rlgt-10q_20170331.htm

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

There were 48,886,358 shares issued and outstanding of the registrant’s common stock, par value $.001 per share, as of May 5, 2017.

(In thousands, except share and per share data)	March 31,			June 30,
	2017			2016
ASSETS
Current assets:
Cash and cash equivalents	$	12,933		$	4,768
Accounts receivable, net of allowance of $1,954 and $1,806, respectively		97,479			101,035
Employee and other receivables		369			635
Income tax deposit		1,585			1,525
Prepaid expenses and other current assets		6,048			5,410
Total current assets		118,414			113,373

Technology and equipment, net		13,133			12,453

Acquired intangibles, net		65,758			71,941
Goodwill		62,888			62,888
Deposits and other assets		2,891			2,814
Total long-term assets		131,537			137,643
Total assets	$	263,084		$	263,469

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued transportation costs	$	71,911		$	75,071
Commissions payable		9,065			8,280
Other accrued costs		4,628			5,331
Due to former shareholders of acquired operations		—			50
Current portion of notes payable		2,463			2,416
Current portion of contingent consideration		4,735			3,387
Current portion of transition and lease termination liability		1,301			1,838
Other current liabilities		94			138
Total current liabilities		94,197			96,511

Notes payable, net of current portion		30,206			28,903
Contingent consideration, net of current portion		665			4,098
Transition and lease termination liability, net of current portion		318			658
Deferred rent liability		854			851
Deferred tax liability		11,954			12,525
Other long-term liabilities		882			742
Total long-term liabilities		44,879			47,777
Total liabilities		139,076			144,288

Stockholders' equity:
Preferred stock, $0.001 par value, 5,000,000 shares authorized; 839,200 shares issued and outstanding, liquidation preference of $20,980		1			1
Common stock, $0.001 par value, 100,000,000 shares authorized; 48,932,533 and 48,857,506 shares issued, and 48,840,735 and 48,857,506 shares outstanding, respectively		30			30
Additional paid-in capital		115,195			114,392
Treasury stock, at cost, 91,798 and 0 shares, respectively		(253	)		—
Deferred compensation		—			(1	)
Retained earnings		8,427			4,581
Accumulated other comprehensive income		528			98
Total Radiant Logistics, Inc. stockholders’ equity		123,928			119,101
Non-controlling interest		80			80
Total stockholders’ equity		124,008			119,181
Total liabilities and stockholders’ equity	$	263,084		$	263,469

The accompanying notes form an integral part of these condensed consolidated financial statements.

(In thousands, except share and per share data)	Three Months Ended March 31,						Nine Months Ended March 31,
	2017			2016			2017			2016
Revenues	$	181,771		$	178,299		$	575,785		$	600,116
Cost of transportation		136,062			136,498			430,943			460,005
Net revenues		45,709			41,801			144,842			140,111

Operating partner commissions		21,421			18,955			67,729			62,944
Personnel costs		12,505			13,185			38,238			40,907
Selling, general and administrative expenses		5,575			5,865			16,924			18,957
Depreciation and amortization		3,005			3,037			9,039			9,261
Transition and lease termination costs		446			789			1,307			5,109
Impairment of acquired intangible assets		—			—			—			3,680
Change in contingent consideration		737			442			1,793			628
Total operating expenses		43,689			42,273			135,030			141,486

Income (loss) from operations		2,020			(472	)		9,812			(1,375	)

Other income (expense):
Interest income		6			30			17			44
Interest expense		(614	)		(1,370	)		(1,873	)		(4,104	)
Foreign exchange gain (loss)		(35	)		(80	)		354			389
Other		85			(15	)		393			102
Total other expense:		(558	)		(1,435	)		(1,109	)		(3,569	)

Income (loss) before income tax expense		1,462			(1,907	)		8,703			(4,944	)

Income tax benefit (expense)		(540	)		208			(3,281	)		1,601

Net income (loss)		922			(1,699	)		5,422			(3,343	)
Less: Net income attributable to non-controlling interest		(15	)		(20	)		(42	)		(53	)

Net income (loss) attributable to Radiant Logistics, Inc.		907			(1,719	)		5,380			(3,396	)
Less: Preferred stock dividends		(511	)		(511	)		(1,534	)		(1,534	)

Net income (loss) attributable to common stockholders	$	396		$	(2,230	)	$	3,846		$	(4,930	)

Other comprehensive income (loss):
Foreign currency translation gain (loss)		(109	)		(759	)		430			663
Comprehensive income (loss)	$	287		$	(2,989	)	$	4,276		$	(4,267	)

Net income (loss) per common share - basic and diluted	$	0.01		$	(0.05	)	$	0.08		$	(0.10	)

Weighted average shares outstanding:
Basic shares		48,817,330			48,745,727			48,822,882			48,282,964
Diluted shares		50,169,571			48,745,727			49,834,591			48,282,964

The accompanying notes form an integral part of these condensed consolidated financial statements.

	RADIANT LOGISTICS, INC. STOCKHOLDERS' EQUITY
(In thousands, except share data)	Preferred Stock				Common Stock					Additional Paid-in			Treasury			Deferred			Retained			Accumulated Other Comprehensive		Non- Controlling			Total Stockholders’
	Shares		Amount		Shares			Amount		Capital			Stock			Compensation			Earnings			Income		Interest			Equity
Balance as of June 30, 2016		839,200	$	1		48,857,506		$	30	$	114,392		$	—		$	(1	)	$	4,581		$	98	$	80		$	119,181
Repurchase of common stock		—		—		(91,798	)				—			(253	)		—			—			—		—			(253	)
Share-based compensation		—		—		—			—		982			—			—			—			—		—			982
Amortization of deferred compensation		—		—		—			—		—			—			1			—			—		—			1
Cashless exercise of stock options		—		—		75,027			—		(179	)		—			—			—			—		—			(179	)
Preferred dividends paid		—		—		—			—		—			—			—			(1,534	)		—		—			(1,534	)
Distribution to non- controlling interest		—		—		—			—		—			—			—			—			—		(42	)		(42	)
Net income		—		—		—			—		—			—			—			5,380			—		42			5,422
Comprehensive income		—		—		—			—		—			—			—			—			430		—			430
Balance as of March 31, 2017		839,200	$	1		48,840,735		$	30	$	115,195		$	(253	)	$	—		$	8,427		$	528	$	80		$	124,008

The accompanying notes form an integral part of these condensed consolidated financial statements.

(In thousands)	Nine Months Ended March 31,
		2017			2016
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES
Net income (loss)	$	5,422		$	(3,343	)
ADJUSTMENTS TO RECONCILE NET INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES
share-based compensation expense		983			1,085
amortization of intangibles		6,233			6,487
depreciation and leasehold amortization		2,806			2,774
deferred income tax benefit		(662	)		(2,438	)
amortization of loan fees		239			302
change in contingent consideration		1,793			628
loss on impairment of acquired intangible assets		—			3,680
transition and lease termination costs		44			3,177
loss on disposal of technology and equipment		14			229
change in provision for doubtful accounts		148			128
CHANGE IN OPERATING ASSETS AND LIABILITIES:
accounts receivable		2,975			27,665
employee and other receivables		266			(199	)
income tax deposit		(38	)		(2,332	)
prepaid expenses, deposits and other assets		(807	)		2,658
accounts payable and accrued transportation costs		(2,845	)		(16,718	)
commissions payable		785			(601	)
other accrued costs		(680	)		(2,611	)
other liabilities		120			(143	)
deferred rent liability		7			(178	)
payment of contingent consideration		(432	)		(15	)
transition and lease termination liability		(875	)		(1,074	)
Net cash provided by operating activities		15,496			19,161

CASH FLOWS USED FOR INVESTING ACTIVITIES:
Acquisition during the fiscal year		(50	)		(800	)
Purchases of technology and equipment		(3,603	)		(2,956	)
Proceeds from sale of technology and equipment		61			396
Payments to former shareholders of acquired operations		(50	)		(684	)
Net cash used for investing activities		(3,642	)		(4,044	)

CASH FLOWS USED FOR FINANCING ACTIVITIES:
Proceeds from (repayments to) credit facility, net of credit fees		3,505			(37,708	)
Repayments of notes payable		(1,760	)		(128	)
Proceeds from stock offering, net of offering costs		—			38,430
Purchases of treasury stock		(253	)		—
Payments of contingent consideration		(3,446	)		(1,541	)
Payment of preferred stock dividends		(1,534	)		(1,534	)
Distribution to non-controlling interest		(42	)		(48	)
Payments of employee tax withholdings related to cashless stock option exercises		(179	)		(119	)
Tax benefit from exercise of stock options		—			2
Net cash used for financing activities		(3,709	)		(2,646	)

Effect of exchange rate changes on cash and cash equivalents		20			58

NET INCREASE IN CASH AND CASH EQUIVALENTS		8,165			12,529
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		4,768			7,268

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	12,933		$	19,797

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Income taxes paid	$	4,389		$	2,220
Interest paid	$	1,647		$	3,739

In December 2015, the Company issued 7,385 shares of common stock at a fair value of $4.23 per share in satisfaction of $31 of the Copper Logistics, Incorporated purchase price, resulting in an increase to common stock and an increase to additional paid-in capital of $31.

The accompanying notes form an integral part of these condensed consolidated financial statements.

(All amounts in these footnotes other than share amounts and per share amounts are in thousands)

Radiant Logistics, Inc. (the “Company”) operates as a third party logistics company, providing multi-modal transportation and logistics services primarily in the United States and Canada. The Company services a large and diversified account base consisting of consumer goods, food and beverage, manufacturing and retail customers which it supports from an extensive network of over 100 operating locations across North America, as well as an integrated international service partner network located in other key markets around the globe. The Company provides these services through a multi-brand network including 18 Company-owned offices. As a third party logistics company, the Company has approximately 10,000 asset-based transportation companies, including motor carriers, railroads, airlines and ocean lines, in its carrier network. The Company believes shippers value its services because it is able to objectively arrange the most efficient and cost-effective means, type and provider of transportation service since it is not influenced by the ownership of transportation assets. In addition, the Company’s minimal investment in physical assets affords it the opportunity for higher return on invested capital and net cash flows than the Company’s asset-based competitors.

Through its operating locations across North America, the Company offers domestic and international air and ocean freight forwarding services and freight brokerage services including truckload services, less than truckload services and intermodal services, which is the movement of freight in trailers or containers by combination of truck and rail. The Company’s primary business operations involve arranging the shipment, on behalf of its customers, of materials, products, equipment and other goods that are generally larger than shipments handled by integrated carriers of primarily small parcels, such as FedEx, DHL and UPS, including arranging and monitoring all aspects of material flow activity utilizing advanced information technology systems. The Company also provides other value-added logistics services, including customs brokerage, order fulfillment, inventory management and warehousing services to complement its core transportation service offering.

The Company expects to grow its business organically and by completing acquisitions of other companies with complementary geographical and logistics service offerings. The Company’s organic growth strategy will continue to focus on strengthening existing and expanding new customer relationships leveraging the benefit of the Company’s new truck brokerage and intermodal service offerings, while continuing its efforts on the organic build-out of the Company’s network of strategic operating partner locations. In addition, as the Company continues to grow and scale its business, the Company is creating density in its trade lanes which creates opportunities for the Company to more efficiently source and manage its transportation capacity.

In addition to its focus on organic growth, the Company will continue to search for acquisition candidates that bring critical mass from a geographic and purchasing power standpoint, along with providing complementary service offerings to its current platform. As the Company continues to grow and scale its business, it remains focused on leveraging its back-office infrastructure and technology systems to drive productivity improvement across the organization.

The condensed consolidated financial statements included herein have been prepared, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted pursuant to such rules and regulations. The Company’s management believes that the disclosures are adequate to make the information presented not misleading. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto included in the Company’s Annual Report on Form 10-K for the year ended June 30, 2016.

