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Radiant Logistics Announces Results For Second Fiscal Quarter Ended December 31, 2013 - Valley News Live - KVLY/KXJB - Fargo/Grand Forks

Radiant Logistics Announces Results For Second Fiscal Quarter Ended December 31, 2013

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SOURCE Radiant Logistics, Inc.

Posts quarterly results with Adjusted EBITDA of $3.6 Million - Up $1.6 Million and 76.4%; Margin Expansion with Adjusted EBITDA as a Percentage of Net Revenues Up 520 bps at 14.7%

BELLEVUE, Wash., Feb. 13, 2014 /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, 2013.

(Logo: http://photos.prnewswire.com/prnh/20110606/CL14193LOGO)

Second Fiscal Quarter Financial Highlights (Quarter Ended December 31, 2013)

  • Net income attributable to common shareholders was approximately $0.3 million, including a one-time non-cash charge of $1.2 million related to the unamortized original issue discount and debt issue costs written off in connection with the retirement of subordinate debt, on $84.1 million of revenues, or $0.01 per basic and diluted share, for the second fiscal quarter of 2014, compared to net income of less than $0.1 million on $78.2 million of revenues, or $0.00 per basic and diluted share, for the comparable prior year period. 
  • Adjusted net income attributable to common shareholders was $1.9 million, or $0.06 per basic and $0.05 per diluted share, for the second fiscal quarter of 2014, compared to adjusted net income attributable to common shareholders of $0.9 million, or $0.03 per basic and $0.02 per fully diluted share, for the comparable prior year period. Both periods are calculated by applying a normalized tax rate of 40% and excluding other items not considered part of regular operating activities.
  • Adjusted EBITDA increased 76.4% to $3,588,000 for the second fiscal quarter of 2014, compared to adjusted EBITDA of $2,035,000 in the comparable prior year period.
  • Adjusted EBITDA margin (expressed as a function of net revenues) increased 520 basis points to 14.7% for the second fiscal quarter of 2014, compared to Adjusted EBITDA margin of 9.5% in the comparable prior year period.
  • Effective October 1, Radiant acquired Phoenix based On Time Express, Inc., internalizing a proprietary dedicated line-haul network which we expect will serve as a catalyst for margin expansion and a competitive differentiator to help secure new end customers and attract additional agent stations to the Radiant network.  On Time Express is anticipated to add $26.0 -$28.0 million in revenues and $3.5 - $4.0 million in additional adjusted EBITDA.
  • During the second fiscal quarter of 2014, the Company raised non-diluted growth capital of approximately $19.3 million in net proceeds through the issuance of a redeemable perpetual preferred equity security, the proceeds of which were used to retire its subordinated debt and substantially reduce amounts outstanding under its senior credit facility.

CEO Comments

"We are very pleased to report another solid quarter and continuing our trend of margin expansion and earnings growth," said Bohn Crain, Founder and CEO. "We posted Adjusted EBITDA of $3.6 million for the quarter ended December 31, 2013, up approximately $1.6 million and 76.4% over the comparable prior year period. Consistent with past quarters, we also continue to make good progress in leveraging our scalable business model to drive margin expansion. For the quarter ended December 31, 2013, our Adjusted EBITDA expressed as a function of net revenues increased 520 basis points, up from 9.5% to 14.7% for the comparable prior year period. As we have previously discussed, our incremental cost of supporting that next dollar of gross margin is very small and we are very excited about our opportunity to drive further margin expansion as we continue to scale the business and look for ways to drive operating efficiencies in our non-asset based business model. This was also the first quarter where our reported results include the benefit our recent acquisition of On Time and the step-function growth in the earnings power of our platform.  We believe On Time will become even more impactful over time as we get further into the integration and have the opportunity to leverage On Time's capabilities for the benefit of the broader Radiant network. 

"We are also very excited to have completed our recent preferred equity offering which fortified our balance sheet and positioned us for future growth.  The preferred offering is effectively non-dilutive growth capital which we used to de-lever; retiring our subordinated debt and substantially reducing amounts outstanding under our senior credit facility with Bank of America. At December 31, 2013, (and excluding contingent earn-outs) we had no net debt (i.e. $11.5 million in total debt and $11.8 million of cash). In effect, we now have access to approximately $30.0 million low-cost capital via our senior credit facility to continue to advance our acquisition strategy. Assuming we continue to focus on acquiring complimentary non-asset based transportation businesses following historic practices, this would imply we could on-board an additional $12.0 million in incremental EBITDA with minimal dilution to the common shareholders (e.g. acquisition candidates generating $1.0-$3.0 million in EBITDA - $12.0 million in aggregate EBITDA valued at 5 times multiple with 50% of the purchase price paid at closing). We are not ruling out the possibility of larger transactions at potentially higher multiples in the years ahead but acquisition candidates generating $1.0 - $3.0 million EBITDA continue to be the focus of our efforts."

