2011
---- ---- ---- ----
Revenue $78,177,757 $72,613,729 $157,326,215 $144,446,773
Cost of transportation 56,652,509 52,365,148 113,562,525 102,959,272
---------- ---------- ----------- -----------
Net revenues 21,525,248 20,248,581 43,763,690 41,487,501
Agent commissions 13,183,721 12,752,341 26,479,046 26,644,766
Personnel costs 3,845,875 3,078,281 7,603,247 5,972,019
Selling, general and administrative expenses 2,526,233 2,432,105 5,426,470 5,093,231
Transition and lease termination costs 1,544,454 279,743 1,544,454 562,379
Depreciation and amortization 1,015,367 599,913 2,135,171 990,306
Change in contingent consideration (325,000) - (275,000) -
---
Total operating expenses 21,790,650 19,142,383 42,913,388 39,262,701
----------
Income (loss) from operations (265,402) 1,106,198 850,302 2,224,800
Other income (expense):
Interest income 5,059 5,064 9,132 9,998
Interest expense (512,690) (211,269) (1,008,021) (303,357)
Gain on litigation settlement, net 368,162 - 368,162 -
Other 62,766 47,231 211,738 119,960
Total other expense (76,703) (158,974) (418,989) (173,399)
Income (loss) before income tax expense (342,105) 947,224 431,313 2,051,401
Income tax benefit (expense) 397,656 (487,966) 57,652 (889,435)
------- -------- ------ --------
Net income 55,551 459,258 488,965 1,161,966
Less: Net income attributable to non-controlling interest (34,771) (41,761) (65,032) (89,442)
Net income attributable to Radiant Logistics, Inc. $20,780 $417,497 $423,933 $1,072,524
======= ======== ======== ==========
Net income per common share - basic and diluted $ - $.01 $.01 $.03
Weighted average shares outstanding:
Basic shares 33,041,430 31,954,955 33,036,270 31,815,696
Diluted shares 35,384,437 34,874,343 35,493,359 34,742,154
RADIANT LOGISTICS, INC.
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)
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 38% tax rate for calculating the provision for income taxes 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, unusual legal and claims settlement as well as depreciation and amortization and certain other non-cash charges.
Adjusted EBITDA means earnings before interest, income taxes, depreciation and amortization, which is then further adjusted for changes in contingent consideration stock-based compensation, acquisition, severance and lease termination costs and other non-cash charges consistent with the
financial covenants of our senior credit facility. 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. 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. 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 SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------ ------------
2012 2011 2012 2011
---- ---- ---- ----
Net income $20,780 $417,497 $423,933 $1,072,524
Net income per common share - basic and diluted $ - $.01 $.01 $.03
Weighted average shares outstanding:
Basic shares 33,041,430 31,954,955 33,036,270 31,815,696
Diluted shares 35,384,437 34,874,343 35,493,359 34,742,154
Reconciliation of net income to adjusted net income:
Net income $20,780 $417,497 $423,933 $1,072,524
Adjustments to net income:
Income tax expense (benefit) (397,656) 487,966 (57,652) 889,435
Depreciation and amortization 1,015,367 599,913 2,135,171 990,306
Change in contingent consideration (325,000) - (275,000) -
Gain on litigation settlement (368,162) - (368,162) -
Lease termination costs 1,439,018 - 1,439,018 -
Acquisition related costs 39,337 188,022 39,337 256,818
Severance and transition costs associated with 105,436 279,743 105,436 574,320
acquisitions
Non-recurring legal costs (127,781) 68,833 123,413 219,157
Amortization of loan fees and original issue discount 68,727 19,361 134,735 19,361
------ ------ ------- ------
Adjusted net income before taxes 1,470,066 2,061,335 3,700,229 4,021,921
Provision for income taxes at 38% (558,625) (783,307) (1,406,087) (1,528,330)
-------- -------- ---------- ----------
Adjusted net income $911,441 $1,278,028 $2,294,142 $2,493,591
======== ========== ========== ==========
Adjusted net income per common share:
Basic $.03 $.04 $.07 $.08
Diluted $.03 $.04 $.06 $.07
THREE MONTHS ENDED SIX MONTHS ENDED
DECEMBER 31, DECEMBER 31,
------------ ------------
Reconciliation of net income to adjusted EBITDA: 2012 2011 2012 2011
---- ---- ---- ----
Net income $20,780 $417,497 $423,933 $1,072,524
Adjustments to net income:
Income tax expense (benefit) (397,656) 487,966 (57,652) 889,435
Depreciation and amortization 1,015,367 599,913 2,135,171 990,306
Net interest expense 507,631 206,205 998,889 293,359
------- ------- ------- -------
EBITDA 1,146,122 1,711,581 3,500,341 3,245,624
Share-based compensation 103,243 41,165 204,744 65,409
Change in contingent consideration (325,000) - (275,000) -
Gain on litigation settlement (368,162) - (368,162) -
Lease termination costs 1,439,018 - 1,439,018 -
Acquisition related costs 39,337 188,022 39,337 268,759
Adjusted EBITDA $2,034,558 $1,940,768 $4,540,278 $3,579,792
========== ========== ========== ==========
SOURCE Radiant Logistics, Inc.