The interim period information included in this Quarterly Report on Form 10-Q reflects all adjustments, consisting of normal recurring adjustments, that are, in the opinion of the Company’s management, necessary for a fair statement of the results of the respective interim periods. Results of operations for interim periods are not necessarily indicative of results to be expected for an entire year.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries as well as a single variable interest entity, Radiant Logistics Partners, LLC (“RLP”), which is 40% owned by Radiant Global Logistics, Inc. (“RGL”), and 60% owned by Radiant Capital Partners, LLC (“RCP”, see Note 8), an affiliate of Bohn H. Crain, the Company’s Chief Executive Officer, whose accounts are included in the condensed consolidated financial statements. All significant intercompany balances and transactions have been eliminated. All amounts in the condensed consolidated financial statements are stated in thousands, except share and per share amounts.

The preparation of financial statements and related disclosures in accordance with accounting principles generally accepted in the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates include revenue recognition, accruals for the cost of purchased transportation, the fair value of acquired assets and liabilities, changes in contingent consideration, accounting for the issuance of shares and share-based compensation, the assessment of the recoverability of long-lived assets and goodwill, and the establishment of an allowance for doubtful accounts. Estimates and assumptions are reviewed periodically and the effects of revisions are reflected in the period that they are determined to be necessary. Actual results could differ from those estimates.

In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the related assets or liabilities. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.

The carrying values of the Company’s receivables, accounts payable and accrued transportation costs, commissions payable, other accrued costs, and the income tax deposit approximate the fair values due to the relatively short maturities of these instruments. The carrying value of the Company’s credit facility and other long-term liabilities would not differ significantly from fair value (based on Level 2 inputs) if recalculated based on current interest rates. Contingent consideration attributable to the Company’s acquisitions are reported at fair value using Level 3 inputs.

For purposes of the statements of cash flows, cash equivalents include all highly liquid investments with original maturities of three months or less that are not securing any corporate obligations. Cash balances may at times exceed federally insured limits. Checks issued by the Company that have not yet been presented to the bank for payment are reported as accounts payable and commissions payable in the accompanying condensed consolidated balance sheets. Accounts payable and commissions payable includes outstanding payments which had not yet been presented to the bank for payment in the amounts of $6,781 and $4,434 as of March 31, 2017 and June 30, 2016, respectively.

The Company maintains its cash in bank deposit accounts that, at times, may exceed federally-insured limits. The Company has not experienced any losses in such accounts.

The Company’s receivables are recorded when billed and represent claims against third parties that will be settled in cash. The carrying value of the Company’s receivables, net of the allowance for doubtful accounts, represents their estimated net realizable value. The Company evaluates the collectability of accounts receivable on a customer-by-customer basis. The Company records a reserve for bad debts against amounts due in order to reduce the net recognized receivable to an amount the Company believes will be reasonably collected. The reserve is a discretionary amount determined from the analysis of the aging of the accounts receivables, historical experience and knowledge of specific customers.

The Company derives a substantial portion of its revenue through independently-owned strategic operating partner locations operating under various Company brands. Each individual strategic operating partner is responsible for some or all of the bad debt expense related to the underlying customers being serviced by such operating partner. To facilitate this arrangement, certain strategic operating partners are required to maintain a security deposit with the Company that is recognized as a liability in the Company’s financial statements. The Company charges each individual strategic operating partner’s bad debt reserve account for any accounts receivable aged beyond 90 days. However, the bad debt reserve account may carry a deficit balance when amounts charged to this reserve exceed amounts otherwise available in the bad debt reserve account. In these circumstances, deficit bad debt reserve accounts, as well as other deficit balances owed to us by our strategic operating partners, are recognized as a receivable in the Company’s financial statements. Other strategic operating partners are not responsible to establish a bad debt reserve, however, they are still responsible for deficits and their strategic operating partner agreements provide that the Company may withhold all or a portion of future commission checks payable to the individual strategic operating partner in satisfaction of any deficit balance. Currently, a number of the Company’s strategic operating partners have a deficit balance in their bad debt reserve account. The Company expects to replenish these funds through the future business operations of these strategic operating partners. However, to the extent any of these operating partners were to cease operations or otherwise be unable to replenish these deficit accounts, the Company would be at risk of loss for any such amount.

Technology (computer software, hardware, and communications), vehicles, furniture and equipment are stated at cost, less accumulated depreciation over the estimated useful lives of the respective assets. Depreciation is computed using three to fifteen year lives for vehicles, communication, office, furniture, and computer equipment using the straight line method of depreciation. Computer software is depreciated over a three to five year life using the straight line method of depreciation. For leasehold improvements, the cost is amortized over the shorter of the lease term or useful life on a straight line basis. Upon retirement or other disposition of these assets, the cost and related accumulated depreciation or amortization are removed from the accounts and the resulting gain or loss, if any, is reflected in other income or expense. Expenditures for maintenance, repairs and renewals of minor items are charged to expense as incurred. Major renewals and improvements are capitalized.

Goodwill represents the excess of purchase price over the value assigned to the net tangible and identifiable intangible assets of a business acquired. The Company typically performs its annual goodwill impairment test effective as of April 1 of each year, unless events or circumstances indicate impairment may have occurred before that time. The Company assesses qualitative factors to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount. After assessing qualitative factors, the Company determined that no further testing was necessary. If further testing was necessary, the Company would determine the fair value of each reporting unit, and compare the fair value to the reporting unit’s carrying amount. To the extent a reporting unit’s carrying amount exceeds its fair value, the implied fair value of the reporting unit’s goodwill is then compared to the carrying amount of goodwill to quantify an impairment charge as of the assessment date. As of March 31, 2017, management believes there are no indications of impairment.

Acquired intangibles consist of customer related intangibles, trade names and trademarks, and non-compete agreements arising from the Company’s acquisitions. Customer related intangibles are amortized using the straight-line method over a period of up to 10 years, trademarks and trade names are amortized using the straight line method over 15 years, and non-compete agreements are amortized using the straight line method over the term of the underlying agreements.

The Company reviews long-lived assets to be held-and-used for impairment whenever events or changes in circumstances indicate the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows over the remaining useful life of a long-lived asset is less than its carrying amount, the asset is considered to be impaired. Impairment losses are measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset. When fair values are not available, the Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset. Assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. Management has performed a review of all long-lived assets and has determined no impairment of the respective carrying value has occurred as of March 31, 2017.

The Company accounts for business combinations using the purchase method of accounting and allocates the purchase price to the tangible and intangible assets acquired and the liabilities assumed based upon their estimated fair values at the acquisition date. The difference between the purchase price and the fair value of the net assets acquired is recorded as goodwill. While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed at the acquisition date, the estimates are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded in the condensed consolidated statements of operations.

The fair values of intangible assets acquired are estimated using a discounted cash flow approach with Level 3 inputs. Under this method, an intangible asset’s fair value is equal to the present value of the incremental after-tax cash flows (excess earnings) attributable solely to the intangible asset over its remaining useful life. To calculate fair value, the Company uses risk-adjusted cash flows discounted at rates considered appropriate given the inherent risks associated with each type of asset. The Company believes the level and timing of cash flows appropriately reflects market participant assumptions.

The Company determines the acquisition date fair value of the contingent consideration payable based on the likelihood of paying the contingent consideration as part of the consideration transferred. The fair value is estimated using projected future operating results and the corresponding future earn-out payments that can be earned upon the achievement of specified operating objectives and financial results by acquired companies using Level 3 inputs and the amounts are then discounted to present value. These liabilities are measured quarterly at fair value, and any change in the contingent liability is included in the condensed consolidated statements of operations.

The Company has operating lease commitments for equipment rentals, office space, and warehouse space under non-cancelable operating leases expiring at various dates through November 2022. Rent expense is recognized straight line over the term of the lease. Minimum future lease payments (excluding the lease payments included in the lease termination liability) under these non-cancelable operating leases for each of the next five fiscal years ending June 30 and thereafter are as follows:

Rent expense amounted to $1,171 and $3,566 for the three and nine months ended March 31, 2017, respectively, and $1,237 and $3,659 for the three and nine months ended March 31, 2016, respectively.

Lease termination costs consist of expenses related to future rent payments for which the Company no longer intends to receive any economic benefit. A liability is recorded when the Company ceases to use leased space. Lease termination costs are calculated as the present value of lease payments, net of expected sublease income, and the loss on disposition of assets. Transition costs consist of non-recurring personnel costs that will be eliminated in connection with the winding-down of the historical back-office of Service by Air, Inc. (“SBA”) and other operating locations.

The Company has an employee savings plan under which the Company provides safe harbor matching contributions. The Company’s contributions under the plan were $204 and $572 for the three and nine months ended March 31, 2017, respectively, and $208 and $508 for the three and nine months ended March 31, 2016, respectively.

Deferred income taxes are reported using the asset and liability method. Deferred tax assets are recognized for deductible temporary differences and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

The Company reports a liability for unrecognized tax benefits resulting from uncertain income tax positions taken or expected to be taken in an income tax return. Estimated interest and penalties, if any, are recorded as a component of interest expense or other expense, respectively.

The Company is the primary obligor responsible for providing the service desired by the customer and is responsible for fulfillment, including the acceptability of the service(s) ordered or purchased by the customer. At the Company’s sole discretion, it sets the prices charged to its customers, and is not required to obtain approval or consent from any other party in establishing its prices. The Company has multiple suppliers for the services it sells to its customers, and has the absolute and complete discretion and right to select the supplier that will provide the product(s) or service(s) ordered by a customer, including changing the supplier on a shipment-by-shipment basis. In most cases, the Company determines the nature, type, characteristics, and specifications of the service(s) ordered by the customer. The Company also assumes credit risk for the amount billed to the customer.

As a non-asset based carrier, the Company generally does not own transportation assets. The Company generates the major portion of its freight forwarding revenues by purchasing transportation services from direct (asset-based) carriers and reselling those services to its customers. Based upon the terms in the contract of carriage, revenues related to shipments where the Company issues a House Airway Bill or a House Ocean Bill of Lading are recognized at the time the freight is tendered to the direct carrier at origin net of duties and taxes. Costs related to the shipments are also recognized at this same time based upon anticipated margins, contractual arrangements with direct carriers, and other known factors. The estimates are routinely monitored and compared to actual invoiced costs. The estimates are adjusted as deemed necessary by the Company to reflect differences between the original accruals and actual costs of purchased transportation.

This method generally results in recognition of revenues and purchased transportation costs earlier than the preferred methods under GAAP which does not recognize revenue until a proof of delivery is received or which recognizes revenue as progress on the transit is made. The Company’s method of revenue and cost recognition does not result in a material difference from amounts that would be reported under such other methods.

All other revenue, including revenue from other value-added services including brokerage services, warehousing and fulfillment services, is recognized upon completion of the service.

The Company has issued restricted stock awards, restricted stock units and stock options to certain directors, officers and employees. The Company accounts for share-based compensation under the fair value recognition provisions such that compensation cost is measured at the grant date based on the value of the award and is expensed ratably over the vesting period. Determining the fair value of share-based awards at the grant date requires judgment about, among other things, stock volatility, the expected life of the award, and other inputs. The Company accounts for forfeitures as they occur. The Company issues new shares of common stock to satisfy exercises and vesting of awards granted under its stock plans.

The Company recorded share-based compensation expense of $323 and $983 for the three and nine months ended March 31, 2017, respectively, and $327 and $1,085 for the three and nine months ended March 31, 2016, respectively.

Basic income per share is computed by dividing net income attributable to common stockholders by the weighted average number of common shares outstanding. Diluted income per share is computed similar to basic income per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares, such as stock awards and stock options, had been issued and if the additional common shares were dilutive. Net income attributable to common stockholders is calculated after earned preferred stock dividends, whether or not declared.

For the three months ended March 31, 2017, the weighted average outstanding number of potentially dilutive common shares totaled 50,169,571 shares of common stock, including unvested restricted stock awards and options to purchase 3,535,275 shares of common stock as of March 31, 2017, of which 1,380,868 were excluded as their effect would have been antidilutive. For the three months ended March 31, 2016, the weighted average outstanding number of dilutive common shares totaled 48,745,727 shares of common stock. Unvested restricted stock awards and options to purchase 4,349,922 shares of common stock were excluded from the diluted income per share for the three months ended March 31, 2016 as there was a net loss in the period and their effect would have been antidilutive.