Crain concluded: "We are also providing guidance for the upcoming quarter ending March 31, 2014 and excluding the benefit of any further acquisitions, we are projecting adjusted EBITDA in the range of $3.1 - $3.6 million on approximately $80.1 - $83.4 million in revenues which equates to adjusted net income available to common shareholders in the range of $1.2 - $1.5 million, or $0.04 per basic and $0.03 - $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."

Second Fiscal Quarter ended December 31, 2013 – Financial Results

For the three months ended December 31, 2013, Radiant reported net income attributable to common shareholders of $264,000 on $84.1 million of revenues, or $0.01 per basic and fully diluted share, including a loss on write-off of debt discount of $1,238,000.  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 transition and lease termination costs of $1,544,000

For the three months ended December 31, 2013, Radiant reported adjusted net income attributable to common shareholders of $1,858,000, or $0.06 per basic and $.05 per fully diluted share.  For the three months ended December 31, 2012, Radiant reported adjusted net income attributable to common shareholders of $882,000, or $0.03 per basic and $0.02 per fully diluted share. 

The Company also reported adjusted EBITDA of $3,588,000 for the three months ended December 31, 2013, compared to adjusted EBITDA of $2,035,000 for the three months ended December 31, 2012.

A reconciliation of the Company's adjusted net income and adjusted EBITDA to the most directly comparable GAAP measure for both the three month periods ending December 31, 2013 appears at the end of this release.

Six Months ended December 31, 2013 – Financial Results

For the six months ended December 31, 2013, Radiant reported net income attributable to common shareholders of $1,355,000 on $160.8 million of revenues, or $0.04 per basic and fully diluted share, including a loss on write-off of debt discount of $1,238,000.  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 transition and lease termination costs of $1,544,000

For the six months ended December 31, 2013, Radiant reported adjusted net income attributable to common shareholders of $3,381,000, or $0.10 per basic and $0.09 per fully diluted share.  For the six months ended December 31, 2012, Radiant reported adjusted net income attributable to common shareholders of $2,220,000, or $0.07 per basic and $0.06 per fully diluted share. 

The Company also reported adjusted EBITDA of $6,684,000 for the six months ended December 31, 2013, compared to adjusted EBITDA of $4,540,000 for the six months ended December 31, 2012.

A reconciliation of the Company's adjusted net income and adjusted EBITDA to the most directly comparable GAAP measure for the six month periods ending December 31, 2013 and 2012 appears at the end of this release.

Network Expansion – Acquisition of On Time Express

On October 1, 2013, the Company completed the acquisition of Phoenix, Arizona-based On Time Express, Inc. ("On Time"). On Time brings Radiant a diverse and unique service offering along with a best-of-class domestic line haul network that will serve as a catalyst for margin expansion and a competitive differentiator to help secure new end customers and attract additional agent stations to the Radiant network.

Other Significant Events

In December of 2013, the Company completed the public offering of 839,200 shares of its 9.75% Series A Cumulative Redeemable Perpetual Preferred Stock (the "Series A Preferred Shares"), liquidation preference $25.00 per share.  After deducting the underwriting discount and other offering costs, net proceeds to the Company were approximately $19.3 million. The Series A Preferred Shares are listed on the NYSE MKT Stock Market under the symbol RLGT-PA.

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 March 31, 2014 is as follows:

(in thousands, except for earnings per share)




Outlook

Fiscal Quarter Ending

March 31, 2014








Net income attributable to Radiant Logistics, Inc.


$1,002 - $1,304



Less: Preferred Dividend Requirement


($566)



Net Income attributable to common shareholders


$436-$738








Net income per common share

      Basic and Diluted


$0.01 - $0.02








Weighted average shares outstanding:





Basic shares


33,700,000



Diluted shares


36,500,000








Reconciliation of net income to adjusted net income:





Net income attributable to Radiant Logistics, Inc.