For the nine months ended March 31, 2017, the weighted average outstanding number of potentially dilutive common shares totaled 49,834,591 shares of common stock, including unvested restricted stock awards and options to purchase 3,535,275 shares of common stock as of March 31, 2017, of which 1,886,854 were excluded as their effect would have been antidilutive. For the nine months ended March 31, 2016, the weighted average outstanding number of dilutive common shares totaled 48,282,964 shares of common stock. Unvested restricted stock awards and options to purchase 4,349,922 shares of common stock were excluded from the diluted income per share for the nine months ended March 31, 2016 as there was a net loss in the period and their effect would have been antidilutive.

The following table reconciles the numerator and denominator of the basic and diluted per share computations for earnings per share as follows:

For the Company’s significant foreign subsidiaries that prepare financial statements in currencies other than U.S. dollars, the local currency is the functional currency. All assets and liabilities are translated at period-end exchange rates and all income statement amounts are translated at the weighted average rates for the period. Translation adjustments are recorded in accumulated other comprehensive (loss) income. Gains and losses on transactions of monetary items are recognized in the condensed consolidated statements of operations.

Certain amounts for prior periods have been reclassified in the Company’s condensed consolidated financial statements to conform to the classification used in fiscal year.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers, to clarify the principles used to recognize revenue for all entities. In March 2016, the FASB issued ASU 2016-08 to further clarify the implementation guidance on principal versus agent considerations. The guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is not permitted. The Company is currently evaluating the impact, if any, that the adoption of this guidance will have on the Company’s consolidated financial statements and related disclosures.

In February 2016, the FASB issued ASU 2016-02, Leases, to replace existing guidance. The guidance requires the recognition of right-of-use assets and lease liabilities for operating leases with terms more than 12 months on the balance sheet. Guidance is also provided for the presentation of leases within the statement of operations and cash flows. The guidance is effective for annual and interim periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on the Company’s consolidated financial statements and related disclosures.

In October 2016, the FASB issued ASU 2016-16, Income Taxes, allowing the recognition of income tax consequences on intra-entity asset transfers. Current GAAP prohibits recognizing current and deferred income tax consequences for an intra-entity asset transfer until the asset has been sold to an outside party. The guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is permitted. The Company is currently evaluating the impact that the adoption of this guidance will have on the Company’s consolidated financial statements and related disclosures.

In March 2016, the FASB issued ASU 2016-09, Stock Compensation, to improve the accounting for share-based compensation. The guidance changes how companies account for certain aspects of share-based compensation and the related financial statement presentation. The ASU includes a requirement that the tax effect related to settled share-based awards be recorded as a component of income tax expense or benefit rather than as a component of changes to additional paid-in capital. Cash flows related to excess tax benefits are now reflected as an operating activity. In addition, this ASU simplifies accounting of forfeitures and allows a company to make an accounting policy to estimate the number of share-based awards that are expected to vest and develop a forfeiture rate or to recognize forfeitures as they occur. The Company has elected to account for forfeitures as they occur. The guidance is effective for annual and interim periods beginning after December 15, 2016, and early adoption is permitted. The Company elected early adoption as of July 1, 2016, applied on a prospective basis. As such, there were no changes to prior periods presented. The presentation requirements for cash flows related to employee taxes paid for withheld shares had no impact to the periods presented on the Company’s Condensed Consolidated Statements of Cash Flows since such cash flows have historically been presented as a financing activity.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows, to address eight specific cash flow issues to reduce existing divergence in practice. The guidance is effective for annual and interim periods beginning after December 15, 2017, and early adoption is permitted. The Company elected early adoption as of July 1, 2016, applied on a retrospective basis. The primary impact to the Company from this ASU is: 1) cash payments for debt prepayment or debt extinguishment are classified as cash outflows for financing activities; 2) cash payments made soon after an acquisition are classified as cash outflows for investing activities. Cash payments made after a business combination up to the amount of contingent consideration initially recorded are classified as cash outflows for financing activities. Any payments in excess of the amount initially recorded are classified as cash outflows from operating activities. For the nine months ended March 31, 2016, there was a reclassification of $15 from payments of contingent consideration from financing activities to operating activities.

In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other, to supersede the current guidance by replacing the current two-step impairment test with a one-step impairment test. The guidance is effective for annual and interim goodwill impairment tests in fiscal years beginning after December 15, 2019. Early adoption is permitted for goodwill impairment tests performed after January 1, 2017. The Company elected early adoption as of January 1, 2017. Adoption of this is not expected to impact the Company’s consolidated financial statements.

In the prior fiscal year, the Company adopted ASU 2015-03, Imputation of Interest, and ASU 2015-17, Balance Sheet Classification of Deferred Taxes.

On November 2, 2015, the Company acquired the operations and assets of Copper Logistics, Incorporated (“Copper”), a Minneapolis, Minnesota based company that provides a full range of domestic and international transportation and logistics services across North America. The Company has structured the transaction similar to previous acquisitions, with a portion of the expected purchase price payable in subsequent periods based on future performance of the acquired operation.

The results of operations for the business acquired are included in the financial statements as of the date of purchase.

Depreciation and amortization expense related to technology and equipment was $929 and $2,806 for the three and nine months ended March 31, 2017, respectively, and $963 and $2,774 for the three and nine months ended March 31, 2016, respectively. Computer software includes approximately $3,100 of software currently in development as of March 31, 2017.

The table below reflects acquired intangible assets related to all acquisitions:

Amortization expense amounted to $2,076 and $6,233 for the three and nine months ended March 31, 2017, respectively, and $2,074 and $6,487 for the three and nine months ended March 31, 2016, respectively. Future amortization expense for each of the next five fiscal years ending June 30 and thereafter are as follows:

Future maturities of notes payable and other long-term debt for each of the next five fiscal years ending June 30 and thereafter are as follows:

The Company has a $65.0 million senior credit facility (the “Credit Facility”) with Bank of America, N.A. (the “Lender”) on its own behalf and as agent to the other lenders named therein, currently consisting of the Bank of Montreal (as the initial member of the syndicate under such loan), pursuant to an Amended and Restated Loan and Security Agreement. The Credit Facility includes a $2.0 million sublimit to support letters of credit and matures August 9, 2018.

Borrowings accrue interest based on the Company’s fixed charge coverage ratio at the Lender’s base rate plus 0.0% to 0.50% or LIBOR plus 1.50% to 2.25%. The Credit Facility provides for advances of up to 85% of the eligible Canadian and domestic accounts receivable, 75% of eligible accrued but unbilled domestic receivables and eligible foreign accounts receivable, all of which are subject to certain sub-limits, reserves and reductions. The Credit Facility is collateralized by a first-priority security interest in all of the assets of the U.S. co-borrowers, a first-priority security interest in all of the accounts receivable and associated assets of the Canadian co-borrowers (the “Canadian A/R Assets”) and a second-priority security interest on the other assets of the Canadian borrowers.

Borrowings are available to fund future acquisitions, capital expenditures, repurchase of Company stock or for other corporate purposes. The terms of the Credit Facility are subject to customary financial and operational covenants, including covenants that may limit or restrict the ability to, among other things, borrow under the Credit Facility, incur indebtedness from other lenders, and make acquisitions. As of March 31, 2017, the Company was in compliance with all of its covenants.

As of March 31, 2017, based on available collateral and $0.3 million in outstanding letter of credit commitments, there was $46.6 million available for borrowing under the Credit Facility.

In connection with the Company’s acquisition of Wheels International Inc. (“Wheels”), Wheels obtained a CAD$29.0 million senior secured Canadian term loan from Integrated Private Debt Fund IV LP (“IPD”) pursuant to a CAD$29,000,000 Credit Facilities Loan Agreement (the “IPD Loan Agreement”). The Company and its U.S. and Canadian subsidiaries are guarantors of the Wheels obligations thereunder. The loan matures on April 1, 2024 and accrues interest at a rate of 6.65% per annum. The Company is required to maintain five months interest in a debt service reserve account to be controlled by IPD. This amount is recorded as deposits and other assets in the accompanying condensed consolidated financial statements. The loan repayment consists of interest-only payments for the first 12 months followed by blended principal and interest payments for the next eight years. The loan may be prepaid in whole at any time upon providing at least 30 days prior written notice and paying the difference between (i) the present value of the loan interest and the principal payments foregone discounted at the Government of Canada Bond Yield for the term from the date of prepayment to April 1, 2024, and (ii) the face value of the principal amount being prepaid. As of March 31, 2017, the Company was in compliance with all of its covenants.

The loan is collateralized by a (i) first-priority security interest in all of the assets of Wheels except the Canadian A/R Assets, (ii) a second-priority security interest in the Canadian A/R Assets, and (iii) a second-priority security interest on all of the Company’s assets.

The Company is authorized to issue 5,000,000 shares of preferred stock, par value at $0.001 per share and 100,000,000 shares of common stock, $0.001 per share.

The Company has 839,200 shares of 9.75% Series A Cumulative Redeemable Perpetual Preferred Stock (“Series A Preferred Shares”), which have a liquidation preference of $25.00 per share. Dividends on the Series A Preferred Shares are cumulative from the date of original issue and are payable on January 31, April 30, July 31 and October 31, as and if declared by the Company’s board of directors. If the Company does not pay dividends in full on any two payment dates (whether consecutive or not), the per annum dividend rate will increase an additional 2.0% per annum per $25.00 stated liquidation preference, up to a maximum of 19.0% per annum. If the Company fails to maintain the listing of the Series A Preferred Shares on the NYSE MKT or other exchange for 30 days or more, the per annum dividend rate will increase by an additional 2.0% per annum so long as the listing failure continues. The Series A Preferred Shares require the Company to maintain a Fixed Charge Coverage Ratio of at least 2.0. If the Company is not in compliance with this ratio, then it cannot pay any dividend on its common stock. As of March 31, 2017, the Company was in compliance with this ratio.

Commencing on December 20, 2018, the Company may redeem, at its option, the Series A Preferred Shares, in whole or in part, at a cash redemption price of $25.00 per share plus accrued and unpaid dividends (whether or not declared). Among other things, the Series A Preferred Shares have no stated maturity, are not subject to any sinking fund or other mandatory redemption, and are not convertible into or exchangeable for any of the Company’s other securities. Holders of Series A Preferred Shares generally have no voting rights, except if the Company fails to pay dividends on the Series A Preferred Shares for six or more quarterly periods (whether consecutive or not). Under such circumstances, holders of Series A Preferred Shares will be entitled to vote to elect two additional directors to the Company’s board of directors, until all unpaid dividends have been paid or declared and set aside for payment. In addition, certain changes to the terms of the Series A Preferred Shares cannot be made without the affirmative vote of the holders of two-thirds of the outstanding Series A Preferred Shares, voting as a separate class. The Series A Preferred Shares are senior to the Company’s common stock with respect to dividends and distributions, including distributions upon liquidation, dissolution or winding up. The Series A Preferred Shares are listed on the NYSE MKT under the symbol “RLGT-PA.”

For the nine months ended March 31, 2017, the Company’s board of directors declared and paid cash dividends to holders of Series A Preferred Shares in the amount of $1.828125 per share, totaling $1,534.

In January 2016, the Company’s board of directors authorized the repurchase of up to 5,000,000 shares of the Company’s common stock through December 31, 2016. Under the stock repurchase program, the Company was authorized to repurchase, from time-to-time, shares of its outstanding common stock in the open market at prevailing market prices or through privately negotiated transactions as permitted by securities laws and other legal requirements. The program did not obligate the Company to repurchase any specific number of shares and could be suspended or terminated at any time without prior notice. Under this repurchase program, the Company purchased 91,798 shares of its common stock at an average cost of $2.75 per share for an aggregate cost of $253 for the nine months ended March 31, 2017. Prior to this fiscal year, there were no purchases of common stock executed under the repurchase program.

RLP is owned 40% by RGL and 60% by RCP, a company for which the Chief Executive Officer of the Company is the sole member. RLP is a certified minority business enterprise that was formed for the purpose of providing the Company with a national accounts strategy to pursue corporate and government accounts with diversity initiatives. RCP’s ownership interest entitles it to a majority of the profits and distributable cash, if any, generated by RLP. The operations of RLP are intended to provide certain benefits to the Company, including expanding the scope of services offered by the Company and participating in supplier diversity programs not otherwise available to the Company. In the course of evaluating and approving the ownership structure, operations and economics emanating from RLP, a committee consisting of the independent Board member of the Company, considered, among other factors, the significant benefits provided to the Company through association with a minority business enterprise, particularly as many of the Company’s largest current and potential customers have a need for diversity offerings. In addition, the committee concluded that the economic relationship with RLP was on terms no less favorable to the Company than terms generally available from unaffiliated third parties.

Certain entities in which equity investors do not have the characteristics of a controlling financial interest or do not have the sufficient equity at risk for the entity to finance its activities without additional subordinated financial support from other parties are considered “variable interest entities.” RLP qualifies as a variable interest entity and is included in the Company’s condensed consolidated financial statements.

RLP recorded $24 and $71 in profits, of which RCP’s distributable share was $15 and $42 for the three and nine months ended March 31, 2017, respectively. RLP recorded $33 and $89 in profits, of which RCP’s distributable share was $20 and $53 for the three and nine months ended March 31, 2016, respectively. The non-controlling interest recorded as a reduction of income on the condensed consolidated statements of operations represents RCP’s distributive share.

The following table sets forth the Company’s financial liabilities measured at fair value on a recurring basis:

The Company has contingent obligations to transfer cash payments and equity shares to former shareholders of acquired operations in conjunction with certain acquisitions if specified operating results and financial objectives are met over the next four fiscal years. Contingent consideration is measured quarterly at fair value, and any change in the contingent liability is included in the condensed consolidated statements of operations. The Company recorded an increase to contingent consideration of $737 and $1,793 for the three and nine months ended March 31, 2017, respectively, and an increase of $442 and $628 for the three and nine months ended March 31, 2016, respectively. The change in the current period is principally attributable to a net increase in management’s estimates of future earn-out payments through the remainder of its earn-out periods.

The Company uses projected future financial results based on recent and historical data to value the anticipated future earn-out payments. To calculate fair value, the future earn-out payments were discounted using Level 3 inputs. The Company has classified the contingent consideration as Level 3 due to the lack of relevant observable market data over fair value inputs. The Company believes the discount rate used to discount the earn-out payments reflects market participant assumptions. Changes in assumptions and operating results could have a significant impact on the earn-out amount, up to a maximum of $14.4 million, through earn-out periods measured through November 2019, although there are no maximums on certain earn-out payments.

The following table provides a reconciliation of the beginning and ending liabilities for the liabilities measured at fair value using significant unobservable inputs (Level 3):

The Company and its wholly owned U.S. subsidiaries file a consolidated Federal income tax return. The Company also files unitary or separate returns in various state, local, and non-U.S. jurisdictions based on state, local and non-U.S. filing requirements. Tax years which remain subject to examination by U.S. authorities are the years ended June 30, 2014 through June 30, 2016. Tax years which remain subject to examination by state authorities are the years ended June 30, 2013 through June 30, 2016. Tax years which remain subject to examination by non-U.S. authorities are the periods ended December 31, 2013 through June 30, 2016. Occasionally acquired entities have tax years that differ from the Company and are still open under the relevant statute of limitations and therefore are subject to potential adjustment.

The Company grants restricted stock awards and restricted stock units. The Company granted restricted stock awards to certain employees in August 2012. The shares are restricted in transferability for a term of up to five years and are forfeited in the event the employee terminates employment prior to the lapse of the restriction and generally vest ratably over a five year period. The Company began granting restricted stock units to certain employees in October 2016. One unit is equivalent to one share of common stock. The restricted stock units generally vest after three years. The Company recognized share-based compensation expense related to stock awards of $63 and $111 for the three and nine months ended March 31, 2017, respectively, and $1 and $3 for the three and nine months ended March 31, 2016, respectively.

The Company recognized share-based compensation expense related to stock options of $260 and $872 for the three and nine months ended March 31, 2017, respectively, and $326 and $1,082 for the three and nine months ended March 31, 2016, respectively. The aggregate intrinsic value of options exercised was $332 and $504 for the three and nine months ended March 31, 2017, respectively, and $45 and $372 for the three and nine months ended March 31, 2016, respectively.

During the nine months ended March 31, 2017, the weighted average fair value per share of employee stock options granted was $1.65. The fair value of each stock option grant is estimated as of the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions:

The Company is involved in various claims and legal actions arising in the ordinary course of business, some of which are in the very early stages of litigation and therefore difficult to judge their potential materiality. For those claims for which the Company can judge the materiality, in the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the Company’s consolidated financial position, results of operations or liquidity. Legal expenses are expensed as incurred. A summary of potential material litigation is as follows.

Ingrid Barahona v. Accountabilities, Inc. d/b/a/ Accountabilities Staffing, Inc., Radiant Global Logistics, Inc. and DBA Distribution Services, Inc. (Ingrid Barahona California Class Action)

On October 25, 2013, plaintiff Ingrid Barahona filed a purported class action lawsuit against RGL, DBA Distribution Services, Inc. (“DBA”), and two third-party staffing companies (collectively, the “Staffing Defendants”) with whom Radiant and DBA contracted for temporary employees. In the lawsuit, Ms. Barahona, on behalf of herself and the putative class, seeks damages and penalties under California law, plus interest, attorneys’ fees, and costs, along with equitable remedies, alleging that she and the putative class were the subject of unfair and unlawful business practices, including certain wage and hour violations relating to, among others, failure to provide meal and rest periods, failure to pay minimum wages and overtime, and failure to reimburse employees for work-related expenses. Ms. Barahona alleges that she was jointly employed by the staffing companies and Radiant and DBA. Radiant and DBA deny Ms. Barahona’s allegations in their entirety, deny that they are liable to Ms. Barahona or the putative class members in any way, and are vigorously defending against these allegations based upon a preliminary evaluation of applicable records and legal standards.

If Ms. Barahona’s allegations were to prevail on all claims the Company, as well as its co-defendants, could be liable for uninsured damages in an amount that, while not significant when evaluated against either the Company’s assets or current and expected level of annual earnings, could be material when judged against the Company’s earnings in the particular quarter in which any such damages arose, if at all. However, based upon the Company’s preliminary evaluation of the matter, it does not believe it is likely to incur material damages, if at all, since, among others: (i) the amount of any potential damages remains highly speculative at this stage of the proceedings; (ii) the Company does not believe as a matter of law it should be characterized as Ms. Barahona’s employer and codefendant Accountabilities admitted to being the employer of record, (iii) wage and hour class actions of this nature typically settle for amounts significantly less than plaintiffs’ demands because of the uncertainly with litigation and the difficulty in taking these types of cases to trial; and (iv) Ms. Barahona has indicated her desire to resolve this matter through a mediated settlement. Ms. Barahona admitted in a report to the court that she is unable to prosecute the case because the payroll and personnel records she needs are in the possession of Tri-State and/or Accountabilities (“Debtors”), and the case has been stayed as to them pending resolution of their chapter 11 bankruptcy proceedings. In January 2016, the court held a status conference, which was continued multiple times so that the parties could attempt to obtain the necessary documents. DBA and the Company informally obtained all records within co-defendants’ bankruptcy estate through their trustee’s counsel; however, those records were incomplete and did not contain the requisite time, payroll and personnel records. Based on its belief that the debtors have additional records and in an effort to lift the bankruptcy “stay”, Ms. Barahona obtained the dismissal of the debtors without prejudice from the state court action. The court set a deadline of November 30, 2017, for Ms. Barahona to file her motion for class certification, and set a further status conference for December 14, 2017, to set a briefing schedule for the motion for class certification. The court has also ordered the parties to participate in mediation by August 31, 2017. At this time, the Company is unable to express an opinion as to the likely outcome of the matter.

High Protection Company, a Utah Company, Plaintiff v. Professional Air Transportation, LLC, a Utah Limited Liability Company, d/b/a ADCOM, SLC; Radiant Logistics, Inc., a Foreign Corporation; ADCOM World-Wide,, an Operating Division of Radiant Logistics, Inc.; Radiant Global Logistics, Inc., a Foreign Corporation, d/b/a Container Lines; Felipe Lake, an individual, Rubens Correa, an individual; and Does 1-100, Defendants, United States District Court of Utah (Central), Civil Docket No. 2:14-cv-00466-TC-BCW (formerly Salt Lake County, Utah, Case # 140902965)

On or about May 27, 2014, the Company, together with its co-defendants, including certain of its subsidiaries, were sued in the Third Judicial District Court, Salt Lake County, State of Utah. The matter was subsequently removed to the Federal Courts in the United States District Court, for the District of Utah. The lawsuit alleges liability and damages arising from the ocean shipment of five (5) armored vehicles from Jordan to the Kandahar Air Base, Afghanistan, commencing in August, 2011.

On April 10, 2011, the Plaintiff, High Protection Company, was awarded a contract from the United States Army in the amount of $0.7 million for the manufacture and delivery of five armored vehicles. The vehicles were to be delivered to the Kandahar Airfield in Kandahar, Afghanistan, by May 16, 2011. The delivery of the vehicles was delayed into 2013 due to various delays that occurred during the shipping process, including the closing of the border between Pakistan and Afghanistan from November 2011 to July 2012. In June 2013, the United States Army terminated its contract with the Plaintiff. Plaintiff asserted damages against the Company and its co-defendants in excess of $1.0 million, including loss of a $0.7 million contract with the United States Army, demurrage and storage charges now alleged to exceed $0.2 million, and loss of the vehicles.

A mediation took place in early 2016 and the parties were unable to come to a resolution. Subsequent to the mediation, the Company filed a Motion for Summary Judgment with the Court on the basis that the claim is time barred. Additionally, the Court, of its own accord, asked the parties for briefing on the subject of “Jurisdiction.”

On January 4, 2017, the parties entered into a Settlement Agreement and Mutual Release, pursuant to which the Company and its co-defendants agreed to pay the Plaintiff the aggregate amount of approximately $0.1 million, which was covered under our insurance policy, and the parties agreed to release all claims related to the lawsuit. The Court accepted the settlement and the case has been dismissed with prejudice.

The Company’s agreements with respect to previous acquisitions contain future consideration provisions which provide for the selling equity owners to receive additional consideration if specified operating objectives and financial results are achieved in future periods, as defined in their respective agreements. Any changes to the fair value of the contingent consideration are recorded in the condensed consolidated statements of operations. Earn-out payments are generally due annually on November 1, and 90 days following the quarter of the final earn-out period for each respective acquisition.

The following table represents the estimated undiscounted earn-out payments to be paid in each of the following fiscal years:

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, or decision-making group, in making decisions regarding allocation of resources and assessing performance. The Company’s chief operating decision-maker is the Chief Executive Officer. The Company has two operating segments: United States and Canada. Immaterial operations outside of the United States and Canada are reported in the United States segment.

The Company evaluates the performance of the segments primarily based on their respective revenues, net revenues and income from operations. Accordingly, capital expenditures and total assets are not reported in segment results. In addition, the Company has disclosed a corporate segment, which is not an operating segment and includes the costs of the Company’s executives, board of directors, professional services such as legal and consulting, amortization of acquired intangible assets and certain other corporate costs associated with operating as a public company. Intercompany transactions have been eliminated in the condensed consolidated balance sheets and statements of operations.