$1,002 - $1,304



Less: Preferred Dividends Requirement


($566)



Net Income attributable to common shareholders


$436-$738








Adjustments to net income:





Income tax expense


688 – 890



Depreciation and amortization


1,250



Adjusted net income before taxes


$2,374 - $2,878








Provision for income taxes at 40% before preferred dividends


1,176 – 1,378








Adjusted net income


$1,198 - $1,500








Adjusted net income per common share:





Basic


$0.04 - $0.04



Diluted


$0.03 - $0.04





Reconciliation of net income to adjusted EBITDA:

 

Outlook

Fiscal Quarter Ending

March 31, 2014








Net income attributable to Radiant Logistics, Inc.


$1,002 - $1,304



Less: Preferred Dividends Requirement


($566)



Net Income attributable to common shareholders


$436-$738








Adjustments to net income:





Preferred Dividend Requirement


566



Income tax expense


688 – 890



Depreciation and amortization


1,250



Net interest expense


50








EBITDA


$2,990 - $3,494













Share-based compensation


118



Change in contingent consideration


35








Adjusted EBITDA


$3,144 - $3,648








 

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 Friday, February 14, 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 13572569. 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)





DECEMBER 31,



JUNE 30,



2013



2013


ASSETS 








Current assets:








Cash and cash equivalents

$

11,838,784



$

1,024,192


Accounts receivable, net of allowance of $1,044,203 and $1,445,646, respectively


50,298,466




52,131,462


Current portion of employee and other receivables


469,150




328,123


Prepaid expenses and other current assets


2,230,766




2,477,904


Deferred tax asset


837,391




908,564


Total current assets


65,674,557




56,870,245










Furniture and equipment, net


1,376,020




1,289,818










Acquired intangibles, net


15,599,346




9,231,163


Goodwill


26,802,045




15,952,544


Employee and other receivables, net of current portion


37,742




72,433


Deposits and other assets


700,002




336,613


Total long term assets


43,139,135




25,592,753


Total assets

$

110,189,712



$

83,752,816










LIABILITIES AND STOCKHOLDERS' EQUITY








Current liabilities:








Accounts payable and accrued transportation costs

$

36,929,007



$

35,767,785


Commissions payable


5,308,050




6,086,324


Other accrued costs


2,340,752




2,176,567


Income taxes payable


744,943




361,571


Current portion of notes payable to former shareholders of acquired operations


2,767,091




767,091


Amounts due to former shareholders of acquired operations


1,369,613




-


Current portion of contingent consideration


1,609,000




305,000


Current portion of lease termination liability


303,862




305,496


Total current liabilities


51,372,318




45,769,834










Notes payable  and other long-term debt, net of current portion and debt discount


8,713,630




17,213,424


Contingent consideration, net of current portion


8,886,000




3,720,000


Lease termination liability, net of current portion


364,868




505,353


Deferred tax liability


2,902,426




73,433


Deferred rent liability


572,097




583,401


Other long-term liabilities


2,610




2,610


Total long term liabilities


21,441,631




22,098,221


Total liabilities


72,813,949




67,868,055










 

RADIANT LOGISTICS, INC.

Consolidated Balance Sheets (continued)

(unaudited)





DECEMBER 31,



JUNE 30,



2013



2013


Stockholders' equity:








Radiant Logistics, Inc. 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, 33,645,497 and
            33,348,166 shares issued and outstanding, respectively


15,100




14,803


Additional paid-in capital


34,032,411




13,873,157


Deferred compensation


(11,730)




(14,252)


Retained  earnings


3,298,840




1,943,530


Total Radiant Logistics, Inc. stockholders' equity


37,335,460




15,817,238


Non-controlling interest


40,303




67,523


Total stockholders' equity


37,375,763




15,884,761


Total liabilities and stockholders' equity

$

110,189,712



$

83,752,816


 

RADIANT LOGISTICS, INC.

Consolidated Statements of Operations

(unaudited)





THREE MONTHS ENDED

DECEMBER 31,


SIX MONTHS ENDED

DECEMBER 31,



2013


2012


2013


2012
















Revenue

$

84,143,519


$

78,177,757


$

160,845,380


$

157,326,215


Cost of transportation


59,777,636



56,652,509



113,258,996



113,562,525


Net revenues


24,365,883



21,525,248



47,586,384



43,763,690















Agent commissions


12,906,080



13,183,721



26,540,852



26,479,046


Personnel costs


5,396,200



4,188,218



9,887,803



8,302,496


Selling, general and administrative expenses


2,686,711



2,183,890



4,951,045



4,727,221


Depreciation and amortization


1,241,656



1,015,367



2,071,754



2,135,171


Transition and lease termination costs


-



1,544,454



-



1,544,454


Change in contingent consideration


(17,567)