Three Months Ended March 31, 2017 (in thousands):	United States		Canada			Corporate/ Eliminations			Total
Revenues	$	159,374	$	23,487		$	(1,090	)	$	181,771
Net revenues		41,014		4,695			—			45,709
Income (loss) from operations		5,663		1,010			(4,653	)		2,020
Other income (expense)		117		(68	)		(607	)		(558	)
Income (loss) before income tax expense		5,780		942			(5,260	)		1,462
Depreciation and amortization		595		150			2,260			3,005
Technology and equipment, net		11,053		1,350			730			13,133
Goodwill		42,984		19,904			—			62,888

Three Months Ended March 31, 2016 (in thousands):
Revenues	$	152,782	$	26,132		$	(615	)	$	178,299
Net revenues		37,631		4,170			—			41,801
Income (loss) from operations		4,086		201			(4,759	)		(472	)
Other income (expense)		35		(130	)		(1,340	)		(1,435	)
Income (loss) before income tax expense		4,121		71			(6,099	)		(1,907	)
Depreciation and amortization		621		160			2,256			3,037
Technology and equipment, net		10,220		1,634			1,459			13,313
Goodwill		43,215		19,904			—			63,119

Nine Months Ended March 31, 2017 (in thousands):	United States		Canada			Corporate/ Eliminations			Total
Revenues	$	506,264	$	73,385		$	(3,864	)	$	575,785
Net revenues		129,988		14,854			—			144,842
Income (loss) from operations		19,507		3,573			(13,268	)		9,812
Other income (expense)		714		33			(1,856	)		(1,109	)
Income (loss) before income tax expense		20,221		3,606			(15,124	)		8,703
Depreciation and amortization		1,786		469			6,784			9,039
Technology and equipment, net		11,053		1,350			730			13,133
Goodwill		42,984		19,904			—			62,888

Nine Months Ended March 31, 2016 (in thousands):
Revenues	$	522,237	$	81,134		$	(3,255	)	$	600,116
Net revenues		126,084		14,027			—			140,111
Income (loss) from operations		17,382		(430	)		(18,327	)		(1,375	)
Other income (expense)		406		86			(4,061	)		(3,569	)
Income (loss) before income tax expense		17,788		(344	)		(22,388	)		(4,944	)
Depreciation and amortization		1,531		514			7,216			9,261
Technology and equipment, net		10,220		1,634			1,459			13,313
Goodwill		43,215		19,904			—			63,119

On April 1, 2017, through a wholly-owned subsidiary, Wheels, the Company acquired the assets and operations of Lomas Logistics, a division of L.V. Lomas Limited. The purchase price of approximately $7.0 million was financed using the Company’s existing Credit Facility prior to March 31, 2017, causing an increase to both cash and notes payable on the condensed consolidated balance sheets. Pro forma results of operations have not been presented because the effect of this acquisition is not material to the consolidated financial statements.

On April 14, 2017, the Company’s board of directors declared a cash dividend to holders of the Series A Preferred Shares in the amount of $0.609375 per share. The declared dividend totaled $511 and was paid on May 1, 2017.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

This report contains “forward-looking statements” within the meaning set forth in United States securities laws and regulations – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business, financial performance and financial condition, and often contain words such as “anticipate,” “believe,” “estimates,” “expect,” “future,” “intend,” “may,” “plan,” “see,” “seek,” “strategy,” or “will” or the negative thereof or any variation thereon or similar terminology or expressions. 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. We have developed our forward-looking statements based on management’s beliefs and assumptions, which in turn rely upon information available to them at the time such statements were made. Such forward-looking statements reflect our current perspectives on our business, future performance, existing trends and information as of the date of this report. These include, but are not limited to, our beliefs about future revenue and expense levels, growth rates, prospects related to our strategic initiatives and business strategies, along with express or implied assumptions about, among other things: our continued relationships with our strategic operating partners; the performance of our historic business, as well as the businesses we have recently acquired, at levels consistent with recent trends and reflective of the synergies we believe will be available to us as a result of such acquisitions; our ability to successfully integrate our recently acquired businesses; our ability to locate suitable acquisition opportunities and secure the financing necessary to complete such acquisitions; the occurrence of no adverse developments affecting domestic and international economic, political or competitive conditions within our industry; transportation costs remaining in-line with recent levels and expected trends; our ability to mitigate, to the best extent possible, our dependence on current management and certain of our larger strategic operating partners; the absence of any adverse laws or governmental regulations affecting the transportation industry in general, and our operations in particular; and such other factors that may be identified from time to time in our Securities and Exchange Commission (“SEC”) filings and other public announcements including those set forth under the caption “Risk Factors” in our Form 10-K for the year ended June 30, 2016. All subsequent written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by the foregoing. Readers are cautioned not to place undue reliance on our forward-looking statements, as they speak only as of the date made. We disclaim any obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise.

The following discussion and analysis of our financial condition and result of operations should be read in conjunction with the condensed consolidated financial statements and the related notes and other information included elsewhere in this report.

We operate as a third party logistics company, providing multi-modal transportation and logistics services primarily in the United States and Canada. We service a large and diversified account base consisting of consumer goods, food and beverage, manufacturing and retail customers which we support from an extensive network of over 100 operating locations across North America, as well as an integrated international service partner network located in other key markets around the globe. We provide these services through a multi-brand network including 18 Company-owned offices. As a third party logistics company, we have approximately 10,000 asset-based transportation companies, including motor carriers, railroads, airlines and ocean lines, in our carrier network. We believe shippers value our services because we are able to objectively arrange the most efficient and cost-effective means, type and provider of transportation service without undue influence caused by the ownership of transportation assets. In addition, our minimal investment in physical assets affords us the opportunity for a higher return on invested capital and net cash flows than our asset-based competitors.

Through our operating locations across North America, we offer domestic and international air and ocean freight forwarding services and freight brokerage services including truckload services, less-than-truckload services, and intermodal services, which is the movement of freight in trailers or containers by combination of truck and rail. Our primary business operations involve arranging the shipment, on behalf of our customers, of materials, products, equipment and other goods that are generally larger than shipments handled by integrated carriers of primarily small parcels, such as FedEx, DHL and UPS. Our services include arranging and monitoring all aspects of material flow activity utilizing advanced information technology systems. We also provide other value-added logistics services, including customs brokerage and materials management and distribution solutions to complement our core transportation services.

We expect to grow our business organically and by completing acquisitions of other companies with complementary geographic and logistics service offerings. Our organic growth strategy will continue to focus on strengthening existing and expanding new customer relationships leveraging the benefit of our new truck brokerage and intermodal service offerings, while continuing our efforts on the organic build-out of our network of strategic operating partner locations. In addition to our focus on organic growth, we continue to search for acquisition candidates that bring to our current platform a critical mass from a geographic and/or purchasing power standpoint along with complementary service offerings. As we continue to grow and scale our business, we believe that we are creating density in our trade lanes which creates opportunities for us to more efficiently source and manage our transportation capacity. In addition, we remain focused on leveraging our back-office infrastructure to drive productivity improvement across the organization.

Our principal source of income is derived from freight forwarding and freight brokerage services we provide to our customers. As a third party logistics provider, we arrange for the shipment of our customers’ freight from point of origin to point of destination. Generally, we quote our customers a turnkey cost for the movement of their freight. Our price quote will often depend upon the customer’s time-definite needs (first day through fifth day delivery), special handling needs (heavy equipment, delicate items, environmentally sensitive goods, electronic components, etc.), and the means of transport (motor carrier, air, ocean or rail). In turn, we assume the responsibility for arranging and paying for the underlying means of transportation.

Our transportation revenue represents the total dollar value of services we sell to our customers. Our cost of transportation includes direct costs of transportation, including motor carrier, air, ocean and rail services. Our net transportation revenue (gross transportation revenue less the direct cost of transportation) is the primary indicator of our ability to source, add value and resell services provided by third parties, and is considered by management to be a key performance measure. In addition, management believes measuring its operating costs as a function of net transportation revenue provides a useful metric, as our ability to control costs as a function of net transportation revenue directly impacts operating earnings.

Our operating results will be affected as acquisitions occur. Since all acquisitions are made using the purchase method of accounting for business combinations, our financial statements will only include the results of operations and cash flows of acquired companies for periods subsequent to the date of acquisition.

Our GAAP-based net income will be affected by non-cash charges relating to the amortization of customer related intangible assets and other intangible assets attributable to completed acquisitions. Under applicable accounting standards, purchasers are required to allocate the total consideration in a business combination to the identified assets acquired and liabilities assumed based on their fair values at the time of acquisition. The excess of the consideration paid over the fair value of the identifiable net assets acquired is to be allocated to goodwill, which is tested at least annually for impairment. Applicable accounting standards require that we separately account for and value certain identifiable intangible assets based on the unique facts and circumstances of each acquisition. As a result of our acquisition strategy, our net income will include material non-cash charges relating to the amortization of customer related intangible assets and other intangible assets acquired in our acquisitions. Although these charges may increase as we complete more acquisitions, we believe we will be growing the value of our intangible assets (e.g., customer relationships). Thus, we believe that earnings before interest, taxes, depreciation and amortization, or EBITDA, is a useful financial measure for investors because it eliminates the effect of these non-cash costs and provides an important metric for our business.

EBITDA is a non-GAAP measure of income and does not include the effects of preferred stock dividends, interest and taxes, and excludes 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 technology and equipment, all amortization charges (including amortization of leasehold improvements), and other intangible assets. We then further adjust EBITDA to exclude changes in contingent consideration, expenses specifically attributable to acquisitions, severance and lease termination costs, foreign exchange gains and losses, extraordinary items, share-based compensation expense, non-recurring litigation expenses, and other non-cash charges. Adjusted EBITDA is then normalized by excluding non-recurring transition costs. While management considers EBITDA, adjusted EBITDA, and normalized adjusted EBITDA useful in analyzing our results, it is not intended to replace any presentation included in our condensed consolidated financial statements.

Our operating results are also subject to seasonal trends when measured on a quarterly basis. The impact of seasonality on our business will depend on numerous factors, including the markets in which we operate, holiday seasons, consumer demand and economic conditions. Since our revenue is largely derived from customers whose shipments are dependent upon consumer demand and just-in-time production schedules, the timing of our revenue is often beyond our control. Factors such as shifting demand for retail goods and/or manufacturing production delays could unexpectedly affect the timing of our revenue. As we increase the scale of our operations, seasonal trends in one area of our business may be offset to an extent by opposite trends in another area. We cannot accurately predict the timing of these factors, nor can we accurately estimate the impact of any particular factor, and thus we can give no assurance any historical seasonal patterns will continue in future periods.

The following table summarizes transportation revenue, cost of transportation and net transportation revenue by operating segments for the three months ended March 31, 2017 and 2016 (in thousands):

	Three months ended March 31, 2017												Three months ended March 31, 2016
	United States			Canada			Corporate/ Eliminations			Total			United States			Canada			Corporate/ Eliminations			Total
Transportation revenue
Forwarding	$	130,389		$	787		$	(135	)	$	131,041		$	121,773		$	896		$	(52	)	$	122,617
Brokerage		28,019			22,066			(955	)		49,130			29,794			24,483			(563	)		53,714
		158,408			22,853			(1,090	)		180,171			151,567			25,379			(615	)		176,331

Cost of transportation
Forwarding		92,557			642			(135	)		93,064			88,117			735			(52	)		88,800
Brokerage		25,803			18,150			(955	)		42,998			27,034			21,227			(563	)		47,698
		118,360			18,792			(1,090	)		136,062			115,151			21,962			(615	)		136,498

Net transportation revenue
Forwarding		37,832			145			—			37,977			33,656			161			—			33,817
Brokerage		2,216			3,916			—			6,132			2,760			3,256			—			6,016
		40,048			4,061			—			44,109			36,416			3,417			—			39,833
Net transportation margins		25.3	%		17.8	%					24.5	%		24.0	%		13.5	%					22.6	%

Other value-added services		966			634			—			1,600			1,215			753			—			1,968
Net revenues	$	41,014		$	4,695		$	—		$	45,709		$	37,631		$	4,170		$	—		$	41,801

Forwarding revenue was $131.0 million and $122.6 million for the three months ended March 31, 2017 and 2016, respectively. The increase of $8.4 million, or 6.9%, is primarily attributable to increased revenues by certain strategic operating partners. Forwarding net transportation revenue was $38.0 million and $33.8 million for three months ended March 31, 2017 and 2016, respectively. Net forwarding transportation margins increased from 27.6% to 29.0% over the comparable prior year period, primarily due to lower costs of purchased transportation.

Brokerage revenue was $49.1 million and $53.7 for the three months ended March 31, 2017 and 2016, respectively. The decrease of $4.6 million, or 8.6%, is primarily attributable to general softness in the brokerage markets. Brokerage net transportation revenue was $6.1 million and $6.0 million for the three months ended March 31, 2017 and 2016, respectively. Net brokerage transportation margins increased from 11.2% to 12.5% over the comparable prior year period, primarily as a result of slightly lower costs of purchased transportation.

Other value added services were $1.6 million for the three months ended March 31, 2017, compared to $2.0 million for the comparable prior year period.

The following table compares condensed consolidated statements of operations data by operating segment for the three months ended March 31, 2017 and 2016 (in thousands):

	Three months ended March 31, 2017												Three months ended March 31, 2016
	United States			Canada			Corporate/ Eliminations			Total			United States			Canada			Corporate/ Eliminations			Total
Net revenues	$	41,014		$	4,695		$	—		$	45,709		$	37,631		$	4,170		$	—		$	41,801

Operating partner commissions		21,421			—			—			21,421			18,955			—			—			18,955
Personnel costs		9,100			2,607			798			12,505			9,868			2,602			715			13,185
Selling, general and administrative expenses		3,789			928			858			5,575			3,532			987			1,346			5,865
Depreciation and amortization		595			150			2,260			3,005			621			160			2,256			3,037
Transition and lease termination costs		446			—			—			446			569			220			—			789
Change in contingent consideration		—			—			737			737			—			—			442			442

Total operating expenses		35,351			3,685			4,653			43,689			33,545			3,969			4,759			42,273

Income (loss) from operations		5,663			1,010			(4,653	)		2,020			4,086			201			(4,759	)		(472	)
Other income (expense)		117			(68	)		(607	)		(558	)		35			(130	)		(1,340	)		(1,435	)

Income (loss) before income tax expense		5,780			942			(5,260	)		1,462			4,121			71			(6,099	)		(1,907	)
Income tax benefit (expense)		—			—			(540	)		(540	)		—			—			208			208

Net income (loss)		5,780			942			(5,800	)		922			4,121			71			(5,891	)		(1,699	)
Less: Net income attributable to non-controlling interest		(15	)		—			—			(15	)		(20	)		—			—			(20	)

Net income (loss) attributable to Radiant Logistics, Inc.		5,765			942			(5,800	)		907			4,101			71			(5,891	)		(1,719	)
Less: Preferred stock dividends		—			—			(511	)		(511	)		—			—			(511	)		(511	)

Net income (loss) attributable to common stockholders	$	5,765		$	942		$	(6,311	)	$	396		$	4,101		$	71		$	(6,402	)	$	(2,230	)

Operating partner commissions increased $2.4 million, or 13.0%, to $21.4 million for the three months ended March 31, 2017 primarily due to higher commissions resulting from increases in net revenues from strategic operating partners. Operating partner commissions as a percentage of net revenue increased to 46.9% for the three months ended March 31, 2017, from 45.3% for the comparable prior year period.

Personnel costs decreased $0.7 million, or 5.2%, to $12.5 million for the three months ended March 31, 2017. The decrease is attributable to a reduction in headcount due to a consolidation of operating locations and workforce reduction at On Time Express, Inc. (“On Time”) made in connection with the loss of a significant customer in the prior fiscal year. Personnel costs as a percentage of net revenue decreased to 27.4% for the three months ended March 31, 2017, from 31.5% for the comparable prior year period.

Selling, general and administrative (“SG&A”) costs decreased $0.3 million, or 4.9%, to $5.6 million for the three months ended March 31, 2017. The decrease is primarily due to a decrease in professional services costs associated with litigation and our recent acquisitions. SG&A as a percentage of net revenue decreased to 12.2% for the three months ended March 31, 2017, from 14.0% for the comparable prior year period.

Transition and lease termination costs decreased $0.4 million, or 43.5%, to $0.4 million for the three months ended March 31, 2017. The current period amounts primarily represent non-recurring personnel costs for Service by Air, Inc. (“SBA”) that are being eliminated in connection with the winding down of SBA’s historical back-office operations.

Change in contingent consideration represents the change in the fair value of contingent consideration due to former shareholders of acquired operations. Change in contingent consideration increased $0.3 million, or 66.7%, to $0.7 million for the three months ended March 31, 2017. The change in the current period is principally attributable to a net increase in management’s estimates of future earn-out payments through the remainder of the respective earn-out periods.

Other expenses decreased $0.8 million, or 61.1%, to $0.6 million for the three months ended March 31, 2017. The decrease is primarily due to lower interest expense following the retirement of debt used to acquire Wheels.

Our change in net income (loss) was driven principally by increased net revenues and decreased interest expenses compared to the comparable prior year period, offset by an increase in income taxes.

Our future financial results may be impacted by amortization of intangibles resulting from acquisitions as well as changes in contingent consideration that are difficult to predict.

The following table provides a reconciliation for the three months ended March 31, 2017 and 2016 of normalized adjusted EBITDA to net income (loss), the most directly comparable GAAP measure in accordance with SEC Regulation G (in thousands):

	Three months ended March 31, 2017												Three months ended March 31, 2016
	United States			Canada			Corporate/ Eliminations			Total			United States			Canada			Corporate/ Eliminations			Total
Net revenues	$	41,014		$	4,695		$	—		$	45,709		$	37,631		$	4,170		$	—		$	41,801

Net income (loss) attributable to common stockholders	$	5,765		$	942		$	(6,311	)	$	396		$	4,101		$	71		$	(6,402	)	$	(2,230	)
Plus: Preferred stock dividends		—			—			511			511			—			—			511			511
Net income (loss) attributable to Radiant Logistics, Inc.		5,765			942			(5,800	)		907			4,101			71			(5,891	)		(1,719	)

Income tax expense (benefit)		—			—			540			540			—			—			(208	)		(208	)
Depreciation and amortization		595			150			2,260			3,005			621			160			2,256			3,037
Net interest expense		—			—			608			608			—			—			1,340			1,340

EBITDA		6,360			1,092			(2,392	)		5,060			4,722			231			(2,503	)		2,450

Share-based compensation		219			7			97			323			196			62			69			327
Change in contingent consideration		—			—			737			737			—			—			442			442
Acquisition related costs		—			—			308			308			—			—			694			694
Legal costs		—			—			25			25			—			—			277			277
Non-recurring costs		—			—			—			—			—			—			145			145
Transition and lease termination costs		—			—			—			—			15			220			—			235
Foreign exchange loss (gain)		(33	)		68			—			35			(50	)		130			—			80

Adjusted EBITDA		6,546			1,167			(1,225	)		6,488			4,883			643			(876	)		4,650
Transition costs		446			—			—			446			554			—			—			554
Normalized Adjusted EBITDA	$	6,992		$	1,167		$	(1,225	)	$	6,934		$	5,437		$	643		$	(876	)	$	5,204
Adjusted EBITDA as a % of Net Revenues		16.0	%		24.9	%	N/A				14.2	%		13.0	%		15.4	%	N/A				11.1	%
Normalized Adjusted EBITDA as a % of Net Revenues		17.0	%		24.9	%	N/A				15.2	%		14.4	%		15.4	%	N/A				12.4	%

The following table summarizes transportation revenue, cost of transportation and net transportation revenue by operating segments for the nine months ended March 31, 2017 and 2016 (in thousands):

	Nine Months Ended March 31, 2017												Nine Months Ended March 31, 2016
	United States			Canada			Corporate/ Eliminations			Total			United States			Canada			Corporate/ Eliminations			Total
Transportation revenue
Forwarding	$	412,014		$	2,225		$	(321	)	$	413,918		$	415,566		$	3,135		$	(233	)	$	418,468
Brokerage		91,194			68,838			(3,543	)		156,489			102,988			75,716			(3,022	)		175,682
		503,208			71,063			(3,864	)		570,407			518,554			78,851			(3,255	)		594,150

Cost of transportation
Forwarding		292,550			1,732			(321	)		293,961			302,219			2,612			(233	)		304,598
Brokerage		83,726			56,799			(3,543	)		136,982			93,934			64,495			(3,022	)		155,407
		376,276			58,531			(3,864	)		430,943			396,153			67,107			(3,255	)		460,005

Net transportation revenue
Forwarding		119,464			493			—			119,957			113,347			523			—			113,870
Brokerage		7,468			12,039			—			19,507			9,054			11,221			—			20,275
		126,932			12,532			—			139,464			122,401			11,744			—			134,145
Net transportation margins		25.2	%		17.6	%					24.4	%		23.6	%		14.9	%					22.6	%

Other value-added services		3,056			2,322			—			5,378			3,683			2,283			—			5,966
Net revenues	$	129,988		$	14,854		$	—		$	144,842		$	126,084		$	14,027		$	—		$	140,111

Forwarding revenue was $413.9 million and $418.5 million for the nine months ended March 31, 2017 and 2016, respectively. The decrease of $4.6 million, or 1.1%, is primarily attributable to reduced customer pricing driven principally by the impact of excess transportation capacity in the marketplace, partially offset by increased shipments and revenues by certain Company-owned locations and strategic operating partners. Forwarding net transportation revenue was $120.0 million and $113.9 million for the nine months ended March 31, 2017 and 2016, respectively. Although overall revenues decreased, net revenues increased and net forwarding transportation margins increased from 27.2% to 29.0% over the comparable prior year period, primarily due to product mix and lower costs of purchased transportation.

Brokerage revenue was $156.5 million and $175.7 million for the nine months ended March 31, 2017 and 2016, respectively. The decrease of $19.2 million, or 10.9%, is primarily attributable to general softness in the brokerage markets. Brokerage net transportation revenue was $19.5 million and $20.3 million for the nine months ended March 31, 2017 and 2016, respectively. Net brokerage transportation margins increased from 11.5% to 12.5% over the comparable prior year period, primarily as a result of lower costs of purchased transportation.

Other value added services were $5.4 million for the nine months ended March 31, 2017 compared to $6.0 million for the comparable prior year period.

The following table compares condensed consolidated statements of operations data by operating segment for the nine months ended March 31, 2017 and 2016 (in thousands):

	Nine Months Ended March 31, 2017											Nine Months Ended March 31, 2016
	United States			Canada		Corporate/ Eliminations			Total			United States			Canada			Corporate/ Eliminations			Total
Net revenues	$	129,988		$	14,854	$	—		$	144,842		$	126,084		$	14,027		$	—		$	140,111

Operating partner commissions		67,729			—		—			67,729			62,944			—			—			62,944
Personnel costs		28,153			7,836		2,249			38,238			30,405			8,147			2,355			40,907
Selling, general and administrative expenses		11,506			2,976		2,442			16,924			10,929			3,580			4,448			18,957
Depreciation and amortization		1,786			469		6,784			9,039			1,531			514			7,216			9,261
Transition and lease termination costs		1,307			—		—			1,307			2,893			2,216			—			5,109
Impairment of acquired intangible assets		—			—		—			—			—			—			3,680			3,680
Change in contingent consideration		—			—		1,793			1,793			—			—			628			628

Total operating expenses		110,481			11,281		13,268			135,030			108,702			14,457			18,327			141,486

Income (loss) from operations		19,507			3,573		(13,268	)		9,812			17,382			(430	)		(18,327	)		(1,375	)
Other income (expense)		714			33		(1,856	)		(1,109	)		406			86			(4,061	)		(3,569	)

Income (loss) before income tax expense		20,221			3,606		(15,124	)		8,703			17,788			(344	)		(22,388	)		(4,944	)
Income tax benefit (expense)		—			—		(3,281	)		(3,281	)		—			—			1,601			1,601

Net income (loss)		20,221			3,606		(18,405	)		5,422			17,788			(344	)		(20,787	)		(3,343	)
Less: Net income attributable to non-controlling interest		(42	)		—		—			(42	)		(53	)		—			—			(53	)

Net income (loss) attributable to Radiant Logistics, Inc.		20,179			3,606		(18,405	)		5,380			17,735			(344	)		(20,787	)		(3,396	)
Less: Preferred stock dividends		—			—		(1,534	)		(1,534	)		—			—			(1,534	)		(1,534	)

Net income (loss) attributable to common stockholders	$	20,179		$	3,606	$	(19,939	)	$	3,846		$	17,735		$	(344	)	$	(22,321	)	$	(4,930	)

Operating partner commissions increased $4.8 million, or 7.6%, to $67.7 million for the nine months ended March 31, 2017 due primarily to increased commissions resulting from increases in net revenues from strategic operating partners. Operating partner commissions as a percentage of net revenue increased to 46.8% for the nine months ended March 31, 2017, from 44.9% for the comparable prior year period.