(325,000)



(212,567)



(275,000)


Total operating expenses


22,213,080



21,790,650



43,238,887



42,913,388















Income (loss) from operations


2,152,803



(265,402)



4,347,497



850,302















Other income (expense):













Interest income


2,128



5,059



4,628



9,132


Interest expense


(495,293)



(512,690)



(1,016,456)



(1,008,021)


Loss on write-off of debt discount


(1,238,409)






(1,238,409)





Gain on litigation settlement, net


-



368,162






368,162


Other


8,563



62,766



92,746



211,738


Total other expense


(1,723,011)



(76,703)



(2,157,491)



(418,989)















Income (loss) before income tax benefit (expense)


429,792



(342,105)



2,190,006



431,313















Income tax benefit (expense)


(150,081)



397,656



(801,916)



57,652















Net income


279,711



55,551



1,388,090



488,965















Less: Net income attributable to non-controlling interest


(16,138)



(34,771)



(32,780)



(65,032)















Net income attributable to Radiant Logistics, Inc.

$

263,573


$

20,780


$

1,355,310


$

423,933















Net income per common share – basic and diluted

$

.01


$

.00


$

.04


$

.01















Weighted average shares outstanding:













Basic shares


33,601,956



33,041,430



33,469,659



33,036,270


    Diluted shares


36,466,123



35,384,437



36,226,803



35,493,359


 

RADIANT LOGISTICS, INC.
Reconciliation of Net Income (Loss) 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 40% 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.  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

DECEMBER 31,


SIX MONTHS ENDED

DECEMBER 31,



2013


2012


2013


2012
















Net income

$

263,573


$

20,780


$

1,355,310


$

423,933















Net income per common share – basic and diluted

$

.01


$

.00


$

.04


$

.01















Weighted average shares outstanding:













Basic shares


33,601,956



33,041,430



33,469,659



33,036,270


Diluted shares


36,466,123



35,384,437



36,226,803



35,493,359















Reconciliation of net income to adjusted net income:













Net income

$

263,573


$

20,780


$

1,355,310


$

423,933















Adjustments to net income:













Income tax expense (benefit)


150,081



(397,656)



801,916



(57,652)


Depreciation and amortization


1,241,656



1,015,367



2,071,754



2,135,171


Change in contingent consideration


(17,567)



(325,000)



(212,567)



(275,000)


Gain on litigation settlement, net


-



(368,162)



-



(368,162)


Lease termination costs


-



1,439,018



-



1,439,018


Acquisition related costs


74,887



39,337



140,455



39,337


Severance and transition costs associated with acquisitions


-



105,436



-



105,436


Non-recurring legal costs


51,473



(127,781)



67,234



123,413


Loss on write-off of debt discount


1,238,409



-



1,238,409



-


Amortization of loan fees and original issue discount


94,844



68,727



172,412



134,735


Adjusted net income before taxes


3,097,356



1,470,066



5,634,923



3,700,229















Provision for income taxes at 40%


(1,238,942)



(588,026)



(2,253,969)



(1,480,092)















Adjusted net income

$

1,858,414


$

882,040


$

3,380,954


$

2,220,137















Adjusted net income per common share:













Basic

$

.06


$

.03


$

.10


$

.07


Diluted

$

.05


$

.02


$

.09


$

.06


 


THREE MONTHS ENDED

DECEMBER 31,


SIX MONTHS ENDED

DECEMBER 31,


Reconciliation of net income to adjusted EBITDA:

2013


2012


2013


2012
















Net income

$

263,573


$

20,780


$

1,355,310


$

423,933















Adjustments to net income:













Income tax expense (benefit)


150,081



(397,656)



801,916



(57,652)


Depreciation and amortization


1,241,656



1,015,367



2,071,754



2,135,171


Net interest expense


493,165



507,631



1,011,828



998,889















EBITDA


2,148,475



1,146,122



5,240,808



3,500,341




























Share-based compensation


143,998



103,243



277,187



204,744


Change in contingent consideration


(17,567)



(325,000)



(212,567)



(275,000)


Gain on litigation settlement, net


-



(368,162)



-



(368,162)


Lease termination costs


-



1,439,018



-



1,439,018


Acquisition related costs


74,887



39,337



140,455



39,337


Loss on write-off of debt discount


1,238,409



-



1,238,409



-















Adjusted EBITDA

$

3,588,202


$

2,034,558


$

6,684,292


$

4,540,278















 

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