Personnel costs decreased $2.7 million, or 6.5%, to $38.2 million for the nine months ended March 31, 2017. The decrease is attributable to workforce reduction at On Time made in connection with the loss of a significant customer in the prior fiscal year, and a reduction in headcount due to a consolidation of operating locations. Personnel costs as a percentage of net revenue decreased to 26.4% for the nine months ended March 31, 2017, from 29.2% for the comparable prior year period.

SG&A costs decreased $2.1 million, or 10.7%, to $16.9 million for the nine months ended March 31, 2017. The decrease is primarily due to decreases in professional services costs associated with litigation and our recent acquisitions. SG&A as a percentage of net revenue decreased to 11.7% for the nine months ended March 31, 2017 from 13.5% for the comparable prior year period.

Depreciation and amortization costs decreased $0.3 million, or 2.4%, to $9.0 million for the nine months ended March 31, 2017.

Impairment of acquired intangible assets in the comparable prior year period is attributable to the customer related intangibles associated with On Time.

Transition and lease termination costs decreased $3.8 million, or 74.4%, to $1.3 million for the nine months ended March 31, 2017. The current period amounts primarily represent non-recurring personnel costs for SBA that are being eliminated in connection with the winding down of SBA’s historical back-office operations. The comparable prior period consists of consolidation efforts in our Toronto and New York locations, as well as non-recurring personnel costs for SBA.

Change in contingent consideration represents the change in the fair value of contingent consideration due to former shareholders of acquired operations. Change in contingent consideration increased $1.2 million, or 185.5%, to $1.8 million for the nine months ended March 31, 2017. The change in the current period is principally attributable to a net increase in management’s estimates of future earn-out payments through the remainder of the respective earn-out periods.

Other expenses decreased $2.5 million, or 68.9%, to $1.1 million for the nine months ended March 31, 2017. The decrease is primarily due to lower interest expense following the retirement of debt used to acquire Wheels.

Our change in net income (loss) was driven principally by increased net revenues, decreased operating and interest expenses compared to the comparable prior year period, offset by an increase in income taxes.

Our future financial results may be impacted by amortization of intangibles resulting from acquisitions as well as changes in contingent consideration that are difficult to predict.

The following table provides a reconciliation for the nine months ended March 31, 2017 and 2016 of adjusted EBITDA to net income, the most directly comparable GAAP measure in accordance with SEC Regulation G (in thousands):

	Nine Months Ended March 31, 2017												Nine Months Ended March 31, 2016
	United States			Canada			Corporate/ Eliminations			Total			United States			Canada			Corporate/ Eliminations			Total
Net revenues	$	129,988		$	14,854		$	—		$	144,842		$	126,084		$	14,027		$	—		$	140,111

Net income (loss) attributable to common stockholders	$	20,179		$	3,606		$	(19,939	)	$	3,846		$	17,735		$	(344	)	$	(22,321	)	$	(4,930	)
Plus: Preferred stock dividends		—			—			1,534			1,534			—			—			1,534			1,534
Net income (loss) attributable to Radiant Logistics, Inc.		20,179			3,606			(18,405	)		5,380			17,735			(344	)		(20,787	)		(3,396	)

Income tax expense (benefit)		—			—			3,281			3,281			—			—			(1,601	)		(1,601	)
Depreciation and amortization		1,786			469			6,784			9,039			1,531			514			7,216			9,261
Net interest expense		—			—			1,856			1,856			—			—			4,060			4,060

EBITDA		21,965			4,075			(6,484	)		19,556			19,266			170			(11,112	)		8,324

Share-based compensation		679			9			295			983			600			188			297			1,085
Change in contingent consideration		—			—			1,793			1,793			—			—			628			628
Acquisition related costs		—			—			525			525			—			286			1,820			2,106
Legal costs		—			—			138			138			—			—			959			959
Non-recurring costs		—			—			14			14			—			—			250			250
Lease termination costs		25			—			—			25			241			2,102			—			2,343
Loss on impairment of acquired intangible assets		—			—			—			—			—			—			3,680			3,680
Foreign exchange gain		(327	)		(27	)		—			(354	)		(309	)		(80	)		—			(389	)

Adjusted EBITDA		22,342			4,057			(3,719	)		22,680			19,798			2,666			(3,478	)		18,986
Transition costs		1,263			—			—			1,263			1,931			—			—			1,931
Normalized Adjusted EBITDA	$	23,605		$	4,057		$	(3,719	)	$	23,943		$	21,729		$	2,666		$	(3,478	)	$	20,917
Adjusted EBITDA as a % of Net Revenues		17.2	%		27.3	%	N/A				15.7	%		15.7	%		19.0	%	N/A				13.6	%
Normalized Adjusted EBITDA as a % of Net Revenues		18.2	%		27.3	%	N/A				16.5	%		17.2	%		19.0	%	N/A				14.9	%

Net cash provided by operating activities was $15.5 million for the nine months ended March 31, 2017, compared to $19.2 million for the nine months ended March 31, 2016. The change was principally driven by our net income adjusted for deferred income taxes, contingent consideration, impairment of acquired intangible assets, transition and lease termination costs, and changes in accounts receivable, accounts payable and commissions payable.

Net cash used for investing activities was $3.6 million for the nine months ended March 31, 2017, compared to $4.0 million for the nine months ended March 31, 2016. Use of cash for the nine months ended March 31, 2017 consisted primarily of $3.6 million of purchases of technology and equipment. Use of cash for the nine months ended March 31, 2016 consisted of purchases of $3.0 million in technology and equipment, $0.8 million for an acquisition, and $0.7 million of payments to former shareholders of acquired operations, offset by $0.4 million of proceeds from the sale of equipment.

Net cash used for financing activities was $3.7 million for the nine months ended March 31, 2017, compared to cash used of $2.6 million for the nine months ended March 31, 2016. Cash used for the nine months ended March 31, 2017 consisted of proceeds from our credit facility of $3.5 million, repayments of notes payable of $1.8 million, payment of contingent consideration to former shareholders of acquired operations of $3.4 million, payment of preferred stock dividends of $1.5 million, purchases of treasury stock of $0.3 million, and payment of employee tax withholdings related to net share settlements of stock option exercises of $0.2 million. Cash used for the nine months ended March 31, 2016 consisted of $38.4 million of proceeds from our common stock offering, offset by repayments to our credit facility of $37.7 million, payment of contingent consideration to former shareholders of acquired operations of $1.5 million, payment of preferred stock dividends of $1.5 million, repayments of notes payable of $0.1 million, and payment of employee tax withholdings related to net share settlements of stock option exercises of $0.1 million.

Our agreements with respect to our prior acquisitions contain future consideration provisions that provide for the prior owners of the acquired entities to receive additional consideration if specified operating objectives and financial results are achieved in future periods. For additional information regarding our acquisitions and potential earn-out payments, see Note 3 and Note 9 to our audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended June 30, 2016, and Note 3 and Note 9 to our unaudited condensed consolidated financial statements contained elsewhere in this report.

A primary component of our business strategy is the continued development and implementation of advanced information systems to provide accurate and timely information to our management, strategic operating partners and customers. This includes a recent upgrade to our accounting system as well as investments in our overall network infrastructure. We intend to spend in excess of $3.0 million during the fiscal year ended June 30, 2017 in order to continue improving our technology systems, which we expect will include the implementation of a key transportation management system that will, among other things, more fully integrate our systems with our strategic operating partners and any new operations that we may acquire in the future.

We have a USD$65.0 million revolving credit facility (the “Senior Credit Facility”) with Bank of America, N.A. (“BofA”) on its own behalf and as agent to the other lenders named therein, currently consisting of the Bank of Montreal (as the initial member of the syndicate under such loan). The Senior Credit Facility matures on August 9, 2018 and is collateralized by a first-priority security interest in all of the assets of the U.S. co-borrowers, a first-priority security interest in all of the accounts receivable and associated assets of the Canadian co-borrowers (the “Canadian A/R Assets”) and a second-priority security interest on the other assets of the Canadian borrowers. Advances under the Senior Credit Facility were used to fund the Wheels acquisition and are available for future acquisitions, certain debt repayment and for other corporate purposes. Borrowings under the Senior Credit Facility accrue interest at a variable rate of interest based upon LIBOR and/or one or more other interest rate indices plus an applicable margin. The Senior Credit Facility provides for advances of up to 85% of our eligible Canadian and domestic accounts receivable, 75% of eligible accrued but unbilled domestic receivables and eligible foreign accounts receivable, all of which are subject to certain sub-limits, reserves and reductions.

The co-borrowers of the Senior Credit Facility include the following: (i) with respect to U.S. obligations under the Senior Credit Facility, Radiant Logistics, Inc., Radiant Global Logistics, Inc., Radiant Transportation Services, Inc., Radiant Logistics Partners LLC, Adcom Express, Inc., Radiant Customs Services, Inc., DBA Distribution Services, Inc., International Freight Systems (of Oregon), Inc., Radiant Off-Shore Holdings LLC, Green Acquisition Company, Inc., On Time Express, Inc., Clipper Exxpress Company, Bluenose Finance LLC, Wheels MSM US, Inc., Service By Air, Inc., Highways and Skyways, Inc., and Radiant Trade Services, Inc.; and (ii) with respect to Canadian obligations under the Senior Credit Facility, Radiant Global Logistics, Ltd., Wheels Group Inc., 1371482 Ontario Inc., Wheels MSM Canada Inc., 2062698 Ontario Inc., Associate Carriers Canada Inc. and Wheels Associate Carriers Inc. As co-borrowers under the Senior Credit Facility, the accounts receivable of the foregoing entities are eligible for inclusion within the overall borrowing base of the Company and all borrowers are responsible for repayment of the debt associated with applicable advances (U.S. or Canadian) under the Senior Credit Facility. In addition, we and our U.S. subsidiaries guarantee both the U.S. and Canadian obligations under the Senior Credit Facility, while our Canadian subsidiaries guarantee only the Canadian obligations under the Senior Credit Facility.

The terms of the Senior Credit Facility are subject to a financial covenant which may limit the amount otherwise available under such facility. The covenant requires us to maintain a basic fixed charge coverage ratio of at least 1.1 to 1.0 during any period (the “Trigger Period”) in which we are in default under the Senior Credit Facility, if total availability falls below $10.0 million or if U.S. availability is less than $6.0 million.

Under the terms of the Senior Credit Facility, we are permitted to make additional acquisitions without the consent of the senior lenders only if certain conditions are satisfied. The conditions imposed by the Senior Credit Facility include the following: (i) the absence of an event of default under the Senior Credit Facility, (ii) the acquisition must be consensual; (iii) the company to be acquired must be in the transportation and logistics industry, located in the United States or certain other approved jurisdictions, and have a positive EBITDA for the 12 month period most recently ended prior to such acquisition, (iv) no debt or liens may be incurred, assumed or result from the acquisition, subject to limited exceptions, and (v) after giving effect for the funding of the acquisition, we must have availability under the Senior Credit Facility of at least the greater of 20% of the U.S.-based borrowing base and Canadian-based borrowing base or $12.5 million, and U.S. availability of at least $7.5 million. In the event that we are not able to satisfy the conditions of the Senior Credit Facility in connection with a proposed acquisition, we must either forego the acquisition, obtain the consent of the senior lenders, or retire the Senior Credit Facility. This may limit or slow our ability to achieve the critical mass we may need to achieve our strategic objectives.

As of March 31, 2017, we have gross availability of $60.2 million, net of $8.7 million in advances and letter of credit reserves of approximately $0.3 million with approximately $46.6 million in availability under the Senior Credit Facility to support future acquisitions and our ongoing working capital requirements. We expect to structure acquisitions with certain amounts paid at closing, and the balance paid over a number of years in the form of earn-out installments which are payable based upon the future earnings of the acquired businesses payable in cash, stock or some combination thereof. As we continue to execute our acquisition strategy, we will be required to make significant payments in the future if the earn-out installments under our various acquisitions become due. While we believe that a portion of any required cash payments will be generated by the acquired businesses, we may have to secure additional sources of capital to fund the remainder of any cash-based earn-out payments as they become due. This presents us with certain business risks relative to the availability of capacity under our Senior Credit Facility, the availability and pricing of future fund raising, as well as the potential dilution to our stockholders to the extent the earn-outs are satisfied directly, or indirectly, from the sale of equity.

On April 2, 2015, Wheels obtained a CAD$29.0 million senior secured Canadian term loan from Integrated Private Debt Fund IV LP (“IPD”) pursuant to a CAD$29,000,000 Credit Facilities Loan Agreement (the “IPD Loan Agreement”). The Company and its U.S. and Canadian subsidiaries are guarantors of the Wheels obligations thereunder. The loan matures on April 1, 2024 and accrues interest at a rate of 6.65% per annum. The loan repayment consists of interest-only payments for the first 12 months followed by blended principal and interest payments for the next eight years. The loan may be prepaid in whole at any time upon providing at least 30 days prior written notice and paying the difference between (i) the present value of the loan interest and the principal payments foregone discounted at the Government of Canada Bond Yield for the term from the date of prepayment to April 1, 2024, and (ii) the face value of the principal amount being prepaid. In connection with the loan, we paid an amount equal to five months of interest payments into a debt service reserve account controlled by IPD.

The terms of the loan are subject to certain financial covenants, which require us to maintain (i) a debt service coverage ratio of at least 1.2 to 1.0 and (ii) a senior debt to EBITDA ratio of at least 3.0 to 1.0. In addition, during any Trigger Period, the Company and its U.S. and Canadian subsidiaries must maintain a fixed charge coverage ratio of at least 1.1 to 1.0.

Under the terms of the IPD Loan Agreement, we are permitted to make additional acquisitions without IPD’s consent only if certain conditions are satisfied, including, among others: (i) the equity interests or property acquired in such acquisition constitute a business reasonably related to our business or the business of Wheels; (ii) no default or event of default shall exist prior to or will be caused as a result of such acquisition; (iii) we or Wheels shall have provided IPD with at least 10 business days prior written notice of such acquisition that must include certain descriptive information and pro forma information regarding the acquisition; (iv) such person whose equity interests or property are being acquired shall have, as of the last day of the most recent fiscal quarter of such person, actual (or pro forma to the extent approved in writing by IPD) positive EBITDA and net income, in each case for the 12 month period ending on such date; (v) the aggregate cash consideration payable at the closing of the acquisition shall not exceed $10.0 million for any single transaction and $25.0 million in the aggregate, in any fiscal year or such greater amount approved in writing by IPD; provided, however, that the foregoing limitation shall exclude cash consideration derived from the proceeds of sales of newly issued equity interests of Radiant during the twelve-month period prior to the closing of such acquisition (as described below); (vi) no debt or liens may be incurred, assumed or result from the acquisition, subject to limited exceptions; (vii) the assets subject to the acquisition are free from all liens except those permitted under the IPD Loan Agreement; and (viii) the post-closing U.S. availability under the Senior Credit Facility is at least $7.5 million on a pro forma basis.

For additional information regarding our indebtedness, see Note 6 to our audited consolidated financial statements contained in our Annual Report on Form 10-K for the year ended June 30, 2016, and Note 6 to our unaudited condensed consolidated financial statements contained elsewhere in this report.

Given our continued focus on the build-out of our network of operating partner locations, we believe that our current working capital and anticipated cash flow from operations are adequate to fund existing operations for the next 12 months. However, continued growth through strategic acquisitions will require additional sources of financing as our existing working capital is not sufficient to finance our operations and an acquisition program. Thus, our ability to finance future acquisitions will be limited by the availability of additional capital. We may, however, finance acquisitions using our common stock as all or some portion of the consideration. In the event that our common stock does not attain or maintain a sufficient market value or potential acquisition candidates are otherwise unwilling to accept our securities as part of the purchase price for the sale of their businesses, we may be required to utilize more of our cash resources, if available, in order to continue our acquisition program. If we do not have sufficient cash resources through either operations or from debt facilities, our growth could be limited unless we are able to obtain such additional capital.

As of March 31, 2017, we did not have any relationships with unconsolidated entities or financial partners, such as entities often referred to as structured finance or special purpose entities, which had been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. As such, we are not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

The recent accounting pronouncements are discussed in Note 2 of the “Notes to the Condensed Consolidated Financial Statements” contained elsewhere in this report.

There have been no material changes from the information previously reported under Part II, Item 7A of our Annual Report on Form 10-K for the year ended June 30, 2016.

An evaluation of the effectiveness of our “disclosure controls and procedures” (as such term is defined in Rules 13a-15(e) or 15d-15(e) of the Exchange Act as of March 31, 2017, was carried out by our management under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”). Based upon that evaluation, our CEO and CFO concluded that, as of March 31, 2017, our disclosure controls and procedures were effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms and (ii) accumulated and communicated to our management, including our CEO and CFO, as appropriate to allow timely decisions regarding disclosure.

There have not been any changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter ended March 31, 2017 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

From time to time, the Company and our operating subsidiaries are involved in claims, proceedings and litigation, including the actions set forth in Item 3 of our Annual Report on Form 10-K for the year ended June 30, 2016. Below are some updates to legal proceedings that have been previously disclosed in our Annual Report on Form 10-K for the year ended June 30, 2016 and supplemented in subsequent filings with the SEC.

Ingrid Barahona v. Accountabilities, Inc. d/b/a/ Accountabilities Staffing, Inc., Radiant Global Logistics, Inc. and DBA Distribution Services, Inc. (Ingrid Barahona California Class Action)

During the quarter, the Court held a status conference so the parties could provide an update regarding their respective attempts to obtain the necessary documents. Based on its belief that the debtors have additional records and in an effort to lift the bankruptcy “stay”, Ms. Barahona obtained the dismissal of the debtors without prejudice from the state court action. The Court set a deadline of November 30, 2017, for Ms. Barahona to file her motion for class certification, and set a further status conference for December 14, 2017, to set a briefing schedule for the motion for class certification. The Court has also ordered the parties to participate in mediation by August 31, 2017. At this time, we are unable to express an opinion as to the likely outcome of the matter.

On January 4, 2017, the parties entered into a Settlement Agreement and Mutual Release, pursuant to which we and our co-defendants agreed to pay the plaintiff the aggregate amount of approximately $0.1 million, which was covered under our insurance policy, and the parties agreed to release all claims related to the lawsuit. The Court accepted the settlement and the case has been dismissed with prejudice.

In addition to the information set forth in this Form 10-Q, you should carefully consider the risk factors discussed in Part I, Item 1A of our Annual Report on Form 10-K for the year ended June 30, 2016.

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	405 114^th Ave S.E., Bellevue, WA 98004
	(Address of principal executive offices)

	(425) 943-4599
	(Registrant’s telephone number, including area code)

	N/A
(Former name, former address, and former fiscal year, if changed since last report)

PART I. FINANCIAL INFORMATION
Item 1.	Condensed Consolidated Financial Statements - Unaudited
	Condensed Consolidated Balance Sheets as of March 31, 2017 and June 30, 2016	3
	Condensed Consolidated Statements of Operations and Other Comprehensive Income for the three and nine months ended March 31, 2017 and 2016	4
	Condensed Consolidated Statement of Stockholders’ Equity for the nine months ended March 31, 2017	5
	Condensed Consolidated Statements of Cash Flows for the nine months ended March 31, 2017 and 2016	6
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	34
Item 4.	Controls and Procedures	34
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	35
Item 6.	Exhibits	36

(In thousands)
2017 (remaining portion)	$	1,168
2018		4,329
2019		3,717
2020		3,352
2021		2,365
Thereafter		975

Total minimum lease payments	$	15,906

(In thousands)	Lease Termination Costs			Retention and Severance Costs			Non-recurring Personnel Costs			Total
Balance as of June 30, 2016	$	1,815		$	681		$	—		$	2,496
Lease termination and transitions costs		26			18			1,263			1,307
Payments and other		(786	)		(135	)		(1,263	)		(2,184	)

Balance as of March 31, 2017	$	1,055		$	564		$	—		$	1,619

(In thousands)	March 31,			June 30,
	2017			2016
Computer software	$	11,587		$	8,596
Trailers and related equipment		4,678			4,890
Leasehold improvements		1,730			1,648
Computer equipment		1,658			1,416
Office and warehouse equipment		898			794
Furniture and fixtures		663			581

		21,214			17,925
Less: Accumulated depreciation and amortization		(8,081	)		(5,472	)

	$	13,133		$	12,453

Large accelerated filer	☐	Accelerated filer	☒

Non-accelerated filer	☐	Smaller reporting company	☐

Emerging growth company	☐

(In thousands)
2017 (remaining portion)	$	2,071
2018		8,245
2019		8,201
2020		8,089
2021		8,026
Thereafter		31,126

	$	65,758

(In thousands)	Fair Value Measurements as of March 31, 2017
	Level 3		Total
Contingent consideration	$	5,400	$	5,400

	Fair Value Measurements as of June 30, 2016
	Level 3		Total
Contingent consideration	$	7,485	$	7,485

(In thousands)	Contingent Consideration
Balance as of June 30, 2016	$	7,485
Contingent consideration paid		(3,878	)
Change in fair value		1,793

Balance as of March 31, 2017	$	5,400

	Number of Shares			Weighted Average Grant- Date Fair Value
Balance as of June 30, 2016		1,078		$	1.62
Vested		(1,078	)		1.62
Granted		275,281			2.86
Forfeited		(12,984	)		2.75

Balance as of March 31, 2017		262,297		$	2.86

	Nine Months Ended March 31, 2017
Risk-free interest rate	1.15 - 2.05%
Expected term	6.5 years
Expected volatility	47.97 - 48.02%
Expected dividend yield		0.00%

	Number of Shares			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value (in thousands)
Outstanding as of June 30, 2016		3,855,290		$	2.95		6.95	$	2,530
Granted		180,000			3.42		10.00		—
Exercised		(244,535	)		2.23		—		—
Forfeited		(255,480	)		4.17		—		—

Outstanding as of March 31, 2017		3,535,275		$	2.93		6.44	$	7,518

Exercisable as of March 31, 2017		1,866,051		$	2.27		5.25	$	5,195

(In thousands)	2017 (remaining)		2018		2019		2020		Total
Earn-out payments:
Cash	$	1,118	$	2,385	$	383	$	142	$	4,028
Equity		372		981		128		47		1,528

Total estimated earn-out payments⁽¹⁾	$	1,490	$	3,366	$	511	$	189	$	5,556

	Three months ended March 31, 2017										Three months ended March 31, 2016
Selected operating expenses as a percent of net revenue:	United States			Canada			Corporate/ Eliminations	Total			United States			Canada			Corporate/ Eliminations	Total
Operating partner commissions		52.2	%		0.0	%	N/A		46.9	%		50.4	%		0.0	%	N/A		45.3	%
Personnel costs		22.2	%		55.5	%	N/A		27.4	%		26.2	%		62.4	%	N/A		31.5	%
Selling, general and administrative expenses		9.2	%		19.8	%	N/A		12.2	%		9.4	%		23.7	%	N/A		14.0	%

Exhibit No.	Exhibit	Method of Filing

31.1	Certification by Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith

31.2	Certification by Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002	Filed herewith

32.1	Certification by the Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002	Filed herewith

101.INS	XBRL Instance	Filed herewith

101.SCH	XBRL Taxonomy Extension Schema	Filed herewith

101.CAL	XBRL Taxonomy Extension Calculation	Filed herewith

101.DEF	XBRL Taxonomy Extension Definition	Filed herewith

101.LAB	XBRL Taxonomy Extension Label	Filed herewith

101.PRE	XBRL Taxonomy Extension Presentation	Filed herewith

		RADIANT LOGISTICS, INC.

Date: May 10, 2017		/s/ Bohn H. Crain
		Bohn H. Crain
		Chief Executive Officer
		(Principal Executive Officer)

Date: May 10, 2017		/s/ Todd E. Macomber
		Todd E. Macomber
		Senior Vice President and Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

Exhibit No.		Exhibit

31.1		Certification by the Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2		Certification by the Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1		Certification by the Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101.INS		XBRL Instance

101.SCH		XBRL Taxonomy Extension Schema

101.CAL		XBRL Taxonomy Extension Calculation

101.DEF		XBRL Taxonomy Extension Definition

101.LAB		XBRL Taxonomy Extension Label

101.PRE		XBRL Taxonomy Extension Presentation